US Export Council

Walmart’s Massmart takeover sparks US interest in Africa

2013-02-17T12:26:00.000-05:00

NORTH American investors have seen the successful takeover of South African retailer Massmart by US giant Walmart as a signal that investing in Africa is a valuable proposition.

Africa is seen as a major investment frontier because of its young population, untapped resources and economic instability in other regions such as the European Union, African Venture Capital Association CEO Michelle Essomé said in an interview on Friday.

The North American interest in African businesses had only developed recently.

Ms Essomé said this did not mean that investors would be flocking to Africa. "It takes time, but African leaders are starting to communicate better with investors.

"We have noticed express interest from American companies since the Walmart purchase of Massmart."

The South African government had initially expressed reservations about the $2.4bn takeover, saying in 2011 that it would destroy jobs and lead to a decline in local manufacturing and production. But the deal went ahead with conditions.

One of the conditions was that the government and the merging companies should set up a study on how smaller companies could participate in Walmart’s supply chain.

Massmart corporate affairs executive Brian Leroni said he could not comment in detail on how Walmart had influenced Massmart’s performance as it was in a closed period.

But Mr Leroni did say there had been a positive effect. "There are numerous benefits associated with the merger with Walmart, which include benefiting from Walmart expertise as we develop our new retail food supply chain."

Further, Massmart had benefited from adopting Walmart’s supplier planning processes to improve merchandise availability and the local farmer development programme to improve fresh food supply chain efficiency.

Innovative product promotions were another benefit Massmart had enjoyed. An example of this was the ten-week extended price cut promotions that generated in excess of R300m savings for consumer savings.

Ms Essomé said various American companies were interested in developing infrastructure and working in various sectors in Africa, especially in oil and gas. But investors from developed countries still believed there could still be too much state interference in business affairs on the continent.

http://www.bdlive.co.za/world/africa/2013/02/15/walmarts-massmart-takeover-sparks-us-interest-in-africa

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Foresight Africa: Top Priorities for the Continent in 2013

2013-01-17T14:20:00.003-05:00

Africa starts 2013 with hope and optimism. Africa has dropped its mantle as a “doomed continent” and has weathered several global economic crises fairly well. Today, the continent is a land of opportunity both for Africans and international investors. Many now see the region as “emerging Africa” because of the positive changes that have taken place and continue to take place across the continent.

Africa has changed, moving from economic stagnation to above 5 percent GDP growth on average. The continent is now home to some of the fastest growing economies in the world: Ethiopia, Ghana, Mozambique and Tanzania. This growth has helped build a burgeoning middle class, which has created new markets for goods and services. Investors focused on tapping into these new markets in Africa are likely to find it easier to do business there than ever before as African governments are working to reduce transaction costs. In addition to growing consumer markets, African countries have discovered additional natural resources. If managed properly, these resources could help spur further economic growth and development for the region and improve the lives of millions.

Such an optimistic outlook for the continent means that African and global policymakers must get ahead of the challenges and opportunities for an important year of decision-making. Since 2010, the Brookings Africa Growth Initiative (AGI) has asked its scholars to assess the top priorities for Africa in the coming year. This year, AGI experts and colleagues have identified what they consider to be the key issues for 2013 and ways to leverage opportunities so that Africa can continue its “emerging” momentum. The following briefs in the Foresight Africa collection are meant to create a dialogue on what matters in Africa for 2013, and it is our hope that this dialogue will continue through the year.

Download the full 2013 Foresight Africa report »

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South Africa -State cannot build cheaper — Trevor Manuel

2012-06-07T12:33:00.000-04:00

It is a mistake to assume that the state alone is responsible for improving infrastructure and can deliver it more cheaply than the private sector, says Planning Minister Trevor Manuel .

He questioned the controversial decision by the Cabinet last week to veto a deal between Telkomand South Korea’s KT Corporation, which would probably have resulted in lower data prices for consumers.

Deputy President Kgalema Motlanthe on Tuesday praised South Korea for propelling itself into the top-eight richest economies in the world by setting up a knowledge-based economy.

"Even when lucrative offers are on the table we seem not to be able to utilise them," Mr Manuel told a conference yesterday organised by the Bureau for Economic Research.

"We think we as a state can deliver more cheaply than the private sector."

KT was set to buy a 20% stake in Telkom for R3,3bn — a badly needed cash injection for the ailing company — but that would have diluted the government’s 39,8% share in Telkom.

Mr Manuel said capacity was a "fundamental challenge" in implementing the plans to upgrade SA’s infrastructure.

The government aims to spend R845bn over the next three years to improve roads, railways and ports, increase power supply and improve social infrastructure.

"This notion that the state should be responsible for delivery ... is a non-starter. If we want transformation, a lot will emerge from partnerships (with the private sector)," Mr Manuel said.

His comments are the strongest acknowledgement yet by a Cabinet minister that the government lacks capacity to deliver on its infrastructure plans.

Last week, Transnet CEO Brian Molefe said that possible capacity problems were one of the threats to the group’s R300bn investment programme.

Grahame McCaig, MD of construction and engineering group Aveng Grinaker, told the conference he was "shocked" by the dilution of skills when he returned to SA after an 18-year absence.

"It’s not just general management skills but trade skills ... manufacturing and construction productivity are going down.

"We need people who can use their hands ... it’s not just a South African issue, but it needs to be addressed very urgently."

Mr McCaig said more than 80% of his firm’s R34bn turnover in the financial year 2010-11 was generated by private sector projects. Lack of engineering skills in the government and municipalities was responsible for the lack of public sector participation.

A Presidential Infrastructure Co-ordinating Commission study released last month counted 5515 engineers in the public sector.

Mr Manuel said infrastructure should be paid for by its users, although the state had a role to pay in "lengthening the payback period". But the poor should be shielded from this, he added.

He was critical of the idea that high wage settlements would boost demand, saying they would only lead to greater poverty and inequality. Finance Minister Pravin Gordhan has pledged to keep public sector pay rises in check this year, but unions are already threatening action as their demands are not being met.

Global rating agencies have warned that the outcome of the negotiations could affect SA’s investment grade credit rating.

It was "necessary for the state to have the best sovereign rating that it can", Mr Manuel said.

isam@bdfm.co.za

DIFC-based firms boost deposits to $12.8 billion

2012-05-29T04:21:00.003-04:00

Issac John / 29 May 2012

The Dubai International Financial Centre, or DIFC, said on Monday that deposits out of the global financial hub have grown in the past three years at an average annual rate of 39 per cent to reach $12.8 billion at the end of Q1 2012.

Loans and advances of DIFC’s regulated entities rose over the same period at an average annual rate of 40 per cent to reach $14.7 billion.

Assets under management at DIFC-based companies remained steady, and recorded $8.1 billion during the period.

Abdulla Mohammed Al Awar, chief executive officer of the DIFC Authority said the numbers were testament to the successful growth in the breadth and depth of financial activity within DIFC due to the diverse services provided by the regulated firms. “As one of the global financial hubs, it is natural that we are observing an influx of new companies from around the world, especially banking and financial services firms, who are attracted by the vast opportunities the region offers.”

“Our effort toward enhancing DIFC’s legal and regulatory framework as well as its physical infrastructure positions DIFC as an ideal platform for regional and international growth,” said Al Awar.

He said DIFC continued to grow steadily as one of the world’s established financial centres. “As of March 2012, the DIFC community comprised 861 active registered companies (322 regulated and 539 non-regulated companies); already two per cent up on 2011 numbers.” Dr Nasser Saidi, Chief Economist at the DIFC, said the hub is the only international financial centre that collects and publishes financial activity data of its registered entities.

“What the data clearly shows is that DIFC entities have witnessed continued real growth over the past three years, despite the international financial crisis and regional events. “Deposits and credit growth rates of DIFC-based companies have also been substantially higher compared to those of the GCC area banks. We expect higher growth to continue as DIFC-based companies expand their activities further.”

The DIFC is home for 21 of the world’s top 30 global banks, 8 of the top global money managers, 6 of the 10 largest insurers and six of the top 10 law firms in the world.

The DIFC statistics are collected from different sources.

The DIFC Economics team and the Dubai Financial Services Authority provided data and estimates. Other information, including data on deposits, credits, and assets under management outside the DIFC, were collected from monetary and statistical authorities’ websites and other databases.

issacjohn@khaleejtimes.com

Al Maliki holding Iraq to ransom

2012-05-29T04:16:00.000-04:00

Democracy is not served by political instability and pushing for a military showdown with Kurds

The roots of Iraq’s present political conflict lie in the 2010 elections. But in reality, the problem started since the establishment of the country in the 1920s. Almost a century has passed, but these conflicts have not been resolved.

The problems between different Iraqi blocs are numerous and varied. However, the most dangerous of them is the conflict between the government in Baghdad and the Iraqi Kurdistan government. Some say that it is a conflict between Kurds and Arabs though Iraqi governments prior to 2003 saw it as a form of Kurdish mutiny.

Kurds consider the conflict as a struggle for gaining their legitimate rights in their land.

Iraqi governments, in both the monarchy and the republican eras, tried to resolve the conflict through force. The results were devastating as the clashes depleted Iraq’s human and financial wealth. The struggle also obstructed Iraq’s development plans and contributed to undermining its national security, leading to interference from neighbouring countries.

Iraq’s political atmosphere was never devoid of dangerous tensions, but after the downfall of the Baathist regime, it has entered a new phase that is threatening to destroy the foundations of democracy.

Prime Minister Nouri Al Maliki is at the centre of these developments, and has been targeted by many. He has clashed with fugitive vice-president Tareq Al Hashemi, deputy prime minister Saleh Al Mutlaq, chairman of Al Iraqiya bloc Eyad Allawi, president of the Kurdish province Masoud Barzani and Sadrist leader Muqtada Al Sadr. Al Maliki is probably having problems with those in his own Al Dawa party.

Political survival

It is difficult to see Al Maliki emerging unscathed from these conflicts as all these forces are closing in on him in a joint attempt to get him out of office.

Playing on the interests of the US and those of regional powers, which served him well in recent years, will not ensure Al Maliki’s political survival, as finding a substitute is not very difficult.

The opposition has lately become more influential and has begun to take the initiative.

It recently held a meeting that was also attended by Al Sadr. A memo was sent by those who met in Arbil to the Iraqi National Alliance (INA), giving them two weeks to reply and threatening a no-confidence motion if they failed to comply. The two weeks went by, and another meeting was held in Najaf. The INA was given another week to choose a new prime minister.

Members of parliament threatening to go ahead with the no-confidence motion against Al Maliki constitute a majority in the house. However, whether or not they actually go ahead with this decision is not guaranteed. Each lawmaker has a number of issues that decide his or her position, and some of those are personal and related to re-election. Other factors that may influence the decision may relate to the power vacuum Al Maliki’s dismissal may create.

The INA expressed its backing for Al Maliki as a reply to the Arbil ultimatum. It also pointed out that it does not mind instituting reforms if Al Maliki can continue as prime minister.

In the midst of all this, the prime minister decided to turn the tables and transform the struggle into a conflict with the Kurds.

Al Maliki, accompanied by ministers from the federal government arrived in Kirkuk on May 8 to hold a cabinet meeting. His visit was preceded by military forces, who had orders to drive away any militia.

The struggle has become extremely tense.

Kirkuk drama

Al Maliki chose Kirkuk as a battleground so as to announce from an Iraqi city that includes every component of Iraq’s ethnic and sectarian groups that the demand of the Kurdish province to include Kirkuk is unacceptable to his government. And that the Constitution’s item 140 — relating to Kirkuk determining its future — is not applicable.

Thus, Al Maliki decided that the differences, and the mechanisms to solve them, will not be settled through the constitution. He was also very clear about freezing it until the end of his tenure. All this will serve Al Maliki’s opponents, who accuse him of being autocratic.

Al Maliki’s shortsightedness is dangerous as it contravenes the strategic alliance between the State of Law and the INA.

Al Maliki is pushing towards a military a showdown with the Kurds at a time when they are stronger than ever before — locally, regionally and internationally.

He is betting that his dangerous step will break the opposition alliance against him, as he thinks he will be seen as fighting a national battle. He is also betting on other smaller alliances with those who have already walked out on Al Iraqiya.

Al Maliki’s statements about freezing the constitution raise concerns about his seriousness regarding democracy in Iraq. Talking about freezing the constitution is akin to a coup against the political process in Iraq. It is like declaring a state of emergency, wherein the government does what it pleases.

Dr Mohammad Akef Jamal is an Iraqi writer based in Dubai.

Opportunity still in the air across the GCC

2012-05-29T04:11:00.001-04:00

Abu Dhabi accounted for 70% of the $20b in contracts awarded between first quarter and third quarter of 2011

Dubai: Investment opportunities worth more than $500 billion (Dh1.83 trillion) in energy, transportation, education, health care and other critical sectors of economic development continue to beckon for contractors in the Gulf, industry experts said.

"GCC countries have significant trade surpluses which they are planning to invest in order to diversify their economies' dependence on oil revenues and also to develop their countries and satisfy the demands of their people following the Arab Spring. The region certainly is expected to continue to offer a lot of opportunity for contractors," said Rizwan Shah, managing director, Corporate Finance, and leader of Deloitte's Capital Projects Advisory services practice for the Middle East.

Despite grappling with challenges and delivery issues related to current projects, major opportunities remain prevalent in Saudi Arabia, Qatar, Abu Dhabi and Iraq this year.

Shah said the UAE is ranked the second largest market with investments worth $9 billion allocated to buildings, infrastructure and energy in the first quarter.

Abu Dhabi in particular accounted for 70 per cent of the $20 billion in contracts awarded between first and third quarters of 2011.

Driving this growth, with over $12 billion in awarded contracts, the emirate is placing "particular attention on transport, utilities and social infrastructure," Shah said.

Of the biggest investments currently underway is Qatar's plan to spend $100 billion in preparation to host the 2022 World Cup and Saudi Arabia's capital spend programme approaching $400 billion over the next ten years.

Laurie Voyer, CEO and managing director of Al Habtoor Leighton LLC, said: "The market is probably best described as challenging. The challenges we're facing now, as described above, will remain for the foreseeable future."

Area of growth

However, he said significant opportunities still exist — particularly in Qatar, Saudi Arabia and Iraq — and for those who are able to demonstrate that they can deliver to an international standard, the region can still be an area of growth."

Backed by vast oil-based reserves and government stimulus packages, Deloitte's latest report said that the economic prospects of the GCC region have remained positive despite ongoing political unrest in the wider Middle East.

"The oil and gas exporting countries, such as Saudi Arabia, Qatar and Abu Dhabi, have an additional objective which is the need to diversify their economies away from the traditional petrochemical and hydrocarbon industries.

