Monthly Archives: April 2019

Thabo MBEKI Interview: Transcript

Transcript of an interview  between President Thabo Mbeki and Ms Qaanitah Hunter of the Sunday Times. 

Thursday, April 25, 2019, Killarney, Johannesburg.

Qaanitah Hunter: Thank you for allowing us to have this opportunity. We really appreciate it.

There are two main reasons why we are here.

One is Freedom Day with South Africa commemorating 25 years since the end of apartheid. When you look at the country, are you overtly disappointed from your hopes that you had 25 years ago or are you comforted in some way?

President Thabo Mbeki: These choices you are putting, there must be some other choices … (laughter, Qaanitah Hunter: Option C)

There must be an option C.

Qaanitah Hunter: How would you assess the last 25 years?

President Thabo Mbeki: I think we, basically we, when we came into government we said our first task was the eradication of the legacy of colonialism and apartheid and then spelt out in various ways what that eradication, that legacy means.

So the fact of the matter, 25 years later, it is quite obvious that we have not succeeded, quite, in terms of the eradication of that legacy. And I think one of the things that becomes important to understand, which may be what we did not properly understand then, was the stubbornness of the thing that we inherited.

Qaanitah Hunter: Apartheid?

President Thabo Mbeki: Not apartheid, the construct. The South Africa we inherited in 1994, was started and created from 1652. It did not start in 1948. To change that South Africa into this South Africa with the legacy having been eradicated of colonialism and apartheid, that takes time.I am saying that it may very well be that in 1994, we visualized a kind of speed with regard to the eradication of that legacy which was unrealistic. So the basic task remains, what is it that we need to do to eradicate that legacy.

Now you got to naturally break that into its component parts.

So, I think that we are now in a better position today to plan for what we need to do, than we were in 1994, largely because of the experience that has been gathered. Let me give you a small example, it is obvious that one of the things that has to be addressed here, as part of that eradication of that legacy, is skills training, is really developing, giving the necessary skills to our people to deal with the current economic and other challenges. That skills base is not there; it is very weak. Too many people who are un- skilled and therefore are unemployable.

Now you will look at what we are saying in 1994, this is one of the matters that would have been raised, about reducing the levels of unemployment, dah, dah, dah! 

What happened in 1994? We then said in terms of the Constitution, the educational competence is shared between national and provincial. The matter about skills training is important, the technical colleges; we hand them over to the provinces, so primary education and the technical colleges were part of the provincial competence, and higher-education national. And budgets were handled like that. But it was a mistake, because what the provinces would then do, naturally for them, they would start planning in terms of money, expenditures and all that, start planning in the first instance for primary schools. They need so much money, so many teachers, whatever and then say, “by the way, there are the technical colleges”. You put those technical colleges on the back burner, it is a side issue in a situation where you say the matter of skills is central to our eradication of the legacy.

So when President Zuma took over, the government took a correct decision to say we must move those technical colleges to the national. Because I visited a number when we were in government and you found for instance, that the equipment on which the students were being trained as electricians, or whatever, was 15 years old, completely overtaken.

For instance, I went once to one of these technical colleges, the same day I visited one of these motor car plants and I asked them about their connection with the technical schools and they said, “yes, yes, yes we have that contact”. We take those people when they qualify they come here to work, many of them are working here, but we have to train them from the beginning because the equipment they are being trained on, the last time we had that equipment here was 15 years ago.

So I am saying that it was a mistake to take those colleges and give them as a provincial competence.

It was correct to move them to national and hopefully what national has done is to address those matters.

That is why I am saying to you that we are in a much better position to plan for a future South Africa than we were in 1994. There is enough experience about matters of the economy, education and all of that.

Take the question of the matter that was raised by the Minister of Finance, in the last budget when he said we have to do something about reducing the size of the public service, because it is costing too much. And then said, the way to do it is to allow for early retirement. So it is a natural process, so you do not retrench people. But in the end, a very important point is raised about that which is when we were in government, we said the same thing about teachers. At a certain point, that there was an oversupply of teachers. So in order to reduce the numbers, let’s allow this early retirement and therefore that kind natural attrition. And what happened is that the best teachers left. The best teachers left. And then after- wards we said ah, ah, ah! This was not the correct way. (Qaanitah Hunter: These are the ones with experience.) They are the ones with the longer experience and son, and therefore closest to retirement age and so they left.

So I am saying the point has been raised that when the government is saying this now what lessons have we learnt from that past. We may very well say let’s reduce the size of the public service, we may very well be correct, but how do you do it? You don’t want to lose now the very experienced civil servant who has been working for 40, or 30 years, or whatever, who knows the area and field of work very well because they know the challenges we have to respond to but you say no, no, no, please go away.

