SA trade with the Middle East
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.
Bilateral trade with the Middle East has grown significantly since 1994, and increased from some R32-billion in 2000 to over R35-billion in 2001. Because of South Africa’s energy imports, it has a large trade deficit with the region. South Africa's trade with the Middle East made up 7.5% of the country's total international trade in 2001.
Key trading partners
There are an increasing number of bilateral agreements which have been concluded with countries in the region. Lead trading partners in the Middle East are Saudi Arabia, Iran, Israel, the United Arab Emirates (UAE) and Turkey. Agreements cover areas such as civil aviation, taxation, protection of investments and scientific co-operation.
Saudi Arabia
Trade between
South Africa and Saudi Arabia currently stands close to R14-billion. However, there is a large trade deficit on the South African side – South Africa purchases a significant percentage of its oil from Saudi Arabia. In 2002 the trade deficit was R11-billion. South Africa recently signed a Memorandum of Understanding with the Saudi Arabia Chamber of Commerce and Industry that will see the establishment of a joint business council. In 2003 exports were R1.2-billion and imports R15-billion.
Jeddah Economic Forum
The annual Jeddah Economic Forum (JEF) is a regional economic forum for major business interests in the Middle East. It encourages discussion and exchange of ideas on the economic and social development of the global economy. It provides a platform for debate among local business representatives, government agencies and ministries, academics, international politicians and global business leaders. Jeddah is the commercial centre of Saudi
Arabia.
Iran
Iran and South Africa recently agreed on the need to strengthen relations between the two countries, especially in the area of trade and investment. Relations between South Africa and Iran favour Iran through a sugar-for-oil trade. The country’s total exports to South Africa, mainly in oil, stood at R5.2-billion in 2002, constituting 40% of South Africa's supplies, while South Africa's exports to Iran in 2002, mainly sugar, amounted to R325-million. A number of South African companies, including oil giants Sasol and PetroSA, have invested in the Iranian petrochemical sector, while significant Iranian interests in South Africa include property development. In 2003 imports from Iran stood at R9.2-billion, remaining relatively stable compared to the previous two years. In comparison, 2003 exports were R301-million, down R170-million from 2001.
Israel
Israel is the biggest Middle East destination for South African exports. Although down
some R2-billion from the previous year, exports to Israel in 2003 were nearly R4-billion and imports R1.3-billion in the same year.
United Arab Emirates
The United Arab Emirates (UAE) is one of South Africa's lucrative markets in the Gulf and current statistics show that trade between South Africa and the UAE – especially gold exports from South Africa - is gaining momentum. Exports to the UAE were R2.4-billion in 2003 and imports R558-million in the same year.
Turkey
Exports to Turkey were over R1-billion in 2003 and imports nearly a billion (R979-million) in the same year. Foreign direct investment from Turkey in South Africa amounts to some US$60-million. Agreements on trade and economic co-operation, and co-operation in the areas of science and technology have been signed with Turkey.
SouthAfrica.info reporter
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