New ground in the minerals, energy sectors
JOHANNESBURG: Despite the shadow cast by the world global financial crises that has hit South Africa hard, India is continuing to expand its economic ties, said senior Foreign Ministry officials accompanying Vice-President Hamid Ansari for the presidential inauguration ceremony of Jacob Zuma.
“The most significant relationship we have with South Africa. Through South Africa we will be reaching out to the rest of Africa. Indian companies are also using South Africa as the base to extend operations in the continent,” said Secretary (West) in the Ministry of External Affairs Nalin Surie.
Mr. Ansari utilised the visit to consolidate ties with other African countries. He met Presidents of Seychelles, Congo, Gambia, Comoros and Tanzania besides the legendry African leader and former President of Zambia, Kenneth Kaunda.
Apart from the historical context that includes the Mahatma Gandhi factor and the presence of large number of people of Indian origin, the relationship is fuelled by the very active business being conducted by all of us. “There is also sustained cultural interaction,” said High Commissioner Rajiv Bhatia. Two-way investments are estimated at $2.5 to 3 billion covering a large number of sectors. Approximately 40 Indian companies are here including big names such as the Tatas, Mahindra & Mahindra and Ranbaxy.
Two-way trade in 2007-08 was at $6.2 billions and in the first six months of the current financial grew by 11 per cent. But the global meltdown is having its impact here. Indian exports during this period fell by 14 per cent due to contraction of the South African economy. As against growth of four per cent in the last fiscal, it is expected to contract by 0.5 per cent.
Mr. Bhatia said technical and economic cooperation formed a crucial fulcrum of South Africa’s interaction with India. With a mix of first and third world economies, South Africa has made considerable progress in the financial sector and mining but needs help in human resources development. The Indian government has increased the number of slots for South Africa to 110 and this is being supplemented at the corporate level with India Inc. helping South African companies to train people.
The two countries have broken new ground in the minerals and energy sectors with the formation of two working groups on hydrocarbons and coal sectors.
Mr. Bhatia denied there was any fear psychosis prevailing among the Indian diplomats and companies. “It is open knowledge that in some parts of South Africa security is a problem. The government recognises it and is committed to tackling the issue. The flow of tourists from India is going up and Indian companies are steadily getting more involved,” he said. From the South African side, Sam Miller has invested $1billion and Sason, a coal technology major, promises to become one of the biggest investors. Another company, ACSA, is involved in the modernisation of the Mumbai airport.
Asked about the blanking out of South African defence company Denel, Mr. Surie said defence procurement was open and transparent and there was no longer any preferred relationship.
“All companies have to participate in the tendering process. This is what we have been telling some Central European countries. There is no favouritism.”