T Mbeki: Transcript of media briefing on Cabinet Lekgotla

30 July 2006

Mr Themba Maseko, CEO Government Communications (GCIS): Good afternoon and
welcome to the media briefing. We have the Chief Executive of the country with
us; he is going to do a briefing about some of the discussions that took place
at the Cabinet Lekgotla over three days.

(Note: Topic headings corresponding largely to those in the Background
Document have been inserted in the transcript as follows to facilitate
reference)

Improving the capacity of the state
Accelerated and shared growth
Provision of housing and basic services
2010 FIFA world cup
Justice and crime prevention
African agenda and global issues
Macro social environment
Conclusion

Answers by President Mbeki to questions by journalists

President Mbeki: This briefing is about the July Cabinet Lekgotla, which
took place earlier this week, Wednesday, Thursday and Friday. As you would
know, there are two Cabinet Lekgotla. One of them is in January, some of whose
results were reflected in the State of the Nation Address and Government's
Programme of Action. The July Lekgotla does two things. First of all it looks
at what has happened with regard to the Programme of Action in the previous six
months; and it also looks ahead at what we need to do.

As usual, this particular Lekgotla was attended by the National Ministers,
Deputy Ministers, Provincial Premiers, and the Directors-General, both in
national government and provincial government and representatives of the South
African Local Government Association (SALGA). So it has all three spheres of
government, both in terms of the political leadership and the leadership of the
administration.

Overall, let me say that the Lekgotla was satisfied with the progress that
has been made with regard to the implementation of the government programme. It
looked at all elements: the economic cluster reported; the social sector
cluster reported; the governance and administration cluster reported; the
justice and crime prevention system cluster reported; and of course the
international cluster.

We had a look at all of those things and generally, I am saying, the view of
the Lekgotla was that indeed progress is being made with regard to the
implementation of the programmes that we have agreed.

Improving the capacity of the state

The Lekgotla agreed that we must continue to focus on the matter, which we
believe is critical, of improving the capacity of the state.

Naturally, as we would expect, we therefore looked, among others, at what is
happening at local government. And we are indeed very pleased that by this
month, that is July 2006, over 90% of the municipalities had completed their
Integrated Development Plans.

This is a very important planning instrument plus an implementation
programme with regard to local development at municipal level. It brings
together the plans of the municipalities, the plans of the provincial
governments and the plans of national government. And 92% of the municipalities
by this month, July 2006, had completed their Integrated Development Plans, so
that all sectors of government and all spheres of government therefore know
what it is that needs to be done in each one of our plus 280
municipalities.

That is an important example of the progress with regard to addressing this
matter of the capacity of the state. It is true that we also felt that we
needed to revisit some of those Integrated Development Plans to improve the
quality because in some instances it is clear that there was not sufficient
information and data available to ensure that the planning was indeed
accurate.

Another matter that arose with regard to local government relates to some
weaknesses which you would know that the Auditor-General had identified,
particularly in terms of municipal debt, billing systems and so on. It was
agreed that the Department of Provincial and Local Government, the National
Treasury and the Provincial Governments would come together to assist the
municipalities identified by the Auditor-General as requiring that kind of
support.

And to ensure that we impact properly on this matter of the capacity of the
State with regard to local government, the new mayors and councillors,
particularly in the municipalities that form part of Project Consolidate, are
currently undergoing targeted induction. This is aimed at leadership training
and capacity building, so that we ensure that this political leadership at the
local level is able to discharge its responsibilities, both in the context of
the Integrated Development Plans and in the context of the legal obligations of
our municipal authorities. We intend to complete that programme of induction
for the leadership at that local level by June 2007.

I am sure we have indicated this in the past, that part of the problem at
municipal level has been vacancies at certain senior management levels, as well
as in professional posts. So, we have been engaging that process, particularly
at national government to assist the local governments to fill these vacancies
and that work will continue. It was also agreed that the Department of Public
Service and Administration, the Department of Provincial and Local Government,
the Police Service and National Intelligence will work together with local
government to look at the effective implementation of the local government
anti-corruption strategy. We are very keen that we run clean government.

I am citing these examples to indicate further work that will be done with
regard to the challenge of ensuring that our system of local government is
sufficiently effective in terms of what it has to do.

Of course, as we have said in the past, we continue to have a detailed look
at the same capacity problem as it affects national departments. Again,
progress is being made with regard to that matter.

A lot of it has to do with vacancies that have not been filled. The
Department of Trade and Industry, for instance, has a lot of vacancies and work
is going on there. In fact, it has started to advertise so that they can fill
these posts that are vacant. What happens as a result of that weakness in the
capacity of the state is, for instance, that you would get small business
people who apply to the Department of Trade and Industry for support in terms
of existing programmes and then you find people faced with long delays in terms
of responses. So the matter of the capacity in national departments, we are
addressing it in the same way that we are addressing it at the level of local
government.

Just to give another indication of some of the challenges, it is quite
clear, and we have taken this decision before, that you need a comprehensive,
integrated National Health Information System. If somebody falls sick here in
Pretoria and has been attending the public health institutions and that person
then moves to Cape Town, it must be possible within the public health system
for the people who treat that person in Cape Town to access the medical records
of such a person.

So the establishment of a National Health Information System has been an
important part of improving service delivery to the people in this area of
health. But currently you only have 20% of the 440 hospitals that have
computerised health systems. And the figure is even worse for the clinics, only
five percent of the clinics have computerised health system. I am citing this
as an example of how, as one looks at the capacity of the state at the level of
national departments, you come up with information of that kind. Clearly, we
shall have to do something to speed up the process of ensuring that we do
indeed establish this National Health Information System. It is going to mean
the necessary investment in people, equipment and systems, to ensure that we
link up the public health system so that it is able to do what I have just
indicated.

