Hanekom on BRICS: The African dream, brick by brick

In his State of the nation address on the 14th of this month, His Excellency, Mr Jacob Zuma confirmed and I quote:

Our vision of a better Africa in a better world will receive great impetus when we host the 5th BRICS summit next month in Durban. We are inspired by the exponential growth of bilateral relations, diplomatically and economically, between South Africa and other BRICS countries”. End quote

Our country is at the advanced stage of preparations to host this important BRICS Summit. The Summit will take place from 26th -27th March 2013 for the first time on the African soil. Because of the role played by the Province of Gauteng in the continental economy, it is even more appropriate that we meet here today in the “City of gold”, a city that is regarded as the economic hub of the country and a gateway to the African continent.

Brazil, Russia, India, China and South Africa (BRICS) is a partnership of emerging economies of the Global South.

The theme of this upcoming Summit is “BRICS and Africa: Partnership for Development, Integration and Industrialization”. This theme is in line with our foreign policy objective of strengthening the African agenda and this is one of our critical agenda in this membership of BRICS.

South Africa’s membership of this group of emerging markets provided strong mortar to the unfinished project of the Brazil, Russia, India and China and therefore created the strong BRICS. In addition to the above-mentioned objective of belonging to BRICS, we joined these emerging powers in order to:

·         advance our national interest;

·         promote our regional integration programme; and

·          partner with key players of the South on issues of global governance and its reform.

The BRICS grouping accounts for 43% of the global population, which is more than a quarter of the land in the world. This makes them an incredibly powerful economic force that is taking the world by storm. Their combined nominal gross domestic product (GDP) is estimated at US$13,7 trillion and between 20% and 25% of global GDP, as well as combined foreign reserves estimated at US$4 trillion. As a result, BRICS accounted for approximately 11% of global annual Foreign Direct Investment (FDI) flows in 2012 (US$465 billion) and 17% of world trade.

Our BRICS membership can go a long way in enhancing the progress that Gauteng has so far made in terms of economic development and various opportunities can be developed to maximise trade and investment.

South Africa is a leading country in comparison to the rest of the world with regard to the abundance of mineral resources. These minerals include gold, manganese, diamonds, coal and many more. They account for a significant proportion of world production and reserves and therefore, making Gauteng one of the key role players in the mining industry around the globe. Our partnership with BRIC countries enables us to access markets for our mineral resources.

In terms of investment, we already have companies from the BRIC countries investing in the mining sector mostly in this Province. We have Russian companies such as the Renova Group that have invested in the mining sectors extracting minerals, among others, manganese. This Russian company has established a Branch in Sandton called the United Manganese Kalahari (Pty) Ltd. This company currently owns 49% of shares and contributes positively towards skills development and job creation and foreign exchange earnings within the Province.

There is no doubt that the mining sector is a linchpin to our country’s socio-economic conditions. In 2010 the total expenditure in this sector was R441 billion, of which R409 billion was spent locally. Such incredible profits will encourage confidence for more investments from companies from the BRIC partners.

According to the Chamber of Mines the mining industry in Gauteng creates one million jobs, 500 000 directly and 500 000 indirectly. It accounts for R78 million spent in wages and salaries of employees. This directly contributes toward poverty alleviation for the Province.

There are still many opportunities for the BRICS companies to explore and invest in mining sectors such as, gold, platinum and coal among others. Such opportunities will open doors toward investment in the junior and small scale mining sector. This type of mining will contribute towards community upliftment, job creation and poverty alleviation in communities.

The mining industry has turned the Gauteng province into one of the “hot spots” for businesses and investments. It has opened doors for international companies particularly countries that formulate our BRICS partnership. Trade and Investment opportunities would significantly increase as a result of our membership and in this regard a number of already existing investments such the following would increase:

·         Tata Motors from India and Tata Africa made a joint venture by opening a plant in Rosslyn; and

·         BMW South Africa’s Rosslyn plant is expected to make exports in China.

As we speak, a Russian company has awarded South Africa a support contract to supply South African built Hilux bakkies to Russia’s markets. This will assist us to enhance production capacity of our country. In improving investment prospects in Gauteng, Toyota has announced an investment of R363 million in construction and development of a warehouse in Ekhurhuleni.

This project is expected to fully operate in 2015 and will service both local and International Toyota markets. This presents an important opportunity for South Africa to contribute extensively on 57 markets in both African and European countries, Russia being one of them. This will also assist us as Government to create more jobs in a quest of alleviating poverty.

China continues to add value in Gauteng transport infrastructure system. This is indicated by a partnership with the State Industrial Agency, the Industrial Development Cooperation and Beijing Automobile Works (BAW) through setting up a taxi assembly plant in Gauteng. This presents us with an opportunity to minimise imports and maximise an ideal of manufacturing within the country. This will certainly advance our economic development, integration and industrialisation.

This Taxi Assembly Plant was launched in January this year in Springs. This plant will add value towards job creation in the province through an estimation of 470 new jobs in local community. This plant will also enhance production capacity as well as contribute towards skills development and transfer between the two countries.

Companies such as Beijing Automobile Works certainly provide confidence in other BRIC counterparts to maximise investments opportunities in our Province. The BRICS partnership will add impetus towards infrastructure, exports of manufactured goods and industrial capacity of the continent. This will ultimately have a significant impact towards sustainable development of South Africa and the rest of the continent.

The Gauteng province also boasts a very rich history which has resulted in many historical monuments and tourist destinations. Johannesburg is the second most visited city in Africa, which makes tourism a significant economic contributor in the province.

In Soweto, Vilakazi Street attracts tourist across the world with its history of producing two Nobel peace prize winners Desmond Tutu and Nelson Mandela. The township also has Monuments such as the Hector Peterson memorial and the Nelson Mandela house. Amongst many other key areas of tourist interest we have Apartheid museum, The African museum, Union Buildings and the Cradle of Human Kind. These key areas are essential as they uphold our province on map.

The Province also has tourist destinations such as the Pretoria zoo, which is considered one of the ten best zoo’s in the world and the Krugersdorp Game reserve.

Based on the Province as a tourist attraction, a great number of tourists across the globe grace our shores. It brings about more opportunities for communities to develop projects such has hand crafts, arts, cultural pieces and many more. It also promotes entrepreneurship close to these tourist attractions, which encourage community development. In this regard, BRICS partnership provides impetus to build sustainable tourism, which will benefit the Province of Gauteng.

The FIFA world cup alone generated an amount of 309,554 tourists. Of these tourists, Brazil and China were amongst the highest countries that had tourists in the country during the month of June and an estimated amount of R3.64 billion was spent locally. Tourism in our Province offers our BRIC countries an opportunity to gain understanding of our culture and heritage. Subsequently this contributes positively in our economy.

Through our collective efforts, we can strive to attain a common goal of enhancing our socio-economic conditions to our people and the rest of the African continent.

This is an edited version of a speech delivered by the Minister of the Department of Science and Technology, D Hanekom – on the occasion of the BRICS road show in Sandton on 23 February 2013

 

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