Luncheon with

Thomas C Hippele,

President and Co-Founder of SwissCham Southern Africa – South Africa Chapter,

Tuesday, 12th of July 2016, held at the

Zunfthaus zur Schmiden, 8001 Zurich

Its activities and rise to an important voice of Swiss business in South Africa

Ladies  and  Gentlemen,        It  is  a  great  honour  and  pleasure  for  me  to  be  with  you  today  as  your  guest  and  speaker.    Like  any  bilateral  or  mul;lateral  Swiss  Chamber  of  Commerce,  there  is  a  “mother  Chamber”  which  in  our  case  is  your  organisa;on  and  there  is,  at  present,  one  country  Chamber  being  ourselves,  the  South  Africa  Chapter;  other  country  Chapters  are  well  on  the  way.    At  your  AGM  in  2016,  you  have  bestowed  a  great  honour  on  me  by  appoin;ng  me  as  a  member  of  your  Board.  

   In  my  speech,  I  would  like  to  give  a  brief  background  on  SwissCham  Southern  Africa  –  South  Africa  Chapter’s  history,  then  say   something  about  our  membership  and   then  elaborate  on  our  ac;vi;es  and   importance   in  South  Africa.    ThereaMer,   I  shall   speak  about  our   co-‐opera;on  partners   in  general,   and   in  par;cular   co-‐opera;on  with  SCSA   in  Zurich  and   respec;ve  future  possibili;es  for  a  more  intense  co-‐opera;on  with  yourselves.    Then,  I  would  like  to  show  you  our  work  in  South  Africa  which   (with   some;mes   necessary   lack   of  modesty)   I   would   call   “important”,   not   for   the   sake   of  my   person   but   for   the  importance  our  Chapter  has  developed  over  the  years  in  maRers  of  communica;ng  the  posi;on  of  Swiss  business  in  South  Africa   to  Government   throughout  all   levels   and   in   the   compe;;ve  environment  of   the   country.     Last  but  not   least,   I  will  gladly  answer  ques;ons,  both  on  the  actual  speech  and  the  work  of  our  Chapter  but  also   in  general  about  South  Africa   in  contexts  which  may  be  relevant  for  members  of  a  Chamber  of  Commerce.    Accordingly,  I  will  also  say  a  few  words  about  the  environment  being  South  Africa  as  a  poli;cal  and  economic  reality  in  which  we  operate.      

   HISTORY    SwissCham  Southern  Africa  –  South  Africa  Chapter  (SCSA-‐SAC)  was  formed  and  inaugurated  on  the  occasion  of  an  official  visit  by  the  then   Federal   Councillor   for   Economic   Affairs,   Doris   Leuthard,   in   2007.     The   first  mee;ng   of   the   Chapter   took   place   thereaMer   in  Johannesburg  and  we  established  ourselves  as  a  bilateral  Chamber  of  Commerce  and  industry.      The  presence  of  Swiss  enterprises  in  South  Africa  dates  back  well  over  100  years.    Today,  Switzerland  is  the  sixth  or  seventh  largest  investor   in   South   Africa   (sixth   or   seventh   depending   on   the   data   considered).     At   the   ;me   of   the   forma;on   of   the   Chapter,  Switzerland  was  s;ll  number  four  or  five.    Before  the  Chapter  was  formed,  well  known  Swiss  enterprises  and  Swiss  business  people  were  organised  within  the  Swiss  Business  Council  (SBC),  from  which  the  first  approximately  40    members  became  members  of  the  Chapter.    Originally,  our  Chapter  was  supposed  to  be  formed  before  your  organisa;on,  but  we  experienced  some  delay  as  a  group  of  South  Africans  not  having  obvious  business  interest  in  Switzerland  had  formed  a  “Chamber  of  Commerce  and  Industry  South  Africa  –  Switzerland”,  during  the  ;me  the  Business  Council  was  considering  its  transforma;on.    The  Business  Council  as  such  did  not  have  the  ac;vi;es  of  a  Chamber  and  was  open  on  invita;on  only.    Once  that  with  hindsight  funny  but  at  the  ;me  not-‐so-‐funny  “compe;ng  Chamber”  had  been  dissolved  by  nego;a;on  and  with  a  pinch  of  force,  the  way  was  open  for  the  Swiss  Business  Council  to  disband  in  October  2007  and  join  forces  with  the  Chapter.      OBJECT  (PURPOSE)  AND  WORK  OF  THE  CHAPTER    