This process of identifying capacity problems at national level is led by
the Department of Public Service and Administration. We are accumulating a
database of all skills shortages in national government so that we can approach
that matter in an integrated way. So, I am saying that generally the view was
that progress is being made with regard to various challenges which have got to
do with capacity.

Another issue that we looked in this context of capacity is relevant to
particularly economic activity. A critical area in this regard is the issue of
Environmental Impact Assessments. They are necessary, because all this
development that takes place has got to take into account the impact on the
environment, environmental impact assessments become critical. But if you do
not have the capacity to do them they then delay any development while people
are waiting for those assessments.

You will be aware that we had revamped the system and the new regulations
came into effect this month, July. But in terms of outstanding Environmental
Impact Assessment Applications, so that people can do whatever investment
programmes they have in mind, the Lekgotla agreed that we shall have to appoint
consultants and other experts/ people urgently to assist in finalising the
outstanding impact assessment applications, so that we remove this backlog. We
are quite convinced that once we have removed that backlog, the new regulations
which came into effect this month would be sufficient to ensure that that
backlog does not arise again and that the delays experienced in the past do not
arise again.

This particular intervention, to appoint consultants and others, even on a
short term basis relates in particular to provincial governments, many of which
did not have the capacity to respond quickly and properly to these applications
relating to environmental impact.

Accelerated and shared growth

The view of the Cabinet Lekgotla with regard to the economy was that it is
developing well. We noted all of the positive things that are happening about
investor and consumer confidence, rates of investment in the economy, and so
on. And of course we talked also about some of the challenges that might
emerge, for instance, arising out of the high prices of crude oil. But we
confirmed that the general direction of the government with regard to the
economy was correct, and that what was needed was a speeding up of the
implementation of the initiatives that we had already decided.

A critical part of those initiatives is investment in infrastructure. With
regard to the investment plans by the State Owned Enterprises, the Lekgotla was
of the view that work had indeed been done with regard to this and that we are
very much on course with regard to the detailed investment plans on ports, on
rail, on road, electricity, and so on.

The matter that I was talking about with regard to strengthening the
capacity of municipal government also has to do with this, because a lot of the
public sector investment programmes will have to be carried out at that level
and therefore we want to ensure that the moneys voted for infrastructure
development are properly utilised at that level.

We also agreed that Accelerated and Shared Growth Initiative of South Africa
(AsgiSA) has indeed become a national project. There is no sector of our
country that has not bought into AsgiSA, the trade unions, business and local
communities and so on. Therefore, the challenge there is to do whatever is
necessary to be done, to make sure that we speed up implementation of these
programmes in all elements. This also relates to the matter of investment.

We had a look at the issue of public transport in all its elements: road,
rail, taxis, and air. The Department of Transport is in the process of
completing a comprehensive presentation on this matter. But in the medium term
we have allocated R3 billion to improve the public transport system, which
would mean investment in the public transport sector.

Overall, then, the view of the government was that government’s economic
programme is correct and that we need to expedite implementation.

That, of course, includes the issue of addressing the skills challenge. In
that context we have opened a register for South Africans in the diasporas, the
South Africans who had left the country with skills, to be able to indicate to
them the available work possibilities in the country so that we can attract
those kind of skills back in the country.

At the same time the Department of Home Affairs will complete by next month
a new scarce skills immigration quota list, to say that these are the scarce
skills and therefore we should ensure in applying immigration regulations that
those regulations do not serve as an obstacle to attracting people with the
necessary skills to immigrate into South Africa. That will be published next
month. It is important because this is part of what the corporate world is
raising with government. They identify skills in their companies which are in
short supply, which they can not find in the country, and would then make the
necessary applications to say, we want the following people to come and work
with us from abroad. And then you can not treat those people in the ordinary
way. You have to find ways of expediting the processes of clearing them through
immigration so that they become available for those purposes.

With regard to interventions in the second economy, I think I should mention
only two things.

You would be familiar with all the funds voted for the Expanded Public Works
Programme. One of the problems relating to the capacity of the State that we
identified is that the Department of Public Works, at the national level, has
handled the Expanded Public Works Programme (EPWP) as a co-ordinator. This is
because the Expanded Public Works funds are essentially allocated to provinces
and municipalities, and so the national Department of Public Works served as a
coordinator rather than a driver of this very, very important process.

So there is a process of major restructuring of the Department of Public
Works at a national level to make sure that it should be able to drive this
programme. One result will be better coordination of the programmes, despite
the dispersal of the funds into these various institutions of government.
National Public Works must serve not just as a coordinator but as a driver, and
I am quite sure that we will produce the necessary results.

We have also said that we have to improve the capacity and the reach of our
micro-financing institutions. You are familiar the fact that there are all
these micro-finance institutions in government. But we want to make sure that
they are able to reach the people at the grassroots level who need that
micro-financing.

Provision of housing and basic services

In connection with development processes, we discussed the issue of housing
delivery and there is a particular problem here. It has to do with the
availability of land, some of it privately owned some of it in state hands,
some of it even municipal property, and you find that municipalities respond
differently to this and some of them dispose of this land, and so on.

So, we have agreed that it is important to deal with the availability of
urban land for housing in a coordinated fashion. And therefore the national
Department of Housing with other departments, is leading a process of
considering what mechanism we should establish so that we have this common pool
of land that is available, a pool that is known and controlled commonly. So
that, when we say that housing must take place and that the housing process
must also help to de-racialise the settlement patterns in the country, which is
handled centrally. Apart from achieving these other purposes, that availability
of land would also assist with regard to expediting the process of housing
delivery.

And, I must say, this is a particular challenge, for two reasons.

