Department Budget and Strategic Plan: South African Institute of International Affairs briefing

FOREIGN AFFAIRS PORTFOLIO COMMITTEE
17 May 2006
DEPARTMENT BUDGET AND STRATEGIC PLAN: SOUTH AFRICAN INSTITUTE OF INTERNATIONAL AFFAIRS BRIEFING

Acting Chairperson: Ms F Hajaig

Document handed out:
South African Institute of International Affairs presentation on Department budget

SUMMARY
The South African Institute of International Affairs (SAIIA) briefed the Committee on the alignment of the Department, in terms of the strategic plan, the budget and the annual report, and proceeded to point out several areas of concern that obstruct this alignment.

MINUTES

South African Institute of International Affairs (SAIIA) briefing
Mr Tim Hughes (South African Institute of International Affairs) gave an assessment of the alignment and consistency of the Department’s strategic plan, budget and annual report, and also identified variance, blockages, and other areas, which it was necessary for the Committee to address.

The Department had ambitious programmes. Its mandates were broad and multifaceted (alongside the Department of Trade and Industry, the Presidency, the Department of Safety and Security, and the Department of Defence). Therefore measurement of the Department’s performance was difficult. Another obstacle resided in the budget, where two thirds consisted of foreign denominations. This should be sorted out with Treasury. Lastly, the Department itself, which had experienced considerable flux during the past decade, appeared to be heading towards institutional stability and the best structure thus far.

The Department’s Strategic Plan had been condensed into a more accessible format. The key performance areas were: main priorities and objectives, service delivery, service delivery improvement plan, allocations to key department programmes. It was important to evaluate these key performance areas according to their degree of alignment with the aims of the Department.

The vision of the Department involved the consolidation of the African agenda, South-South co-operation, bilateral relations, and governance (politics, security, and socio-economic governance). SAIIA assessed the Strategic Plan according to not only the priorities, objectives, performance indicators and critical issues, but also resource allocation per department programme. These resource allocations included programme administration, programme of foreign relations, diplomatic and protocol services, and international transfers (including payment of membership fees). There was also an asset management plan, an Information and Communication Technology (ICT) plan, and a section dedicated to the Foreign Services Institute and human resources.

The prioritisation and consolidation of the African agenda was consistent within the Strategic Plan. The material embodiment of this prioritisation was in missions established in Africa with the intention of owning a mission in every African country by 2008. Consistency was also apparent in budget allocations. The Strategic Plan and budget allocation was in line with South Africa’s preferred approach to international relations of multilateralism. Increasing emphasis was placed on the Middle East and Asia.

In the area of employment equity the Department was making consistent progress, except in the case of the disabled. The last aspect, which had emerged during the past three years, was the urgent need to emphasise skills development. It was necessary to orientate South Africa in its efforts in terms of human rights, poverty alleviation, African involvement, National Development Goals (NDGs), and South-South engagement.

Mr Hughes continued by raising questions about the Strategic Plan:
• Firstly, there was a degree of absence of macro-analysis within the Strategic Plan. The plan did not see beyond the set priorities within the short to medium term, in other words, beyond 2015.
• Secondly, he questioned whether the Strategic Plan was mindful of the emerging economic powers of Brazil, Russia, India and China (BRIC). These economies, within the increasingly globalised world, were gradually overtaking the mainstream economies of the G7. How was South Africa’s foreign relations orientated towards these emerging powers? Did the foreign policies sufficiently address BRIC and take advantage of this situation.
• Thirdly, the Strategic Plan has been adjusted, and one should ask the reason for this. The Department should show where they had made amendments and give adequate reasons for these changes. Transparency was a valuable asset in order to keep all Members informed on changes in priorities and objectives.
• Fourthly, the Strategic Plan appeared at times vague, repetitive, and constituted more of a ‘wish list’ than reality.
• Lastly, he questioned whether the Strategic Plan placed sufficient emphasis on the development of Asia, particularly Southeast Asia.

With regard to skills development within the department, Mr Hughes agreed that the skills audit was necessary. However, the Department should provide clarity in terms of the criteria and methodology used to perform the audit. Further, what was the outcome of the audit and where these skills consistent with the priorities and objectives of the Strategic Plan.

He continued to look at the steps taken to improve skills within the Department. He gave an example, where approximately 120 people were fluent in French, yet other relevant languages were neglected, such as Arabic, Mandarin, Swahili, Portuguese and Russian. A lack of emphasis on future skills also raised concern. It was unclear what the Department saw as future skills. Mr Hughes suggested several, including conflict mediation / resolution, and environmental and nuclear management. Transparency was also needed regarding the revitalised Foreign Services Institute (FSI).

The secondment of Department personnel was also a concern. The African agenda and the consolidation of this agenda were areas of priority for South African foreign policy. Central to this was the secondment of personnel to the African Union (AU) and also the strengthening of the South African Development Community (SADC). He enquired whether this reduced capacity, weakened the Department, and exacerbated the current skills shortage within the Department. Was there any temporary loss of skill, due to a secondment, and were these skills replaced and reintegrated.

Mr Hughes presented SADC as a case study in order to look at the alignment of the Strategic Plan, the Budget and the Annual Report. The Department Strategic Plan for 2005-2008 stated the following: "Within the region, SADC remains the primary vehicle of South African policy and action to achieve regional integration and development within all priority development sectors." Therefore SADC played a crucial role within the African agenda. Under-performance of SADC had been reported in the Annual Report of 2004-2005, which was subsequently explained by financial and human resources restraints, which in turn affected the Regional Indicative Strategic Development Programme (RISDP) negatively.

