Rob Davies - Trade and Industry Minister, South Africa HARDtalk


Rob Davies - Trade and Industry Minister, South Africa

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More from me later. First, here is HARDtalk.

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Welcome to HARDtalk. South Africa's president, Jacob Zuma, is on the

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ropes. In recent months, he's been dealt low after blow, by the courts,

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by political opponents, even by erstwhile friends. Only the

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knee-jerk loyalty of the ANC has saved him from impeachment and

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disgrace. My guess today is South Africa's Trade Minister, Rob Davies.

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If the president won't jump, does he need to be pushed for the good of

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South Africa? -- my guest. Rob Davies in Cape Town, welcome to

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HARDtalk. Thank you very much. Minister, do you feel comfortable

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serving president whose behaviour has been defined by the

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Constitutional Court as in violation of your country's Constitution?

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Well, I think the point I would make is that the Constitutional Court,

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and indeed the High Court in Gauteng, none of the findings to be

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made recently have required the president should leave office. They

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have dealt with other issues and other remedial actions that are

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required, including the payment of a reasonable portion of what is

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deemed... No. Yeah, let me stop you right there, Minister. You've just

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thrown out of red -- a red herring in your first question. He is paid

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to mean not behaving in line with the Constitution, and my question is

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simple. Are you comfortable serving a president who is violating the

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constitution? As I said, there is no legal or constitutional reason for

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the president to leave office. It becomes a political question. If you

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look at most of the opposition parties, what they are looking at is

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not just the removal of President Zuma from office, they are looking

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at the removal of the African National Congress from its position

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in government, and I think that's fundamentally what it's about. They

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are looking for some early exit of the ANC, some movement from

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government before the expiry of its term in office, which lasts until

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the end of 2019. Actually what we've got is we've got a functioning

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government that is continuing to serve the interests of the people,

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and I'm very happy to continue to serve him. Well, you've just

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politicised this from the beginning and maybe unit something I don't.

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Maybe the finance minister is a secret member of the opposition,

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even though he appears to be a member of the ANC and the

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government, and I'm mentioning him because he set on the fifth of

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April, once our actions are seen to being congruent with the

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constitution, we must know that we've moved away from our duty to

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serve our people, and we have broken our contract. That's a government

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minister saying that. Well, I think that, yes, there were findings by

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the Constitutional Court in regard to the Incanla upgrade issue, and

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there were prescribed actions, that they appeared process of determining

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the value of the non- security upgrades and the proportion the

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president must pay, and that the president must pay it. So I think

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those were the findings of the Constitutional Court. What I'm

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saying is that it becomes a political question thereafter what

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happens to the president, and many of the opposition parties, much of

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the noise that there is around the need for the president to leave

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office is not founded... No, I'm sorry. I must come back. It's

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founded on a desire to try and replace a governing party that has

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not yet completed its mandate and continues to serve the people of the

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country. Maybe I'm not asking my question is clearly enough. Let me

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ask one more time. One of the most important ministers in your

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government, the Minister that you loyally serve, has basically

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declared that, in his view, given what the Constitutional Court has

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said, the president has broken his contract with the people. I'm asking

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you, do you agree with that or disagree? I think that the minister

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was actually saying, he was warning us that we cannot operate beyond the

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bounds of the constitution. We have to operate within the framework of

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the constitution. The president is way beyond the bounds of the

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constitution. I think that's a matter of debate and discussion.

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That's what I'm saying. From a legal and constitutional point of view,

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there is no reason for the president to leave office. The call and the

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clamour for him to do so is a political clamour, and quite a lot

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of it is orchestrated by political parties who want to shorten the term

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of the government. Let's leave aside your constant refrain that this is

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cooked up by the opposition. Let's remember that the highest

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Constitutional Court, independent - that's the point of the

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constitution. And let's reflect on the Incandla scandal. Many people

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around the world won't know the story that innocence Jacob Zuma said

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he was refurbishing because of requirements for special pencil

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cattle on his Raj style estate, an amphitheatre as well. He claimed all

