Response to questions to the President in the National Assembly

Provinces
Southern African integration
Place names
Economic development
African Peer Review Mechanism
International Investment Council

Question: Provinces

Leader of the opposition Democratic Alliance (DA): Whether, in light of the recent call made by a Member of the Executive for a review of the number of provinces, the Government is considering rationalising the number of provinces; if not, why not; if so, (a) on what basis was such a decision taken, (b) when is that process envisaged to begin and (c) how will this impact on governance?

President Mbeki: With regard to the first part of the question from the honourable Leader of the Opposition concerning the question about provinces, if I may I would like to begin by referring to the Constitution of our Republic so that we remind ourselves about what it says regarding our system of governance.

The Constitution says that the Republic of South Africa is one, sovereign, democratic state in which all citizens are equally entitled to the rights, privileges and benefits of citizenship, and are equally subject to the duties and responsibilities of citizenship. In this regard, the Constitution enjoins all the spheres of government and all the organs of state within each sphere to secure the well-being of all our people, irrespective of where they reside in the Republic.

We recall these constitutional provisions because our approach to the question of the permutation of sub-national spheres of government should be informed by the recognition that our country is one sovereign, democratic state.

In direct response to the question posed by the honourable Leader of the Opposition, let me state categorically that our government has not taken any decision to reduce the number of provinces, neither are we considering rationalising the number of provinces, as the honourable member put it.

What Cabinet has decided to do within the context of examining the macro organisation of the state is to assess whether the central objectives of government to serve the people are being advanced by the current provincial and local government arrangements and what actions would be required to address this imperative?

In my recollection this matter has formally been aired publicly on a number of occasions on behalf of Cabinet in the past two years and, as such, there is nothing new in what I have just said. Our government proceeds from the understanding that government exists for one purpose and one purpose only: to serve the people. As such, in actual practice, ours should be a people-centred society. This is a central criterion that we need to apply in addressing the question of the role, the place, the number and the status of the provinces as it would apply in considering the other spheres of government.

As honourable members of the House know, since the establishment of our democratic system of governance we have taken several measures to strengthen the capacity of government institutions so that they can meet the fundamental task of efficiently serving the people. Indeed, as happens with all other policies of government, monitoring and evaluation of implementation dictates that we should, from time to time, assess whether the goals we have set ourselves and our country are being realised. This is the context in which this matter of the provinces has arisen.

When I addressed the joint sitting of both Houses of Parliament on 9 February this year, I made the following statement:

"Many of the weaknesses in improving services to the population derive in part from inadequate capacity and systems to monitor implementation. As such, in the period leading up to 2009, the issue of the organisation and capacity of the state will remain high on our agenda."

In the light of this, our Minister for Provincial and Local Government has been mandated by Cabinet to undertake a review of the current system of provincial and local government and the manner in which this review will be undertaken, and these processes I am informed, will be announced by the Minister during his Budget Vote debate in the National Assembly on 6 June.

Needless to say, in the same measure as our system of government should be people-centred and people-driven, a process that examines such fundamental questions as the role and place of each of the spheres of government will need, similarly, to be people-centred and people-driven. Naturally, therefore, public representatives of our people in all spheres citizens of our country will be afforded the opportunity to participate fully in such a process.

So, no decision has been taken to reduce the number of provinces and no decision has been taken to consider rationalising the number of provinces. There is no a priori or preconceived standpoint in the task that the Minister for Provincial and Local Government has been given with regard to the number of our provinces.

Let me conclude by setting the record straight on two critical matters. The first of these is a fantastic suggestion that this non-existent decision to rationalise the number of provinces, to gerrymander the system of governance, is driven by hunger for power intended to promote the objectives of the political incumbents in the national and provincial spheres. This is pure fiction.

In this regard, I would like to advice against seeking partisan political advantage by misrepresenting government positions, thus also undermining the possibility for rational discussion of important questions facing our country.

The second question pertains to the grossly erroneous idea harboured by some in our society that residing in one or another part of our country determines whether one gets better or worse access to the rights, privileges, benefits and responsibilities to which citizenship equally entitles each citizen. Our nation is indivisible, and I want to repeat what our Constitution says: that the Republic of South Africa is one, sovereign, democratic state that belongs to all South Africans.

Therefore the idea that living in one part of the country rather than another means that one would be denied the rights, the privileges, the benefits and the responsibilities to which every citizen is entitled is very wrong. I would like to thank you, Madam Speaker.

Leader of the Opposition (DA): Thank you. I am reassured by your reassurances this afternoon that there will be no unwise action in terms of provinces. Although, I am afraid this idea has been placed in our midst by two Ministers present here today, and it is not going to go away.

However, you would know better than I do probably that the Constitution makes clear provision for intervention in the provinces on the basis of assistance with capacity and resources. I would appreciate it if you would again reassure the House that you will take this route and that so will the Minister for Provincial and Local Government, and not tamper injudiciously with the constitutional framework and, certainly, not embark, although you said those are fictions, but sometimes truth is stranger than fiction on any politically expedient changes particularly with regard to the Western Cape.

President Mbeki: I would like to say, honourable Botha that indeed as I have said, the Minister for Provincial and Local Government, Sydney Mufamadi, has been asked by Cabinet to look at this question. I think the last time I stood here I did say that one of the reasons for this was that we introduced a new system of local government in 2000 and did not then do the next logical step, which would be to look at what impact that had on our system of provincial government with regard to the allocation of tasks and responsibilities. That is one of the matters that the Minister will address.

The Ministers, who have commented on this, as you indicated, reflect the concern which I have again explained, that in the context of looking at the macro organisation of the state, we have been concerned about making sure that government functions effectively, efficiently, meets its obligation to serve the people. That is what the intention of this exercise is.

Indeed, the Minister will address this matter before Parliament, precisely because there is nothing secretive or sinister about it. Indeed, we would want to make sure that the Members of Parliament engaged this matter, hopefully with the view to giving such ideas as they may have in terms of improving the capacity of the state to serve the people.

So, this is not a matter of tampering with the Constitution with any evil intention, but of looking at the manner in which government works so that indeed it discharges its responsibilities to the people. And I would really like that matter to be clear. Thanks, Madam Speaker.

Dr P W A Mulder, Freedom Front Plus (FFP): Mr President, we all know that Africa's borders were drawn in Europe, the results being that often people with vastly different interests found themselves in one country. The only way to govern some of these countries is with regional principles. For example, Nigeria started in the sixties with three regions; later it was 12 states; and at the moment Nigeria is 36 states.

Now, does the President agree that it is wrong to address current capacity maybe and administrative problems by changing the Constitution or abandoning the principle of co-operative government that also brings government closer to the people, as we see also in the rest of Africa?

President Mbeki: No, honourable Mulder, there is no intention of any kind to abandon the system of co-operative governance in our country. Indeed, it is in the Constitution, and we have not spoken about any constitutional changes. We are also, as I have indicated, very interested that any proposals there may be, even about reallocating responsibilities among the spheres of government, should be matters for public discussion. And, indeed, Parliament, all the parties that are here should participate in that process, so that we can look to see whether this allocation of responsibilities among the spheres of government best serves this purpose of changing the lives of our people for the better.

I would imagine, in this context that issues will arise; for instance that relate to a difficult matter, a matter that might not be peculiar to South Africa which is the matter of how you manage the process of governance in the context of concurrent powers among the different spheres of government. It is clearly a challenge. Certainly, I know from the governments' side that it is a challenge that we face.

But these are matters that we should all discuss. If we come at these matters not with the suspicions, not with presumptions about people with secret agendas and agendas up their sleeves, but come to address properly systematically the actual situation that faces us in the country, I think that that would be the best way to move with regard to this. Certainly, as government, we are very interested that everybody should participate in this discussion. Thanks, Madam Speaker.

Mr W P Doman (DA): Thank you very much, Speaker. I would just like to ask the honourable President if, given the fact that he has just referred to functions and powers, whether the government's intention is also to look at local government and to describe the powers and functions specifically of the district municipalities vis-à-vis the functions and powers of provinces that could be described more clearly and maybe shifted to enhance the power of provinces.

