Rob Davies HARDtalk


Rob Davies

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talks ahead of their meeting with the Greek Prime Minister over the

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weekend. It is now time for HARDtalk.

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When South African police shot dead 34 striking Mineworkers days ago,

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the deep divisions within post apartheid South Africa were Crawley

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exposed. South Africa's government faces a potentially damaging

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combination of worker unrest, investor uncertainty and political

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infighting. My guest is Rob Davies, South Africa's Minister of Trade

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and Industry. What has South Africa's learned from the massacre

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Rob Davies, in Cape Town, thank you for joining us. It is a pleasure.

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We have to start with the events at Marikana a few days ago. Are you

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proud with the way your government handled the mass killing? I am

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proud of the way in which the our government has respo

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events. The events are an enormous tragedy. We need to go into a

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judiciary investigation which the President announced. Our President

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cut short his summit. He flew back to the officials in charge of the

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situation. He appropriately defined this week as a week of mourning.

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Our response has been a response which has been to see this as an

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enormous challenge and a tragedy, something which we have to respond

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to whizz all hours born -- resources. What about the police

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commissioner? Are a woman said she did not believe the police should

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be sorry for opening fire. It was the right thing to do. The actions

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of the police and action of the police commanders will be looked at.

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With considerable debts, that is. - - debts. It is an appropriate

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response. We will investigate his circumstances. It is an enormous

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tragedy that should not have happened. You sit in the government

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alongside the police minister. Hugh is what was said the other day. The

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minister said, how can the police commissioner or police minister

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keep their posts in a civilised society after more than 40 people

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have been killed in the mining incident? A incident? Aill

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responsibility. responsibility. Who did what wrong

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and who will be held to account. That is heap correct prices in the

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democratic society. There needs to be evidence. There is the question

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of responsibility. Police have to be held to account. Somebody has to

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take responsibility with this. In your government, nobody has taken

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responsibility. We have all respect -- accepted responsibility. We said

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mattof the the meantime, we have organised a

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committee to go out to Marikana to try to reverse the cycle that has

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led to this tragedy. We will also deal with matters relating to that.

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You talk about the cycle. It is complex. One part of it has been

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the long-running dispute between the National Union and mine workers

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and breakaway union representing other mine workers, the AMCU. Does

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it surprise you that other aware of the assistance of the AMCU

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are until after the massacre. -- existence. Those matters to do with

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Labour is in the purview of the Minister of Labour. The Minister of

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the mines is not responsible for that. The existence of the union

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was known beforehand. The impact of it was something which took many

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people by surprise. It is not credible, is it, that your

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colleague, the mind Minister did not know about the AMCU. It is not

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credible. I am sure they had a good idea of what the make-up of what

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the organisations in that industry was. Five cents a little

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awkwardness awkwardnessue satisfied that other key members of

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the government are on top of the situation? Every effort is being

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made by our government to address the challenges arising from the

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situation. That includes some of the broader matters that may arise

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from this. Generally, we have responded in an appropriate way.

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leaves you with a big problem. Your trading ministry Minister says that

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more workers are going on strike. Anglo American platinum mine is

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being affected. The Royal Bafokeng platinum mine is being affected.

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There are some serious industry challenges. I have been looking

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closely at what this means in terms of the broader market reaction to

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South Africa and what it means in terms of investment pipeline. This

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event is very contained. For example, we have seen the stock

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market has been resilient under the circumstances, generally. And the

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shares of Lonmin have taken a tumble. But shares across the board

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have holed up in other sectors. As far as the correct investment

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pipeline is concerned, there are bigger factors which are being

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considered by investors. This includes the fact that Africa is

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without doubt the next frontier with a shock. There is a

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repositioning of foreign investors towards the African continent. --

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Asia. I am seeing no signs that at this point there is no serious

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contagion affecting those regions. Our response has got to be... We

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have to work in all aspects of the Our response is going to be what is

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critical. If you make the appropriate response, the art