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this the security purposes, which patented wasn't true, and you are

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saying it doesn't call into question whether he can be president any

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more. Well, the remedial action that the public thought was in respect of

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those features, that the president should pay a reasonable proportion

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of the cost of those, and that is what the constitutional court has

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upheld, and that process of determining that, which will be

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followed within a period of time, overseen by the Constitutional

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Court, that is the remedy in respect of that particular episode, which,

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by the way, had other features in it, and the cost overruns, the

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design of the security features, the way in which it was contracted out -

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those various departments and government officials and ministers

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were required to deal with the consequences of that. And indeed

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they have been subject to criminal investigation. Dynasty, are you in

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anyway embarrassed by the artist you feel you've had to give to me today,

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presumably for political reasons -- Minister? I haven't any reason to be

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embarrassed. I'm telling you the way I look at the situation in South

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Africa, that we've got a functioning government in place, and there have

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been some unfortunate incidents. I don't think anyone thinks the

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Incandla story was something that we were all happy and proud about. But

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also the president asked for the security upgrades in his house, and

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certainly there have been some excesses and lapses in our system,

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but the remedial action has been described by the Public protector

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and upheld by the Constitutional Court. One thought on a personal

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level. It was very striking to me that one of Nelson Mandela's

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greatest friends and fellow strugglers and prisoners, who is now

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86, who has consistently said, I will not criticise the leadership of

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the ANC, even if I feel they are going in the wrong direction because

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they are disloyal. This man Ahmed Kathrada finally said this when he

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saw what the court ruled. He said, is it asking too much to express the

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hope that you, Jacob Zuma, of course, will choose the correct way

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and finally consider stepping down? Now, Ahmed Kathrada is in many ways

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the living conscience of your movement, the ANC. Did his words

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give you pause for thought? Well, I think that Ahmed Kathrada is someone

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that we respect greatly. There have been other voices, Dennis Goldberg

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among them, also a person that we respect greatly and we revere, and

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they have been expressing their opinions. They've been expressing

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their opinions publicly. We have a process in the African National

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Congress of consulting our branches and our members, but we, actually,

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the leadership of the ANC, the National executive committee, of

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which I'm a member, we took the view that the apology of the president,

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the remedial action that was in place, was a very significant path

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towards putting right what had gone wrong, and that we didn't consider

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that the removal of the president was warranted at that particular

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moment in time, and that's the decision that we took, and that

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decision we debated and discussed with members of our organisation,

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including, I believe, that the leadership of the organisation, the

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top six, will be meeting with some of those revered leaders of hours

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and discussing with them their views and our views as well. You are a

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parliamentarian. Obviously Parliament is ultimately the

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legislative authority, and also the authority when it comes to

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impeaching a president. You have the opportunity to vote on impeaching

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Jacob Zuma. I can't think of a more important vote that you might have

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faced in your entire career. Did you vote? Well, actually I wasn't there.

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I was on government business elsewhere. It was an opposition

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motion. I wasn't fair. It was an opposition motion which needed a two

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thirds majority. It was never going to fly. It was something driven by

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them and their agenda. We didn't believe it was anything that was

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warranted, and that was the outcome is well in terms of the vote. I

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suppose it is, in a way, convenient that you don't have a mark on your

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record as having said that you actually voted to support Jacob

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Zuma. You were, rather conveniently, away from the chamber. It just seems

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you dodged the issue entirely. I would have voted with the ANC to

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vote down the impeachment motion of the opposition. How many people

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inside your party believe it's time to Jacob Zuma to go? Well, I don't

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know. As you indicated, there are some prominent voices which have

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said so publicly. There may be other people. But the view of the

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leadership is that it's not warranted by the outcome of the

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Constitutional Court. Just to be clear. I want to make this personal

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because politics is about conscience, it's not just about

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party loyalty, so I want to make this personal. Finally, on this

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point, on the record, to be clear, you personally believe that Jacob

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Zuma has the credibility, has the integrity to continue to be

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president of your country? Well, Jacob Zuma was elected president of

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the African National Congress, president of the country. His

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mandate has not concluded, and I believe his mandate is ongoing, and

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I'm happy to serve the government of the African National Congress.

