OECD ENHANCED ENGAGEMENT WITH SOUTH AFRICA

C O N F I D E N T I A L SECTION 01 OF 02 PRETORIA 000934 SIPDIS SIPDIS DEPT FOR AF/S, EEB/ESC, ISN DOE FOR T.SPERL, G.PERSON, A.BIENAWSKI, L.PARKER, M.SCOTT E.O. 12958: DECL: 04/29/2018 TAGS: OECD ECON EINV PREL SF SUBJECT: OECD ENHANCED ENGAGEMENT WITH SOUTH AFRICA Classified By: Economic Counselor Perry Ball for reasons 1.5 (b) and (d ) ¶1. (SBU) Summary: OECD Deputy Secretary General Thelma Askey briefed the Pretoria contact group on April 25 on OECD Enhanced Engagement with South Africa, one of five designated target countries with the possibility of leading ultimately to membership. South Africa has expressed strong interest, but OECD engagement will be an economically and politically challenging process. The OECD will continue to engage in dialogue with the SAG in this long-term process and work closely with a contact group of interested OECD Embassies in Pretoria. The Secretary General will visit South Africa July 15 for the launch of the Economic Assessment of South Africa. End Summary. -------------- Enhanced Engagement - Long Process -------------- ¶2. (SBU) OECD Deputy Secretary General Thelma Askey and Finland's OECD Ambassador Pertti Majanen gave a briefing on April 25 at the Finnish Embassy on the OECD's Enhanced Engagement (EE) program with South Africa. The OECD is working with Brazil, China, India, Indonesia, and South Africa through EE programs to support these target countries in the adoption of OECD practices, policies, and standards, also with a view to possible membership. The Reflection Group on South Africa's EE works under the chairmanship of Finland's Ambassador to the OECD and works closely with an informal contact group of interested OECD embassies in Pretoria. About twenty countries attended this second briefing of the Pretoria contact group, represented by a mix of Ambassadors and Economic Counselors. ¶3. (C) Askey gave a read-out on the SAG approach to OECD EE, highlighting the cabinet decision expressing commitment and support to the process and positive feed-back from important Ministries. Finance Minister Trevor Manuel expressed support to the team. He is the designated point person for the SAG, leading an inter-Ministerial team. The OECD team also received positive feed-back from Deputy Minister of Foreign Affairs Sue van der Merwe. Askey described positive meetings with officials at the Department of Trade and Industry, which sought help on priority setting and investment best practices. The OECD team described the EE engagement process as threefold: stock-taking ("SWOT": strengths, weaknesses, opportunities, and threats),preliminary analysis/conclusions, and dialogue. The latter step was started last March. The OECD has drafted a convergence paper for South Africa, but it is not ready for distribution. -------------- What's Next? -------------- ¶4. (C) Askey said the next steps would be for the OECD to continue to engage with Ministries on the EE process, encouraging Treasury to take a proactive role to make the most of EE. The contact group noted that other Ministries may be less engaged or supportive, such as Agriculture, Environment, Energy, Health, and Rural Development. Indeed, the "back bench" within interested Ministries or other Ministries not yet engaged may not be as committed to or as knowledgeable about OECD practices. ¶5. (C) The OECD team asked for help from the contact group to dispel the notion that the OECD is a "club of the rich." Rather, it is a group of like-minded countries seeking convergence on market and democratic principles and Qconvergence on market and democratic principles and practices. The contact group noted that South Africa perceives itself as a leader of Africa, the "South", the developing nations, and the G-20, which could militate against closer engagement with the OECD. There may be negativity and suspicion to enhanced engagement with the OECD from labor unions and the Communist Party, both powerful in South Africa politics and defensive of South African economic and labor policies. The German representative noted that there had been deterioration in the NEPAD/AU peer review assessments. ¶6. (U) Askey said the OECD Secretary General would come to South Africa on July 15 for the release of the Economic Assessment of South Africa, which will offer an opportunity to advance the EE process. PRETORIA 00000934 002 OF 002 ¶7. (C) Comment: Convincing SAG skeptics to support OECD membership may prove to be a tough task. However, even if the EE process does not lead to OECD membership for South Africa, both the OECD and the SAG are interested in active engagement and in continuing the process for its own sake. BALL