You are leaving me with very real experience, is that the correct thing to do?

Again, I am saying this is an example of…given the experience we have had over the last 25 years, we are in a much better position to say what is it that needs to be done.

Take the National Development Plan. Everybody in the country, as far as I can determine, agrees with the Plan. Everybody says this is the correct perspective, this is the correct vision. Fine! Then I would imagine that the next steps are, therefore, what are the practical steps we must take to implement this vision. Be- cause that is what the National Development Plan is, it is a vision. This is what we want South Africa to look like in so many years with regard to the economy, education, healthcare, and so on.

Fine, the country seems to agree but what is the plan of action to implement?

I think again, we are in a much better position now to elaborate a realistic plan of action given our experience, and our understanding of where we are today, what is it that we did in the past that brought us to where we are today, which worked or did not work, and therefore in light of that, that experience, what is that we need to do to implement this NDP?

I am answering your question in a very long way. I am talking principally about the task I think, that faces all of us as South Africans. We will have the elections next month but after that we need to say, the reality of the matter is that we said we need to build a non-racial South Africa. That is what the Constitution says. We are not quite there. What is it that we must do about that? We said we need to build a, the Constitution says, we must build a non-sexist South Africa. We are not quite there with regard to this. What do we need to do about that? I am saying all of these objectives which is what we need to after the elections, all of us as South Africans, to have a very serious discussion to say for instance, what do we do about this economy? The steps that have been taken by government are fine, like that Investment Conference, the Jobs Summit, those things are ok. But I am saying, in addition, those same partners need to sit down and say, very seriously, what is it that we need to do about this economy.

In the same context we need to bring into this equation the Fourth Industrial Revolution.

Qaanitah Hunter: So, the discussions if you take the economy, the problems facing the economy are known and vast. But for a long time to get people to agree on a solution or in the path, has always been the bone of contention because there has always been this disjuncture in society, along racial lines, along government and the rest of society, in the past nine years, so what do you think will be different this time around, after these elections, to create this cohesiveness which is necessary to bring everyone on board?

President Thabo Mbeki: What I am saying is that, I think that if all of us say as South Africans, there are certain things, certain outcomes that we had hoped for and worked towards during these past 25 years: eradication of poverty, radical reductions in levels of unemployment, levels of racial and gender-inequality, things like this. Now, all of us know where we are with regard to all of these matters, so let us sit down and say what it is that we need to do now for the next 25 years? So one of the things that must happen is that the rates of investment in the South African economy need to be increased. We need new factories, new whatever, that means investment.

Where has a discussion taken place about that? To call an investment conference and make pledges, that is fine. That is ok. I am talking about something different that we should sit down and say – the investors, the people who own capital into this country, are they investing? (Qaanitah Hunter: instead of going aboard). Instead of going abroad and so on.

If you look at the banks, South African banks, the level of risk aversion, so you and I might say, that it is very important to have higher rates of investment in the economy and yet you may very well find that when you go to the bank to say, “look I need to open a factory, can you give me credit”, the banks may be so risk averse that they may very well – I am not saying this is what they do – they may very well say we will give you that money on condition that we are 100% assured of the success of this venture. That is risk aversion.

Let’s sit down with the banks and look at that. You see, for instance, if you look at the debt to equity ratios in the banks. I was talking to an economics professor in the US – he is an American – he was saying that if you look at the EU banks, the US banks, the South African banks, the best capitalized are the South African banks (Qaanitah Hunter: Meaning they are sitting on cash?) And if you looked at the debt to equity ratios you would find that an EU bank might have 20:1 debt to equity. In South Africa it is 2:1. So he was saying, why this difference? To him it means the South African banks are being super, super cautious as bankers, to say that you don’t want…the levels must be very, very low if I am going to extend credit to you. Now that was his reading of the situation. I am not saying if he is right or wrong. 

But that is the kind of thing we need to sit down – government, the banks, and investors – sit down and say are we investing?

So that if the investors say look, we are very hesitant to invest because of the uncertainties, let the uncertainties spelt out and let’s discuss this. If they say, there is too much uncertainty with regards to policy matters, from government’s side, ok, let’s discuss those.

You know, I have said for many years, that part of the challenge we faced, since 1994 is that some of our South African investors, even in 1994, came to the conclusion that that transition from apartheid to democracy was too good to be true and therefore were quite convinced that, soon or later, something was going to go wrong. Therefore, you had to be very careful, very cautious about investing too much in case real trouble starts. Hence, this is a known thing.