President Mbeki: The matters, Madam Speaker, of the powers, the role and the functions of the district municipalities relative to the local municipalities, and the powers and the role and so on of the district municipalities relative to the provincial governments, are matters indeed that have arisen in the context of our interactions with the municipalities in the imbizo process. As the honourable member, I am sure, knows, various procedures have been put in place in various areas of our country. For instance, the issue of water services, in some areas this responsibility has been shifted from local municipalities to the district and certain complications have arisen.

So, it is natural that as we discuss this matter, this issue of the local municipalities, the district municipalities, the provincial government all of these matters will arise to see what indeed is the most effective way to function in terms of the relationship between these different spheres of government. So, yes, indeed, the issue of the district municipality as relative to the provinces will arise. As I was saying, we are not proceeding from any position that says that there is an a priori justification for any constitutional changes. But we do believe that in terms of practice, as said, that we do need to see how our system of governance is functioning so that indeed we are able effectively to address the challenges facing us. Thanks, Madam Speaker.

Mr M M S Lekgoro, African National Congress (ANC): Thank you, Madam Speaker. I wish to ask Mr President this question, in the experience of government, does the existence of provinces add value and increase the capacity of the state to address the developmental needs of society, or do they intend to cause inefficiencies?

President Mbeki: The government is bound by our Constitution. The government believes that it is important that we should do everything to respect that Constitution. The national government works very well with the provincial governments together to address all manner of issues. I would not believe that national government has found the provinces to be a hindrance in terms of the implementation of policies, or the elaboration of policies even.

Therefore, as I was saying, when the Cabinet decided that the Minister for Provincial and Local Government should have a look at how the system is working, it was not based on any presumption that we should question the existence of the provinces or in any way proceed from a first assumption that there was any need to change our system of governance.

So the honourable member may have a different view about the provinces, but certainly the national government has not held any view that the provincial system of government is an obstacle in terms of what the country needs to do. Thanks, Madam Speaker.

Question: Southern African Integration

Ms D M Ramodibe (ANC): What progress has been made towards integrating the Southern African region in pursuance of advancing a common political and economic agenda for the African continent?

President Mbeki: Madam Speaker, with regard to this matter of regional integration and especially with regard to Southern Africa, our approach to regional integration is informed by the African agenda. The African agenda is driven by the vision of an African Renaissance, as given concrete expression by the Southern African Development Community (SADC) Treaty and SADC programmes, the Constitutive Act of the African Union and the programmes contained in the New Partnership for Africa's Development (Nepad). In this context, South Africa's democratic transformation, stability, security and economic development are interlinked to that of our immediate region and the whole of the African continent. This means that the stability and development of South Africa cannot be assured if any part of the region is characterised by the underdevelopment, instability, poverty and marginalisation. That is why, Madam Speaker, South Africa takes regional integration very seriously.

With regard to our own region and our regional economic community, the first point that I would like to emphasise is that we have made enormous progress in the area of the policies and programmes that we need to advance regional integration. In this regard I would like to draw attention to the following important documents which our Parliament has ratified:

* the Southern African Development Community (SADC) Treaty
* the Regional Indicative Strategic Development Plan
* the Strategic Indicative Plan for the Organ on Politics, Defence and Security Co-operation
* the SADC principles and guidelines governing democratic elections
* the 23 protocols which cover such areas as trade, energy, facilitation of movement of persons, health, education and training, mining, tourism, shared watercourses, corruption, combating illegal drugs and mutual legal assistance in criminal matters.

The honourable Ramodibe will understand that it is not possible to review the implementation of all these agreements in the time that we have. We will therefore speak only briefly to some of the matters contained in the SADC agreements that we have mentioned. The central point that we would like to re-emphasise is that we believe that SADC has indeed established a policy and programme base for the all-round integration of our region. At the same time I believe that the region as a whole is not satisfied with the progress we are making in terms of the implementation of the agreed programmes. For this reason, efforts have been made to improve the implementation organs of the community and this matter remains under constant review. It is; however, clear that all of us will have to put in a lot more work and effort to advance the goal of regional integration so as to meet the objectives that we have set ourselves.

The SADC Treaty contains a set of objectives, which member states are to achieve. This includes the promotion of sustainable and equitable economic growth and socio-economic development that will ensure poverty alleviation and the ultimate objective of its eradication; of promoting self-sustaining development on the basis of collective self-reliance, and interdependence among the member states, of achieving complementarities between the national and regional strategies and programmes; promoting and maximising productive employment and utilisation of the resources of the region and consolidating; defending and maintaining democracy, peace, security, stability and so on.

In pursuit of the socio-economic objectives set out in the SADC Treaty, the Regional Indicative Strategic Development Plan, which provides strategic direction for the operationalisation of the SADC common agenda, was adopted in August 2003. One of the main focus areas of the development plan is the attainment of a SADC free trade area by 2008, a customs union by 2010, a common market by 2015 and a monetary union by 2016. At the annual summit meeting last year in Maseru, SADC heads of state and government prioritised the following areas of regional co-operation and integration: Politics, defence, peace and security; trade and economic liberalisation; regional infrastructure and services and special programmes of regional dimension such as food security, HIV and AIDS, and gender equality.

The Maseru summit further constituted a task force of ministers of Trade, Finance and Investment to review the regional economic integration agenda, in particular the milestones for achieving a free trade area and the SADC customs union. This task force reported to the extraordinary SADC summit held in Midrand in October 2006, where after the summit adopted measures to accelerate the implementation of the SADC economic integration agenda.

These measures include the mobilisation of resources to address issues of infrastructure, food security and supply-side challenges within the Southern African region. There is a need to diversity the economies of SADC member states and increase intra-regional trade and growth and proceeding with the establishment of the SADC free trade area, taking cognisance of issues such as infrastructure, poverty alleviation and sustainable development.

At the upcoming SADC summit in August 2007 comprehensive reports on the economic integration process will be considered, including the road map towards both the free trade area and the customs union, taking into account the need for compatibility of national trade policies.

In this regard, South Africa has co-operated closely with his partners in the SADC Customs Union, whose members are all members of SADC. In this regard we have put together a national regional economic integration task team comprising of the Department of Trade and Industry, Foreign Affairs, National Treasury, South African Revenue Services, Agriculture to work with other Southern African Customs Union (SACU) members in examining the impact of the envisaged SADC customs union. This initiative will fit into the work of the SADC task force on a free trade area in particular and economic integration in general.

We should also mention that SADC has also decided to create a monitoring surveillance and performance unit by June 2007 to measure macroeconomic convergence in the region, which must be achieved as an important part of the process of regional economic integration.

Perhaps, let me stop here for now, Madam Speaker.

Ms D M Ramodibe (ANC): I thank you, Mr President, for your comprehensive and elaborate response. It is quite evident that the steps taken along the path to integration cannot be measured against technical indicators but by the extent to which they contribute to our shared developmental goals. Of the priorities that are set and notwithstanding the immense progress made thus far in this regard, to what extent are the challenges in terms of funding and capacity building of regional bloc?

President Mbeki: The honourable member is correct to refer to these challenges. As I had said, the region as a whole is not satisfied with the progress that we are making with regard to the implementation of the agreements and programmes that have been agreed on. In the past we have looked at the implementation structures and we did change them and continue to keep this matter very much on the agenda.

One of the tasks is the matter of resources to which the honourable member referred. If we take into account what we said earlier about the fact that apart from the things mentioned like the indicative plan, you have this number of protocols, which also form part of the package of measures that need to be implemented. They need all of the resources that are required.

This matter would also affect the protocol on politics, defence, security co-operation and the indicative plan that was adopted to make sure that we implement that. In that particular context indeed some progress has been made. We have signed a mutual defence pact. We have adopted the principles governing democratic elections and we have moved with regard to the establishment of a SADC stand-by force, which includes a stand-by brigade, a civilian police force and an early warning system.

