SPEAKER High Commissioner

DATE 20/10/2009

I’m delighted to be here. Delighted to be in South Africa, and in its commercial centre in Jbg.  Delighted to be invited by the British Chamber because this is a great place to find people who rate the commercial relationship between South Africa and the UK as highly as I do.  I don’t need to start by telling you how vital that relationship is to growth in your businesses and both of our economies.  We both take that for granted.  What the Chamber also offers is a perfect platform to explain the wider significance of that commercial relationship.  I have a picture in my mind of an intricate mosaic, each of the pieces adding up to a satisfying pattern, some old and worn gentle by time, some still sharp, and some bright and new.  After 3 months in this job, I know that business isn’t one piece in this mosaic, it’s lots of them.

I presented my credentials as High Commissioner from the Queen to President Zuma about a fortnight ago. We talked about a lot of things. About the strong ties of history and family between our two countries. About sport and trade and education and climate change. About regional conflicts in Africa, the G20, social justice.  And he said something which is both a tribute and a challenge to everyone in this room tonight.  He said, Britain is South Africa’s largest trading partner.

I’m going to talk this evening about the truth behind that tribute and challenge, and the pattern in the mosaic. I’m going to expand on something I said to the President: why I believe South Africa belongs in the Premier League of partners of choice for the UK, why the UK should stay in SA’s Premier League, and how you are helping us do that.

I’m going to show how

• our trade relationship,
• our sporting links,
• our joint work on education, and
• our shared commitment to combating climate change

are all facets of a modern, dynamic partnership which can be competitive in the best sense, pragmatic – we are British after all – but also has space for idealism.

And especially for our many South African guests tonight, I’m going to give you evidence that the UK is still an attractive market for export and investment for your companies.  Even while we’re all climbing out of a global downturn.

South Africa is 15 years into a democratic journey the start of which inspired and delighted the world.  As I used to say in my last job, as CEO of Britain’s first Equality and Human Rights Commission, one of the two big questions of the 21st century is ‘how to live with each other’. Your neighbour may come from anywhere in the world these days.  If you live in east London, there’s a sporting chance your next door neighbour’s family were born in Bangladesh. If you live in south west London, they probably come from South Africa.

Like populations, economic power has shifted dramatically. International institutions haven’t yet caught up.  But there is a bigger shared agenda.  The second big question of the 21st century is ‘how to live together on this fragile planet’. There was a rather striking photograph in the South African press last week of the Maldives’ cabinet meeting underwater. If we don’t all cooperate to reduce global CO2 emissions, that’s just where the Maldives will be.

A  Premier League partnership adapts to meet challenges like that.  And it takes account of how the vision of each of the partners changes. As South Africa begins to chart where it wants to be in another fifteen years through Trevor Manuel’s work on the National Planning Commission, our partnership will need to develop. I’m confident that it will.

Like any relationship born out of a colonial past, our connection is a complex one.  As I said to President Zuma, there’s a danger that we sometimes see each other in ways that are out of date. History breeds stereotypes. And as the Nigerian author Chimamanda Ngozi Adichie says, the problem with stereotypes is not that they are untrue, but that they are incomplete.  Historical events – many bad, some good, like sanctuary from apartheid - are only part of our current, complex identities. They aren’t the whole truth.  

As important, in my view, are the common values which connect the multiple identities which define us. I grew up in Northern Ireland and love many aspects of the Province. I also feel Welsh, British and European; I’m the daughter of a Welsh rugby international as listeners to Radio 702 know, I’m also a mother, wife, lousy tennis player, avid reader of novels and poor teller of jokes - as well as being proud to be Britain’s High Commissioner to South Africa. A Premier League partnership has its own multiple identities: historical and modern; commercial and cultural; political and environmental; issues on which we agree and those on which we don’t.

It’s my job, as High Commissioner, to communicate and develop those different pieces in the mosaic: trade, development, peacekeeping, politics and all the other areas where we stand to benefit mutually from coming together.  And it’s my job to identify the coherence between them.

As businessmen and women you’re working to improve your bottom line. But you’re also doing something else. There is an old African proverb which says:  “If you want to walk fast, walk alone. If you want to walk far, walk together”.  Mamphela Ramphele and her colleagues who drew up the Dinokeng Scenarios thought that was relevant to South Africa over the next 20 years.  I can see its application in the UK too, as we try to create a society which truly values and celebrates our diversity. South Africa’s recent history, and its ground breaking constitution, offer us inspiration.

And I believe that it also applies to the growing need to form modern, dynamic, pragmatic and inspirational partnerships to face today’s complex global agendas.  The UK and South Africa need to stay the course and walk together – aligning our agendas while accepting each other’s realities as only old friends or family members, who are prepared to work at staying together, really can.

South Africa is an important partner for many countries and in many organisations – more multiple identities there.  SADC, the African Union, the G77, the NAM, the G20, the G8+5, the UN.  It’s also an emerging economy and a developing country with a clear domestic agenda. So let me focus for a moment on South Africa as an emerging economy and the country whose largest trading partner – I’m sticking to President Zuma’s words – is Britain.

