In a statement released on 29 January 2013, the Democratic Alliance (DA) spokesperson on Trade and Industry (dti) Dr Wilmot James indicated that he would be submitting parliamentary questions to the Minister of Trade and Industry, Dr Rob Davies calling for increased staffing in Foreign Economic Offices. In response, the dti has thanked Dr James for his concern and pointed out that on his brief recent visit to Malaysia, he may not have had an opportunity to be adequately briefed on the dti's trade promotion efforts in the South East Asian region.
The selection of Foreign Economic Offices is made based on a prioritisation of those markets with the largest potential for South Africa from an investment and export perspective, and key considerations such as regional integration, South Africa's role in Africa, and important economic groupings such as BRICS.
The dti has a mandate to service new high growth markets as well as those traditional markets which have been and still are important business partners to South Africa, albeit at a lower growth rate, such as the United States of America, Japan, Germany and the United Kingdom. South Africa's inclusion into BRICS lends an added impetus for focus on countries such as Brazil, India, Russia and China. This is due to the untapped potential for collaboration not just from a bilateral trade and investment flow perspective, but from the perspective of African opportunities.
As it stands, 36% of our trade is with traditional partners, (EU and US), 21% Africa 22% BRICS and 21% Asia (excluding China and India). As new trading patterns emerge, we cannot ignore the importance of China and India as key markets in Asia exhibiting impressive annual export growth rates.
South Africa's exports to key developing countries of the South in 2011/12 increased by over 5% of the R6.42 billion export sales facilitated by the dti, 47% was from Africa and the Middle East and 15% from Asia. In terms of an investment pipeline of potential projects of R40.91 billion, an amount of R14.81 billion has been recorded representing 36.2% from developing countries which include China, India, South Korea, Singapore and Russia.
Trade and Investment South Africa (TISA) a division of the dti, has strategic relationships and partnerships with counterpart agencies in these countries such as Malaysian External Trade Development Corporation, and Malaysian Investment Development Authority in Malaysia, Board of Investment in Thailand, Indonesia Investment Coordinating Board, as well as Economic Development Board and International Enterprise in Singapore.
In the past year a number of high level business delegations were facilitated between TISA and counterpart agencies on a reciprocal basis. TISA recently facilitated the establishment of IE Singapore offices in South Africa. The intent of IE Singapore is to support Singapore investment into South Africa and vice versa. In recognition of the need to boost trading in the region, Minister Davies visited Indonesia in October 2012 to revive the Joint Trade Committee (JTC) and as a result of these efforts the JTC will re-convene in South Africa later this year.
Based on the budget provided to the dti it currently manages 29 Foreign Economic Offices abroad. Due to limited resources, it is not possible to be represented in every market, however the dti collaborates closely with Department of International Relations and Cooperation offices to provide support on economic matters where the budget does not allow for full-time dti representation. The rise of the global South is an opportunity that the dti is harnessing and various activities have been embarked on annually in the aforementioned markets.
South East Asian countries are recognised as a model for regional cooperation and integration from which the dti has learnt through years of active engagement with countries such as Malaysia and Singapore. The dti regularly participates in trade exhibitions and missions in these countries such as Defence Services Asia in Malaysia in 2012 and an investment recruitment mission to Singapore in 2011. One of the notable successes of participating at Defence Services Malaysia was with Denel signing a R3.5 billion contract with the Malaysian Government to supply defence equipment.
This year, Outward Selling Missions have been planned for Singapore, Indonesia, Vietnam and Thailand, in order to leverage opportunities in these markets for agro-processing, capital equipment, electro-technical and other sectors. South Africa also engages closely with the economic agencies of these countries to collaborate on mutually beneficial projects.
The dti views South East Asian countries such as Malaysia, Indonesia, Singapore and Thailand as integral to our market diversification strategy, and as such there is active engagement with these countries on both export and investment related programmes. Various new offices have been identified for economic representation, and the dti is in the process off securing funding to enlarge its global footprint.
Issued by: Department of Trade and Industry