One of them is rural-urban migration which, as you would know, is very
strong in certain areas into the Johannesburg area, into Cape Town, into
Durban. So, as you do your housing programme, one of the reasons that the
housing backlog does not go down is because of movement of people who come into
these urban areas and look for land.

The other matter that we had raised in an earlier report, the Macro-Social
Report, which I am sure you have seen, is the reduction in the size of
families. Before, we would say we were planning on the basis of a house which
would have five people live in it. Because of the availability of housing, the
extended families are, in a sense, reducing. The children will get out of the
house of the parents. So as you were calculating on five people a house, you
suddenly have three because the others also want an additional house.

All of this emphasises the importance of speeding up housing delivery, with
the related challenges of ensuring that the programme for the provision of free
basic services is properly attended to.

And again, we believe that progress is being made in this regard. For
instance, the number of households with access to clean water increased from
59% in 1994 to 83% now. Or to put it in other words, the backlog has reduced
from 41% to 17%. So, progress is being made, and I am sure we could produce
similar figures with regard to electricity.

I must mention a matter that, when we do Izimbizo, gets raised by people
quite sharply in those areas that are affected. With regard to sanitation,
people really do want us to wipe out the bucket system. So, we made the
commitment that we would complete this process in formal areas by the end of
2007. And we will indeed do that. So we even had a look at the detailed figures
of how many of bucket systems still exist and what sorts of resources need to
be devoted to make sure that we meet that target of the elimination of the
bucket system by December next year. And, indeed, in this case progress is also
being made.

2010 FIFA World Cup

We discussed quite extensively the issue of 2010, the Soccer World Cup and
received a comprehensive report on the issue.

We are quite convinced that we are very much on course with regard to the
preparations for the World Cup. The transport planning I was telling you about
earlier, for which I was saying that already R3 billion had been made
available, also relates to this. It will ensure that the transport requirements
are met. Indeed, we are of the view that this would be one of the lasting
legacies of the World Cup, efficient and reliable and affordable public
transport system. Essentially that we are convinced that we are very much on
course.

As you would know, from the point of view of the government, we have a
number of Ministers that serve on the Local Organising Committee for 2010. In
addition, there is an Inter-Ministerial Committee with about 17 ministers that
is also focused on 2010, so that we are able to take care of all elements that
have to do with it, from Transport and Security to Tourism and Finance and so
on, so that all elements are taken care of.

We have also decided that the Presidency will have a meeting every month
with the Ministers who deal with 2010. In a sense it is an additional Cabinet
Committee, this monthly meeting between the Presidency and the Ministers
dealing with 2010, so that we are at all times in a position to respond
immediately to whatever problems or challenges might arise.

Justice and crime prevention

The Lekgotla also discussed the matter of crime and the challenge of
reducing crime.

We expressed our concern, particularly about what seems to be a rising
incidence of organised crime. You have seen the money stolen at Johannesburg
International Airport, flown in from London; banks robbed or shopping centres;
the shootout at Jeppestown and so on.

We are satisfied with the work that is being done by the Police Service and
National Intelligence, with regard to improving capacity to deal with these
kinds of crimes. I think that if you had followed this matter in the media you
would see the progress that is being made with regard to arresting people who
have been involved. For instance, you would get some crime committed and the
police actually being able to catch people they believe had been involved in
these crimes within a short time, in various parts of the country. It suggests
that they come together in these organised gangs. They might very well be
staying or living in different parts of the country, but come together for
particular operations. The capacity to pick them up in the country, wherever
they are, including the capacity to pick them up even as they are trying to
leave the country, indicates the extent of the work that is being done.

We agreed that it is necessary to do further work to increase the capacity
of the police, particularly with regard to intelligence, so as to be able to
get hold of the people involved in this organised crime. According to police
investigations, you would find that one person has been involved in crimes of
robbery with violence in 15, 16, 17 different incidents around the country.
That is organised crime.

The police are also working with Business against Crime as well as civil
society organisations, generally to look at this issue of contact crimes,
crimes of violence, to see what else can be done particularly to generate
community mobilisation and popular partnership, to be able to deal with these
crimes, because a lot of them, for instance the crime of rape, occur among
people who know one another, and a significant proportion even amongst people
who are related. So, it is clear that social involvement in the combating of
those sorts of crimes becomes important. The crime of murder is the same. A lot
of murders occur amongst people who know one another. So there is something in
the social setting that feeds what the police call contact crimes. We are
working at that so that we can strengthen the cooperation between the
communities and the law enforcement authorities, to deal with that kind of
crime.

We also discussed some of the issues that relate to the transformation of
the judiciary. It is the view of the government that we need to generate a
broad public discussion about this matter. We therefore have agreed that the
Department of Justice and Constitutional Development should finalise a White
Paper on the subject which would be available for public discussion, so that if
there are any legislative measures that would need to be taken, it would come
after that public discussion had taken place. So, later in his year there will
be a white paper on the transformation of the judiciary.

There are other things that, of course, we are dealing with in this area,
one of them being the treatment of awaiting trial prisoners. These are people
who have not been convicted and it clearly is not correct, simply because they
are in the same jails as people who have been convicted, that they should be
treated in the same way. So we are looking at what is it that we need to do, as
well as the challenge of expediting the process of ensuring that juvenile
convicts are held in places other than the regular prisons. It is just a matter
of ensuring that we build up the necessary capacity for that.

African agenda and global issues

The meeting also looked at our African agenda. In this regard I think I
should only mention three things.

One of them is that we are, all of us looking forward to the outcome of the
elections in the Democratic Republic of Congo (DRC).

