Address by Deputy Minister Aziz Pahad
to the Africa - Asia Society, 02 October 2000
Your Excellencies, members of the Diplomatic Corps,
President Mbeki at the recent historical UN Millennium
Summit said : "The poor of the world stand at the
gates of the comfortable mansions occupied by every
King and Queen, President, Prime Minister and Minister
privileged to attend this unique meeting. The question
these billions ask is what are you doing
to end the deliberate and savage violence against us
that, everyday, sentences many of us to a degrading
and unnecessary death!
The fundamental challenge that faces this Millennium
Summit is that, credibly, we must demonstrate the will
to end poverty and underdevelopment!
We are very encouraged by the The Millennium Summit
Declaration which stated:
"The central challenge we face today is to ensure
that globalisation becomes a positive force for all
the worlds people. While globalisation offers great
opportunities, at present its benefits are very unevenly
shared, while its costs are unevenly distributed. We
realise that the developing countries and countries
with economies in transition face special difficulties
in responding to this central challenge.
Thus only through broad and sustained efforts to create
a shared future, based on our common humanity in all
its diversity, can globalisation be made fully inclusive
South-South relations, and SA and African relations
specifically with the Asian continent, is a foundation
which will ensure that globalisation is fully inclusive
and equitable. Therefore, it gives me great please to
be here today, to exchange ideas on the importance of
African-Asian relations, and in this context, share
with you some thoughts on my recent visit to Singapore,
Thailand and Vietnam.
Our host, the African Asian Society plays an important
role in stimulating interest in Asian affairs in South
Africa. It is important that Africans & Asians should
breach the knowledge divide and open the curtain of
ignorance that unfortunately still exists on many issues
relating to our two regions.
I recently visited Singapore, Thailand and Vietnam.
The main aim of my visit was to consolidate and strengthen
our bilateral political and economic relations and to
open the curtain of ignorance. We also explored new
opportunities for South Africa to establish relations
of substance with these three countries in areas such
as interaction at multilateral fora, the utilisation
of business and investment opportunities and the development
of SMMEs. Furthermore to look at the similarities
and complimentaries of ASEAN and SADC.
It was also an opportunity for me to participate in
our Asian and Middle East Heads of Mission meeting which
was held in Singapore.
I was surprised that our invitation to Chambers of
Commerce, SACOB, AHI, NAFCOC and others for business
representatives to accompany our delegation rendered
Is this another manifestation of the curtain of ignorance
that exists in South Africa about the potential of economic
relations with Asia?
Concretely, why is Asia, important to South Africa
and Africa? Asia affords us excellent opportunities
to significantly expand our economic relations, tourism,
science and technology co-operation (including technological
transfers), research co-operation and exchange of expertise.
According to the 1999 Annual report of the World Bank.
Reputed for its fast growth, sound management, income
equality, it is now recovering from the worst economic
collapse in modern times. Current account balances,
dangerously in deficit in 1997 have swung by more than
100 billion dollars into large surpluses. Region enjoy
more stable exchange rates and interest rates have fallen
to pre-crisis levels.
However, recovery remains uneven, but profound changes
are taking place. East Asia is on its way to becoming
the fastest growing region among developing countries
GDP grew at an estimated 5.2% in 1998. This was slightly
below the 1991-1997 average of 5.7%, but faster than
in other regions. South Asian economies were largely
insulated from the immediate fallout of the East Asian
Slower growth was a result of a slackening of export
markets, loss of momentum in policy reforms, political
instability, the centurys worst floods in Bangladesh,
the fall in tourism to Sri Lanka and other areas and
G-8 economic sanctions against India and Pakistan.
The region contains a little more than 20% of the worlds
population, it is a home to 40% of the wolds poor.
The World Bank identifies some reasons :
under investment in human capital
the region is the least integrated in the world economy
: it accounts for only 1% of world trade and receives
just 3.6% of net private long term capital flows to
civil conflicts inter alia in Afghanistan, Sri Lanka,
Nepal and Kashmir
These are some of the same problems inflicting sub-sharan
africa together we can begin to tackle these problems.
South Asian countries are taking major steps to deal
with their problems and analysts believe that there
will be a "take off" in many of these countries.
South Africans must position themselves to take advantage
of the opportunities
Our bilateral trade with the ten member countries making
up the Association of Southeast Asian Nation (ASEAN)
in 1999 amounted to more that R10,4 billion Rand. South
Africa exported goods worth R4,2 billion and imported
goods to the value of R6,2 billion. Statistics for the
first six months of this year indicate that the trend
towards increased trade is being sustained.
The region has a potential market of almost 500 million
people which recorded the strongest economic growth
patterns in the pre-crisis era. Although the Asian Economic
and Financial Crisis devastated many economies, the
member countries of ASEAN are all in various stages
of economic recovery.
