at a dinner at the Dorchester Hotel
23 May 2006
Key issues discussed:
* African Peer Review Mechanism (APRM),
* Investment,
* Skills,
* Middle East,
* Iran,
Question (Richard Dowden, Director Royal Africa
Society):
The African Peer Review Mechanism (APRM) has now produced two country
reviews but the reports have not been published. Given that it is funded by
western governments, where does that leave accountability? Do you feel that the
reports should be published as this would give people a way of holding their
own governments to account?
Mbeki:
Yes I do think they should be published. Indeed it is part of the process that
they should be published. It is in the interest of the African countries that
they should be published because part of the argument for this peer review
system and its quality was that inevitably as African countries we get rated by
somebody. Inevitably whether we like it or not. So the best thing to do is to
do a very objective, honest, fearless evaluation of ourselves so that we can
then give the world a set of benchmarks to judge usâ¦because they judge us
anyway. So the publication (of the review reports) becomes an important part of
the process because at least hopefully they will tell an accurate story of
Africa which is sensitive to the actuality of Africa as seen by Africans.
Question (Michael Young, Businessman, with
anti-Apartheid background):
Can you explain to us what your wish list is for inward investment⦠in
addressing the issue of poverty and deprivation and what do you do to
facilitate (inward investment)? Have you a mechanism whereby you can
concentrate our minds on the sort of things that we can provide? What is the
process so that we can understand specifically what it is that you are
after?
Mbeki:
Tony (Trahar, CEO of AngloAmerican), can you answer that one? Iâm asking Tony
Trahar to assist me.
Tony Trahar:
The government recently announced the target of increasing the growth rate
which has been very strong around four percent, to get to six percent. I think
what one is looking for is for companies to have confidence to invest in South
Africa. We have created the foundations of stable economic conditions, a stable
currency hugely improved trade balances and foreign reserves. So I think all
the doors are open and a number of companies have invested we are putting in $5
or $6 billion over the next three or four years because we know that itâs a
very attractive country to invest in. We rate countries around the world on the
usual criteria we donât look at the military coups (laughter â a reference to
an earlier remark by Mbeki about a rating agency which had said there was a
50/50 chance of a military coup of South Africa in the future). I think South
Africa is seeking to attract expressions of long term confidence not just short
term capital inflows, depending on currencies and interest rates. A lot of the
principles have been well set out and are very clear. Whether the country is
communicating them effectively (is another matter). As a company we have an
investor relations department dealing with these dreadful analysts and
observers around the worldâ¦and we are constantly trying to communicate the
message. Whether they always understand it is a mute point and perhaps we in
South Africa need to up that emphasis more.
Mbeki:
For those who donât know, that was Tony Trahar, CEO of AngloAmerican. Michael
Young comes a long time ago from Goldfields. He knows South Africa very well
and I asked Tony Trahar to answer this question because I think Michael has the
answers, rather than the President. A lot of the UK corporations know South
Africa very well. They know these issues that Tony Trahar is raising about the
general conditions of the South Africa economy. When the people from Barclays
Bank came to talk about ABSA, naturally I saw them and they told me a story
about South Africa that I didnât know about the things that made them decide to
invest that huge sum of money in the South African economy.
So, my answer to the question that you posed would be: what does the British
corporate world say we should do, to facilitate investment in South Africa?
Because I think the British corporate world would know what it is we need to
do. Our Deputy President is coming here next week. She will talk to business
people and she will say that there are some particular sectors in which we, as
government, are interested. Tourism for instance, we need to build up the
tourism infrastructure. We are attracting far fewer tourists to the country
than we can than is possible. One of the things that we are trying to push very
hard is Business Process Outsourcing (BPO) training people and looking at the
costs of telecommunications. But I suspect that we would get a much better
outcome if we, the government, listen to the potential investor rather than the
other way around. But I am certain that in this country (UK) a lot of your
corporations are sufficiently familiar with South Africa to be able to say;
âyour tax regime is wrong, you take too long to process requests there is too
much bureaucracy, youâve done your minerals and energy but to get this licence
why is it taking nine months?â And I think we would get a better result from
that (rather than asking these questions).
