Pravin Gordhan - South Africa's Finance Minister HARDtalk


Pravin Gordhan - South Africa's Finance Minister

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second attack in three days. -- outskirts of Damascus.

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Now it is time for HARDtalk. Welcome to HARDtalk. South Africa

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has been told by the old colonial power, Britain, that it does not

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need development aid any more. Recently, they attended a summit of

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economic powers. Growth has slowed. Black South Africans are much more

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likely to be unemployed than their white compatriots. The finance

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minister has a national plan to raise more people out of poverty by

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making the economy grow. He wants to counter negative perceptions

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which has gearing of foreign investors. The ANC are facing an

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election. It's union comrades are no longer paying ball. Has the

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country Britain once described as Africa's economic powerhouse

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Pravin Gordhan, welcome to HARDtalk. The thank you. As finance minister,

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how worried argue that negative perceptions are taking cold. I have

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spent --? I have spent most of this week in the UK meeting investors

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who have been supporting South African debt and buying our bonds

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for many years. New people are interested. Many others have an

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interest in the South African economy. What I have met is quite

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contrary to your introduction. I have met a positive sentiment

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towards South Africa, particularly more generally. I have met with

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critical questions, people asking if I can do better in some

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departments. I'll take the message back to the Government. Generally,

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there is an understanding that we are a 19-year-old democracy, a

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teenager, and the world tends to forget that we only had a

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democratic elections in the 20s and a fable, 1994. There is -- 27th

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April. There is an understanding that South Africa is very much at

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the centre of the growth story of the future on the African continent.

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Democracy might still be a teenager, perhaps that is why it is

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displaying the tantrums associated with a teenager. The strikes at be

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sought through the summer and the autumn had damaged the coalition in

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South Africa. He said that yourself. It has created out in a certain

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type of investor. How do you answer this? I have met many of the senior

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people who are heads or cheer people of companies who have

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invested billions in South Africa. -- chairman. They will do that

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again. It happened regrettably at Marikana. The government is dealing

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with it. We're trying to get to the bottom what went wrong and who

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should be held responsible. When the judge has completed his inquiry,

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he will give us some answers to that question. Secondly, we have

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made huge efforts as government and as business and labour to sit

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around the table and to understand the common challenges that all of

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us have and the deficiencies we might have demonstrated in the

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lead-up to that particular period. We are beginning to answer

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questions. What do we do about housing? How do we tackle the ill-

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effects of a migrant labour system? How do we keep more people employed

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and unemployed at this point and time? How do we return minds to

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production in a climate, by the way, that is not just related to South

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Africa but, global, demand for mineral products is at a low.

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is partly because China is suffering and it is a big customer

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of the minerals such you provide. What is striking, if you look at

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figures from last to October from the Trade and Development

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conference, foreign investment into said that figure has SPD's to 43 %

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decline compared to the same period. -- foreign investment into South

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Africa has experienced. You will tell us there has been a recovery

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but it has been from a low level. That suggests that, coupled with

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growth figures, South Africa is facing a much harsher environment

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than it has experienced in recent years. We don't feel embattled in

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any way. We feel confident. We have taken a few knocks. Most countries

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around the world have had negative impacts from outside their own

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country or from within from time to time. Britain is no exception. We

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have tremendous resilience, bought in the business sector and more

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generally to overcome these problems. We have global

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circumstances were corporates are hanging on to cash. That is

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happening in South Africa also. Former colonial powers and the

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European Continent are involved. Development has a negative impact

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on South Africa and South African sentiment as well. At the same time,

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as you pointed out, we have a national development plan. I have

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to provide the money. Everyone else has to do the work. That plan is

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rallying a great deal of support from all quarters. There are a few

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exceptions which I will come too. We are optimistic that we have the

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right path for the next 20 years. We have a fantastic Continent. We

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have new relationships to embolden us and encourage us. We have some

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of our own challenges that we have to overcome. I am determined to do

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that. Let me ask you about those international relationships. You

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mentioned Britain. A different view from what you have told me came

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with the announcement in different is that Britain will end the

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development aid it provides to South Africa. The International

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Development Secretary told a conference in London won 30th April,

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that is the British Secretary, has it that figure had made tremendous

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progress and he has agreed with his counterparts in South Africa that

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so that figure can fund its own development. You must have been

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pleased. -- that South Africa can fund. Not at all. That statement

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came from nowhere. I said at the time that it was a misleading

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statement. I have always spoken to her once before on the telephone

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from Cape Town to London. No figure in my discussions with her did I

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say that I agree that we can cope with our own development challenges.

