Turning away from fiscal policy, it is clear to us that the other macro economic reforms we have implemented under the GEAR program also served us very well in the turbulent conditions of last year. We have committed a free trade deal with the EU and will shortly ratify the SADC protocol in Parliament. These two agreements will have a dramatic impact on the structure of the South African economy. The SADC agreements lays the foundation for the emergence of a single regional market in Southern Africa, creating huge opportunities for firms throughout the region. South African firms will gain enhanced access to the second largest market in the world, while increasing competition in the domestic market should focus investment on areas in which South Africa has a comparative advantage.
Openness also implies opening previously protected domestic sectors to foreign investment.
Specifically, foreign investment in state-owned enterprises allows for access to cutting edge technologies and increases the effectiveness with which these entities can deliver on the rollout of essential services. Private sector finance allows for investment in much needed infrastructure without further burdening the fiscus. We are committed to continue the restructuring and privatization process through both the sale of strategic stakes to international players and partnering with the private sector in infrastructure development. On the capital account South Africa remains committed to the gradual liberalization of the capital account. These controls will continue to be reduced in a manner that does not destabilize the market, while ensuring that the financial system manages its risk exposure in a prudent manner.