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SOUTH AFRICA


  
  

 

Key Economic Data 
 
  2003 2002 2001 Ranking(2003)
GDP
Millions of US $ 159,886 104,235 113,300 29
         
GNI per capita
 US $ 2,780 2,600 2,820 93
Ranking is given out of 208 nations - (data from the World Bank)

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REPUBLICAN REFERENCE

Area (sq.km)
1,219,912

Population
43,586,097

Capital
Pretoria

Currency
rand

President
Thabo Mbeki


Update No: 056 - (01/09/06)

Expropriation of land - coming soon!
If a remark made by South Africa's land affairs minister is to be taken at face value, the country could start expropriating white-owned farms by early next year. "We have given six months for negotiations. If it fails, we'll start expropriating the land," Lulu Xingwana told journalists Aug. 11 in Polokwane, capital of the northern province of Limpopo. "The president has given me a mandate to finish the land restitution by 2008," she added. "Our people have waited for 12 years (since the advent of democracy in 1994). They can't wait longer." Under apartheid, blacks were forced off land; government now aims to return this property to them, or provide compensation for it. Authorities have committed themselves to reallocating 30 per cent of commercial farmland to blacks by 2014. To date, government has favoured a "willing seller, willing buyer" policy for addressing racial imbalances in land ownership. Concerns about land reform have been aggravated by events in Zimbabwe, where thousands of white farmers lost their properties during farm invasions that got underway in 2000 and in a subsequent fast-track land redistribution programme. Some fear South Africa may follow in the footsteps of its northern neighbour. Land reallocation is seen as having contributed to steep economic decline in Zimbabwe, which now suffers from triple-digit inflation, an acute shortage of basic commodities, and widespread hunger. 

The economy
Economic growth accelerated above expectations in the second quarter of this year, surging to 4,9%, as a weaker rand offered some relief to the production side of the economy. Analysts forecast that the economy will grow above 4% for the full year, buoyed by the expected continued growth in the mining and manufacturing sectors. However, gross domestic product (GDP) growth, which has been driven mainly by an environment of low interest rates and strong domestic spending, is expected to slow from current levels, following two 50 basis points interest rate hikes by the Reserve Bank so far this year.

SADC : Regional Growth
The annual summit of the Southern African Development Community (SADC) ended in Lesotho with an undertaking to improve the investment climate and a call for serious introspection by countries as a Free Trade Area target fast approaches. Leaders of the 14-member economic and political bloc approved the SADC Protocol on Finance and Investment, which aims to harmonise financial and investment policies of member states and ensure that changes in policies in one country do not affect other countries. The protocol is an important stepping stone for a region whose target is to become a free trade area by 2008 and a customs union two years later. It was signed by seven of the member states - Democratic Republic of Congo, Lesotho, Madagascar, Mauritius, Mozambique, South Africa and the United Republic of Tanzania. Other SADC member states - Angola, Botswana, Malawi, Namibia, Swaziland, Zambia and Zimbabwe - require approvals of their parliaments or the concurrency of their Attorney General before signing protocols. 
SADC as a region recorded a higher economic growth rate of 5 per cent in 2005, up from 4.1 per cent in 2004, officials said August 16th. "The region recorded an overall 5 per cent growth in real GDP in 2005 which is projected to grow to 6 per cent in 2006," Timothy Thahane, Chairperson of the SADC Council of Ministers said at a press conference. According to SADC Secretariat, the average real GDP growth of 5 per cent in 2005 indicates an overall increase in macroeconomic performance in SADC despite disparities amongst member states, with some SADC countries recording a reasonably high growth while others have grown minimally. Angola achieved the highest real GDP growth of 15.6 per cent, followed by Botswana at 8.3 per cent, Mozambique with 7.7 per cent and Tanzania, 6.9 per cent, while South Africa achieved about 5 per cent increase in its real GDP in 2005. "But the region still needs to work hard as it remains below the 7 per cent target for the developing nations to attain the Millennium Development Goals by 2015," said Thahane, who is also Lesotho's Minister of Finance and Economic Planning. 

Zuma trial
Scorpions boss Leonard McCarthy has slammed the application by Jacob Zuma and French arms manufacturer, Thint, to have the case against them permanently or provisionally struck off the roll. He said their arguments were scurrilous, unfounded and based on a "self-serving distortion of the facts." These arguments of unacceptable delays in prosecuting and of a conspiracy against Zuma "were simply not valid," said McCarthy. McCarthy said. Zuma's claim that he will need five to seven years to prepare a defence against a forensic report and indictment was completely unacceptable. McCarthy said that if the trial started at the beginning of 2007, Zuma would have five months to study the forensic report and three-and-a-half months to study the amended indictment. 

Uranium enrichment
South Africa will launch an investigation into the viability of the controversial activity of uranium enrichment, in a move that could draw criticism from western powers. Minerals and Energy Minister Buyelwa Sonjica said that SA would undertake a cost-benefit analysis into the beneficiation of uranium. Sonjica said she would make announcements in this regard "soon". She was speaking at the launch of the South African Young Nuclear Professionals Society August 25th. SA enriched uranium in the '70s and '80s for the production of nuclear fuel for Koeberg power station in Western Cape. Head of the Nuclear Energy Corporation of SA Rob Adam said earlier nuclear enrichment would make sense for SA, but that western powers might try block such a move, as has been the case with Iran. The minister unveiled her nuclear plans shortly after a senior US diplomat visited SA to ask Pretoria to take a tougher line on the Iranian nuclear programme. The visit by ambassador Greg Schulte, the US's permanent representative to the International Atomic Energy Agency, was seen by some as evidence of growing concern among world powers over SA's position on the Iranian nuclear programme. Iran's foreign minister also met his South African counterpart on the matter late August. Sonjica did not comment on the Iranian issue but said nuclear energy would play a significant role in fulfilling the world's energy needs. 

Putin to visit
Russian President Vladimir Putin visits South Africa in September. It is only the second visit by a Russian head of state to Africa the first being Nikolai Podgorny's 1976 visit to Zambia, Mozambique and Tanzania, with a meaning obvious in the Cold War context and the liberation struggles of the time. A standing invitation to visit SA was extended to the then Russian president, Boris Yeltsin, in April 1999, during president Nelson Mandela's visit to Russia, but he never came. On the face of it, this was surprising: the USSR had been the African National Congress's (ANC's) most powerful backer and so the most obvious candidate for a visit. Putin's meeting with Mbeki will have as one of its prime objectives the creation of a better climate for trade and investment, stimulating interest and removing administrative hurdles where possible. Russia is better prepared for this task than South Africa: its universities teach South African languages and its research institutions study South Africa's history, politics, economy and culture. SA has nothing to match this. Both leaders now face uneasy transfers of power, Putin in 2008, Mbeki in 2009. While willing to respect their term limits, both are keenly concerned with managing their succession. 