As you know, we have been working with the Congolese on this matter for some
years. Even now we have a large deployment of our people in the Congo, who are
assisting with this. For instance, our people, South Africans are staffing all
of the Information Technology (IT) centres in the country, where the results
will come in and be recorded and sent to counting centres, and so on. The
entirety of that staff is provided by our people.

We believe that the election campaign has gone very well. It is true that
some people were killed, various numbers have been mentioned, such as 11 and I
have been saying that the number of people that were killed in this country
ahead of the 1994 elections was much, much, much more than what has happened in
the Congo. It suggests that the elections that are taking place today will
result in a proper reflection of the will of the people of the Congo. We will,
of course, continue to engage with the Congolese process, even after the
elections.

Similarly we are of the view that good progress is being made with regard to
the processes in Cote d'Ivoire. There are essentially two critical elements.
One is the process of disarmament and the second the process of the
identification and registration of citizens and residents, voters, and so on,
which was a central element of what caused the civil war in Cote d'Ivoire.
Progress is being made with regard to both of those things and we will continue
to engage the Ivorians.

Thirdly, the Sudan, we have agreed with the government of Sudan, both
President al-Bashir, and the first Vice President, Salva Kiir, that we should
institute a process of regular engagement between ourselves and themselves, to
look at all elements that bear on the implementation of the comprehensive peace
agreement and it is impact on all of the country. That would include the region
of Darfur. We are currently designing the process by which we would institute
that regular interaction. In reality, it is going to mean that from the
President downwards, we are going to have to visit Khartoum very regularly so
that we can look in detail at what is happening with regard to the
implementation of the comprehensive peace agreement and other elements that
bear on the establishment of peace throughout Sudan.

So we will do that. So I am saying that we are in the process of designing
the programme and processes to ensure that we engage that kind of cooperation,
which, incidentally, was requested by the Sudanese leadership. They want us to
work very closely with them to help them to implement the programmes on which
they have agreed.

The Lekgotla, of course, going beyond the African Continent, also paid a lot
of attention to the situation in the Middle East. It expressed very serious
concern about the violence taking place there and believes also that there
should be an immediate ceasefire and the other things can be attended to.
Essentially we believe that we should support the positions that had been taken
by the Secretary General of the United Nations with regard, in particular, to
the resolution of this conflict between Israel and Lebanon. So the Lekgotla
thought we should support the Secretary General of the United Nations with
regard to the proposals that he has made, an essential element of which is a
cessation of the hostilities now and then he can deal with other issues
later.

But we are also concerned that this conflict between Israel and Lebanon
which must come to an end must not result in our forgetting the conflict as it
affects Palestine. The violence affecting the Palestinian people has continued
and it is necessary to stop that conflict. We supported the view expressed by
the President of Palestine, Mahmoud Abbas that there should be formed in
Palestine a government of national unity, that there should be a cessation of
the hostilities and the re-opening of negotiations between Israel and
Palestine. This matter of Palestine should not come off the screen because
there is now this focus on Lebanon. The focus is important but it must not
serve to exclude this critically important matter of the future of Palestine
which in reality stands at the centre of many of the conflicts in the Middle
East.

Macro social environment

The last thing I should mention is the document, which I am sure you have
read, which is the macro-social setting of what is happening to our country ‘A
nation in the making: a discussion document on macro social trends in South
Africa’.

We talk about growth rates and what to do about this and investment in
infrastructure and so on. But what is happening to issues such as social
cohesion? What is happening to issues that have to do with gender parity? That
has to do with eradication of racism? That has to do with questions of national
pride and national identity? And we are hoping that there would be all of the
necessary response from the public to that document, so that we are, all of us,
better able to address these issues that have to do with social cohesion, that
have to do with the national reconciliation.

In that regard we thought it was quite clear that the 2010 Federation
International Football Association (FIFA) World Cup has inspired a lot of
interest and excitement among all or people, and that we should find a way in
the preparations for the FIFA World Cup to use it to improve that sense of
social cohesion, of national pride, of the unity of our people around positive
values, and so on. So, we will develop a programme around that.

But also thought that it is important to focus on our young people, the
national youth programme that has started; other initiatives that have to focus
on developing among the youth these positive community values, solidarity,
sense of national identity, of national pride, of service to the people and so
on. The Social Cluster led by the Department of Health are doing work on this
and we will have a look at this at the January Lekgotla next year to see what
else we need to do to encourage that sense of social cohesion, the new
patriotism, the elements of this kind which we believe are important for the
processes we are engaged in for the reconstruction and development of our
country.

Conclusion

Next week, the Ministers will be doing detailed briefings and should be able
to provide the necessary answers in more detail about all of these elements
that I have mentioned. As I said this Cabinet Lekgotla is not only about review
of the past but also impacts on the current budget process which would deal
with the medium-term expenditure framework for the period up to 2010. Some of
the work that is being done now would be reflected in the Medium Term Budget
Policy Statement at the end of this year and the budget for 2006/07. So part of
the importance of the briefings that will be given by the Ministers will be
that they will give you an indication of what is going to happen going
forward.

Answers by President Mbeki to questions by Journalists

Chairman: Thank you, Mr President we will open the floor now for questions
from members of the media to the President. I will request you to just tell us
who you are and give us a question.

Moshoeshoe Monare (Independent Newspapers): You are talking about the
vacancies at municipal level. I remember last year you talked about the problem
of attracting people such as engineers, to rural municipalities, attracting and
retaining them. I just wanted to know as to whether you deliberated on that
particular issue in terms of how, because it was not only on skills, but on
trying to move them to those rural areas.

Secondly, I just wanted to know, when you are talking about restructuring of
the Department of Public Works so that it become a driver of Expanded Public
Works Programme, have you also considered the same issue regarding other
departments? The reason I am asking this is that even the African National
Congress (ANC) National Executive Committee (NEC) was discussing the question
of the capacity of provinces in terms of delivering services and its
relationship with the national departments.

