Television Interview by President Thabo Mbeki with SABC 2, Broadcast on Sunday, 5 February 2006

John Perlman: The President has delivered the State of the Nation address. Now it's time for the debates to begin.

Good evening and welcome to this special broadcast on SABC 2, and on our radio stations across South Africa. From the Union Buildings in Pretoria we're joined for the next hour by President Thabo Mbeki, as we explore and examine the vision he set out for South Africa in Parliament two days ago. Mr. President, welcome and thanks for this time.

President Thabo Mbeki: Thank you very much, John.

John Perlman: Joining me as well for this broadcast is Miranda Strydom, my colleague at the SABC, our political correspondent.

Mr. President, the economy is at the centre of every South African's concern. Now, on Friday you spoke about the Accelerated and Shared Growth Initiative for South Africa. I want to focus on the word 'shared'. Transnet is an institution right at the heart of everything we want to do in our economy, and yet the unions and management are at daggers drawn over the very fundamentals of what Transnet should be doing. Are you confident that that shared vision is one that everyone shares?

President Thabo Mbeki: Yes, I'm quite certain about that, John. Just to deal specifically with the matter that you are raising about Transnet, there's an old agreement between government and the Transnet unions, that Transnet needs to be restructured in order to do the positive things that it needs to do. This is critical for the future of the country because these transport issues very much central to what needs to happen. So there is agreement that restructuring should take place, the unions agree to that. The issue that arose was about specific negotiations that need to take place in order to effect that restructuring. And I'm quite certain that the matter will be resolved. There is agreement that there must be restructuring.

John Perlman: Aren't we going to run into those clashes with virtually everything we look to change?

President Thabo Mbeki: No, it is important that we should engage all of the social partners, we should engage all of the stakeholders in these processes precisely to avoid that. But I think more important, is to define the roles and the inputs that people make, so that you don't have a situation where everybody says government must do this and that. Because I think people also have to answer the question, what do they bring to the party, what do they contribute to this. And that can only be done via a process of interaction and discussion among all of the stakeholders.

Miranda Strydom: President, you talk about getting the social partners involved. Is there sufficient buy into this accelerated growth strategy?

President Thabo Mbeki: Well, as I tried to indicate in the State of the Nation address, we've actually had quite a bit of discussion with the unions, asked for inputs. I know for instance that even in the last few days COSATU made another presentation to the Deputy President, in addition to what they had said before. There has been that kind of engagement. There's been engagement with business about all of these matters.

For instance there's agreement about the need for us to act together to address a very serious constraint, this constraint of skills. And that requires government, that requires business, that requires the unions. That is why we set up this joint committee to deal with this thing to be able to move quickly, as agreed. The Deputy President also has had an engagement with women drawn from all sorts of organisations who came together to say, this is the vision of the women. She had a similar engagement with the youth. And all of them have engaged with this. In reality, as we said in the State of the Nation address about ASGISA, there's actually been quite a fair amount of consultation about it.

Miranda Strydom: But is there an understanding what ASGISA is, President? Is it GEAR number two? Is it a new policy document? What exactly is ASGISA?

President Thabo Mbeki: I thought I'd explained this.

There's one element of ASGISA which deals with infrastructure, social and economic infrastructure, the matter that John referred to for instance, about transport: rail, road, harbours, pipelines, airways, all that; and electricity, water, telecommunications. That's the infrastructure part, economic infrastructure part of it.

There's a social infrastructure part of it, which is the schools and the clinics, bulk infrastructure for housing, all of that.

You've got then the element thrown up by those programs, which is the skills issue, which will arise also in connection with the other element of ASGISA, which is the focus on particular sectors, particular industries: chemicals, the metal industries, tourism, business process outsourcing, agriculture. These specific sectors have become part of ASGISA. I'm saying that if you look at all of those you will see that clearly that one of the biggest constraints will not be money, capital in order to carry out those programs, but will be the people. For instance, in the work that has been done by the state corporations like Transnet, one of the things they've found is that because they've not done serious infrastructure work since perhaps the '70s, they've lost a lot of skills. They don't have project managers. They must get project managers in order to manage these major infrastructure programs.

So those are elements of ASGISA. I'm saying infrastructure development, social and economic; particular sectors of the economy that need to be attended to; the skills issue that needs to be attended to; and then capacity of government.

