Minister Maite Nkoana-Mashabane’s current visit to Iran has opened a new chapter in the bilateral relations between the two countries, says Shannon Ebrahim.
Mashabane has hailed Iran as a friend of South Africa.
“Iran was at the forefront of the fight against apartheid and pledged solidarity to the South African people,” the minister said at the opening of the 12th meeting of the South Africa-Iran joint commission in Tehran.
Iran has been a strong ally of South Africa internationally and in the Non-Aligned Movement, and remains a strategic partner given its pivotal and influential role in the region, and the fact that it has one of the world’s largest sources of energy. At one time Iran was the largest supplier of crude oil to South Africa and an important market for South African products. South Africa was obliged to halt its imports of Iranian oil as of June 2012 as a result of sanctions.
South Africa has condemned the imposition of sanctions against Iran. “Sanctions against Iran are irrational and illegal,” Mashabane said at the joint commission. “We want to see them removed and see natural resources being utilised for peaceful means.” The imposition of sanctions negatively affected South Africa as the increase in the price of oil adversely affected our national development goals.
South Africa is hoping to see the nuclear deal between Iran and the P5+1 concluded as soon as possible, so that trade can be fully normalised and Iran fully integrated into the community of nations. In the meantime South Africa is looking to substantially expand its trade relations with Iran. A plethora of other countries are also looking to court Iranian trade and investment, most notably the US, China, India, France, Germany, Italy, Ethiopia and Yemen. Countries want to get in on the action early so as to secure trade deals and a significant share of Iran’s oil and gas in the future.
South Africa’s joint commission with Iran is one of the longest running structured bilaterals it has with any country. Mashabane is being accompanied by Deputy Minister of Trade and Industry Mzwandile Masina and a large contingent of senior officials from the departments of Trade and Industry, Energy, Treasury, Water, and Science and Technology. Mashabane has also brought to Iran a sizeable South African business delegation of at least 16 members of the private sector and she has presided over the launch of the South Africa-Iran business forum.
The South African companies included in the visit come from sectors such as mining, telecommunications, engineering, agro-processing and transport. Transnet is a key player on the delegation that intends looking at rail infrastructure projects in Iran.
The Strategic Fuel Fund is also involved in discussions with the Iranian government. The fund is a government entity which trades in oil on behalf of the South African government.
One of the greatest challenges for South African businesses seeking to operate in Iran is the ability to do financial transactions due to sanctions. Companies find it complicated due to the inability to freely transfer funds between the two countries. This has resulted in a substantial decline in trade, with South African exports to Iran going from R1.5 billion in 2007 to R250.1 million in 2014. Currently there are eight banks not on the sanctions list, but the question is whether they will be allowed to transact in the Swift system.
In addition to identifying concrete ways to improve economic and trade links, Mashabane has capitalised on the opportunity to get an overview of political developments in the region, and has been accompanied by a member of her special envoy team to the Middle East, ambassador Mahommed Dangor. Referring to the conflict in Yemen, Mashabane said: “We do not believe there can be a military solution to the problem in Yemen, only a political solution.”
Iranian Foreign Minister Mohammad Javad Zarif noted in his opening remarks to the joint commission that he believes South Africa and Iran have almost identical views on extremism and terrorism, and believes the two countries can work together in combating both as strategic partners. On the issue of trade, he said: “We have to do away with obstacles to our joint trade, we need dynamic business interaction between our countries.”
Mashabane will hold a second day of meetings with her counterpart on Tuesday.
* Shannon Ebrahim is Foreign Editor of Independent Media.