Cosatu Opposes SACP Split From ANC 
The Congress of South African Trade Unions (Cosatu) will not support a South African Communist Party (SACP) breakaway from the tripartite alliance. Rather, it will work towards a new look, "pro-poor" African National Congress (ANC) leadership to lead the party after President Thabo Mbeki steps down from the ANC presidency next year. Cosatu's stance is likely to deal a heavy blow to those in the SACP pushing for the party to abandon its partnership with the ANC and field candidates to oppose the ruling party in future elections. The future of the tripartite alliance will come under scrutiny at Cosatu's congress in September. Cosatu secretary-general Zwelinzima Vavi said August 29 that there was no appetite among Cosatu members for a split in the ANC-led alliance, despite tensions over the fate of ANC deputy president Jacob Zuma and government's perceived marginalisation of the trade union federation in policy- and decision-making. "Cosatu should capture the leadership of the ANC and steer it away from business and the middle classes. We need a massive reconstruction programme in the ANC," Vavi said in an interview. His stance appears to be backed by the findings of a major survey of workers' opinions of the alliance, conducted by Cosatu think tank Naledi late last year. The survey, to be released today, finds that more than half of Cosatu members would prefer the federation stay out of party politics altogether in the event of an alliance split, suggesting most Cosatu members do not want to see the federation choosing between its two allies. However, the survey also found that most Cosatu members did not believe the ANC had delivered on its promises. Asked whether they felt the ANC had honoured its promises to workers, more than half of respondents said no. A third of workers surveyed said the ruling party had not delivered "at all", while one-fifth said the ANC had "not entirely" delivered. This view was held by 46% of Cosatu members surveyed, 53% of non-Cosatu members, and 55% of unorganised workers. Despite the findings, 60% of workers still indicated a willingness to vote for the ANC, largely because of historical loyalties. "Most Cosatu workers argue that they vote for the ANC because their family has always supported it (43%). Only 19% of Cosatu workers say they chose the ANC because it has the best policies for workers or the poor," says the survey. The survey found workers almost evenly split between support for Zuma and Mbeki. Former president Nelson Mandela got the backing of 33% of workers as their "most important leader". Only 11% chose Mbeki, with Zuma marginally ahead at 13%. Factional disagreements centred on the top two ANC leaders have split opinion in the alliance, and Cosatu has not escaped the internal divisions. Cosatu last year called for Zuma to be reinstated as deputy president and for corruption charges against him to be dropped.

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AUTOMOBILES 

Higher Rates Slows Vehicle Production

The National Association of Automobile Manufacturers of SA (Naamsa) has downscaled its estimates for total vehicle production, warning of the negative impact of interest rate increases on new vehicle sales and the industry in general. Naamsa's reduction of projections for total domestic production follows the recent interest rate increase, which was the second in weeks. As a result, rate hikes are expected to take the steam out of the unprecedented records of new vehicle sales experienced recently. In a review for the second quarter of this year, Naamsa executive director Nico Vermeulen said August 11 they expected 621900 vehicles to be produced this year. The previous projection was 636900 units. Vermeulen said interest rate increases, record energy and vehicle operating costs were among factors that would put brakes on new vehicle sales during the remainder of this year. However, even with the revised projection, he said the local automotive industry was already on course to another record year in new vehicle sales. Vermeulen also warned of possible increases in vehicles prices. "The weaker exchange rate and substantially higher producer price inflation will place pressure on new vehicle pricing, which has remained virtually unchanged over the past three years," he said. In the second quarter of the year, new vehicle sales showed an increase, with all the four segments -- passenger, light commercial, medium commercial and heavy commercial vehicles -- reporting gains, compared to the same period last year. "However, the rate of growth, with the exception of the heavy truck segment, slowed considerably compared to previous quarters," Vermeulen said. Passenger vehicles sales were down 0,2% compared with the first quarter of this year. Light commercial vehicles sales fell 3,2% compared with the first quarter. Medium commercial and heavy commercial vehicles increased 18,1% and 25,9% respectively. Naamsa has also reduced this year's projected aggregate exports from the previous 210400 units to 195400. Vermeulen said in the first six months of this year 80651 units were exported compared with 51823 units in first half of last year. Aggregate exports were expected to increase 40% this year compared with last year. He said, at 37848 jobs, employment levels in the industry reached the highest aggregate level in the past 10 years. "The main reason for this growth is the increase in production associated with higher levels of sales and particularly the ramping up of major export programmes," he said. The number of new vehicle sales in July increased 20,8%, compared with the same month last year. All the vehicle segments showed increases in sales compared to July last year.

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AGRICULTURE

Poor Performance in Agriculture Sector

The release of the country's growth figures by Statistics SA shows a dismal performance by the farming, fisheries and forestry sector. Having contracted 33% over the past two quarters, the sector is technically in recession. In any other sector, alarm bells would be sounding, but agricultural economists are quick to point out that volatility is in the nature of the sector, with seasonal factors, climatic fluctuations and market volatility affecting input costs, such as fuel, greatly affecting production. The sector's contribution to gross domestic product (GDP) now stands at 2,4%. Though the government's statistics agency has not explained the composition of its figure, the contribution to GDP from forestry is about 1,8% and from fisheries about 0,3%. Contributions to GDP from fisheries and forestry have been in steady decline over the past few years. The total catch of deep-sea hake has dropped from 165000 tons four years ago to 150000 tons and the outlook for saw-log supplies has changed from near self- sufficiency to a projected shortage. This means agriculture is the single biggest contributor to GDP in this lumped-together sector and must therefore shoulder most of the blame for the decline. Although agriculture's contribution to GDP is relatively small, compared with, say, that of tourism at 7%, a poor performance in the farm sector raises concern because economists reckon SA needs a degree of food self-sufficiency. "To import food would expose SA to the political upheavals elsewhere in the world -- a risk we cannot afford to take," says economist Nico Kelder of the Efficient Group. There are also broader social and political issues that are deeply affected by the robustness of the sector. As in fisheries and forestry, farming is demographically associated with rural poverty and government is concentrating its efforts in poverty alleviation on these sectors. This happens mainly in agriculture, with land reform and the development of black farmers central to government's strategy. Statistics SA says the decline reflects the performance of field crops, which make up about a third of total agricultural production. The Reserve Bank points out in its latest quarterly bulletin that growth in other sub-sectors was also modest, due in part to good rains which raised the carrying capacity of grazing land, prompting farmers to expand their herds, thereby reducing the rate of slaughter. It is, however, last season's overproduction of maize that pushed the price down below cost for most farmers, which led producer organisation Grain SA to urge farmers to scale back planting for this season. "The point was to correct the price of maize, which has now been achieved at R1200 a ton, to allow farmers to plant again next season," says Nico Hawkins, agricultural economist at Grain SA. "Last year's harvest of about 1,2-million tons yielded a price of R600 a ton. This year, the expected yield is about half that of the previous season, but the price has doubled. It is a classic economic formula of price versus supply," says Hawkins. He acknowledges the risk of further volatility if farmers plant too much, though he suggests the lessons have been learnt from last year's "fiasco". It is notoriously difficult to judge seasonal trends but the market does tend to correct itself by value, as the experience over the past two quarters has shown. Kelder says risk related to volatility is part of the business and does not mean the sector is in trouble. He agrees that there may be special risks to emerging farmers who, unlike established commercial farmers, do not have long- established credit lines, but says that such risk would not justify changes in agrarian reform policies. Hawkins and other sector commentators dismiss the notion that the decline in growth has anything to do with land reform. "Short-term production decisions are not affected by policies of that nature. Farmers make their decisions based on the price of the commodity and the availability of seasonal finance."

