Malaysia's ties with S. Africa start on good footing
SOUTH Africa, which is Malaysia's largest trading partner in Africa, makes a "flying" start to boost bilateral ties in 2012.
Thanks to Prime Minister Datuk Najib Razak's visit in the beginning of the year, albeit brief, the vistas for trade and investment opportunities are expected to broaden.
But the rates can be improved over the next decade based on the 15 per cent two-way annual growth rate for the past decade, said South African High Commissioner Thami Mseleku.
"As Malaysia's largest trading partner on the African continent, South Africa continues to offer the best investment destination for Malaysian business," he said.
Following Najib's visit, there is work underway to take the bilateral relations to a new level, which includes a visit by the Malaysian business community to meet their counterparts in South Africa.
"Malaysian businesses should take advantage of opportunities presented through his country's world-class infrastructure and sophisticated economic environment.
"Furthermore, South Africa is well positioned as a global business partner and serves as a gateway not only for the Southern African (SADC) region, but also Africa as a whole."
South Africa is Malaysia's 25th largest trading partner. Total trade amounted to RM5.2 billion last year.
For South Africa, Malaysia is its largest export destination in the Asean region with total bilateral trade increasing over four-fold to about RM 5.83 billion in 2010 - the balance of trade in Malaysia's favour.
Malaysian goods such as palm oil, telephone sets, monitors and projectors, automatic data processing machines and rubber are finding their way into the South African market, while Malaysian imports comprise mainly commodities - mineral fuels, iron and steel, aluminium but also an array of agricultural products.
According to the Malaysian External Trade Development Corp (Matrade) Malaysia's trillion ringgit trade volume in 2010 was contributed by significant increases in exports from South Africa, where exports jumped by 40.7 per cent, thanks to the palm oil uptake.
South Africa's significance as a member of the G20 major economies has earned further international recognition in the group of emerging countries with it joining the BRICS (Brazil, Russia, India, China and South Africa) grouping.
Highly ranked in the 2011 World Bank Report for Ease of Doing Business, South Africa was ranked number two in the ease of obtaining credit and 10th in investor protection out of 183 countries.
The World Economic Forum's Global Competitiveness Report ranked South Africa 54th in terms of overall competitiveness, ahead of countries such as Russia, Brazil and Mexico.
South Africa was also ranked 38th in business sophistication and 24th in business sector innovation.
"As an investment destination South Africa presents a number of very lucrative opportunities, especially in business process outsourcing and IT enabled services, electro-technical industries, automotives and components and metal fabrication, capital and transport equipment," Mseleku said.
The South African government offers various attractive investment incentives, targeted at specific sectors or types of business activities.
"Among others, foreign investment and training grants and significant tax deductions for qualifying projects are available," he said, adding that South Africa has no general restrictions on inflows and outflows of foreign capital under exchange controls.
"Local borrowing for the purpose of genuine FDI may be undertaken without restriction, while foreign companies may also raise capital in the local equity and bond markets (inward listings) with prior approval."
Also, there are no restrictions on property ownership by non-residents provided that there is compliance with procedures.
"Currently, Malaysian investment in South Africa is found in the petroleum sector, as well as in the leisure and housing sectors," Mseleku said.
Petronas is the majority shareholder of the South African Engen oil company, which operates 1,600 service stations in 17 countries on the African continent.
Important South African business activities in Malaysia include the establishment of the hugely popular and successful Nandos peri-peri chicken franchise, with 35 outlets currently in operation.
"To give further momentum to the business relationship between the two countries, the South African High Commission will be arranging several events in the next few weeks and months.
The High Commission will soon join forces with the Malaysian Institute of Accountants in hosting a special seminar "Business and Investment Opportunities in South Africa".
South African firms in the arms manufacturing and security industry will be showcasing their products and engage in business enterprises during the forthcoming Defence Services Asia Fair and Exhibition at the Putra World Trade Centre.
The efforts of the High Commission to enhance business relations between Malaysia and South Africa are augmented through the support given by the Malaysia-South Africa Business Council.
Mseleku said the recent visit to South Africa by Najib underlines the significance of the strong relationship between the two countries, which evolved during Malaysia's support for the liberation movement, and were further cemented through the personal friendship between the countries' iconic statesmen, Tun Dr Mahathir Mohamad and former president Nelson Mandela.
To Malaysia, Najib's visit signalled close relations between both countries and Malaysia's consistent foreign policy of supporting South Africa and the struggles of its black people for their rights.
Najib was in South Africa at the invitation of South African president Jacob Juma, along with 45 other heads of state to gather in Bloemfontein, to witness the historic moment of the centenary celebration of the ruling party, the African National Congress.
Source : New Straits Times
Date : 26 January 2011
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