"This is also driving infrastructure spending in these countries.

"These countries are now looking at how to take advantage of existing strengths to develop upstream industries — and the focus has shifted to construction," Shah said.

Construction contracts alone worth $40 billion were awarded to contractors in the first quarter of 2011, 47 per cent of which were in the energy sector.

"The region certainly is expected to continue to offer a lot of opportunity for contractors," said Cynthia Corby, audit partner Deloitte Middle East and leader of the construction industry for the UAE.

The report indicates that there are vast opportunities across the Middle East, with longer term infrastructure investment plans for the region estimated to be in excess of $1 trillion.

In terms of projects in the pipeline across the Middle East, the majority are social (36 per cent); 29 per cent power-related; 13 per cent in transport and 13 per cent in oil and gas.

Budget value of contacts to be awarded in Saudi Arabia in 2011 onwards is set to increase to $35 billion, as compared to $25 billion in 2006.

The government is undertaking grand investments, with plans nearing $400 billion in five years, demonstrating an increasing trend of projects that will need to be awarded in the coming years ahead. The construction market is therefore expected to be one of the most buoyant in the world.

Qatar holds an eight per cent share of the value of the regional projects. Projects planned to be underway in the future are valued at approximately $230 billion

South Africa - State fiscal watchdog warns on spend plans

2012-05-29T03:59:00.001-04:00

The Finance and Fiscal Commission has cast doubt on the effectiveness of infrastructure spending to create jobs and redress poverty unless it is supplemented by other critical policy interventions.

The government and state-owned companies plan to spend about R845bn on infrastructure over the next three years, which they expect will contribute significantly to meeting the government job-creation target of 5-million jobs in 10 years. This spending is also key to the government’s New Growth Path policy and Industrial Policy Action Plan.

The commission, an independent body established by the constitution to make recommendations on fiscal policy and to assess the effect of government policies, urged the adoption of job-creation policies such as giving incentives to companies that create employment, enhancing productivity and promoting the informal sector.

The commission also argued in its 2013-14 submission for the division of revenue, tabled in Parliament on Friday, that the failure of the government, business and trade unions to reach a social compact on job creation needed "urgent redress".

Acting chairman and CEO Bongani Khumalo stressed at a media briefing yesterday that the report was intended to promote innovative initiatives to enhance economic development. The commission noted that "the negligible impact on growth of interventions such as an expansive infrastructure strategy or expanded public expenditures has important implications for fiscal policy".

The commission’s researchers examined several studies on the effect of infrastructure spending on projects such as roads, sanitation, electrification and dams on economies in sub-Saharan Africa. They found that while some were beneficial for poverty reduction, others actually caused poverty.

"At the very least, the finding suggests government interventions that emphasise infrastructure alone will make little impression on employment. Therefore, such interventions are not an adequate basis for introducing new economic sectors or raising the capabilities of existing economic sectors," the report read.

"Rather than replacing ageing infrastructure, new infrastructure should be used as a catalyst and long-term solution for economic development and job creation.

"The analysis shows clearly that fiscal policy (infrastructure and current expenditures) alone is not going to solve job-creation problems unless complemented by other interventions.

"New investments are required that allow shifts towards jobs and knowledge-intensive production and provision of government services. In all cases fiscal policy needs to be consistent with long-term fiscal objectives and take into account the limits of direct public-sector employment."

Department of Trade and Industry director-general Nimrod Zalk said the department would not disagree with the commission’s assessment that a wide range of interventions was needed to create jobs.

"Public investment will create important opportunities to either create new industries or generate a step change in production and employment in some existing industries. This includes establishment of an industry to supply components into renewable energy generation as well as to build rail rolling stock, both for the South African market and for export," Mr Zalk said yesterday

Investment Solutions chief strategist Chris Hart said yesterday infrastructure spending was "an important component, but not a necessary component" of job creation.

Such spending would not automatically produce spinoffs for economic growth and job creation as commonly assumed. Many examples show ed it had not generated growth, notably in Europe. The critical issue was decent economic leveraging off the spending, Mr Hart said.

"Infrastructure is only one aspect, but the government has pinned its entire strategy on infrastructure and virtually very little else. This one can see by the way they allocate resources," he said.

The commission recommended that companies that excelled in job creation should be rewarded and the Public Investment Corporation should direct its investments into such JSE-listed companies.

ensorl@bdfm.co.za

South Africa set for massive infrastructure drive

2012-05-29T00:25:00.000-04:00

South Africa will spend billions of rands on new infrastructure in the coming years, focusing on rail and road projects, economic links in five regions in the country, new universities and refurbished hospitals, President Jacob Zuma said in his 2012 State of the Nation address.

Addressing Parliament in Cape Town on Thursday evening, Zuma announced that he would convene a presidential infrastructure summit to discuss the implementation of the government's plan with potential investors and social partners.

The government's massive infrastructure plan would be driven and overseen by the Presidential Infrastructure Coordinating Commission which was set up in September last year.

The plan brings together ministers, premiers and mayors of the country's metropolitan areas under the leadership of Zuma and Deputy President Kgalema Motlanthe.

"We will use the project management expertise gained during the 2010 Fifa Soccer World Cup to make this project a success," he said, adding that the commission had identified and developed projects from state-owned enterprises as well as government departments.

"These have been clustered, sequenced and prioritised into a pipeline of strategic integrated projects," he said.

Projects in five regions

The projects in the five regions are:

The development and integration of rail, road and water infrastructure in the Waterberg and Steelpoort in Limpopo.
Improving the movement of goods and economic integration through a Durban-Free State-Gauteng logistics and industrial corridor.
A new south-eastern node that will improve the industrial and agricultural development and export capacity of the Eastern Cape region, and links with the Northern Cape and KwaZulu-Natal.
The expansion in the North West of the roll-out of water, road, rail and electricity infrastructure.
The improvement of infrastructure, including rail, on the West Coast.

In Limpopo, Zuma said the improved infrastructure would help unlock the enormous mineral belt of coal, platinum, palladium, chrome and other minerals, in order to facilitate increased mining as well as stepped-up beneficiation of minerals.

"Using the developments in Limpopo as a base, we will expand rail transport in Mpumalanga, connecting coalfields to power stations," Zuma said.

"This will enable us to decisively shift from road to rail in the transportation of coal, which has caused a deterioration of the roads in Mpumalanga."

He said the eastern parts of the North West would also benefit from the greater focus on infrastructure connected to mining and mineral beneficiation.

Durban-Free State-Gauteng corridor

Zuma said the development of the Durban-Free State-Gauteng logistics and industrial corridor would help connect the major economic centres of Gauteng and Durban and Pinetown, and connect these centres with improved export capacity through our sea-ports.

"In this regard, I am pleased to announce the Market Demand Strategy of Transnet, which entails an investment, over the next seven years, of R300-billion rand in capital projects," said Zuma, adding that R200-billion had been allocated to rail projects and the majority of the balance, to projects in the ports.

He said among the list of planned projects, the expansion of the iron ore export channel from 60-million tons per annum to 82-million tons per annum.

"It also includes various improvements to the Durban-Gauteng Rail corridor and the phased development of a new 16-million tons per annum manganese export channel through the Port of Ngqura in Nelson Mandela Bay," he said.

He said the Market Demand Strategy would result in the creation of more jobs in the SA economy, as well as increased localisation and black economic empowerment (BEE).

"It will also position South Africa as a regional trans-shipment hub for Sub-Saharan Africa and deliver on Nepad's regional integration agenda," he said.

He added that the government had also been looking at reducing port charges, as part of reducing the costs of doing business.

"The issue of high port charges was one of those raised sharply by the automotive sector in Port Elizabeth and Uitenhage during my performance monitoring visit to the sector last year," he said.

"In this regard, I am pleased to announce that the Port Regulator and Transnet have agreed to an arrangement which will result in exporters of manufactured goods, receiving a significant decrease in port charges, during the coming year, equal to about R1-billion in total.

Eastern Cape, North West, West Coast

Zuma said the development of the south-eastern node in industrial and agricultural development and export capacity of the Eastern Cape region and expand the province's economic and logistics linkages with the Northern Cape and KwaZulu-Natal.

"In the former Transkei part of the Eastern Cape, we are committed to building a dam using the Umzimvubu River as the source, in order to expand agricultural production," he said.

Added to this, he said the Mthatha revitalisation project, which is a presidential special project, is proceeding very well.

"Work is at an advanced stage to improve water, sanitation, electricity, roads, human settlements, airport development and institutional and governance issues."

Zuma said the expansion infrastructure in the North West would include the upgrading of 10 priority roads.

On the West Coast, the government would focus on expanding the iron-ore rail line between Sishen in Northern Cape and Saldanha Bay in the Western Cape, which he added would create large numbers of jobs in both provinces.

"The iron-ore capacity on the transport-side will increase capacity to 100-million tons per annum," he said, adding that this would help to feed the developing world's demand for iron ore.

Hospitals, universities

The government had also identified infrastructure projects which would help to lay the basis for the National Health Insurance system such as the refurbishment of hospitals and nurses' homes.

Zuma said R300-million had been allocated for the preparatory work towards building new universities in Mpumalanga and Northern Cape.

Another infrastructure project with great potential is South Africa's bid to host the Square Kilometre Array radio telescope in partnership with eight other African countries.

Zuma urged South Africans to support the country's bid, with the winning bid expected to be announced next month.

The country would also champion the North-South Road and Rail Corridor on the continent, which is part of the African Unions's Nepad Presidential Infrastructure Championing initiative.

"The massive investment in infrastructure must leave more than just power stations, rail-lines, dams and roads. It must industrialise the country, generate skills and boost much needed job creation," said Zuma.

Water, renewable energy

Zuma said water infrastructure is also being attended to, with five new water augmentation schemes are on schedule.

Zuma listed these as the Olifants River Water Resource in Steelpoort in Limpopo Province, the Vaal River Eastern Sub-System in Secunda in Mpumalanga, Komati Water Augmentation Scheme in Nkangala in Mpumalanga, the raising of Hazelmere dam in KwaZulu-Natal and the Clan William Dam in Clan William in the Western Cape.

Added to this nine out of the country's 25 dams have been rehabilitated.

He said to boost energy capacity, the government would continue searching for renewable energy sources, especially solar electricity and biofuels as we implement the Green Economy Accord with economic stakeholders.

The government wants to install one million solar geysers by the 2014 financial year, and had so far installed more than 220 000 solar geysers nationwide, said Zuma.

"We have outlined a busy infrastructure implementation programme for now until 2014 and beyond," Zuma said.

"I would like to appeal to all our people to join hands as they always do, as we deal decisively with the triple challenges of unemployment, poverty and inequality. Nobody will do this for us, it is in our hands. And we are all equal to the task."

Funding

Speaking on the night, the leader of the opposition Lindiwe Mazibuko, although welcoming the announcement by Zuma of the infrastructure projects, said it was not clear from where the funding for the infrastructure projects outlined by Zuma would be sourced.

"In fact a quick look actually shows that we are about R300 billion short, so I'm curious to see how that will be dealt with in the budget," said Mazibuko.

Her concern on where the funding would come from for the infrastructure projects was echoed by Cope leader Mosiuoa Lekota, who added that corruption in the procurement system also risked raising the cost of these projects.

Minister of Finance Pravin Gordhan announced that South Africa has the money to spend on the infrastructure projects in the five regions outlined by President Jacob Zuma. "We already know that for the past five or six years that for every three-year period we have had something around R800 billion to R900 billion being spent, largely by our state-owned enterprises (on infrastructure).

"So we've demonstrated the ability to bring resources in which is what will be required to get these projects going," Gordhan told BuaNews, stressing that these key infrastructure projects would be developed over a number of years.

Among other things, the projects would help develop better economic links between outlying areas and the main urban centre and to make it easier for companies to export and do business locally, he said.

"If we get this right it means that many areas of the country will have a heightened level of economic opportunity and there will be all sorts of job opportunities and there will be opportunities for people to manufacture the things that go into the investment in the infrastructure development that has been outlined," he said.

Walmart starts advertising price cuts, business opportunities - South Africa

2011-06-27T01:02:00.000-04:00

Six days after United States giant retailer Walmart completed its acquisition of a controlling stake in Massmart, it started advertising price cuts and new business opportunities for South Africa.

Six days after United States giant retailer Walmart completed its acquisition of a controlling stake in Massmart , it started advertising price cuts and new business opportunities for South Africa.

An eight page colour advertisement in the Sunday Times newspaper was South Africa's first introduction to the Walmart brand.

The advertisement included a letter from "the people" of Massmart and Walmart announcing the merger and price cuts by the group's retailers Game, Dion Wired, Makro and Builders' Warehouse.

Massmart also said it intended creating 15,000 jobs in the next five years.

"While there are other exciting promotional campaigns planned, this offering so soon after the finalisation of the Walmart merger is a clear demonstration of Massmart and Walmart's intent to save people money to live better," Massmart CEO Grant Pattison said in a statement on Sunday.

Earlier, he told the Business Times there were no plans to open Walmart-branded shops as the local brands had "plenty of value", and there were plans to open 40 more of them in the next financial year.

However, these brands would be advertised under Walmart's blue and yellow logo.

Walmart completed a R16.5bn conditional transaction to buy a 51 percent stake in Massmart on Monday, after getting the go-ahead from the Competition Tribunal.

The merger was conditional on the setting up of a R100m supplier development fund, no merger-related retrenchments for two years, and recognition of the SA Commercial Catering and Allied Workers' Union for three years post the merger.

In the statement on Sunday, Pattison said the supplier fund was being created.

Walmart has 55 brands around the world in, among other countries, Canada, Brazil, China, Chile, Japan and Mexico.

Its share of Massmart would be a stake in emerging African markets.

Before the deal was concluded, the South African government and unions voiced concerns that it would lead to job losses and hurt local procurement.

However, the Competition Tribunal found that the conditions to counteract this, which were proposed by Walmart and Massmart, were sufficient and were enforceable.

"Both Massmart and Walmart remain committed to partnering with the South African government as well as all key stakeholders, and we stand by our stated commitment to encourage other international companies to invest in Africa's vibrant economy," Walmart CEO Doug McMillon said in the statement.

http://www.businessday.co.za/articles/Content.aspx?id=146837

US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/

‘Balance African progress, climate change’

2011-06-27T00:39:00.000-04:00

Climate change policy planning and funding of ameliorative efforts for global warming needed to take account of the “development trajectory” of the African continent, Finance Minister Pravin Gordhan told delegates to a climate change forum at the weekend.

Gordhan said he believed that Africa would be emerging as “a key player” in the world economy in the next 30 years.

He was speaking at the Climate Investment Funds (CIF) Partnership Forum, an annual event hosted by the African Development Bank (AfDB) and the World Bank where funding decisions on climate-smart development worldwide are taken.