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FOOD AND DRINK

Sabmiller, Coca-Cola Amatil to Join Forces in Move to Australia

SABMiller said August 10 that it had entered into a joint venture with beverage group Coca-Cola Amatil that would allow the global brewer to import, market and distribute SABMiller's international premium brands in Australia. Although selected SABMiller brands are available in the country through independent distributors, the move is the group's first decisive one into the Australian market. "The joint venture with Coca-Cola Amatil will give SABMiller a platform to expand our premium brands to the market through marketing and distribution," the media relations manager for SABMiller, James Crampton, said. The joint venture, to be known as Pacific Beverages, would combine SABMiller's marketing expertise with Coca-Cola Amatil's sales and distribution infrastructure to sell the Peroni Nastro Azzurro, Pilsner Urquell and Miller Genuine Draft brands, the group said. Coca-Cola Amatil is the largest nonalcoholic beverage company in the Asia-Pacific region, and one of the world's leading Coca-Cola bottlers. Its product portfolio includes water, sports drinks, fruit juices, coffee and iced teas. Coca-Cola Amatil group MD Terry Davis said his firm's strong customer relationships, sales force and distribution capabilities would provide a solid platform to expand the premium beer offering in the Australian market. The venture is expected to be operational by this year's festive season. The MD of SABMiller Africa and Asia, André Parker, said there was "enormous potential to grow the premium beer market in Australia". While the majority of global premium brands are available in Australia, the segment has grown 15% a year over the past five years, driven specifically by international imported premium brands. Underlying growth at SABMiller has largely been driven by the group's portfolio of premium brands as consumers worldwide continue to trade up from mainstream lager, or switch from wine and spirits. SABMiller said the Pacific Beverages venture would be headed by the former MD of the group's Russian operations, Ari Mervis.

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FOREIGN INVESTMENT

Investment Increases to Over R40 Billion

Foreign Direct Investment (FDI) into South Africa had increased significantly from R5.1 billion in 2004 to R40.7 billion in 2005. This is according to the Reserve Bank's 2006 Annual Economic Report released in Pretoria August 23. The bulk of inward direct investment was registered in the third quarter of 2005 when the United Kingdom-based banking group Barclays acquired a 60 percent controlling stake in South Africa's ABSA. Barclays paid R30 billion for their stake in the local bank. The FDI was further propelled early this year when a British company acquired a substantial interest in a South African local mobile phone operator, the Reserve Bank said in the report. The British based Vodafone, which initially owned 35 percent of Vodacom, lifted its stake early this year by acquiring VenFin's 15 percent shares worth about R21 billion, effectively becoming a 50 percent shareholder in the local company. The other 50 percent of the mobile service provider is held by state owned fixed line provider, Telkom. The report said direct investment into the country was encouraged by favourable domestic growth prospects as well as sound monetary and fiscal policy, which improved price stability and the investment climate. "In 2005 portfolio capital flowed into South Africa in the form of equity investment, while non-residents were net sellers of South African bonds. "The inflow of share capital gained further momentum in the first four and half months of 2006 as the prices of commodities and shares soared." The international investor sentiment, however, turned away from emerging market securities and currencies in May 2006, resulting in currency depreciation, a fall in share prices and an increase in bond yields within those markets, said the Bank. The report also noted that the sustained strong global economic expansion and the accompanying rise in international commodity prices boosted the export earnings of South African producers over the past two years. "The favourable external environment, however, coincided with vibrant domestic expenditure and consequently strong demand for foreign-produced intermediate, capital and consumer goods," it added. Consumer spending on credit saw the country experiencing a deficit in its current account which amounted to more than 6 percent in the first half of 2006, compared to deficit ratios of 3.4 percent in 2004 and 4.2 percent in 2005. Apart from South Africa, many emerging-market and commodity producing countries such as Turkey, New Zealand, Hungary, Australia and Poland, also experienced a widening in their current account deficits over the past 18 months.

