Issued by Office of The Presidency
26 June 2000
1 President Thabo Mbeki established the International Investor Council earlier this year to draw upon the insights and wisdom of distinguishedinternational business leaders to provide advice to the President on how to meet the challenges of economic growth and development in South Africa.
2 The inaugural meeting of the International Investor Council took place on 24 and 25 June 2000. The meeting was chaired by President Mbeki and was attended by:
As well as the:
Apologies were received from:
Mode of Operation:
2 Regularity of meetings: twice annually; these to be held in South Africa.
3 Members of the IIC will assist in communicating developments in, and about SA. In this regard members of IIC would arrange fora for interaction between visiting Ministers and/or the President and business leaders and other-opinion-makers.
Macroeconomic Matters:
4 The second session began with a broad presentation of the state of the SA economy, the gains that have been achieved and the major economic challenges confronting the country. In the discussion that followed the following was evinced:
4.1 There was acknowledgment of the careful management of the smooth political transition.
4.2 There was an appreciation of the significant achievements in the fiscal management of government finances and the restructuring of the manufacturing sector.
5 However, the challenge we are facing is to develop an effective communication strategy and programme to deal with misperceptions about this and other issues.
Situation in Southern Africa:
6 In the discussion on Zimbabwe the following was noted:
7 Developments in Zimbabwe in the past few weeks have had some negative effects on perceptions regarding stability in Southern Africa and the respect for private property and the rule of law in particular. Further deliberate and strategic interventions are urgently required to reverse these perceptions.
8 In broad terms the discussion noted that SA's management of its political and socio-economic programmes, efforts towards the integration of southern African economies and the renewal of the African continent are commendable. However, it has become clear that SA suffers a "perceptions deficit". This requires massive improvement in the promotion and imaging of SA amongst investors and opinion formers both within SA and abroad. In this regard, the various initiatives that are being undertaken by the SA government in partnership with the private sector, including the International Marketing Council, should be further strengthened and speeded-up.
9 The IIC is a critical instrument for such interventions especially in the international community. Members of the IIC commit themselves to play an active role to ensure that the endeavours for growth and development in SA and in the region are massively supported. This is both with regard to practical efforts to attract FDI, a more favourable flow of short-term capital and trade, and public communication matters. For this to be effective requires open lines of communication between the President and the SA government on the one hand and members of the IIC on the other.
The meeting agreed on modalities of such communication.
Other issues:
10 Affirmative action:
Views were exchanged on affirmative action and both the IIC and the SA government agree on the need to ensure that communities previously excluded from the mainstream of the economy are integrated. This is being implemented within the context of a Human Resource Development Strategy that, over time, will render intensive affirmative action programmes unnecessary. In the practical implementation of this, account has to be taken of the obligations appropriate to the size of enterprises, as well as management of the brain drain.
11 Development of SMMEs:
It was agreed that one of the greatest challenges in the current period is the development and promotion of SMMEs. Some progress has been made in this regard and government has an important role to play; but solutions need to be found to the problem of access to credit by start-up enterprises from financial institutions. Various ideas were exchanged, including more concerted business training, development of public-private partnerships with financial institutions and promotion of the initiatives among the prospective beneficiaries. Related to this is the campaign around domestic savings, which is critical not only to encourage domestic investments but also to encourage FDI.
12 Restructuring of public enterprises:
A report was presented on the programme of the SA government to restructure state enterprises. A framework document on this will be released in the coming few weeks. Related to this is a comprehensive approach to public-private partnerships, which has been introduced. The meeting agreed that a comprehensive statement by SA on the policy, programme and plans of such restructuring will help clear any market misperceptions on this matter. This includes an understanding on how such restructuring should not result in the perpetuation of private monopolies nor the narrowing of access to services by the broader public.
13 HIV/ Aids:
The meeting was briefed on the programme of SA to deal with the HIV/ Aids pandemic. These include: programmes to increase awareness and change lifestyles; vaccine development; the building of partnerships across society and the formation of the SA National Council Aids Council; as well as the continuing work of the International Aids Panel whose interim report should be ready in a few weeks. IIC members expressed their concern at the misinterpretation of SA's and the President's efforts on this issue.
14 The commitments emerging from the meeting, on the part of both the IIC members and the SA government, derive from a profound confidence that SA and southern Africa - and the continent in general - possess the ingredients for rapid growth and development and a renewal, that will redound to the benefit of the business community and peoples of Africa and the developed world.