The  Chapter  is  an  independent  bilateral,  non-‐poli;cal,  non-‐governmental  and  subscrip;on  based  non-‐profit  organisa;on,  dedicated  to  strengthening  and  expanding  trade  rela;ons  between  the  private  sectors  of  Switzerland  and  South  Africa.    The  Chapter,  known  as  “SwissCham®”  in  Southern  Africa  had  its  name  “SwissCham®”  protected  in  South  Africa  and  several  neighbouring  countries  under  the  respec;ve   trade  mark   legisla;on   as   a   trademark   for   services.     SwissCham®   (which   name   I   will   use   as   synonym   for   the   Chapter)  promotes  and  advances  a  business-‐friendly  environment  in  general  and  the  interests  and  views  of  Swiss  business  in  South  Africa  in  par;cular.    In  addi;on,  we  promote  contacts  and  assist  in  building  rela;onships  between  Swiss  and  South  African  business  en;;es  in  the   private   sector.     For   our  members,  we  hold   business   and   social   events  with   leading   speakers   from   industry,  Government   and  opinion   leaders,    provide  an  excellent  networking  and  communica;on  plaborm   for  our  members  and  between  members  and   the  business  environment  and  monitor  poli;cal  tendencies  in  South  Africa  and  laws  in  the  making,  on  which  where  appropriate  and  in  the   interest  of   Swiss  business  or   for   the   freedom  of   trade  and  commerce   in  general,   comment  and   seek  dialogue  with   the  South  African  Government  on  all  levels  of  Government.    Thus,  SwissCham®  ac;vely  voices  where  appropriate  and  in  a  construc;ve  manner  concerns  and  comments  on  draM  policies,  bills,  legisla;on  and  Government  processes  leading  to  such  and  par;cipates  in  the  requests  for  comments  by  the  South  African  Government  on  intended  legisla;on.    Of  course,  we  also  approach  policy  makers  or  Government  without  an  invita;on  for  comment  when  we  deem  it  necessary.        

Whilst  world-‐wide  a  tendency  is  (or  was  at  least  for  quite  a  few  years)  to  see  bilateral  or  country-‐connected  Chambers  of  Commerce  as  a  dinosaur  on  its  way  to  ex;nc;on,  we  could  create  a  space  for  the  Chapter,  expand  it,  and  in  spite  of  e-‐mail,  social  media  and  other  modern  means  of  communica;on  of  which  we  make  use  ourselves,  create  a  network  and  plaborm  convincing  entrepreneurs  and  companies  to  join  us  and  stay  with  us.    SwissCham®  therefore  works  constantly  on  maintaining  credibility  and  stability,  which  we  then   expand   to   our   members   to   which   the   Chapter   has   been   a   door   opener   and   connec;on-‐facilitator   (and   lobbyist!)   to   assist  growing  and  maintaining  business  to  mul;na;onals  as  well  as  medium  and  small  enterprises.  By  now,  we  are  even  approached  by  South   African   Government   En;;es,   economy-‐related   NGO’s   and   other   chambers   of   commerce,   invited   to   their   events   or   for  comment  on  maRers  and  par;cipa;on  in  their  work.      STRUCTURE  OF  SCSA-‐SAC    

Board  of  Directors:  SwissCham®  has  a  Board  of  Directors  as  according  to  South  African  law,  it  had  to  be  formed  as  a  non-‐profit  company,  which  means  that  we  are  subject  to  the  strict  rules  of  governance,  bookkeeping,  audi;ng  and  corporate  maRers  in  the  same  way  as  a  Limited  company  in  South  Africa,  which  is  the  “big  sister”  of  the  Proprietary  Limited  company;  we  obviously  do  not  have  a  share  capital  or  shareholders  but  instead  have  members.          Accordingly,  we  have  to  have  a  Board  of  Directors  which  currently  consists  of  seven  members,  but  is  in  the  process  of  being  expanded  again.      Directors  

 Thomas    Hippele    President    

 Bob  Judelsohn      Vice  President          MD  of  Portman  Wealth  Management  (Pty)  Ltd.    

