Budget Speech by Dr Naledi Pandor, MP, Minister of International Relations and Cooperation on 20 May 2021
Topic: Building back better, to advance the legacy of Charlotte Maxeke
Members of the Executive
Guests joining us today
We return to Parliament for this Budget Vote debate following an unexpectedly tumultuous financial year. While we have made every effort to act on the priorities we signalled in 2019, much of our work had to be adjusted to focus on supporting government in the battle against the COVID-19 pandemic. Adjustments also had to be made due to significant budget cuts.
2020/2021 was our African Union Chairship year and we had plans to advance our policy agenda of a better Africa and a better world.
The key focus for 2020 was the priority of silencing the guns in Africa and advancing the economic participation of women. We were also committed to ensuring implementation of all the steps necessary to give effect to the African Free Trade Area Agreement and further implementation of the APRM.
Our budget for 2020/21 was R6 850 179 000 in April 2020; it was reduced to R6 314 968 000. The DIRCO budget for 2021/22 was announced as R7 038 531 000 in the 2021 budget speech and was finally reduced to R6 452 372 000 for the current financial year.
The funding pressures we continue to experience have caused severe cutbacks in key areas. Low levels of economic growth and declining investment in South Africa and Africa are a severe constraint on our international ambitions.
South Africa is fortunate to have a dedicated body of DIRCO men and women who work very hard to ensure that we do achieve our objectives and who tolerate significant sacrifices to ensure we succeed. We have done even more to focus missions overseas on economic diplomacy as we must secure more growth and jobs in South Africa.
Chair, we observed the positive character of DIRCO officials in the COVID-19 crisis. Our Consular Services branch ensured the successful repatriation of thousands of South Africans stranded overseas. The department’s efforts benefitted from support of Portfolio Committee members and from the general public. I wish to thank all who played a role in the repatriation efforts.
With respect to our AU Chairship, President Ramaphosa gave sterling leadership to the Bureau, the AU Commission and our continent. The AU Chair ensured a coordinated African response to the pandemic, developed an Africa Strategy and secured the support of African leaders through an open consultative approach. Agreement that Africa should use its own resources to support the African Centres of Disease Control as the scientific adviser on our pandemic response was a critical factor in Africa addressing the pandemic’s effects. Furthermore, the decision of the Chair to create an African Medicines platform as a web-based platform for equal access to health equipment, treatment and diagnostics was innovative and impactful.
The role of Chair went beyond the health response and also focussed on the economic impact of the COVID virus. The economic envoys appointed by the AU Chair and the Commission engaged financial institutions and government leaders to secure debt relief and debt standstill for indebted African countries so they focus on the pandemic and have liquidity for focussed socio-economic recovery. We have not yet secured new funding sources to provide investment for growth on the continent. We continue to engage multilateral financial institutions to provide such new funding and not more debt loans. While focussing on our COVID-19 response, much was done to continue our engagements with the globe, including support to the President’s annual investment conference. The objective of securing recovery funding is still being pursued by President Ramaphosa and other leaders. The Financing Africa Summit in Paris focussed on the urgent need for the IMF to finalise the matter of Special Drawing Rights and the issue of vaccine production as well as the call for the WTO temporary waiver of TRIPS.
I am pleased to indicate that even in the worst effects of the pandemic, the one feature that was prominently confirmed was the vital importance of multilateralism in global collaboration. Faith was restored in multilateral institutions that had been confronting negativity for several years. COVID-19 revived and affirmed global cooperation. The multilateral and other regional bodies enjoyed a long denied prominence and leadership. This reality has assisted our long-held belief that multilateral institutions matter and are a more inclusive and equitable global option for managing global affairs. We have continued to engage in the UN and to uphold the rights of the people of Palestine to statehood, those of Western Sahara to self-determination and the need for the UN and the AU to assist Africa to finally achieve continent-wide peace and focus on development.
Our 2019/20 Annual Report and that of 2020/21 show the progress we have made in meeting our goals and objectives. They show that while our strength is diminished by inadequate resources, we continue to punch above our weight in international cooperation. We will seek even greater impact in 2021/22. We will do more to support Ethiopia, Sudan and Egypt to negotiate an agreement on the GERD. We will also work closely with South Sudan and Libya to promote and support post-conflict reconstruction and finally much more will be done to achieve the gender agenda mandated by the AU adoption of 2020 – 2030 as the Decade of the Financial Inclusion of Women in Africa.
The impact of COVID-19 resonates strongly with the legacy we have inherited from Mama Charlotte Maxeke. She was a woman who believed that it is possible to build back better. In the unquenchable spirit of this great woman of Africa, it is imperative that we focus this year on building back better.
The negative impact of COVID-19 has clear directives for our future agenda. We will continue to promote the mainstreaming of gender perspectives in all our contributions in the UN and AU. Working closely with the AU special envoy on gender and the commission for peace and security, we will consult women leaders in post-conflict areas and work with them to ensure their full contribution to reconstruction and development in their countries.
