31 May 2011
Ms Anitha Soni, International Marketing Council (IMC) Board Chairman
IMC Board Members
IMC Chief Executive Officer
Representatives of Diplomatic Corps
Representatives of labour and business, big and small
Representatives of the media
Ladies and gentlemen
I am honoured and humbled to be invited to address this auspicious occasion.
Last week the IMC met with President Jacob Zuma and it was proposed and agreed in principle that the organisation’s name be changed to Brand South Africa. This will be tabled at the Cabinet meeting in July. The name change is to make clear what IMC does, which is to market and manage perceptions of South Africa internally and globally.
The government fully supports the IMC in its role as the custodian of our country’s nation brand. The IMC’s job is to work with and through stakeholders to attract investment and enhance trade in ways that will stimulate employment and grow our economy. The mobility of capital and talent in the global economy makes it imperative for nations to manage their reputations effectively.
Countries all over the world are shaping and re-shaping their national identities as they compete with neighbours and regional blocks for power, influence, prestige and wealth. The branding of South Africa is not a choice but a necessity. To succeed, it requires a concerted effort by all stakeholders - government, citizenry, businesses, political parties, charities, educational institutions, sporting organisations and the like.
In the case of South Africa, the IMC has developed a strategy to support the country’s sustained global competitiveness as measured by increased exports, inward investment and tourism. Only a country with a clear, credible and positive view of what it is, what it represents and where it is going to, can successfully compete on the global stage.
The IMC’s mandate is to drive South Africa’s global competitive advantage by communicating the country’s unique selling proposition in a clear, credible, attractive, differentiated and consistent manner. The IMC is building on the momentum gained by last year’s successful hosting of the Fifa World Cup and has launched a campaign on the legacy of the event to mobilise South Africans around a shared value proposition.
The campaign has defined the values that make South Africans unique whilst entrenching the principles of pride, patriotism and solid citizenship that were established during 2010. This will ultimately contribute to the country’s rating in international competitive studies in that we don’t only just “write” about “how” citizens should behave, but actually influence the desired behaviour we want people to adopt in achieving desired goals.
The South African economy is relatively small and accounts for less than 1% of global GDP. The lesson is for South Africa to expand its export base to include the leading emerging markets which are shifting to consumption driven growth as part of their response to the global economic crisis.
South Africa’s unemployment problem is well understood to be one of the biggest challenges facing the country. Apart from its social implications, the unemployment rate at over 25% represents the underutilisation of human capital. Stubborn youth unemployment is perhaps the greatest risk to future social and economic stability and requires immediate attention. The high rate of unemployment is one of the main causal factors of persistent poverty and inequality in South Africa. Deepening our manufacturing capability will contribute to large scale job creation.
Ladies and gentlemen
We are all aware that to support higher economic and employment growth in South Africa we need high rates of fixed investment.
It is estimated that over the longer term, for any economy to grow sustainably at a rate of over 5% per annum, an investment rate of 25% of GDP is required. South Africa’s investment rate is currently about 22% of GDP. It is clear that to sustain higher growth rates in future, South Africa needs to attract more foreign direct investment (FDI). To attract FDI in the first place requires the upscaling of growth prospects and a favourable investment climate. This is where a strong nation brand plays such an important role in projecting the image and reputation of South Africa.
This has served to focus attention on place equity and systematic marketing and has created the need for the co-ordinated country branding campaign driven by the International Marketing Council. There are several indexes that are used to gauge the global competitiveness of a country on a whole range of criteria. Today I want to focus on the Global Competitiveness Index Report series which continues to stand out as one of the world's most comprehensive and respected assessment of countries' competitiveness.
Produced in collaboration with leading academics and a global network of research institutes, the Global Competitiveness Report 2010-2011 provides users with a comprehensive assessment of their strengths and weaknesses related to national competitiveness using the Global Competitiveness Index (GCI) developed for the World Economic Forum as the main methodology.
The GCI is based on 12 pillars of competitiveness, providing a comprehensive picture of the competitiveness landscape in countries around the world at all stages of development. The pillars are: institutions, infrastructure, macroeconomic environment, health and primary education, higher education and training, goods market efficiency, labour market efficiency, financial market development, technological readiness, market size, business sophistication and innovation.
South Africa has been ranked as the most competitive African country in the GCI 2010–2011 for Sub - Saharan Africa. South Africa ranks in the 54th position out of a total of 139 featured economies. The Report contains the following commentary on South Africa:
(I quote) “South Africa remains the highest ranked country in sub-Saharan Africa. While it has dropped somewhat in rank since last year, its performance has in fact remained stable and the decline reflects improvements in other countries. South Africa still benefits from the large size of its economy, particularly by regional standards (it is ranked 25th in the market size pillar). It also does well on measures of the quality of institutions and factor allocation, such as intellectual property protection (27th), property rights (29th), the accountability of private institutions (3rd), and goods market efficiency (40th). Particularly impressive is the country’s financial market development (ranked 9th), indicating high confidence in South Africa’s financial markets at a time when trust has been eroded in many other parts of the world. South Africa also does reasonably well in more complex areas such as business sophistication (38th) and innovation (44th), benefiting from good scientific research institutions (ranked 29th) and strong collaboration between universities and the business sector in innovation (ranked 24th)” (I close quote).
While a number of attributes therefore make South Africa the most competitive economy in the region, in order to further enhance its competitiveness it will need to address some weaknesses. The credibility of South Africa being ranked as one of the top emerging economies in terms of its ease of doing business has a significant impact on its competitiveness as a country with which investors would want to do business in the future. We have to remain globally competitive, and this can only be achieved when we form profitable partnerships between all sectors of Government, the private sector, civil society and the IMC in delivering a coherent and impactful voice about what our country is and stands for.
To remain globally competitive, Government must also play its role in ensuring that South Africa has enabling policies in place so as to remain attractive as an investment and trade destination. But perhaps the most important of all is that global competitiveness, whilst spear-headed and championed by the IMC, is the responsibility of each and every South African. It is through being globally competitive that we are able to simultaneously address our socio-economic challenges domestically, whilst building our reputation so as to take our rightful place in the global community.
In closing, I would like to re-iterate that through partnerships we can make our country more reputable. I call on all of you to respond when the IMC calls seeking partnership, so that we can work together to create a truly improved South Africa for all – both domestically and internationally.
I wish you everything of the best in your deliberations.
I thank you for your attention.