“What Africa does require is that traditional paradigms of funding and aid need to be transformed,” he said.

“A new formula which links action on climate change to genuine development for the peoples of Africa for industrialisation and economic development… is needed.”

Such initiatives should be directed at genuine job creation and skills development “and urgent and systematic processes that will eradicate poverty on this continent as well,” he added.

Gordhan said he was “a firm believer” that Africa would become the site for research and development for new technologies and policies to fight climate change.

He said climate change was the “key issue facing humanity”, which he believed would test the human ability “to co-operate to overcome adversity, to overcome our instinct to act only within our own self-interest and attempt to act to redefine the global interest”.

“Let us ask ourselves how we can… reformulate the development trajectory on the African continent and use the opportunity… to ensure the benefits of growth don’t get left to a small elite,” he said, adding that the change should benefit Africa’s 1 billion people.

AfDB communications officer Chawki Chahed said that Africa would put nearly 40 percent, or $2.6 billion (R17.9bn), of the CIF’s $6.5bn to work across the continent this year.

The funding is earmarked for renewable energy and energy efficiency projects, climate-compatible development planning and sustainable forest management.

Delegates from 45 countries attended the forum. The African delegates hailed from Algeria, Burkina Faso, the Democratic Republic of Congo, Egypt, Ethiopia, Ghana, Kenya, Mali, Morocco, Mozambique, Niger, Nigeria, South Africa, Tunisia and Zambia.

Donwald Pressly http://www.iol.co.za/business/business-news/balance-african-progress-climate-change-1.1088893

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Africa - Tripartite Free Trade Area negotiations

2011-06-15T17:59:00.001-04:00

Launching the Tripartite Free Trade Area negotiations: opportunities and challenges

2011-06-15 Taku Fundira

Resources > By Topic > REGIONAL TRADE ARRANGEMENTS > SADC EAC COMESA Tripartite FTA

Taku Fundira, a tralac Researcher, discusses launching the Tripartite Free Trade Area negotiations: opportunities and challenges.

The Southern and Eastern regional economic communities (RECs) of the Common Market for East and Southern Africa (COMESA); the Economic African Community (EAC) and the Southern African Development Community (SADC) on 12 June 2011 signed an agreement at a Summit in Johannesburg, South Africa to launch negotiations of an expanded free trade agreement (FTA). The COMESA-EAC-SADC FTA also referred to as the tripartite FTA will be the continent’s biggest FTA comprising of26 countries spanning from Cape Town to Cairo with an estimated market potential of US$ 1 trillion.

At the Summit, Heads of State adopted a developmental approach to the integration process that anchors on three pillars namely; market integration; infrastructure development and industrial development. Negotiations will be in three phases, two of which are expected to be concluded within three years of signing the agreement (by June 2014). These phases which will run concurrently include market integration and infrastructure development. The movement of legitimate business people will also be negotiated during this phase. The final phase which will look at Industrial development and other trade related measures has no time frame allocated to it.

Launching of this tripartite FTA has been welcomed with mixed feelings. As already noted in our previous discussions, there are some benefits that can come out of such an arrangement. These include: duty free access to an enlarged market; an opportunity to simplify the Rules of Origin requirements; and elimination of non-tariff barriers (Fundira, 2009). However, it should be noted that there will be winners and losers in this agreement. Based on a computer analysis of such an FTA, in a recent tralac publication “Cape to Cairo: An Assessment of the Tripartite Free Trade Area,” we note that there are more losers than winners.

The Global Trade Analysis Project (GTAP)¹ latest pre-release Version 8 database used to assess the welfare and trade gains from this FTA as determined by duty-free merchandise goods access and with a small (two percent) reduction in assumed non-tariff barriers to both merchandise goods and services barriers also factored in, revealed interesting findings (Jensen and Sandrey, 2011);

a) For the final tripartite agreement only the results show that there are significant gains to Southern Africa, but only for South Africa and Mozambique. South Africa welfare increases by US$1,321 million or 0.22 percent of the real Gross Domestic Product (GDP).
b) Results for the rest of SACU (Lesotho, Namibia and Swaziland) are disappointing with a welfare loss of $84 million, while Botswana similarly loses $16 million.
c) Most other tripartite partners gain or lose very marginally, excepting Mozambique which gains $57 million. This is because most countries other than South Africa and Mozambique have access to other FTAs through their multiple membership of overlapping FTAs.
d) For agriculture, the tripartite FTA is only beneficial in sugar and then only for the South African and Mozambique agricultural sectors.
e) Manufacturing is the big gainer for Southern Africa, but again really only for South Africa with lesser gains for Egypt and rest of eastern Africa (Kenya).
f) Revenue for the SACU tariff actually increases by US$49 million as a result of South African manufacturing imports from non-African countries to replace increased exports to the rest of east Africa. Employment and real wage outcomes are both positive for South Africa.

Although the findings depict a bleak picture with regards to the “winners and losers” from such an agreement, there is optimism on the prospects of the tripartite FTA as a driver of economic growth and development. As the expanded economic zone helps boost the region’s economies, smaller countries that stand to lose in the interim should regard this as a short term temporary setback that in the long run will benefit, once they identify and develop sectors where they have competitive advantage. According to South Africa’s Trade and Industry Minister Rob Davies, “integration would enhance Africa's chances of capitalising on the two drivers of its faster growth rates - the mineral boom and the growth in the domestic market” (SAPA, 2011).

Despite the optimism, if past experience is by all means regarded as indicative of future success, the prospects of a successful establishment of the tripartite FTA are minimal. Arguments for this notion are based on the fact that currently, within the individual RECs, integration has not been as smooth and there are still problems with implementation.

For example, in COMESA, although in theory, the REC has attained customs status, some members have not adopted the common external tariff, while in SADC; already the REC has missed a 2010 deadline to attain customs status with some members still not yet implemented the SADC FTA. A lack of “political will” and implementation deficiencies to comply with a rules-based regional trading arrangement which they negotiated, within the existing trade regimes are some of the reasons for such problems. It is therefore necessary that such issues are addressed and that Members are encouraged to comply with their FTA obligations..

¹ See the GTAP website at https://www.gtap.agecon.purdue.edu/ for a full introduction to the model.

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South Africa approves Wal-Mart bid, govt could take action

2011-06-02T12:34:00.001-04:00

South Africa approved Wal-Mart’s R16.5 billion (US$2.4 billion) bid for control of retailer Massmart with minimal conditions on Tuesday, giving the world’s top retailer a big boost in its plan to expand in fast-growing Africa.

South Africa’s Competition Tribunal told Wal-Mart not to cut jobs for two years, honor existing labor agreements, and work to develop local suppliers, concessions the US firm had earlier proposed itself.

The deal gives Wal-Mart a 51 percent stake of Massmart, a discount retailer that sells everything from liquor to televisions and has a presence in at least a dozen African countries.

The decision will be seen as a major advance for Wal-Mart, which had said it could drop its offer if the government imposed targets on using local suppliers.

“This is good news. It included concessions put forward by both parties so it’s a victory all round,” said Paul Theron, CEO of Johannesburg-based asset manager Vestact.

“It shows that South Africa is open for business, that large corporates are potential players for outside investment.”

Massmart must also “give preference” to reemploying 503 workers fired in 2010, set up a R100 million (US$15 million) fund to help develop local suppliers, and not challenge SACCAWU’s right to represent bargaining units for three years, the tribunal said.

The two companies said in a joint statement they were “pleased” with the decision and expected Massmart’s food business to grow by 50 percent over the next five years.

The decision was a victory for Wal-Mart, as it did not impose restrictions on where it sources it goods, said Brian Sozzi, a New York-based analyst at Wall Street Strategies.

“In two years it looks like they can go to town on labor costs,” he said.

“The whole thing with them is to get goods into the South African market as cheap as possible and sell them as cheap as possible.”

However, the ruling is a blow to South Africa’s influential labor unions, one of which is already considering an appeal.

“We are meeting with our legal representatives to explore legal options,” said Mike Abrahams, a spokesman for the South Africa Commercial, Catering and Allied Workers Union (SACCAWU), adding that the union could consider appealing to the Competition Appeals Court.

That could further delay the deal, which was first announced in September 2010.

The deal was a test case for major foreign investment in South Africa, which has the continent’s deepest capital markets but where unions are in a coalition with the ruling African National Congress.

Three government departments – economic development, trade and industry, and forestry and fisheries – and the unions had lined up against the deal, asking the tribunal to impose targets on local procurement and a freeze on job cuts.

The government and unions have said Wal-Mart’s global supply network could lead to a flood of cheap imports, sparking job losses and squeezing local companies.

“We would have hoped that the deal would be rejected or at least much more stringent conditions be imposed,” said Patrick Craven, a spokesman for the COSATU union federation.

“Our biggest concern remains completely unanswered, and that is the knock-on effect on jobs in other retailers and the manufacturing industry.”

The three departments said in a joint statement late on Tuesday they would need further study to determine whether the conditions were sufficient enough to prevent widespread job losses.

“Based on the outcome of the study of the conditions and the responses of Wal-Mart/Massmart, we will decide on the next steps to take. Government reserves its legal options at this stage,” the three departments said.

http://www.tralac.org/cgi-bin/giga.cgi?cmd=cause_dir_news_item&cause_id=1694&news_id=104482&cat_id=1026

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Walmart’s SA play leads to Africa

2011-06-02T12:25:00.000-04:00

The Walmart issue stirred so many passions on both sides of the free market versus workers dictatorship divide that the only sensible decision the Competition Tribunal could settle on was something resembling the wisdom of King Solomon, who threatened to cut a disputed baby in half, prompting the real mother to speak up and save the child.

Except in this case, the tribunal simply split the issue down the middle, setting conditions that were not too onerous and making concessions that don’t cost too much.

Steven Kilfoil of corporate finance at Grant Thornton says, with a weather eye on potential foreign direct investment: “The decision is hugely positive. If they had imposed seriously onerous conditions, that would have been negative in a big way.

“We are trying as a country to get away from people just investing their money in (the JSE) and taking it away at a moment’s notice. We are trying to get them to invest properly in South Africa by building businesses. The South African play by Walmart leads to a much larger African play. If we had imposed serious conditions on Walmart, that would have been seen as prohibitive and anyone else contemplating investing here would have run away.

“Take the introduction of the Companies Act, we couldn’t get the dates right – amateurish is about the kindest thing that can be said about that. The foreign investor is looking for a place of safety and comfort and all he hears is talk of nationalisation and unions trying to intervene in how business is done. Let us just be glad that common sense has prevailed.”

That will give a lot of comfort to foreign investors.

Walmart

Attempts to elicit comment from the Economic Development Ministry of Ebrahim Patel on the landmark decision on Wal-mart being given permission by the competition tribunal – with certain conditions – to buy control of JSE-listed Massmart proved fruitless yesterday.

Understandably Zubeida Jaffer, the minister’s spokesman, could not comment as she took ill on Monday and was rushed to a Johannesburg hospital. Someone who answered her phone referred the matter to a Dumi Makwetla – apparently a new staff member – but he switched off his phone.

Jaffer’s assistant, Roslyn Daniels, was courteous, but unable to help. But she indicated that the minister was in a departmental meeting for two days in Johannesburg, with his senior staff. A call to Richard Levin, the director-general, was answered but he indicated he was “in an important meeting” and could not talk.

ANC spokesman Jackson Mthembu’s phone was engaged but then rang. It was subsequently switched off. The phone of second spokesman Keith Khoza took messages, not returned. A third man listed as spokesman Moloto Mothapo, a spokesman at Luthuli House during the municipal election campaign, has returned to Parliament in Cape Town to his old job as the chief whip’s spokesman. He indicated he could not answer questions on the ruling, which was a Luthuli House matter.

Finally spokesman Brian Sokutu said while the ANC welcomed the ruling “we share sentiments expressed by labour federation Cosatu that this massive investment which is certainly set to stimulate economic growth… should not lead to job losses. Job creation is one of the key ANC priorities with (the president) already having announced a special fund to create jobs”.

The silence of Economic Development, however, is perplexing, especially as Patel sought from Walmart in February “strong local procurement, that the South African supply base is supported and that our capacity to create jobs locally is highlighted”.

The conditions of the ruling pretty much carried out that mandate.

Competition Tribunal

For those puzzling over the what many consider to be rather light conditions imposed on Walmart and Massmart, the following from the Competition Tribunal may shed some light.

“Our job in merger control is not to make the world a better place, only to prevent it becoming worse as a result of a transaction.” These are the words of the tribunal in a statement issued yesterday, which announced its decision to approve Walmart’s acquisition of 51 percent of Massmart, with conditions.

It added: “This narrow construction of our jurisdiction has not always been appreciated by some of the interveners who have sought remedies whose ambition lies beyond our purpose. It is not our task to determine whether those ambitions are legitimate public policy goals; only whether they lie within our powers.”

This goes some way to explaining why the conditions imposed on the merging parties are so moderate, especially given the effect the deal will have in South Africa, on suppliers specifically. A full explanation from the tribunal is expected in 20 days.

The tribunal says it is required by law to be aware of public interest concerns, but the law limits its ability to remedy concerns. In addition, the purpose of public interest concerns is not to protect firms from losing out to market forces, but to protect a substantial public interest.

So it may see a problem looming, but not have within its scope the means to remedy it. That is not to say that the tribunal has taken the view that the deal will present problems. In fact, it says a likely outcome of the merger based on Walmart’s history is low prices and consumer choice.

But it concedes that just how significant those benefits will be is not clear.

Walmart itself cannot (or will not) put a number to this claim, despite many acquisitions over many years in many parts of the world, which could provide quite specific details on just how much (or how little) consumers have benefited.

Questions over the merits of this deal are not likely to evaporate now that it has been approved. Instead evidence of the many touted benefits are eagerly awaited.

Edited by Peter DeIonno. With contributions by Peter DeIonno, Donwald Pressly and Samantha Enslin-Payne.

http://www.iol.co.za/business/opinion/business-watch/walmart-s-sa-play-leads-to-africa-1.1076735

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WORLD INDUSTRIAL PRODUCTION ON THE RISE

2011-06-01T11:49:00.000-04:00

World manufacturing output has grown by 6.5 per cent in the first quarter of 2011 compared to the same period last year, the United Nations Industrial Development Organization (UNIDO) reported today.

“The figure clearly indicates the progress of the recovery of world industrial production from the recent financial crisis,” UNIDO http://www.unis.unvienna.org/unis/pressrels/2011/unisous085.html said, in the first edition of its new plan to report industrial statistics quarterly. Formerly the presentations were annual.