President Mbeki: The question of the relationship between provincial
government and national was not discussed as any particular problem. In part
this is because we have the Presidential Coordinating Council which brings
together national government and the provinces, and now also SALGA. So you have
a structure which is also governed by the Intergovernmental Relations Framework
Act of 2005 which prescribes how national and provincial government should
work. And that Presidential Coordinating Council and the institutions that have
now been put in place in the context of the Intergovernmental Framework
Relations Act we believe ought to address the matter of the proper coordination
between provincial and national government.

So, no, I mentioned this restructuring of the Department of Public Works
because of its importance with regard to ensuring that the Expanded Public
Works Programme works in the way that was visualised and has the necessary
impact in terms of job creation, in terms of providing the possibility for
people to be trained in various skills in building infrastructure, particularly
in the black areas, the rural areas, and so on. So I was mentioning that
department in particular because of its critical importance with regard to a
very important programme of the government that addresses the Second Economy,
namely the Expanded Public Works Programme.

With regards to the skills shortages at municipal level, including rural
areas, we have taken decisions about this already, and what I was reflecting on
was the implementation. For instance, through the Development Bank of Southern
Africa we instituted a process of attracting skilled people who would be
deployed in these municipalities, and the deployment of those people has
already started. And I should say, in that context, that it was the Development
Bank of Southern Africa (DBSA), because the DBSA is very much involved in the
funding of infrastructure at municipal level and feasibility studies and
therefore has an understanding of the challenges at local government. So they
know what kind of skill is in short supply. That is why we went via them, to
say they must participate in this process of identifying these skills. The
deployment of that kind of person is taking place in both rural and urban
areas, in the context of the shortages that have been identified through
Project Consolidate.

Terence Creamer (Engineering News): Referring to the industrial strategy
discussions that you had, we had the Harvard economists here two weeks ago,
saying that we can not just look at tourism and BPO but that manufacturing and
value added industries are vital to get growth going through six percent. Could
you just reflect on that?

Also if you could say how the skills quotas that are going to be identified
by Home Affairs differ from those that was gazetted a couple of months ago.
There was a quota list gazetted.

Lastly, during the week that the Doha talks were suspended and a week after
the Group of Eight (G8) really made some promises, did the Lekgotla reflect on
that at all?

President Mbeki: Well, on the last question, yes, indeed, our view is that
the Doha development round negotiations must be restarted, that what happened
last week is not the final word on this matter. And therefore our Minister of
Trade and Industry is engaging other players to ensure that we resume those
negotiations. We are quite convinced that the issues that the Doha development
round is addressing are of critical importance to the developing countries. So
our Minister of Trade and Industry, Minister Mpahlwa, is engaging his
counterparts on this. We are hoping that it would come to a point where these
negotiations are resumed. Of course everybody is concerned that the mandate
that was given by the United State (US) Congress to the US Administration to
conclude these agreements should not run out, because it would create a very
serious complication for reaching any agreement. We believe that it is
important to have a comprehensive global trade agreement rather than a whole
series of bilateral trade agreements, which is what, would have to take place
in the event that Doha does not produce the outcomes what we want.

Yes, we discussed the question of a comprehensive industrial policy. The
Department of Trade and Industry had been doing work on this and made a
presentation about that policy, which had been discussed in Cabinet earlier.
The view of Cabinet, which was the same view as taken by the Harvard
economists, was that more work needed to be done. In particular, having
identified the critical industrial sectors in the economy, we need to look at
everything that needs to be done make sure that we actually succeed. We
instituted the Motor Industry Development Program, the Motor Industry
Development Programme (MIDP), and it has worked and you have this very thriving
and growing motor industry. So, why are not we looking at similar interventions
with regard to other industrial sectors, manufacturing sectors?

So, yes, there was a presentation. A lot of work had already been done by
Trade and Industry on this. But it was a feeling, even in Cabinet before the
Lekgotla, that more work was needed, and so more work is being done to build on
what had already been achieved. I am pretty certain that before the end of this
year we would have that comprehensive industrial policy with the necessary
mechanisms to make sure that beyond BPO and tourism and so on, we are able to
generate the sort of development and growth that is visualised, with particular
emphasis on manufacturing.

Among other things it means that we have got to solve the problems about
import parity pricing and so on. But that is work in progress. Yes, a report
was tabled, but it was felt that, in the same way as Harvard economists,
independently, that indeed more work needed to be done.
Mathatha Tsedu (City Press): Mr President, on the Environmental Impact
Assessments, are you able to give us some details about what amount of
investment has been caught up in the backlog resulting from the inability to
implement the assessments.

Secondly, you are saying that soon you may actually be spending a lot of
time in Khartoum. What is the stumbling block in the implementation of an
agreement that was signed those many, many months ago, that now necessitates
this re-look that might see you spending more time there?

President Mbeki: Well, with regard to the second question, these are people
coming out of a civil war of twenty years and more. Beyond that, you have the
history of Sudan from a long time ago. This challenge of an Arab North and an
African South has been a problem long before civil war started. You know what
has been said, for instance, about even the practice of slavery within Sudan,
with the enslavement of people from the African South.

So you have a situation in which there is an agreement that has been reached
and that has to be implemented. But a critically important element to succeed
in the implementation is to overcome the degree of mistrust that has evolved
and developed over a long period of time. As you know, we were given the
responsibility by the African Union to chair the post-conflict reconstruction
committee to support the Sudanese. So, the role we would play is as
disinterested parties.

