Minister of International Relations and Cooperation Budget Speech & reponse by ACDP & DA
11 Jul 2019
Minister of International Relations and Cooperation, Ms Naledi Pandor, gave her budget vote speech on the 11July 2019
Accelerating Economic Diplomacy towards a better South Africa, Africa and world
Your Excellencies, Ambassadors, High Commissioners, members of the Diplomatic Corps and Representatives of International Organisations,
Ladies and Gentlemen
I am pleased to have the opportunity to report to this House on our progress and activities in the 2018/19 financial year and to indicate our plans for 2019/20.
Last year DIRCO was allocated R6 552.7 billion to be utilised to advance our agenda for global co-operation. The development of our region and our continent. This year we are allocated R6 508.5 billion and as with all departments we are confronted by the limitations of budget reductions, currency fluctuations and the inadequacy of our compensation budget. Given these challenges we have to use our resources wisely and strategically. The reduced budget severely impacts on our ability to support government in reaching our national priorities. Fortunately, we have an excellent team in DIRCO and we shall do our best.
Debates on the international relations budget and programme are incomplete if they are not associated with the tremendous role the international community played in supporting us to achieve freedom. We have in many ways sought to honour these solidarity based contributions through reciprocating in creating a just world order that has a humane face – a face of empowered women and girls, of men and boys, free from war, living with human security. I have been pleased that our statements and voting pattern in Geneva and New York reflect our support for a more just world.
Our work must always reflect this commitment to return the privilege of international solidarity with attention to the plight of those who seek refuge, democracy, freedom and peace.
The world has improved vastly from the world in which racial domination could thrive, yet Palestine is still occupied and not free, South Sudan has internal conflict, Western Sahara is still occupied and not free, Cuba remains blockaded and extremism and terrorism destabilise the world. Powerful forces of economic bullying seek to alter the established multi-lateral world order. Africa too continues to have many development challenges. We have to promote our relations in this challenging context. We have to use our extensive network and limited resources to support the emergence of a world where all enjoy freedom and democracy, increased human security and peace. Our relationships with the world must be centred on achieving these outcomes.
This year we celebrate 25 years of freedom. Even though we are young adults in democracy, we can as President Ramaphosa said in SONA “move forward together towards achieving a stronger, greater, more compassionate, more united and harmonious South Africa” and we add Africa.
We recall too that Rwanda is commemorating 25 years since the genocide of 1994. We reaffirm our friendship and solidarity with the people and government of Rwanda and salute them for their determined efforts to achieve reconciliation and a nation at peace with itself. The search for social cohesion and reconciliation have been put to good effect in both our countries and we should use this common experience to forge greater links.
The work we do will advance such links and also actively contribute to the seven priorities announced by the President:
- Economic transformation and job creation;
- Education, skills and health;
- Consolidating the social wage through reliable and quality basic services;
- Spatial Integration, human settlements and local government;
- Social cohesion and safe communities;
- A capable, ethical and developmental state; and
- A better Africa and World.
These priorities are global, they are in the NDP, the SDGs (Agenda 2030), and in our Africa Agenda 2063. We will promote action to realise them for our country and our continent.
We pursue the priorities in a period in which Africa has entered a phase that holds much promise for genuine sustainable development. We plan to use our diplomacy to build stronger links with Nigeria, Egypt and Kenya as anchor countries that should advance these goals.
Many African countries are achieving positive economic growth and developing social and economic infrastructure that expands the likelihood of national development, higher growth levels and social development for all. It is noteworthy that democracy has also taken root in much of the continent with free, fair and regular elections on the rise.
We are very encouraged by the launch of the African Continental Free Trade Area Agreement. Now that the ACFTA has come into force, immense opportunity for trade within Africa has come into being. South Africa must ensure it is ready to take advantage of the potential offered by this expanded market access. Once the agreement is fully operationalised Africa will be one of the world’s largest single markets encompassing 55 countries, a population of 1,2 billion people and a combined GDP of 3,2 trillion U.S. dollars. The development of the necessary infrastructure is going to gather speed and we must be ready to play a key role.
In addition honourable members, our capacity for research and innovation could play a critical role in enhancing our industrial development ambitions.
Minerals beneficiation, advanced manufacturing and wider use of digital technologies could place us at the leading edge of economic innovation support in Africa.