There is progress but indeed the honourable member is correct to say that one of the biggest challenges with regard to implementation is a resource limitation issue, not only financial resources but also human resource limitation. This is why this matter remains constantly on the SADC agenda.

Mr W J Seremane (DA): Honourable President, we thank you for your extensive and informative response but what comes to mind immediately is: How far and wide is that kind of information reaching the ordinary citizen living in the region, especially in reference to the political agenda? What progress is being made in areas such as Swaziland and Zimbabwe, given the difficulties prevailing in the area? On the economic front, how does the pursuit of advancing the economic agenda shape up, especially in the light of the initiatives such as Nepad and the APRM, and as seen and understood by the people of the region?

President Mbeki: I think that the Honourable Seremane is quite correct to draw attention to the fact that the knowledge and information about SADC, what it stands for and what it is doing, does no reach the ordinary masses of our people. That is quite correct. Clearly, it is something that we need to address, given the importance of the community in terms of the impact that it would have potentially on all of our countries. It is something that indeed needs to be addressed.

I mentioned that SADC adopted a programme to address the implementation of the protocol on politics, defence and security. That deals with the political matters to which the honourable member refers and it is indeed within that context that SADC took the decision that we should act as a facilitator with regard to the challenges facing Zimbabwe. That is a practical implementation of the decisions and protocols of SADC and I would imagine that the people generally in the region are familiar with what is happening in that particular regard.

In that context I must add, as we were coming to the House this afternoon, I was told that it is alleged that the South African government has information that there are divisions in Zanu-PF and there are questions raised about the candidacy of President Mugabe, in terms of the elections next year. In that regard, I would really like to say that the South African government has no such information about divisions in Zanu-PF or any problems on whatever decisions Zanu-PF might take with regard to who might be its presidential candidate. I am not quite sure where the matter comes from, but certainly does not represent any knowledge that the South African government has. It is not anything that we would want to cook up. There may very well be other people in society who think so or may have that information, but we do not.

With regard to these political challenges, indeed the region has in the past discussed the matter of Swaziland and in that context and at that particular time, the matter was handled by the Commonwealth and the Commonwealth had deployed people to work with the government of Swaziland with regard to the constitution of Swaziland. Indeed at the end of that process the Commonwealth gave a report about this particular matter. It is an issue about which SADC is interested. The impact and relationship to Nepad, APRM and so on, of course derives from the implementation of our own programmes. All the socio-economic programmes, which SADC is addressing, are very consistent with what the Nepad programmes are, and indeed all of these other matters that relate to good governance are matters that also are consistent with the protocols of the APRM.

Critically, the manner in which SADC would relate to Nepad and the APRM is by implementing the programmes that we have agreed on.

Rev K R J Meshoe; African Christian Democratic Party (ACDP): Honourable President, advancing a common political and economic agenda for the African continent has, we believe, the ultimate goal of uniting all member states politically, economically and otherwise. This might result in a single central government enjoying legislative and executive powers and the loss of sovereignty of all member states. Will the President agree with the assumption that the resulting loss of sovereignty and the negative economic effects would by far outweigh any benefits? What would be the economic impact on our Gross Domestic Product (GDP) if our relatively stronger economy is integrated with that, for example, of Zimbabwe, in pursuance of advancing this common political and economic agenda?

President Mbeki: I would imagine that all of us are agreed about the strategic objective of African unity. We cannot be agreed about African disunity. We must be agreed, I would imagine, about the matter of African unity. Quite how that expresses itself is in the matter that needs to be discussed. That includes the issue of regional integration. We have the regions of Southern Africa, Central Africa, West Africa, East Africa and North Africa, and so on. They must get together because it is obviously beneficial as one can see this process of regionalisation that is taking place all over the world. We are not immune from that. That would be of benefit as would be the further co-operation among those regions. That is a process that I again imagine we all agree about.

There is a discussion that is indeed taking place about the possible formation of an African government. At the last summit meeting of the African Union (AU) in January, it was decided that the African Union summit should set aside two days when it meets now in July in Accra, specifically to discuss this matter. What should we do, especially on the political side but also the economic side; further to advance that process of the integration of the African continent and the matter of the possibility of taking steps towards the formation of an all-African government. It is a matter that has been tabled and that will be discussed.

The South African government has certainly not arrived at a position where we would say: Suppose it was to be this type of government, what are the pros and cons? We are quite convinced that in a sense you can only build that African unity from below. It has got to start at these regional levels and as I was indicating earlier, we really do have challenges with regard to the implementation of the programmes that we have agreed to within SADC. When we still face those challenges, whether it is free trade areas or whatever else, clearly you can not start running before you are able to walk. I don not think as far as South Africa was concerned we would want to start speculating now as to what might happen when some government in the future might emerge. The immediate challenge is indeed to address this matter of regional integration and see how this region interacts with the rest, as well as implementing the already agreed programmes of Nepad, which are cross boundary, multi-country and so on. Our time would be better spent, looking at what it is that we need to do in order to achieve regional integration, rather than to spend speculating time on what might be lost or gained by the formation of an African government.

The matter will be discussed in July. I do not know what the outcome of that will be but certainly the position of the South African government would be that it would not work to come at this matter from above and proclaim: Let there be an all-African government. It is not going to work. Let it evolve as part of the process of the development of our regions and the linkage between our regions.

Dr P W A Mulder (FF Plus): Mr President, the FF Plus believes, as you just stated, that successful African co-operation is only possible after successful regional integration and co-operation. From time to time South Africa experiences power shortages. I dream of a Southern African region where we share a strong infrastructure, with almost unlimited hydro electrical potential of the Ingwe Falls, Cahora Bassa, Ruacana and our own power plants, all power shortages in the region can be eradicated. If I may ask: How far are we with establishing this electrical power infrastructure in the SADC region?

President Mbeki: As I indicated, one of the SADC protocols deals with this matter, namely the SADC Protocol on Energy. As a consequence of which, there exists a SADC power pool. There is an arrangement already by which all of the power utilities in the region co-operate. In that context, this particular challenge has been identified by the whole region. There is an urgent challenge to make sure that we build up the capacity to generate and transmit electricity.

The Ingha Project is indeed part of this. I am sure that the honourable member knows of work that is already going on to rehabilitate the existing facilities at Ingha, but there has also been work going on and a feasibility study being carried out to look at the further expansion of Ingha, which means new investment and new generating capacity. Everybody recognises the fact that there is enormous hydro electric potential at Ingha, which indeed would meet the needs of the region and beyond, as well as address the environmental questions about environmentally safe generation of electrical power. It is indeed one of your most active elements in terms of the integration, this matter of power generation and power sharing in the region. The honourable member would know because the Ministers have referred to this.

A decision has been taken to build a major coal-fired power station in Botswana, which should be seen within the context of this energy provision. We have also reported on the work we had been doing with the governments of Mozambique and Portugal with regard to Cabora Bassa. Fortunately, the agreement the Portugal and Mozambique has been concluded which makes it possible to put Cabora Bassa within the context of that Southern African power pool, given that the ownership will now shift to the Mozambican government.

Question: Place names

Mr M A Mncwango (IFP): Whether (a) changing the names of places or (b) the rewriting of history to reflect a dominant political position will provide any opportunity for reconciliation and nation-building; if not, what is the position in this regard; if so, what are the relevant details?

President Mbeki: Madam Speaker, with regard to this important matter of place names, I would like to say that it is indeed one of the critical challenges facing our transformation process. Dealing with this matter should help all of us to reflect on and grapple with the true nature of the history of our country, and not just deal with positions of dominant political formations.

This history will tell us that more than 300 years of colonial and apartheid domination have left a serious imprint on the identity of South Africa, an imprint that in most instances communicates a wrong message, that we are citizens of some European outposts, rather than belonging to a proudly and full-fledged African country.

It is when we openly address these matters of which we are what is our history and how we arrived at this democracy that we create an opportunity for true reconciliation and nation-building through the issue of place names.