The report, based on an analysis of quarterly production data, said developing countries were in the lead with their manufacturing production increasing by 11.5 per cent. The major contribution to this growth was by China, with its output growing by 15 per cent.

Newly industrialized countries also performed well, with Turkey displaying a growth rate of 13.8 per cent, while Mexico’s was estimated at 7.4 per cent and India’s at 5.1 per cent.

The manufacturing output of industrialized countries increased by 4.4 per cent during the named period, with strong growth of 7.1 per cent observed in the United States, the world’s largest manufacturer.

Major European economies, including France, Germany and the United Kingdom, also demonstrated significant growth in manufacturing output. But other European countries, such as Greece, witnessed a 6.9 per cent drop, while Portugal and Spain maintained a marginal growth of less than one per cent.

Japan’s figures fell by 2.4 per cent. The full impact of the March Tsunami disaster was not yet reflected in manufacturing production data for the first quarter.

Negative growth was observed in North Africa, where the manufacturing output of Egypt and Tunisia fell by 8.9 per cent and 7.4 per cent respectively.

The UNIDO report also contains the growth estimates for the first quarter by major manufacturing sectors. It suggests that production of general machinery has increased by more than 15 per cent, electrical machinery and apparatus by 12 per cent, and medical and precision equipment by 11 per cent.

While industrialized countries performed well in high-tech sectors, their growth in traditional manufacturing areas such as food and beverages, textile and wearing apparel was quite low. Developing countries maintained higher growth across all sectors.

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South Africa, Walmart / Massmart Merger

2011-05-25T09:39:00.000-04:00

Gerhard Erasmus, a tralac Associate and Paul Kruger, a tralac Researcher, discusses the Walmart/Massmart Merger - The Role of International Law in Regulating Competition, Investment and Trade.

BACKGROUND

The recent hearings before the South African Competition Tribunal on the proposed Walmart/Massmart merger were dominated by arguments about the impact of the proposed deal on jobs and local procurement. Some have argued that the Tribunal should decline permission for the merger, and that if it could not do so, it should impose restrictive conditions on Walmart, which wants to buy 51% of Massmart for about R16.5bn. The South African trade unions, the government and some retailers want specific conditions about future labour practices and imports to be imposed as part of the conditional approval for the transaction to go ahead.

A number of important international legal issues have also been raised. Arguments on behalf of Walmart suggest that several international agreements impact on the domestic regulation of trade, competition, investment and related aspects. These matters are often connected. This paper discusses these issues and the reasons why international trade law applies to investment, competition and this particular merger. The relationship between national and international law also needs clarification, as does the role of the government in this matter. One of the additional questions to consider is whether private parties can invoke these agreements; or do they only apply on the inter-state level?

Walmart has subsequently offered certain concessions but during the hearings before the Competition Tribunal its legal representatives have argued that restrictive conditions (depending on how they are formulated) may violate South Africa’s obligations under the WTO agreements. It would be impermissible, they argued, to discriminate against Walmart by obliging it to comply with obligations which do not bind its competitors. What are these international obligations and why would the suggested conditions constitute violations of international rules? Do these international agreements apply domestically?

IS IT ABOUT PROTECTIONISM?
There have been suggestions that the intervention by the South African government before the Competition Tribunal is inspired by protectionist motives. The implication seems to be that it is improper for the authorities to be involved in these hearings. There is nothing improper about the government being concerned about an investment of this kind and to raise questions about its consequences. The other parties and commentators are free to entertain different views. They may challenge assumptions that employment can be protected in the manner proposed by the government and the unions and may offer alternative ideas on how best to secure welfare gains and consumer benefits. They may even pass judgment on the government’s motives and call them ‘protectionist’. The fact that the government raises its concerns now is, however, not wrong or inappropriate. These hearings take place before a public forum and the purpose is to obtain information from the parties concerned and to test the evidence; before making a final ruling on the conditions applicable to the merger. Ultimately the criteria laid down in South Africa’s competition legislation apply, while certain international obligations should also be considered. There is a qualification though; the government’s concerns can, insofar as they relate to binding international legal arrangements, only be accommodated within the ambit of permissible exceptions, in addition to complying with the Competition Act and general administrative law requirements. The accommodation of the international dimension is one of the challenges now facing the Competition Tribunal.

Governments are, as a matter of course, involved in matters of this magnitude; overseeing foreign investment is an accepted governmental function. Many states have legislation dealing with foreign investment and official permission is often required; as happened when foreign investors bought shares in Absa and Standard Bank in South Africa a few years ago.

In the globalised economy national market regulation measures frequently have international ramifications. Compliance with international obligations then enters the equation. There are many examples. Only last week the WTO Appellate Body gave a ruling in the EU/USA dispute about state subsidies paid to the Airbus and Boeing companies and the effect thereof on fair trade. It does not come as a surprise that the same consideration (the effect of the state’s international obligations)
applies to measures about competition and mergers involving foreign companies.

The procedure with respect to the present merger is not at fault. The transparent involvement by the government, together with other parties, acknowledges a basic rule of law requirement. The issues are openly debated. In South Africa (and in certain neighbouring countries) questions concerning the promotion of competition are regulated by law. The Competition Tribunal is an independent forum and will give a decision on the merits and in terms of its legal powers. If a particular party with the necessary standing feels aggrieved about the final ruling, it will be possible to take the matter to the Competition Appeal Court and even to the regular courts. South Africa has a dedicated legal arrangement consisting of detailed legislation and institutions (Competition Commission, Competition Tribunal and Competition Appeal Court) to investigate, decide and review competition related questions and rulings. This includes procedures for protecting the rights of parties and to ensure that the applicable legal norms are fully adhered to. Remedies will be granted where due.

This happened in Namibia with respect to Walmart’s recent merger notification in Windhoek. The facts of that case are mentioned below in order to highlight an important aspect of the present matter, the general rules-based nature of the procedure and the fact that decisions by competition authorities should be justiciable.

THE REGIONAL CONTEXT
The competition hearing in South Africa is the final hurdle for Walmart’s entrance into Africa, as the necessary approval has already been obtained in the other African states with competition regulators. Massmart operates in 14 African countries, but only six of these countries require competition approval for the acquisition. The competition authorities in Tanzania, Malawi, Swaziland and Zambia gave their unconditional approval for the deal. Namibia and South Africa are the two outstanding jurisdictions.

South Africa represents by far the most important market for Walmart in Africa; as 93 percent of Massmart’s revenues are generated in this country. If the merger is refused, or too strict conditions are imposed on its South African operations, it will seriously frustrate Walmart’s entry into Africa.

http://www.tralac.org/cgi-bin/giga.cgi?cmd=cause_dir_news_item&cause_id=1694&news_id=104218&cat_id=1027

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No Better Export: Higher Education - By Francisco Sánchez

2011-04-10T13:15:00.000-04:00

In his State of the Union address, President Obama, who has emphasized the importance of higher education in our nation, said we must "out-innovate, out-educate, and out-build the rest of the world. ... That's how we'll win the future." From my perspective, a crucial element of winning the future is an increased focus on exports—and among our most valuable exports is education.

This week I have been joined by recruiters from 56 colleges and universities across the country, from Columbia University to the University of Texas at San Antonio, for a weeklong education mission to Jakarta, Indonesia, and to Ho Chi Minh City and Hanoi, Vietnam. The purpose of the trip is to explore opportunities for student recruitment and partnerships with higher-education institutions in those two countries. In each city, we are meeting with students and their families, and the participating American colleges will promote their international-study programs in the United States. We have also organized networking sessions and education symposia to promote university-to-university partnerships, such as faculty exchanges, student exchanges, and research projects.

Why do this? Why now?

At the International Trade Administration, in the U.S. Commerce Department, my primary objective is to spur job creation and aid the nation's economic recovery by doubling U.S. exports within five years. You might not think of students as part of our export strategy, but, in fact, higher education ranks among the country's top 10 service exports, right between environmental services and safety and security. We are the largest destination for international students seeking higher education; tuition and living expenses paid by those students and their families brought nearly $20-billion to the U.S. economy during the 2009-10 academic year. According to the Institute of International Education, that dollar figure is expected to continue rising.

More than 20,000 students from Indonesia and Vietnam are already enrolled in colleges and universities in the United States, and most of them pay full tuition. That opens opportunities for more American students to receive financial aid and scholarships. The purchasing power of international students who study in the United States remains strong after they graduate and return home. And as they become part of the growing middle class, regardless of where they live in the world, they will have a better understanding and appreciation of American products and services, and will be more likely to remain our customers.

We are focusing on Jakarta, Ho Chi Minh City, and Hanoi for a number of reasons.

Expanding educational opportunities for students in emerging economies like Indonesia's and Vietnam's is critical to developing a middle class in those markets. The new middle-class consumers emerge with increased resources to participate in both local and global markets, including that of the United States.

In Jakarta, education is the No. 1 priority of the U.S. Embassy, and doubling the number of Indonesian students in the United States by 2014 is one of its top goals. This mission will help meet that goal and ultimately benefit both our educational institutions and our economy. We used our domestic network to recruit colleges and universities that are interested in exploring international partnerships and working toward a global educational approach on their campuses.

In Vietnam, with a population of 86 million, a steadily increasing per capita income, and the high value placed on education, there are significant opportunities for American providers of education services. Vietnam has more than 20,000 students studying abroad, paying about $200-million in tuition and fees every year. It ranks ninth among countries sending students to the United States.

Expanding the educational opportunities for Indonesian and Vietnamese students will provide direct benefits to U.S. companies doing business with those critical markets in the future. Many of them seek out U.S.-educated distributors overseas because of their understanding of American culture, their English-language skills, and the resulting increased ease of doing business with them. This is a part of a long-term strategy to set America on strong footing in emerging global markets.

However, international competition is fierce, and the United States has seen a 30-percent decrease of its market share in the past decade, reinforcing the importance of its efforts to maintain its position as the world's leading higher-education destination. Building ties with international students not only helps American students gain a greater level of international understanding—a vital skill for success in the 21st-century global economy—but also familiarizes future global leaders with the American people and U.S. society. As we look to "win the future," I see no more valuable export than that.

Francisco Sánchez is under secretary for international trade at the U.S. Commerce Department.

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The Square Kilometre Array (SKA) will be a mega radio telescope, about 100 times more sensitive than the biggest existing radio telescope.

2011-03-11T17:55:00.007-05:00

Africa is bidding to host the world's most powerful radio telescope, the Square Kilometre Array (SKA). When constructed, in 2025, it will have 50 times greater sensitivity than any other radio telescope on Earth.

The SKA will probe the edges of our universe, even before the first stars and galaxies that formed after the Big Bang. This telescope will contribute to answering fundamental questions in astronomy, physics and cosmology, including the nature of dark energy and dark matter.

South Africa is leading the African bid and has already legislated to create 12.5 million hectares of protected area - or radio astronomy reserve. This area is also referred to as the Karoo Central Astronomy Advantage Area, offering low levels of radio frequency interference, very little light pollution, basic infrastructure of roads, electricity and communication.

The Square Kilometre Array (SKA) will be a mega radio telescope, about 100 times more sensitive than the biggest existing radio telescope.

SKA is a €1.5 billion project, with operating costs of about €100 million a year.

It will be the first to provide mankind with detailed pictures of the “dark ages” 13.7 billion years back in time.

This mega telescope will be powerful and sensitive enough to observe radio signals from the immediate aftermath of the Big Bang.

If there is life somewhere else in the Universe, the SKA will help us find it.

At least 24 organisations from 12 countries, including Australia, Canada, India, China, France, Germany, Italy, Portugal, Spain, South Africa, Sweden, the Netherlands, the UK and the USA, are involved.

The SKA will consist of approximately 4 000 dish-shaped antennae and other hybrid receiving technologies.

Both South Africa and Australia have suitably remote, radio quiet areas for hosting the SKA and have competing bids to host the SKA.

If Africa wins the SKA bid, the core of this giant telescope will be constructed in the Karoo region of the Northern Cape Province near to the towns of Carnarvon and Williston, linked to a computing facility in Cape Town.

Other countries where stations will be placed include Namibia, Botswana, Mozambique, Mauritius, Madagascar, Kenya and Zambia.

South Africa is already building the Karoo Array Telescope (MeerKAT) which is a precursor instrument for the SKA, but will in its own right be amongst the largest and most powerful telescopes in the world.

For More Infromation
Mr. Rod Marcel
E Mail rod@skaafrica.com

www.skaafrica.com

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A hands-on leader pushes Commerce

2011-01-05T11:56:00.003-05:00

Commerce Secretary Gary Locke's spacious, wood-paneled office features a working fireplace, elegant artwork and other luxurious touches befitting one of the federal government's top economic officials.

More unusual is the nearly 60-foot-long Chinese dragon kite that hovers over his desk. The piece is not just a nod to the heritage of the first Chinese American to hold the top Commerce Department job but also evidence of Locke's hands-on style - aides said he came in one weekend and hung it himself.

It is an approach Locke has taken to running the sprawling department, which plays a crucial role in the Obama administration's plans for fixing the badly broken economy.

Since Locke took office in March 2009, he has earned a reputation as the type of manager eager to know details and wring out new efficiencies. He has pushed the Patent and Trademark Office to shorten the time it takes to get a patent, from 34 months to 20 months. He cajoled the Economic Development Administration, which makes business-development grants to distressed communities, to streamline its approval process. And he brought the 2010 Census in 25 percent under budget, saving taxpayers $1.9 billion.

But those management feats pale next to the challenge he faces as one of the key figures in implementing President Obama's pledge to double U.S. exports within five years.

The expansion of exports would mean 2 million new jobs, officials calculate, and with the nation desperate for new sources of employment growth, the mission is urgent.

Even before the housing crash and deep recession, the nation's economic growth was built on a flawed foundation of asset bubbles and excessive consumer debt, Locke said. Coupled with growth driven by innovation in areas such as renewable energy and high-quality manufacturing, he said, exports could form the basis for a new prosperity.

"Clearly we need to export more as a country as part of our economic recovery," Locke said.

The export goal is ambitious. Countries such as China and India, once thought of mostly as sources of cheap labor, are developing increasingly sophisticated manufacturing capabilities.

Still, Locke said, the potential for expanding U.S exports is plain.

Only 1 percent of U.S. companies export products at all, and of those, 58 percent export to just one country, most frequently Canada or Mexico, he said.

"If we can just help those firms export to one or two more countries, we would be able to increase exports exponentially," he said. In 2010, he noted, U.S. exports increased by 17 percent. The growth was broad-based, led by increases in exports of industrial supplies and materials, machinery and food.

For Locke, all of this plays into his prior experience. During the two terms he served as governor of Washington - home to global giants such as Microsoft and Boeing - trade with China more than doubled.