South Africa has excellent research universities, trains a large number of African post-graduate students and absorbs only a small number of them. We also have very competent research councils, imagine the contributions we could make to Africa if we multiply this capacity. The development in potential of a vibrant Africa based knowledge economy would become a genuine reality. Our capacity for innovation must become part of our diplomatic interactions and be utilised to advance our continent’s interests.
We should promote the creation of hundreds of research institutes all over Africa and support them to be innovative, productive and responsive. We have the capacity, let us use it strategically.
One of our major co-operation successes is our regional economic community that has established a strong platform for greater integration and growth. We must consolidate and expand trade and investment in SADC and give effect to the President’s assertion that:
“Within the SADC region, we should prioritise development of cross-border value chains in key sectors such as energy, mining and mineral beneficiation, industrialisation and enhancing manufacturing capacity, infrastructure development as well as agro-processing”.
We will, therefore, intensify several related SADC initiatives.
I am pleased with the progress that was achieved during South Africa’s tenure as SADC chair.
Progress on regional trade has been increased by the operationalisation of the Integrated Real Time Gross Settlement System (SADC-RTGS), which is hosted by the South African Reserve Bank. A total of 81 banks (central banks and commercial banks) are participating in the system. The system aims at establishing a firm platform for increased intra-SADC trade and investment to further strengthen regional financial integration. The SADC-RTGS has performed impressively since July 2013 when the system went live, with a total of 1,275,591 transactions settled as at end 2018, representing ZAR5.21 Trillion. The benefits of the cross-border payment system are its efficiency and the reduction in transaction costs. This experience is going to be a valuable contribution to the development of the payment system announced at the AU Summit in Niger three days ago.
A second example is the completion and adoption of the SADC Energy Foresight and Assessment Study for Renewable Energy Value Chains.
Member States are going to use the recommendations to develop SADC renewable energy capacities. The Council for Scientific and Industrial Research (CSIR) was tasked to conduct a mapping exercise of potential renewable energy value chains for use by Member States. A progress report will be presented to Ministers in June 2020.
Third, the SADC Engineering Needs and Numbers Study has been concluded. It will assist Member States to implement programmes for developing enhanced engineering training at national or regional platforms to enable career development through sharing of experience and expertise. Furthermore, Member States were also urged to introduce Science, Technology, Engineering and Mathematics subjects at early stages in the education systems to increase the number of students able to take up studies in engineering fields.
Tripartite Free Trade Area
The Common Market for East Africa (COMESA) – East African Community (EAC) –Southern African Development Community (SADC) Tripartite Summit agreed in October 2008 to accelerate the programme to harmonise trade arrangements among the three Regional Economic Communities (RECs), with a view to establishing a single free trade area (TFTA) encompassing all Member States of the three RECs.
Our country appended her signature on the Agreement establishing the TFTA on 7 July 2017 in Kampala, Uganda. To date, the Agreement has been signed by 23 member countries and requires 14 ratifications to enter into force. To date, only Kenya, Egypt, Uganda, and South Africa have signed and ratified the agreement.
South Africa will intensify its diplomatic efforts aimed at urging other TFTA members to sign and ratify this important trade facilitation instrument in order for it to become operational. To this end, a TFTA Summit is scheduled to take place in January 2020 in Rwanda, we hope that the ratification threshold would have been achieved by that date.
The recent report of Africa’s regional bodies at the AU’s extra-ordinary summit confirmed the critical role regional bodies are playing in our development programmes.
Our commitment to Agenda 2063 remains steadfast. We are honoured to have been selected as the 2020 AU Africa Chair. We are cognisant of the huge responsibility, this places on South Africa, particularly, the pursuit of the ambitious goal of silencing the guns by the end of 2020 in the continent.
We have a rare opportunity to place this goal on top of the Agenda of the United Nations Security Council (UNSC) when we assume the Presidency of the Council in October 2019. The theme for our Council Presidency is “Continuing the Legacy: Working for a Just and Peaceful World”. It is important to use our tenures at the UNSC and as chair of AU to implement the Enhanced Co-operation Agreement on Peace and Security as it foregrounds commitment to conflict prevention and to addressing the root causes of conflict.