Other big investors, well let me put it like this; we used to have an international economic advisory council, and these were big business representatives from around the world, and one of the issues they kept raising with us was why do the South African big corporations hold, maintain, unnaturally high levels of liquidity and they kept saying to us that looking at the South African economy as Americans, Europeans, Indians and so on, the levels of liquidity maintained by the South African companies are not normal (Qaanitah Hunter: back then and still now?) – back then and still now. And it is because of a view amongst some investors here who have said, that transition which people called a miracle, was as I was saying, too good to be true and something will go wrong tomorrow and therefore we need to be very careful not to invest.

If you look at levels of investment in research and development, I am talking about the private sector, it may also affect the public sector too, those levels of research and development in this country are very low. One of the consequences of that is that you will get – I am manufacturing shoes, so I am selling shoes – but there is someone else who is producing shoes much quicker and cheaper than me and they will export their shoes to South Africa and I will have to close down my factory because I cannot compete. There is not enough investment in research and so on to be able to keep pace with the rest of the world. This is a very open economy. You have to keep pace with the rest of the world in terms of technology and innovation. This is not happening now. One of the consequences is the deindustrialisation. Your manufacturing, if it does not keep pace with technological developments elsewhere in the world, your manufacturing sector will close down.

It is part of the same phenomenon. I, who operate this shoe factory, we are saying, this transition was too good to be true, I am going to say also there is no point my spending millions doing research, because I am not sure what the future holds.

Qaanitah Hunter: Was that notion of its too good to be true, was it almost validated by what is termed by the nine wasted years?

President Thabo Mbeki: Sure, so we now start doing wrong things. And indeed people who had been skeptical from the beginning are watching and say this is what we had been afraid would happen. It confirms the fears and suspicions we had had. If you see what is coming out of these judicial commissions, I am saying the people who were skeptical would say, we suspected these things would happen, that is why we were cautious.

These things that are now being reported, this misbehavior, this and that and the other, it results in this risk aversion on our part. The point I am making, this was just an example, we need to sit down after the elections really to do the very detailed thinking about various matters, what do we do, I was citing this ex- ample about investment – we are in the fortunate position I am saying, that we have 25 years of experience in terms of the efforts to transform this country, so building on this experience let’s sit down, the investors, the workers, government, everybody, this economy needs high rates of investment on a sustained basis. If you do not do that, all of you can dream about 6% growth rates, it is not going to happen without the investment. So let’s sit down all of us and discuss this matter quite frankly amongst ourselves.

Qaanitah Hunter: In Davos there was this kind of attempt to initiate this conversation and the Finance Minister coined the term “nine wasted years”, but it is something that the incumbent President has been saying on the campaign trail. Do you agree with this phenomenon of the nine wasted years, 2009 to 2018?

President Thabo Mbeki: No. I think you would have to look at matters in a more detailed fashion. As I was saying for instance, to you, the transference of the technical colleges back to national, was a correct decision, very correct. So we can’t say that was a wasted decision.

It may very well be that for instance, when you talk about the creation of two education departments, basic and higher education because of the imperatives around education, you may very well say that was a correct decision which would have been in the last nine years, when Zuma took over as President.

So now I think you would have to segment, to break down these nine years, if it is nine years, to say what happened in this area, this area, and the other area? Because you would also find that some of the problems which we experience now are older than nine years. For instance, if you look at Eskom, one of the big problems at Eskom which emerged was the drop in expenditure in terms of the maintenance of the power stations, in 2006, 2007, and so on. It started then. Off course it continues over the years, and gets worse and worse and worse until you have these power cuts and so on but it is not a phenomenon of the last nine years. The Kusile, or Medupe Power Stations – Medupe, they start constructing in 2007 and these two power stations, Medupe and Kusile, are way behind in time, way above cost (Qaanitah Hunter: and badly designed) I don’t know what is meant by badly designed, I really do not know what this means. What I know is what they did, Eskom, instead of saying, we need Medupe power station, it will be ready in eight years, it will generate so many kilowatts and so on and we are going to put out a tender and let people to bid to build this thing and in the end we have agreed, we have ‘Siya Incorporated’, we give them a contract to build Medupe. We give them eight years and we want a power station that will generate so much electricity.

Instead of doing that, they broke down the contract into segments, all contracted to Eskom so now where- as, if he had this, I think it is called a Ten Key Project, it will be his responsibility to make sure all the sub- contractors bring the materials on time, and they do all of that. Eskom took on that responsibility to co- ordinate all these different pieces and did not put together the machinery to do that.

So you have those two power stations, Medupe and Kusile – they generate electricity at higher temperatures han the other coal fired power stations at Eskom. But for some reason because of the lack of management of all these different contractors, you will get someone who is contracted to weld and they will come to weld but because the person who is supposed to be co-ordinating does not tell them that these power stations generate electricity at higher temperatures, so you weld and they finish welding and then you say, no, once the station works this thing is going to melt. It is bad management. So you have got to undo the welding and redo it. That doubles the cost and delays.