 

 Roberto  Agustoni    Treasurer          CEO  of  Pharmaco  Distribu?on  (Pty)  Ltd.  

 

 Dr.  Jürg  Schalch    Director          Chairman  of  saXum  Insurance  Limited  

 

 Pankaj  Sinha      Director          MD  of  Schindler  LiCs  SA  (Pty)  Ltd.  

   Anita  Die;ker    Director        Head  of  the  Swiss  Business  Hub  SA  

 

 Balz  Abplanalp    Director        Minister  Counsellor,  Embassy  of  Switzerland  

 Overseas  Directors  

 Georg  Umbricht    Director  (non-‐execu;ve)    

 Hansjürg  Saager    Director  (non-‐execu;ve)    Unfortunately,  through  serious  illness,  we  lost  our  highly  appreciated  and  much  liked  colleague  on  the  Board,  Ian  Donald,  Managing  Director  and  CEO  of  Nestlé,  a  few  months  ago.    In  addi;on  to  the  seven  members  on  the  Board  in  South  Africa,  we  have  two  of  your  Directors,  being  Georg  Umbricht  and  Hansjürg  Saager,  as  non-‐execu;ve  Directors  on  our    Board.  All  Directors  work  without  receiving  any  payment  from  the  Chapter.        ExecuFve  Manager    

The  Execu;ve  Manager  of  the  Chapter  (since  2010  Daniela  Maurer)  is  the  backbone  of  our  opera;on:  whilst  the  Directors  (including  the  President)  can  only  dedicate  a  rela;vely  small  part  of  their  ;me  to  SwissCham®,  the  Execu;ve  Manager  works  on  a  70%  plus  basis  for   the  Chapter,   takes  care  of  all  maRers  organisa;onal,  membership  care,  membership  expansion,  collec;on  of  membership   fees  and  event   costs,  works  permanently  on  organising   the   future  programme  and  new  speakers,  monitors   the  poli;cal  and  economic  developments  in  the  country  and  in  Switzerland,  co-‐ordinates  between  SwissCham®  on  the  one  hand  and  the  members,  Government,  poten;al  speakers,  all  our  co-‐opera;on  partners  and  third  par;es  on  the  other  hand,  just  to  men;on  some  of  the  tasks.    In  addi;on,  she  aRends  Board  mee;ngs  during  which  she  reports  on  approximately  half  of  the  items  on  the  Agenda,  and  prepares  the  Minutes  of  the  mee;ngs.  Finally,  the  finances  of  the  Chapter  are  administered  by  her  in  co-‐opera;on  with  the  Treasurer  (Roberto  Agustoni  since  incep;on  of  SwissCham®).    

In  order  to  develop  a  scope  of  ac;vi;es  such  as  SwissCham’s®,  an  Execu;ve  Manager  is  needed  as  without  such,  the  Chapter  would  not  be  in  a  posi;on  to  have  the  ac;vi;es  and  events  it  has  or  to  perform  the  work  it  does.              

     

 Members  The  Chapter  has  currently  over  100  members  and  a   few  membership  applica;ons  are   in   the  process  of  being  made.    At   the  ;me  when  I  became  the  President  of  SwissCham®,  I  set  the  ambi;ous  target  of  having  a  stable  membership  (which  means  at  all  ;mes,  as  there  are  always  -‐  mainly  smaller  -‐  businesses  being  sold  or  closed  and  memberships  cancelled)  of  over  100,  which  target  has  been  achieved   by   the   end   of   2014.     Our   membership   ranges   from   self-‐employed   businessmen’s   and   -‐women’s   enterprises   to   small  enterprises  (50%)  and  further  to  medium  enterprises  (24%)  right  to  large  mul;na;onal  corpora;ons  (26%)  and  our  members  cover  every  sector  and  field  of  business  of  the  South  African  economy.  