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Well, you are extraordinarily loyal to your party, but you didn't really

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address the question of your own personal feelings about Jacob Zuma.

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Maybe you choose not to. Well, I'm loyal to the collective of the

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African National Congress, the vision of the African National

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Congress. To ask to correct things that have gone wrong in the

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administration of the state, but I believe we have a proud record of

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achievements that needs to be safeguarded as Phares the African

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National Congress is concerned. That's where I deployed and I have a

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contribution to make, and that's what I'm doing. We'll get to

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discussing the economy in just a minute. Let's get there by way of,

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it seems to me, another fundamental credibility issue facing your

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government. How did you respond when the Financial Times reported that

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deputy finance minister Jonas had told them that a controversial

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family with major business interest in South Africa, the Gupta family,

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had offered him the post of Finance Secretary, Finance Minister?

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Well, like many, many people I am extremely concerned if there is any

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element of truth in that. I do know that minister macro tree is a person

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of integrity. I have no reason to doubt that he is telling us the

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truth, and I think there is a serious problem if we have people

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from business concerned offering people ministerial positions. That

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is completely out of order, that is completely unacceptable, and indeed,

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I think Deputy Minister Jonas, the way he reported it, he did the right

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thing in refusing it. That's what Jonas said, he said I rejected out

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of hand because it made a mockery of hard earned democracy and of course

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I should say that the Gupta family have categorically denied the

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meeting, have denied that they were politically interfering in any way

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but the fact is that many South Africans have seen... Go on. So the

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ANC has invited everyone with information to come to the ANC and

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explain to them, to put all their cards on the table, and to come back

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to the executive and deliver us a report on this matter. I don't know

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the veracity of any particular allegations or not, I don't know.

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What you do know is that Jacob Zuma fired his Finance Minister on the

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ninth of December 2015, I think it was. He appointed a man who was

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virtually unknown to the position, and then four days later he fired

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him, and appointed another man who had been Finance Minister before

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him. What does that tell us about the ability of the President to

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manage the economy by way of key appointments? Well, I think that the

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fact that he eventually emerged as the Finance Minister meant that what

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happened was that the organisation, the leadership of the organisation,

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are capable of recognising where there has been a mistake and capable

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of correcting it. And that's what happened in that particular case. It

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was a shambles. Well, you can use whatever adjective you want, but I'm

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just saying that the organisation was capable of rectifying the

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mistake. And on this question of crony capitalism, and the state

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being captured by certain business interests, which you know better

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than me is a conversation that many South Africans have had in the last

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few months, and are having right now today, let me just ask you this

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question. Do you know of are Guptas? I do. I have met them on a number of

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occasions, yes. You have met them as a minister. Does it strike you as at

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least an uneasy and awkward thing that when you meet the Guptas, you

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know full well that the President's Sun has a major stake in some of

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their holding companies. Does that... You know, when we are

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talking about crony capitalism and the way South Africa works today,

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does that make you feel uneasy? Well, let me just say from point of

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view of me and my department and where I work, when I interact with

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people there no way at all that any interaction I have with any

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individual, any person, is going to influence how we deploy our forces

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as a department. We have professionals. We take decisions

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about how we deploy our incentives. We set policy frameworks. I do not

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get involved in deciding whether any individual businessperson will or

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will not get access to any of our particular programmes. They never

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asked me about it, and had they asked me, that would be the answer I

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gave them. Coming back, finally, give me a simple answer. Do you feel

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uneasy when you meet significant, major business players in South

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Africa and you know that one of the President's closest relatives as a

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major stake in what they are doing? Well, the Gupta family, none of

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their business interests interact with anything our department. I met

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many business people in South Africa, I met multinational

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corporations who have invested in our country, all kinds of business

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people. I have an approach to them which is one that I am a servant of

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the people of the country. I take decisions in the interest of the