Further, to attain real reconciliation and nation-building we need to answer honestly a number of important questions related to the issue of place names, and these include: What is the true history of each of the places where name changes are suggested? Was the original and indigenous named changed during colonial or apartheid conquest, and, if so, what do we do with the original name? Was there consensus when a specific name was given to the area or was the name unilaterally imposed?

When changing the name, how do we contribute to reconciliation and nation-building? Is the current name offensive to some sections of the community? How does the name reflect and define the people and the area in question? And how does the name reflect the experiences, the challenges, the work and the struggles of the local people?

And clearly, Madam Speaker, part of the colonial and apartheid strategy was indeed to destroy the identity of the majority of the people in this country so that this majority should see itself in the image of the colonial and the apartheid masters. Hence we have places such as East London, Parys and Newcastle here in South Africa, because this was seen as an extension of Europe. So naturally, it would be remiss for a free South Africa, an African country with citizens who are Africans, not to address this matter.

As we know, during the difficult years of colonialism and apartheid many South Africans engaged in heroic struggles against oppression, and because of their sacrifices, today we live in a democratic country.

The question is: How do we remember and recognise their contribution to the freedom that we enjoy today? Indeed I agree that when we recognise and remember these heroes and heroines we should not be partisan, but acknowledge the contribution of all those who sacrificed for our freedom.

In this regard, in dealing with the matter of place names and in the process of attempting to answer, as we should, the questions I have cited, we have to engage all sections of our communities so that there is a general understanding of why we have embarked on this task. We should answer these questions so that we don't repeat the mistakes made in the past, when many of the names we have inherited were imposed without any input from the majority of the people.

By engaging the mass of our people, we will create the possibility, through that process, to reflect the true history and the views of the majority of the people in the area. Honourable members will also recall that the Truth and Reconciliation Commission (TRC) recommended the renaming of geographical features as a form of symbolic reparation to address South Africa's unjust past. Therefore the issue of changing names is part of redressing the imbalances of the past as mandated by the Constitution and recommended by the TRC.

It is noted that among the injustices of the past was the degradation of African place names. It is, therefore, the responsibility of the government to ensure that all South African geographical features or places are representative of all South African citizens.

At the same time, a matter that honourable members may wish to reflect upon in the coming period is that the process of place-name changes is correctly a grass-roots one, emerging at times at various unco-ordinated moments as each local municipality, with its municipal government, finalises its own reflections on the matter. However, the disadvantage of this is that disjointed national discourse may take place, informed by the flavour of the moment, with generalisations that have little to do with the national state of affairs.

So, I would think that it might very well be better if the South African Geographical Names Council, working with the provincial geographic names committees and the local municipalities, conducted hearings across the country and established a slate of changes that we can refer to as "base changes", that accord with the new dispensation, and changes that would also take into account the legitimate sensitivities about the culture and the histories of our diverse communities.

This would give the nation a clearer picture of the modifications being made on a national scale. In my view this would also help to debunk the myth that specific communities, languages and legitimate schools of thought within the broad constitutional framework are being marginalised. I do hope that honourable members will respond to this suggestion.

On our part as the executive, this is an issue that is exercising our minds, and we will in due course place a proposal before the nation on this matter. Thank you, Madam Speaker.

Mr M A Mncwango; Inkatha Freedom Party (IFP): Thank you, Mr President, for your comprehensive answer to my question. I must say that I was very impressed and very satisfied. However, I do want to say that true reconciliation between all races and amongst blacks in particular is very fundamental for this country in underpinning and advancing the cause of our hard-won democracy. And for that reason, Mr President, I want to say that the naming and renaming of public buildings, streets and other public facilities is one of those important instruments, I believe, that could be used to unite all the people of this country and also promote the cause of nation-building.

I want to say that all those people who had contributed to the development of this country, socially, politically, economically and otherwise, should be recognised without any due consideration for their political, racial and linguistic backgrounds. I am not too sure that the manner in which the name-change process currently being undertaken by the ANC administration in the City of Durban, does in any way contribute to nation-building and reconciliation. My question, Madam Speaker, is: Would the President be averse to the idea of an all-inclusive forum, to be established at all three levels of government, to deal with this important issue in such a manner that in the end an outcome, which will be based on consensus as opposed to majoritarianism, is achieved? Thank you.

President Mbeki: Madam Speaker, let me, first of all, say that with regard to the matter of the processes at the eThekwini metro, I am sure the honourable member is aware of the decision that the national government took, which was to ask the Ministers of Arts and Culture, and Provincial and Local Government to interact with the municipal government to address this, precisely because we are indeed fully in agreement with you with regard to the manner in which these processes should be handled. That is the reason the national Cabinet decided to ask those two Ministers to interact with the municipal administration in the eThekwini metro.

As I have indicated, honourable member, we have the geographic names council, which operates in terms of legislation that was approved by this Parliament, I think in 1998, which lays down particular procedures, as well as various criteria, that we need to adopt as we address this matter of place names. I think that that is really what we need to do to ensure that that council operates as visualised in the piece of legislation concerned.

I have just said now that indeed it might be very useful if the National Geographic Names Council interacts with the Provincial Geographic Names Committees, as well as the municipalities, so that before any change takes place anywhere, it is involved in that particular process to ensure consistency nationally, but also to ensure sensitivity to all of these basic principles.

I think that indeed, without derogating the powers and privileges that the different spheres of government might have, granted to them by the Constitution and legislation, it would be important to have an inclusive process. And I do believe that the National Geographic Names Council would have the ability to bring together these other spheres of government so that indeed we achieve these objectives of reconciliation, about which I'm quite certain we all agreed. Thanks, Madam Speaker.

Language spoken has changed to IsiXhosa

Nkosazana P Tshwete (ANC): Mongameli, ndiyabuleli ngengcaciso ecacileyo ngokubhekisele kutshitsho lwamagama eendawo. Uwuchaphazele umba wokudala uxolo, wawuchaphazela umba weziphumo zomzabalazo wenkululeko. Ngokutshintsha amagama eendawo senzela ukuba singayilibali imbali yethu.

Kukho ingxolo enkulu mva nje, ngokubhekisele kutshintsho lwamagama, nangona uzicacisile ngokupheleleyo iinkqubo zohlengahlengiso okanye i-transformation. Siyazi ngokupheleleyo ukuba olu hlengahlengiso lulungiselelwe kuMgaqo-siseko woMzantsi Afrika.

Ngaba, Mongameli, sithini ngabantu abangafuni kulandela uMgaqo-siseko nabaphikisana nawo? Asazi ukuba masenze ni ngabo. Enkosi. [Kwahlekwa.]

President Mbeki: Ngekhe sivumelane nabo, sizimanye nabo ekuphikiseni umthetho kwanoMgaqo-siseko wethu.

I would hope that all of us agree on the point that we approved the legislation setting up the geographical names council. This matter needs to be addressed, and you cannot avoid it.

Indeed, regarding the area that you come from, why do we have a town named after King William, King William's Town? You and I know that that place is called eQonce, but why don not we say so? So I am saying that I am quite sure that all of us are agreed about that.

But the issues that are being raised about the process, about procedure, about inclusivity and about sensitivity to all manner of issues, of culture, of history and so on, are very important. And I think that we need to respond to those very positively, without commenting on the substance of the processes. In the eThekwini Metro, for instance, you have a great heroine of our people, honoured in our national orders, Princess Magogo, she is a national hero. She has a gold award in the Order of Ikhamanga for her contribution to culture.

I would not imagine that there has been anybody in the country who would want not to honour her. So I am saying that the processes, the inclusivity, respect for the principles and finding all these difficult balances in this regard is important, starting from the point that change is both necessary and inevitable. The sensitivities ought not to be used to block change.

You cannot still have, I think, names like Boesman's Rivier.

