Russian-South African Economic Cooperation

The legal platform for the Russian-South African relations in trade and economy was launched in 1993 with the Agreement on Trade and Economic Cooperation which reciprocally introduced almost favoured nation bilateral treatment in trade and investment protection, and provided for freedom of transit of goods through either party territory.

Other key documents are Agreement on Cooperation in Mining (1999), Agreement on Double Taxation Avoidance (2000) and Investment Promotion and Protection Agreement (2000).In 2002 South Africa recognised the market status of the Russian economy.

South Africa is a leading Russian foreign trade partner in Sub-Saharan Africa. Bilateral trade in 2010 increased by 0.5% to USD519.1 million (USD516.5 million in 2009). With Russia's exports dropping by 74.5% to USD45.8 million (USD195.2 million in 2009), imports grew by 47.3% toUSD473.3 million (USD321.3 million in 2009). In the first half of 2011 bilateral trade turnover amounted to USD234.0 million (7.9% growth), with Russian exports totallingUSD33.5 million, and import - USD200.5 million.

The major Russian exports comprise chemical and agro-industrial products, precious and base metals, coking coal, fertilisers, machinery, equipment, vehicles, tools, textiles, footwear and mineral products. Russia's imports from South Africa were dominated by fruits, mineral products, machinery, equipment, vehicles, chemical products, precious and base metals, raw hides, textiles and footwear.

Mutual investment projects in progress in both countries are mainly engaged in mineral resources. A number of major Russian companies operate in South Africa, among them Renova Group (manganese and alloys), OJSCMMC Norilsk Nickel (nickel and associated metals), EVRAZ Group S.A. (steel, alloys, and vanadium), OAO Severstal (steel).

South African economic operators have in turn been quite active in the Russian market, to name SABMiller (brewery), Anglo American/ Mondi Group(paper and packaging), Naspers (international media), Bateman and Shaft Sinkers (engineering), Anglo American Platinum (mining), Standard Bank(banking, finance).

The Joint Inter-Governmental Committee on Trade and Economic Cooperation (ITEC) between Russia and South Africa was established in 1999 as a coordinating bilateral body to exploit trade and investment opportunities and identify and resolve potential obstacles in areas of cooperation.

Russian ITEC chapter is presently chaired by Yury Trutnev, Minister of Natural Resources, his South African counterpart is M.Nkoana Mashabane, Minister of International Relations and Cooperation.

The most recent 10th ITEC session was held on 28-29 September 2011 in Pretoria, its agenda included bilateral trade and economic issues, conventional and nuclear energy, space, science and technology, banking, mineral resources, agriculture and education. As was discussed, although strategically poised, bilateral trade and economic ties between South Africa and Russia had in recent years fallen below its potential. To strike a balance, the two sides agreed to take steps to increase trade, while shifting the focus to high value-added products, as well as to enhance cooperation in high-technology areas. The next ITEC session is to be held in 2012 in Russia.

During the 2006 Russia-South African summit the bilateral Business Council was established as a mechanism to bring together interested stakeholders in both countries. The Russian chapter of the Business Council is currently headed by Vladimir Kremer, Renova Group Managing Director, the South African part is chaired by Robert Gumede, businessman. The first Business Council joint session convened in Moscow in February 2011 elaborated a list of cooperation priorities. The two sides also agreed to frequent interaction to enhance knowledge of commercial opportunities, while prioritising capacity building and skills transfer, particularly in high-technology areas. In September 2011 in the margins of the 10th ITEC session Pretoria hosted the second Business Council session attended by numerous companies and various business organisations from Russia and South Africa.