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country as a whole, I don't take decisions in the interest of any

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particular business people. All right. Now, we have talked about the

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political crisis at the top of your government. We have talked about the

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allegations and the uneasy about so-called crony capitalism in South

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Africa today. What we need to get to is the fact that your economy is in

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dire straits. The Finance Minister, whom we have discussed, Pravin

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Gordhan, said just a couple of weeks ago, let us be honest, the economy

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is in crisis. Do you agree? I do. And, as is the world economy. And

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what is happening at this particular phase of the world economic crisis

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is that it is not just affecting us in South Africa as it has done up

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until now, in the form of depressed global demand, but also right now it

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is affecting mineral commodity producing and exporting countries.

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So we're in the same category as Canada, which has been in recession.

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Our growth rate is pretty much the same Australia's. Brazil is in a

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deep recession, and many countries in the African continent which are

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producers and exporters of primary commodities are suffering from the

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fact that the commodity supercycle passed its peak in 2012 and

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commodity prices are very much lower than they have been in recent past.

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That is the gist of it, and we are an economy in which 60% of our

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export earnings are from exports. Well, if I may say so, minister, a

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lot of South Africans would say that is partly the gist of it. No one

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would doubt that the end of the commodity supercycle has had a great

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effect on South Africa, that is hardly deniable. But what is surely

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to the point here, is that your government, the government usurped

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as part of, has proven incapable of showing leadership and getting the

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country out of the mess. In fact, the mess is getting worse and worse.

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Unemployment is at least 25%, although the IMF says it is much

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closer to 32%. You've got a growing debt in your nation which has, I

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think, doubled since Jacob Zuma came to power. Your currency is showing

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historic weakness, and all the signs are that the credit ratings agencies

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who look at you from the outside are going to downgrade your credit

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rating to junk status. You represent sort of South Africa to the world in

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economic terms. You've got to accept this is all a disaster. I don't

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accept it is all a disaster, what I would accept is that we are facing

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some very, very serious challengers. And we are in the same category as

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many other economies. Now... Yes, but not all those economies are led

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by governments which have totally lost credibility. No, but I don't

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think that that's the case either with South Africa. For a start, what

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our programmes are are to address the things that we can affect under

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very difficult circumstances. So for example, if you are in South Africa

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about 18 months ago, people were talking about the energy challenges.

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We have not had any kind of power interruption for nine months in this

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country now. We are getting on top of the energy situation. But that is

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precisely because so many of your big industrial countries, including

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mining operations and others, are no longer using the same amount of

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power because the economy is in such a slowdown. That is precisely why

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your power cuts are not taking place at the moment. But leave that aside,

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we are almost out of time. You are the Trade Minister, surely this...

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We are not in recession. Not yet, but you are very close. We have a

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steady inflow of investments. We have a steady inflow of investments.

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Some of our sectors in manufacturing, where I am

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responsible, where diversification is the key element of our response,

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we have seen for example the automotive, we have seen very

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significant investment and very significant... Foreign Minister, if

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I may say so, we are almost out of time. Foreign investment into South

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Africa fell 74%, that according to the Congress on trade and

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development on the 24th of January. That is the real situation in your

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country today because of the political mess all around you.

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Absolutely not. That particular figure was the product of two

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transactions by two companies. We will see the same drop again when we

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see Barclays restructure its operations in Africa but actually

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there is a steady pipeline of investments that are coming into our

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country, going into the water, going into fast moving consumer goods,

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going into our infrastructure projects, going into railways, there

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is a steady stream of foreign investment in the real economy. Yes,

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the mining economy is not as attractive as it was. There is

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difficult circumstances. But the devalued currency has not been bad

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for many of our productive sectors. All right, final question because

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we're out of time and it will have to be pretty much yes or no. Will

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Jacob Zuma serve out his full term? Well, I'm not going to get into

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those kinds of predictions. I don't see any reason at this point in time

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why he should not. All right, Rob Davies, thank you very much for

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joining me from Cape Town.

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