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-- nowhere. The original discussions started with Andrew

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Mitchell. He was the former secretary. He explained in July

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last year that there is a different tack. He and I had a very cordial

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relationship and a mutually respectful one. I said to him that

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we noted that the Government had made a different decision. I would

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like to debate. We had a partial debate on the question of

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development challenges in South Africa. Many charities including

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Oxfam have pointed this out. South Africa is a mixed society. There is

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a developed part. There's lots of for to do on education, health, HIV

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and Aids. -- There is lot of work. �98 million does not make a huge

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difference to us. What is important is what type of relationship we

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want to continue. That is interesting. He goes back to the

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perception of reality to the outside world. You say the reality

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is different to the perception. That is a dilemma for you. If you

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are country where, for example, flush toilets is a bit of a

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ludicrous sounding example, but an important one in terms of hygiene

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and self-respect, only 57 % of the population habit compared to 50 %

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ten years before. That kind of trajectory, that incremental

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improvement in people's lives is nowhere near the level of

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expectation. How do you deal with that gap? Let's look at the facts.

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We are looking at results from the 2011 census. The per capita income

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in 1994 17,000, we are now at about 37,000 rand per person. If you look

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at employment numbers, they are higher. Tax revenue, not donations,

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just over 100 billion rand in 1994, 810-812 billion last year. If you

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look at water access in committees, over 80 %. In the city, 85 %.

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Schooling is of a 95 % access. Health facilities, a tremendous

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increase in access. Flush toilets might be the slight exception. They

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are not possible in the deep rural areas. Affair. Mac.We will get

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there. -- a fair point. That may put something to you. And old

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colleague and friend and fellow campaigner against apartheid and

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the former minister for education, he said to me that he was

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astonished how poor black South Africans have been with -- out-

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patient the poor black South Africans have been the province. --

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how patient. You have disparities in percentages between white and

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black South Africans. In nearly 20 years, RUC and that progress is

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satisfactory and you are on the right trajectory? -- Are you

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saying? If you look at 1994, 18 administrations of Health. 13 % of

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the land is in the hand of the majority. Very little of the

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economy was in the hands of black people at that point and time.

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There has been terrific progress. We had to take the opportunities

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that are available to us to make greater impact. We must improve the

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quality of the outcomes of some of the spending that we are doing. We

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consider ourselves. We are very frank in South Africa. We are very

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straightforward. Read the diagnostic of the development plan.

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It will tell you and the world what we think our problems are and it

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will tell you how we intend to deal with them. You mentioned Marikana

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at the start of the interview. Those terrible scenes and the

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deaths of 34 miners' shot dead by police but a novice last year. More

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recently, we have seen pictures of Vanguards burning because of

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industrial action by agricultural workers. As vineyards. There are

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strikes with transport unions. The unions have cause to question what

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has been achieved and whether or not fair shares are happening in

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South Africa. On the one hand, yes. On the other hand, no. If you look

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at the numbers, and increased since 1994 until now. -- an increase.

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There are sectors of the economy were the distribution of benefits

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and is to be different. Secondly, and this is now a global debate

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that many politicians will share the sentiment, inequality is a

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challenge that all societies have. We certainly have it in South

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Africa. In a context when CEOs walk away with massive salaries come up

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workers have a fair case to say "why much we have such a gap?" Du

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Bee Gees need to be higher? We to be productive. -- do wages need.

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Employers and employees need to sit down together and work out what is

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the bible wage. They are, aren't they? -- viable. There must be a

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framework in which they can do it. It is difficult to sit back and

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watch some of these figures. metal workers and transport workers

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are after 18 %. The truckers could 8.5 %. Terrible since last year and

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the mines. Public sector workers have settled for 7% between now won

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2015. The transport workers' union secretary worked in the -- and all

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that the current strike said that all they wanted was a living wage.

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For many South Africans at the bottom, they do not feel they are

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getting it. You national plan is about growing the economy. That is

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proving harder and harder, giving what is happening in the world.

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Others say you should not be growing the economy but

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redistributing the considerable To day, not of the expenditure is

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spent on the social wage, education, health, social housing and

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assistance. But the agreements reached between employers and

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employees can't if employers think that is an us -- a sustainable way

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to move forward, that is the agreement... But they might feel

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they are being blackmailed. They've will still do week in the context

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of the labour relations system within a democratic society.

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are standing back? Not cattle. We brought the partners together, like

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I said. -- not at all. In the mining sector, everybody around the

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table, that violence is not acceptable. Talking is acceptable

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and necessary. Find your answers by talking together. What do you say

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in response to the chief executive whose boatie The Financial Times.

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He says the waiters are more than inflation and more than

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productivity. He says productivity has declined, Hardy sustain your

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business in that sense? That is the charge that he has. He has to work

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together with the unions and find a viable way forward, where workers

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feel they are getting their fair share of the benefits of running...

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Operating that business and he feels he is getting a fair share

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for the shareholders. Do you share the view of the Governor of the

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Central Bank of South Africa, that the country is not matching the

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growth of emerging markets? Absolutely. We have a potential

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growth of about 3.5%. In the national development plan, we said

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we need to grow at 5% on a sustainable basis, probably over 20

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years. If we succeed, we can cut unemployment by half, down to about

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14%. It's a big if.Life does not operate without ambition and

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aspiration and hard work. We are committed to do the hard work

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necessary to get to the level of growth. Without social partners.