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HIV/AIDS

Aids Responses Criticised

United States Senator Barack Obama has criticised South Africa's leaders for their HIV/AIDS policy, saying health minister Manto Tshabalala-Msimang was "making a terrible mistake" by promoting traditional medicines to fight AIDS while undermining the role of antiretroviral (ARV) therapy. "On the treatment side, the information being provided by the minister of health is not accurate," he told reporters August 21 outside an AIDS clinic in Cape Town's Khayelitsha township, according to Reuters. He added that western medicine should not be pitted against traditional medicine in the battle against HIV. Tshabalala-Msimang has come under widespread criticism for her views on HIV treatment. The minister has questioned the value of ARVs and says her approach - which involves using garlic, beetroot, lemon and African potatoes to combat the virus - is aimed at promoting basic nutrition as a safeguard against illness. Obama, the US's only black senator, is on a two-week tour of Africa and will take an HIV test during the Kenyan portion of his trip.
Mark Heywood, national treasurer of the South African AIDS lobby group, Treatment Action Campaign (TAC), used the International AIDS Conference in Toronto as a platform August 17 to implore the world to speak out against what he described as the South African government's lack of political leadership in combating HIV/AIDS. "One of the greatest missing pieces in this conference has been the question of political leadership," he told delegates. "Without political leadership it will not be possible to turn the scientific discoveries we've heard about into public health initiatives." South Africa has more than five million HIV positive people, and of the 800,000 in urgent need of antiretroviral (ARV) treatment, just 180,000 receive it. Heywood blamed the silence of world leaders about South Africa's "failures" to tackle HIV on "global geopolitics and the rules of 'diplomacy'". "It's likely I'll be accused of being disloyal and unpatriotic, but AIDS in South Africa is not for the South African government alone - it is a matter for the global community," he said. "When this many people are dying, the world has to speak up." Describing the lack of access to treatment for large numbers of infected South Africans as a human rights violation, Heywood called for the resignation of South Africa's Health Minister, Manto Tshabalala-Msimang. He and other speakers were later joined on-stage by TAC supporters holding placards saying: "Fire Manto Now." Prof Alan Whiteside of the University of KwaZulu-Natal, who was in the audience, pointed out that South Africa was not alone in lacking leadership in HIV. Governments in many other countries have been guilty of denial and foot-dragging, while leaders from the G8 countries have failed to deliver on promises. "The next five years needs to be about social mobilisation," he said. Other speakers and delegates criticised the attention given to high-profile western donors, like Bill Gates and Bill Clinton, and new prevention and treatment technologies. The real fight, they said, was not about money or science, but about creating a larger movement for social and economic justice. Gregg Gonsalves of the AIDS and Rights Alliance for Southern Africa said the "root causes that drive health disparities" should be examined. "It's no coincidence that these multiple epidemics exist among marginalised communities across the globe." Musimbi Kanyoro, general secretary of the World Young Men's Christian Association, who shared the stage with Heywood, argued that while governments have much work to do, civil society, the private sector and individuals should also take moral responsibility for reversing the HIV epidemic. "We need leadership at every level," she said. "In our hospitals, in our homes and in our youth clubs."
Mark Wainberg, co-chairman of the 16th International AIDS Conference, added his voice August 17 to activists slamming global leaders for not speaking out against the South African government's poor progress in combating the country's HIV epidemic -- considered one of the world's worst-case scenarios. More than 5,5-million South Africans, or one in nine citizens, are infected with HIV, according to government figures. The latest report from the United Nations (UN) joint agency on HIV/AIDS (UNAIDS) noted that the epidemic was slowing in many African nations, but that SA was not one of them; close to 900 South Africans died daily from AIDS-related illness, said the report. "There are far too many political leaders in other countries, and even leaders of international agencies such as UNAIDS ... who feel that for diplomatic reasons they are unable to comment in a forthright fashion on the irresponsibility of political leaders who should and must know better if we are going to make progress," said Wainberg on the conference sidelines. During a plenary session yesterday, AIDS Law Project head and Treatment Action Campaign (TAC) member Mark Heywood said: "When this many people are dying ... the world has to speak up." He called on UN Secretary-General Kofi Annan, UNAIDS executive director Peter Piot, and former US president Bill Clinton to break their silence on SA's failings. He said the lack of political leadership on AIDS in SA had allowed the country's HIV epidemic to grow "inexorably". "If we had the political will at a much earlier stage, we could have saved many hundreds of thousands of lives." Activists also expressed unhappiness with the extensive media coverage accorded to Clinton and Microsoft chairman Bill Gates, who made several well-attended appearances at the conference. While activists appreciated Clinton and Gates's commitment to HIV/AIDS, TAC chairman Sipho Mthathi said they were distracting attention from critical issues such as reducing drug prices. "The real heroes are people like (activists) Gugu Dhlamini, Ashok Pillai, Mandla Majola ... and Sunil Pant," said Gregg Gonsalves from the AIDS and Rights Alliance for Southern Africa. "The powers-that-be have told us 'everything is fine, we're on your side, you can demobilise and leave the epidemic to us'. Don't believe a word they say," he said. Shortly after his remarks, TAC activists disrupted a press conference waving placards saying "Activists not Hollywood," and "Bill Gates is not our voice". The activists then marched to the South African exhibition, where they angrily demanded organisers remove the displays of lemon, beetroot and garlic that caused controversy this week. "This exhibition is a farce. You are killing people while you take fat salaries," cried an activist. "They are free to protest, it's their democratic right," said one organiser, Pathudi Rathupetsane. There were no apparent signs of damage when the activists left.
Health Minister Manto Tshabalala-Msimang has blasted the media for misrepresenting SA's efforts to combat HIV and "distorting" its exhibition at the 16th International AIDS Conference in Toronto. The stand, with its prominent display of the minister's garlic, lemon and beetroot remedy for combating HIV, has drawn unwanted global media attention to her unorthodox views that patients should be given a choice between using medicines or nutrition to hold the virus at bay. SA has one of the world's worst HIV/AIDS epidemics, with one in nine people in the country living with the disease. "I just move around (the conference halls) and people say 'your stall is great...'. We haven't shocked the world, we've told them the truth," Tshabalala-Msimang told South African delegates invited to a private function at the residence of SA's consul-general to Canada, Nogolide Nojozi, August 15. "I don't mind to be called 'Dr Beetroot' " she said, to cheers and applause from the assembled guests, which included Deputy Correctional Services Minister Loretta Jacobus and Social Development Minister Zola Skweyiya. Tshabalala-Msimang said she had learnt that beetroot helped combat anaemia during her studies. "You can't tell me at this stage I must abandon what I learnt as a medical student," she said. Tshabalala-Msimang said the controversial exhibition displayed antiretroviral medicines as well as vegetables. Two vials of pills were hurriedly added to the stand August 13 after journalists posed questions about the absence of antiretroviral drugs. Noting that she had attended two previous international AIDS conferences -- in Barcelona in 2004, and Bangkok this year -- the health minister said: "I have never, never, never been in a situation where SA has not been bashed." However, it was important for SA to develop its own health-care policies, she said. "After all, we as South Africans can think for ourselves," she said. The minister said the world had failed to acknowledge SA for the strides it had made in combating HIV/AIDS and influencing approaches to the disease. She claimed SA had forced the world to acknowledge the importance of nutrition in the fight against the disease. Referring to the International AIDS Conference held in Durban in 2000, she said: "Nobody wanted to hear anything about nutrition. But today, it's the theme of the conference and that's SA's (influence)." Although the conference has several sessions devoted to nutrition, it was not a theme on any particular day.

