Doing Business in Southern Africa

Speech by the

Minister for Trade

Senator Bob McMullan

at the

Australia Southern Africa Business Council

Melbourne, 6 July 1995

Introduction

It's my great pleasure to be here today to address the Australia Southern Africa Business Council

- in particular for the opportunity to congratulate the Council for its recent transition from a collection of separate State-based organisations to that of a truly national body.

That aim coincides with an objective I have been pursuing with some vigour this year in visits to Zimbabwe, South Africa and Mauritius

- as part of a new emphasis on building up Australia's economic links with the region.

I want to talk about that emphasis and to set out for you why Australia is concentrating more of its energies on doing business with Southern Africa.

Developing commercial links

I believe the prospects for Australian business in Southern Africa are now looking much brighter than they have in the past

- aided by natural complementarities, such as the region's need for Australian skills in the large-scale infrastructure projects the region now requires

- and our shared experience of overcoming problems such as harsh climatic conditions and the tyranny of distance.

That adds up to an environment in which new opportunities are emerging for involvement by Australian business

- opportunities the government has been keen to exploit through a range of initiatives, working in close cooperation with Australian business.

I was very pleased, during my visit to Southern Africa, to have the opportunity meet several influential public and private sector figures and to be able to underline to them

- Australia's credibility as a source of sophisticated manufactured goods, technology and services

- and our commitment to establishing Indian Ocean region business and investment partnerships and promoting the development of an Indian Ocean regional identity.

My major objective was to change some of the negative, outdated perceptions about Australia.

Much of this was done by the business delegation identifying some of the complementarities between our economies

- dispelling limiting attitudes about the inevitable competitive nature of the relationship between Australia and South Africa

- and encouraging a better understanding of the positive role that Australian companies and Government can play in assisting with Southern Africa's reconstruction and development objectives.

I returned from my visit to Southern Africa with the strong belief that our developing track relationship must focus on the complementary possibilities open to us. Our respective countries do have many similarities in terms of climate, distance and strong mining and agricultural sectors. This does result in competition. But it was the opportunity for co-operation that was the lasting impression from my time in Southern Africa

My impressions were strengthened by the track record that Australia has established in Southern Africa

- despite our relative neglect of the region, there have been pioneering efforts by Australian companies to establish and develop relationships

And I am very pleased to be able to announce tonight a further development in trading relationship between Australia and Southern Africa

In a very positive example of complementary trade development. Tubemakers Australia and two partners in South Africa will exchange technology in waste water and sewage.

Tubemakers will enter a Manufacturing Licence Agreement with Stewart Scott Inc, a leading technology consultant in South Africa, to bring Biological Nutrient Removal technology to Australia.

These partnerships are an outstanding example of the way that Australia's trade is changing with Southern Africa and of the development of both the Australian and South African economies.

Australia and Southern Africa have long been considered as competitors - an attitude born of a history of strong price competition for our mineral and agricultural produce. While there is no doubt that there are areas where Australia and South Africa will continue to vigorously compete, these joint ventures are a clear sign of the opportunities for and benefits of cooperation and exploitation of complementarities - particularly in technology exchange.

It is also a partnership that should be successful because of the demand for sewage treatment plants generated by the new South African Government's "Reconstruction and Development Plan".

Tubemakers and South African company Dorbyl Limited will enter the Southern African market for sewage treatment plants using Tubemaker's patented Aeration and Allied Technologies processes and products.

I am very pleased to announce these joint ventures with Tubemakers because I opened a steel pipe venture for them in Southern Africa when I was there in March. There were also a number of other valuable ventures I am across on my visit

- Homestead Award Winning Homes had already made a substantial investment

- in Zimbabwe, to BHP's is involved in a US$230 million joint venture investment in the Hartley gold and platinum mine

- and in Mauritius there is a burgeoning education relationship in trade in services, particularly in education and tourism

For example the Australian High Commission in Port Louis issued 116 student visas in 1993-94. Of these 57 were for scholarship holders and 59 for full fee-paying students.

During this visit, it was also very useful to have on the visit your President, Ivan Chaitt, representing an organisation which forms a very useful umbrella for commercial activity between Australia and Southern Africa

- and which brings together invaluable personal, familial and historical links of Southern Africans in Australia and your counterparts in Africa.

IFIOR

One of the Government's objectives has been to build these sorts of bilateral relationships within a context of enhanced regional cooperation

- and we have been very active, over the last year or so, promoting the development of a regional identity and habits of regional dialogue and cooperation.

My visit to Southern Africa was part of this strategy

- and it was followed up by a visit by Gareth Evans, our Foreign Minister

- and by IFIOR - the International Forum on the Indian Ocean Region - which was held in Perth last 11 to 13 June.

IFIOR's major objectives were to:

- develop a sense of community among the countries of the Indian Ocean region

- identify and explore opportunities for closer trade and investment and prospects for enhanced regional cooperation in a wide range of areas

- and explore interest in the development of networks among business and academics.

There was strong support for accelerating cooperation in the region to enhance economic and social prosperity.

Participants acknowledged that the countries of the Indian Ocean were starting out on the path of regional cooperation later than many other regions

- but that the Perth meeting had demonstrated a real interest in working together for mutual benefit eg in business facilitation.

Business participants from a wide range of regional business organisations agreed to establish a Consultative Business Network to meet in New Delhi next December

- and I hope the Australia-Southern Africa Business Council will be among the Australian business organisations represented there.

NTIOC

The IFIOR meeting provided a useful focus on some key Southern African markets.

And the international spotlight will again be thrown on the region later this year at NTIOC 95

- to be held at the World Congress Centre in Melbourne from 4 to 6 December

NTIOC has had major success in providing Australian and international business people with the opportunity to

- gain first-hand knowledge of new export markets

- develop business contacts

- and showcase the sophisticated goods and services Australia is able to supply.

Senior executives from major South African companies such as Premier Group Ltd and Dorbyl will be participating.

I am very pleased to be able to tell you that one of NTIOC 95's keynote speakers will be of particular interest members of this Council

- he is the South African Minister for Trade and Industry, the Hon Trevor Manuel

: who I know will be interested to meet members of the Australia Southern Africa Business Council.

Conclusion

There are obvious limits on the part governments can and should play in building overseas trade

- business is the best judge of the market, in closer touch with commercial developments overseas, and putting its own money on the line.

It's up to business to do business

- with the government working to establish the right environment for trade and investment to flourish.

Yet, government and business must work closely together

- to achieve effective coordination and cooperation in our export efforts through the "Team Australia" approach, bringing together the expertise of Federal and State governments, business and unions.

Organisations like this Council play an important role in consolidating the opportunities that government can facilitate.

I am impressed by the excellent start you have made in the new era that is emerging in Southern Africa.

And it is against a backdrop of renewed optimism for the future of the Southern African region

- and a revitalised Australian interest in doing business and creating new networks and ties with Southern Africa

: that I thank you for inviting me

and look forward to meeting you again here in Melbourne in early December.