Mrs D van der Walt (DA): Honourable President, the DA supports name changes where current names cause offence, have become irrelevant or are not of any historical significance. We truly believe that South Africa belongs to all who live in it, and therefore believe that the history and heritage of all communities must be recognised when any name changes are made. The manner in which Cape Town is approaching name changing seems to us to be an example for the whole of the country to follow. Mr President, I have listened very carefully when you answered the previous questions on this issue and because it is not happening the way you described it and want it to happen, I ask you: Will you undertake, Mr President, so that we do not make the same mistakes as in the past and ensure that name changes will be properly and sensitively handled with all stakeholders consulted and everyone's history, heroes and heritage being recognised?

President Mbeki: Madam Speaker, we would want to handle this matter in the manner that is prescribed by law. I did say that the legislation was approved in this Parliament. This legislation set up the council which succeeded an earlier committee which I am told had existed since 1939 and this committee dealt with the same question. We must handle it within the context of the law and if the honourable member has a look again at that legislation, it will indicate what needs to be done and the criteria that need to be respected. We do indeed need to follow that and I believe that the legislation and the procedures set out there are sufficient to achieve these purposes of inclusivity, consultation and so on that we need.

The point that we are also making further to entrench that system is to move more formally to institute a system of regular consultation. That is the thing that the Honourable Mncwango raised of some inclusive forum that would include bringing in national provinces and the municipalities. What is said in the legislation is sufficient to address these particular purposes. I do not believe therefore that there is any intervention that needs to be made by the President beyond what the legislation provides. It is a matter of the implementation of the law of the land and if we do, as we should, it should address such controversies.

Rev K R J Meshoe (ACDP): Honourable President, the renaming of streets and places is a very sensitive issue, as it is used to rewrite the history and or to erase the imprint of previous political regimes as the President has correctly said. While recognising the enormous costs incurred by the taxpayers and business in the process, the ACDP nevertheless supports the changing of offensive names and those in honour of former apartheid architects and leaders.

I appreciated what the President said about the importance of inclusivity and sensitivity. I still want the President to give an assurance whether he will consider the impact that name-changing will have on nation-building and reconciliation before endorsing or agreeing with decisions that have been made to include names of people who had no respect for life and those who caused physical injury and pain and suffering to many of our people. Thank you.

President Mbeki: I am quite certain that the honourable member is aware of the processes to which I have referred, and which are required in terms of our legislation. When the proclamations are issued with regard to these name changes, by the Minister of Arts and Culture, it is after there has been a process and the names are then recommended to him. It is the result of processes that have been carried through by the Geographic Names Council.

I would not imagine that this body of very distinguished South Africans would find it possible to recommend honouring people who had done harm to the nation. I wouldn't imagine that it would happen. The Minister does not wake up one day and decides that he is going to rename Cape Town or any other place. It is a matter that is dealt with by him through prescribed legal processes. I am quite sure that both the council and the Minister would be sensitive to what the honourable member raised here. He may very well have some specific examples of places that were named after people who have done the kind of harm to the nation to which he referred. I am not aware of that. If that should happen, it surely ought to be corrected.

Question: Economic Development

Mr LV J Ngculu (ANC): (a) What progress has been made in view of the Government's resolve to fight poverty and create conditions conducive to the economic development of the masses of our people and (b) what key successes have been achieved in (i) fighting poverty and (ii) reducing unemployment?

President Mbeki: Madam Speaker, with regard to this matter of economic development and the fight against poverty, we have indeed, on a number of occasions in this House, provided details of our efforts on poverty eradication. My Cabinet colleagues have likewise from time to time provided their sector-specific details on this matter. Our main message in this regard is that we have indeed made progress since 1994 in fighting poverty, but such is the legacy of the inequities we inherited that much more needs to be done to ensure that all South Africans experience the dignified quality of life.

The government is indeed determined to speed up the process that will help us to achieve higher rates of economic growth and job creation and to improve the provision of social services. As the honourable member knows, government has resolved to halve unemployment and poverty by 2014 and, as such, we have put into place a number of key programmes to ensure that this objective is attained.

At the core of these interventions are programmes such as sustainable growth, largely through stimulating opportunities for formal sector employment, bringing the economically marginalised sector of our people into the mainstream of our economy through support for small and micro enterprises and co-operatives, speeding up land reform, skills development, the Expanded Public Works Programme and improving our social interventions directed especially at poor citizens.

As honourable members know, economic growth averaged about three percent during the first decade of our freedom, from 1994 to 2004, which was itself a considerable improvement on the decade before 1994 when growth averaged one percent a year. Since 2004 growth has exceeded four percent a year, reaching about five percent in 2005/06. Growth is focused to rise to over five percent in the years commencing 2009. Of course, as the member knows, government intends that that should go to six percent and above.

On average, in the decade before 1994, per capita growth was negative, but the situation has much changed. With the faster growth rate has come rapid improvement in job creation. Again, as the honourable member would know, close to 1,5 million net new jobs were created over the past three years. In the last year measured to March 2006, around 540 000 net new jobs were created.

Though unemployment remains high, this is considerably better than the unemployment rate registered a few years ago. Recent research indicates that real income of the poorest 20% of South Africans rose by 30% in real terms between 1994 and 2004. As part of that process of ensuring that our economy grows, by the last quarter of 2006 fixed investment had reached 19,5% of gross domestic product and its rate of growth is even higher than that envisaged in Accelerated Shared Growth South Africa (AsgiSA). Planned public sector investment has increased to over R415 billion an increase of more than 15,8%.

The infrastructure investment is in projects across government, including investment for the 2010 Federation International Football Association (FIFA) World Cup and 37% is invested by the state-owned enterprises in power generation, transmission and distribution, port, rail and pipeline infrastructure.

We cite this question of economic growth because job creation and promotion of self-employment are critical interventions in dealing with poverty. As such, what the honourable member referred to as "economic development of the mass of our people" should be at the core of our poverty-reduction efforts. A critical element of this should be deliberate action on the part of government to ensure that the benefits of economic growth are shared among all our people, including the poor. Let me stop there and I will continue later.

Mr L V J Ngculu (ANC): Thank you very much, Honourable President, for your elaborate reply and also for the extensive nature in which you replied to the question regarding the issue of poverty and unemployment. In my own view, Comrade President, I think this challenge varies and is multidimensional, in terms of the challenges we face in reducing unemployment and fighting poverty. Could perhaps the President respond to the view that one of the ways of addressing this question is to ensure that people engage in sustainable programmes of self-employment or sustainable programmes for their own empowerment? Put differently, perhaps, how best could we re-ignite your call of Vukuzenzele?

President Mbeki: Yes, indeed, I would agree, honourable member, that it is important that we inspire that sense of Vuk'uzenzele among our people to ensure that they themselves join this process of development. But it is important that the government should play its role in terms of empowerment of people, so that bakwazi ukuvuka bazenzele (they can stand up and do things for themselves), not to act on their own but to act with the support of the government.

In that context, it is important that we should continue and improve our performance with regard to the development of the small-medium and micro enterprises (SMMEs) to ensure that we address all of these matters that relate to this. Indeed, as people stand up to take care of their own development and ensure that those matters are addressed, we need to deal with these issues about problems of regulatory burdens and problems of institutional state support for such people, problems of access to financing, problems of access to proper training and education to equip people to be able to run these enterprises on their own. It is necessary to do that; so that indeed people are empowered to do precisely what the honourable member correctly said needs to be done.

In this regard, I would say that indeed a significant amount of work has taken place towards the integration of the SMME development through the strengthening of our institutional mechanisms. That would relate to Small Enterprise Development Agency (Seda), Khula, the Apex Fund and Umsobomvu Fund. Indeed, this particular challenge is going to become, I think, sharper as we decide on the 10 products set aside for government to procure services and goods from SMMEs.

We must also address these other matters where government has acted negatively with regard to these developments. We have, for instance, failed to settle SMME accounts within the 30 days that we said should be the longest period before the government pays for what it has bought. I am saying, yes indeed, we need to encourage that spirit of Vuk'uzenzele, but we must also make sure that this is properly supported by government. Thanks, Madam Speaker.