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INFORMATION TECHNOLOGY

IBM SA in R1bn 10-year Deal

IBM SA has won a 10-year deal worth more than R1bn to manage the information technology infrastructure run by shipping company Safmarine. The contract is one of the largest ever won by IBM SA. The deal will see Safmarine transfer all its IT assets to IBM, along with 159 technicians. Mteto Nyati, IBM SA's director of global technology services, said the additional staff were all skilled technicians. Since they would also work on other IBM projects, they would give the company a far larger presence in Western Cape and boost its ability to support the technology systems for other customers in SA and the rest of Africa, he said. Safmarine signed the deal to improve the reliability and flexibility of its technology infrastructure and cut the running costs. IBM will provide IT strategy consulting, run Safmarine's data centre, provide disaster recovery and manage its computers and data storage systems. "Safmarine and IBM have enjoyed a close business relationship for more than 20 years and this agreement takes our relationship to a new level," said Safmarine CEO Ivan Heesom-Green. "IBM will offer Safmarine competitive, on-demand IT services and provide for our IT solutions as we expand our worldwide shipping services." The deal is subject to Competition Commission approval.
Newspaper Website Visits Soar
The number of people visiting newspaper and magazine websites has almost doubled in the past year, according to research by the Online Publishers Association. Altogether 6,7-million visits were made to websites run by the association's members in the June quarter, up 48% from 4,5-million a year ago. The majority of visitors were from overseas, accounting for 63% of the traffic. The local audience grew 42%, with 2,48-million visitors. The figures showed clearly the use of online media was expanding, the association said. That growth was welcome, but internet penetration in SA still had to catch up with overseas markets. Lower-income groups still remained largely untapped because of the cost of computers and internet access. South African web users were predominantly from higher-income groups in urban Johannesburg, Cape Town and Durban. They were typically well-educated, with 82% having completed further education, and most accessed the internet from their office computers. The gender split was almost equal, with 51% of traffic from men and 49% from women. The wealth of the user group was fuelling online advertising, which was expected to top R183m by the end of the year. Websites were a mature and increasingly important part of the media industry, and were gaining respect from advertisers, said association chairman Russell Hanly. "The challenge the industry must now overcome is removing the digital divide that exists in SA. This can only be removed by further driving down the costs and increasing the accessibility of online media," Hanly said. The most popular site was Media24, with an average of 2,43-million users every month, putting it well ahead of its closest rival, Independent Online, with an average of 1,9-million monthly visitors. None of the other members managed to attract more than a million visits a month.

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INTERNATIONAL ECONOMIC RELATIONS

South Africa and Belarus Increase Co-operation

South Africa and Belarus have entered into an agreement that seeks to enhance bilateral economic cooperation between the two countries. Foreign Affairs Minister Nkosazana Dlamini Zuma and her Belarusian counterpart Sergey Martynov signed an agreement on economic co-operation in the areas of trade and science and technology, August 28 at the Presidential Guest House in Pretoria. Addressing reporters following the signing, Dr Dlamini Zuma said the meeting afforded the two ministers the opportunity to discuss a wide range of issues, both economic and political. "Politically, we are both members of the Non-Aligned Movement (NAM) so we have a lot in common to discuss. "We also looked at the United Nations Security Council and how we can cooperate there as well as in the Southern African Development Community (SADC) region." Minister Martynov outlined areas in which the two countries could cooperate in science and technology, in line with the agreement. "We are thinking of a co-operation in areas related to laser technology, physics and space technologies," he explained. He pointed out that trade between South Africa and Belarus was still low, but expressed a desire to increase it substantially. "We do have trade turnover between our countries, even if it's a modest one, but we would like to work towards having a much more meaningful economic [relationship] between our countries," he said. One of the important areas of trade that have already been identified by the parties is the supply by Belarussian companies of quality equipment for use in the agriculture and construction sectors, among others "Belarus is an important producer of equipment that South Africa needs for its endeavours to bring more economic development," said Mr Martynov. Mr Martynov and Arts and Culture Minister Pallo Jordan also signed an agreement in the areas of arts and culture, which would mainly see the exchange of artists skilled in various disciplines. 

South Africa and Belgium Strengthen Ties

Defence Minister Mosiuoa Lekota arrived in Belgium August 22 on a two-day official visit aimed at enhancing diplomatic links between the two countries. Mr Lekota was to meet his Belgian counterpart Andre Flahaut to discuss a range of issues including a co-operative defence plan. "The Department of Defence regards Belgium as an important partner in its efforts to support government peace initiatives in the Great Lakes region," the department said in a statement. Belgium is the former colonial power of the Democratic Republic of Congo (DRC), Burundi and Rwanda Both Mr Lekota and Mr Flahaut signed a bilateral agreement on military partnership in Pretoria in February this year to train the newly integrated and restructured defence force of the DRC. South Africa, Belgium and the DRC have a trilateral co-operation in terms of finding peace in the Great Lakes. Belgium has also declared its willingness to contribute towards the disengagement, demobilisation, repatriation and reintegration of former combatants in that region as well as towards reconstruction and development. This has resulted in a 5.5 million Euro contribution towards some of the expenses when the first SA mission was deployed in Burundi to protect that country's political leaders returning from exile. The European Union has also contributed 9.5 million Euros in support of this mission. In this regard, the SANDF has been assisting with the identification, training and integration of DRC combatants and 113 236 have been identified to date.

South Africa Increases Co-operation with Iran

South Africa and Iran signed a Customs Cooperation Agreement August 22 to enhance trade between businesses in their countries. This emerged at the conclusion of a two-day meeting between Foreign Affairs Minister Nkosazana Dlamini Zuma and her Iranian counterpart Manouchehr Mottaki. The ministers also signed a joint communiqué outlining commitments they had agreed upon on as part of the SA-Iran joint bilateral commission (JBC). The two ministers expressed their satisfaction with the work done by their delegations in taking SA-Iran cooperation to new heights. "On implementation, this [customs] agreement will also facilitate the promotion of trade between the private sectors of the Islamic Republic of Iran and South Africa," reads the joint communiqué. The parties discussed the exchange of delegations to investigate the possibility of signing an agreement to exempt diplomatic and official passport holders from visa requirements and also to consider the possibility of exempting legitimate tourists for a period of 30 days in that regard. Iran also intends to set up crude oil storage at Saldanha Bay in the Western Cape. "We believe South Africa can act as a gate for the Iranian petrochemical trade in Southern Africa," explained Mr Mottaki. Iran also emphasised its support for the Accelerated and Shared Growth Initiative for South Africa (AsgiSA) and the New Partnership for Africa's Development (Nepad). "We are very pleased with the developments in Iran because they have established Africa headquarters in the ministry [of foreign affairs]," said Dr Dlamini Zuma. Other sectors set to see increased cooperation between the two countries, bilaterally and through regional bodies, include trade and investment promotion, commerce, free trade zones, transport, agriculture, housing, health, electricity, mining, education, environment and tourism, arts and culture, home affairs, sports and recreation, science and technology. The ministers explained that the two working groups of the JBC - the Economic and Technical Working Group and the Political and Social Affairs Working Group - would continue with work to implement agreements and realise the commitments made, leading up to the next meeting. "The implementation of the agreements is more important than the signing. I call for political support for the implementation of the agreements," said Mr Mottaki. He also emphasised the importance of the two governments' support of cooperation between private sectors from both countries. Minister Dlamini Zuma also accepted an invitation to visit Tehran and to attend the next JBC there next year.

