Mr. Andrey Molchan: “African Renaissance creates unique possibilities”
[b]In late November, a large delegation from the SAR visited Minsk — led by Elizabeth Thabethe, the Deputy Minister of Trade and Industry of South Africa. Promising areas of interaction came under discussion — primarily, in the fields of agriculture, industry and machine building — as did opportunities linked to our bilateral ties and regional associations — such as the Single Economic Space of Belarus, Russia and Kazakhstan and the South African Customs Union. Talks ended with the signing of a protocol envisaging measures to achieve set goals.Ms. Thabethe notes that Belarus is among the SAR’s strategic trade-economic partners on the European continent. Interestingly, the SAR governmental delegation was accompanied by South African businessmen, who took part in a forum organised by the Belarusian Chamber of Commerce and Industry, jointly with Belarusian businesses. As a result of talks, a memorandum on co-operation was signed jointly by the SAR Council of Black Entrepreneurs and by the Belarusian Chamber of Commerce and Industry. This important visit indicates that Belarus’ collaboration with a leading African state is intensifying. The Ambassador Extraordinary and Plenipotentiary of Belarus to the South African Republic (SAR), H.E. Mr. Andrey Molchan, tells Belarus magazine how Belarusian interests are being promoted in Africa.[/b]
Ms. Thabethe notes that Belarus is among the SAR’s strategic trade-economic partners on the European continent. Interestingly, the SAR governmental delegation was accompanied by South African businessmen, who took part in a forum organised by the Belarusian Chamber of Commerce and Industry, jointly with Belarusian businesses. As a result of talks, a memorandum on co-operation was signed jointly by the SAR Council of Black Entrepreneurs and by the Belarusian Chamber of Commerce and Industry. This important visit indicates that Belarus’ collaboration with a leading African state is intensifying. The Ambassador Extraordinary and Plenipotentiary of Belarus to the South African Republic (SAR), H.E. Mr. Andrey Molchan, tells Belarus magazine how Belarusian interests are being promoted in Africa.
You represent Belarus not only in the SAR but in some other African states. Before focusing on aspects of co-operation, we’d love you to describe this region from a geopolitical view. The UN’s recent Human Development Report — The Rise of the South — indicates that a new global trend is being observed: some African states are enjoying 10 percent economic growth, which is truly incredible. What potential does this offer Belarus?
You’re right in noting that, in recent times, Africa — especially south of the Sahara (called ‘black Africa’ sometimes) — is demonstrating sustainable social-economic growth. The trend is confirmed by the UN in the report you’ve mentioned, and by several major global centres. In line with prognoses by the McKinsey Global Institute, $1.4tr of products will have been sold in Africa by 2020, if present trends continue. Moreover, by 2030, agricultural revenue could reach $600bn and mineral resources could generate $540bn by 2020.
Business Monitor International has calculated that, in the coming decade, Mozambique (commonly viewed as a less developed state) could top the globe by 2022 in its cumulative growth in terms of real GDP and GDP per capita (158.8 percent or $1,840). Other top states in this field could include African Tanzania, Uganda, Cote d’Ivore, Ruanda and Nigeria.
Mineral wealth is Africa’s major potential, in addition to huge agricultural opportunities: 60 percent of the globe’s unused crop-lands are situated in Africa. Demographically, by 2150, the continent may boast the greatest potential workforce: 1.2bn. A quarter of the world’s workers may come from Africa. Meanwhile, a high pace of urbanisation is leading to the spread of an educated middle class, while high-tech and Internet development is contributing to the continent’s further progress.
In recent years, there have been fewer conflicts across the continent, with state structures and institutions strengthening. Relatively sustainable political systems are evident in most African states, with the ruling elite focusing on progressive national development. Africa is gaining a more positive image, as a promising and attractive player on the international arena. As SAR President Jacob Zuma recently said: ‘at present, we can confidently speak of a real African revival in the original sense of this word’: an African Renaissance.
Integration tendencies are spreading and strengthening across the continent and the South African Development Community (SADC) truly stands out, uniting 15 countries overseen by our Embassy. The SADC is dynamically developing and, with its human, territorial and mineral resources, could become a serious economic block in the coming 10-15 years, able to produce worthy global competition.