John Perlman: We'll get into some of those issues around skills a little bit later, but I want to ask you a question, Mr. President, about how we measure progress of various initiatives. You spoke about… in your speech the phrase you used was 'significant job creation', and yet six… 55% of the 658 000 new jobs created to date, September 2005, are in the informal retail sector. In other words, hawkers. Now you could argue that that's job creation, you could also say that's a reflection of a failure to create jobs.

President Thabo Mbeki: No, if you look at many economies around the world, that informal sector is very much part of the development of any economy. The reason that anybody is able to run a little shop in a township, and it runs successfully, is because there are people in the community who have got money to buy things from the shop. And that gets generated from somewhere else in the economy. So I think it's incorrect when you look at the economy of South Africa, the economy of Italy, the economy of wherever, to discount that sector of the economy which is called informal. It always is a very important part.

John Perlman: But don't we need a more comprehensive measure if we're going to look at an initiative like ASGISA in two years' time and say, where have we got? I mean, to factor in for example the extent to which people can actually make a living from that economic activity, shouldn't that be the definition of a job?

President Thabo Mbeki: Sure, I'm talking about these various sectors of the economy which we've identified.

Just take one of them, what is called business process outsourcing, which has to do with what's been happening in many countries, the most outstanding example being India. Big corporations around the world hand over the computing work, the maintenance of accounts and all of this, outsourced to some companies in India. So this work is done there, in call centres and that kind of thing, and that creates lots of jobs. Major corporations have been saying, South Africa is in a very advantageous position in terms of, for instance Europe, because we're on the same timeline, and we could be doing that work here so that by the time they get up in the morning to go to work we report back from here.

When we say let's develop that sector of the economy, it will create jobs. When we talk about issues of import parity pricing, and mentioning particularly steel and chemicals, it's because we want those sectors of the economy to grow. The country is producing the chemicals that would go into further production. The country's producing the steel that would go into further production. But we are buying those materials here as though we're importing them, which then suffocates the growth of those sectors of the economy. So you want to deal with that import pricing issue, in order to make these inputs affordable, here, that will result in the growth of the metals and metallurgical sector. It will result in the growth of the chemicals sector, and therefore the necessary jobs.

John Perlman: We'll get back to ASGISA, we're going to have to get used to that, the Accelerated and Shared Growth Initiative for South Africa, quite a mouthful. But I want to talk local government. It is very much on people's minds because of the election. You remarked on that yourself in the State of the Nation address, you said 45% of South Africans are satisfied with the service they get at local level. Now our SABC reporters are travelling around a lot to different areas, they often come back and say that people draw a link between poor service delivery and corruption. You've drawn that link yourself and spoke out strongly against corruption, yet in KwaZulu-Natal the ANC in that Province has put someone involved in the Travelgate Scandal at the top of their list. Do you think members of your own party misunderstand how serious you are about this?

President Thabo Mbeki: Well let me say John, you know that during the year 2005 we changed the izimbizo Program, because before that, what we were doing was going to communities and asking the communities to come and raise whatever issues. We decided last year that we need them to take the next step. We've heard what the people said. We've heard what their complaints are. We need therefore to look at the actual functioning of the system of local government to see why local government was not doing the things that they were expected, why the people are complaining.

So what we did in going around all the provinces was to talk to the mayors, the municipal managers, councillors in charge of particular portfolios, as well as ward committees to get an understanding of what the problem is.

And fundamentally the problem is not a problem of corruption, it's fundamentally a problem of lack of capacity. You see you run a town with no engineers who are able to run your water system, your sewerage system and it will break down. Senior managers that you need to get this thing moving aren't there in many of these places, so there are problems of that kind. Not corruption.

John Perlman: The corruption comes into it. I mean, are you not uncomfortable giving how strongly you've spoken about it, you referred to in your online letter to the ranks of our movement being corrupted by a self-seeking spirit… you clearly feel passionately about this. Someone involved in corruption could well be the mayor of a prominent municipality, six seven months after the scandal.

President Thabo Mbeki: You see, I am not underestimating the importance of corruption , but I am saying, fundamentally the problem of delivery, of weakness in delivery, arises out of that capacity question which we are trying to address.