                 

     

0%  5%  

10%  15%  20%  25%  30%  35%  40%  45%  50%  

Medium  Enterprises                      Large  &  mul;-‐na;onal                    Small        Enterprises                                                                                                                  Corpora;ons            

 Large  CorporaFons    

     ABB  South  Africa  (Pty)  Ltd.    Buhler  (Pty)  Ltd.    Clariant  (Pty)  Ltd.    Credit  Suisse    DeloiRe  &  Touche    Endress  +  Hauser    Founda;on  for  Professional  Development  (FPD)    Glencore  Holdings  (Pty)  Ltd.    Hil;  SA  (Pty)  Ltd.    KPMG  Services  (Pty)  Ltd.    Mediclinic  Interna;onal    Naledi  Rail  Engineering  (Pty)  Ltd.    Nestle  (South  Africa)  (Pty)  Ltd.    Novar;s  (Pty)  Ltd.    Philip  Morris  (Pty)  Ltd.    Roche  (Pty)  Ltd.    Schindler  LiMs  (Pty)  Ltd.    SGS  (Pty)  Ltd.    Sulzer  Holdings  (Pty)  Ltd.    Swiss  Interna;onal  Airlines    Swissport    UBS    Zurich  Insurance  Company  (Pty)  Ltd.    Swiss  Business  Hub  SA  –  Sponsor  Member  

PROJECTS    

Whilst  usually,  as  a  Chamber  of  Commerce,  doing  projects  of  the  kind  is  not  our  primary  object,  we  nevertheless  have  engaged  in  a  very  large  and  equally  important  project:    “skills  shortage”  has  been  iden;fied  as  a  problem  which  needs  to  be  urgently  addressed,  both   by   the   private   sector   and   the   Government   of   South   Africa.     Having   great   experience   in   Switzerland   with   appren;ceships  combined  with  profound  training  at  a  Technicon,  the  following  project  was  defined  and  ventured  into:    

Early  in  2013,  SwissCham®  in  co-‐opera;on  with  the  Swiss  Embassy  and  the  Swiss  South  African  Coopera;on  Ini;a;ve  (SSACI),  started  an   ini;a;ve  on  Skills  Development  against   the  background  of  a   less-‐than-‐op;mal  output   from  voca;onal   colleges   (TVET)   in  South  Africa,  which   is   a   key   contributor   to   the   chronic   shortage   of   skills   faced   by   industry,   including   Swiss   companies   opera;ng   in   the  country.   The   Government   of   South   Africa   recognises   that   Switzerland   has   a   demonstrated   outstanding   strength   in   the   area   of  voca;onal   educa;on   and   training   and   its   voca;onal   ins;tutes   produce  highly   skilled   and  employable   students.   Later   in   2013,   the  Department  of  Higher  Educa;on  and  Training  (DHET),  and  SwissCham®    entered  into  a  partnership  aimed  at  improving  the  quality  of  teaching  and  learning  in  public  TVET  colleges,  and  making  them  centres  of  excellence  in  the  na;onal  skills  development  landscape.    

This   partnership   was   officially   announced   on   the   16th   of   April   2014   by   the  Minister   of   Higher   Educa;on   and   Training,   Dr.   Blade  Nzimande  at  the  launch  of  the  Department  of  Higher  Educa;on  and  Training  (DHET)  –  SwissCham®  College  Improvement  Project,  at  the  Ekurhuleni  West  College  (EWC),  in  Germiston.    