This is the embodiment of the legacy of Nelson Mandela who, during his tenure as President of our country, worked tirelessly to advance peace and stability on the continent and globally, through mediation, and preventative diplomacy.
The continued existence of conflicts in Africa diverts us away from our goal of peace and development. In this regard, we repeat our call for a total ceasefire in Libya and the pursuit of an inclusive national dialogue led by the AU. On Sudan, we deplore the recent violence and deaths in that country and welcome the agreement reached by the Transitional Military Council and the Forces For Freedom and Change. This is an opportunity for the people of Sudan to begin entrenching peace and stability. We applaud the mediation efforts of the AU and IGAD. As South Africa we stand ready to assist where we can. Our experience in conflict resolution and in drafting a progressive constitution, make us a partner genuinely able to resolve complex national problems.
Our President has done much to assist the Kingdom of Lesotho to achieve political stability. While appreciating progress reported recently, we implore all the people of the Kingdom of Lesotho to work diligently on the finalisation of the necessary constitutional and security sector reforms. We thank former Deputy Chief Justice Moseneke for his work as the presidential envoy.
A peaceful and stable as well as economically integrated Africa will contribute towards transforming the world to ensure that people of the global South are not marginalised. We have partnered with like-minded countries to improve our condition and that of our partners. Work in Africa’s partnership with China in the Forum for China Africa Co-operation and with Japan in The International Conference for Africa’s Development can make a significant contribution to our development.
The BRICS is also a formation which has the potential to change the global political and economic outlook. The work of the New Development Bank (NDB), its Africa Regional Centre (ARC) and the Contingency Reserve Arrangement (CRA), are concrete examples of the effectiveness of BRICS.
The ARC is focussed on providing financial and project preparation support and funding for infrastructure and sustainable development in South Africa, Africa and in future to developing countries at the global level.
In April this year, the NDB approved around $790 million of loans for three projects in South Africa. Over half the funding is for Eskom to stabilise our national electricity grid. The NDB and Eskom signed a separate agreement for a $180 million loan to implement an integrated renewable energy project. This is evidence of the use of diplomacy to address national imperatives.
The NDB will also provide infrastructure and sustainable development project funding to countries that are not members of the BRICS. It has confirmed that part of the $790 million will fund the Lesotho Highlands water project. The implementation of the Second Phase of this project is important for both South Africa and Lesotho as it provides water to the Gauteng Province and hydro-energy for Lesotho’s electricity needs.
We continue to enhance our cooperation with institutions and countries of the North. Our partners continue to play a constructive role in bridging the global development divide.
President Ramaphosa has been consistent in using platforms like the G20 and the G7 to argue for support for Africa and for a fair, inclusive and balanced world trade environment. We believe in multilateralism and reject attempts at unipolarity and neglect of the poor and marginalised. We believe much more must be done for shared growth, for the empowerment of women and the eradication of poverty and reduction of inequality.
Success in pursuing these objectives means leadership, hard work, consistency and commitment. We as Africans must rise and act in our interest, must execute our own agenda.
The United States of America is our strategic partner in the fight against HIV and Aids. They have been instrumental in supporting our national and HIV interventions and American businesses continue to invest in South Africa to create employment and reverse the frontiers of poverty. We have excellent trade relationships and are determined to expand them for increased growth and job creation.
We will affirm these links while also working to support measures for peace in South Sudan, freedom and justice for the people of Saharawi and freedom, security and democracy for the people of Palestine. We will also continue to strive for the end of the unilateral economic blockade against Cuba and continue to strengthen our collaboration.
We have been closely monitoring developments regarding the UK’s planned exit from the EU. South Africa remains strongly committed to our Strategic Partnership with the European Union, which has created a platform for engagement at various levels, not only on bilateral matters, but also on matters pertaining to regional, continental and global challenges. The European Union (as a bloc) is South Africa’s largest trading partner with total trade having increased from R497 billion in 2014 to R620 billion in 2018. While there remains a significant trade deficit, South African exports to the EU have increased from R197 billion in 2014 to R268 billion in 2018. The R1.4 trillion in foreign investment from Europe (representing approximately 77% of total FDI in the country) has made a significant contribution towards job creation and industrialisation in South Africa.
We will work with greater energy to increase our cooperation with India, Russia and Brazil. Our partnership with the People’s Republic of China continues to grow. The recent conclusion of 90 trade and export contracts will enhance our partnership even further.
