President Vladimir Putin: Ladies and Gentlemen,
First of all, I am pleased to have this opportunity to meet with business community leaders.
President Mbeki spoke just now of the deep roots of our relations, the history of our cooperation and the mutual sympathy our peoples, business and political circles feel towards each other. Russia has great respect for South Africa’s economic achievements too.
We are convinced that there are real possibilities and a real need to intensify our bilateral trade and economic ties. We believe this will help both countries realise their considerable production and scientific-technical potential and enable us to make greater use of our countries’ immense natural resources in the interests of development. But as my colleague also noted, we are not satisfied with the current level of our business partnership. I think that business in both countries is missing out on considerable benefits. Business initiatives clearly have the support today of stable political relations between our countries and Russian companies’ successful and longstanding experience of work in many regions in Africa. I am talking above all, here, of our Russian companies. It is important that our business communities develop an infrastructure for direct ties. So far, the main channel of contact has been through mixed intergovernmental commissions on trade and economic cooperation, but today the direct contacts between our respective business communities are giving a real boost to business relations, especially with the creation of the Business Council, established by our countries’ Chambers of Commerce and Industry.
I think you are well informed on the stable political, macroeconomic and financial situation in Russia. I already spoke about this yesterday at the press conference. The situation is well known, but I would like to repeat a few main points once again here before this audience today. Our economy has been experiencing high growth rates for the last several years in a row. We had average GDP growth of around 7 percent over the last 3–3.5 years, and GDP growth was 7.4 percent in July 2006. Investment in basic capital is on the rise and increased by more than 10 percent over the last months. We have a budget surplus and we also have a positive trade balance. Our gold and currency reserves are increasing all the time and are now close to the $300-billion mark, having risen by more than $70 billion in the last seven months alone. New trends that favour business development are emerging in our economy. In particular, we have begun developing free economic zones and are making greater use of concessions, above all in carrying out infrastructure projects in the housing, construction and transport sectors, and in the construction of roads and railways. There are no limits on the amount of potential investment.
Promising areas for reciprocal investment are also opening up in the energy sector. The legal base is already in place for a partnership between Russia and South Africa on peaceful nuclear energy. This has given South Africa the possibility of taking part in the work of the Russian Academy of Sciences’ Joint Institute for Nuclear Research.
Now we can go further and increase our focus on practical areas for work such as uranium mining and the construction and operation of nuclear power plants. Russian companies have something to offer in this sector, from unique engineering and design solutions to highly professional specialists and specialist training.
I think we should also work very seriously on pursuing cooperation in the oil and gas sector. Russian participation in deep-water offshore exploration could be a very promising area of cooperation for South Africa. Our energy specialists and construction firms are ready to take part in developing your country’s gas infrastructure. There are also plans to supply Russian liquefied natural gas to the South African market.
For our part, we are interested in your experience in deep processing of accompanying gas into synthetic fuel.
There are also promising and mutually beneficial cooperation opportunities in the mining sector. Russian companies are ready to take part in prospecting and exploration work in South Africa.
Investment cooperation between companies from both our countries in developing South Africa’s natural resources could be a very promising form of work together. One example already mentioned several times is the participation of Russian company Renova in developing manganese ore deposits in the Kalahari Desert region.
Russian companies have proposed to their South African colleagues a programme for the construction of a ferrous alloys plant, and Russian company ALROSA proposes taking part in the exploration of diamond deposits.
There are proposals in the energy sector, for the construction of an aluminium smelter, and this project would involve hundreds of millions of dollars of investment in the South African economy. If we keep to the plans we have drawn up, investment could reach into the billions of dollars over a few years.
The Russian automobile industry also has considerable investment potential. The world’s leading carmakers are beginning to work actively in our country now and we, in turn, are ready to propose the range of products most in demand on the markets of other countries, including South Africa. I am thinking of mini-buses, for example, which have been doing well here. This would make a significant contribution to supporting the project to organise their assembly right here in South Africa.
I particularly want to stress that Russia’s and South Africa’s potential enables us to develop a balanced structure of economic relations and to focus maximum attention on developing advanced technology.
Russia has considerable possibilities for the use of outer space in peaceful aims.
I hope that the intergovernmental agreement on outer space will give a major boost to our cooperation in this area. Good new opportunities are opening up today for cooperation between our countries in areas such as micro-gravity, geo-information space technology, satellite radio navigation and remote Earth probes.
We are ready to offer South Africa the use of our spacecraft capacity to organise satellite communications channels.
The Russian education and healthcare sectors also offer good opportunities for cooperation. We are aware in particular of South African companies’ interest in our developments in the areas of marine biology, pharmacology, laser and bio-technology.
As you know, President Mbeki took part in discussions during the G8 summit in St Petersburg. The summit resulted in a practical proposal to activate international cooperation in the fight against infectious diseases and in improving the accessibility and quality of education. The Russian scientific community, Russia’s tertiary education system and Russian business are all open to the broadest partnership in all of these areas.
Finally, South African business could increase its presence on our services market. There is big demand for investment in the Russian tourism sector. Some companies are already planning to invest in the hotel and leisure infrastructure, for example, including in Russia, in the Moscow Region. I hope that the conditions will be created so that more Russian tourists can visit South Africa and get to know its history and nature.
In conclusion I would like to say that it is impossible to list all the potential opportunities for developing our business partnership, and I stress that we will do everything we can to encourage joint initiatives by Russian and South African business.
As my colleague, Mr Mbeki, said, we truly do have many possibilities for developing a mutually beneficial partnership. The main thing is that we already have the foundation – friendly feelings for each other and a good background to our relations.
Yesterday, at the reception given by the [South African] President in honour of our delegation, we were amazed and impressed when the Russian national anthem was performed in excellent Russian. This was completely unexpected for us.
We learned that members of your Government studied in our country. Your education minister studied in my native city of St Petersburg. We learned that some senior members of the South African leadership have given their children Russian names. All of this creates a special moral atmosphere for our work together.
One of our colleagues came up yesterday and said, “You know, I studied in your country, and after I finished my studies I came back here and ended up in prison, not far from here, on the famous island”. Of course, prison is not the best experience, but there he is now sitting opposite and smiling, and judging by the fact that he was at the state reception, after studying in our country he eventually came to hold a good position in your society today. So, his studies seem to have been for the good. And I studied no doubt in a similar establishment in my own country, and things have turned out pretty well in my life, too, so we have a lot in common.
Now we need to take all the best that has characterised our relations over the past years, look to the future and use this potential to achieve development today, focusing our attention on developing trade and economic ties. This is the most important basis for developing relations in all other areas of cooperation in the future. And in this context, the business community in both our countries has a huge part to play.
Thank you for your attention.