Since  then,  a  number  of  mul;na;onal  Swiss  companies  opera;ng  in  South  Africa  are  working  collabora;vely  to  improve  the  standard  of  teaching  and  learning  in  South  Africa’s  colleges.  In  support  of  Government’s  policy  on  skills  development,  these  companies  believe  that   the  only  way   that   colleges  will   produce   graduates   that  have   the   skills   required  by   industry   is   if   industry   gets   involved   in   the  delivery  of   the   curriculum.  Companies   such  as  Nestlé,   Schindler,  Bühler,   Sulzer,  Geberit,   Panalpina,  ABB  and  Hil;  have  during   the  course  of  2015  provided  support  to  colleges  in  the  form  of  guest  lecturing,  student  and  lecturer  work  placements,  lecturer  training  and  lecturer  exchanges.      

           

Meanwhile,  pilot  programes  are  running  in  five  different  TVET  colleges  within  the  Gauteng  province.  

CO-‐OPERATION  PARTNERS    

Whilst   the  majority  of   SwissCham’s®  events  are  organised   independently,   there  are  a  number  of  occasions   at   which   the   Chapter   works   with   the   Swiss   Business   Hub   (an   en;ty   aRached   to   the  Embassy   which   is   strongly   and   mainly   connected   to   Switzerland   Global   Enterprise   (S-‐GE)   –  previously  named  OSEC)  and/or  the  Embassy  of  Switzerland.    Events  where  all  three  par;cipants  have  a  role  are  for  example  the  visits  of  Swiss  Federal  Councillors,  Secretaries  of  State,  events  of  the   JEC   (Joint   Economic   CommiRee),   events   involving   an   ac;ve   discussion   with   South   African  na;onal  Government  and  the  like.    Apart  from  these  events,  SwissCham®  has  every  now  and  then  engaged  with  the  Business  Hub  and  from  ;me  to  ;me  with  the  Embassy  of  Switzerland  for  events  which  hold  an  interest  to  both  or  all  three  en;;es  concerned  and  which  some;mes  take  place  at  the  Residence  of  the  Ambassador  of  Switzerland  in  Pretoria.      Apart  from  the  aforesaid,  there  is  an  exchange,  formally  and  informally,  of  informa;on  and  regular  brainstorming  involving  the  Swiss  Business  Hub  and  /or  the  Embassy.    Co-‐opera;on  is  also  sought  where  SwissCham®  submits  official  comment  to  the  aRen;on  of  a  Department  of  the  South  African  Na;onal  Government  and/or  a  Parliamentary  Porbolio  CommiRee  on  draM   legisla;on  which  has  been  published  for  comment.    Of  course  and  at  all  stages,  the  main  source  of  SwissCham’s®  stance  comes  from  introspec;ve  posi;on-‐gathering  with  its  members  on  the  one  hand  and  assessment  of  draM   legisla;on   by   its   Management   and   Board   on   the   other   hand.     Whenever   SwissCham®  comments   on   draM   legisla;on   or   important   economic   maRers,   it   is   the   lead   partner   as   the  comment  will  finally  be  SwissCham’s®  responsibility  and  be  submiRed  under  its  leRerhead.          SwissCham®  is  a  member  of  the  IRR  (Ins;tute  of  Race  Rela;ons),  which  Ins;tu;on  has  been  around  for  more   than   four  decades  and  was  previously  known  as  SAIRR   (South  African   Ins;tute  of  Race  Rela;ons).     For   those   who   do   not   know   the   IRR:     it   is   a   non-‐profit   organisa;on,   same   as   the  Chapter,   which   is   not   mainly   engaged   in   race   rela;ons   in   the   narrow   sense   but   rather,   it   has  become  the  best  and  most  reliable  economic  analyst,  source  of  sta;s;cs  and  scenario  planner   in    South   and   meanwhile   Southern   Africa.       Whenever   highly   informa;ve   data   and   sta;s;cs   and  studies  are  required,  both  the  private  sector  and  the  South  African  Government  do  turn  to  the  IRR.    Our   rela;ons  with   the   IRR   gives   us   access   to   all   their   studies,   a   certain   amount   of   hours   spent  individually  on  the  Chapter’s   requests  or  projects,  and  a  highly   fruibul  and  precious  exchange  of  thoughts   when   we   are   dealing   with   submissions   on   important   new   legisla;on   or   poli;cal  tendencies.      

