Middle East Middle East emerges as SA’s sixth largest export market Several bilateral agreements in

ED RICHARDSON HIDDEN BEHIND the news of tensions, bombings and unrest in the Middle East is an untold story – that of a region of opportunity. “The Middle East is becoming an important trade zone for South Africa. It holds great potential for South Africa as an export market, and serves as a potential strategic source of foreign direct investment,” states the Department of Trade and Industry (dti). But, we are not alone in identifying the potential: “The Middle East and North Africa are considered among the most attractive areas in the world for doing business. “The fact that most of its countries, if not all, are developing states and need to catch up with the rest of the world, is creating attractive investment opportunities in almost every sector,” says the Canadian Advanced Technology Alliance (CATAAlliance). And, according to the South African Department of Tourism, investment bank Merrill Lynch rates the member states of the Gulf Cooperation Council as offering far greater untapped economic prospects than South Africa’s other major trading partners, China and Japan. Exports from South Africa to the Middle East have grown from
R9.7-billion in 2003 to R16.08-billion in 2006, making the region the sixth-largest export market for South African goods and services. South Africa’s biggest trading partner in the region is Israel (R4.5-billion), followed by the United Arab Emirates (UAE) at R3.9-bn, and then Turkey at R2.4-bn. Fourth is Saudi Arabia, R2.08-bn, which is a major supplier of oil to South Africa. Imports from the region in 2006 totalled R56.9-bn, up from R28.4-bn in 2003, but most of this growth was oil imports. The trade deficit with the region was around R40.8-bn. This puts pressure on both the South African and Middle Eastern trade authorities to narrow the gap. There is an increasing number of bilateral agreements which have been concluded with countries in the region. Agreements cover areas such as civil aviation, taxation, protection of investments and scientific co-operation. Recently, a senior delegation flew out on a 10-day mission to promote South African trade, tourism and investment in the five Gulf states of Kuwait, Qatar, Oman, Saudi Arabia and the United Arab Emirates. Tyrone Seale, head of the International Marketing Council of SA (IMC), said the visit confirmed the importance of the Gulf region to South Africa. However, trade between the two is mainly in the form of South African imports of crude oil and other petroleum products, leading to a huge negative trade imbalance. As a result, Seale said, there was huge potential for growth in trade outside the fuel sector, as well as significant new opportunities opening up in the leisure and hospitality and construction and engineering sectors.