What began as a financial crisis in the North last year would probably, in an earlier century, have ended there.  But now everything is connected to everything else. Falling trade and investment led to lower remittance flows to developing countries.  Lower consumption led to falling commodity prices, and so on. The developing world, which didn’t start the crisis, got caught up in it.

International trade is not, like football, a “beautiful game”.  But not everything is beautiful about football.  A bit of bad luck and a few of injuries and you can get knocked off the top of the table and down the league.  You will know, as I didn’t want to be the one to point out to President Zuma, that the UK has been knocked off its top spot among South Africa’s trading partners. Today, China’s in that place.  

Should we be bothered?  Well we shouldn’t be surprised that short-term trade flows are affected.  Today’s Financial Times headlines China’s role as a major investor in South Africa.  That means we need to adapt and foster China’s emergence as a global trading partner – seeking partnerships and collaborating more on this continent.  And it means corporate responsibility, particularly with regards to investment.  

To stay in the Premier League of South Africa’s trading partners and destinations of choice for investment, we need to recognise the new economic world we operate in, find our place in it, and learn to adapt and re-gain our global trading position. I’m old enough to know we’ve done it before.  To twist shamelessly a familiar saying – those who learn from history have a chance of repeating it.

Last week, the UK Business Secretary Lord Mandelson announced the results of research on emerging markets commissioned from the Economist Intelligence Unit.  In light of the global economic crisis and the fact that emerging markets like South Africa are outperforming developed economies, Peter Mandelson encouraged British business to diversify their export base and seek out new opportunities in the emerging markets.  

To my delight – but not surprise - South Africa has moved up to 4th place in the list of investment markets among emerging economies, from 8th place in 2008.  This clearly vindicates the wise and prescient decision by UKTI to focus on South Africa as a key emerging market - a tribute to Brian Gallagher, the British Trade Commissioner, and his team here and also to many of you.

Andrew Cahn, UKTI’s CEO, and a former FCO Board colleague of mine, points particularly to South Africa’s ambitious infrastructure spending plans both as a key driver for the South African economy and a key opportunity for UK business to invest here.   And he sees another benefit of investing in South Africa: "By establishing a business in South Africa, UK companies can gain a foothold into sub-Saharan Africa."

So there are big opportunities for UK companies here. But there’s benefit in the other direction too – all good partnerships have to be a two way street.  Some 600 South African companies are already serious about investment in the UK.  London is a global springboard, for trade, finance and international growth. The South African coffee shop Vida e Caffe, who’ve just opened a third shop in Selfridges, know that. So do Eskom, who have increased their presence in the UK.  The IT company Logicalis has been inspired to invest in Wales.  A South African family restaurant chain, Spur, offering quality food at affordable prices, have opened restaurants in London, Derby, Belfast and later this month in Aberdeen.   Working from London, Standard Bank and Old Mutual have identified Europe as a key market for future growth.  The temptation during an economic storm is to put up the shutters and try to ride it out, concentrating on domestic activity.  We have good reason to be unlike Oscar Wilde, and resist temptation: UKTI research shows that UK companies who export are 11% more likely to survive.

So Britain remains “Open for Business”.  Despite the crisis, the fundamentals of the UK economy remain healthy.  Let me give you a few of my favourite examples which dispel some persistent myths:

• The UK manufacturing sector is very much alive and well. The UK is still the world’s 6th largest manufacturer.  Manufactured goods account for more than half of our exports.  And UK manufacturing is high-tech, high-skill and high value. The Airbus A380  - the largest, most advanced and environmentally friendly commercial aircraft – more than one-third of it is manufactured in the UK.  And a pretty important third - the engines and wings.
• The UK is also a world leader in low-carbon industries, creative industries, life sciences, advanced engineering and, despite recent events, still in financial services.  A report published by the World Economic Forum earlier this month ranked the UK as the world's leading international financial centre, above Australia and the US. And we can combine creative design and classic engineering. The last 2 Formula 1 champions are British – Lewis Hamilton and Jensen Button.  And with temperatures rising here in South Africa, I was glad to see James Dyson’s latest strikingly designed product – a bladeless fan.  It looks pretty cool.

There now follows a short commercial for UKTI.

The comedian George Burns said “Happiness is having a large, loving, caring, close-knit family - in another city.”  I’m sure Brian Gallagher sometimes feels that the best aspect of the UK family is that it is mostly located in Pretoria.  The reason UKTI is in Johannesburg is so it can be close to you.  UKTI is here so it can build relationships with you, offer quality strategic advice, political support, research and provide a platform for the promotion of trade and investment between South Africa and the UK.

20,000 UK companies use UKTI’s services every year. Of those, 70% report significant business benefits amounting to £3bn during 2007-08.  That’s £16 additional profit for every £1 spent on delivering UKTI trade services.  Not a bad return. In this key emerging market, last year Brian and his team put on more than 80 events, both to promote South Africa as an opportunity for UK companies and UK as the destination of choice for FDI.