For instance, there is a debate that is going on in Sudan which they have
not resolved that of drawing the boundaries as a result of which you will say
this is the South and this is the North. It is proven very difficult to resolve
this matter which impacts on other things. For instance, with regard to the
agreement as it affects issues of revenue sharing, particularly the oil
resources, this is affected by where you draw this line. When you come to the
stage when the people in the South must conduct a referendum to decide whether
they stay part of Sudan or become an independent state, that also will be
affected by that the drawing of the line. Who is a Southerner?

If you look at the question as it has been debated, you can see that part of
the reason it is difficult to resolve is because of suspicions that derive from
the past. In a sense you need somebody else who, as I was saying, is
disinterested. There is nothing that would say that in the national South
African interest, this line must be drawn at this point. So, we can come at
this problem with a more objective view. And that is why they believe it is
important that we should be part of this discussion to help facilitate it and,
in particular, centrally, to overcome this element of mistrust. They asked us,
as South Africans, because both sides in this historic conflict have confidence
in South Africa. We have worked with both sides. We are working with both sides
and they believe we have the capacity to assist them to implement this, not as
referee, but as somebody else, who in any case in the context of the African
Union decisions, is supposed to be playing this kind of role.

The point I am making is that we should be playing a monitoring role, but a
more active role in ensuring the implementation of the programme.

With regard to the first question, I am afraid I cannot. I wish I could. I
was even trying to remember as you were talking, the numbers of applications
that were outstanding province by province. Some of them were quite
frightening. But I cannot even remember those numbers. That is part of the
reason we decided that, despite the new regulations, it is necessary for us to
put in additional personnel, even on a short-term basis, just to deal with the
backlog. Quite how much investment got delayed as result of these delays I
really do not know, but it really is quite significant if you look at the
numbers and some of the time - six years in some cases before an assessment is
done. So I am sure that this resulted in quite considerable slowing down of
possible economic activity.

Karima Brown (Business Day): Mr President, I just wanted to ask if the
Lekgotla was briefed on the round table discussions that were held between the
various stakeholders, Government, Business, Labour on some of the issues
relating to reform of the labour market, because you did say in your State of
the Nation Address that this is something you need to address as part of the
binding constraints. So, I just wanted to know if there was any input and how
far that process is.

The second question relates to the capacity of the state. You already
indicated the Department of Public Works will be overhauled. Will the dti in
any way be restructured or overhauled to deal with some of its challenges
relating specifically to addressing those binding constraints?

The third question relates to the establishing of a single Public Service,
again in relation to capacity. How far are we? Did Cabinet Lekgotla discuss
progress in that regard?

President Mbeki: No, no we did not discuss progress in regard to that
business of the formation of one Public Service, except that a report was given
that this is work in progress. So, it is a matter that is still being
discussed. We did not discuss it in any detail except to hear that work is
going on, which is what we wanted to happen.

There was also not any discussion on the issue of that round table to do
with labour legislation, because also that is work in progress. There was not
anything in particular we had to consider or take a decision about, so we await
the outcome of those processes.

Very detailed work had been done, led by the Department of Public Service
and Administration, on the restructuring and strengthening of the Department of
Trade and Industry. I think you would be familiar with the fact that under the
leadership of the previous Minister of Trade and Industry, Alec Erwin, they had
conducted a very thorough review of the functions of the Department and,
indeed, then restructured the department. When we discussed the matter we
believed that that restructuring was correct and there is no need for us to do
any other restructuring now. The critical challenge is to fill the empty boxes,
and there are many. It is very, very necessary to push very hard to make sure
that, indeed, the department is able to do what it needs to do within the
context of the restructuring that already had taken place.

So, there is a very active and a vigorous campaign now to find the people
who would occupy these various places. Because it is clear, as I was saying
earlier, that it has made an impact on the speed with which the department can
respond without long delays to the small business people who want access to
support by the department in established programs. So it is skills, a people
shortage.

I am saying that a lot of work is going on with regard to that. This is a
very big department, very critical for the future of the economy. When I
discussed this matter with the Minister of Trade and Industry, I said to him
and fortunately I was late. I said to him, you know what we need to do? We need
to look at MITI in Japan, and its history. It would tell us some important
lessons as to what we should do with dti. I am saying, fortunately I was late,
because he had already discussed this matter with his Japanese counterpart, who
had given him an account of the structures MITI and how it has driven the
industrialisation of Japan, international competitiveness and all of these
questions.

So, there is work going on. It is essentially focused on ensuring that all
of the various directorates at the Department of Trade and Industry have the
people that are required in terms of the organograms that they themselves have
decided. You have even a situation where, given the role and the place of this
department, it actually does not have a directorate that globally analyses the
movement of the economy, a directorate that would say, look, at the way the
economy is doing, in the way that Treasury does. It does not. So it is these
capacity problems that have to do with people, not so much the structure. So we
are really trying to push as hard as we can to make sure that we find the
people who have to do this work in these various directorates.

Carol Paton (Financial Mail): Could you please tell me, just in terms of the
transformation of the judiciary, does producing a white paper mean that the
Judicial Bills that are before Parliament are going to be withdrawn? If so, how
would that happen and are there aspects of these bills that you particularly
feel are necessary?

Secondly, on the capacity problems in the dti, could you explain why if the
dti is so important as you say it is, it took fourteen months to appoint a new
Director-general and would that be an acceptable time period for you?

President Mbeki: Well you must pose this question about the Director-General
to the Minister. I had been asking the same question as you are asking me. No,
you should pose that question; they might have some good answers for you.

No, it is not everything that has got to do with the judiciary that would be
going into the White Paper, because I am sure you know that the Minister of
Justice has been engaging the judiciary with regard to various elements that
have to do with the judiciary, some of which they agreed on.