Michael Young:
I think, Mr President, it is about the way you see the advantage to South
Africa. There is a limited pot externally and there are many takers from that
pot. I think there is a need to have a very clear, sharp focus for the South
African government and the South African economy as to what you want. And those
of us who are predisposed to be partisan in favour of South Africa need to be
given that steer. Itâs your economy, itâs the South African economy and we need
a steer from you.
Question from Sir David King (Chief Scientific
Adviser to the British Government):
Iâm Tony Blairâs Chief Scientific Adviser. The British government is, as you
know, committed to African development. My particular angle on this is the kind
of infrastructure that has created self sustained development. Part of that
infrastructure is skills development skills in engineering to provide clean
water and sanitation for large cities skills in medicine, nursing, basic
technology. And I see this as the big issue. Our estimate is that Africa is
losing net 100 000 skilled people per year to northern countries. We are very
keen to work with you and other African countries. We are willing and able if
you can see a way forward to assist in that process that will lead to self
sustained economic development in Africa.
Mbeki:
I would agree with you fully about the skills issue. As you would know Sir
David, the matter was discussed at the G8 Summit at Gleneagles last year and
some decisions were taken which relate to developing centres of excellence
around the continent which would then produce these various skills.
We need better utilisation of resources in that respect so that we donât
have little initiatives in a hundred countries but better concentration. I
donât know to what extent the recognition of the challenge translates into
actual practical activity. We have said that there is an important skills
question facing South Africa and the rest of the continent. There are certain
capacities in South Africa that other African countries donât have. So we have
got to do something to make available such space as we can make available in
South Africa to assist with regard to this. So one of the things we say is that
students from Rwanda, Eritrea and so on can come to South African universities
and institutes of higher education and pay the same fees as South African
students.
We (South Africa) have a fairly strong science base and have entered into an
agreement with the International Organisation on Migration (IOM) to help us to
find these African scientists who have gone into the countries of the north to
try and encourage them to come back and do their science in South Africa,
recognising that that kind of science base may not exist in their own
countries. There must be a way by which we encourage this process so that other
countries that have other capacities can engage in this kind of
development.
There is of course the outstanding question of poaching. So why donât you
(UK) then give us money to train larger numbers so that if we train five and
you take two thatâs ok. Then we can keep three.
Question (Foreign Minister Nkosazana Dhlamini-Zuma):
What does Sir David think we should do? Britain has an ageing population, we
have a young population. What is it that we can do together to use the young
population of Africa for our mutual benefit? We do train people but you take
them?
Sir David King:
Of course Iâm asking the question because I donât know the answer. But I do
think that the African Diaspora that you referred to is part of the solution
and creating institutions in Africa that will attract them back will create
massive advantages for Africans. I realise that this is not a process that can
appear over night. But it is an aspiration that can be moved towards if you
take a holistic attitude towards education. I mean north working with south.
And that is really our commitment. If we work to improve primary school
education, secondary school education, university education, all the way
through to those centres of excellence that you mentioned, then we can perhaps
create centres of excellence that will bring back the African Diaspora in the
way that China is bringing back highly experienced scientists from countries
like Britain and the US. And the benefits they bring from the 10 or 20 years
theyâve spent abroad are enormous. But it is going to take quite a long
time.
Paul Boateng (UK High Commissioner to South Africa):
Mr President and Dr Zuma, there is actually one practical thing that you can do
which I think would help. At the moment a 55 year old specialist consultant in
tuberculosis (TB) or malaria whether from the Diaspora or not, who wants to
make a contribution to Africa or South Africa who wants to practice in South
Africa, having spent most of their professional lives in the UK can only do
that if they are prepared to undertake to the government to work for five years
wherever the government sends them in South Africa. If they are not prepared to
do that they will not be permitted to practice medicine in South Africa. That
is a restrictive practice and this is not hypothetical, I have many such
examples. I know several doctors who want to work in South Africa but cannot
because of your regulatory regime. If you examine your regulatory regime and
remove some of these obstacles then you will get not just the Diaspora people
to come back, but also many other British people of whatever racial origin and
of good will who want to work in South Africa and make a contribution to
Africa. Itâs a simple thing, Mr President, which so far hasnât been
achieved.
Tony Trahar (CEO AngloAmerican):
I think business is seeing a very real problem getting regulatory clearance and
import approval for people who want to come into South Africa, in all fields,
not just the medical field to work as mining engineers, technicians and
financial people. I think there is a regulatory impedimentâ¦to attract skills
into the country.
