India has progressed from having almost no trade with South Africa in 1994 to being the country’s sixth- to eighth-largest trading partner today, South African Trade and Industry Minister Dr Rob Davies has highlighted. He was addressing the recent India-South Africa Business Summit, in Sandton, Johannesburg. And bilateral trade continues to grow. He pointed out that, while it totalled R68-billion in 2012, it had risen to R107-billion in 2017. And this trade had been accompanied by investment. “Approximately 130 Indian firms are operating in South Africa in one way or another.” A number of Indian brands are now well established in South Africa, he noted, and South African companies have also invested in India. “So, we have something to build on.
“We need to take that [bilateral] relationship forward a lot further,” he affirmed. “We can do it . . . India is one of the fastest-growing economies in the world . . . South Africa . . . is on a new path . . . We have seen already a new broom . . . We have seen action to reduce uncertainties in policy and practice.” He pointed out that the current economic growth forecasts for South Africa represented the floor growth level, not the ceiling, and that Goldman Sachs had chosen South Africa as the “hot emerging market” for this year. “We are seeking a massive investment drive, [with a target of $100-billion]. That is a stretch target, but it can be achieved.”
“Africa and India have the youngest populations,” emphasised Indian Commerce, Industry and Civil Aviation Minister Suresh Prabhu in his address to the summit. “What we need to do today . . . is to address the expectations of the young people.” He cited the great potential between Africa and India, especially Southern Africa and India, and “particularly” South Africa and India. “We are working for a better world. The huge potential that exists, we’d like to develop together.
“We want to make [trade and investment] for the benefit of either side,” he assured. “We want jobs in India, but not at the expense of jobs in South Africa. We must work together. Africa, and South Africa, are blessed with so many resources . . . Development is what benefits the people in our countries.”
“There are shockwaves in the multilateral trading system,” warned Davies. There was thus a need to strengthen trade relations between developing countries. The planned African Free Trade Area showed that the continent was on the way to creating a large domestic market. Prabhu also cautioned that the global trading system, which had been in place for decades, was now being questioned by some. “Now it is the turn for Africa [and] India to benefit from it.” He expressed India’s support for an open, rules-based, global trading system. “It [will] solve the world’s global problems” by defeating poverty by trade, not aid.
Davies stressed that the reason Indian-South African trade had been so insignificant in 1994 had been India’s steadfast opposition to apartheid. India was the first country to call for sanctions on apartheid South Africa. “India was at the forefront of solidarity for our struggle!”
The summit was also addressed by South African Public Enterprises Minister Pravin Gordhan, who also cautioned that the global situation posed a number of risks. These included a new global financial crisis and damage to the multilateral trade regime, as well as the readiness (or lack of it) of countries for the Fourth Industrial Revolution, including artificial intelligence. The countries of the Brics (Brazil, Russia, India, China and South Africa) alignment could, he observed, mitigate against these.
Also, new ways to grow economies, achieve sustainable development and reduce inequality could emerge. “Clearly, yesterday’s skills are not good enough for tomorrow,” he highlighted. Training the younger generations will be the biggest challenge for both India and South Africa.
“Today, South Africa and India share many common factors,” he pointed out. They were both members of Brics, the G20 group of leading economies, and the World Trade Organisation. But, today, both needed to “raise the bar” in terms of inclusive development and reducing inequality.
“In South Africa, . . . we do indeed have a new dawn,” he affirmed. “That new dawn has created an immense new spirit in the country.” It had increased trust between government, business and citizens. And that trust would be increased if the people experienced the benefits of development, such as the provision of water, power and the creation of jobs.
Turning to his own portfolio, Gordhan referred to South African State-owned Enterprises (SOEs). “SOEs need to move in a very different direction from the era of what we call State Capture in South Africa.” He noted that India also had major SOEs. “There is a lot of room for us to learn from each other [concerning good governance and the turning around of SOEs].”