Mr C M Lowe (DA): Madam Speaker, Mr President, as you have indicated in your very comprehensive reply this afternoon, the question of unemployment is at the heart of poverty and is certainly one of the key things we have to address if we are going to successfully address poverty in South Africa. As you have also indicated, you have had some successes and you have also been less successful in other areas. I think you particularly mentioned the Growth and Development summit and the targets that were set there, the Sector Education and Training Authorities tried to address the skills deficit on the training of people. And of course, there is the question of labour legislation whether it is too flexible or not flexible enough, and the whole question of affirmative action and employment equity.

Regarding all of these things you have had success with but you also, I think, would agree that you have been less than successful in other areas. The DA has criticised your government. We have done so honestly at all times as an attempt to find solutions. We have always put alternatives, and we have put proposals that we think would work better, based on research and overseas best practice in a real attempt to find a solution to the questions that face us.

Mr President, my question to you this afternoon is: Would you be prepared to meet with a delegation or send a delegation from your government to meet with the DA to sit down and talk about these real problems and about unemployment in South Africa, the question of skills and the question of making a difference in poverty because we really do believe that we have some answers that we could look at? Perhaps, they are not the only answers but we believe that they are constructive and are real answers we want to work with to find solutions. Would you be prepared to meet with us, either yourself or as a delegation of people to sit down and come up with some constructive solutions for all the people in South Africa? Thank you.

President Mbeki: Madam Speaker, the answer to that question is, yes. We would certainly be quite happy to do that and listen to the views of the DA on the matters that the honourable member has raised, all of which are important. I am quite certain that, perhaps, in that process both sides might learn something, including learning how to, in a balanced way, respond to these various challenges that the country faces. In that sense, it might help to kind-of flush us out of our partisan spaces to really address these matters as national challenges rather than promotion of particular parties and agendas. Certainly, honourable member, yes, we would be quite happy to meet with the DA. Thanks, Madam Speaker.

Mr H B Cupido (ACDP): Madam Speaker, honourable President, in order to address the mammoth challenge of reducing unemployment and to fight poverty, can the honourable President give us an indication which industries have been identified as potential hubs of creating employment and how these objectives will be achieved while South Africa is experiencing a critical shortage of skills? Thank you, Madam Speaker.

President Mbeki: I understand that the honourable Minister of Trade and Industry addressed this question the day before yesterday when he presented his Budget Vote. Indeed, honourable member, he would have identified those. I would really like to suggest that you have a look at that because we have addressed this matter before and said that, in terms of that industrial policy framework, we would want to focus on particular sectors to address a variety of matters, some of which have to do with job creation and others have to do with other elements in terms of ensuring the economy grows at the pace that is required.

That would include, with regard to these sectors that you are talking about, tourism which all of us have spoken about. It is very important. We have spoken about business process outsourcing, a very important sector. We have spoken about the whole approach towards labour-intensive methods of construction, all of which are parts of this and a whole variety of other matters, such as the development of the small and medium enterprises sector as a sector of the economy that would generate and be a source of jobs.

But I would recommend that the honourable member has a look at the Minister's speech that he made when he presented his Budget Vote. I am quite confident that he did address this particular matter. Thanks, Madam Speaker.

Question: African Peer Review Mechanism

Leader of the Opposition (DA): (1) Whether, in light of recent reports that the Government has rejected 149 out of 50 African Peer Review Mechanism recommendations on South Africa, the Government has rejected any such recommendations; if not, what is the position in this regard; if so, on what basis;

(2) whether the African Peer Review Mechanism still has any important role to play in assessing governance in (a) South Africa and (b) the African continent; if not, why not; if so, what are the relevant details?

President Mbeki: Madam Speaker, with regard to this matter of the African Peer Review Mechanism, let me commence by reiterating what we have consistently stated before, that we are indeed committed to the APRM process, whose primary purpose is to foster the adoption of policies and practices that lead to political stability, high economic growth, sustainable development and accelerated sub-regional and continental integration through sharing of experiences and reinforcement of successful and best practice.

It is for this reason that we welcome the African Peer Review Mechanism's country review report on South Africa, which will be presented to the African Union, and which will be implemented to the members of the peer review system during the African Union Heads of State and government meeting in Accra next month.

Reports that our government has rejected the report are devoid of any truth. On the contrary, virtually all of the report's recommendations have been integrated into the South African APRM's national programme of action.

The APRM process has an important role to play in assessing good governance, accountability and transparency in South Africa as it did in other countries thus far assessed, and we know they will continue to do so in future.

It was set up by the leadership of the continent precisely because we seek, as peers, to improve the performance of our governments and other sectors of society so as to build a better life for all of the people of the continent.

According to the guidelines of the APRM for countries to prepare for and participate in the APRM process, the country review panel receives a country's self-assessment report, undertakes its own review, and thereafter drafts a country review report which assesses political, economic and corporate governance as well as the state of socio-economic development.

The guidelines further stipulate that the draft report should first be discussed with the government concerned with a view to ensuring the accuracy of the information, and to provide the government with an opportunity both to react to the APRM teams' findings, and to put forward its own views on how the identified shortcomings might be addressed.

Those responses of the government are then appended to the report of the APRM team. Once the discussions are completed, the country being assessed finalises its programme of action, taking into account the conclusions and recommendations of what would have been the draft report.

This is precisely what has happened in our country, and we are confident that, as the APRM process unfolds in more countries, it will continue to draw important lessons from experiences gathered in its initial undertakings.

Unfortunately, for purposes of this discussion, but quite correctly in the general order of things, the APRM process stipulates that the country report, which includes comments by the government of the country being assessed and the national programme of action, assumes the status of a draft until it has been considered by the summit meeting, and it is only then when documents are made public, six months thereafter.

As such we are therefore not at liberty to reflect on the actual substance of the issues that the report on South Africa covers. We are constrained in this way because we do respect the protocols of the APRM, and fully understand the rationale behind that.

I must say that this is contradistinction to the posture of some individuals in some civil society organisations and some in the media who took advantage of the very important process of public consultation to get their hands on initial drafts of the report, and publicly air their content in a selective manner that seeks to discredit our country and our government.

We wish to assure the honourable members that once these processes have been completed, we will be only too happy to engage the House on issues that have arisen so that, together, we can enhance the work we have already done to build a better South Africa. In that regard, let me again say that virtually all of the recommendations made by the APRM report have been integrated into our national programme of action. Thank you very much.

Leader of the Opposition (DA): Madam Speaker, Mr President, South Africa and you personally were a driving force behind the establishment of the African Peer Review Mechanism process. We have rightly taken great pride in the acceptance of this process by our peers.

Numerous reputable commentators have assured us that our report has now been heavily edited. We have had reports of the flawed public participation process, which in a way you have now disputed, but which nevertheless has been said often. There was even our pleading of extenuating circumstances in areas of poor performance.

Can you reassure us that this is not going to devalue the eventual report and also the credibility of the future processes?

President Mbeki: I do believe that, Honourable Botha, I have the advantage that I have been part of this process, and therefore, having not listened to commentators, I do not know what the commentators have been saying, but what I am saying is that, yes, that is all you will have to go by, Honourable Botha. It requires a little bit of patience.

I am trying to explain what happens. There are set procedures in terms of the APRM process. As I have explained, we do a country report. The panel comes and does its own report. They look at our own report, and so when they prepare their own report, they make their comments and send a draft. You make your own comments which, as I said, they will attach to their own report.

They report on the peer review to the peers. As a result of that, six months afterwards, these documents are published. I am afraid that you have to be patient for that. You see, my advice to you, Honourable Botha, is that if anybody comes to you to tell you that this is what this thing says, and this is what has happened, and this is the outcome, chase them away, because they are not telling you the truth. They are not telling you the truth at all, and I promise that.

You will see. Keep the press cuttings of the commentators, and when the report comes out, then you can have a look at what the commentators said, and what the report may say. I am quite certain that you will find that, in this particular instance, I am being more truthful than the commentators. Thanks, Madam Speaker.