I am saying that these things then do not necessarily begin in the last nine years. So you would have to break down in order to say. nine wasted years. I think you would have to break down these things. As I am saying some of the problems at Eskom do not start in the last nine years. Sure, because of the time factor, they get worse, and worse and worse and erupt as a real crisis in the last nine years not because they started then. But it is obvious also that you have a lot of negative things like this during the nine years, you had somebody said to me 3-4 years ago, that when we left government in 2008, the civil service staff in the Presidency, that means President and Deputy President, was 300. By 2014/15 this had in- creased to a 1000. So when I asked him, but what are the 1000 civil servants doing, for the Presidency, from 300 to 1000, he says to me, President they are doing nothing. You get people who come to work and all they do is play games on the computer and then they knock off, go home and at the end of month they get a salary. So you have things got things like that, that happened in last nine years. (Qaanitah Hunter: pure patronage) Absolutely!

So, you expand the public service like this, it has nothing to do with effectiveness of state institutions. So you have some negatives like that, clearly, so but again I might come back to this thing, this is part of our experience over the last 25 years. If you look at these matters quite seriously, to understand – I was say- ing yesterday, or the other day, talking at the ANC stall at the Rand Easter Show, the ANC manifesto says the ANC has veered off course. Now that is a very serious statement, to say “veer off course”, instead of going this way, it goes this way. Now the ANC must ask and answer this question – why? It is not simply enough to state the question; why did you veer off course? You need to answer that question in order not to repeat that. So, I am saying that a proper understanding of what happened in the last 25 years and including the last nine would put us in a much better position to be able to plan for the next 25 years. I think this is a big, big challenge that we face after the elections.

Qaanitah Hunter: You said at the Rand Easter Show, that it was difficult to vote for the ANC. Why was it difficult to vote for the ANC? Why is it different now?

President Thabo Mbeki: No. I was saying that the ANC at some time developed a slogan at some point, that the ANC had a good story to tell. I am told that some people say that, I said it was Jacob Zuma who said that, I didn’t. I never mentioned Jacob Zuma, it was an ANC thing, “We have got a good story to tell”.

So I was saying it was not possible for me to go out to the South African population and say them, “the ANC has a good story to tell, vote for the ANC”. Because I knew that things were going wrong. These things which come up now in these commissions, you have got to see that things are going wrong. I was saying it would dishonest for a person like me, who knew some of what was going wrong, to go and say we have a good story to tell when I know for a fact there is no good story to tell. I couldn’t do that.

Qaanitah Hunter: What makes it different now Mr President?

President Thabo Mbeki: It is because now the ANC has said, even in its manifesto, we veered off course, wrong things happened, as a result of which they say, in the manifesto, there is corruption, loss of integrity, lawlessness, as a result of which the ANC going off course. Now that is a very important first step for the ANC to take to say it is making a commitment to the South African population to put it in their manifesto. They are saying to the South African population, look South Africans, we want to tell you that we admit that this is what happened and produced these consequences. So that is a commitment which then, says in the manifesto that we have to deal with these things. I am saying that is the very first step instead of saying we have a good story to tell to say, here is the story we want to tell. We veered off course with these consequences. We must deal with them. So it becomes possible for me to say at last the ANC has recognized its mistakes. Let’s vote for the ANC and that is not the end of the story when we cast our votes on the 8 May. The day after, we have got to say, now ANC, having admitted these things, let’s see what are we doing practically to correct these things? It is a commitment that has been made. The ANC will get elected, as national government on the basis of the manifesto, so you make a commitment to the population about dealing with these things. I say very good. Let’s vote for them and make sure they then live up to this commitment.

Qaanitah Hunter: How much has the change in guard affected your decision to campaign for the ANC, by that I mean, the incumbent has changed?

President Thabo Mbeki: It is not so much the change of guard. It is the policies that are being discussed, for instance, the December conference of the ANC raises a very important objective. It talks about the need for the renewal of the ANC. Now that is a big word. Anyone who is familiar with the structure of the ANC, when the organisation itself says, we face a challenge of renewal, now that is a very big policy. What does renewal mean? If you look at ANC conference documents, from…let us start in 1997 for instance, what you will find, in the President’s political report and in the Secretary-General’s organisational report, they raise this one question, that when Nelson Mandela addresses the ANC Conference in 1997, he says part of what is happening to the ANC is that we are getting people as members of the ANC who are not in the least any interest in accepting the value system of the ANC. They see the ANC as a vehicle to state power for self-enrichment. That statement – if you look at every policy statement since then, that statement, so the ANC for 25 years let us say, has recognised this phenomenon is that you are getting these members who have got absolutely nothing to do with an ANC value system, nothing to do with the commitment that we are here to serve the people of South Africa, no, no, no, they are in this thing to serve their own pockets. Now this thing has therefore been accumulating for many years so when you say to renew the ANC, it must mean to say let us look at our membership. Why are members of the ANC, why is it possible now, for someone with money to buy whole branches of the ANC. Whole branches of the ANC are owned by an individual. How does that happen?