With this in mind, I can answer your question in the following way: Africa is creating grounds for co-operation with Belarus and the rest of the world. However, due to a great number of problems, which I suppose we’ll discuss later, it’s too late to assume that the South will dominate the North economically. We’ve already seen attempts by most African states to weaken such dominance, while building domestic policies and economies: not in the interests of western governments and transnational corporations but for their own citizens.
I also need to add that I’m an official representative of Belarus and find it extremely interesting to be here now — observing the above mentioned processes, while defining and recommending to our Government and companies the most promising avenues for our country’s interests. I contribute in all possible ways to the establishment of mutually beneficial economic and political ties between our countries.
What are the major principles of our foreign economic strategy in promoting Belarusian interests in the SAR? What place does it occupy in the ‘far arc’ of Belarus’ partnerships and allies? What makes this region interesting regarding the extension of our trade-economic liaisons?
The SAR is definitely a locomotive for African economic development, being the natural leader of the whole continent. The SAR boasts the most developed economy (its GDP exceeds $550bn) and transport-logistics infrastructure, but also the most sustainable political and social systems and the strongest African army. These circumstances enable the SAR to play an active and influential role in settling a wide range of pan-African problems.
In the past, the SAR pursued its continental policy alongside other strong states in Northern Africa — primarily Libya. However, as a result of recent events, North Africa is now ruined — playing no role in pan-African affairs. Nigeria and Angola are attempting to rival the SAR but the latter remains the most powerful and developed state in Africa (with all factors taken into consideration).
In building plans for joining Africa, Belarus must establish close partnerships in all spheres with its leader: the SAR. On gaining a foothold in the SAR and SADC states, our country will then gain access to a large market for its goods, penetrating African markets over the course of time.
I must admit that, until recently, the SAR and the South of Africa in general, despite being declared a priority, failed to be treated as such, due to various circumstances and for various reasons, objective and subjective. When I arrived in Pretoria in December 2011, we had to establish multi-sided relations from scratch, since no clear political dialogue or stable trade-economic ties were evident. At that time, the SAR occupied 86th place among Belarus’ trading partners and was 79th among those countries from which we imported. Over the first nine months of this year, Pretoria climbed to 62nd place regarding turnover and 49th position for Belarusian exports.
In 2011, our country exported $14.7m of goods to the SAR; from January-September 2013, this figure reached $22.5m. Importantly, our exports comprise high-tech machinery, trucks, tools and equipment (around 50 products in total), in addition to our ‘heavy artillery’: potash fertilisers and oil products. Taking into consideration our two states’ potential, this is quite a low level: the beginning of a ‘great path’.
Over the past two years, we’ve managed to establish regular political dialogue with the SAR authorities, enhancing possibilities for our interaction with local businessmen — as confirmed by their business trips to our country. Importantly, our enterprises are taking a closer look at the SAR and the South of Africa generally.
Increasing interest in mutual co-operation was also demonstrated at the 3rd session of the Joint Belarusian-South African Committee on Trade-Economic Collaboration, which took place in Minsk on November 21st-22nd. The SAR’s official delegation was led by Elizabeth Thabethe, the Deputy Minister of Trade and Industry of South Africa. The session focused on promising avenues of interaction — primarily, in the fields of agriculture, industry and machine building (as part of bilateral ties and regional associations — such as the Single Economic Space of Belarus, Russia and Kazakhstan and the South African Customs Union). Talks ended with the signing of a protocol of measures towards achieving set goals. According to Ms. Thabethe, Belarus is among the SAR’s most significant trade-economic partners in Europe.
Interestingly, the SAR governmental delegation was accompanied by South African businessmen, who took part in a forum organised by the Belarusian Chamber of Commerce and Industry jointly with Belarusian businesses. As a result of their talks, a memorandum on co-operation was signed between the SAR Council of Black Entrepreneurs and the Belarusian Chamber of Commerce and Industry.