But most certainly the issue of corruption is an issue that we've got to attend to. It does worry me a great deal, because it seems to me that there are many people who think that they should come into government for purposes of self-enrichment, that this is one of the easiest ways to get hold of money. And it is therefore something that we've got to attend very closely.

When we approved the Municipal Finance Management Act we removed the task of awarding tenders from the councillors and gave it to the administration, so that these politicians who sit there as councillors are not the people who should decide on tenders. It should be somebody else who is there as an official is not elected and thus isn't subject to those sorts of pressures that these local politicians would be.

It is an important question and I haven't discussed this issue of the one you that you referred to, in KwaZulu-Natal. I haven't discussed it either with the national list committee or the provincial list committee as to what happened where, but most certainly it's a matter that we have to combat very continuously.

Miranda Strydom: But President, just to come back to the issue of the skills, that you say there is not enough capacity especially at the local government level, if we take for example the EPWP, the projects… do you think it is a sustainable solution to this job creation, because you find a situation as you mentioned, building roads, schools, clinics… is it sustainable? Because what happens then to those who have been… or in after the construction phase , what happens then to those who are employed in that position?

President Thabo Mbeki: We are trying to address a number of things in the Expanded Public Works Programme, one of which is the infrastructure programme. Roads must be built and schools must be built and clinics must be built, and all of that, and maintained. So whatever else happens, that infrastructure has got to be put in place. That must be one of the outcomes of the Expanded Public Works Programme.

The second thing I we are saying is that while people are employed in that Public Works Programme, it also serves for purposes of poverty alleviation, because while they are working there they are paid, these are the people who were unemployed yesterday and now they've got a job.

But in addition to that, while they are working there they need to be given training,. Some of it, a lot of it, is just adult basic education, because you are getting people who are illiterate, so they must get that other basic education to be literate, to be numerate plus to get skills. This is one of the matters on which we should focus, so by the time you've finished whatever particular projects, you have somebody who has skills now that are marketable. You can see for instance, with this major infrastructure programme that we've announced, there is clearly going to be the need for more workers, but modern construction doesn't just require a "daka [cement] boy", it needs people with some skills in construction.

So the Expanded Public Works Programme must really focus on the matter of the provisions of these skills, so that these people are then able to get more normal jobs as it were, rather than this kind of job.

John Perlman: Skills and capacity in municipalities, you highlighted it yourself, now the South African Institute of Civil Engineering had this to say, they by the way point out that 74 out of 231 of our municipalities have no civil engineers, no technologists, no technicians, which is alarming for things like water supply and at safety, but this is the explanation Mister President, and I'd like your response. They say policies developed over the past 12 years relating to early retirement, affirmative action, employment equity etcetera have seen large numbers of senior professionals leaving local government and other state organizations. Did we perhaps go too quickly on the equity stuff on the one hand advancing a relatively small number of black people at the expense of a much larger number of black people who depended on their services?

President Thabo Mbeki: I don't know John. I think that I would need to have more of a closer detailed look at that to see whatever report that assessment is based on. We have for instance said, as you know, that indeed we would like to get even retired people to come in and fill the skills gap.

That's why I was announcing in Parliament that the first batch of 90 will be deployed in May. These are names and CVs supplied, for instance, by the Freedom Front and other people who say that here are people, many of them retired, not pushed out of a job, but who are ready to work and they are ready to come back.

No I don't believe that the decline in these numbers has being caused by that. You know the history of South Africa. The Lekoa Bantu Municipal Council did not have civil engineers when it was there during those Bantustan years. So it's there now and needs those people. So I don't think it is so much a matter of attrition in terms of people who are there, but it's the expansion of the system of local government to cover all of the population groups in South Africa and that's put the pressure on the skills issue.

John Perlman: But you're sending a strong signal, aren't you, by talking about those retirees that are coming back that you want to draw on all the skills of all South Africans if you can. Presumably in what, mentoring roles, that kind of thing?

President Thabo Mbeki: Well some of it is just straight forward because there isn't a civil engineer as the civil engineers are saying, so we put a civil engineer there. But some of it indeed is mentoring, because in some municipalities, I know Kroonstad for instance, they've got young engineers there who recently qualified and most certainly would be able to do with somebody more experienced to mentor them and to help develop them and so on. And that goes for the managers too.