Now your renewal must be to say, what do you do about those branches? Those people are carrying ANC membership cards, but they are not ANC. Hence you would find, naturally, people misbehaving. We have had this phenomenon. ANC has had this phenomenon for some time. For instance, at local government, you get this phenomenon of concerned citizens, concerned citizens how are agitating for service delivery of one kind or the other and you probe a little bit and you find that it is other ANC people who now calling themselves concerned citizens because they want to remove this Councilor. Because it is now my turn to become a Councilor. These people are ANC, but they are not ANC, they are ANC because they are carry- ing ANC membership cards. They don’t carry the value system of the ANC. So when the ANC Conference in December 2017 says we need a process of renewal, I am saying that is a very serious statement and the ANC has to do something to implement that renewal. It is a very tough challenging job.

For instance, the National Consultative Conference which met in November 2017, I think, they also talked about the same issue, about the renewal of the ANC and spelt out what they mean. For instance, they were saying, here is this old policy document, “Through the Eye of the Needle”, adopted 2001, 2002 or something like that – why are we not implementing this in terms of membership of the ANC, even in terms of leadership positions and so on?

So I am saying this is a very important commitment so since the ANC has taken this commitment in terms of renewal, it is therefore important for me to re-engage the ANC to help because we are no longer deal- ing with an ANC which is allowed to rot. You would remember the report given by the then Secretary- General of the ANC, Gwede Mantashe at the ANC Policy Conference in 2017 – it was called a Diagnostic Report, where he spelt out very correctly the rot that had taken place in the ANC. Now to renew the ANC means to deal with this rot. So I am saying in these circumstances, I say this is a very correct decision and all of us must support the implementation of this thing because the ANC remains to this day the dominant political formation in the country. If the ANC goes wrong, inevitably the country goes wrong because of the position it takes. So let us really work together, I am talking as the ANC, to do that renewal correctly decided upon by the December conference of 2017. In the context of the diagnostic report which had been done by the Secretary-General Gwede Mantashe, a renewed ANC that is driven by the historic values of the ANC means – an attack against corruption, an attack against the loss of integrity, and the fulfillment and implementation of the standard and old, slogan of the ANC and MK, “we serve the people of South Africa!” How do we get back to that, “we serve the people of South Africa!” and do that practically, be- cause part of what is coming out of these commissions is that for instance some people who carry membership cards and have done so for many years, are not there to serve the ANC, they are there to serve their own pockets.

Qaanitah Hunter: But that is there is this manifestation now in society as we accompany leaders on campaign trails, that you have one ANC that is probably embodied in the form of the face of the President and then you have another alongside ANC which is embodies state capture and the beneficiaries of state capture, who still hold high office in the ANC, including the office of the Secretary-General now. So that competing opposites are present in the same, so how does the party renew itself with these elements in the same leadership forum?

President Thabo Mbeki: Sure, exactly that is why I am saying, it was very important that the ANC Nation- al Conference takes a decision for renewal and it wass very important that the ANC in its election manifesto should say, that we went off course which resulted in all of these negatives. We must deal with these things. One of the things it must deal with is itself apart from the other things it must do to correct the things that went wrong because it veered off course, that includes looking at itself. That is where the renewal comes in. And therefore you see, if it does not do that, deal with its commitment that it has made to the population of South Africa, to deal with its problems, the ANC will itself die. So it has to ad- dress this renewal process, I am saying, in the context of that diagnostic report that was prepared by Gwede Mantashe. And therefore if there are people, wherever they are in the ANC, the ANC decides are not behaving consistently in a manner consistent with the value system of the ANC, the ANC must act. Otherwise the ANC cannot continue to say the people of South Africa must support us when it is carrying people who are doing the opposite of what is necessary.

I said at the Rand Easter Show that the National Executive Committee gives the Parliamentary lists to the Integrity Committee (Qaanitah Hunter: quite late) quite late and says, Integrity Committee look at these names. I said the Integrity Committee will report, I don’t know where that process is, but the Integrity Committee will report to the National Executive Committee and I said it is important for the ANC to under- stand this is not a private report to the ANC, it is a public report. It is a view of the Integrity Committee to the South African population because the South Africans have been raising questions about the lists. The Integrity Committee will respond. I don’t know what they will say but this will become public. So that NEC of the ANC, if it disagrees with the Integrity Committee, it will have to explain. 