Chinese Expansion in Construction Industry

The Chinese invasion in the construction industry has started, with at least 25 Chinese companies said to have applied for registration with the Construction Industry Development Board (CIDB) this year, a requirement if companies want to tender for government projects. With government's multibillion-rand infrastructure expansion programme moving into gear, more foreign companies are expected to be lured to SA. The influx of foreign competitors into the construction market presents a major risk for local players contending for government tenders, a construction analyst has warned. And with government procurement falling outside the World Trade Organisation's General Agreement on Trade and Services (GATS), there is not much to be done to stem the tide and protect local interests. Local construction businesses are not the only players threatened. Foreign groups often source material outside the country, which means the local economy as a whole stands to lose out, says Rajay Ambekar, an analyst with African Harvest. With spending expected to rise to a level the industry has not seen over the past 30 years, and pressure on government to open the local market without a real defensive strategy, the question arises whether the industry is ready for the new dynamic of aggressive international participation, says Pierre Blaauw, an economist at the South African Federation of Civil Engineering Contractors. State-owned Chinese companies, focused on establishing a local presence and willing to go "as low as it takes", are the real threat. And the local industry faces a double whammy, it already has to pay high salaries in a scarce skills environment. Now it faces a further crunch on margins as Chinese groups come in with much lower tenders. Chinese firm Covec recently secured a R425m contract with the Trans Caledon Tunnel Authority (TCTA) -- a government agency developing bulk water supply -- to build the Vaal River Eastern Sub-system Augmentation Project. Covec's tender was about R100m less than that of its closest South African contender. "It is difficult to understand how a foreign firm can enter the local market on a cost base that is significantly lower than that of local firms. It begs the question whether they are buying work simply to get access to this market," says Colin de Kock, CE of the Gauteng Master Builders Association. It is also rumoured the Chinese government provided the guarantee for the project -- a claim TCTA denies. This is tantamount to the likes of Grinaker-LTA "competing with the People's Republic of China", another source says. But Qi Kai, economic and commercial attache at the Chinese embassy in Pretoria, shrugs off the claim. "The Chinese government does not have that kind of budget. This is market behaviour. Competition in China is fierce, so companies have to be competitive." Government's empowerment requirements are a likely tool to regulate the entrance of foreign players. However, the trade and industry department's concession to multinational companies, exempting them from the transfer of equity to black players if their holding company policy prevented such transfers, has in effect removed that measure of control. While Covec is a reputable company, Blaauw says he is concerned that companies with lesser track records could gain access to the South African market on the back of Covec's reputation. Qi, however, thinks the concerns are being blown out of proportion. "It is true that Chinese companies compare very well in terms of quality and price, but the distance from this market and communication problems disadvantage them. "I don't think there are so many Chinese enterprises that have come to this market," he says. What is curious about Covec's low tender, is that TCTA had strict prescriptions for the procurement of material from local suppliers and the participation of a local black partner. While the company could have saved on costs by bringing in its own engineers and equipment, the tender was simply not at a level that indicated the company was profit driven, a sector source says. There was a tendency on the part of clients -- especially government -- to distrust the industry, suspecting it of beefing up costs to push up margins. A recent study of the civil engineering and construction industry, however, shows that the industry's profit margins were on average a modest 3%. An industry source says a possible explanation for government's tolerance of foreign players is that it is "fed-up" with an industry that has not transformed itself over the past 12 years and has done little to help establish new black players.

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LAND REDISTRIBUTION

Deadline for Land Transfer Negotiations Set

South Africa's agriculture minister has courted controversy with commercial land owners after she said the government would terminate its 'willing-seller, willing-buyer' land restitution policy and begin expropriating property from the country's white farmers early next year. Agriculture Minister Lulama Xingwana, who took up her post in May, threatened to end negotiations with white farmers in six months in order to speed the transfer of land to blacks, a thorny process the African National Congress (ANC) government began in 1994 but has found difficult to implement. Under former President Nelson Mandela, the ruling ANC party made land reform - the transfer of farms from whites to landless blacks - one of its main policy goals when it assumed power. Despite years of negotiations with white farmers and the establishment of the Land Claims Commission, the current ANC government under President Thabo Mbeki is still a long way from closing the book on all outstanding land restitution claims by its own target date of 2008. Xingwana told reporters in South Africa's northern province of Limpopo it was time to kick-start the process of land restitution if the government were to meet its promises. "We have given six months for negotiations. If it fails, we'll start expropriating the land. Our people have waited 12 years - they can't wait any longer." The South African Communist Party, a partner in the ANC government, backed the statement. Her comments were met with a mixture of surprise and anger from groups representing South Africa's land-holding farmers, about 90 percent of whom are white. "Before you get to expropriation there is a land claims court and a legal process that must be followed," said Lourie Bosman, president of Agri SA, a group representing 70,000 farmers across South Africa. "There is no reason to resort to expropriation without following legal procedures that are in the constitution ... We are also worried about the effects on the economy in general, and the view taken of South Africa outside the country when a minister makes statements like these," he said. "We are asking for a meeting and an explanation for her comments." Land redistribution is one of the most divisive issues plaguing South Africa. Race-based dispossession was formalised in 1913 when the colonial government limited indigenous land ownership in the Natives Land Act. Apartheid - the forced separation of whites and non-whites - made it impossible for blacks to own land in almost all areas of the country. The ANC has used a two-pronged approach to land reform: through restitution it wants to return land to those forced off under white rule by no later than 2008; more ambitiously, it hopes to redistribute 30 percent of commercial farmland from whites to blacks by 2014. Progress has been made in both areas, but at current rates of land transfer the government will not meet its targets. From 1995 to mid-2004 the government settled 48,825 restitution claims, with more than 660,000 people in over 120,000 households benefiting from the policy. But the redistribution programme has so far turned over only about 4 percent of commercial land to blacks - well short of the 30 percent target. The government has so far taken a cautious 'willing-seller, willing-buyer' approach, in which farm land is transferred from a willing white seller to willing black buyer at prices determined by the market. It has been careful to avoid any comparison with the land grab made by President Robert Mugabe in neighbouring Zimbabwe, where the ruling ZANU-PF party began seizing white-owned farms in 2000, sparking violent and often bloody confrontations, and triggering a dramatic economic collapse. According to the South African government, slow progress in restitution could largely be blamed on white farmers who were unwilling to negotiate a fair price for their land, while some had dug their heels in deeper and refused to negotiate at all. Bosman commented that "it is true there are a minority of farmers holding up the process, and some reject outright any land-reform policy, but the vast majority do and will continue to work with the government", despite the agriculture minister's ultimatum. "As long as the government sticks to the constitution and legal processes the transfer of land will be peaceful," he said. "Hopefully, we won't see violence because it would be a disaster for the whole country."