Representatives of over 40 companies from Belarus and the SAR took part in the business forum, discussing prospects for business collaboration and outlining steps to promote domestic produce to both markets, via commercial agreements. Our South African guests toured Minsk Tractor Works and visited Belarusian agro-towns, holding bilateral talks with Belarusian enterprises on the possible establishment of joint facilities in the SAR (to produce our machinery).
In order for our agreements to yield real results, we need to build a wise and flexible strategy in joining the South African market, to ensure a firm foothold. The task is far from simple but, once achieved, Africa — and its South, in particular — could significantly supplement Belarus’ traditional markets.
Regarding the region’s attractiveness, we note the following:
• relative proximity to Belarus (in comparison to Australia, New Zealand and Latin America);
• a low level of technological development in most states, enabling us to offer a wide range of Belarus-made industrial produce;
• a positive attitude towards former Soviet states against the historical ‘insult’ of the West; and
• our ability to use our expertise to help solve problems of social-economic development.
Belarus is interested not only in African sales markets but possibilities for buying resources and products: exotic fruit and vegetables, meat and seafood products and rare mineral resources. Meanwhile, we can accumulate experience regarding mastery of certain mineral deposits needed by our Belarusian industry.
Taking into account all these factors, our Head of State and Prime Minister have set clear tasks for us — diplomats — and exporters regarding this region. The key principle followed by Belarus in its relations with African states (and the SAR in particular) is its readiness to establish mutually beneficial equal-right partnerships and joint action, for the benefit of both sides. We are partners rather than commercial rivals aiming to conquer markets. Such an approach is appreciated by our African friends, who express true interest in strengthening relations with modest Belarus, despite the distance between us.
Mr. Ambassador, what potential have Angola, Mozambique and other states where you have accreditation?
Belarus is optimistic about the future of our multi-sided relations with African states, as their strengthening meets our national interests and those of our foreign partners. We see significant potential and prospects for co-operation with Angola, Zimbabwe, Mozambique and Namibia (where we have concurrent accreditation).
Almost all states in the South of Africa face similar problems: food security, employment, and enhanced medical and educational services. They badly need to diversify their national economies, setting aside the colonial type of economy inherited from their European colonising nations.
Among the key tasks in this field are industrial development, agricultural modernisation and mechanisation, construction of social-economic infrastructure (roads, bridges, ports and accommodation), and enhanced workforce training — especially of engineers and technical and medical specialists. Of course, these are branches in which Belarus excels in skill and experience, being ready to share its expertise to mutual benefit. We are ready to help others improve their agro-mechanisation, supplying machinery from MAZ, alongside BelAZ trucks and MTZ tractors. Belarus has a wealth of equipment, tools and scientific devices which could be exported to African countries not currently producing such technologies.
Regarding prospects for mutual beneficially collaboration, spheres under focus include: agriculture (supply of Belarusian machinery and equipment, opening of food processing facilities and construction of agro-towns); industrial co-operation (assembly facilities for Belarusian machinery); infrastructure projects (supplying road-construction vehicles and trucks, and building of bridges and roads); and education (training of students from this region and exchange of lecturers). In addition, tourism, culture and promotion of inter-municipal and inter-regional ties can help create an atmosphere of trust, openness and mutual understanding.
In this respect, our co-operation with Mozambique is exemplary. In October 2012, joint venture BelAfrica Ltd launched, with the participation of Promagroleasing JSC and Mozambique partners. The facility aims to promote Belarusian machine building equipment and tools to Mozambique and the South of Africa (through leasing or rent) and is already yielding fruit: on May 20th, 2013, a permanent exposition of Belarusian produce opened in the city of Maputo. Belarusian machinery began being sold to Mozambique in late 2012 and we are now seeing significant growth in Belarus-Mozambique trade: from January-September 2013, our turnover reached almost $9m (over six times more than in the same period of 2012) — including $8.7m of exports (an 8-fold rise on 2012).
Taking into consideration this achievement, Belarus is planning further expansion of its presence in other states across the South of Africa. Talks have begun with partners in Namibia, Zimbabwe and Angola.
