Pravin Gordhan - South Africa's Finance Minister HARDtalk

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

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

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

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

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

likely to be unemployed than their white compatriots. The finance

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

making the economy grow. He wants to counter negative perceptions

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

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

country Britain once described as Africa's economic powerhouse

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

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

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

who have been supporting South African debt and buying our bonds

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

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

contrary to your introduction. I have met a positive sentiment

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

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

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

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

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

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

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

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

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

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

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

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

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

people who are heads or cheer people of companies who have

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

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

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

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

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

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

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

us have and the deficiencies we might have demonstrated in the

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

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

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

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

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

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

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

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

figures from last to October from the Trade and Development

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

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

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

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

growth figures, South Africa is facing a much harsher environment

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

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

around the world have had negative impacts from outside their own

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

have tremendous resilience, bought in the business sector and more

generally to overcome these problems. We have global

circumstances were corporates are hanging on to cash. That is

happening in South Africa also. Former colonial powers and the

European Continent are involved. Development has a negative impact

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

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

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

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

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

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

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

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

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

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

with the announcement in different is that Britain will end the

development aid it provides to South Africa. The International

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

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

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

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

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

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

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

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

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

-- nowhere. The original discussions started with Andrew

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

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

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

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

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

development challenges in South Africa. Many charities including

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

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

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

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

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

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

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

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

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

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

ten years before. That kind of trajectory, that incremental

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

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

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

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

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

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

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

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

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

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

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

colleague and friend and fellow campaigner against apartheid and

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

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

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

how patient. You have disparities in percentages between white and

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

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

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

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

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

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

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

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

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

straightforward. Read the diagnostic of the development plan.

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

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

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

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

recently, we have seen pictures of Vanguards burning because of

industrial action by agricultural workers. As vineyards. There are

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

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

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

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

There are sectors of the economy were the distribution of benefits

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

that many politicians will share the sentiment, inequality is a

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

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

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

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

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

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

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

watch some of these figures. metal workers and transport workers

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

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

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

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

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

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

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

Others say you should not be growing the economy but

redistributing the considerable To day, not of the expenditure is

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

assistance. But the agreements reached between employers and

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

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

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

of the labour relations system within a democratic society.

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

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

table, that violence is not acceptable. Talking is acceptable

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

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

He says the waiters are more than inflation and more than

productivity. He says productivity has declined, Hardy sustain your

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

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

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

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

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

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

growth of emerging markets? Absolutely. We have a potential

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

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

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

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

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

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

She said those comments about not keeping up with equivalent

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

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

inflicted. The implication of that being that industrial action had

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

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

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

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

continued lack of recovery in Europe is having a significant

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

membership grows every day. Its structures are operational,

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

attended a workshop before coming here, where 400 delegates from

throughout the country at the leadership level look at surveys of

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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