Despite SADC’s restructuring, it continued to operate at times ineffectively. The budgetary allocation to SADC was contradictory to its priority position in the Strategic Plan. Of the total R 685 million (35% of the grand total) allocated to Africa, only R12.6 million could be identified as a direct spend as a membership contribution. They would put the cart before the horse if they tried to implement national programmes (RISDP) when the regional programme was still undergoing restructuring. This case study proved the misalignment of the Strategic Plan, the Budget and the Annual Report.

The budget was consistent in terms of budgetary allocation. Variance in interpretation was possible due to currency fluctuations. The only area of possible concern was within the sub-programme of management, where the budgeted amount in 2005-2006 was R19 million. In the Medium-Term Expenditure Estimate this had increased to R 50 million. There were no reasons given for the more than 100% (163%) increase in budget allocation. The reasons for the 50% increase in budget allocation in foreign and domestic property, in other words from R 20 million to R 30 million, were unclear.

He continued by mentioning that the budget was consistent in terms its focus on Africa, both on a bilateral and multilateral level. Mr Hughes speculated whether the greater part of the budget was allocated to the advancement of the African Renaissance Fund, which was recently recapitalised, and he wondered how this was managed. He was satisfied with the budgetary allocations to diplomatic affairs in Africa. From the foreign relations expenditure of R 1.7 billion, R 682 million (35%) was allocated to Africa. In terms of transfers and subsidies allocation, R350 million (74%) of R 473 million was allocated to Africa. An increase in the South African share of the AU budget, from 8.2% to 15%, had been approved. On recapitalisation of the African Renaissance Fund of R 150 million, Mr Hughes posed the question: how often would this fund be recapitalised; in other words, was it self-sustainable and how was it managed? The only line item on the budget referring to SADC, was the membership fee, which was R 12.6 million. There needed to be a quantification of expenditure to prove South Africa’s commitment to SADC.

Despite the Department’s efforts to fill posts, the vacancy rate within the Department was unexpectedly high. Last year in March, the vacancy proportion was the following: Low skilled (21%), Skilled (45%), Highly Skilled Production Rate (56%), Highly Skilled Supervision (20%), Senior Management (11%), Political Office Bearers (Fully Occupied), Key Department personnel (37%) (of which the Diplomatic Core (48%)), and key Department personnel in head office (14%). He asked why there was such a high vacancy rate, despite a recruitment campaign. One had to ask what the reasons were for 50 people resigning in the previous year, and what steps were taken to address these issues. He wondered whether there was a mismatch between the South African policy priorities, objectives, ambitions, and abilities to successfully recruit new personnel.

Mr Hughes moved on to the Department’s efforts to develop interdepartmental relations. He suggested that the Department should implement a survey to receive responses from its "customers" on its performance.

He concluded by advising that the Department formulate a consistency and alignment report. This would motivate the Department to enhance alignment between the Strategic Plan, the Budget and the Annual Report. Apart from this report, a timeframe of errors and variances must be documented and the steps taken must also be put on paper and explained to provide departmental transparency. Lastly, it would be helpful if the Department were to call in all its chief directors to discuss budgetary and strategic plans for two consecutive weeks prior to approaching the Minister and the Director-General.

Discussion
Mr M Ramgobin (ANC) referred to Mr Hughes comment on the contradiction of the policy engagement, performance and commitment to SADC. The South African relationship to SADC was not completely reliant on the Department. The Department itself would never be responsible for achieving the goals of the Strategic Development programme. SADC was an interdepartmental issue. Therefore Mr Hughes’ assessment was deficient in addressing SADC.

Mr B Skosana (IFP) said that this was not really a question of the content but rather of the procedures. He pointed out that this information should have been given before the Committee’s discussion with the Department and the Director-General. It was unfortunate that this input was late as it might not have any effect. He commented that it was a good evaluation, but he could not understand why it had been presented now.

The Chairperson mentioned that the Co-Chairperson, who was absent, might have given more clarity. She agreed with Mr Skosana, and said that she would look into the matter. Both Chairpersons had not been available at the time, thereby complicating the situation.

A Member pointed out that the Strategic Plan must also be investigated in terms of Accelerated Shared Growth Initiative South Africa (ASGISA). SADC’s expenditures were allocated according to its stable environment. On the restructuring of the training component of the Department, she asked for recommendations from Mr Hughes.

Mr Hughes replied, firstly, that he did not know, since neither the budget nor the annual report indicated the amount of expenditure on SADC, but it must be more than it appeared. He agreed that the stability was at its highest ever, yet skills and training were still issues that needed to be addressed. These also needed to be aligned with the Department and its objectives and priorities. He suggested that the Department make an assessment of whether the current skills were indeed in line with the Department.

Mr L Joubert referred to the staff challenge. Staff offices tended to be top heavy because of all the heads of mission that needed to be on a very high level. He recommended that the Department appointed non-career diplomats, which was what other countries had already done. He asked whether there was a benchmark of non-career diplomats or heads of mission appointed outside the diplomatic pool.

Mr B Skosana spoke of a French ambassador who had visited the Department the previous week. He gave the impression that South Africa was sacrificing national interest in trying to accommodate the consolidation of the African agenda. He asked Mr Hughes opinion on the matter.

Mr Hughes said that he did not know. He added that he would send a note to the Member. He felt that advice from other countries should always be welcomed and be given a free platform. He also considered the remark from the French ambassador as a reflection of what was historically viewed as the French modus operandi in international relations. South Africa’s vision and commitment was entirely different. The strength of the South Africans policy was its multilateralism. Africa remained a controversial affair.

The meeting was adjourned.