South Africa Readies for 2-Day Visit From Russia's Putin

[Ryan Ruck]

South Africa Readies for 2-Day Visit From Russia's Putin

South Africa is rolling out the red carpet for Russian President Vladimir Putin, who arrives Tuesday for a two-day visit expected to strengthen economic ties and political cooperation on issues like U.N. reform and the Iranian nuclear standoff.

Putin, the first Russian head of state to visit South Africa, will be accompanied by a heavyweight business contingent intent on forging closer links and boosting investment in the diamond, mining and metals sectors.

The South African Foreign Ministry on Monday said that Putin's bilateral talks with President Thabo Mbeki would include discussions about the Middle East crisis and Iran's nuclear ambitions.

Russia has generally opposed the push by the United States, Britain and France for the U.N. Security Council to get tough with Tehran. South Africa, which says that countries should be allowed to peaceful uses of nuclear energy, contends that U.N. sanctions would be counterproductive.

Mbeki and Putin are expected to sign a number of partnership and cooperation agreements, including on health care and outer space exploration — where South Africa wants to become a bigger player in international astronomy and deep space research.

Putin will also make a brief visit to Robben Island, where former President Nelson Mandela and other anti-apartheid leaders were imprisoned. The Soviet Union was a powerful supporter of the underground African National Congress when it was banned by the white racist government. Mbeki received military training in Russia in 1970, as did other members of the current government.

Moscow, which used many African countries as pawns against the West during the Cold War era, has lost much influence on the continent to China. But in his state of the nation address in May, Putin indicated that Russian wanted better relations with Africa.

"Russia's economic gains and brighter prospects are the basis of a new foreign policy that seeks to renew, on a different basis, Russia's presence in regions it vacated with the collapse of the Soviet Union," said Irina Filatova, a professor emeritus at the University of KwaZulu-Natal and professor of the Moscow High School of Economics.

"This is the key to the visit: Russia is back," she wrote in a column in South Africa's Business Day newspaper.

Given that Russia holds the leadership of the Group of Eight, Mbeki is also anxious to remind him of industrialized nations' commitments to helping Africa through trade and aid.

Most of the focus is expected to be on business links, because of Russia's thirst for raw materials, South Africa's need for investment, and their joint domination of the diamond and platinum market.

Putin is to talk Tuesday with Nicky Oppenheimer, chairman of the De Beers group, the world's largest diamond mining company. With him will be Alexander Nichiporuk, president of Russia's Alrosa, the second biggest rough diamond company.

The two companies were the subject of an antitrust probe by the European Union into a 2001 deal whereby De Beers said it would buy diamonds worth US$800 million from Alrosa every year for five years. The EU in February forced De Beers to agree to stop buying diamonds from Alrosa beginning in 2009, to open up more opportunity for competition. De Beers controls about 60 percent of the world's rough diamond supplies and produces 43 percent of world output.

Putin and Mbeki are also due to attend a Russian-South African business forum grouping top Russian business figures such as EurasHolding Alexander Abramov, and oil and metals magnate Viktor Vekselberg. South African companies include the state oil refining body SASOL, media giant Naspers, Sun International leisure group, and mining companies Anglo-American and Gold Fields.

South African exports to Russia totaled US$130 million in 2004, with Russia replacing Britain as the biggest buyer of fruit. It imported just US$9 million worth of goods, mainly nickel.

[Ryan Ruck]

Putin Pledges Billions In South African Investment

Russian President Vladimir Putin pledged billions of dollars of investment in South Africa on Tuesday at the start of a historic trip to forge closer ties between the global mineral and diamond superpowers.

Putin is the first Kremlin leader to visit South Africa, despite Moscow's long historical ties with the ruling African National Congress (ANC), many of whose leaders received military training in Russia during their anti-apartheid fight.

Putin and South African President Thabo Mbeki told a news conference Pretoria and Moscow wanted to build on those strong political ties to deepen economic and trade relations, and had signed several agreements including a friendship treaty.

"We can sense the warmth with which we've been received in South Africa. We're pleased that South Africans haven't forgotten about this," Putin said. But the main focus was economic cooperation, he added.

"We should not only get absorbed in sentimental reminiscences of the past but also get involved in ways to enhance our cooperation in the future," Putin said. "We are planning big projects worth billions of dollars."