After leaving the governorship, Locke was a partner in the Seattle office of the law firm Davis Wright Tremaine. There, his work focused on helping U.S. companies break into international markets.

"I'm trying to bring some of those lessons learned" to the Commerce Department, Locke said.

He noted that "Made in the USA" is a phrase that still has clout around the world. "There is a huge hunger and demand for U.S. products," he said.

In its first two years, the Obama administration has earned a reputation in some quarters for being hostile to business.

Some business leaders have complained that the administration has demonized them in its rhetoric while hamstringing them with new environmental, health-care and financial industry regulations.

Locke, however, says the tension has not been obvious in his job, which requires constant interaction with business leaders.

In 2010, Commerce coordinated 31 trade missions in 31 countries with 368 companies. Participating companies anticipate $2 billion in increased exports from the missions, the department says. In 2011, Locke is scheduled to lead four trade missions.

Locke was not the president's first choice to head Commerce. He got the job only after New Mexico Gov. Bill Richardson (D) and New Hampshire Sen. Judd Gregg (R), withdrew; Richardson cited an investigation of state contracting, and Gregg voiced his political differences with the president.

Still, Locke was eager to take on the challenge.

"I wanted to help the president turn around the economy," he said.

"It has taken the country many years to get to this sorry state of affairs, and we will not be able to turn it around overnight."

Even so, the process has proven more arduous than many people expected. While the overall economy is expanding, job growth has been anemic and the national unemployment rate has hovered close to 10 percent for a year.

Locke, however, says the administration is on the right track with its heavy investments in green energy, education and health care.

"It is almost like building the foundation of a house or an office tower," he said. "All the foundation work takes a long, long time. You don't really see it. It is all happening below the street level. . . . After that, then things really begin to take off."

By Michael A. Fletcher
Washington Post Staff Writer

http://www.washingtonpost.com/wp-dyn/content/article/2011/01/02/AR2011010203214.html

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Development Bank of South Africa to help finance projects in Angola

2010-12-29T11:22:00.001-05:00

The Development Bank of Southern Africa (DBSA) is opening up a R1.75 billion credit line to fund reconstruction and development projects in Angola.

The fund will be operated through Angolan bank Banco Africano de Investimento in partnership with the African Development Bank, and comes on the back of last week’s state visit to South Africa by Angolan President Jose Eduardo dos Santos.

Under the terms of a “declaration of intent on the utilisation of financial facilities” signed during Dos Santos’ visit, the Industrial Development Corporation and the Export Credit Insurance Corporation are also expected to expand on their financing programmes with Angola.

The credit, which could run into billions of dollars, will help South African companies secure lucrative contracts in Angola, a market previously dominated by China, Brazil and Portugal.

Aguinaldo Jaime, the head of Angola’s private investment agency ANIP, said: “The procedure and mechanism are still being worked out between the financial institutions, but the declaration is a clear signal that the political will is in place for these financial mechanisms to facilitate the co-operation between the two countries.”

He added: “I think the two countries have recognised that you can boost investment only if you have financial mechanisms in place.

“This is what we have learned relating to our experiences with Portugal, China and Brazil.”

One organisation hoping to benefit from the credit lines is the South Africa-Angola Housing Initiative (SAAHI), an umbrella management group that has been planning big infrastructure and construction projects in three provinces in Angola.

SAAHI chief executive Sello Rathete said it already had a commitment for about $500 million (R3.4bn) from the DBSA.

Other co-operation deals inked between Angola and South Africa during Dos Santos’s historic state visit, the first by an Angolan head of state since 1994, covered information and communications technology, public works and infrastructure development and a protocol on technical co-operation on veterinary services.

Although no details were given, an energy implementation plan signed by ministers is believed to relate to electricity supply, rather than oil and gas as has been suggested.

The deal between South Africa’s PetroSA and Angolanm state oil firm Sonangol, which could lead to a joint refining project, is still under discussion, according to President Jacob Zuma.

Responding to complaints about the difficulties in obtaining entry visas into Angola, Dos Santos said his government was working on possibly creating a multiple-entry visa for South African business executives.. - Louise Redvers

http://www.tios.co.za/dbsa-to-help-finance-projects-in-angola-1.1003240

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South Africa seeks trade and investor gains from joining Bric club.

2010-12-28T15:13:00.002-05:00

South Africa EXPECTED to gain substantial trade and investment benefits when it joined Brazil, Russia, India, China in the Bric grouping of emerging economies, a top government official said yesterday.

SA appears set to join the bloc after an invitation extended last week by China, which holds the rotating chairmanship.

The invitation was made in a telephone call to International Relations and Co-operation Minister Maite Nkoana-Mashabane by her Chinese counterpart, Foreign Minister Yang Jiechi.

Although SA’s government has long aspired to be in the Bric league, most commentators feel its economy is dwarfed by those of the Bric countries, whose growth rates have been the envy of the developed world especially during the recession.

In a recent commentary, Prof Mills Soko of the University of Cape Town Graduate School of Business said SA should not be "obsessed" with joining.

Prof Soko argued that markets in the rest of Africa, the Middle East and other Latin American countries should not be neglected, and emphasised that the Bric grouping was not in fact an organisation, but the construct of an economist, and did not have a strategy, or clear objectives.

"We cannot engage in an ill- defined, ad hoc manner," Prof Soko said, emphasising SA should understand the trade policies of the Bric countries and how these would affect it, and what competitive pressures these would apply. While Bric countries represented markets for South African goods, they were also competitors in sectors such as steel, clothing and textiles and the automotive industry.

However, in an indication of SA’s foreign policy priorities, President Jacob Zuma has made state visits to each of the Bric countries since coming to office.

Goldman Sachs Asset Management chairman Jim O’Neill coined the term "Bric" in 2001 to describe the four countries whose joint output would, he said, equal that of the US by the year 2020.

China’s "invitation" to SA comes barely a week after Russian President Dmitry Medvedev’s envoy to Africa, Alexei Vasiliev, said his country expected SA to join as early as next year .

SA has argued that its accession would give it some economic and developmental advantage in Africa, while promoting the development of Bric and enhancing co-operation among these emerging market economies.

SA stands to benefit from the potential preferential trade pacts and economic co-operation agreements that could be concluded with Bric countries, whose combined population of 2,5-billion people shares between them an estimated annual gross domestic product of more than 9-trillion.

Sipho Nene, acting director- general of the Department of International Relations and Co- operation, said the department’s motivation to Mr Zuma about joining Bric was that it was for SA’s economic and political benefit. "Since Bric has no secretariat, the body does not yet have financial obligations for our country, but we anticipate huge trade and investment spin-offs from it."

On the economic front, he said SA stood a chance to negotiate positions that would enhance its trade and leverage the potential for direct foreign investment from Bric member states.

"By joining Bric we are not starting from scratch … we are merely building on already established trade agreements, standing binational commissions or bilateral relations and other diplomatic and economic links with Bric countries who are already SA’s strategic partners.

"This membership is aimed at keeping SA as an important player in various organisations outside the United Nations, which is supposed to remain the pillar of cooperation and collaboration for the world," Mr Nene said.

Mr Yang indicated that Chinese President Hu Jintao had also invited Mr Zuma to attend the third Bric leaders’ summit, to be held in China next year.

Ms Nkoana-Mashabane said SA was ready to step up communication and co-ordination with China and other Bric members.

"Our approach to intensifying our relations with emerging powers and other countries of the South is through bilateral engagement," she said.

"We also see the Nonaligned Movement and the Group of 77 as important for South-South interaction, especially in the framework of the United Nations.

"Our trilateral partnership with India and Brazil (Ibsa) will get a better balance, and become even stronger, with SA a member of the Brics. SA’s diversified foreign policy objectives and interests allow both groupings (Ibsa and Brics) to co-exist. The mandates of Brics and Ibsa are complementary," she said.

HOPEWELL RADEBE radebeh@bdfm.co.za http://www.businessday.co.za/articles/Content.aspx?id=130374

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Hilary Clinton - Remarks Saban Center for Middle East Policy Seventh Annual Forum

2010-12-12T22:34:00.003-05:00

Remarks at the Brookings Institution's Saban Center for Middle East Policy Seventh Annual Forum

Hillary Rodham Clinton
Secretary of State
Washington, DC
December 10, 2010

Thank you. Thank you very much. I appreciate the introduction, but nothing is imminent – (laughter) – so far as I know. But it is a great pleasure for me to be back here and part of this very important forum.

And I appreciate your introduction. I appreciate the friendship that you and Cheryl have given to me and to my family. You’ve been friends for many years. And certainly, as anyone who knows Haim understands, as an entrepreneur, a philanthropist, he is unparalleled, but also as a champion for peace. He represents in many ways in the best qualities of both Israel and America. He’s generous, he’s irrepressible, and absolutely unstoppable. And he has dedicated his energy and support to so many important causes and helped so many people. But he has probably no deeper passion than the one we are here discussing tonight – strengthening U.S.-Israeli relations and securing a just and lasting peace in the Middle East.

So I thank him and I thank Strobe Talbott, I thank Martin Indyk, and I thank all of you. And in particular, I appreciate your bringing us together to discuss the crucial issues surrounding the Middle East. I also want to acknowledge all of the colleagues from Israel who are here. Certainly, you’ll hear in a minute from Defense Minister Barak.

There are other members of the Israeli Government here – opposition leader Livni, and I’m delighted that Prime Minister Fayyad is also with us. Prime Minister Fayyad has accomplished a great deal in a short amount of time under very difficult circumstances. Along with President Abbas, he has brought strong leadership to the Palestinian Authority and he has helped advance the cause of a two-state solution by making a real difference in the lives of the Palestinian people. So Mr. Prime Minister, welcome again to Washington and thank you for your very good work. (Applause.)

Now, you don’t have to read secret diplomatic cables to know that we are meeting during a difficult period in the pursuit of peace in the Middle East. I understand and indeed I share the deep frustrations of many of you in this room and across the region and the world. But rather than dwell on what has come before, I want to focus tonight on the way forward, on America’s continuing engagement in helping the parties achieve a two-state solution that ends the conflict between Israelis and Palestinians once and for all, and on what it will take, finally, to realize that elusive, but essential goal.

Before I go further, I want to offer the deepest condolences of the American people for the lives lost in the recent fires in Northern Israel. Israelis are always among the first to lend a hand when an emergency strikes anywhere in the world. So when the fires began to burn, people and nations stepped up and offered help. It was remarkable to watch. Turkey sent planes; Egypt and Jordan donated chemicals and equipment; the Palestinian Authority dispatched firefighters and their trucks; and the United States was also part of the effort deploying expert firefighters, C-130 cargo planes, and thousands of gallons of chemicals and suppressants. It was testament once again to the deep and enduring bonds that unite our two countries, to the partnership between our governments, and the friendship between our people.

The United States will always be there when Israel is threatened. We say it often, but it bears repeating: America’s commitment to Israel’s security and its future is rock solid and unwavering, and that will not change. From our first days in office, the Obama Administration has reaffirmed this commitment. For me and for President Obama, this is not simply a policy position. It is also a deeply held personal conviction.

Over the last two years under President Obama’s leadership, the United States has expanded our cooperation with Israel and focused in particular on helping Israel meet the most consequential threats to its future as a secure and democratic Jewish state. Our security relationship has grown broader, deeper, and more intense than ever before. And we have not just worked to maintain Israel’s qualitative military edge. We have increased it through new advances like the Iron Dome, a short-range rocket defense system that will help protect Israeli homes and cities. And our military continues to work closely with the IDF through exchanges, training, and joint exercises.

For Israel and for the region, there may be no greater strategic threat than the prospect of a nuclear-armed Iran. We just heard my husband speaking to that. And let me restate clearly: The United States is determined to prevent Iran from developing nuclear weapons. And along with our international partners, we have implemented tough new sanctions whose bite is being felt in Tehran. Iran’s leaders face a clear choice, one of those tough choices that Strobe mentioned as the theme of this forum: Meet your international responsibilities or face continued isolation and consequences.

We have also stepped up efforts to block the transfer of dangerous weapons and financing to terrorist groups like Hezbollah and Hamas. But Iran and its proxies are not the only threat to regional stability or to Israel’s long-term security. The conflict between Israel and the Palestinians and between Israel and Arab neighbors is a source of tension and an obstacle to prosperity and opportunity for all the people of the region. It denies the legitimate aspirations of the Palestinian people and it poses a threat to Israel’s future security. It is at odds also with the interests of the United States.

I know that improvements in security and growing prosperity have convinced some that this conflict can be waited out or largely ignored. This view is wrong and it is dangerous. The long-term population trends that result from the occupation are endangering the Zionist vision of a Jewish and democratic state in the historic homeland of the Jewish people. Israelis should not have to choose between preserving both elements of their dream. But that day is approaching.

At the same time, the ever-evolving technology of war, especially the expanding reach of the rockets amassed on Israel’s borders means that it will be increasingly difficult to guarantee the security of Israeli families throughout the country without implementing peace agreements that answer these threats.

Continuing conflict also strengthens the hands of extremists and rejectionists across the region while sapping the support of those open to coexistence and cooperation. Radicalization of the region’s young people and growing support for violent ideologies undermine the stability and prosperity of the Middle East. The United States looks at these trends. We reflect on our deep and unwavering support of the state of Israel and we conclude without a shadow of a doubt that ending this conflict once and for all and achieving a comprehensive regional peace is imperative for safeguarding Israelis’ future.

We also look at our friends the Palestinians, and we remember the painful history of a people who have never had a state of their own, and we are renewed in our determination to help them finally realize their legitimate aspirations. The lack of peace and the occupation that began in 1967 continue to deprive the Palestinian people of dignity and self-determination. This is unacceptable, and, ultimately, it too is unsustainable.

So for both Israelis and Palestinians and, indeed, for all the people of the region, it is in their interest to end this conflict and bring a just, lasting, and comprehensive peace to the Middle East based on two states for two peoples.

For two years, you have heard me and others emphasize again and again that negotiations between the parties is the only path that will succeed in securing their respective aspirations; for the Israelis, security and recognition; for the Palestinians, an independent, viable sovereign state of their own. This remains true today. There is no alternative other than reaching mutual agreement. The stakes are too high, the pain too deep, and the issues to complex for any other approach.

Now, it is no secret that the parties have a long way to go and that they have not yet made the difficult decisions that peace requires. And like many of you, I regret that we have not gotten farther faster in our recent efforts. That is why yesterday and today I met with Israeli and Palestinian negotiators and underscored our seriousness about moving forward with refocused goals and expectations.

It is time to grapple with the core issues of the conflict on borders and security; settlements, water and refugees; and on Jerusalem itself. And starting with my meetings this week, that is exactly what we are doing. We will also deepen our strong commitment to supporting the state-building work of the Palestinian Authority and continue to urge the states of the region to develop the content of the Arab Peace Initiative and to work toward implementing its vision.