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Sunworld will see that we are a government that is capable of

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responding. -- are the outside world. We have to make a dent into

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the big structural problems that have confronted South African

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society for many decades, including the apartheid era. They were

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miserable conditions for workers. We would get to that in a moment. I

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am amazed that you are not seeing worrying signs. I can quote to you

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a leading mining and business consultant in Cape Town. He says

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that what has happened has reinforced the view that South

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Africa is a risky place to put your money. This incident is another

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obstacle in a way of attracting it, another person says. Many

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commentators who have said things like that Port the markets have not

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responded in that particular way. - Some people think it is too risky

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to continue with the projects they have been involved in. We are not

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seeing that at this point. It is our job as government to try to

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reassure investors, particularly investors not directly involved in

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the platinum industry. If you work will be improved. Is it really

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contained when the chief of Royal Bafokeng Platinum says, I don't

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think this is about Lonmin or mining. This is becoming a South

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African phenomenon where people are dissatisfied and resorting to

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violence means to resolve disputes, rather than negotiations. I think

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that the resort to violence in certain disputes, including

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industrial relations, is not new. It is something which we are trying

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to grapple with. This incident is alarming us to become more

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effective in this regard. -- allowing. We have to address

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inequalities in our country. We have to move forward with our

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changes if we want to bring about In the next few years, the efforts

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we have made are beginning to bear some results. We have to me forward

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in the programme. We have to include this year economic

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conditions of the him vast majority of the working people and

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unemployed. That is what we are focused on. I have to interrupt. I

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have to say, over the last seven years, I have had a host of senior

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South Africa ministers telling me that that is their commitment and

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that is what they pledged to deliver to the South African people.

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A major up list for the living standards. It has not happened. 18

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years after the liberation struggle and did, after Nelson Mandela was

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put into the presidential headquarters, Hicom 40% of your

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people are living in poverty? How come the government has failed to

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it to deliver for so many South African people? The reality is that

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the social records has been pretty impressive in terms of delivering

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of housing, social security and things of that sort. What we have

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not salt is the structural unemployment problem which we have

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inherited from apartheid. It has gotten worse since the economy went

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into crisis. This administration has at under fire that we need to

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make some important structural changes in our economy. --

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identified. We have started to roll out a series of policies. We have

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started to roll out infrastructure development programmes. It has gone

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through a high level of planning. These steps are necessary to bring

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about structural changes. These changes will deliver the results we

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want. But not in the immediate term. They will require a year or two

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before the fruits are filled. We can see the benefits of these

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You use the language of dry economics. Many people who are

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dissatisfied with what the governments have delivered by using

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a very different language. I'm thinking about the deposed head of

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the ANC Youth League. He is making a political here right now. And he

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said that Jacob Zuma had totally failed to challenge what he calls

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white monopoly capital. He said that is the lesson to learn from

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what has happened. A those of us who are still in the ANC had agreed

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that the next phase of democratic revolution will have to focus on

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bringing about a much more rapid process of economic transformation.

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That does mean also that we have to change very much the patterns of

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ownership and the way in which ownership is going to be exercised

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in our country. That has caught a number of different aspects to it.

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-- that has caught. These programmes are something that we

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have outlined. We know the direction as we need to move in. We

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face challenges of implementation. I would suggest that we can already

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see some of the benefits of that. Short-term populist solutions which

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are suggested by individuals will not solve the problems. These are

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serious structural problems. I would argue that we have the

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approaches in place which will deliver the results. What we need

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to do is stick to what we have indicated that we will do. We need

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to move in a more energetic and effective way towards

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implementation. I think it is a cause which we are committed to.