For instance, a judicial college for training of people for the judiciary,
there is no disagreement about that. The only discussion that is taking place
currently has to do with more technical matters that relate to the budgeting
system, that relate to Public Finance Management Act and so on, its location.
So, it is not anything that is contentious and must therefore go into a white
paper. There is an agreement about the Constitutional Court being the apex
court in terms of our judicial system. So, there is no disagreement about that.
There are various things about which there is agreement in terms of the
interaction between the Executive and the judiciary and so there should not be
any particular delay with regard to that. Any legislation that would be brought
would cover these matters about which there would have been agreement.

It has been our view as government, which is why we requested Parliament in
a sense to suspend its own discussion on these Judicial Bills, that it is
better that we reach agreement nationally about all of these issues affecting
the judiciary. That remains our position and it is partly why we have taken a
decision to do a White Paper on those matters that are contentious so that we
bring everybody into discussion about those issues.

So, yes indeed, there will be matters that will go forward in terms of
legislation and there will be matters that will be held in abeyance pending
discussion that would arise as a result of the discussion on the White
Paper.

Sophie Mokoena (SABC): Mr President, on the Middle East crisis, you said
South Africa would be giving humanitarian assistance, when will that start? And
you said we would act in support of the United Nations (UN) Secretary General.
How would we do that? And have you engaged in discussion with other Heads of
States on this?

President Mbeki: The first thing would be to engage with the necessary
people, that would include the UN structures, to establish what is required and
what quantities, so that we can then generate the resources from government as
well as reach out to civil society in the country to help this joint national
effort with regard to the humanitarian needs. The Minister of Social
Development is leading us on that. As I say, the first thing would be to
establish from people who have been dealing with this question already what the
needs are and so on, and we can then do whatever we can to generate the
necessary assistance.

With regard to the contact with people in the region, you might have seen at
some point that a number of foreign ministers, particularly European, descended
on this part of the world: Lebanon, Israel and so on. It was good that
everybody was showing concern. But our view was that it is important not to
have too many initiatives because this could create crossed lines and all sort
of problems. So our support for the Secretary-General was to say that publicly,
in the positions we take, we would say: “Secretary-General, we believe that the
UN is correct with regard to this matter.” Therefore to the extent that we
would have to intervene anywhere to generate support for the positions of the
Secretary-General, we would do that. But there has not been any need for us to
do that up till now.

We will be watching what happens at the Security Council from tomorrow, in
terms of statements by President Bush and Prime Minister Blair. Normally we are
in regular contact with the Palestinians, with the Israelis, with the Lebanese,
with the Iranians with all these people who have been mentioned as relevant to
this conflict. We are normally in touch with them and indeed if it seemed that
as a consequence of the Security Council processes that it was necessary for us
to intervene in one way or the other we would, but it has not been necessary so
far.

Vukani Mde (Business Day): Mr President, I would like to take you away
slightly from issues directly pertaining to the Lekgotla. Last night I listened
to your Nelson Mandela Lecture in which you denounced quite strongly what can
be described as the greed and acquisitive nature of market economies but also
the social values that go with them. And, judging by the reaction of your
audience, and I think generally it stands to reason that a lot of people would
agree with some of the sentiments that you expressed in that lecture. For me,
it raises two questions.

The first question, I suppose, is a general conceptual or call it
philosophical question, and it is this: Is it possible to adopt and to harness
and attempt to grow market led economies while at the same time eschewing what
one may call market economy values?

And secondly, last week the NEC of the ANC debated issues related to this
and they decided in a decision that was reported by the media this week, that,
yes, it was okay for members of the ANC, but not only members of the ANC, but
for people in the public service as well, to be involved in private business
and I just wanted to find out from you personally. Do you not think that
perhaps the decision should have gone the other way? Are we not starting to
send mixed messages to people around this issue? Perhaps, for private citizens
who happen to be members of the ANC, it does not apply so much but certainly
for people in the Public Service, has the time not arrived for us to say? In
addition to the high standards to which we are going to hold you as Public
Servants, what we would like to do is that you must choose. You can either be
in the Public Service or you can be in private accumulation. If you are in
private accumulation, 'good luck', and we hope that you hold true to the values
what we seek as a society but if you are going to be in the Public Service, you
can not do that and still be in business. Because, quite clearly it seems to me
that the process of disclosure that we have are not adequate to prevent these
sorts of social ills that you are pointing to.

President Mbeki: Well, first of all I must say that this was not the first
time we have raised these issues. If you want I can give you a bound volume of
the speeches I have given on this matter in the past. It was not by any means
new. And that is part of the reason I referred to George Soros because it was
very interesting for me that a big financier like George Soros would raise
moral issues of this kind, to say you cannot have this system and just allow it
free rein. He says it produces a situation of what he called market
fundamentalism, and that this thing is wrong. So, it is not the first time that
we are raising this thing.

So, it is possible, I am quite sure, to have that market driven economy but
intervene in various ways that address negative outcomes that are consistent
with welfare positions {unclear} within the context of the capitalist
system.

You know this thing is not peculiarly South African. You see for instance
what that has gone on globally as a result of the collapse of Enron. If you
look at the discussion around the collapse of Enron and what it provoked, take
for instance work that we have already done here, the behaviour of the auditing
companies in the context of Enron, you would find that a lot of the discussion
around this from Johannesburg to Washington has been around: How do you
regulate this process of acquisition of wealth within this market-driven
economy in such a way that it does not have such negative consequences as were
represented by what happened to Enron?

It is a challenge, I think, which affects everybody and it is a challenge to
which we shall have to continue to respond. But I think it is very important in
the context of the development of our society that we should also develop a
common national view that there are ways of acquisition of wealth which are
impermissible. I know of instances, not only on the African continent but
elsewhere in the world, where the social expectation is that if you are a
Minister, by the time you get reshuffled out of Cabinet you must have
accumulated enough money, and if you have not people will say, but what were
you doing then?