In the recent SONA the President referred to the need for us to increase tourist arrivals to support our economy. Europe and Africa are among leading continents in terms of tourist arrivals in South Africa.
I have tasked all our Missions abroad with the responsibility to help manage and brand South Africa to attract more tourists. Similarly they have the huge task of assisting us in securing more Foreign Direct Investment (FDI), whilst identifying and leveraging trade and cultural diplomacy opportunities in their host countries.
Our foreign policy principles remains centred on promoting peace, human rights and dignity for all people in all countries of the world. We continue to be guided our apex mandate, our Constitution. I am studying the report of the Ministerial Review Panel on our Foreign policy and hope to report on our response to the portfolio committee soon.
We also hope that Parliament will conclude its processing of the Foreign Service Bill.
I wish to thank the two Deputy Ministers for their guidance and support in preparing for the Budget Vote. Deputy Minister Botes will outline further details of our work in his contribution.
The Director-General and the management of the Department, my special advisors, ministry staff and family contributed immensely to this budget vote and their efforts are most appreciated. Let me thank the DIRCO Team for their role in ensuring that a detailed overview of our work is presented in this debate.
I thank you.
Budget Vote Speech of the Department of International Relations and Cooperation delivered by Deputy Minister Alvin Botes, Cape Town, 11 July 2019
Minister Dr. Pandor
Our Director General,
Your Excellencies, Ambassadors, High Commissioners, members of the Diplomatic Corps and Representatives of International Organisations,
Leaders and Members of civil society
Comrades and Friends
We are Proud of our Past, and Confident about the Future!
We are proud of our freedom fighters, who did not flinch, who did not submit, and who prosecuted our freedom struggle for a just South Africa and a noble world order.
Today we salute the Rivonia Trialists, Nelson Mandela, Walter Sisulu, Govan Mbeki, Raymond Mhlaba, Ahmed Kathrada, Lionel Bernstein, Bob Hepple, Arthur Goldreich, Andrew Mlangeni, James Kantor, Dennis Goldberg, Harold Wolpe and Elias Motsoaledi, some of whom were arrested on this day 56 years ago, in 1963.
The Rivonia Trialists made a choice to fight for the achievement of the provisions of the Freedom Charter, which contains a clause stating that, There Shall be Peace and Friendship!
The Freedom Charter argued that:
- South Africa shall be a fully independent state which respects the rights and sovereignty of nations
- South Africa shall strive to maintain world peace and the settlement of international disputes by negotiation - not war.
- Peace and friendship amongst all people shall be secured by upholding the equal rights, opportunities and status of all.
Our constitution, as well as Chapter 7 of the National Development Plan, envision an activist, developmental state, with an over-arching foreign policy architecture premised on
- Pan Africanism; which in its simplest form means the political and economic liberation of Africa;
- Progressive Internationalism and Human Solidarity with countries of the South,
- A Human Rights centred foreign policy and respect for international law;
- Multi-Lateralism and an International Rules Based Order to resolve conflict peacefully; and
- Economic Diplomacy
The Department of International Relations and Cooperation’s mission is to promote South Africa's national interest and values and the African Renaissance, and to create a better world for all. Our national interest is to eradicate poverty, to confront joblessness and to reduce inequality. Our value proposition is to construct a better African and a noble world… a new world order.
When we pause to reflect on What Needs to be Done, we recall Nelson Mandela who inspired us that ‘we owe it to all the peoples of the sub-continent to ensure that they see in us, not merely good leaders waxing lyrical about development, but as the front commanders in the blast furnaces of productive investments and visible change’. African unity and International Solidarity is integral if we wish to accelerate our economic diplomacy. Moreover, Patrice Lumumba, was unambiguous in asserting that African unity and International Solidarity are no longer dreams. They must be expressed in decisions’.
Our concrete expression of South-to-South solidarity, is through the African Renaissance Fund, whereby we committed more than R770 million for projects that are currently under implementation from previous financial years. These projects include amongst others humanitarian aid, conflict resolution, peace keeping, post-reconstruction and development projects. Countries that have benefited included Namibia for drought relief, emergency food assistance to the Kingdom of Swaziland and emergency humanitarian assistance for the Saharawi refugees.Furthermore, we have supported peace keeping missions, conflict- mediation, promotion of democracy and good governance in both the kingdom of Lesotho and Madagascar. The establishment of the African Ombudsman Research Instituteand South Africa’s participation in the African electoral observer missions of Zimbabwe, Swaziland, DRC, Mauritius, Madagascar and Comoros, were also supported.