Over recent months, Prime Minister Netanyahu and President Abbas have met face to face multiple times. I have been privileged to be present during their meetings in Sharm el-Sheikh, in Jerusalem, and in Washington. I have also had the chance to talk with each leader privately. These were meaningful talks that yielded new clarity about the gaps that must be bridged.

Significantly, both sides decided together to pursue a framework agreement that would establish the fundamental compromises on all permanent status issues and pave the way for a final peace treaty.

Reaching this goal will not be easy by any means. The differences between the two sides are real and they are persistent. But the way to get there is by engaging, in good faith, with the full complexities of the core issues and by working to narrow the gaps between the two sides.

By doing this, the parties can begin to rebuild confidence, demonstrate their seriousness, and hopefully find enough common ground on which to eventually re-launch direct negotiations and achieve that framework.

The parties have indicated that they want the United States to continue its efforts. And in the days ahead, our discussions with both sides will be substantive two-way conversations with an eye toward making real progress in the next few months on the key questions of an eventual framework agreement. The United States will not be a passive participant. We will push the parties to lay out their positions on the core issues without delay and with real specificity. We will work to narrow the gaps asking the tough questions and expecting substantive answers. And in the context of our private conversations with the parties, we will offer our own ideas and bridging proposals when appropriate.

We enter this phase with clear expectations of both parties. Their seriousness about achieving an agreement will be measured by their engagement on these core issues. And let me say a few words about some of the important aspects of these issues we will be discussing.

First, on borders and security. The land between the Jordan River and the Mediterranean is finite, and both sides must know exactly which parts belong to each. They must agree to a single line drawn on a map that divides Israel from Palestine and to an outcome that implements the two-state solution with permanent Palestinian borders with Israel, Jordan, and Egypt. The Palestinian leaders must be able to show their people that the occupation will be over. Israeli leaders must be able to offer their people internationally recognized borders that protect Israel’s security. And they must be able to demonstrate to their people that the compromises needed to make peace will not leave Israel vulnerable. Security arrangements must prevent any resurgence of terrorism and deal effectively with new and emerging threats. Families on both sides must feel confident in their security and be able to live free from fear.

Second, on refugees. This is a difficult and emotional issue, but there must be a just and permanent solution that meets the needs of both sides.

Third, on settlements. The fate of existing settlements is an issue that must be dealt with by the parties along with the other final status issues. But let me be clear: The position of the United States on settlements has not changed and will not change. Like every American administration for decades, we do not accept the legitimacy of continued settlement activity. We believe their continued expansion is corrosive not only to peace efforts and two-state solution, but to Israel’s future itself.

And finally, on Jerusalem which is profoundly important for Jews, Muslims, and Christians everywhere. There will surely be no peace without an agreement on this, the most sensitive of all the issues. The religious interests of people of all faiths around the world must be respected and protected. We believe that through good faith negotiations, the parties should mutually agree on an outcome that realizes the aspirations for both parties, for Jerusalem, and safeguard its status for people around the world.

These core issues are woven together. Considering the larger strategic picture makes it easier to weigh the compromises that must be made on both sides and see the benefits to be gained. We are not moving forward in a vacuum. From day one, the Obama Administration has recognized the importance of making progress on two simultaneous and mutually reinforcing tracks – negotiations between the parties and institution-building that helps the Palestinians as they prepare to govern their own state. Improvements on the ground give confidence to negotiators and help create a climate for progress at the peace table.

So even as we engage both sides on the core issues with an eye toward eventually restarting direct negotiations, we will deepen our support of the Palestinians’ state-building efforts. Because we recognize that a Palestinian state achieved through negotiations is inevitable.

I want, once again, to commend President Abbas and Prime Minister Fayyad for their leadership in this effort. Under the Palestinian Authority’s Two-Year State-Building plan, security has improved dramatically, services are being delivered, and the economy is growing.

It is of course true that much work remains to reverse a long history of corruption and mismanagement. But Palestinians are rightfully proud of the progress they have achieved, and the World Bank recently concluded that if the Palestinian Authority maintains its momentum in building institutions and delivering public services, it is – and I quote – “Well positioned for the establishment of a state at any point in the near future.”

The United States is continuing our efforts to support this important work along with many other international partners, NGOs and governments, including the government of Israel to bring together key players to focus on solving specific challenges in the region, including in the Palestinian territories, we have launched an initiative called Partners for a New Beginning chaired by Madeleine Albright, Walter Isaacson, and Muhtar Kent. And we are working directly with the Palestinian Authority on a range of issues. Last month I was pleased to announce the transfer of an additional $150 million in direct assistance to the Palestinian Authority.

This fall, to cite one example, American experts in partnership with the Palestinian Water Authority, began drilling new and much needed wells in Hebron. And with recent Israeli approvals, we soon will begin several water infrastructure projects in Gaza that the Palestinian Authority has identified as priorities. These and other efforts to expand wastewater treatment and provide sanitation services have already helped 12,000 Palestinian families gain access to clean water.

The United States is working with the Palestinian Authority, with Israel, and with international partners to ease the situation in Gaza and increase the flow of needed commercial goods and construction supplies while taking appropriate measures to ensure they don’t fall into the wrong hands. We are pleased with Israel’s recent decision to allow more exports from Gaza which will foster legitimate economic growth there. This is an important and overdue step, and we look forward to seeing it implemented.

Now, we also look forward to working with Israel and the Palestinian Authority on further improvements while maintaining pressure on Hamas to end the weapons smuggling and accept the fundamental principles of peacemaking – recognizing Israel, renouncing violence, and abiding by past agreements. This is the only path to achieve Palestinians’ dreams of independence.

Security is one area where the Palestinian Authority has made some of its most dramatic progress. I have seen it myself on recent trips to the West Bank, where well-trained and well-equipped Palestinian security forces stood watchful guard. Families in Nablus and Jenin shop, work, and play with a newfound sense of security, which also contributes to the improved economic conditions. As the Palestinian security forces continue to become more professional and capable, we look to Israel to facilitate their efforts. And we hope to see a significant curtailment of incursions by Israeli troops into Palestinian areas.

But for all the progress on the ground and all that the Palestinian Authority has accomplished, a stubborn truth remains: While economic and institutional progress is important, indeed necessary, it is not a substitute for a political resolution. The legitimate aspirations of the Palestinian people will never be satisfied, and Israel will never enjoy secure and recognized borders until there is a two-state solution that ensures dignity, justice, and security for all.

This outcome is also in the interests of Israel’s neighbors. The Arab states have a pivotal role to play in ending the conflict. Egypt and Jordan in particular have been valuable partners for peace. In the days ahead, as we engage with the parties on the core issues and support the Palestinian people’s efforts to build their own institutions, we will also continue our diplomacy across the region and with our partners in the Quartet. Senator Mitchell will leave this weekend for Jerusalem and Ramallah and will then visit a number of Arab and European capitals.

Our message remains the same: The Arab states have an interest in a stable and secure region. They should take steps that show Israelis, Palestinians, and their own people that peace is possible and that there will be tangible benefits if it is achieved. Their support makes it easier for the Palestinians to pursue negotiations and a final agreement. And their cooperation is necessary for any future peace between Israel and Lebanon and Israel and Syria.

We continue to support the vision of the Arab Peace Initiative, a vision of a better future for all the people of the Middle East. This landmark proposal rests on the basic bargain that peace between Israel and her neighbors will bring recognition and normalization from all the Arab states. It is time to advance this vision with actions, as well as words. And Israel should seize the opportunity presented by this initiative while it is still available.

In the end, no matter how much the United States and other nations around the region and the world work to see a resolution to this conflict, only the parties themselves will be able to achieve it. The United States and the international community cannot impose a solution. Sometimes I think both parties seem to think we can. We cannot. And even if we could, we would not, because it is only a negotiated agreement between the parties that will be sustainable. The parties themselves have to want it. The people of the region must decide to move beyond a past that cannot change and embrace a future they can shape together.

As a political figure, a Senator, and now as Secretary of State, I have seen what it takes for old adversaries to make sacrifices and come together on common ground. Unfortunately, as we have learned, the parties in this conflict have often not been ready to take the necessary steps. Going forward, they must take responsibility and make the difficult decisions that peace requires.

And this begins with a sincere effort to see the world through the other side’s eyes, to try to understand their perspective and positions. Palestinians must appreciate Israel’s legitimate security concerns. And Israelis must accept the legitimate territorial aspirations of the Palestinian people. Ignoring the other side’s needs is, in the end, self-defeating.

To have a credible negotiating partner, each side must give the other the room, the political space to build a constituency for progress. Part of this is recognizing that Israeli and Palestinian leaders each have their own domestic considerations that neither side can afford to ignore. It takes two sides to agree on a deal and two sides to implement a deal. Both need credibility and standing with their own people to pull it off.

So this is also about how the leaders prepare their own people for compromise. Demonizing the other side will only make it harder to bring each public around to an eventual agreement.

By the same token, to build trust and momentum, both sides need to give the other credit when they take a hard step. As we begin to grapple with the core issues, each side will have to make difficult decisions, and they deserve credit when they do so. And it should not just be the United States that acknowledges moves that are made; the parties themselves must do so as well.

To demonstrate their commitment to peace, Prime Minister Netanyahu and President Abbas and their respective teams should take these steps. They should help build confidence, work to minimize distractions, and focus on the core questions, even in a period when they are not talking directly.

To demonstrate their commitment to peace, Israeli and Palestinian leaders should stop trying to assign blame for the next failure, and focus instead on what they need to do to make these efforts succeed.

And to demonstrate their commitment to peace, they should avoid actions that prejudge the outcome of negotiations or undermine good faith efforts to resolve final status issues. Unilateral efforts at the United Nations are not helpful and undermine trust. Provocative announcements on East Jerusalem are counterproductive. And the United States will not shy away from saying so.

America is serious about peace. We know the road forward will not be easy. But we are convinced that peace is both necessary and possible. So we will be persistent and press forward. We will push the parties to grapple with the core issues. We will work with them on the ground to continue laying the foundations for a future Palestinian state. And we will redouble our regional diplomacy. When one way is blocked, we will seek another. We will not lose hope and neither should the people of the region.

Peace is worth the struggle. It is worth the setbacks and the heartaches. A just and lasting peace will transform the region. Israelis will finally be able to live in security, at peace with their neighbors, and confident in their future. Palestinians will at last have the dignity and justice they deserve with a state of their own and the freedom to chart their own destiny. Across the Middle East, moderates and advocates of peace and coexistence will be strengthened, while old arguments will be drained of their venom and the rejectionists and extremists will be exposed and marginalized.

We must keep our eyes trained on this future and work together to realize it. That is what this is all about. That is what makes the compromises and difficult decisions worth it, for both sides.

We are now in the holiday season, a time of reflection and fellowship. The National Christmas Tree is lighting up the sky. Jewish families have just completed the eight days of Hanukkah, the Festival of Lights, which reminds us that even when the future looks darkest, there is light and hope to be found through perseverance and faith. Muslims around the world also recently celebrated Eid al-Adha, the Festival of Sacrifice, which teaches the story of a man whose faith was tested when he was ordered by God to give up his beloved son. Whether we call him Abraham, Avraham, or Ibrahim, this man is the father of all the faiths of the Holy Land. He is a reminder that despite our differences, our histories are deeply entwined. And so too are our futures.

Today we should remember these stories. Sometimes we will be asked to walk difficult roads together, and sometimes these roads will be lined with naysayers, second-guessers, and rejectionists. But with faith in our common mission, we can and will come through the darkness together. That is the way – the only way toward peace, and that is what I hope we will keep in mind as we make this journey – this difficult journey toward a destination that awaits.

Thank you and may God bless you in this effort.

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G20 - Balance of power is shifting from developed to emerging economies

2010-11-18T10:44:00.004-05:00

The Leaders of the G20 recently had their fifth meeting since the start of the world recession in 2008. Many commentators view the outcome as neither surprising nor particularly disappointing. The Leaders build on their original commitments to support and stabilise the global economy and to lay the foundation for reform. They adopted an Action Plan which focuses on five policy areas namely: monetary and exchange rate polices, trade and development policies, fiscal policies, financial reforms, and structural reforms. However, given the complex world that we live in, these countries will have to rely on a number of international organisations such as the WTO, World Bank and IMF to pursue these reforms.

In the area of monetary and exchange rate policies, they agreed to follow “more market-determined exchange rate systems” to reflect underlying economic fundamentals. This came in response to China’s unwillingness to allow the Yuan to appreciate and America’s push for more liquidity into its banking system. However, in reference to concerns of emerging markets with overvalued flexible exchange rates such as South Africa, countries may respond with “carefully designed macro-prudential measures”. This could be interpreted as giving these countries the go-ahead to take the necessary steps to deal with the vast capital inflows into their economies, which have driven the currency gains.

On the issue of trade and development they reaffirmed their previous commitment to refrain from protectionist trade actions and to conclude the Doha Round of multilateral trade negotiations. They also agreed to formulate medium-term fiscal consolidation plans for advanced economies in line with the Toronto commitment. This commitment must ultimately bring about the stabilisation or reduction of government debt to GDP ratios by 2016 and to at least halve deficits by 2013.

The Leaders agreed to raise international financial regulation standards and to ensure that national authorities fully implement current global standards. They endorsed the policy framework by the Financial Stability Board to address problems related to systemically important financial institutions and banks that are purported to be too-big-to-fail. This latest undertaking comes in response to the financial crisis that was caused by reckless and irresponsible risk taking by banks and other financial institutions, combined with major regulatory and supervisory failures.

These decisions came amid a related debate on the reform of international financial institutions. These organisations, originally responsible for the regulation of the international economy after the Second World War, were created for a different time and purpose. Urgent reforms were necessitated by the realities of a multi-polar global economy where developing countries are now key global players. In response to better reflect these realities, the voting powers of developing and transition countries at the World Bank were increased earlier this year. The 3.13 percentage point increase in the voting power of these countries brought their share to 47.19 percent.

Similarly, the IMF’s Executive Board also announced governance reforms earlier this month. This will bring about a 6 percent shift in the voting power of developing countries. Accordingly, the top ten shareholders of the Fund; the United States, Japan, the four largest European economies (France, Germany, Italy and the United Kingdom), and the BRICs (Brazil, China, India and the Russian Federation) will better reflect their ranking in the global economy.

One thing is clear; the balance of power is shifting from developed to emerging economies.

