Address by President Nelson Mandela to heads of major South Korean business associations

7 July 1995

Distinguished guests;
Ladies and gentlemen.

It is a great honour to be able to meet with the leaders of such important South Korean business associations. A meeting of this kind can only have beneficial results for both South Korea and South Africa. I would therefore like to thank you for this opportunity.

In South Africa we have great admiration for the achievements of your country. You have lifted South Korea from extremely difficult circumstances to become one of the "four Asian tigers" and one of the major economic success stories of this era. Your spectacular dynamic growth provides many lessons from which countries such as ours can learn a great deal.

South Africa is therefore studying your experience with great interest as we embark upon the process of reconstruction and development.

There are many pointers to the potential for greatly expanded economic links between South Korean and South Africa.

Not least among these is the prominent place of South Korea in the Asian region. And now that South Africa has freed itself from apartheid, with the help of South Koreans and the rest of the international community, the barriers to realising this potential have been swept aside.

In the short period since we began our transition to democracy, trade between us, albeit from a small base, has rapidly grown. For us it is particularly pleasing that our exports to South Korea almost doubled in the two years after 1992, when your government lifted the economic sanctions.

Products of South Korean design are now very familiar in South Africa. We would however like to see much more trade between our countries. Above all, we are convinced that there is great scope for direct investment which will be both profitable and beneficial to our business communities and nations.

This judgement, that there are long-term business opportunities for productive investment, is one which is increasingly shared by business, both in South Africa and internationally.

We are experiencing a sharp surge in domestic fixed investment as South African business commits itself to the future of our country. Many transnational corporations are currently establishing themselves in South Africa or increasing their existing operations. The activities engaging foreign investors are diverse, such as food processing; information technology; telecommunication; tourism; property development and others.

The scale of the opportunities and the character of our needs arise out of the imperative to reconstruct and develop our country. And there is consensus from international experts that South Africa is on track.

Our basic policy concerning foreign investment is that of national treatment. That is, foreign investors receive the same rights, privileges and incentives as local investors. Furthermore, there are no restrictions on foreign ownership of business or areas of the economy in which they may invest. Policy changes such as the relaxation of exchange control and the abolition of non-residents tax on dividends are meant to facilitate these initiatives.

Ladies and Gentlemen;

Southern Africa is quickly settling down to post-apartheid political stability and economic growth. The region is beginning with the implementation of a framework for integration in trade, investment, infrastructure and financial markets within the Southern African Development Community. This brings together South African and Lesotho, Botswana, Swaziland, Namibia, Zambia, Zimbabwe, Angola, Mozambique, Malawi and Tanzania.

Indeed, in the past, a mere mention of these countries would conjure up images of conflict and instability. We are proud that the emergence of a democratic South Africa has helped release the energies of the region to accomplish democracy, peace and security.

As such, the opportunities that we refer to in respect of South Africa, are, multiplied many-fold, viewed against the backdrop of the region's potential.

South Africa is grateful that the South Korean government has moved rapidly to support reconstruction and development in our country. We are in no doubt that the private sector in this country shares the same sentiment.

The Republic of Korea is one of our most important trading partners. While it ranked 13th in 1994, total growth in trade has increase by some 27% in 1994 alone. This is given added poignancy by the increased involvement of Korean investors in our economy.

Ladies and Gentlemen;

While we emphasise this, your obligation, we cannot claim to have resolved every detailed problem. We do know that South Africa has strengths and weaknesses in its drive to attract new investment.

Our strengths include the existence of a diversified economy, very good physical infrastructure, a sophisticated financial sector, low energy costs, mineral wealth and potentially high levels of domestic investment and access to markets in the region and beyond.

Our weaknesses include the fact that much of our labour is under-trained, which is a legacy of apartheid. Our manufacturing sector is currently not very competitive, and we have inward looking policies which are hangovers of the previous era.

However, in the short period of our democracy, we have already introduced policies to address these defects, and we are planning to do more.

We are part of the World Trade Organisation and are fully committed to extensive, though gradual, tariff reform. We are taking steps towards the complete removal of exchange control and we are imposing tight discipline on government spending. In addition, revised competition policies will open the market to competitive new entrants.

In quite a few countries we have visited, questions have been raised about stability and security in our country, about crime and industrial actions.

One could go on and on, quoting the successes we are scoring against crime, as a result of the co-operation between the law-enforcement agencies and communities. This was unthinkable in the apartheid era. One could go on and on extolling the virtues of our rainbow nation, particularly its capacity to bury the past and together tackle the future. We could spend time explaining the principled commitment our government and people have for consensus in dealing with major national matters; and explaining the partnership between business, labour and government in working out industrial strategies.

But the most reliable witness to all this are the large South Korean companies that have already opened offices in South Africa. Some of them have entered into joint ventures with South African companies. The confidence of investors in the future of our country is also reflected by the Korean companies which are already becoming involved in RDP projects such as housing.

The task we face is to speed up these efforts and diversify our relations. There are complementarities between our economies. South Korea and South Africa could become close and good partners in many fields.

This requires creativity on the part of the private sector in both our countries. This will benefit our economies and ensure significant dividends for our business communities. But, above all, it will provide fertile ground for the flourishing of democracy, human rights and many other values that our nations share. Not only will South Africans and South Koreans stand to benefit. But this will also redound to the good of Asia and Africa as a whole.

It is in this spirit that I invite you to apply your expertise and capital strength in South Africa. It is in this spirit that I encourage South African business to take part in the economy of South Korea.

Together, we can move mountains.

Source: Nelson Mandela Foundation