(Qaanitah Hunter: to the voter?) Absolutely! That report technically, the Integrity Committee will report to the NEC, you gave us the lists, here are our comments. That is true, that’s all. But the reality of the matter because you went to the people of the country to say please elect these people to be your representatives in parliament you cannot avoid accounting to the people about those positions that will be taken by the Integrity Commit- tee. So if the Integrity Committee says Thabo Mbeki should not be there, remove him because he is a very bad fellow, he is a thief. If the National Executive Committee still keeps me in this position, it has to explain to the population why are you keeping a thief.

I am saying therefore, that we as the ANC cannot avoid acting on these negatives having made these commitments. It may not be an easy thing to do but it cannot be avoided. If we don’t do this renewal and deal with all these matters as we are discussing them, I am saying effectively we will be sentencing the ANC to death.

Qaanitah Hunter: Mr President are you shocked by anything that emanates from these commissions – the Zondo Commission, the PIC Commission, but particularly the Zondo Commission? Are you shocked by the extent of the rot, criminality?

President Thabo Mbeki: Off course, yes, off course, naturally. But I think it will be not honest to say that one didn’t know or suspect, at least suspect. But off course, I did not know many of these details but I think in principle, there are some things that are truly shocking like for instance, the Nugent Report.

The Nugent Report tells, what I call a frightening story. The reason that report is frightening is because it is clear there was a decision taken by some people, I am not sure who, to destroy SARS (Qaanitah Hunter: and systematically do that) and systematically went ahead to do that. Now SARS is responsible for managing, 95% or whatever of the state revenues. You destroy SARS, you destroy the state, you destroy this democratic government. And I am saying the thing was conscious. That frightened me, that shocked me. I did not know. I knew there were problems at SARS – which were being spoken about – revenue shortfalls, and things like that, problems, quarrels that we had never known, suddenly the Commissioner is not on speaking terms with the Minister of Finance, things like that. So you could see there were problems. But this thing, that Judge Nugent tells – the story he tells that there was a plan to destroy this institution (Qaanitah Hunter: the same you saw at the NPA, the same you saw at other …) we have to see what happens. From these judicial commissions, the one that has completed its work, apart from the Judge Mokgoro one is the Nugent Commission. And if you read the Commission report you see in the de- tail what was done to destroy SARS. We have not got there yet with regard to the NPA, with regard to these other state institutions.

What’s the explanation about the crisis at Eskom – we have not got there yet in my view. I was saying to somebody, if you look at, we spend quite a lot of time in Addis Ababa when handling these negotiations about Sudan, about this that and the other. At some point, the Ethiopian Airways management says to me, Mr President if you get a free day we will be very happy to take you around our premises to tell you about our airline. So indeed, I managed to get a free day and I went to see them. So they took me around their premises and explained and so on. They say to me, we are a state owned airline and we are profitable, there is not a single cent that comes from the fiscus to finance Ethiopian Airways instead we pay dividends to government. So they say to me President it is possible to have a profitable, functioning, efficient state owned airline. We do not understand why South Africa cannot do that.

So the point I am making really is that I think that this kind of work that was done by Judge Nugent on the SARS issue, I think we are going to need similar processes with regard to the state institutions.

If you listen to Robert McBride when he presented his evidence to Judge Zondo one of the things he raises is that Minister Nhleko worked with a number of police officers to defeat everybody within that sector – policing – who was fighting against corruption and he gives his examples. Whether he is right or wrong, I don’t know. But he is making these assertions that where you talk about state capture, corruption, in this sector, here are the examples. This process was led by a Minister and the following police officers were working with him. So I listened to this. It was very interesting. So we need more, let more people talk about this so that we can have a better view about what happened to policing. The kind of detail that was beginning to come out that you find in the Nugent Commission with regard to policing (Qaanitah Hunter: similar to the Sydney Mufamadi Report on intelligence) Yes, that report.

Qaanitah Hunter: Mr President, in light of what we are seeing in all of these issues, did you foresee any of this and is this possibly why you took the decision in Polokwane to stand for a 3rd term as ANC President ? Did you foresee these levels of lawlessness and sort of malfeasance creeping into the party and the state?

President Thabo Mbeki: Yes, you see as I was saying to you, that if you look at ANC reports since 1997, one of the things that is raised consistently is that the organisation is getting corrupted because the membership is changing because we are taking on board this kind of person. So by the time we got to Polokwane it was clear to me that we needed to do whatever we could to protect the ANC, to deal with this problem. You know in 2000, the ANC has a National General Council and that National General Council we are responding to this problem. We talked about the need to develop what we called a new cadre.