By: JB Cronje - Tralac South Africa
http://www.tralac.org/cgi-bin/giga.cgi?cmd=cause_dir_news_item&cause_id=1694&news_id=95688&cat_id=1059

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South Africa - A Very Sick Society - Vavi

2010-11-17T12:07:00.004-05:00

Keynote address to the Civil Society Conference by Zwelinzima Vavi, General Secretary of COSATU, 27 October 2010, Boksburg, South Africa

How can we build on the World Cup success and mobilise our society to build a more egalitarian nation

Comrade COSATU President, Sidumo Dlamini
Comrade TAC Chairperson, Nonkosi Khumalo
Representatives of COSATU, NACTU, FEDUSA and CONSAWU
Representatives of civil society formations
Comrades and friends

Inspired by the African proverb that says ‘If you want to go quickly, go alone. If you want to go far, go together', we gather here - as the progressive trade unions, social movements, NGOs, progressive academics, small business and street vendor associations, taxi associations, religious bodies, youth organisations, environmental groups, indigenous peoples' groups and other progressive formations - to say to ourselves that we have the capacity to make a decisive contribution in changing our current situation for the better.

Internationally, globalisation and neoliberal have launched assaults on the working class, which include, but are not limited to: informalisation, flexibilisation, regionalisation of states, deregulation, marketisation, financialisation, and securitisation. The global governance, commercial and trade system is supported by political and ideological institutions, rules and enforcement mechanisms that only broad civil society coalitions have historically been able to challenge successfully.

In South Africa, the GEAR strategy epitomised the dominance of the neoliberal ideology within the leading sections of the government. The neoliberal logic still continues to be dominant, in spite of some talk about a developmental state. Increasingly though it has taken a more crude political expression and there are some emerging elements that tend to perceive the working class and active elements of civil society as merely being a nuisance that must be crushed with the might of the state apparatus.

Today, as we gather here, there is panic in the ranks of the predatory elite, which is a new coalition of the tenderpreneurs. Paranoia elsewhere is deepening with the political elite, convincing itself that any gathering of independent civil society formations to confront our challenges is a threat to them.

Let us right from onset state that we are not an anti-ANC and anti-government coalition. We are not here to begin a process to form any political party, nor to advance the interest of any individual. We have only one enemy - neoliberalism, that has condemned our people to poverty and unemployment. We want to roll back neoliberal advances and struggle for the adoption and implementation of alternatives. Our struggles have to be both defensive and offensive.

We are friends to all genuinely anti-neoliberal and pro-poor and working class political parties that have an undisputable record of struggle to advance our interests as the marginalised societies.

We gather here to say another South Africa is possible! Another world is possible!

On 11 July, just four months ago, all South Africans were basking in the reflected glory of our successful hosting of the best-ever FIFA world Cup. The whole world saw our country at its best - united, efficient, friendly and enthusiastic.

The question we were all asking was - if we can organise such a brilliant event so well, how can we use the qualities that contributed to that World Cup triumph to create jobs, build houses, provide education for our children, launch a free national health service and solve all the other major problems we face.

So we urged the government and every union, civil society formation, political party, business and faith organisation to sign a new declaration in support of a programme to rebuild our country and build a lasting legacy of the 2010 World Cup.

Today's historic conference takes this decision forward. It brings together the people who are best able to meet this challenge - South African civil society and trade unions. The forces we represent here today can - and indeed must - have a decisive say in the future of our country. Our goal must be to forge a strong, united movement for change.

A similar united social movement - of COSATU, the UDF, civic movements and progressive NGOs - played a critical role - alongside the unbanned ANC and SACP - in bringing the racist dictatorship to its knees in those decisive years leading up to our democratic breakthrough in 1994.

The challenges we face today are different but nevertheless very major and require a similar mobilisation of the democratic forces as we saw in those years.

Comrades and friends

In our 16 years of democracy we have achieved major advances. We have a democratic Constitution and many laws, which have given South Africans basic rights, on paper at least, to freedom, dignity and equality.

There have been significant important improvements in the lives of millions of our people. As examples: In 1996, only 3 million people had access to social grants; today the figure is 14 million. In 1996, 58% of the population had access to electricity; today the figure is 80%. In 1996, 62% of the population had access to running water; today the figure is 88%. We have built 3.1 million subsidised houses, giving shelter to over 15 million people.

Despite our historic victories on the political battlefield, however, in the economic arena, many of the problems we faced in 1994 are still very much with us in 2010.

The central challenge is that our economic structure, in particular the distribution of wealth and income, remains largely unchanged, and in one crucial respect - inequality - has worsened, to become the widest in the world, and it also still reflects the racial and gender features of apartheid, with wealth and financial power still predominantly in the hands of white males.

The top 20 paid directors in JSE listed companies earned on average 1 728 times the average income of a South African worker while state-owned enterprises paid CEOs 194 times an average worker's income.

Typical of everything that is wrong with our society today, is this week's announcement that Standard Bank, whose CEO Jacko Maree received a massive R18, 2m in 2009 alone, intends to retrench over 2000 staff, making workers pay the price for their bosses' extravagance and incompetence.

In the 21 months from January 2009 to September 2010, we have lost 1 145 000 jobs, which, as we keep saying means that because each wage earner supports on average five dependents, more than 5.7 million people were thrown into poverty. The latest figures released yesterday reveal that the official rate of unemployment is still rising, even if more slowly, to 25.3%; a further 45 000 jobs were lost in the third
quarter of 2010.

In education - although we have made progress in many areas, such as the improved access to education, in particular for girl children, reduction of the teacher to pupil ratio, the introduction of more no-fee schools, etc. - black working class students are still at the receiving end of an unequal system. We have not transformed the education system in either quality or quantity.

The drop-out rate for children who started school in 1998 was 64%. Our matric pass rate last year was 60.6%. A staggering 70% of (matric) exam passes are accounted for by just 11% of schools, where the mainly white rich can buy their children top-quality education. The culture of learning and teaching has collapsed and many of our schools, in particular in the former blacks only residential areas are dysfunctional. Many of our schools have no libraries and no laboratories.

It is the same story in our healthcare service. The apartheid fault lines persist. While the mainly white wealthy can buy world-class healthcare in the private sector, 86% of mainly black poor have to struggle to get any service at all in an under-funded, understaffed public sector where in some parts patients are told to bring their own bedding and with only Panado available, in filthy hospitals where rights of patients are hung on the wall but not their living reality.

Although we rank 79th globally in terms of GDP per capita, we rank 178th in terms of life expectancy, 130th in terms of infant mortality, and 119th in terms of doctors per 1000 people.

The HIV and AIDS epidemic has worsened our situation, with life expectancy dropping from 62 years in 1992, to 50 years in 2006. Yet we know that in terms of South African Institute of Race Relations survey in 2009, the life expectancy of a white South African now stands at 71 years and that of a black South African at 48.

Comrades and friends

The high levels of poverty and inequality aggravate many other anti-social phenomena which we see increasingly - violent community protests, xenophobia crime, corruption and the collapse of social and moral values. We face not just personal and family disasters but a national catastrophe, a ticking bomb, which has already begun to explode in our poorest communities.

This was our reasoning behind calling this summit. We can't stand there making speeches without developing a programme that will mobilise our society to stop this ticking bomb from exploding. "The ultimate measure of a man is not where he stands in moments of comfort, but where he stands at times of challenge and controversy." Martin Luther King, Jr.

Corruption in particular is a matter of life and death for our democracy. Day after day we see allegations of trusted public representatives being accused of using their position to enrich themselves and their families. Some allegations may be groundless; most public officials are honest servants of the people. But only full investigations into every allegation will clear the innocent and lead to the conviction and punishment of those who steal from the poor who put them in power. We should give our full support to the government's efforts to bring offenders to justice.

The source of the problem has always been the capitalist system, which is run on the principle of ‘me-first'. Whilst workers' universal slogan is "an injury to one is an injury to all" the capitalist mentality daily practises: "an injury to one is an opportunity to another".

For every official who receives a bribe there is a businessperson who gives the bribe to ‘persuade' the official to use his or her political power to advance private commercial interests. This is the biggest threat to our efforts to establish a transparent and corruption-free government.

It is even worse when the public representatives themselves, or family members, are getting rich from government tenders. The mere fact that they are in business to make money creates an inevitable conflict of interest when they are legislating in parliament, a provincial legislature or municipal council.

The danger always exists that in formulating policy, they will be guided by the impact this will have on their businesses rather than the broader public interest. We have called on our public representatives and union leaders to choose between being people's representatives or being in business.

It is greed that is inspired by the conspicuous consumption of the new elite - the BEE types who blow up to R700 000 on one-night in parties that makes the public representatives not want to live within the means provided by their salaries and rather hefty perks.

The corrupting morality our public representatives is seen in these parties. where I am told in one party sushi was served from bodies of half naked ladies. It is the sight of these parties where the elite display their wealth often secured in questionable methods that turn my stomach. It is this spitting on the face of the poor and insulting their integrity that makes me sick. Next year this elite will not go out door-to-door to get our people to vote. But soon thereafter they will host victory parties to scavenge on the carcass of our people like the typical hyenas that they are.

Our belief is that if we were to confiscate all the medical aids, that most of us here have; if our cabinet Ministers and MPs were forced to take their children to the public hospitals and be subjected to the same conditions as the poor; if we were to burn their private clinics and hospitals and private schools; if the children of the bosses were to be loaded into unsafe open bakkies to the dysfunctional township schools; if the high walls and electronic wired fences were to be removed; if all were forced to live on R322 a month, as 48% of the population has to do, and if their kids were to die without access to antiretrovirals, we would have long ago seen more decisive action on many of these fronts.

Our society in many ways is a very sick society. In addition to allowing these massive inequalities and for apartheid to continue in the economy, we are now sitting indifferent when the new elite is on rampage, humiliating the very motive force of our liberation struggle.

A few kilometres from where we are today hundreds of workers have not been paid for 10 months by their black empowerment bosses in the company called Aurora. Young people in their 20s and 30s have become overnight multimillionaires. A message is being sent out to our students that says:

‘Why work so hard when few correct political-sounding speeches and demagoguery can make you a multimillionaire'.

It says to the genuine entrepreneurs:

‘Why sweat when political connections and greasing the hand of those in political office can make you an instant billionaire?'

We are rewarding laziness, greed and corruption and discouraging hard work, honesty and integrity.

In the process we making our political organisations new battlegrounds where we have replaced the apartheid regime in killing and poisoning those identified as a threat to the march to gain these not-worked-for riches. Look at what is happening in COPE, IFP? Now even Lucas Mangophe is not safe. Look at what is happening in the ANC in some provinces. Look at the number of splits in every political party.Genuineness is fast becoming a rare commodity!

But as the poor and the black people in general, we can't afford to sit on our laurels and do nothing about these conditions. Our dream is that of a mobilised poor that takes its destiny into its own hands.

Why must we allow our schools not to function when we have numbers to flood the school governing bodies, and insist that teachers must be at school all the time, must prepare for classes and must teach for 7 and half hours for five days a week?

Why are we not mobilising to deal with the ill-discipline of our own kids? Why are we not mobilising to change the culture of mainly working class parents and taking an active interest in the education our children? Why have we not mobilised to change the work ethics of our members in the public sector so that they give the first-class treatment to the poor who have no money to go and get better services in the private sector?

Why have we allowed criminals to take our freedom away and return to our townships after 1994, only to rape and murder us daily, one by one, when we have the power of the numbers to drive them out? Why are today allowing a new class of tenderpreneurs to threaten our freedom and impose stinking morality of greed?

Yes we are angry! Yes COSATU is angry! Yes our tolerance levels are running thin! We can no longer just fold our arms and do nothing. Today we are here to say we want our freedom back from the elite and all these rogue elements of our society. Their party must come to an end. We demand a more egalitarian society today and moving forward!

Comrades and friends

The roots of nearly all these problems lie in the failed economic policies adopted in 1996, centred around the misnamed Growth, Employment and Redistribution (GEAR) strategy. It led to growth at a snail's pace, higher unemployment and only redistributed wealth from the poor to the rich! It was a policy based on the misguided free-market, neoliberal policies of the ‘Washington consensus', which led directly to the devastating worldwide economic crisis of 2008 and 2009.

The government yesterday announced its new growth path, which aims to create 5 million jobs by 2020, bringing the unemployment rate down to 15%. While we obviously welcome and support such a target, we shall have to study in detail how the government's new growth plan will achieve this.

COSATU has accepted the challenge to produce its alternative strategy. In "A Growth path Towards Full Employment", we set out a path which will transform our economy into one based on the expansion of manufacturing industry and the creation of decent and sustainable jobs. Let us hope we have persuaded government to base their new growth path strategy on the same principles.

But most important is that the strategy must be turned from words into deeds. It will be a tragedy if we miss this historic opportunity to build a developmental state and turn the economy around.

It would be a disaster if the government were to believe that we can continue with the status quo. It would mean condemning another generation of living with no jobs, no money and no hope.

So I appeal to every organisation represented here today to sign the post-World Cup Declaration, which will commit us all to:

1. Remain united behind Bafana Bafana and do everything possible to promote soccer, which remains the biggest and most popular sport, yet is seriously under-developed. We need to develop academies to hone the skills of unknown South African Peles, Drogbas and Ronaldos, who have no opportunity for their skills to be recognised.

2. Bring down the astronomical levels of unemployment, poverty and inequality, which blight our land. Even as we prepare to host the World Cup, jobs continued to disappear, inequalities continued to grow and poverty remain widespread after the World Cup. We need a new economic growth path that will help address these challenges with necessary urgency and speed.

3. Address the challenges of our education system. The 1-Goal Campaign and the Nelson Mandela Day celebrations offer an opportunity to take our international icon's dream to new heights. We call on government to prioritise building and refurbishing schools and to ensure that all schools receive adequate support from the education departments at all levels. We must move beyond the call for all to donate books and build school libraries on Nelson Mandela Day and run for 12 months until every school functions and is a centre of empowerment to build a new generation that can take our dreams to a new height.

4. Unite behind a goal of transforming our health system and implementing the National Health Insurance Scheme. We have to fix our public hospitals and defeat the scourge of HIV/AIDS to build a healthy nation and improve our country's life expectancy.

5. Address underdevelopment and poverty in rural areas. This campaign should address food insecurity and empower our people to use land that currently lies unused, so that people can produce the food they need and escape from their deep levels of unemployment and poverty.

6. Lead a campaign against crime and corruption. We can build on the successes of the World Cup by sending out an unequivocal message that crime does not pay. Corruption is stealing from the poor to feed into narrow elites' selfish accumulation interests. Corruption kills the spirits of the majority, black and white, who want to work hard to build their country.

7. Mobilise to fix the energy challenge the country is facing. We need more action and not empty words to ensure that South Africa moves out of the current crisis. Imagine a day when thousands of activists move door-to-door handing over pamphlets to our people educating them about the benefits of saving electricity.