You need people with experience to come and assist them, to help them develop, to sharpen their skills, so it would both be a straightforward employment, but also strengthening the capacity of people who might be there already.

John Perlman: 37% of our managers have less than five years experience in local government, so I'm sure that would come in as something very valuable

Miranda Strydom: President, if we can just go on now to talk about the economy. , There's a very sunny perception of the South African ecomomy. We've heard people talking about the economy firing on all four cylinders. The Economist actually said it's a very sunny perception. But there also is concern about the public/private investment into or economy; something like 15-16% of GDP. What would you like to see Business doing, as one of those that you mentioned during your Sate of the Nation address? Do you think they would be able to participate a little bit more in achieving those targets?

President Thabo Mbeki: Well as you see we are saying that a principle driver in terms of economic growth with the regards to the 6% plus that we must reach must be investment in the economy.

We've got to raise the rate of investment in the economy, by both the public and the private sectors. So the government has indicated what it is going to do with regard to it's own investment programmes and I must say that would include better supervision of capital expenditure by the provinces. Because this has been a problem that even when funds are available for capital expenditure you get under spending.

So the government has said this is our infrastructure investment programme for the next 3 years, these are the sorts of sums of money. But the people who are going to invest in the chemical industry or the engineering industry or business and process outsourcing, that's the private sector.

So we are engaging them on each of those sectors to say: what are your plans? What are the constraints? What is the problem?

You get, for instance, responses from some business people who say well, it's true that we've got capital, we can invest, but we don't know to invest in what. So all right, let's sit and work together on those things. When we talk about, for instance, reducing the price at which manufacturers buy steel, we should be able to say we'll get these prices down so that people don't buy steel as though they are buying the steel in England when it is produced here. So, now with this cheap steel available, what are you going to do?

So, we are engaging the various sectors because that's the only wayto understand their business plans and to understand whatever constraints they may have with regard to undertaking this new investment.

Miranda Strydom: Just talking of constraints, President there is an idea that the labour laws may have to be changed. Is this one the constraints the President sees needs to be addressed?

President Thabo Mbeki: No, you will remember of course that a lot of this is negotiated. Labour legislation goes through Nedlac, so government, business, unions are involved when those negotiations take place and we want to respect the fact that those agreements are not unilateral government things. We believe that the framework is correct, but also have then said but we need to look at the impact of the entire regulatory framework on the person who wants to start a small business.

And it's not just a labour thing, - let me give you a specific example. There's clearly a serious problem in government in terms of making environmental impact assessments. You get situations where it will take three, four, five years for the government to do an Environmental Impact Assessment and during that whole time the person wanting to invest can't move, because the assessment is not done. It's a government problem.

So I'm saying there is a whole variety of things that you want to look at to say what are these things that make it difficult for people to open a business, employ other people, help to grow the economy and you must deal with those, and it can't just be labour issues.

John Perlman: Skills, we keep coming back to that. Now there's a big push to raise skills levels. At the same time, according to a study by the University of Stellenbosch, spending on higher education as a proportion of budget spend has dropped by 17%. In five years universities' share of education expenditure has fallen from 12.5% in 1987 to less than 9% in 2003. Shouldn't the trend be moving in the other direction? Are we failing to invest in what could be part of our economic strength?

President Thabo Mbeki: One of the things that we are doing is to re-equip the Further Education and Training Colleges. I've been to some of them and we find that the equipment that is used to train artisans, which is the kind of person we need, is antiquated. The teachers themselves will tell you that, yes indeed we're training these young people here to give them into the market and when they get a job they find that the equipment they've got to use there is so much more modern than the equipment they're trained on, that they need to be retrained.

So we are re-equipping those Further Education and Training Colleges, giving them the resources. That's a critical element you need. You need to improve output from the Further Education & Training Colleges, sort out the skills that are needed.

We need to link that up to the Sector Education and Training Authorities, the SETAs, which also have this responsibility of mentorship, of learnerships and so on in order to help produce the skills - and the universities. You know that we've got a working group with the university leadership, and we have raised these questions with them to say: let's have a look at the way in which our system of tertiary education functions. What kind of person is it producing?

John Perlman: But are we falling behind on the University spending? Do you have concerns in that regard?