In 2019/20 the African Renaissance Fund has committed a further R138 million to new projects. The new projects commitments include humanitarian (disaster) assistance to Zimbabwe (R50 million) and Mozambique, deployment of a border boundary expert and humanitarian aid to South Sudan to the tune of approximately R115 million and the African Women in Dialogue (AWID) leadership programme which brings to together one thousand women leaders from the continent. We will continue to support electoral observer missions in the forthcoming elections across the continent, and strengthen electoral training support; strengthening democratic institutions and good governance.
We draw inspiration from Che Guevara, when he defined what a revolutionary and a comrade is, he said ’If you tremble with indignation every time that an injustice is committed in the world, then you are a comrade of mine’ To solidify our posture on progressive internationalism and revolutionary solidarity we approved in 2015, an amount of R350 million economic assistance package to the people of Cuba.
South -South Co-operation (Latin America & Caribbean) Bilateral, Multi- lateral and Regional Organisations Co-operation
We will continue to strengthen our bi and multi-lateral co-operation with Cuba which includes amongst others, skill transfer, development assistance and trade. We will continue to increase our trade with the regional economic organisations. We remain steadfast in our call to end the unjust economic blockade by the USA against the people of Cuba.
We also remain concerned about the humanitarian crisis in Venezuela. We call for a peaceful solution to the crisis and that development assistance provided must be through internationally recognised humanitarian organisations.
We will continue to ensure that the African Continent and the Global South remain on the agenda of BRICS, India, Brazil and South Africa (IBSA) partnership and the Indian Ocean Rim Association (IORA). Our national (economic) interests and the interests of the Global South remain the driving force behind our membership in these formations.
Co-operation with formations of the North- Americas and Europe
’The forces that unite us are intrinsic and greater than the superimposed influences that keep us apart’ (Kwame Nkrumah).
Through our bi-lateral, regional and multi-lateral relations we will work with our European Counterparts to address mutual geo-political global challenges. This includes the rise of:
- terrorism ;
- right-wing populism;
- narrow nationalism ;
- neo-fascism ;
- anti-Semitism and
We believe that these challenges are not unique to Europe and are instead the effects of the failure of neo liberal internationalism that has taken root over the past 3 decades globally.
We will work with and build an alliance with like-minded countries in the North to push back:
- the threat to multi-lateralism;
- climate change denialism and
- political interference in the sovereignty of countries, particularly of the south by those countries who seem to want to revert to unilateralism and a unipolar world.
There are more than 2,000 companies from the Americas and Europe operating in South Africa, employing South Africans, enhancing their skills and investing in the economy. Many countries in the Americas and Europe allocate significant funding to technical exchanges, collaboration in the fields of science and technology, as well as vocational training. There is significant potential and interest in collaboration on the Fourth Industrial Revolution programmes.
Whilst we believe that our future economic growth opportunities are in the South (Middle East and Asia in particular), currently (as the Minister indicated earlier) the EU countries collectively still remains our largest trading partner. Therefore, we require equal commitment to both the north and south.
South Africa will continue to engage with North America, as an important region for trade, investment, tourism, technology transfer, education and health cooperation, in pursuit of the country’s national priorities. The United States of America is South Africa’s most significant economic partner, with R76.7 billion in South African exports to the United States in 2018, with R73.1 billion in imports, supplemented by investments worth R129 billion in South Africa.
There will also be continued focus, working with partner Departments and our friends and partners in the US, on removing the impediments to South Africa’s value-added exports to the United States under the African Growth and Opportunity Act (AGOA). The attraction of higher level of FDI from the United States will be a key focus to secure increased support for the President’s investment drive, including for the follow-up investment conference to be held in November 2019.
Aligned with the national objectives identified by President Ramaphosa in the SONA, South Africa will receive in excess of US$ 915 million (approximately R12.8 billion) in development cooperation from the United States in 2019, geared towards medical research, education and youth, environment and energy, agriculture and trade.