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Why would the poor people of South Africa, who have seen this lack of

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delivery for many years, believe you now. Who are the people, the

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people used to DNC advocates, they are directors of massive corporate

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entities. These people are, in some cases, working inside companies

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like Lonmin. They are part of the capital system. They are not trying

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to transform it. We have had a long, hard look at what we have

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understood in Parliament. Just yesterday, we have released some

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amendments to the black economic codes of practice. We want to give

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more emphasis to those parts of the empowerment that deal with the

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support for enterprise development and promote a real entrepreneurial

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culture among our people in South Africa and give much more serious

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support to intubation programmes, training, skills development and

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things like that. -- intubation. That is the direction we are trying

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to move in. These, I would contend, are the things that are necessary

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for us to do. I think we have outlined and have got quite a

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serious political buy into. The challenge, as I say, is to make

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sure we move forward towards implementation of those programmes.

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You are no communist command you? am indeed. -- You are a communist

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command you? You much support the call for the implementation of the

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mines. We have taken the view that fundamental issues are not

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questions of changes of ownership. These are questions of the

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structural direction of the economy. Those are the fundamental questions.

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We support the call that we should have a stronger state involvement

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in the mining sector. That should lead to greater beneficiary -- more

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Let's drop the jargon and stick to the basic points. Where do you

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stand? Are you prepared to tell me that you are ready to countenance

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the nationalisation of the mines? It is the hottest issue in South

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Africa today. There was a study which was under tick by the ANC. --

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which the ANC under tick. There was contribution made to the debate.

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The main focus was that what we need to do is to use the mineral

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wealth but we have in our country as a tool to develop an

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industrialised South Africa. That is fundamentally what it is about.

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That is not jargon. The real challenge that Africa faces, not

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just South Africa, is to move from not just being producers and

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exporters have brought under the ground but to being producers and

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exporters of products based on the mineral wealth that we have. That

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should be used in international trade. That is where we need to go

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as a country and the Continent. I think our strategy is beginning to

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lay out how we need to move on. Correct me if I am wrong but I do

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not feel I am getting a clear answer from you on this issue of

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nationalisation. That might be because you face impossible

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pressures. On the one hand, you have got a loud call for many

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people in South Africa to move ahead with nationalisation. You

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have also got the business sector and you have to watch what they are

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telling you. They will say that even the current policy of imposing

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a super tax on profits and regulating the mines in a more

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assertive way, even that threatens the mining sector, which is so

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important to you country. You are caught between a rock and a hard

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place, aren't you? The fundamental challenge is that we need to move

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from being producers and exporters of dirt out of the ground used in

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other industrial processes to a country which is able to

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industrialise on the basis of the wealth that we have. At the

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question is what used to be make of the already existing ownership of

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mineral rights that we have offered government -- as a government and

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the allocation of these rights to companies, but becomes a critically

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important question. We already have significant ownership rights of

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mineral wealth. I think but once we get that right, we can begin to

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talk about a more substantial state involvement. We need to talk about

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shares in the mining sector not being held by a state company.

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autumn wind, Jacob Zuma faces a challenge for the leadership of the

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ANC in November. -- bottom line. There are other candidates who

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seemed more keen. Who will you back? Could do you believe will be

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the new leader? I will not get into that. The time for us to discuss

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leadership preferences within the structures of the ANC is not now.

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Some individuals may have chosen not to accept that discipline. That

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is the discipline that is applicable to all was. The country

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is in a terrible mess right now. -- to all of us. The economy looks

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weaker than many of your African neighbours. Many talk about the new

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frontier and after cuts but said that figure is in grave danger of

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missing out. That's the new frontier in Africa.

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We are a critical part of the African continent. We are

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energetically pursuing integration in a number of ways. It is very

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clear that South Africa's role in Africa is an important one. I think

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that the picture of the country falling apart is not correct. Many

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people in this country, commentators, others who want to

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tell a different story, they are wrong. I do not believe that is a

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correct picture. I think the picture is akin to that in Britain

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a few years ago where there was youth unrest taking place across

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your country. There were deep and serious social issues. It merited a

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serious ongoing engagement. That is what has happened for us. We need

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to address those type of challenges and issues. It is to be seen as an

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injunction to move more rapidly. We need to create employment and

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