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Growth may put SA high on global chart.

Posted On Monday, 14 October 2002 10:01 Published by
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Durban - South Africa had a good chance of becoming a leading international economy because its projected 3 percent growth rate for 2003 was higher than average global expectations, Alec Erwin, the minister of trade and industry, said yesterday.
Durban - South Africa had a good chance of becoming a leading international economy because its projected 3 percent growth rate for 2003 was higher than average global expectations, Alec Erwin, the minister of trade and industry, said yesterday.

Speaking after the fourth international investment council meeting at Zimbali this weekend, Erwin admitted, however, that this was still not high enough.

The International Investment Council (IIC), proposed by President Thabo Mbeki in his first address to parliament in 1999, was established to draw on the insight of international business leaders to meet the challenges of economic growth and development in South Africa.

Erwin discussed opportunities for business process outsourcing from developed countries to South Africa.

IIC members confirmed the government's view that current international economic conditions created opportunities for South
Africa to attract job-intensive business processes such as call centres, data processing and other forms of back office operations, as well as manufacturing in targeted sectors.

Members commended the move to higher value-added exports and the diversification of export markets. However, they urged the government to focus its marketing efforts on targeted sectors with a competitive advantage and to continue reducing business costs and improving the skills of South Africa's workforce.

Erwin attributed the positive economic outlook to the country's improved export performance. He said domestic spending would increase following measures announced by the government last week to boost pensions and child support grants to offset high food prices.

Jurgen Schrempp, the chairman of the DaimlerChrysler board in Germany, was one of several international delegates who was upbeat about the government's economic policies and improved conditions for investors in South Africa.

'South Africa's fiscal flexibility, monetary discipline and quality manufacturing, combined with the cost effectiveness of its highly sophisticated products, make it very competitive,' he said.

The sensitive issue remained labour relations, which had to be well handled.
Niall Fitzgerald, the co-chairman of Unilever, said that while Zimbabwe remained an issue for offshore investors, 'shouting over the fence at your neighbours will never persuade them'. South Africa would have to continue to work 'quietly but urgently' to resolve the issue.

Mbeki said foreign affairs minister Nkosazana Dlamini-Zuma, who returned from a visit to Zimbabwe last week, had briefed the council on an agreement reached with Harare. The two governments would engage on matters from land reform to legislation, the economy and food shortages to find quick solutions to these problems.

Publisher: Business Report
Source: Business Report
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