           

 

Co-‐operaFon  with  SCSA    

The  co-‐opera;on  with  SCSA   is  effected   regularly   through  an  exchange  of   thoughts  between   the  Directors  of   the  Chapter  who  are  Directors  of  SCSA  and  vice  versa.    However,  the  “official”  co-‐opera;on  is  rela;vely  loose  at  present  but  there  is  a  mutual  wish  on  the  sides   of   both   SCSA   and   the   Chapter   to   intensify   the   co-‐opera;on.     Since   quite   a   few   years,   all  Minutes   of   the   Chapter’s   Board  mee;ngs  are  provided  gaplessly  to  the  Board  of  SCSA,  same  as  all  official  submissions  of  the  Chapter  and  its  event  reviews.      A  few  years  back,  we  introduced  a  rule  at  the  Chapter  that  all  members  of  SCSA,  if  aRending  our  events,  have  the  right  to  par;cipate  at  the  same  cost  as  we  charge  members  and  not  at  the  higher  cost  which  is  charged  to  guests.    The  same  seems  to  apply  reciprocally  to   the  extent   that   SCSA   charges  different   rates.     Furthermore,   the  management  of   the  Chapter  has   created   certain   logos   and  an  aRrac;ve  website,  the  logo  having  been  made  available  in  an  appropriately  changed  format  to  SCSA  and  the  Chapter’s  website  shows  a  well-‐visible  link  to  SCSA’s.    Finally,  the  informa;on  on  the  Chapter’s  website  is  accessible  to  members  of  SCSA.      So  and  hopefully  for  good  reason,  the  co-‐opera;on  between  SCSA  and  the  Chapter  is  friendly,  posi;ve  and  construc;ve.    However,  it  is  in  a  way  not  all  that  intense.    Not  wan;ng  to  pre-‐empt  discussions  between  the  two  Boards  but  in  the  sense  of  ideas  for  improving  and   intensifying   the   co-‐opera;on,   there  would   be   topics   such   as   dual  membership,   (i.e.   pay   the   one   or   the   other  who  will   then  transfer  a  certain  amount  to  the  respec;ve  other  en;ty  and  be  full  members  of  both),  beRer  flow  of  more  detailed  informa;on  and  regular  teleconferences  between  the  Boards  or  Execu;ve  CommiRees  to  address  common  issues  in  more  depth.    Further,  a  regular  exchange  of  ideas  and  informa;on  as  well  as  methodology  between  the  Execu;ve  Managements  of  SCSA  and  the  Chapter  could  be  an   important   factor   to   deepen   the   rela;onship   and   assist   SCSA   (and   the   Chapter)   in   expanding   its   ac;vi;es.    Maybe,   when   the  ques;on  and  answer  and  discussion  session  opens  just  now,  some  of  you  will  have  sugges;ons  to  make.      Last  but  not  least,  the  region  of  Southern  Africa  has  started  to  move  in  a  posi;ve  direc;on  a  few  years  back:    Mozambique  is  opening  up  for  business,  concluding  reciprocal   investment  protec;on  trea;es  and  developing  the  gas   industry,  but  with  a  firm  inten;on  to  expand  from  proceeds  of  its  rich  mineral  and  gas  wealth  into  all  sectors  of  the  economy;  Botswana  is  a  highly  aRrac;ve  des;na;on  in  Southern  Africa,  connec;ng  to  seaports  to  the  east  and  west  by  rail  and  beRer  roads  to  overcome  the  disadvantages  of  its  landlocked  posi;on,  just  to  name  two.    Accordingly,  SCSA  should  be  looking  more  intensely  at  crea;ng  new  Country  Chapters,  in  Mozambique  and  Botswana  as  well  as  other  countries  of  the  region  as  may  become  appropriate  in  future.    For  the  Chapter,  these  would  be  sister  Chambers  whilst  SCSA  is  the  “mother  Chamber”  or  “big  sister”  and  SwissCham®  in  South  Africa  could,  being  in  a  beRer  posi;on,  foster  nego;a;ons  and  ac;vely  support  the  crea;on  of  country  Chapters   in  the  region.    SwissCham’s®  Cons;tu;on  is,  as  amended  at  the  AGM   in  2015  by  unanimous  consent  of  all  members,  a  blueprint  which  could  be  “exported”   into  other  countries,   subject   to  small  amendments  according  to  local  legisla;on.      

