INTERNATIONAL BUSINESS
Friday, February 13, 2004
S Africa on Asian tigers' trail, sets up duty-free zones
REUTERS
PORT ELIZABETH: South Africa, hoping to copy the miracle that created Asia's tiger economies, is building a multi-billion rand duty-free industrial park, the first in a series aimed at boosting economic growth.
The Coega Industrial Development Zone project - comprising a duty-free industrial zone and deep-water port - is modelled on the industrial development zones in countries such as Singapore and China, that have fuelled fast-paced export-led economic growth. But the 7.4bn rand ($1.1bn) project, 20 km (12 miles) from the coastal city of Port Elizabeth, has not been without controversy. Environmental groups have expressed concern about its possible impact to fragile coastal ecological systems.
Coega was also initially criticised as a white elephant - a fear that has returned since Canadian aluminium giant Alcan took over French group Pechiney, putting into doubt the latter's proposed $2bn aluminium smelter there. Eugene Heeger, executive manager for business development, dismisses the criticism. He says he has 8.5bn rand ($1.2bn) worth of proposed projects lined up, excluding the "Pechiney smelter." "I reject that assertion. Coega can never be shown to be a white elephant until it's proved to be a failure," Mr Heeger said. "We're not building a shopping centre where we get tenants. This is an industrial city we're developing over time."
Coega is at the heart of a broader economic strategy by President Thabo Mbeki's government to transform South Africa into a competitive export-driven economy from one where domestic industries were protected and isolated during apartheid. At least four duty-free industrial parks have been earmarked international airport. -- Reuters
with Coega the flagship project.
Coega is expected to ease unemployment in the poor Eastern Cape province - estimated at about 42% - by creating more than 50,000 jobs in the next 10 years. The Eastern Cape is now one of the fastest growing of the country's nine provinces.
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