President Thabo Mbeki: Sure, as I say, we are looking at the entirety of the system of our education, together with the vice-chancellors, rectors and all sorts of people, to say: let's look at it; what is it that we want to do, so that once we've sorted that matter out, we can look at the question of what does it cost. I don't have those figures that you mentioned. we'll talk for instance about the monies government makes available for the education of young people who come from poor families. Nobody can say that it has dropped.

John Perlman: That's included, but someone argued that should be in addition, but perhaps something we could explore further.

President Thabo Mbeki: Yes sure, but I think the matter of resource allocation is always difficult. The historically black universities for instance will tell you a different story and say that you still have this disproportion in terms of the allocation of resources between them and the historically white universities. This is really work in progress, but I'm saying that one of the central issues we're discussing with the university principals is how you fashion, redesign, reposition universities to be relevant with regards to matters of skills training, with regards to matters of research, whether fundamental or applied and what sort of resources you would need in order to meet all of it, not to say that they will obviously be available, because you have competing demands in the society.

Miranda Strydom: President you mention in your State of the Nation address that government will intensify negotiations with the Financial Sector to help generate the funds to develop and promote SMMEs. What's taking so long? Surely this process should have moved by now.

President Thabo Mbeki: One of the problems that's arisen is indeed in terms of the Financial Services Charter. All sorts of sums of money were committed, like this R42billion for housing, but then as we get into the detailed discussions about disbursement of those funds, the financial sector says only on condition that the government gives guarantees. We are now taking onto the budget an issue which wasn't there, so we now have to discuss that with them, government guarantees in order to be able to release these sorts of sums of money, shifting the entire risk to government. I don't think it is correct, but these are some of the problems that would then arise.

John Perlman: One of the sectors you spoke about for potential accelerated growth is agriculture, but of course there are thorny land questions, you said that you are going to be reviewing "willing-buyer-willing-seller" and generally looking at the framework for redistribution, what do you say then Mister President to the argument that there are problems on government side that are holding the process back? I'm referring for example to the fact in Limpopo Province, the NCOP reported on a R100million land redistribution programme that's fallen into complete disrepair, lack of backup, lack of funds, lack of skill. You put in place the Comprehensive Agricultural Support Programme, in the Eastern Cape - they spent 32% and in the Free State they spent 8.5%. Shouldn't government be sorting out some of its own stuff in regard to land before moving on the market like that?

President Thabo Mbeki: I think we should do both.

When I was saying earlier that one of the things that we've got to look at is expenditure of investment funds by the provinces, I was talking about things like that. Quite correct, with this agriculture support programme, for instance, there has been underspending and again I quite agree with the NCOP where you have had projects like this agricultural one that was started but because of weaknesses in the provincial agricultural departments, they don't get the necessary support. I agree entirely.

But that's precisely part of what we've got to do, that's why we're looking at the capacity of government. That's why we are going from department to department to say, at Housing, at Agriculture, Trade and Industry, let's really see if we've actually got the capacity to do these things that we say should be done, and discovering that in all the departments are looked at, we have very serious shortfalls, huge number of vacancies. This kind of problem must be addressed.

John Perlman: Mister President, let's stay with the land thing just for a little bit longer. You must be concerned, given that jobs are at the heart of what you are trying to do with all economic policy, at the job losses in the Agricultural Sector. 138 000 jobs in a year, nearly half a million lost since September 2003. How do you see the changes that you want to make in agriculture with regard to ownership, taking cognisance of the need to keep people employed in that sector?

President Thabo Mbeki: You know that we have set up the fund Mafisa [Micro-Agricultural Finance Schemes of South Africa] to run as it were parallel to the Land Bank. The reason for that is that it was clear that with regard to the small so-called emerging farmers the cost of capital from the Land Bank was too expensive. Therefore we needed to set up a different fund in order to finance small farmers, new emerging farmers. I think that from the point of view of job creation in agriculture, that is where the jobs are going to come from, because what has happened with South African Agriculture over a period of many years has been an increase in the level of mechanisation of agriculture. It is a natural consequence, higher capital intensity in agriculture, you can't stop it. I am quite certain that with the development of small business agriculture, bringing in new people, that's where you are going to get growth, in terms of agricultural employment.