We are having this problem that we have been talking about of the ANC getting rotten, being corrupted from the inside. Let’s consciously now really now rebuild and focus on this new cadre. That is why you have had this document, “Through the Eye of the Needle”. It is part of the same process. So we are battling with this question, what is it that we need to do in order to make sure that the ANC does not get overwhelmed by these forces because all you need is R14. What is it we need to do to make sure we don’t get overrun by this sort of person who is an opportunist and it was clear to me certainly that as we go to Polokwane this is one of the things we need to make sure happens. What happens is that we present, as usual, the President must present the Political Report, which I did. That is the first item on the agenda of Conference, to discuss the Political Report. It is important for the ANC because it gives an opportunity to the members gathered there to discuss the politics of the previous five years, of the ANC, of the country, everything and to give some projections of the politics, where else do we want to go politically. It is a very important discussion.

But for the first time it never happened, the discussion, because there are people there who have been sent specifically to make sure that political report was not discussed and when you talk to them now, they say the reason we made sure the report was not discussed is because we knew if the Political Report was discussed, the outcome of the election would have been different. So it was better not to have the discussion.

So I am saying we knew, in the report, if you read it today, I suppose it is still on the ANC website, we raised these issues about the corruption of the ANC, all sorts of negatives. We said these are negative developments that have happened. We are preparing in five years’ time to commemorate the centenary of the ANC, and I say in that report, the problem with these negatives we might get to 2012 and find that we are the only people who are celebrating the centenary, the rest of the country stays away (Qaanitah Hunter: did that happen?) It did, it did, off course it did. Some people did not want that report dis- cussed. So the report was not discussed.

I am saying that when you talk to them later they say we made sure the report was not discussed because if it had been discussed the outcome in terms of the elections to take place would have been different.

So therefore we were quite conscious of the need to, even then, handle the ANC in such a manner that it does not self-destruct but there were people there who had other interests (Qaanitah Hunter: did the ANC self-destruct since 2007?) No it didn’t but the negatives that happened that results in the ANC now saying we need renewal…

Qaanitah Hunter: President, just two quick questions.

Former President Motlanthe says President Ramaphosa is not a messiah. One man cannot fix it all. How much do you buy into this concept of the New Dawn and what is your analysis that President Ramaphosa despite the rotten apples, so to say in the ANC, can fix the country?

President Thabo Mbeki: You see, President Ramaphosa in my view, was raising the concept of the New Dawn not to say, “a New Dawn has arrived”, but to say we need to work towards a New Dawn. Changes in the leadership effected in December, in the ANC in the first instance, give the possibility to aspire towards that New Dawn. I think that is what he was saying. Which is fine. I think Kgalema is quite correct to say he is not a messiah. He does not consider himself to be a messiah either.

Now, we meet President Ramaphosa and myself, we meet, we discuss things about what we do about this and what we do about the other. He is very conscious of the fact that he is not a messiah and of that he is not trying to bring about changes on his own. But you would have heard him speak about two things in public, unity and renewal. And he is mentioning this renewal thing for the reasons I mentioned earlier, that you have got to renew this ANC to deal with this negative thing that emerged. As I was saying, the rot that set in, in the ANC which Gwede Mantashe describes in his diagnostic report. He is very conscious of that and therefore the renewal that is necessary. So, I think we have to do this, all of us. I don’t think we can say, Comrade Cyril you have been elected President, go and do your thing. I think the rest of us have to intervene to help, including in changes in the ANC.

Qaanitah Hunter: Mr President, are you uncomfortable that the Secretary-General of the ANC is facing the levels of accusations in terms of direct corruption, fraud, misrepresenting his struggle credentials, for example.

President Thabo Mbeki: Yes, it is a worrying development. I think this is something on which the ANC will have to engage.

Qaanitah Hunter: How do you engage when your Secretary-General who manages the engagements is….

President Thabo Mbeki: Well, there is the National Executive Committee. He belongs to the National Executive Committee. The National Executive Committee surely must discuss that. You have a book that gets published and it says all of these things about your Secretary-General, (Qaanitah Hunter: But not only a book, there is criminal processes as well.) Sure. So, I think the National Executive Committee surely, it must have a look at that and say, what do we do about this? Is there any substance to these things? And do whatever they have to do to respond. They can’t pretend that this negative reporting about their Secretary-General does not exist.

Qaanitah Hunter: In an ideal world what would you like to see?

President Thabo Mbeki: The ANC must look at itself honestly. It is critically important that the ANC must look at itself honestly. It is important for the ANC and it is important for the country. You cannot have this dominant political formation in South Africa, in government since 1994, I think will continue as government. You can’t have that going in a wrong direction and hope that you can get South Africa moving in the right direction. You will not solve the problems of unemployment, of crime and all of this, if the ANC does not correct itself. It is critical for the future of South Africa, for our people. I am saying the ANC needs to look at itself critically, understanding its role, understanding its role, as a leading political forma- tion in the country and what does this mean? It does not mean therefore, that we will be the government because we will be elected. It means you have a responsibility to the people of the country. A rotten ANC cannot correct the problems of South Africa. So that is why it has to renew.