           

 

Apart   from   the   aforemen;oned   co-‐opera;on   partners,   SwissCham®   has   in  maRers   of   great   importance   such   as   the   new   B-‐BBEE  legisla;on,  the  termina;on  of  bilateral  investment  protec;on  trea;es,  the  planned  infringement  of  intellectual  property  rights,  just  to  name  a   few,   ac;vely  worked  with  other  Chambers   in   South  Africa,   such  as   the  American  Chamber,   the  German  Chamber,   the  French  Chamber,   the  Bri;sh  Chamber,   the   Scandinavian  Chamber   and   the  Austrian  Chamber,   just   to  name  a   few.    We  have   also  engaged   with   the   Free   Market   Founda;on   and   similar   organisa;ons   being   ac;ve   in   the   field   of   crea;ng   a   beRer   and   more  compe;;ve  economy.    

SWISSCHAM’S®  WORKING  ENVIRONMENT    

Our   working   environment   is   South   Africa,   i.e.   the   South  African   business   environment   consis;ng   of   the   country’s  economy,   laws,  Government,  percep;on   in  the  rest  of   the  world   and   resources   of   all   kinds   available   in   South  Africa.    Unfortunately,  the  world  economy  is  not  at  its  best  and  the  appe;te   of   the   larger   established   economies   to   invest   in  BRICS  states  and  emerging  markets  has  been  dampened  for  the  ;me  being.    In  addi;on,  South  Africa  has  engaged  in  the  enactment   of   quite   a   few   laws   which   are   regarded   as  “hos;le  to  investors”  and  has  moreover,  effec;ve  last  year,  terminated   numerous   reciprocal   investment   protec;on  trea;es  with  mainly  European  countries,  which  countries  in  total   make   for   not   less   than   80%   of   all   Foreign   Direct  Investment  (FDI)  in  South  Africa.    Last  but  not  least,  South  Africa’s   taxes   are   rela;vely   high   compared   to  many   other  markets  (and  the  Government  is  insis;ng  that  tax  holidays  or   tax   breaks   are   not   proper   incen;ves   for   investors,   unlike  many   other   Governments   who   have   successfully   established   such   tax  incen;ves);   labour   is  expensive,  produc;vity   is   low  and  there   is  a   lot  of  “red  tape”  around  obtaining  work  and  residence  permits   for  investors  and/or  managers  of  foreign  owned  companies  and  their  families,  the  currency  is  not  very  stable  and  has  seRled  at  a  very  low  exchange  rate  making  the  many  imports  into  the  economy  expensive.    Also,  Broad-‐Based  Black  Economic  Empowerment,  known  as  “B-‐BBEE”,  makes  investment  more  burdensome.    Many  of  the  aforesaid  are  factors  which  are  “homemade”  by  which  I  mean  they  are  in  the  hand  of  the  South  African  Government  and  lawmakers  (Parliament)  and  thus  a  choice  that  has  been  made,  which  could  be  changed  to  the  beRer  or  the  worse.  

       

Interna;onal  ra;ng  agencies  have  rated  South  Africa  at   one   notch   above   “junk   status”,  which   ra;ng  was  recently   confirmed,   preceded   by  well-‐founded   fears  that  we  may  not  be  able  to  maintain  such  status  and  have   to   take   the   jump   on   the   dump.     In   mid-‐2016  where   we   are   now,   the   country’s   economy   is  hovering   on   the   brink   of   recession   having   been  assessed   at   a   growth   level   of   0.1%.     According   to  some   leading   economists,   the   recession   has   already  clawed  us  from  behind.     In  addi;on,  we  are  facing  a  wider   unemployment   rate   just   under   40%   and  tensions  of  a  social  nature  and  based  on  inequali;es  between   different   racial   groups   are   exploited   by  quite  a  few  poli;cians  and  poli;cal  par;es.      