I am saying that you want to ensure that you build a sense of understanding
nationally which objects to that kind of thing. I think we should continue, all
of us, to raise these matters.

This is not to say that people must not get wealthy. We want to say, “Where
you have as a social norm, this thing George Soros is talking about, the view
that to be a successful citizen, a prominent South African who appears on the
front pages of the Business Day, to be such a citizen it means you have got to
have money, that attitude is wrong.” Because if it becomes socially acceptable,
what you then find is a part of the problem that I know certainly, we had to
confront in the selection of candidates for the ANC in these last municipal
elections. You have people who actually, let me say innocently, who would
actually say: “I want so and so to be elected our mayor because once he becomes
mayor we will get the tender.” I am saying 'innocently' because somehow people
like that believe that there is nothing wrong with it, because after all, why
do you want to get into power just to be a mayor with a chain. You have got to
combat that all the time.

Now with regard to people in the Public Service involved in business or
whatever, I do not think it would be correct to say that only the poor must
come into the Public Service. I mean, I might inherit a farm from my
grandfather. Why should that serve as a prohibition in terms of my serving in
Government? Or indeed, I might decide, from the salary I get, to buy five
percent equity in some company. Why should I be prohibited? I do not think I
should. Unless as I say you make a general ruling, which I think would be very
difficult to sustain, that only the property-less shall serve in government. I
might have a house somewhere, I get appointed as a minister and the Department
of Public Works gives me a house here, at Bryntirion, so I come and stay there
and I rent out that house to Vukani Mde, which is being a business person. Why
should I disqualify the person?

No, I do not think it would be a rational way of approaching this. As we
were instituting the process of reporting by senior civil servants in that
register of assets, one of the Ministers said to me: “You know President, there
is a serious problem here, because looking at this register, in this particular
Department, and nobody has any assets of any kind. Nothing and there will be a
problem,” the Minister said to me, ”there will be a problem that will arise in
future. This person is going to say, you know I am now 50 years old, I have
absolutely no assets, what happens when it comes to retirement time, apart from
whatever pension there might be?” And he was saying to me, “You know this might
be part of what might entice people to some resources by illegal means.”

You cannot say that it must be a condition of Public service that you must
be poor. But you have to police it so that ownership of whatever assets does
not interfere with Public Service.

So I do not know what you mean when you say that people who are involved in
Government are also involved in business. There is nobody that I know in the
Presidency. Rev Chikane, Is there anybody who moonlights during the day to go
and run a business somewhere? I do not think so.

Take people who came in from exile, this has been a particular challenge to
people that were in exile for thirty years or so. They come back and the first
thing we said, as ANC, I was part of that: ”Comrades, let us avoid the gravy
train“. You are saying that to people who own absolutely nothing. If there is
anything at all they own, it is a debt. And then you say: “No, no, no, you have
got to keep the salaries down because we must not be accused of a gravy train“.
That is the principal reason we put in these special pensions. It is because we
have people who spent thirty years full-time, devoted to the struggle. By the
time they return, they are 55 years old, with a very short time to be working
anywhere, if they are going to get any work, and you say that in the interests
of avoiding accusations of the gravy train, remain in that condition. It is
clearly wrong.

So I think that we are sure, I do not know what is meant by people in the
Public Service running businesses. I do not know of anybody running any
business from the Public Service. There might be people who own unit trusts;
there might be people who, as I was saying, own five percent of some company or
something. What you need is to police that to make sure that it does not impact
on how they work and on decisions that they would take that would favour the
particular companies with which they are associated.

But I think a more objective look would show that we are not in a situation
where central Government has become a centre for the running of businesses. I
do not believe that to be true.

Ming Chen (Xinhua News Agency): As we know the corruption trial of Zuma will
be starting tomorrow. Some people even turn out to support Zuma. So do you have
a special message to your deputy ANC President, President Zuma and his
supporters? And the other question is: We have not noticed, police taking
action against the crime. But do you have the confidence and the determination
to make Johannesburg and Pretoria to be as safe as Paris, London or Washington
before 2010?

President Mbeki: You know, I do not know what you know of the incidence of
crime in Paris and London. You know London has got one of the highest
incidences of car theft in the world, worse than Johannesburg. I do not know if
you know that. I saw on one of the British television stations a report about
mugging, very wide spread, people getting mugged in London in large numbers to
steal their cell phones. If you check that, you will see that report. We should
not follow an example like that.

I did say that we discussed the question of improving the combating of crime
in particular focused on violent crime as well as organised crime. And I was
saying that yes, indeed, our view is that the law enforcement authorities are
indeed responding properly on this.

But there will be further intensified interaction with for instance Business
against Crime so that we improve general capacity. There are various things
that the Minister of Safety and Security would mention. For instance, the
companies that move cash, we have raised this thing before that they themselves
need to take particular measures to be able to ensure that it is not so easy to
bump these vehicles so that they roll over. It is not just a police matter; it
is the people who are handling this cash themselves. So, these are some of the
discussions that will be going on in order to deal with this particular
issue.

Now, with regard to the matter of the Deputy President of the ANC, no, we
did not discuss that matter in the Cabinet Lekgotla. It was not discussed.

Mr Themba Maseko: Okay ladies and gentlemen, I think we should conclude at
this point. Let me take the opportunity to thank you, Mr President, for making
the time to share your thoughts with the journalists this afternoon, but also
to thank members of the media for taking the time to come and be with us this
afternoon.

Issued by: Government Communication (GCIS)
20 July 2006