Qaanitah Hunter: Thank you very much.

HOW NOT TO DEVELOP AND GROW AN ECONOMY: VODACCOM AND ABSA

Unmasking of Vodacom and MTN racket reveals the unacceptable face of capitalism

  • Sunday Times28 April 2019BARNEY MTHOMBOTHI

The Competition Commission’s report on the high cost of data in SA, released this week, should be welcomed by all who want to stamp out all forms of corporate greed. In essence, the report is not telling us anything we didn’t know: we as customers have been suffering this diabolical treatment at the hands of these ravenous behemoths, and he who feels it knows it. We have known for years, for instance, that both Vodacom and MTN charge far more in SA than they do in other countries. The only surprise is that they have been allowed to fleece customers for so long.

What we didn’t know, however — and it came as a real shock — is the yawning gap between the charges. “Some of the operators charge six to 10 times [more] in SA than they do in other countries, with the data price gap widening rapidly over time,” said James Hodge, the commission’s chief economist. What was also astounding to learn is that the companies’ pricing strategy is geared at sucking even more money from the poor. That’s just intolerable.

What we also know is that these companies are making millions from data bundles that customers forfeit if they haven’t used them by the expiry date. It’s like a supermarket reclaiming a packet of cereal, pint of milk or loaf of bread because you haven’t been able to consume it by its use-by date. Utter madness.

The cellphone companies came into being at the very same time the new SA was born. Initially they were welcomed as saviours and soon thrived in a market that for years had been ill-served by Telkom, a long-standing telecommunications monopoly. But the arrival of these companies has not created the competition that was envisaged, and customers have therefore not benefited from the lower prices that should have accrued.

Instead of imbibing the ethos of fairness and equality in line with the spirit of the new democratic dispensation, they adopted old practices and mutated into an allgrasping duopoly that’s almost become a law unto itself. Cellphone companies are probably among the most unpopular entities in the country. Cries and concerns have fallen on deaf ears. Customers complain, among other things, of extortionate charges and dropped calls as a result of poor network coverage. A cellphone is not a luxury item any more, but an essential tool of communication, especially among poorer and more vulnerable communities.

It is unconscionable that these companies, scions of the new SA, should be at the forefront of exploiting the poor. They’re printing money and their executives are amply rewarded.

But we shouldn’t be too harsh on them. They’re not alone in the bazaar. The economic dynamics in the country seem to allow, if not welcome, such practices. Our banks, for instance, have the highest charges in the world. Canada comes a distant second. And we’re not expected to worry about it because it’s the free enterprise system at work.

When the ANC came to power its reputation was that of an organisation that was generally hostile to the free enterprise system and, what’s more, it had communists tagging along. It was feared that it would uproot a system that had endured under apartheid. But nothing of the sort happened. The ANC left the economy alone, and it, on the whole, thrived, especially under Nelson Mandela and Thabo Mbeki.

Probably in order to preserve its record as a responsible government vis-a-vis the economy, it seems to have decided on a hands-off approach even where action is necessary or advisable.

But capitalism is not the absence of government involvement in the economy. The US, probably the most free-market society on Earth, has some of the strictest antitrust laws. The government or its agencies are very quick to nip any anticompetitive behaviour in the bud. It was, for instance, during the Reagan presidency, perhaps the apogee of US free-market fundamentalism, that AT&T, the vast conglomerate, was broken up into smaller regional companies in order to foster competition in the sector. That move, however, has since been undone with mergers and acquisitions that have rebuilt the old behemoth.

The EU, that mother of capitalist systems, has also been cracking the whip against any form of anti-competitive behaviour. Google, the US tech giant, has in the past three years been fined a total of €8bn (about R114.4bn) for various offences, including abusing its market dominance.

Free enterprise does not mean that entities are free to abuse the system. There have to be rules that ensure a level playing field, and equal treatment for all. And in a country such as ours that is disfigured by dreadful poverty, businesses have to be extra careful not to be seen to be exploiting vulnerable sectors of society. It can’t just be profits at all cost. To use a cliché, they have to be good corporate citizens.

It’s surprising that, given the fact that the majority of voters are struggling to make ends meet, bread-and-butter issues don’t seem to have been uppermost in the current election campaign. Even the initial uproar over the ever-increasing fuel price, which has sent the cost of living skyrocketing, seems to have died down. Instead, we get worked up about land as if its resolution will be a panacea for all our problems.

The capitalist system — which seems under attack on many fronts, including here in SA — can only thrive if it’s seen to be inclusive and, more important, if it treats every participant — rich or poor — fairly and equitably.