In our modern world, countries are moving away from traditional trade, turning to more mutually beneficial forms of production co-operation. This transition is truly important for Belarus, as Africa is an ideal market for our domestic produce. What action is your Embassy taking, alongside Belarusian exporters?
Against the global financial-economic crisis, which has affected the traditional markets of the SAR and Belarus (primarily, the EU), our states are interested in finding promising and reliable partners. Belarus can become a true partner to the SAR and other South African states, offering beneficial terms on a wide range of produce, services and technologies, helping the technological modernisation of the SAR and neighbouring states. Regarding agriculture, we can supply a diverse range of Belarusian agricultural equipment and machinery, as well as fertilisers. We can also advise on agricultural safety, share our expertise and help train specialists.
You are right in saying that we need to shift from traditional trade, especially as it’s a challenge for us to conquer this market with ready-made produce; the local market — especially the SAR — is already saturated with imports, boasting almost every global brand. Tractors alone are being sold by over 40 manufacturers, inspiring some states to discuss ways of balancing their foreign trade, with import restrictions introduced. With this in mind, Belarus needs to adopt alternative methods — especially taking into account the distance between us, which brings expensive logistics and tough price competition from China and India.
Practice indicates that, to achieve results, we need to take into account the peculiarities and priorities of South African states’ development, while remembering the key principle of partnership. Among the most promising avenues, bringing benefit to both sides, are industrial co-operation, establishment of assembly facilities for our machinery, supplies of our equipment to process meat, milk and poultry, sales of our agro-technologies and knowledge, city planning and infrastructure development.
Belarus is eager to promote industrial co-operation with the SAR and other states in the region — as is beneficial to all sides. Belarusian brands could gain a foothold on the South African market while our partners would gain modernisation of their industrial complex, creating new jobs and manufacturing new produce enjoying regional demand. Such co-operation could be realised via the establishment of joint facilities and assembly plants for Belarusian high-tech produce, with the participation of South African partners. We are already moving in this direction, our industrial giants joining efforts with African partners. MTZ, MAZ, Amkodor and other Belarusian enterprises are poised and ready.
Good prospects are observed regarding the expansion of bilateral interaction in the field of agriculture, since Belarus boasts a well-developed agro-industrial complex. It leads globally in its production and export of a wide range of food products, agricultural machinery and fertilisers. We’ve achieved ultimate food safety and technological agro-independence, while building social infrastructure in rural areas (agro-towns) and developing agro-industrial training. All these aspects are arousing interest from the SAR Government so we can certainly develop our bilateral interaction on a mutually beneficial basis.
This year, a joint working group was set up to oversee co-operation in the agricultural sphere, with particular reference to establishing joint facilities to process milk, meat and poultry, and to building agro-towns with a full industrial cycle, as well as social infrastructure. Additionally, the opening of industrial plants to produce complex fertilisers is being discussed. Things are moving slowly but our negotiations have been thorough. In the past, our bilateral relations with the SAR lacked concrete agenda for the development of our trade-economic collaboration.
What do you think of the integration processes being observed on the African continent? Will they be able to match similar processes taking place in Belarus? What is the potential for partnership between the SADC and the Customs Union of Belarus, Russia and Kazakhstan? Could we see a future free trade agreement concluded — similar to that existing between the ACEAN and the Customs Union?
Yes. Integration processes on the African continent are actively gaining momentum, largely owing to the end of a long period of widespread local conflict and war; most African states have now created sustainable political systems, with an elite coming to power, aiming to see gradual national development. The South African Development Community (SADC) stands out in this process. Established in 1992, this trade-economic alliance of South African states unites 15 countries at present: Angola, Botswana, Zambia, Zimbabwe, the Democratic Republic of Congo, Lesotho, Mauritius, Madagascar, Malawi, Mozambique, Namibia, Swaziland, Seychelles, Tanzania and the South African Republic.
The SADC unites states stable in comparison to those in other African regions. Their total population numbers around 260m and their accumulated GDP equals $920bn. In 2012 alone, GDP rose by around 5 percent among all SADC members — despite the global financial-economic crisis. Among the leaders were Zimbabwe (over 9 percent), Mozambique (over 7 percent) and Congo (over 6 percent). Importantly, no SADC member state demonstrates a negative tendency, which has inspired SADC governments to launch co-ordinated, strategic planning and stage-by-stage realisation of regional goals.