In the area of health, the funding allocation from the USA, will amount to US$730 million to support anti-retroviral treatment (ART). We believe this will contribute significantly to the Government’s efforts to reach the UN 90-90-90 treatment target and to meet the promise made by the President to place an additional 2 million people on antiretroviral treatment by December 2020.
South Africa will continue to enhance cooperation with the United States in the areas of education, training and capacity building, including developing skills for the digital economy and the Fourth Industrial Revolution.
South Africa’s diplomatic Missions in the Americas and Europe will increase their tourism promotion efforts in collaboration with South African Tourism, Brand South Africa and South African Airways. In 2018, six of the top ten sources of overseas tourists were countries from the Americas and Europe, contributing 2.2 million of the 2.7 million overseas tourists that visited South Africa last year.
The current negotiations on the future of the African, Caribbean and Pacific Group of States (ACP) after the Cotonou Partnership Agreement expires in 2020 are crucial. South Africa is participating in the negotiations on the restructuring and reshaping of the African, Caribbean and Pacific Group of States’ relationship with the European Union, with the objective of ensuring that the ACP remains focused on its three core mandates – trade and investment, development cooperation and political dialogue.
To illustrate the strategic and significant role our missions play in the reconstruction and development of our country, I wish to cite the work of our German mission. Our economic diplomacy has resulted in the increased of South Africa’s exports from R125m in 2017 to R133m in 2018, translating in an 11% increase.
We have increased our export orders for beverage, fine food and meat to R893m and R372m in orders for fruit and vegetables in 2018.
In the automotive industry Germany, through BMW, Mercedes Benz SA and VWSA have been able to increase Human Capital Development to enable SA to produce high quality vehicles, parts and accessories to the same standard of Germany. Importantly we are now part of the Global manufacturing supply chain, which make SA an exporter of high quality products.
I want to thank our dedicated Ambassador Stone Sizani for his excellent work in this regard. Our appreciation is also extended to all our heads of missions and staff for their commitment and devotion to promote our country abroad.
President Ramaphosa has been unequivocal that ‘the current generation of youth has therefore chosen as its mission the attainment of economic freedom’. We should be confident that we have the capacity to break inter-generational poverty and maximise the democratic youth dividend. Our young people remain the future of our country and continent. This is why we remain committed to implementing the African Youth Charter (2006) which serves as a strategic framework that gives direction to youth empowerment in our country , region and on a continental level. Our own legislation and policy architecture for youth development and empowerment is aligned to the charter.
In a globalised world our youth require the necessary skills to become ‘’global’’ citizens. To this end our department has been actively working with our sister departments to secure more scholarships, exchange programmes and other training opportunities for our youth to study abroad. In addition we will continue to host our youth conflict resolution programme which has been in existence since 2017. We will also continue to support youth leaders to attend the forth-coming annual Global Forum For Young Diplomats in Russia, the 20th International Youth and Student Festival and the 5th BRICS youth summit.
We currently have more than 1600 students on scholarship in Cuba, China, Turkey, Hungary, Ireland, US and UK to mention but a few. In Cuba alone we have 1200 medical students, this excludes the 600 medical professionals, who have just completed their studies and returned home.
We are committed to expose our young people to the diplomatic world, and will announce a pragmatic programme in this regard on United Nations’ International Day of the Youth, on 12 August 2019.
We will continue to provide consular services to our vulnerable youth who because of their socio-economic conditions becomes exploited by drug traffickers and end up in foreign prisons particularly the girl child, in line with the Vienna Convention.
Our future is inextricably linked to that of our region, continent and the world. The challenges we face both domestically and globally, requires us to work closer with our partners in our region, continent and the world in search of solutions for shared and inclusive prosperity. Thus, our diplomats will continue championing the African Agenda through all the international forums as we work towards realising our vision of “a better South Africa, a better Africa and a better world”.
The President of the Republic of South Africa, Honourable Ramaphosa detailed his vision for a better South Africa, a better Africa and a better world, and was inspired by Dr. Mae Jemison, first African-American female astronaut, who inscribed that we should never be limited by other people’s limited imaginations.
We will continue to re-imagine a world free from hunger and poverty; to re-imagine a world wherein mutual respect is cardinal, to re- imagine a world of peace, free from hunger.
Thank you for your attention!