The  danger  of  such  exploita;on  is  that  social  and  racial  tensions,  instead  of  being  soothed,  are  inflamed  which  may  result  in  an  even  more  difficult  and  difficult-‐to-‐control  overall  environment.    The  sad  story  is  that  the  vision  held  by  Nelson  Mandela  and  FW  de  Klerk  at  the  ;me  the  new  South  Africa  was  born,  being  the  vision  of  a  country  where  tensions  subside  and  a  Na;on  can  be  built,  have  not  become  reality  and  have  been  s;fled  by  the  very  same  poli;cal  bodies  from  which  these  two  remarkable  Nobel  Prize  laureates  emerged.    

“Say  something  posi;ve,  man!”    -‐  that  is  what  my  South  African  friends  would  now  shout  at  me  and  so  would  probably  governing  poli;cians.    However,  there  are  ;mes  when  posi;ve  news  and  views  come  easier  and  ;mes  when  they  become  more  difficult.    Nevertheless,  and  with  inner  convic;on,  I  can  say  that  South  Africa  has,  apart  from  all  the  aforemen;oned  factors  which  make  its  environment  and  reality,  also  truly  posi;ve  ones:    

As  you  are  no  doubt  fully  aware,  the  economy  in  South  Africa  is  not  great  at  this  stage.    Apart  from  some  unfortunate  policies  on  which   the   Government   has   ventured,   the   general   state   of   the   world   economy,   the   already   men;oned   diminished   appe;te   of  investors   to   engage   in   emerging  markets   and   a  high   level   of   corrup;on  have  done   their   fair   share   to  bring   about   this   situa;on,  paired  with  a  percep;on  outside  South  Africa  that  the  Government  of  the  country  is  more  engaged  in  ruling  party  internal  rivalry,  securing  voters  and  maRers  of  personal   interest  rather  than  formula;ng  and  firmly   implemen;ng  posi;ve  and  credible  strategies  towards  improvement.    

                          environment  did   away  with   some   red   tape   resul;ng   in   the   small   and  micro  businesses   and  entrepreneurs   being                  empowered,  we  may  see  a  stronger  and  faster  turn  in  the  right  direc;on.      

Ladies  and  Gentlemen,  please  accept  my  sincere  thanks  for  having  me  as  a  speaker  today  and  for  your  interest  in  my  presenta;on.    I  would  now  be  available  for  ques;ons,  regarding  the  Chapter  but  also  about  the  South  African  business  environment.    Thank  you  very  much!      

there  is  an  emerging  middle  class  in  the  country  which  by  now  has  expanded  considerably  during  the  last  20  years  and   most   of   the   people   who   have   arrived   in   this  expanded   middle   class   come   from   a   previously  disadvantaged  background.    This  is  per  se  good  news  as  it  is   a   trite   fact   that   a   stable  middle   class  of   a   reasonable  size  is  an  important  poli;cal  stabilizer.    Whilst  the  size  of  our  middle  class   is  not  yet  as  strong  as   it  should  be,  we  have   made   remarkable   progress.     Moreover,   in   any  country,   the   spirit   of   the   people   and   the  way   they   are,  play   an   important   role   when   it   comes   to   gewng   an  economy   out   of   troubled   waters.     South   Africans   are  innova;ve   and   entrepreneurial   people.   There   is,  especially  in  amongst  the  younger  people,  a  strong  wish  towards   independence   in   the   sense  of   self-‐employment  and   having   one’s   own   business.     There   are   also   many  good  and  innova;ve  ideas  born  in  South  Africa.    Thus,  if  the  poli;cal