Miranda Strydom: I would just like to focus on the industrial policy you mentioned in the State of the Nation. What form is this going to take and who will be involved in this one?

President Thabo Mbeki: When you talk about industrial policy you are talking about the totality of the industrial sector.

For instance, among the things that we don't mention in this particular sector in the context of ASGISA is mining. Mining is a very important sector of the South African economy. In a comprehensive program you would include mining.

If you ask me to elaborate a program with regard to the development of mining, one of the things that I would say is that we need to open up the sector to the smaller miners. Historically this country has got big mining houses and very few of the smaller people who would help to grow the sector and in many instances with less capital intensity than parent companies need to be grown.

Then you would have to say that if we are taking that route, let's get more small mining people into the industry. What is it that you would have to do to achieve that result? There has been a discussion in the country that there is a weakness in terms of venture capital, in the South African financial market. So the small people don't get access to the monies that they would need in order to develop. So you would have to find a solution for problems of that kind.

A comprehensive industrial policy then would have to deal with everything and put in place taxation policies, training policies and any other policies that will make sure that that industrial policy succeeds.

John Perlman: Mister President doesn't it worry you though that the emphasis of Government has always been redistribution, yes, but growth at the same time. Doesn't it concern you that some of the things that you are describing allow people to acquire a foot hold in the industry, acquire a stake and grow a big company but not necessarily grow that sector of the economy. You could grow huge merely on BEE deals and acquisitions without creating a single new job or opening a single new factory.

President Thabo Mbeki: The Government programs are not preoccupied with acquisition of existing assets. What we are preoccupied with is the creation of new economic activities. One would talk about agricultural development and all that. We want, not somebody who is going to go and buy a share in somebody else's farm, but somebody who is going to start a farming activity.

John Perlman: But the charters tend to push you in that direction, don't they? Just get a share in a business that already exists.

President Thabo Mbeki: There is private sector activity in this area and sometimes people mix these things up. There are private individuals that will indeed take that route. Go and borrow money from a bank, buy a 10% share in somebody's company and all of that. That is a private sector activity and you cannot stop it. You cannot say that it is prohibited to acquire existing assets.

The Government programs are focused on developing the economy, the thing that Miranda was talking about. When we talk about accessing funds by the financial services charter, it is not for the sole purpose of buying existing assets. It is generating these resources that the small and medium people need when they raise this question very sharply of one of the worst problems they face as small business people is access to capital.

So we say all right, let both the Government and the private sector apply that capital for people to start new economic activities and not to acquire existing assets. That is what is happening now.

All of your big people, the highfliers in this economy were seen as successful black business people because of the acquisitions, none of them has acquired because of Government intervention, these are private things that they do and they will happen but Government's focus is somewhat different.

Miranda Strydom: President if we can now move now onto Foreign Policy, given the outcome of the Palestinian legislative elections and Hamas being there now. What sort of relationship do we think we have now with Hamas?

President Thabo Mbeki: We have an agreement with Hamas and the Islamic Jihad that we need to meet. We had agreed on this before the elections. We have discussed it, of course, with Fatah and the Palestinian Authority and they had no problem with that. We will engage with Hamas in the context of, what we had agreed about before the elections, engaging with them to see what we could contribute to further movement in regards to this particular matter. There should not be any problem in terms of any interaction that will happen with them.

Miranda Strydom: Even with the concerns, it is said in media reports that Hamas is continuing to say that they will not recognize Israel. Does this not concern you?

President Thabo Mbeki: We have said in the State of the Nation Address that fundamental to the solution of this problem, is a creation of a Palestinian State but also a secure Israeli State. The two state solution, as far as we are concerned, is the only way to approach this matter. Whoever constitutes the Palestinian Authority, we believe, would have to pursue that goal. Even the existence of the Palestinian Authority is a result of a negotiated agreement. The Palestinian Authority came out of the Oslo agreements and so it was established in that context.

So you can't say, I will constitute the Palestinian Authority which came as a result of those negotiations and ignore the rest of the obligations that arise out of those agreements.

We'll engage Hamas on these things and really do genuinely believe that there really isn't other way to solve this matter, except a two-state solution and the implementation of the roadmap, which everybody had agreed to.