Reputed for its fast growth, sound management and income
equity, the region is now emerging from its worst economic
collapse in modern times a collapse that pushed
millions back to the brink of poverty and decimated
the savings of a whole generation of new middle-class
citizens. At the recent ASEAN Summit meeting in Bangkok
in July, the ASEAN Foreign Ministers noted that ASEANs
economy grew by 4,6 percent in 1999 and is projected
to grow by between 4,5 and 5 percent this year. This
is impressive given South Africas own modest economic
growth forecasts for this year.
Economic recovery and regeneration brings renewed growth
and the possibility to utilise new opportunities to
boost our exports to the region and attract new investments
from Southeast Asia.
In order to sustain business and investor confidence,
the ASEAN leaders in December 1998 agreed to further
accelerate the implementation of the ASEAN Free Trade
Area (AFTA). The six original members of the ASEAN (Brunei
Darussalam, Indonesia, Malaysia, Philippines, Singapore
and Thailand) will advance the implementation of AFTA
by one year from 2003 to 2002. This decision was made
in the midst of the economic crisis and underscores
ASEANs commitment to continue regional economic
liberalisation and integration.
Equally, the member countries of SADC have created
strong regional institutions which are aimed at making
regional trade easier, cheaper and more tariff-free.
A key development took place on 1 September 2000 : The
implementation of the SADC Trade Protocol, which will
free up the SADC region and make doing business in the
region much easier. There is much work still to be done
in implementing the protocol, but September 1 marks
an important stage in the realisation of a region-wide
market. Intra-regional trade is still relatively underdeveloped,
currently standing at 10 percent of total exports (as
compared to 70 percent of APEC, 55 percent of the EU,
and 52 percent for NAFTA). The SADC region is developing
into a substantial regional economic entity and this
offers great trading potential and long-term economic
partnership for ASEAN members.
In reading the documentation emanating from the recent
ASEAN meetings in Bangkok, I was also struck by both
the political and economic similarities with SADCs
approach. We thus find a comforting congruence in our
Our common challenge is to mobilise all the forces
in the South and in the North, to ensure that the developed
countries, take certain concrete measures, interalia;
while accepting that the solution of the debt problem
is not a magic wand for the solutions of underdevelopment
and poverty, for HIPC countries to have any possibility
of tackling their problems of underdevelopment,
the debts of the highly indebted poor countries must
There must be substantial increases in foreign direct
investments in the South. If after the Second World
War millions of dollars poured into Europe through the
Marshall Aid Plan, because of the "spectre of communism",
why is it not possible for us to mobilise the same amount
of resources to take countries of the South out of the
straits it is in. Our objective is a special program
for the African Renaissance.
The reduction of overseas development assistance must
be halted. It is unacceptable that as the developed
countries get richer they cut their development assistance
rather than increase it.
There must be greater market access for the products
of the South, including agricultural products.
Non-tariff restrictions, which all developed countries
without exception impose must be tackled
We need to mobilise against the developed countries,
policies of agricultural subsidies, which is helping
to sustain their agricultural sector while keeping the
prices at an artificially low level
There must be a new transparent financial architecture
The Bretton woods Institutions must be transformed
The "technological devide" must be transformed
into the "digital opportunity". Therefore
we must ensure that Africa receives relevant and affordable
We have seen a number of important visits to South
Africa and from South Africa to the Southeast Asian
Region this year. South Africa received President Wahid
of Indonesia for a visit in April, we also received
Mr Xanana Gusmao from East Timor. The Indonesian Minister
of Trade and Industry also visit South Africa for bilateral
consultations with Minister Erwin. In addition, the
Deputy Trade Minister of Vietnam accompanied by officials
and a business delegation visited South Africa in March
to sign a bilateral trade agreement.
On instruction from our host let me deal specifically
with my recent visit.
Singapore has been an active economic partner and investor
in South Africa and statistics re economic relations
has submitted a proposal on developing South Africa
as a hub between Southeast Asia and Latin America and
this proposal is currently being given renewed attention.
As a country with few natural resources, it has developed
its human resources to a level where it is recognised
world-wide as an important exporter of high tech goods
and services. Its port, airport and national air carrier
are also examples of well-managed entities.
Singapores senior parliamentary secretary to
the ministry of trade and industry, Guan Seng Tang,
who is leading a delegation from the Singapore Trade
Development Board, the Singapore Chinese Chamber of
Commerce of Commerce and Industry and businessmen said
the lack of a co-ordinated system enabling foreign investors
quickly to identify potential partners to act is a stumbling
block to foreign investment in countries such as SA.
Tang said there was a need for regular trade missions
between SA and Singapore. While there had been several
missions to SA, Singapore has not seen as many SA missions
in that country, except for representations of SA Companies
at the Singapore trade fairs.
Singapore was mainly importing petroleum products,
vegetables, textiles, dried nuts and frozen pork from
SA. "There is more we can import from SA and that
is why we have a delegation in the country".