Mr M R Mohlaloga (ANC): Madam Speaker and Honourable President, in the context of the discourse on the African Renaissance, there is an afro-pessimistic perspective that has both persistently and consistently been drumming the message that the process of the revival of the continent is destined for inevitable failure, and that therefore, the African Peer Review Mechanism process would not yield any results, and the undertone of this perspective is both implied and embedded in the question you are responding to, asked by the Leader of the Opposition.

My question, therefore, is that, given the fact that we are not the first country to undergo this process, what experiences have we learned that reinforce our confidence in the APRM process, and defeat the afro-pessimistic perspective?

President Mbeki: Indeed, I would say that, with regard to the reports that we have considered, coming out of the peer review system, they have indeed fully demonstrated the need for the system and its efficacy.

In all of the instances that we have considered, at the end of the process when these reports are presented at peer review level, when these reports are presented, indeed they have never seemed to seek to hide whatever might be wrong in any country. In all instances, when these reports have been presented - that is for Ghana, Rwanda, and Kenya; the peers have been there. The Heads of State of all of those countries have been present when the reports have been presented and discussed.

Indeed, when they then come back to report to their peers about their responses in terms of the actual programme of action that they have adopted to respond to the outcome of the peer review system, again, those reports have been submitted by the Heads of State of those various governments, and they have given us a chance, because we have got their response. Here is a response in terms of our programme of action, and at the same time, you have a copy of the report. You are then able to challenge the programme of action to say, "But you have not addressed some matters".

So, I think the process has gone very well. The one issue that we have not yet addressed, which we have to address, is part of the objective of the peer review system which is not to throw stones at people, but indeed to identify these challenges that face us with regard to good governance, political governance, economic, corporate and all that to say what it is that we need to do. We also need to say how the rest of us the peers, assist to give support in order to ensure that what might have been wrong is addressed.

I am saying that that particular issue of what we might do is not one I believe we have addressed adequately. I just want to give a quick example, honourable member. The peer review system, for instance, will address the issue of the auditing of public accounts: Is the process being done properly? Are the institutions there? Is the legislation there? Are there processes, etc?

You find that, in some instances, that we have dealt with weaknesses in the institutions that would do that auditing, not because the governments do not want to do it, but because they do not have the resources to set up these systems.

It then becomes the responsibility of the rest of the peers to ask what it is that they can do to help to provide the resources so that this problem that is been identified and accepted is addressed. I am saying that with regard to that particular matter.

We have not done as well as we should, I believe. Certainly, there is nothing that has happened with regard to the APRM process which indicates that Africa is set on a path of failure. I think that what happened is precisely the opposite, which the African continent is looking very frankly and very objectively at the challenges it faces and seeks to address that.

Indeed, as I was indicating earlier, those reports, within the context of the processes that the African Peer Review Mechanism (APRM) carried out, have become public reports so that the whole nation and the whole continent can make its own assessment as to the objectivity and so on of the those reports.

I think all of those points to the fact that the continent is indeed trying to do something about its renaissance. Thanks, Madam Speaker.

Mrs C Dudley (ACDP): Madam Speaker, we understand, Mr President, that the Honourable Minister Fraser-Moleketi had already denied claims that Government had rejected all but one African Peer Review Mechanism recommendation, and in view of the honourable Minister's statement yesterday, we know that you will understand why the question still had to be asked.

Does the President believe that South Africa has an additional responsibility when it comes to the manner in which we respond to the APRM recommendations? If so, what responsibility and why? Will South Africans or the representatives of the people of South Africa be informed of Government's intention or intended response to the report before it is tabled at the African Union summit in Ghana later this year? What will the process be? Thank you.

President Mbeki: No, Madam Speaker. We have to respect the rules and regulations that have been set, that have bound everybody. I don't believe that we should set our own rules with regard to this matter. I have explained this process, as I am sure the Minister Fraser-Moleketi has explained this many times.

Indeed, everybody who participated in the process of drawing up that country report, which includes the non-governmental organisations, and indeed Parliament did work with regard to this. I would imagine that, by the time we did all of this, all of us were familiar with the set procedures and set processes for this. I am saying that I do not believe that it would be correct that South Africa decides to kind of place itself outside of those rules and regulations and procedures that have been agreed by the continent. There are set rules, set procedures with argumentation as to why those particular procedures are necessary in order to achieve a peer review system.

So, no, we will proceed according to the rules, and the rules say that we must respond to the report of the peer review team, which we have done. The peer review team will take those reports and submit them to their peers, that is, its own report and our own response. The peers will respond to both as they see fit, and that will include our response in terms of a programme of action arising out of the recommendations of the peer review team.

The peers will then look at all of that, make their own determinations, and then subsequently, all of those documents will be published. That is the process, and we will stick to that. We do not want an exceptional South African process outside of these processes that have bound everybody - Ghana, Kenya, Rwanda and everybody since this is what applied to them. For South Africa to say, "No, we are very special. Bend the rules for us," I think, would be incorrect.

There is no additional responsibility that rests on South Africa that is different from responsibilities that people who have acceded to the African Peer Review Mechanism have. I do not know what such additional responsibilities would refer to. I do not believe there is. There is a responsibility for us to respect the rules and regulations to participate fully in this process, and indeed, an obligation and a responsibility that I am sure affects everybody, which is a responsibility to make sure that we do not do anything which undermines and discredits and renders irrelevant and meaningless this particular process. That is a responsibility that I am sure is binding on everybody, not just South Africa. I do not know what additional responsibility we would have.

So, let us proceed, honourable members, in terms of this House. This House participated in the peer review system. It made its own contributions. I would imagine that by the time you did that, you knew what the rules are and what the framework is, and what it is that happens. We cannot, halfway through that process, now seek to change all of this. Thanks, Madam Speaker.

Adv Z L Madasa (ANC): Honourable President, would you agree with my observation that despite the cynicism that this process may target the so-called "troubled states", the fact that the process was not deterred from raising issues with South Africa speaks to the legitimacy of the process, and its credibility, and the upholding of the principle of equality of states within the African Union, and should finally act as an incentive to all other member states to follow suit and subject themselves to the process? Thank you.

President Mbeki: Yes, I would agree very much with the honourable member. Indeed, it is important that the peer review system should, even in our case, whatever we think of ourselves, come at us in an objective manner within the context of what it seeks to achieve, within the context of its framework, and indeed be critical about any matter that it finds necessary to be critical about.

I agree with you, honourable member, that it ought to add to the legitimacy and the credibility of the system, and indeed, hopefully, people will see that, indeed, this was not intended to identify particular countries, condemn them, demonise them or marginalise them, but indeed, it was intended to ensure that we do identify the challenges that we face in order to be able to say what it is that we need to do to solve that. I think you are quite right. Hopefully, this particular experience in South Africa will convince everybody that, indeed, it is a very worthwhile thing, and that it would be useful for all African countries to accede to the African Peer Review Mechanism. Thank you, Madam Speaker.

Question: International Investment Council

Mr Y S Bhamjee (ANC): (a) What are the key outcomes of the International Investment Council (IIC) meeting hosted by the Government from 11 to 13 May 2007 and (b) how do these outcomes advance the Government's developmental agenda and confidence in the South African economy?

President Mbeki: Madam Speaker, let me begin by saying this is the question on the International Investment Council's last meeting earlier this month. Alicedale, where the IIC met, is a small town in the Eastern Cape, which for decades has been poverty-stricken, with high levels of unemployment. However, investments by the public and private sectors and a series of public/private partnerships, encouraged by the provincial government of the Eastern Cape, have led to the re-building of the centre of the town and the development of a range of new employment opportunities that have helped to reduce the chronic unemployment in the region. Indeed, all the members of the IIC were impressed with this exciting example of social partnership leading to economic recovery and development in a poor region.

