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Presentation to the Portfolio Committee DIRCO. INTRODUCTION.
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INTRODUCTION • The Department of International Relations and Cooperation derives its mandate from the Constitution of South Africa and the NDP vision which is further detailed in the 2014-2019 MTSF provide an overall mandate and scope for all work done by national, provincial and local government and informs SA’s foreign policy • The draft White Paper on South Africa’s Foreign Policy was approved by Cabinet and submitted to Parliament • Under MTSF Outcome 11, Government seeks to “Create a better South Africa and contribute to a better and safer Africa in a better world” through: • Enhanced African Agenda and sustainable development • Regional integration • Reformed global governance institutions, and • Trade and investment
INTRODUCTION Therefore the department’s spending focus over the medium term will be on: • sustaining economic and political relations, • participating in the global governance forums, • enhancing operational capacity by strengthening policy and coordination in relation to outgoing South African development cooperation and to table the SADPA Bill • Agenda 2063 • review of the current legislative framework governing the department’s operations abroad, tabling the Foreign Service Bill • undertaking of various infrastructure projects, and implementing the property management strategy
South Africa’s Current Global Stature • In its execution of SA’s foreign policy DIRCO is informed by SA’s global stature where SA: • is a respected, active and responsible global citizen. • hosts the second largest number of foreign representation in the world and has a current global footprint of 125 Missions • Is regarded as a champion for protection and promotion of human rights • Advocates for disarmament and the peaceful resolution of disputes • Place Africa central in its Foreign Policy which forms the basis for cooperation with countries of the South and the North. - Champions cooperation and partnership over competition in the global arena.
South Africa’s Global Footprint Missions per Region Africa Bilateral – 46 Africa Multilateral – 1 Americas & Caribbean – 17 Europe – 27 Asia & Middle East – 32 Multilateral -2 Total: 125
The changing global environment impacts the execution of DIRCO’s mandate • Shifting political ideological implications-The emergence of nationalistic and conservative governments reduced development aid to developing countries (0.4% drop in 2012) • New trend in trade and economic patterns – Asia and the Middle-East surpassed Europe as SA’ number one trading partner • In two decades, trade with Asia and the Middle-East increased 19-fold from R40.2 billion in 1994 to R760.2 billion in 2013 • In the same period, trade with Africa increased 35-fold from R11.6 billion to R385 billion • Europe remains SA’s main strategic trading block while it continues to recover from the impact of the global financial crisis
The Changing Global Environment • Growing influence of new formations and regional groupings: Brazil, Russia, India, China, South Arica (BRICS), GROUP OF 20,(G20) ,Colombia, Indonesia, Egypt, Turkey, South Africa (CIVETS ), Indian Ocean Rim Association (IORA) • SA attaches importance to its membership of BRICS • China is the second biggest economy in the world after the USA, while Brazil and Russia and India are placed 7th, 8th and 10th respectively • BRICS countries share a common vision to be pursued through economic cooperation, sharing of technical expertise, knowledge and experience to address their own domestic and international challenges
The Changing Global Environment • Growing impact of non-state actors and social movements: growing social disparities, economic and financial volatility, insecurity and scarce resources • New global opportunities and frontiers: The ‘New Economies’ - the Blue Economy, the Green Economy and the Knowledge economy; exploration and utilisation of outer space (SKA project, satellites for communication, defence and environmental surveying) and advances in technologies • Operation Phakisa seeks to harness and leverage some of these sectors as part of NDP implementation
Global Trends that Impact on SA’s Influence • Economic migration: More than half of global population is urbanised ( as compared globally, Africa accounts for only 40%) • There is an increased number of mega-cities in developing countries • However, infrastructure and the provision of service is lagging behind and has socio-economic and political implications. • Regionalism: economies of scale, eroding sovereignty, protectionism vs cooperation for mutual benefit • This occurs while developing economies are moving, steadfastly, towards consumer-oriented economies
Global Trends that Impact on SA’s Influence • The future role of global governance institutions (UNSC, BWI): Reform or Replace. - The impact of the global financial crisis led to increased voices for reform of international financial architecture
Overview of the MTEF allocation • In terms of government priorities of doing more with less, the allocation to the department over the medium term include Cabinet approved reductions of R335.3 million in 2015/16, R467.1 million in 2016/17, and R168.5 million in 2017/18, which the department has to effect on compensation of employees due to vacant posts, goods and services and the transfer to the African Renaissance and International Cooperation Fund. • The Department has proposed additional cost saving measures to unlock its fixed cost overhead expenditure items and mitigate the budget shortfall envisaged, including to accommodate some of the new priorities identified for implementation.