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MANUFACTURING

Manufacturing and Mining Recovery Boosts Growth

Economic growth accelerated above expectations in the second quarter of this year, surging to 4,9%, as a weaker rand offered some relief to the production side of the economy. Analysts forecast that the economy will grow above 4% for the full year, buoyed by the expected continued growth in the mining and manufacturing sectors. However, gross domestic product (GDP) growth, which has been driven mainly by an environment of low interest rates and strong domestic spending, is expected to slow from current levels, following two 50 basis points interest rate hikes by the Reserve Bank so far this year. Markets are discounting the probability of two more rate hikes before the end of this year, which are likely to further curb consumers' exuberance. Last year the economy grew at 4,9%, its highest level in more than 20 years. The seasonally adjusted annualised rate of 4,9% in the second quarter was up from a revised 4% in the first quarter of this year, Statistics SA said August 22. A Reuters poll of 15 local economists had forecast growth of 4,3% quarter on quarter. "Subsequent interest rate tightening will probably have some detrimental impact on the second half of the year's performance but we remain confident that a full-year outcome slightly above 4% is attainable," said Vunani Securities chief economist Johan Rossouw. The combination of higher interest rates and a weaker rand was likely to make GDP growth more dependent on growth in the mining and manufacturing sectors in the second half of the year, JPMorgan economist Marisa Fassler said. But government's planned infrastructure programme would also provide support for growth in sectors such as construction, transport and communication over the medium term, she said. Earlier this year, government announced infrastructure spending plans of about R370bn over the next three years. "A rotation in the sources of economic growth should be welcomed by policy makers, given concerns that strong domestic demand growth has contributed to the sharply widening current account deficit," Fassler said. In the first six months of the year, the economy grew 3,8%. Growth in the second quarter was buoyed mainly by a revival in the manufacturing sector, the economy's largest after finance, real estate and business services. Manufacturing, which contributes about 16% to GDP, was aided by a weaker rand, which helped increase manufacturers' competitiveness. The sector was up by an annualised 6,1% in the quarter, following a rise of 4,3% in the first quarter. The biggest contributors to growth in the second quarter were finance, which added 1,7% to growth, and manufacturing (1%). The agriculture sector continued its contraction, falling 33% (-14%) in the second quarter and subtracting 0,7% from overall GDP growth. This was mainly because of the lower production of field crops, possibly a result of the low agricultural prices experienced last year, prompting farmers to plant less during the current season, said Efficient Group economist Nico Kelder. It was expected that the recovery in prices would prompt farmers to increase their production in the coming season. The mining sector had reported its first expansion in production (3,1%) after three quarters of contraction (-4,4% in the first quarter of this year), he said.

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MINERALS AND METALS

Mittal and Highveld Optimistic on Second-Half Outlook

Steel makers Mittal Steel SA and Highveld Steel & Vanadium expect steel prices to remain strong in the second half of the year, but there are signs of a possible softening in world prices. Merrill Lynch warned in a report August 14 that it expected a general weakening in global steel prices as strong Chinese production continued pushing imports to the US and Europe, and because third- and fourth-quarter demand in the US and Europe was typically slower. UK steel market watcher Meps said recently it expected European steel price gains to slow in the fourth quarter. Tight supply conditions prevailed in the North American market for flat products, however, and Maps expected these to extend into September-October. International price movements provide some hints of steel price changes in SA. Merrill Lynch said Chinese prices had begun to fall, but without much impact on western steel markets. "We are entering a critical period, with mid-August being the time when we should get the Chinese July export data (which will confirm or negate the June export surge) and the start of European September bookings post the August shutdown," said the report. Another steel watcher, CRU Monitor, said that if international markets could not absorb the re-emerging prospect of Chinese oversupply, tight fundamentals in North America and Europe might not be enough to prevent weakness from spreading. Merrill Lynch said it remained "relatively positive on the global steel sector". Price weakening was possible next year, but the brokerage did not expect prices to fall to previous lows. "We continue to favour supply-side management of steel prices through western world production cuts," it said. Anecdotally, it had also not seen inventories reach prior high levels, similar to where destocking caused a sharp drop in steel prices last year. It expected steel demand growth next year to be substantially down on this year's, but said any surplus should be contained by production cuts by the majors, which would limit steel price and earnings downside. "We expect a slower decline in prices than in previous years," said the report.

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MINING

Mugabe Delays Signing Investor Law

The future of South African investment in Zimbabwe mining and precious metals still hangs in the balance as Zimbabwean President Robert Mugabe has delayed signing laws that will protect the business interests of investors. The issue of the bilateral investment protection agreement between Pretoria and Harare hit the headlines about two years ago when South Africans who owned farms in Zimbabwe lost them in Mugabe's land reform debacle. The two governments under-took to negotiate an investment agreement but yesterday Foreign Minister Nkosazana Dlamini-Zuma said it was still not in place. She had said at the time that she was attempting to get such an agreement signed -- having negotiated its details. In a written response to a parliamentary question from Democratic Alliance (DA) chief whip Douglas Gibson, Dlamini- Zuma acknowledged August 21 that government had taken note of Harare's stated intention of nationalising mines. "The government has noted the government of Zimbabwe's inten-tion to acquire a 51% interest in mining companies involved in energy minerals, as well as a 51% share in all precious metals and gemstone mines," she said. She explained that while the changes had been approved by the Zimbabwean cabinet, they had not as yet been formalised or converted into a bill that would need to be enacted to amend Zimbabwe's Mines and Minerals Act. "Government is therefore still waiting to see what the outcome of these proposed changes will be," Dlamini-Zuma said. She said that it was also "continuing to pursue its efforts to get the outstanding bilateral investment-protection agreement to protect the commercial interests of South African nationals in Zimbabwe signed". In response to Dlamini-Zuma, Gibson said SA clearly enjoyed the Mugabe government leading it by the nose. He said there could be no other explanation "for the extraordinary patience" Pretoria had shown over the signing of an agreement, which "the minister told me two years ago was ready for signature". "When will SA begin to act as other democratic governments do elsewhere and protect the interests of their investors? German and French investors can rely on their governments to protect their interests, while South Africans cannot," Gibson said.