8. Mobilise to address the looming water shortage crises so that we do not wait for 2025 when the problem will be much more intense. Let us through our people hold the mine bosses who have been allowed after making billions to abandon their now empty mines and pollute our water. Let us defend our environment and keep our country beautiful and natural whilst also developing.

9. Mobilise the working class and educate them to appreciate that no matter how bad living conditions are, there can be no excuse for blaming fellow-Africans and other foreign nationals for the country's and continent's economic failures. Let us do everything possible to prevent a new outbreak of xenophobic attacks in some of our poorest communities. They are not the cause but the fellow victims of our unjust and unequal economic system. Workers and the poor must stand united against the common enemies of capitalist greed and corruption.

10. Lastly and most importantly, address the massive challenges of underdevelopment in the continent. Africa cannot succeed in developing its economies and transforming the lives of our people while it is still ravaged by poverty. Let us defeat the tyrants in Swaziland, Zimbabwe, Sudan and elsewhere whose refusal to vacate their positions and allow democracy means that can be no hope of Africa ever rising to ensure a coordinated effort to defeat under development. Let us mobilise to free our people in Western Sahara from their colonial masters!

These are just some of the many challenges we face. I look forward to hearing the outcome of the commissions and hope that we shall emerge from this conference tomorrow united and determined to build a South Africa run by and for the working class and the poor. I wish you a very successful conference.

Issued by COSATU, October 27 2010

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US - India Transactions

2010-11-07T07:12:00.005-05:00

As part of the National Export Initiative, President Obama noted that India-with its tremendous economic growth and its large and growing middle class -is a key market for U.S. exports.

Those exports are generating jobs in every corner of the United States and across every major sector. These involve some of our country's largest companies, but also an increasing number of small and medium-sized enterprises.

On the margins of the President's trip, trade transactions were announced or showcased, exceeding $14.9 billion in total value with $9.5 billion in U.S. export content, supporting an estimated 53,670 U.S. jobs.

These cross-border collaborations, both public and private, underpin the expanding U.S.-India strategic partnership, contributing to economic growth and development in both countries.

The following list of deals and details has been quoted verbatim from the official White House statement:

Heavy Transport Aircraft: The Boeing Company and the Indian Air Force have reached preliminary agreement on the purchase of 10 C-17 Globemaster III military transport aircraft, and are now in the process of finalizing the details of the sale. Once all have been delivered, the Indian Air Force will be the owner and operator of the largest fleet of C-17s outside of the United States. Boeing, headquartered in Chicago, Illinois, is the aircraft manufacturer. Boeing reports that each C-17 supports 650 suppliers across 44 U.S. states and that this order will support Boeing’s C-17 production facility in Long Beach, California, for an entire year. This transaction is valued at approximately $4.1 billion, all of which is U.S. export content, supporting an estimated 22,160 jobs.

Engine Sale for the Light Combat Aircraft: On October 1, the General Electric Company, headquartered in Fairfield, Connecticut, was declared the lowest bidder and selected to negotiate a contract to provide the Indian Aeronautical Development Agency with 107 F414 engines to be installed on the Tejas light combat aircraft. Upon finalizing the contract, General Electric’s facility in Lynn, Massachusetts, and other sites across the United States will be positioned to export almost one billion dollars in high technology aerospace products. This transaction is tentatively valued at approximately $822 million, all of which is U.S. export content, supporting an estimated 4,440 jobs.

Commercial Aircraft Sale: Boeing Company, headquartered in Chicago, Illinois, and SpiceJet, a leading private airline in India, concluded a definitive agreement for the sale of 30 B737-800 commercial aircraft. SpiceJet currently operates 22 Boeing aircraft and has several 737 deliveries remaining from previous agreements. This new agreement will enable SpiceJet to offer more domestic routes and to begin offering international flights to neighboring countries. This transaction is valued at approximately $2.7 billion, based on catalogue prices, with an estimated $2.4 billion in U.S. export content, supporting an estimated 12,970 jobs.

Gas and Steam Turbine Sale: The General Electric Company, headquartered in Fairfield, Connecticut, was selected to supply six advanced class 9FA gas turbines and three steam turbines for the 2,500-megawatt Samalkot power plant expansion to be constructed by Reliance Power Ltd., a division of the Reliance Anil Dhirubhai Ambani Group, one of the largest conglomerates in India. General Electric purchases equipment from 240 suppliers across the United States—an estimated 14 percent of which are small- and medium-sized enterprises—for every 9FA gas-fired turbine, which are assembled in Greenville, South Carolina. The combined equipment and maintenance contracts are valued at approximately $750 million, with an estimated $491 million in U.S. export content, supporting an estimated 2,650 jobs.

Reliance Power and U.S. Ex-Im Bank Agreement: Reliance Power Ltd., the flagship company of the Reliance Anil Dhirubhai Ambani Group, and the Export – Import Bank of the United States announced a Memorandum of Understanding (MOU). This MOU will indicate Ex-Im Bank’s willingness to provide up to $5 billion in financial support to Reliance Power for the purchase of U.S. goods and services to be used in the development of up to 8,000 megawatts of gas-fired electricity generating units and up to 900 megawatts of renewable (solar and wind) energy facilities.

Diesel Locomotive Manufacturing Venture: The United States has worldwide leaders in diesel locomotive manufacturing, and the Indian Ministry of Railways announced the prequalification of the sole two bidders—GE Transportation (Erie, Pennsylvania) and Electro-Motive Diesel (LaGrange, Illinois)—for a venture to manufacture and supply of 1,000 diesel locomotives over 10 years. The estimated U.S. content of this contract is expected to exceed $1B.

Motorcycle Assembly Plant: Harley-Davidson Motor Company, headquartered in Milwaukee, Wisconsin, announced that preparations are underway to open a new plant in India for the assembly of Harley-Davidson motorcycles from U.S.-built “complete knock-down” kits. This investment by the company entails job creation in both the United States and India, and it will allow the company to reduce the tariff burden on its motorcycles for sale in the Indian market, driving sales growth by making its motorcycles more accessible to Indian consumers.

Sale of U.S. Mining Equipment and Related Support Equipment: On October 21, the Export – Import Bank of the United States announced the approval of more than $900 million in export finance guarantees to Sasan Power Ltd., a subsidiary of Reliance Power Ltd., supporting the sale of U.S. mining equipment and services from Bucyrus International of South Milwaukee, Wisconsin, and other U.S. vendors, in association with the 3,960-megawatt coal-fired Sasan power plant in Madhya Pradesh, India. This financial commitment supports $641 million in U.S. export content, supporting an estimated 3,460 jobs.

Tunneling Equipment for Underground Water Channel: On July 22, Robbins Company, headquartered in Solon, Ohio, announced an agreement with UNITY-IVRCL, a large infrastructure engineering and construction conglomerate, to provide tunnel-boring machines, conveyer equipment, and associated technical services for the construction of tunnels to convey water for the city of Mumbai. Separately, through a contract signed in 2008 with Jaiprakash Associates, a large infrastructure conglomerate, the Robbins Company is already supplying high technology tunnel-boring machines and technical assistance to bore some of the longest underground tunnels in the world underneath a protected tiger sanctuary in Andhra Pradesh, which will increase irrigation for the production of cotton and other agricultural products. The Mumbai contract alone is valued at $10 million, with $7 million in U.S. export content, supporting an estimated 35 jobs.

Maharashtra Homeland Security Pilot Projects: Palantir Technologies, a small Silicon Valley software development firm, announced a strategic partnership agreement with the Maharashtra State Police, a law enforcement agency in India, to conduct a pilot program, whereby Palantir’s end-to-end analytical software platform will be used on a trial basis to identify and alert authorities to security threats in order to help keep the citizens of Mumbai and Maharashtra safe.

Medanta Duke Research Institute (MDRI): Duke Medicine, located in Durham, North Carolina, one of the leading academic health systems in the United States, and Medanta Medicity, located in Gurgaon, Haryana, a hospital and medical research complex, are announcing a joint venture agreement to launch the MDRI, a proof-of-concept clinical research facility within Medanta’s hospital. Duke Medicine will provide scientific and operational leadership, while Medanta will contribute financial resources and clinical and operational services. Duke Medicine also will be partnering with Jubilant Life Sciences, headquartered in Uttar Pradesh, to conduct research studies and co-develop promising discoveries, with significant funding and in-kind support provided by Jubilant. Subsequent commercialization is expected to result in licensing revenue for Duke Medicine.

Long-range Antenna System for Rural Telecommunications: SPX Communication Technology, a division of SPX Corporation operating out of Raymond, Maine, is in the final phase of the pilot deployment of its long-range antenna system with two leading Indian mobile operators. This innovative technology has been shown to offer a significantly greater coverage area. Once implemented, it is expected to create significant economies of scale, thereby improving the economic viability of rural wireless networks and making wireless communications available for people who either could not afford service or who live in areas that lack coverage. The value of the initial trial equipment is expected to generate approximately $1 million, with 100 percent U.S. export content, supporting an estimated 5 jobs.

Production Equipment for the Manufacture of Pre-fabricated Housing: Spancrete Machinery Corporation, a family-owned business in Waukesha, Wisconsin, announced the sale of six sets of its hollow core, precast production equipment, including installation, training, and after-sales support, to Hindustan Prefab Limited, a state-owned company within the Indian Ministry of Housing and Poverty Alleviation. The production equipment will be used to manufacture inexpensive, prefabricated housing on a mass scale in India. Spancrete also is working with Somat Engineering, Inc., from Detroit, Michigan, and their affiliate, SP Infrastructure India Ltd., in New Delhi. This transaction is valued at approximately $35 million, all of which is U.S. export content. Based on the company’s estimates, the transaction will support 30 jobs.

Cell Phone Rollout for Small Indian Businesses: Intuit, a company headquartered in Mountain View, California, which serves millions of small businesses worldwide, will launch a new mobile and web-based marketing service in partnership with Nokia, called “Intuit GoConnect”. This innovative technology will help Indian micro and small businesses grow and thrive by bringing customer management tools to the entrepreneur, improving the way they communicate with their customers in an increasingly mobile world.

The Unique Identification Project: L-1 Identity Solutions, headquartered in Stamford, Connecticut, and another U.S.-headquartered company, lead two of the three vendor consortia, which have been prequalified by the Unique Identity Authority of India for the first phase of an effort to register Indian residents with a 12-digit unique number using biometric identifiers. Unprecedented in scale, seeking to register 1.2 billion Indian residents, the Unique Identification program aims to enhance delivery of government services in India.

Sale of Precision Measurement Instruments for Fuel Cell Research: Advanced Materials Corporation (AMC), a small, six-person firm in Pittsburgh, Pennsylvania, received an order to supply a specially-designed Pressure-Composition Isotherm Measurement Instrument to the Banaras Hindu University (BHU) in Varanasi, India. BHU will utilize AMC’s instrument to test fuel cell applications, as part of an Indian central government research program.

Trace Explosive Detection Equipment: Implant Sciences, a small company based in Wilmington, Massachusetts, signed a contract with the Ministry of Defence in January to supply its Quantum Sniffer H-150, trace detection devices to be used by the Indian Army to detect the presence of explosive, bomb-making materials that could be used in a terrorist attack. The company announced that the equipment will be ready for pre-dispatch inspection and delivery in November. The transaction is valued at approximately $6 million, all of which is U.S. export content, supporting an estimated 30 jobs.

VIP Helicopter Sale: On August 25, Bell Helicopter, based in Hurst, Texas, signed a purchase agreement with Span Air, a private air charter company, for the sale of its first Bell Model 429 corporate VIP helicopter in India. Span Air has a second order slated for delivery in mid-2011. Bell Helicopter recently sold its 100th helicopter in India.

Sales of Pre-owned Refurbished Healthcare Equipment: Skelley Medical, a rural New Hampshire-based company, sells refurbished medical equipment to Indian hospitals in second and third tier cities through partnerships with various distributors in India. Skelley announced plans to open an after-sales service facility in Mumbai as part of a new venture with Triage Systems, a Mumbai-based Indian medical equipment distributor. This facility will service medical equipment purchased by their Indian hospital customers.

Monitoring Equipment for Greening Buildings: Noveda Technologies, a small start-up company in Branchburg, New Jersey, is finalizing a new venture with Chennai-based Wysine Technology to jointly develop and market a new solution for web-based, real-time energy monitoring for “greening” buildings.

Dredges for Maharashtra Maritime Board: Ellicott Dredges, a small company based in Baltimore, Maryland, announced the sale of two cutter suction dredges to the Maharashtra Maritime Board, a Maharashtra government entity. The equipment will be utilized to dredge a fisherman’s port and various tributaries in the state of Maharashtra

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President Obama will underscore the importance of India as a growing market for US exports

2010-11-03T06:51:00.001-04:00

President Obama will underscore the importance of India as a growing market for US exports - and announce some big commercial deals - when he travels to Mumbai and New Delhi next month, White House officials said yesterday.

Trade will be at the top of the agenda on the first day of the President's trip, when he meets with US and Indian business officials. Mr. Obama will deliver a major address on the commercial relationship that same day - November 6 - before the US-India Business Council.

Growing trade with India is crucial to the President's goal of doubling US exports in five years, the officials told reporters yesterday. “We believe that India has a hugely dynamic and growing market and we want to discuss opportunities for how we can deepen our economic relationship,” Deputy National Security Advisor for Strategic Communications Ben Rhodes said.

The officials declined to discuss details of the commercial agreements the President hopes to announce.

Although President Obama has lately spoken out against the “outsourcing” of US jobs overseas to countries like India, Deputy National Security Advisor for International Economic Affairs Mike Froman said the President sees tremendous potential in India for US exports.

Indian Investment

US exports have quadrupled over the last seven years to about $17 billion, while service exports have tripled to about $10 billion a year. Mr. Froman noted that Indian companies are the second-fastest-growing investors in the United States, currently supporting about 57,000 US jobs.

India would like to see a restart of negotiations on a Bilateral Investment Treaty, which remain on hold while the Administration crafts a new model BIT.

New Delhi is hoping that President Obama will use his first state visit to announce that Washington will ease export controls restricting some sales of high-technology dual-use products. The Administration officials declined to say whether an announcement is likely, saying that talks are still ongoing. But Undersecretary of State for Political Affairs William Burns noted that the Administration is in the process of updating its export controls and wants to make sure “India is treated as a partner and not as a target.”

The White House officials praised India for signing yesterday the Convention on Supplemental Compensation, which will pave the way for US companies to participate in Indian civil nuclear development under the bilateral agreement. The convention will help ensure that international standards apply and that US companies have a level playing field on which to compete, Mr. Burns said.

Washington Trade Daily
October 28, 2010

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