Mbeki:
We discussed this regulatory issue in a cabinet meeting two weeks ago because
there had been quite a few reports about the immigration regulations and the
impact they have. We had quite a long discussion and I agreed with the
Department of Home Affairs that we should go through with all of this because
in many instances it appears that it wasnât the regulations themselves but the
processing that resulted in long delays and funny outcomes. But it is certainly
a matter to which the government is responding.
Question (Jonathan Friedland, The Guardian):
South Africa was the first, if not the only, country to engage in a voluntary
nuclear disarmament. What can we learn from that regarding the current standoff
in Iran? Secondly, given South Africaâs experience in bringing together people
who have been at war, what lessons can be drawn for the Middle-East peace
process particularly how one draws in Hamas (the Islamic resistance
movement)?
Mbeki:
I think most of us are agreed with regard to the Palestine-Israeli question
that the most viable solution is a two State solution. Second, there is the
âroad mapâ that got global endorsement as a way to move forward towards the two
State solutions.
Hamas and the Islamic Jihad approached us early last year and said that they
would like to talk to us. We agreed in principle to meet them and of course of
have to discuss this matter with the Palestine Liberation Organisation (PLO)
and the Palestinian Authority (PA) and the Israeli government. But our own view
was that it was important that we should meet them particularly Hamas. The
reason we really wanted to meet Hamas was because there was a constant demand
that was being made by the Israeli government that was being lead my Ariel
Sharon and being supported by the US that the PA must deal with the terrorism.
In our view this was an impossible demand to make because the PA didnât have
the strength to impose a âsilence of the guns.â You had to engage Hamas in
order to ensure the resumption of negotiation.
As it happens the meeting never took place at the level that we wanted until
the election process caught up with us, both the Palestinian and Israeli
elections. Nevertheless, this matter remained on the agenda. Subsequent to that
we said that we would honour the commitment we had made to Hamas to meet them.
But of course the elections had taken place and they (Hamas) constituted this
important part of the PA and the view that emerged as a result of discussions
particularly with the President Mahmoud Abbas was that it would be better if we
engaged the PA rather than just Hamas, the political organisation.
We are concerned about the possibilities of unilateral action on the part of
the Israelis and concerned about any position on the part of Hamas as the PA
which does not recognise this framework of a two State solution and therefore
the recognition of the State of Israel and a commitment to the resolution of
this conflict by peaceful means.
We shall probably be sending a delegation to the Middle-East quite soon,
both to Israel and Palestine which will then begin the process. I have made a
public commitment to visit both countries personally.
With regard to the issue of Iran, what we have
been insisting on is that Iran, like ourselves is very firmly committed to a
regime of no nuclear weapons. In all our interactions the Iranians will insist
that they are committed to this. They even say that the Ayatollahs have issued
a fatwa against the production of nuclear weapons. That is the level of
seriousness with which they take this prohibition of nuclear weapons.
Secondly, is the issue of the rights that accrue to the signatories of the
Non-Proliferation Treaty (NPT), the right to the peaceful use of nuclear
technology. And we believe that Iranâs rights in this regard need to be
protected. In part we are raising this because you get these whispers that Iran
constitutes a trial run, and if there is success in terms of prohibiting Iran
to do the things that are permitted by the Treaty [peaceful use of nuclear
weapons], that will then be extended to all other countries. So that you then
not only have a small club of nuclear weapon states, but then you also have a
small club of countries that can do anything at all in terms of developing
nuclear technology for peaceful purposes. So the Iran thing is not unique in
itself but is a pace setter for might happen in the future.
We have also said to Iran that whatever the evidence which is quite
difficult to come by with regard to their intentions to produce nuclear
weapons, there is a reality that you have to have certain confidence building
measures because there are many countries that believe that Iran has the
intention of producing nuclear weapons. And we say to the Iranians that we have
to respond to that concern.
We have also been insisting that the best way to solve the Iranian problem
is to keep the matter within the confines of the International Atomic Energy
Agency (IAEA) and let matters be resolved there. We are fearful that once the
matter goes before the Security Council the danger is that you will have
escalating actions taken by the Security Council which will lead to a conflict
that nobody should really want.
Issued by: The Presidency
23 May 2006