UKTI knows its business, knows this market and understands South African companies’ needs and concerns in investing in the UK.  It is a key piece in that mosaic which makes up the modern, professional, pragmatic – and inspirational - partnership between UK and SA.

I did a lot of listening and reading about South Africa before I came here. It’s important to arrive knowing why South Africa is important to the UK. But it’s important to come knowing that specific ideas you’ve preconceived, either about the country itself or elements in this Premier League partnership, are only part of the mosaic. I’m still looking for patterns and for other parts of the story.  I came with a passion for certain issues where I feel the UK and South Africa working together can make a genuine difference.  And I see more opportunities the longer I am here. The challenge is to choose between them, and to focus.  As well as trade and investment, the World Cup, education and climate change are areas on which I’m focusing. And I don’t need to tell you that there are business opportunities in all of them.

As we get closer to the Copenhagen Climate Change summit, less than two months away, it’s clear that we need to do more.  We have a good dialogue with South Africa.  But we step up to the bar from different places. Lord Nick Stern has a neat way of explaining “common but differentiated responsibilities”.  Nick compares responsibility for CO2 emissions to a group of friends in a bar. Some of them have been drinking all evening, putting all their drinks on a tab. A couple arrive just before closing time, in time to have one drink each. As the barman calls time, one of the guys who’s been drinking all evening calls for the bill – and suggests it’s split evenly between everyone in the group. The couple who’ve only had one drink each don’t think that’s fair.  Nick’s message is clear: everyone has to make a contribution.  Climate change needs a global response to avoid future catastrophe.  But this has to be equitable.

I know that UK business can think big on climate change and can offer practical, high tech contributions to solutions.  There’s a saying in Yorkshire that where there’s muck there’s brass: did you know that a company called CO2e.com trades a pig methane project on the London carbon market to gain carbon offset credits to sell to another company?  Building a global low-carbon economy is a business issue as much as a government one, as countless studies have shown.  The global market in low carbon goods and services is already worth £3 trillion and is expected to increase by around half again over the next decade; 800,000 people are now employed in the low carbon sector in the UK.

Education is another area where I feel passionately that a Premier League partnership can make a difference. Nobel prizes are much in the news at the moment. It was a past Nobel literature laureate, Anatole France, who said: “Nine-tenths of education is encouragement”. Last weekend’s Sunday Times gave just that to the top 100 schools in South Africa.

Education is one of the 5 priorities for President Zuma’s administration. It remains one of the key challenges facing South Africa, not just in terms of the human right to education, but also because increased skills are necessary to grow the economy and tackle social issues.  I am proud that the British Council is doing so much imaginative work here to encourage educational links between our two countries and support the capacity of the South African system. I believe that UK schools benefit as much if not more from the connection than South African schools do. They are “walking together”.

One way in which the UK directly assists South African young people to realise their full potential is through our Chevening programmes.  This year, we are sending 13 talented young South Africans on scholarships to UK universities, and more on shorter courses.  I met the 13 scholars a couple of months ago – they are going to universities in the UK as far apart as Aberdeen and Portsmouth.  As one of them said to me, previous Chevening scholars have become presidents and prime ministers – so no pressure! We target the scheme at those whom we think will make the greatest contribution to the future of South Africa when they return – and to bring back modern memories of the UK.  The scheme does its bit to foster the Next Generation of great South Africans.  It also does its bit to build a reflex among young South Africans to ‘think Britain’. So they want to travel and trade with us in future. Now here’s the hard sell: I would like businesses represented here tonight to think about co-sponsoring one Chevening scholarship each. It’s a great brand – and 2010 would be a great year to join in. Just think of all the potential customers each scholar will have on their Facebook wall...

Another very timely initiative, with the personal backing of both Gordon Brown and Jacob Zuma is the 1GOAL project.  It is a campaign to use the 2010 World Cup to raise awareness of the Millennium Development Goal to get 75 million children into education by 2015. Like Jacob Zuma and Gordon Brown did, live by satellite on 6 October, you can sign up to the campaign at www. join1goal.org.

Just like a diamond, there are many sides to a good relationship. Diamonds get cut and polished before they increase in value. Good relationships have to be worked at.  But the rewards if you put in that effort can be huge. If you believe as passionately as I do that this Premier League relationship is worth it, we can build it into a true strategic partnership.  

I’ve avoided the S word until the last minute: because it’s overused. If everything is strategic, nothing is strategic – it just becomes an empty word meaning important.  If everything’s a priority then nothing is.  But I believe that we are building a modern, mature, pragmatic and inspirational partnership with South Africa, drawing strength from shared agendas, mutual respect and mutual benefits.  

That makes it a Premier League partnership to me.  A partnership which enables us to work together for the common good and one which business helps to build and sustain and from which business can profit.

Thank you.

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