We are pleased to be serving in the UN Peacebuilding Commission for 2021 – 2022 as this will help us contribute towards the maintenance of international peace and security just as we did during our term in the UN Security Council. Peace and security are extremely fragile or absent in many parts of the globe. The recent vicious attacks by Israel on Palestinian people and the forced removal of Palestinians from their homes are clear evidence of the absence of peace and security for millions worldwide. Sadly, we all watched as Palestine suffered more and more brutally. Greater effort must be exerted to achieve peace in the Middle East. Powerful nations must accept that we all depend on each other and even the most powerful will not achieve peace and security through unilateral actions and neglect of the poor, the oppressed and marginalised. We call on the UN and the Gulf Council to be more resolute in pursuing freedom for the people of Palestine.
Charlotte Maxeke was a bold agent of change. We must be as bold and determined in seeking concrete practical reform of the UN Security Council. I am pleased that early steps toward text-based negotiations are in motion in the UN. There is significant resistance to changing the status quo and we must continue to insist that change is urgently necessary. We need a representative and 21st century relevant UNSC responsive to today’s challenges. There were 51 member states in 1945; we have grown to 193, yet the most important mechanism of the UN remains untransformed.
Building back better also means we should utilise our global cooperation to secure Africa’s ability to effectively respond to complex challenges such as a global pandemic. We must increase our research and innovation capacity and be more ready to rely on our ingenuity, our products and our institutions in future. Charlotte Maxeke and all our great heroes and heroines believed in our innate abilities; let us use them to free ourselves from post-colonial dependency.
Honourable members, Africa lies at the heart of our international agenda. We firmly believe we should ensure Pan-African ability to determine our affairs and shape Africa’s future. We have begun a process of reviewing our Africa strategy in an effort to respond to the new realities on the continent through a new approach and consistent with Agenda 2063.
We have comparative advantages that can support and promote increased African success. We intend to build strategic partnerships and political alliances in a far more rigorous manner. We will strengthen bilateral relations and cooperation and build strategic partnerships with clear goals and objectives. We plan to begin in southern Africa, and to ensure that SADC plans are reinforced and concretely implemented.
Mama Maxeke did not limit her world to South Africa and as with our dialogue series icon, she was a remarkable internationalist. This is one of the reasons why we are robustly strengthening our trade cooperation and people exchange with Southeast Asia. We are thrilled that our portfolio committee recognised the exciting opportunities in the ASEAN formation and supported our entry into the Treaty of Amity and Cooperation of the ASEAN.
In August, South Africa will assume Chair of the SADC Organ on Politics, Peace and Security. The organ has been deliberating on the extremist attacks in Mozambique and ministers of the organ have developed proposals for support to Mozambique that we hope will soon be adopted by the heads of state.
2020 was our second year as a non-permanent member of the UNSC. The feedback we received indicates that that the role of South Africa in the Security Council was deeply appreciated due to South Africa’s principled position on issues on the council’s agenda. This relatively independent position, together with a compelling commitment to peaceful resolution of disputes and a fair and balanced approach in engaging with member states, allowed South Africa to play a bridge-building role in a divided Security Council. During our tenure, we continued to advance UN and AU cooperation on peace and security matters, especially with reference to Libya, the Sahel region, and the transitional process in South Sudan. We note with hope the positive progress in Libya and further actions on the comprehensive Agreement in South Sudan. DIRCO will remain closely attentive to support for post-conflict reconstruction in South Sudan and we are in constant contact with the government there. We also welcome the efforts by various organisations in South Africa to assist Sudan in the transition and constitution-making processes.
President Ramaphosa also worked closely with G20 countries, with our BRICS partners and the EU to continue supporting South Africa and Africa in implementing our international agenda. We also directed efforts at addressing inadequacies in our department. We have adopted an audit action plan, which is intended to support DIRCO in achieving improved audit outcomes. There is a lot of work to do before a full clean audit is achieved, but we are making progress. Our skills need enhancement in the finance division and we must make changes as indicated in various portfolio committee reports. Action has also been taken following reports on the New York land project. We have confirmed that we will act when public resources are not used according to policy and regulatory requirements.
The budget cuts I referred to earlier resulted in changes in our operations. This and the continued economic impact of COVID-19 have led us to review South Africa’s diplomatic footprint globally. In an effort to reduce costs while ensuring a presence throughout the world, we are in the process of closing 10 of our 122 missions during the course of 2021. The missions in closest geographic proximity will provide diplomatic and consular services to countries that no longer host our missions. We plan to utilise improved information technology services to ensure efficient consular support to our citizens in these countries. We also intend to appoint honorary consuls to ensure we continue to have a presence and that we uphold established relations. I have been most grateful for the understanding shown by my colleagues in all these regrettable actions.