John Perlman: Mister President you didn't mention Zimbabwe in the speech that you gave on Friday. Two years ago in this interview you expressed optimism that talks between Zanu PF and the MDC could bear fruit within two months, that was in response to something the MDC's Professor Welshman Ncube said. Now the fact that you didn't mention it at all does that suggest that our engagement with Zimbabwe is not yielding any fruit?

President Thabo Mbeki: Well, as you can see the Zimbabweans have been involved with their own problems. The MDC has got its own serious problems. At some point they came to us, one of the groups, the Secretary General, the Vice-President and so on, they asked us to assist to mend the relations among themselves. It didn't work. We tried to intervene, but I think that the rupture had gone too far, so they are in the process of sorting themselves out. I don't know what is going happen. We are watching that, because we still believe that really the Zimbabweans need to engage and find their own solutions.

You know that at a certain point, John, I said that the Zimbabweans were talking to each other and they would find a solution. They were engaged in what were described as informal talks. What I didn't say then, because they didn't want us to say it then, was that they were actually involved in negotiating a new constitution for Zimbabwe, and they completed it.

Those are some of the matters we had thought that they would then follow up themselves. They had done this constitution, they gave me a copy, initialled by everybody, done. So we thought the next step then must be to say, where do we take this process. But as I say then new problems arose. We watch the situation and to the extent that we can help in future, we will.

Miranda Strydom: President, if we can just turn to the question of Iran. When you addressed the 60th general assembly last year, you did call for a peaceful resolution to this matter, But now obviously Iran is being sent to the UN Security Council. What is South Africa's position now that the process is at this point?

President Thabo Mbeki: Well, we still believe that it's important to find a negotiated resolution of this matter. And indeed our position at this latest meeting of the IAEA was that we should await a report which the Director General, ElBaradei, is preparing which would be presented to the board of IAEA in March next month. That we should await that report, and only then get the IAEA to submit that report to the Security Council.

So we're not opposing the discussion of this matter by the Security Council. But it seemed to us only logical that instead of doing it now, you could take a decision now to refer the matter to the Security Council, but do it having had sight of this report, because you'll get a report in March next month which might say something else, questioning why was it necessary to send this thing to the Security Council at all in the first place.

But I think that there were some countries there that had in a sense over committed themselves to this kind of action now, and it seemed only rational to ask to await that report of the Director General, and then refer the matter to the Security Council, we have no problem with that.

But anyway the decision has been taken now, but I don't think it takes away the need still to find this negotiated resolution. Indeed, happily everybody says the same thing.

So we'll continue to engage everybody including the Iranians on this matter, to find a solution. Because the Middle East has got enormous problems. There's the Israeli-Palestinian problem, there's the Iraq problem, some confrontation that's developing around Syria and Lebanon. Now you want to add Iran to this.

It seems to us exceedingly, exceedingly urgent that all of us should find ways and means by which to de-escalate these conflicts that are taking place there. And there's no need to use the Iranian thing to raise these tensions further. So we would continue to pursue this thing. Let's find an agreement, an agreed resolution on the basis of no nuclear weapons for Iran, absolutely, but respect for these provisions of the nuclear non-proliferation treaty, which says all members are allowed access to this technology for peaceful purposes.

John Perlman: The other big international thing we're involved with over the next four years is the 2010 World Cup. Now, you were scathing in your criticism of the players after our performance in Egypt. Why did you spare the officials, the people who run SAFA?

President Thabo Mbeki: Well, I think we have to engage the people who run SAFA. Indeed we should have spoken about that also. Because truly it can't just be the fault of the players. The reason that we spent so much time on it is because I saw Sepp Blatter two months back, and he insisted as president of FIFA that from July 2006 all eyes are on South Africa, once the tournament is over in Germany, and all eyes are going to be on us on a daily basis to make sure that we prepare properly for 2010. So it seemed to me correct that we should raise this matter. I agree, we have to engage SAFA. We've got to engage the Local Organising Committee for 2010 to make sure that they do indeed discharge their responsibilities.

John Perlman: On that Local Organising Committee, I'm going back to your speech again Mr. President, I found it quite pointed that you referred to the need, and I quote, selfless dedication by the local organisers of 2010. Implicit in that, are you saying that soccer, amongst other communities in our country perhaps, is prey to delivering less than selfless dedication? Do you have a genuine concern there?