While it was not a priority during the current talks, Putin said: "I will not conceal our desire to see more cooperation in the military sphere."

Putin arrived in Cape Town for a two-day visit along with 100 top Russian businessmen.

Russian tycoon Victor Vekselberg told Reuters his Renova investment firm would invest more than $1 billion in the building of a ferro-alloy plant in South Africa's Eastern Cape region.

The plant, near the coastal city of Port Elizabeth, would have capacity of 300,000 tonnes and be "a big part of the world market", Vekselberg said.

"We are very very fortunate that Russian investors are so keenly committed to help us develop this economy," Mbeki said.

Dominant In Diamonds

Besides metals, Russia's top export earners are energy and weapons, both low down the agenda in Cape Town. However Putin said Russian gas giant Gazprom hoped to sell liquefied natural gas to South Africa in future and he saw a good chance of cooperation in agriculture and chemicals.

He also said Russia had agreed to sell uranium to South Africa's Koeberg nuclear power plant.

One of the four agreements signed on Tuesday covered cooperation on space research and the uses of space.

"We are going to be launching micro-satellites in December using Russian rockets," Mbeki said.

Another of the agreements concerned cooperation on healthcare and medical science, although the document made no mention of AIDS, a disease which has plagued both countries.

Putin will also oversee the signing of a memorandum of understanding between De Beers and Alrosa, the South African and Russian firms that account for around 75 percent of the world's diamond mining.

"Major cooperation is going on between De Beers and Alrosa," he said. "They have far reaching plans for joint projects for many years."

The dominance of the industry by the two firms forced them to accept a deal with the European Commission in February, under which top producer De Beers agreed to phase out the purchase of rough diamonds from No. 2 producer Alrosa from 2009.

In the banking sector, Russia's Vnesheconombank will agree a memorandum of understanding with Nedbank, South Africa's fourth biggest bank by assets, a Kremlin statement said.

Putin, a former KGB spy, will visit Cape Town's Robben Island, the prison where former South African leader Nelson Mandela was held for almost 20 of his 27 years in jail during the apartheid years.

[Ryan Ruck]

Russia's Interest In Africa Is Another Step To End USA's Global Domination

High-tech cooperation will give Russia an opportunity to enter the African market through South Africa. Moscow tries to retrieve its erstwhile influence on the African continent, preparing to face tough competition with world’s leading countries. President Vladimir Putin arrived in Cape Town to solve these issues.

The visit to Africa, which Putin started Tuesday, was initiated with the development of the global economic system, from which Russia was gradually falling out during the recent decade. The Russian administration started formulating its geopolitical interests openly only a short time ago.

Slowly but surely the existence of the unipolar world is drawing to an end. The sweeping development of new centers of influence in Southeast Asia, China and India, the activity of the Muslim world and Russia testify to the creation of new political and economic forces in the world. Each of those forces is in need of new markets and resources to be able to develop and strengthen further on.

Moscow lost its influence in Africa for 15 years. The results of the fierce political struggle between the world’s strongest superpowers in the 1960s and the 1970s returned no results for Russia. Nowadays Russia is returning to Africa. It goes without saying that the Russian government will have to fight with both traditional competitors and new rivals who have already entered the African market: China, Mideastern countries and Latin American states.

Restricting relations with Africa on the whole and with South Africa in particular implies an obvious strategic failure for a superpower. A private initiative of such large Russian enterprises already working on the South African market as Norilsk Nickel, diamond company Alrosa or aluminium giant Rusal is not enough for expanding the cooperation. Russia needs to develop new programs in the field of high-tech industry, including military cooperation, energy and investments.

In spite of the fact that the turnover between Russia and South Africa has been characterized as positive for several years already, the two countries know practically nothing of their own technical and economic opportunities.

Unlike other countries, South Africa runs no policies to discriminate Russian companies. Quite on the contrary, the South African administration is interested in their active participation in the development of the national economy.

Russia’s current interest in Africa already starts raising concerns with foreign competitors. China will most likely be the first country to do something in response. The Chinese administration will try to minimize Russia’s current efforts in Africa. It is not ruled out that China will offer Russia an attractive investment program in the near future. Europe will intensify competition in high-tech field, whereas the USA will do its best to detract Russia’s attention from South Africa. Washington will obviously take account of its past mistakes, when it concentrated on Europe, the CIS, Russia and the Middle East and lost its influence in several Latin American countries.