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She said those comments about not keeping up with equivalent

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economies at the annual conference of the metal workers' union. She

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took the message straight to them and said low growth was self-

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inflicted. The implication of that being that industrial action had

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some part to play. I wonder if the ANC's relationship with the unions

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prevents you from being as planned? I think we are blunt. We are blunt

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when it comes to expressing to the unions and the South African public.

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For example, that the recession has cost us a lot in revenue. That the

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continued lack of recovery in Europe is having a significant

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impact upon us. That the revenue picture is not as good as we would

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like it to be. And therefore we have to move accordingly.

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industrial relations hats to recognise... Let me finish....You

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damage the prospects of the country. We have done well... We are talking

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about the figures. I am asking you about those remarks of self-

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inflicted wounds. I am asking if you are unable to be as blunt...

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am telling you how blood I am. me what you think of industrial

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action. Does it damage the prospects for the economy? At the

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finish what I was saying. I know you like to be aggressive but...

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am not trying to be aggressive. me finish my argument. He said, are

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we planned? I am saying to you that within government, with our social

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partners and with society more broadly, we have been very clear

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about what our expenditure is, how we need to manage that expenditure

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carefully, how we can ensure that debt does not become unbearable, as

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it is in many parts of Europe. Our fiscal management has a lot of

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lessons for your neighbourhood, if I may say so with respect. You may.

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You are welcome to send people over to us and we can show them how to

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do things differently and do things better. On industrial action, what

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is important, not just with the unions but also with business, as I

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have been doing this week... They take strike action. You can have an

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investment strike as well. It is to keep lines of communication open,

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explain to people what we are doing, listen to them carefully in terms

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of what they need. And where possible begin to meet their

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requirements. How will you persuade the unions? Some do not sound

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impressed by the plan. The general secretary of the metal workers'

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union said it's a monopoly will -- and there is inequality. He is an

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exception in terms of his views. Others have said the same. He is

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not isolated. Let me quote the President. He is not a union leader.

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He is the champion of the national development plan. He says we have a

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plan, we will implement it. We will look at any criticisms. In the

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meantime, we have a plan to carry on with implementation processes.

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It does not matter what they think, you will go on anyway? Here is any

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donation from the head of state, come and talk. -- and in that --

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invitation. One alternative with monopoly capital is to make it a

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nationalised monopoly, so that it answers to the needs of society,

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not profit. You said it all. Died because the ANC decided so. Why?We

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do not believe that is in the interest of the country at the

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moment. What could be the consequences of nationalism? It's a

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false debate. The real issue is how do we grow the economy, how do we

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create more jobs, how do we ensure that all people in the country

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benefit? And many of these challenges, as Ireland two weeks

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ago in Washington, a global. you worried there is a perception

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amongst some South Africans that the ANC government, in its 19th

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year, has lost touch? It has not. It is tremendously in touch. Its

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membership grows every day. Its structures are operational,

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leadership is in touch with people in all parts of the country. I just

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attended a workshop before coming here, where 400 delegates from

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throughout the country at the leadership level look at surveys of

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the ANC itself to inquire what do people think, what do they not like

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about us, what would they like us to do and we respond to that.

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give you an example. Last year this happened. The now Deputy President

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of the Union, famous as a campaigner and as a union man in

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the 80s. Before the end of apartheid. He became a non-

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executive director, has been successful in business. He said it

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was a mistake to put his hand up. He regrets it because it is an

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excessive price in this time of poverty. It was one of those

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moments when I was blind cited. That is the worry, that those

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moments become more frequent. a wonderful example. The system has

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become drawn in. A wonderful example of humility and the ability

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to be self-critical and to say that as a leader, no matter how

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experienced I am, I am willing to develop and learn and correct what

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I am doing. In that sense, we have a wonderful Deputy President of the

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ANC who is able to reflect on his own practices and say, I should

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have done it differently. There are many League -- not many readers

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like that around the world. should be reflected them, blunt as

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you said. Do you regret the pictures that appeared of the

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former president Nelson Mandela a few days ago, that have been highly

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could -- criticised, of him not being in the best of health? I have

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not seen those pictures. But all of us throughout the world and in

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South Africa have the highest regard for him. We all recognise

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that he is struggling with his health and we all recognise that he

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will be soon 95 years old and we invite the world to celebrate his

:22:24.:22:30.

95 years. Some in South Africa saw it as a rather crude piece of party

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politics. One newspaper said it is not as if they are above publicity

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stunts. It his trading off the name for the benefit of the party.

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is a cheap shot. Mandela is the ANC's Mandela, if you like. I am

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sure those who did have a particular view in mind, I am sure

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they are open to criticism if such criticism is valid. The tie was not

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there... I appreciate that.I am not able to address that. There was

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a lot of comment on social media from South Africa. One said he is

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treated like an animal at a zoo. That is just one way of looking at

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this. I think he is a great man whose service to South Africa and

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humanity is formidable. All of us should be very privileged that he

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has been in our midst. More importantly, at the head of what

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today is still regarded as one of the most important miracles of the

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