On June 19, South Africa took a landmark decision when it, along with the other members of the Brics (Brazil, Russia, India, China and South Africa) group of nations, pledged to bolster the International Monetary Fund (IMF) facility to counter international financial crises and their knock-on effects of slowing demand and growing unemployment
With its $2 billion (R16.3bn) commitment, South Africa clearly signals its position as a leading middle-income country: a country both willing and able to accept the burden of international responsibility in line with its political role and influence on the global stage.
On the home front President Jacob Zuma’s pledge was swiftly condemned by one of the ANC’s alliance partners as a donation to the less needy. Understandable as this reaction is, in light of South Africa’s significant poverty eradication challenges, the country’s benefits from stabilised international markets should not be underestimated.
South Africa must be congratulated for its decision. Allocating these resources clearly indicates that the country recognises the benefits of – and risks to – participation in a globalised world. Put differently: we all need each other.
As one of only 10 strategic partners of the EU, South Africa’s actions, decisions and utterances matter a great deal to the EU, which has invested in and nurtured its relations with South Africa.
Our engagement is an active and robust one. South Africa and the EU maintain strategic dialogues in key areas and the EU contributes meaningfully to development programmes here.
But perhaps the most important aspect of our collaboration is to keep commercial channels open and thriving, contributing to economic growth and creating jobs.
Bilateral trade is rooted in a trade, development and co-operation agreement, which gives South African goods open access to 95 percent of the EU market, while EU goods enjoy the same in 86 percent of the local market. In addition, South African investors and those of thirteen EU member states enjoy protection in each other’s respective markets through formal bilateral investment treaties.
The EU, despite its financial and economic difficulties, is by a significant margin the biggest foreign direct investor into the South African market with more than 80 percent of foreign direct investment in South Africa originating from the EU.
In an attempt to identify key drivers for even greater European investment, a study was recently completed on EU investors’ presence and attitudes in the country.
I trust that its findings will be constructively interpreted at South Africa’s next Joint Co-operation Council with the EU in late July, after which the findings are expected to be made public.
The EU remains South Africa’s most important trading partner, accounting for almost 30 percent of total trade.
Close to one third of South Africa’s exports go the EU, most of these to longstanding trade partners in western Europe. But the EU has grown significantly to the east in the past 10 years and I would like to encourage local exporters, in addition to deepening existing relations, to seriously start “looking east” to develop new markets for their products and services in the central and eastern parts of the EU.
There is no better time than the present to take a closer look at the opportunities we offer each other.
Roeland van de Geer is the EU’s ambassador to South