SA buys telecommunications, information technology
equipment and other products from Singapore. Tang said
Singapores shipping line the Pacific International
Liner has launched services between Singapore
and Durban. There are intentions of extending the service
to Cape Town.
Thailand has taken over the chair of the UN Conference
on Trade and Development (UNCTAD) from South Africa
in April this year and in 1999 became South Africas
largest trading partner in ASEAN. Thailand is South
Africas 23rd biggest trading partner at present.
An overall long-standing economic relationship exists
and this stable country provides South Africa with many
opportunities. Thailand is also a source of tourists
to South Africa. Bangkok is the regional hub for SAA
and Thailand is a popular tourist destination for many
The decision of the Government of Vietnam to open an
Embassy in South Africa, which followed the placement
of a Trade Counsellor in SA during 1999 and the signing
of a bilateral trade agreement this year, will further
enhance bilateral political and economic interaction.
Vietnam currently chairs the ASEAN Ministers Standing
Committee and the country is making the transition from
a state controlled economy to a free-market enterprise
system. It is following the Chinese process which if,
as successful as in the PRC, will afford South African
enterprises the opportunities which were not available
when China opened up. South African involvement and
investment at this early stage could be profitable.
The bilateral trade agreement with Vietnam which was
signed during March 2000 with the visit of the Deputy
Minister of Trade of Vietnam to South Africa, will strengthen
bilateral economic ties. South African exports to Vietnam
in 1999 amounted to R25,7 million. During the first
five months of 2000, South African exports to Vietnam
increased by 48 percent, compared to same period in
1999. Vietnams exports to South Africa in 1999
amounted to R101,5 million. During the first five months
of 2000, Vietnams exports to South Africa increased
by 53 percent, compared to same period in 1999. Vietnam
currently enjoys a substantial trade surplus.
Vietnam requires investment to upgrade and modernise
its infrastructure especially in sea, road, railway
and aviation transport. In the shipping industry, Vietnam
has the capacity to build ports but lacks the capacity
in seaport drainage, maintenance and repairs. South
African companies were encouraged to invest and become
actively involved in Vietnams transport industry.
It was also interesting how often Vietnamese interlocutors
stressed and acknowledged the need for ongoing administrative
and financial reforms to provide for an easier business
Although Vietnam is not yet a member of the World Trade
Organisation (WTO), its role as a major regional player
is unquestioned. From a business perspective, Vietnam
offers great business and investment opportunities which
should be exploited in terms of a highly literate population
(second after Singapore), abundant labour resources,
a potentially large market of more than 70 million people,
accessibility to regional markets, political stability
and a variety of untapped resources.
Addressing business representatives, members of local
Chambers of Commerce, Boards of Trade and Investment
and Government officials, I stressed that Asia and South
Africans need to know more about each others countries,
given the fact that diplomatic ties between the two
countries were relatively new. I also encouraged business
representatives to visit South Africa in order to gain
first-had experience of the South African business culture
and emphasised that South Africa was not only a producer
of raw materials, but also possessed world-class technological
In doing business with Asia, it was forcibly brought
home to me by my interaction with expatriate South Africans
and other business persons of the importance of the
personal approach in dealing with persons from these
three countries in particular. One cannot just rush
in and do cold business. An example was given of a South
African exhibitor who could not understand why an Asian
businessman asked him to lunch every day. When asked
whether the Asian had taken his brochures and asked
about the product, he answered "yes, on the first
day". The point that the South African entrepreneur
failed to understand was that his product had passed
muster. What was now required was to get to know the
In the 3 countries, I visited industries, such as food
processing, tourism, infrastructure development, information
technology, jewelry manufacturing and transfer of technology,
mining were identified as important areas where cooperation
could lead to mutual economic benefits. This will be
further explored in the next few weeks.
30 Years ago much of Asia was caught up in an endless
cycle of conflict, underdevelopment and abject poverty.
Guerrilla wars, ethnic tensions, super power rivalries,
imperialist aggression against Vietnam, Cambodia Laos
was the order of the day.
Indeed much of the characterisation of Africa, I previously
described could be found in much of Asia.
How did some Asian countries achieve their "miracle"?
Analysts have identified:
Macro economic stability
Investment in people
Creation of institutions and policies
Dramatic increase in domestic savings, matched by increased
Peace and stability
These are the same challenges Africa faces today.
What are the lessons for Africa? Specifically what
are we doing to tap Asias experience, expertise
In conclusion, I want to emphasise that we want to
open doors and assist South African business to develop
ties with these new markets. Together with the Department
of Trade and Industry, we are there to serve and promote
South African business because, economic growth and
the creation of jobs in South Africa is an important
aspect of our foreign policy objectives.
Together, in genuine partnership, we can make South
Africa and the continent of Africa a winning team.