India's Tata Considers Mining in South Africa

Indian-owned Tata Group is considering further investments in SA, exploring opportunities for mining manganese ore, iron ore and coal here. Plans for constructing an automotive plant in Richards Bay were also mooted. The plans were raised at a high-profile sod-turning ceremony in Richards Bay August 21, which kicked off the construction of Tata's R650m ferrochrome smelter, providing the coastal city's industrial development zone with its first tenant. Ferrochrome is used in the manufacture of stainless steel. Tata Africa MD Raman Dhawan, who attended the event, said the group had already discussed its plans for further investment in SA with Deputy President Phumzile Mlambo-Ngcuka, and had received a positive response. The group was likely to make further announcements within the next two to three months. "We are looking at the possibility of greenfields projects in SA for the mining of these ores at the appropriate location, but these are at an exploratory stage. "We don't have anything tangible yet, but will probably come with a proposal within two to three months." The conglomerate has been working systematically to raise its investment in the local economy. It has committed to the second network operator, the competitor for Telkom entering the telecommunications market; is planning to build hotels in Johannesburg and Cape Town; and more and more of the group's low-cost cars, which have made ownership of vehicles easier for SA's emerging middle class, are making their way on to South African roads. The ferrochrome smelter, which will take a year to build, is Tata's biggest commitment in SA yet and fits in with government plans to encourage beneficiation to stimulate economic growth. A contingent of prominent government representatives, led by the deputy president, attended yesterday's sod-turning -- indicating the value that government attaches to the Indian group's commitment in SA.

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TELECOMMUNICATIONS

MTN cuts targets IN Iran and Nigeria 

MTN, the biggest mobile phone operator in sub-Saharan Africa, has cut its subscriber targets in Iran and Nigeria. Analysts said the announcement could indicate that the fast-growing South African firm might have been trying to expand too quickly. They point to the fact that MTN is also trying to build network in unstable Sudan and Afghanistan. Meanwhile, the company also unveiled first-half profits in line with market expectations. For Nigeria, MTN has cut its subscriber target to 2.5 million additions by the end of this year from an earlier aim of at least three million. In Iran, it has reduced its end of the year target from 1.5 million subscribers to one million. "Subscribers are the issue... they are a growth company and need to be beating expectations, not just hitting them," said Sean Gardiner, telecoms analyst at Morgan Stanley. MTN said earlier this year that it might bid for a new mobile phone licence in Saudi Arabia next year. The firm entered the Iranian telecoms marketplace in October last year. 

Telkom Takeover of Business Connexion Waits On Regulators

Telkom's R2,43bn takeover of technology group Business Connexion has been delayed because the competition authorities have yet to decide whether to approve the controversial acquisition. Business Connexion had expected all conditions for the deal to be fulfilled by August 10. Since that had not happened, the suspension of its listing and its delisting had been delayed. Telkom's offer of R9 plus a dividend of 25c a share has been accepted by investors holding 99,58% of the Business Connexion shares. While that generous offer made shareholder acquiescence inevitable, winning competition authority approval will prove more difficult. Other technology players vehemently oppose a move that would give Telkom more power over the hi-tech sector. The Internet Service Providers' Association, representing more than 100 companies, suspects Telkom illegally cross-subsidises its internet offerings with revenue from its basic telephony services. It says such anticompetitive bundling of services would be easier if Telkom owned Business Connexion. SA's largest internet service provider, Internet Solutions, is calling for the deal to be vetoed. CEO Angus MacRobert said Telkom had a monopoly over voice networks and high-speed internet lines, and the acquisition would make it harder for others to compete. The Competition Commission's deputy commissioner, Shan Ramburuth, said the case had attracted an unusually high number of objections -- to be expected, given its nature. "It's a complex issue and a number of internet service providers and value added network service providers have made submissions," he said. As this is a large merger, the commission's recommendation will be passed to the Competition Tribunal for a final verdict. The tribunal will hold public hearings and consider the opinion of the lower authority.

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ZIMBABWE

Human Rights Watch Report Slams Government

A telephone hotline for migrants to report a myriad of human rights abuses by the South African police and employers is one of many recommendations a human rights organisation has made to the government. 'Unprotected Migrants: Zimbabweans in South Africa's Limpopo Province', a report by Human Rights Watch (HRW), noted that "Zimbabweans are arguably the biggest group of foreign Africans in South Africa." The political and economic woes of South Africa's northern neighbour have sent anywhere between three million and five million Zimbabweans flooding into the country. According to HRW, by the end of last year, 114 Zimbabweans had secured refugee status, "while nearly 16,000 Zimbabweans had pending cases for refugee status". There was a "perception among police officers that there is 'no war in Zimbabwe'", the study said, "and therefore Zimbabweans could not possibly have a right to political asylum or refugee status." Zimbabwe's economy is in crisis and has the world's highest inflation. The latest official estimates indicated a drop to 993.6 percent in June, from a previous rate of 1,184 percent, and unemployment has been calculated at over 70 percent. However, Tony Hawkins, a former professor of business studies at the University of Zimbabwe, has predicted that the inflation rate will pick up again in the second half of the year. The 50-odd page human rights report revealed that migrants were "especially vulnerable to abuse by various government departments", particularly South Africa's home affairs department and the police. "Police often mistreat undocumented workers when they arrest them," HRW's deputy Africa director, Georgette Gagnon, said in a statement. "While awaiting deportation at police stations, undocumented migrants are given inadequate shelter and food, and some are detained beyond the 30-day legal limit." Limpopo Province, which borders Zimbabwe, is both a conduit for migrants drawn by the lure of a better life to Johannesburg, South Africa's economic hub, and also provides casual work on the labour-intensive citrus and vegetable farms nearer the border. Farmers who do not depend on Zimbabwean labour blame workers from the north for crime, and speak openly about "how they strive to keep their areas 'clean of Zimbabweans'"; those who do use Zimbabwean labour often do not pay the minimum wage and violate the "constitutional right of migrants to fair labour practices," the report said. Both documented (legal) and undocumented (illegal) migrants from Zimbabwe "occupy an ambiguous space in the law with respect to certain rights guarantees." The human rights body recommended that the South African government enforce compliance with its immigration and employment laws, and amend laws where necessary. The report concluded that "the government should address the specific situation of undocumented Zimbabwean migrants in South Africa through comprehensive rather than ad hoc measures that address their status."

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