Overview of the MTEF allocation • In response to the budget reduction the department is implementing the following additional cost containment measures: • Review of the organisational functional assessment for both Head Office and missions abroad • Review of the provision of support services for the missions’ operations. • Enhancing information and communications technology through modernising and implementation of an enterprise resource planning system. • Implementation of property management strategy
Overview of the MTEF allocation • The 2015 MTEF allocation does not cater for the foreign exchange fluctuations as a result the department remains vulnerable to foreign exchange rate losses, which necessitates a review of how the foreign operations are supported. The department will address the shortfall through the adjustment estimates budget process.
Programme 2: International Relations • Bilateral engagements are the basis for strengthening political and economic relations and provide the platform to advance national priorities and to lobby for support for multilateral engagements and common positions • The performance indicator on political work is predicated on the implementation of Structured Bilateral Mechanisms (BNCs, JCCs, JNCs and others) and reciprocal High-Level visits • The performance indicator on economic diplomacy measures the work that missions undertake to increase value added exports; attract Foreign Direct Investment to priority sectors (NGP and IPAP); promote tourism; promote the removal of non tariff barriers through: • Hosting or participating in trade seminars and tourism promotion, • Engagements with chambers of commerce, high level investors, relevant government ministries
Programme 3: International CooperationSub-programme 3.1: Global Governance • South Africa is committed to multilateralism and a rules-based international order and to this end participates and plays an active role in all for a of the United Nations system and its specialised agencies, funds and programmes • With particular focus on peace and security, sustainable development (social, economic and environmental) protection and promotion of human rights and humanitarian affairs, international crime and international law • Advocate for UNSC reform to curb unilateral actions taken outside the United Nation’s peace and security mechanisms in various regions
Programme 3: International CooperationSub-programme 3.1: Global Governance • Ensure South Africa’s compliance with international law – • the provision of legal advise and opinions on issues relating to international law, e.g. extending the continental shelf to significantly increase South Africa’s territory, International Criminal Court, International Court of Justice, Law of the Sea etc
Sub -programme 3.2Continental & Regional Cooperation • South Africa will align its foreign policy engagements with Africa’s Vision 2063 to contribute to the socio-economic development of the African continent. • South Africa will continue to focus on implementation of the continental integration agenda, regional economic integration and finding African Solutions to African problems through: • Strengthening the AU and its structures • Contribution towards entrenchment of democracy (election observations) • Participating in peace missions, and (Peace, Conflict, Reconstruction and Development (PCRD) initiatives • Promotion of Good Governance (APRM) & protection of Human Rights • Contributing to Socio-economic development ( implementation of the New Partnership for Africa’s Development (NEPAD)
Sub-programmes 3.3 & 3.4South-South & North South Cooperation
2014/15 Expenditure Preliminary Outcome • Programme 1: Administration • The expenditure for the Programme was R1.239 billion (87% spending). The underspending is as a result of delays in capital projects due to unforeseen and unavoidable circumstances. • Programme 2: International Relations • The programme reported an expenditure of R3.106 billion. The overspending is as a result of depreciation of the Rand against other major currency. As a consequence the expenditure for programme 2 has exceeded the budget by R58 million. • Programme 3: International Cooperation • The expenditure for the programme was R460 million. The underspending is as a result of the office accommodation for PAP that has not be concluded.
2014/15 Expenditure Preliminary Outcome • Programme 4: Public Diplomacy and Protocol • The underspending of R35 million is as a result of unclaimed funds by partner department for the Presidential Inauguration activities. • Programme 5: International Transfers • The overspending is as a results of foreign exchange rates losses in relations to the payment of membership fees and assessed contributions to United Nations, African Union and South African development Community.
STRUCTURE OF THE PRESENTATION • Introduction • The utilisation • Programme performance plan • MTEF Allocation • Conclusion
1. Introduction • The African Renaissance and International Co-operation Fund was established in terms of Section 2(1) of the African Renaissance and International Co-operation Fund Act, 2000 (Act No. 51 of 2000) and subject to direction of the Minister under the control of the Director-General (DG).
2. The Utilisation Of Fund The Minister must, in consultation with the Minister of Finance, establish an Advisory Committee consisting of the following members: • the Director-General or the delegate of the Director-General; • three officers of the Department appointed by the Minister; and • two officers of the Department of Finance appointed by the Minister of Finance. • The Advisory Committee must make recommendations to the Minister and the Minister of Finance on the disbursement of funds through loans or other financial assistance.
2. The Utilisation Of Fund • Loans or other financial assistance are granted in accordance with an agreement entered into by the country in question and the Minister of International Relations and Cooperation (hereafter referred to as the Minister). Assistance granted is subject to such terms and conditions as may be agreed upon by that country and the Minister, acting in each case in consultation with the Minister of Finance.
5. Conclusion During 2014/15 the Fund implemented the following: • Appointed full time secretariat for a period of six months as part of the transitional arrangements. • Adopted terms of reference for Advisory Committee as well as Secretariat. • The Accounting Officer appointed the audit and risk committees. • Developed an operational framework and adopted DIRCO policies and procedures relevant to ARF.