President Thabo Mbeki: I have. You see, I think that you will no doubt find people who will want to engage themselves in those preparations for 2010, with a view to getting business possibilities for themselves, and not so much focused on the matter of ensuring that we have a successful 2010 World Cup. So we've got to make sure that whatever selfish interest people might have, particularly in the local organising committee, they leave those ones at home.

John Perlman: Any ideas on how we do that? I mean, perhaps a charter of ethics, a code of conduct? Any thoughts?

President Thabo Mbeki: Well certainly. You know that FIFA is also going to be opening an office here. And I'm quite sure that we would draw properly from their own requirements with regard to this, and a number of countries that have hosted the Soccer World Cup have offered to assist. Even the Germans are very keen that we should watch now what is happening, and they would stay with us after that. You might need a code of conduct, but I think it's going to require some vigilance - I don't sit on a committee like this, with a view to getting John Perlman a tender to do one thing or the other, and he gives me 10% back of that. So that we do the right thing.

John Perlman: Let's stay with that. I mean, is government going to play a role in that?

President Thabo Mbeki: We've got a number of Ministers who serve on the Local Organising Committee: necessarily Finance, the Deputy Minister of Finance is there because the government has had to give all these financial guarantees for this. So the Deputy Minister of Finance sits there. The Minister of Safety and Security sits there because of all the security considerations. Naturally the Minister of Sports and so on. So you've got a number of ministers who sit there. They are part of the Local Organising Committee, and the remarks I'm making affect them as much as anybody else on that Local Organising Committee.

Miranda Strydom: I just want to come back to our responsibilities on the continent, President. The DRC is one of the most historic elections we've seen in years in the Congo. Are things, systems in place now? Are you optimistic that we won't see another delay when it comes to these elections?

President Thabo Mbeki: No, we don't believe that there would be any delay. We watched and worked closely with the Congolese to prepare for the referendum - very good registration, high numbers of people registered, which was very good. High numbers of people participated. There were concerns, for instance, about the eastern part of the Congo that because this is an area which has remained unstable, that you might get people staying away. You had 75%, 75%-plus participation of the population in the referendum, and the enthusiasm of the population is quite clear.

No, we believe there shouldn't be anything that would result in a delay with regard to these elections. We continue to work with them, the Congolese, to make sure that everything is in place.

Miranda Strydom: There's one issue at home that seems not to want to go away, it's the whole question of the third term. The debate is coming back up. It's quite clear that the call is getting louder. Would the President be open to stand for a third term as President of the Republic?

President Thabo Mbeki: No, no, no. We've addressed this thing before, Miranda, and I've said this, that for a long time now the ANC has taken the position that we don't want to change the constitution. And even when we got more than two-thirds majority we said this, that we're not going to use this two-thirds majority fundamentally to alter the constitution, and that remains our position. So I mean, by the end of 2009 I would have been in a senior position in government for 15 years, and I think that's too long. After 15 years I think one should really step aside in any case.

John Perlman: But you're putting in your State of the Nation address, as you have done each year, policies that are going to take a long time to bear fruit. What role do you see yourself playing in plucking that fruit beyond 2009?

President Thabo Mbeki: Well no. There'll be a change in terms of the government leadership in 2009, which is fine. And I think whoever takes over leadership must be given space to do their own thing. I think it would be incorrect for people there to be watching over their shoulder to see, you know, these ones that were here yesterday, what are they saying. I think the capacity will be there no doubt, to continue with these programs and perhaps even to perform better.

John Perlman: Mr. President, before Miranda and I thank you and say goodnight to the viewers and listeners, I know you'd probably like to do the same and greet the people who've been listening and watching.

President Thabo Mbeki: Yes, indeed. I must say that the spirit among our people, the spirit of hope, of optimism, of confidence about the future is very, very important, very good, very inspiring. But I think also it's important that the people themselves should see this development project as their own. Not to see it and say, I wait for government to do this, but also to say, what is it that I can do to join and participate in this process of building a new South Africa. But certainly the spirit among the people is extremely, extremely inspiring.

John Perlman: Mr. President, once again, thank you. From all of us here at the SABC, television and radio, these are important debates, we hope that you continue them in your communities and in your homes. From the Union Buildings, goodnight.

Miranda Strydom: Goodnight.