Gcc Plays the African Card

Article excerpt

Since the collapse of apartheid in South Africa, a remarkable political and trade link has developed between South Africa and the Arab Gulf states. But its full potential has yet to be realised.

South African companies are now doing significant business in the Gulf, selling everything from agricultural produce to textiles, as well as traditional exports such as gold and diamonds.

Arab countries have also turned to South Africa for a host of sophisticated manufactured goods, including cars and trucks, computers, and military equipment. South Africa is seen by them as a vital alternative to American, Japanese or European firms, which have long been the region's dominant suppliers.

South Africans, in turn, have turned to the Gulf Cooperation Council (GCC) member states (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates) as a source of development capital.

However, trade relations have not expanded as much as had been expected in the heady days following the collapse of South Africa's apartheid regime. Trade between the GCC countries and South Africa, for example, still represents less than two per cent of both sides total global trade. (See table)

ECONOMIES AT A GLANCE

by Josh Martin

                Population     GDP       Exports     Imports
                (Million)    ($ bil)     ($ bil)     ($ bil)

South Africa        40         $132        $30         $28
GCC(*)              31         $349        $129        $72

                Chief exports

South Africa    diamonds, metals,
                  coal, food,
                 machinery, chemicals

GCC(*)              oil,
                petrochemicals

(*) Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, United Arab Emirates.

There are several reasons for this. For one thing, trade relationships had to be built up from scratch. Arab countries had been among the foremost supporters of the trade boycott of the racist South African regime.

Yet post-apartheid relations between Gulf Arabs and South Africans have not always run smoothly. Significant political and social differences exist, especially in the areas of women's and labour rights. Moreover, as South Africa moves to assert itself as the most powerful economic and military force on the continent, it has raised concerns among the Arab and Arab-dominated countries of northern Africa.

Some problems were beyond the control of either party. Trade was hurt in the mid- and late 1990s by economic turmoil in southeast Asia and the simultaneous, prolonged slump in world oil prices.

Economic mistakes were also made: When the government of Nelson Mandela came to power in 1994, it adopted a foreign trade policy designed to reduce South Africa's dependence on its traditional trade partners -- the US, the UK and Germany. New relationships were forged, especially with other African states, as well as key `big emerging markets' of Asia. …