Efficient interaction with this union — including as part of the Single Economic Space in Eurasia and the SADC in the South of Africa — is attractive for Belarus, as it would contribute significantly to the social-economic development of all participating countries. Our main task is to conclude an agreement on trade-economic co-operation, establishing a free trade zone. This measure would give all participating states access to major markets in the South of Africa and the Single Economic Space of Belarus, Kazakhstan and Russia. However, so far, our South African partners are cautious in establishing a free trade zone, being afraid of enhanced competition at the expense of their industry. Such agreements may be possible in future, as our Customs Union would open new markets to SADC goods. Strengthening co-operation through the prism of regional associations has always been a focus of our bilateral talks.
The SAR is known as the ‘economic gate to the African continent’. Which projects do you view as most important regarding strategic expansion of interaction?
No doubt, the SAR is the driving force behind SADC development and leads on the African continent, boasting the most developed economy (with GDP of over $550bn). It also has the most sustainable political and social systems in Africa. These circumstances enable the SAR to play an active and influential role in regional integration processes and in solving wider pan-African problems. With this in mind, we propose paying special attention to the SAR and this regional block in making strategic sales expansion plans. A special approach is needed, tailored to the specifics of this region.
Analysis of the social-economic state of SADC members indicates that most are united by shared priorities of national economic development, to solve such problems as poverty, unemployment, illiteracy and low standards of living. Taking into account SADC interests, Belarus is attracted by industrial co-operation relating to agriculture, energy (construction of new facilities and modernisation of obsolete plants), infrastructure (roads, ports, bridges, accommodation, and social and industrial construction), mineral mining and transport (railways, in particular).
What are Belarus’ competitive advantages on the South African market?
Belarus boasts a range of competitive advantages relating to the South African market, such as offering ‘value for money’ goods in demand in Africa. We have well-developed agricultural technologies, we’ve achieved national food security and we have significant sci-tech and educational potential: all sought by African states. Practice shows that Belarusian high-tech goods enjoy demand in Africa, as they offer good value for money.
Traditional sales schemes are less efficient in Africa than in the CIS and Europe (which we’ve mastered already and where our produce has customers). More flexible pricing is necessary, with a variety of payment schemes. The SAR is the most developed African state, with the necessary finances to buy Belarusian wheeled, tractor, road-construction and other special machinery (on terms proposed by Belarusian manufacturers). However, other countries in the region lack ready finances.
It’s vital to open dealerships for Belarus’ major companies in Africa, investing in sales and servicing networks, as well as in advertising, to bring efficient promotion of Belarusian goods. Belarusian exporters are sometimes put off by this but, as I’ve already mentioned, our producers are now changing their attitude towards the region. This year alone, MAZ opened a branch in the SAR and MTZ is considering the same, as are other Belarusian companies.
Not long ago, the South African Minister of International Relations, Maite Nkoana-Mashabane, visited Belarus. How do you view our agreements? Will her visit inspire further development and strengthening of our bilateral co-operation?
Ms. Nkoana-Mashabane’s Septem-ber visit to Belarus was a logical continuation of our bilateral liaisons, which have been expanding recently. This was the first visit of the present South African Minister of International Relations to our country and could be viewed as showing the SAR’s readiness to build close and mutually beneficial ties with Belarus — primarily, in the fields of industrial co-operation, agriculture and education. As you know, the Minister was welcomed by the Belarusian President in a warm and friendly atmosphere. Ms. Nkoana-Mashabane informs us that the SAR President is likely to visit Belarus in late 2014, which should take Belarusian-South African relations to a new, strategic level — as Belarus has achieved with most BRICS members. The SAR joined this union in 2011 and is unlikely to be an exception.
We can state with assurance that an active period is underway for Belarus-SAR contacts. I’m optimistic about Belarus’ strengthening relations with this state and with other countries on the continent.
by Nina Romanova
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