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.

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Enhanced Engagement - Long Process
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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.

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What's Next?
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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.


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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