In addition to reducing our mission footprint, we have made concrete progress towards finalising our organisational structure. We plan to have a department structure that does not cause us to exceed our budget allocation while also ensuring we attract and retain talent within DIRCO. Our senior management team has worked tirelessly to develop a blueprint that we believe will soon be ready for submission to Treasury and the DPSA. The continuing decline in our Compensation of Employees budget has been a challenge for DIRCO and I am hopeful we will resolve this particular challenge. I do believe improved allocations need to be considered for international work, but I am fully appreciative of the constraints to growth that we all need to overcome together.
It is due to the need to support the economic ambitions of our government that we have directed increased attention the promotion of economic diplomacy through all our missions. We are also working hard to secure increased trade opportunities with our major trading partners. China is one of our most significant trading partners. Honourable Chair would be aware that our two-way trade with Asia and the Middle East region grew from R45 billion in 1990 to a staggeringR984 billion in 2020. COVID-19 caused a contraction of 1,6% in our trade with Asia and the Middle East but, importantly, even in this time our trade with China continued to expand. In 2019, two-way trade with China stood at R413 billion and grew to R437 billion in 2020. The agriculture sector has led this growth. This has resulted in more jobs, more small and medium sized business growth, more small commercial farmers and enhanced trade exchange. Most pleasing is that trade is beginning to be a surplus gain for our exporters with an increasing number of countries in the region.
Added to this welcome progress are the improved trade figures for South Africa in the ASEAN region. In 2020, two-way trade between South Africa and East Asia amounted to R119 billion. I have asked our missions in that region to help identify increased opportunities in the massive halal market and in citrus and other commodities. The statistics on current trade indicate significant growth in the ASEAN – a fast-growing region with a GDP of over US$3.1 trillion and a market of over 650 million people.
This evidence of progress links well with our progress in BRICS, especially in the work of the New Development Bank. Charlotte Maxeke was a team player who sought to benefit all in her circle. She did not shy away from a challenge as shown by the support to her choir when stranded in the USA. Similarly, we have been steadfast advocates of a vibrant active collaborative BRICS. We are hopeful of expanded bank membership this year and fully appreciate the US$2 billion we secured from the NDB to assist us in our response to COVID-19. We also secured a billion dollars for our non-toll road infrastructure programme in 2020.
Our trilateral IBSA Forum with India and Brazil has been a glowing example of a new blueprint for South-South cooperation. Since its inception in 2005, the IBSA Fund for poverty and hunger alleviation supported over 30 development projects in 22 countries of the global South to the value of US$32 million. In 2020, the fund approved new development projects in several African countries, including Senegal, the DRC, Benin, Uganda, Sudan, Mail, Niger and eSwatini.
Our focus in international relations includes our promotion of the values and ethos of our Constitution through advocating for human dignity, democracy and equality. We continue to stand in full solidarity with the people of Palestine and will work even harder to persuade the African Union and the United Nations to robustly pursue freedom for the people of Palestine. The cruel bombings and killings of the innocent we witnessed in the past two weeks are a sad testimony of the cruel impunity the world has granted to Israel. The international community must stop this impunity. South Africa should support the International Criminal Court in the planned investigation of the abuse of human rights by the Israeli Government. We hope sanctions and other measures to show the world’s offence at this brutality will soon be evident.
The people of Cuba also continue to be victims of an unwarranted blockade that should be finally ended by the new US Administration. We will continue to support Cuba and work closely with that solid friend of South Africa.
A better Africa continues to be the key foreign policy focus of South Africa. Working closely with Trade, Industry and Competition, we will support implementation of the AfCFTA. We must do everything possible to ensure successful implementation of the free trade area. For many African countries, the AfCFTA means more productive capacity, economic infrastructure and new trade opportunities. We must ensure evidence-based planning as we implement projects for increased African trade.
DIRCO has supported countries that held elections in 2020, providing expertise via the IEC or relevant non-government partners. The support to the Central African Republic supported an election that many judged as free and fair.
While pursuing our Africa Agenda vigorously, we will also build on the excellent trade relations with the United States of America, the European Union member states and the United Kingdom. These are also significant trading partners for South Africa and we plan to grow the trade, people and cultural links through our embassies. Several ambassadors have drawn my attention to the inadequacy of our cultural diplomacy. I am told Black Coffee could fill Wembley Stadium and profile South Africa, but when he performs overseas there is an insufficient association to his South African identity. We have immense talent in a range of fields and could mount international cultural events with a diversity of talents worldwide. This is an area of diplomacy I would like to focus on more as we begin to free funds from other areas of activity. I also hope we can work closely with Arts and Culture on this aspect of our work.
Finally, honourable members, I wish to assure you that we are working hard to build back better as Charlotte Maxeke expected us to. We must provide skills opportunities to young people, enhance our innovation and digital capabilities so we rank with the best and ensure we continue the work to build a South Africa, Africa and world that will be of service to humanity and responsive to the most progressive human development goals.
ISSUED BY THE DEPARTMENT OF INTERNATIONAL RELATIONS AND COOPERATION
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