Business Update: Issue 15

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Progressive Leader - Issue 19

Progressive leader - Issue 19

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Speech By Daryl Swanepoel, Convenor Of The ANC Progressive Business Forum: South Africa - India Business Seminar And B2B: Sheraton Hotel New Delhi: 20 November 2015

Good morning ladies & gentlemen,

First of all, from my side I would also like to welcome you all to this morning's business seminar and B2B session. I would like to thank you all for taking time out to be with us.

I also want to thank the Confederation of Indian Industry for again partnering with us in order to make this event possible. We appreciate your efforts and are pleased with the relationship that has developed between our two organisations. I would like to thank Dr Sunil Dagar and EB Rajesh from the Confederation of Indian Industry for joining us this morning. We look forward to your input.

Then I would also like to extend our appreciation to the South African Embassy here in New Delhi for their advice, guidance and assistance. In particular we wish to thank the Mr Mogale, Minister Plenipotentiary. We look forward to your contribution.

As Progressive Business Forum we are pleased to be here in India again. This is our fourth visit to India. 5 years ago we brought a delegation to Chennai, and soon thereafter we also attended the renewable energy exhibition there. Two years ago we sent a delegation to Mumbai and Chennai. And this year we are in New Delhi.

Ladies and gentlemen,

South Africa and India have a long shared history. It was about 160 years ago that the first indentured Indian labourers landed in South Africa. Since those first Indians arrived from Madras (Chennai today) the community has grown to the largest Indian community outside of India. And of course let's not forget the icon, Mahatma Gandhi, who fought for justice both in South Africa and in Indian.

India was also a key ally in the struggle against apartheid - they contributed enormously in the international arena against apartheid in support of freedom and justice in South Africa.

And the many in the Indian community in South Africa - whose forefathers originated from India - loyally stood by the anti-apartheid cause and today they make an enormous contribution to and play an important role our economy, and our political, social, cultural and civil society arenas.

So I think it is safe to declare that our political and people's to people relationship is indeed in good shape and is growing from strength to strength.

On the economic front we have also seen progress.

Today (using 2014 data) our bilateral trade stands at R90, 2 billion. South Africa imports some R49, 3 billion worth of products from India and we export some R40, 9 billion to India. We import mainly motor vehicles, pharmaceuticals, mechanical appliances and machinery. Out exports to India comprise mainly mineral ore.

Bilateral trade has more than doubled since 2010, when it stood at R42, 8 billion.

So economically speaking we are also moving in the right direction. But let me say, that if we are honest with ourselves, it's from a low base and given our leadership roles in our respective regions, our individual economic strengths and potential - we have only started to scratch the surface. There is much more opportunity which lays waiting and which is not being properly exploited.

And that is what makes events such as todays important, so that we can make contacts, explore business opportunities and build on the foundations that have been laid by our respective governments and pioneering enterprises.

Our relationship in BRICS we should also use to harness that potential; and we should use its structures to improve the 'doing business environment'.

There is much we can do between our two countries to further develop the relationship into a truly mutually-beneficial one that that creates win-win solutions for both our countries and that addresses the huge poverty the need to create jobs - that challenges both our societies.

We need to address the issues of the trade imbalance, changing the content of trade (manufacturing investment in the place of trade), the beneficiation of raw materials prior to export, the cost effect of transacting in third party currencies, and measures to promote greater integration and easier movement of people and goods, and maximise bilateral preferential agreements to the benefit of manufacturing capacity across broader trade blocs.

South Africa is one of the most sophisticated, diverse and promising emerging markets globally. It is strategically located at the tip of Africa. It is a key investment location, both for the market opportunities that lie within its borders and as a gateway to the rest of the continent.

South Africa is the economic powerhouse of Africa and forms part of BRICS.

It has a rapidly expanding middle-class and has growing spending power.

South Africa has a wealth of natural resources such as coal, platinum, gold, iron ore, manganese, etc.

It has world-class infrastructure, innovation, research and development capabilities and an established manufacturing base.

South Africa has sophisticated, financial, legal and telecommunication sectors.

It is politically and economically stable, with an abundant supply of semi-skilled and unskilled labour.

It compares favourably to other emerging markets when it comes to the cost of doing business.

South Africa is ranked 53rd out of 148 countries in the World Economic Forum's Global Competitiveness Report for 2013/2014.

In this report, South Africa ranked 1st when it came to the regulation of security exchanges.

1st in the legal rights index.
2nd for the availability of financial services.
2nd for financing through the local equity market.
8th for the effectiveness of the anti-monopoly policy.
South Africa is also ranked 10th out of 185 countries for good practice in protecting investors in business.

South Africa's strengths lie in its outstanding performance in the efficacy of corporate boards, protection of minority shareholders' interests, availability of financial services, financing through the local equity market, and the soundness of its banks.

And as I have alluded to, it is the gateway to Africa and a stable environment in which to put down your company's roots, using the economic sophistication of the country as a springboard into the neighbouring regions.

And it is a pretty easy country to do business in: ranked 39th out of 185 countries in the World Bank and International Finance Corporation's Doing Business 2013 Report.

I would now like to talk a little bit on the strategic market access to South Africa and the rest of the continent.

South Africa, as I have indicated earlier, has a population of around 53 million, which in itself is sizeable, but on a global scale, and when comparing it with India where we are today, relatively small I suppose. Bear in mind however, that the African population is almost 1 billion. Now that is a consumer market of note.

It is widely recognised that Africa is the new economic growth spot. It is anticipated that growth will exceed 6% for some time to come. And there will be growth in demand due to a rapidly growing middle class. This at a time that many other parts of the world are still battling to recover from the financial downturn following the financial crisis of 2008. For businesses that are reliant on international trade, Africa cannot be ignored.

South Africa is part of the oldest customs union in the world, which is the Southern African Customs Union, where there is a free exchange of goods and a common external tariff. Member states include South Africa, Botswana, Lesotho, Namibia and Swaziland.

In addition, South Africa is part of the 12 nation Southern African Development Community (SADC); which is a free trade area and which gives free market access for products originating from those states.

Recognising the sophistication of the business infrastructure, the links from South Africa into Africa and quality of life, South Africa it makes business sense to locate your company in South Africa as a springboard into Africa. And this will ensure that the tax system is conducive to multinationals wanting to use South Africa as a financial hub for activities in the rest of Africa.

Regrettably time does not permit me to comprehensively deal with all the potential and detail regarding our economy, nor is it the right forum to do so, but I hope I have given you a sense of my countries attractiveness; and at least got you interested in looking into what it has to offer. Maybe just it is the next spot for you to expand your business.

Hope to see you there.

Thank you.

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