The meeting was well attended by members of the Cabinet and overwhelming majority of members of the IIC. The council discussed current economic trends, report-backs on the Accelerated and Shared Growth Initiative for South Africa (AsgiSA) and Joint Initiative for Priority Skills Acquisition (Jipsa), various other issues relating to economic growth and poverty reduction, a report on the progress towards the 2010 FIFA World Cup, a report on strategies to reduce crime in South Africa and a general discussion on communication of South Africa's progress.

The council did indicate that it was very pleased with South Africa's economic progress and urged that the AsgiSA and Jipsa programmes should continue to be implemented with more vigour. One of the members of the council, Percy Barnevik, who has assisted in the Jobs for Growth Programme that is centred on development of co-operatives focusing on poor women, reported that that programme is making good progress.

The council welcomed the presentation made on the preparations for the 2010 FIFA World Cup and recommended that the message of progress towards 2010 should be communicated more broadly.

Similarly, the council was positive about the presentation on combating crime made by Deputy National Police Commissioner Singh and proposed that government should publicise its anti-crime strategy and its implementation again more broadly.

Members of the council continued to help South Africa in communication, especially among the business community internationally. They advised us on how to communicate more effectively and the manner in which they act as ambassadors for South Africa themselves.

An improved international confidence in our economy was clearly indicated this month, when the government issued an international 15-year bond at the lowest cost premium we have ever paid.

Records of the meetings of the council would show that members of the council speak their minds on issues as they see them and that government benefits greatly from their frank but broadly supportive role on areas on which they have immense knowledge and experience.

With regard to the impact of the discussions on our development agenda and confidence in our economy, the discussions have shifted towards a careful analysis of South Africa's potential areas of competitive advantage in future.

In the context of a world where some countries compete on the basis of low production costs, the question was posed whether South Africa intended to compete on the same grounds or if South Africa would not be more realistically capable of competing through other advantages such as industry specialisation, quality and technological innovation. As a result, a discussion on industrial and sectoral development strategy was initiated. At the end of the meeting it was concluded that we should now spend more time in the council discussing this question further to refine our industrial strategy.

Given the wide and comprehensive business and economic experience that members of the ICC have, this will help us better to position our economy to compete both on the domestic and the international markets. Thank you very much, Madam speaker.

Mr Y S Bhamjee (ANC): Madam Speaker, through you, given the fact that our ability to meet our international obligations is highly respected, is it possible for the President to enlighten us on how the ICC views the trend of investment in South Africa for the next three to five years? I know you have touched on that and I will appreciate it if you could kindly elaborate on it a bit further. Thank you, Madam Speaker.

President Mbeki: Madam Speaker, the honourable member would recall that the IIC has taken the position for some time that we should focus on this matter of achieving higher rates of growth that even when we say six percent we should say at least six percent because they strongly believe that the capacity and the possibility is there to raise its levels of growth of the economy to be able to address all of the challenges we are facing, including the challenge of unemployment.

It is part of the reason that they raised this question, which relates to industrial policy, to say that we need to have a closer look at this question as to which ought to be the lead sectors in the South African economy within the context of addressing the competitiveness of the South African economy. That is why they raised the question, and certainly did not believe that we should seek to achieve the competitiveness of the South African economy on the basis of cheap labour. They did not think that would be correct and therefore we need to take other directions.

Now having taken those directions and identified these various sectors which would be the lead sectors addressing that competitiveness matter, then that also creates a better possibility to address investment possibilities because again one of the issues they have been raising is related to the question of communication about what South Africa is, that indeed South Africa ought to be attracting larger volumes of foreign capital and that the more we focus on these particular things the easier it becomes to target particular investors who might come into the various sectors that we might have identified.

I am saying: the matter of proper communication about South Africa; they raised also in that context, because here you have the senior international businesspeople who know this country well, who follow what is happening and are quite very confident about its future but say that there is a wrong message that goes out about South Africa to the rest of the world which might discourage other investors. That could be a wrong message about what is happening, that therefore we need to address; but therefore that we need to do all of these things as a result of which we would be able to focus on particular investors rather than just communicating a general message.

Of course, they have not said that we believe that in two, three of five years time these are the additional volumes of foreign capital that will have flowed into the country but they are raising the issue of taking the necessary practical steps to ensure those larger inflows of capital into the country.

I must say that in that context one of the things they do, as I was saying, is that they themselves are acting as ambassadors because they come from all over the world; Japan, India, France, Germany, the United States, Brazil etc; that whenever any of our leadership comes to their country they do indeed organise the domestic business leadership to interact with our people as part of that process of the sensitisation of the possibilities that exist in this country.

But indeed we have not asked them, and they have not offered, and I do not believe we will ask them, to make any predictions about how much new foreign investment will have flowed into the country in three years.

Thank you, Madam Speaker

Mr H J Bekker (IFP): Thank you, Madam Speaker. Honourable President, thank you very much for your response. The IFP appreciate the contribution from the IIC, particularly their expertise which is so well used for South Africa. We would furthermore just enquire with regard to your indication of the job creation situation if there could be further details, particularly with regard to the development of scarce skills in South Africa for those special occupations. At their previous visit it was mentioned that with regard to the situation in Zimbabwe this specific IIC mentioned that the present situation of the government attitude is the only viable option. I would just like to enquire whether they are still of this particular opinion or whether they have deferred from that.

President Mbeki: Madam Speaker, with regard to the matter of the Jobs for Growth Programme, the programme that I said was led by one of a member of the IIC, Percy Barnevik, I think the Deputy President would agree that we can give more information on that. It is indeed a very important programme and very promising. So, I will negotiate with the Deputy President that she should address that, including the skills and everything else that you need to ensure its success. I must say it is based on a very big programme of that kind that is going on in India which has drawn millions of Indian women into actual productive economic activity. Indeed I agree, honourable member that we will try and persuade the Deputy President to give a report on that.

With regard to Zimbabwe, members of the council knew of the decision that has been taken by SADC, that we should facilitate the discussions between the government of Zimbabwe and the opposition parties. Indeed, as far I could determine. This was not a matter that was on the agenda - they welcome that and obviously that that would produce the necessary results. Thank you, Madam Speaker.

Mr I O Davidson (DA): Thank you honourable President for your reply. I think it was a very broad reply in terms of what progress has been made in that council and what contribution that council can make. Can I ask the honourable President a couple of specific questions as to whether indeed that council has given him any advice in respect of the purchases by foreigners of land in South Africa and secondly whether there has been any advice given to him in respect of our imbalance in trade, in respect of China more specifically with regard textiles and how we should deal with it? Thank you, Madam Speaker.

President Mbeki: No Madam Speaker, there has not been any discussion that I can recall on the matter of land purchases by foreigners here. I know certainly of one of the members of the council, in fact probably more, who've got properties here and it has never been a matter of debate really.

With regard to the issue of China, yes, the matter has been discussed not specifically with regard to South Africa, but the question has been discussed more globally about the role of China, the impact of the Chinese economy not only on Africa but globally and the challenges that we might face in that context. It was raised for that reason. Let's have a look more globally at what is happening to the global economy, the place of China within that global economy, the experience of many countries with regard to that whether it is the US or the EU and so on and how might that impact on South Africa and therefore how should we respond as South Africa to that general process? So, it would not be the kind of product specifically, like how should South Africa deal with the matter of clothing and textiles.

In the context of this discussion, of course, that matter came up because, as the honourable member knows, we have already acted on that and have an agreement with China about that. But the discussion itself was not that kind of product-specific one. But they felt, given where they stand and their own experiences, it was important that this matter should be discussed because inevitably it would have one impact or another on South Africa and South Africa needs to position itself to be able to respond to this issue of the growth and expansion of the Chinese economy in a way that it would be beneficial to the country.

Thank you, Madam Speaker.

Mr S N Swart (ACDP): Thank you Madam Speaker. Honourable State President, a strong economy and world ranking is indeed an achievement of your presidency where by strict fiscal monetary discipline has been exercised, for which we can be very grateful as a nation. An area of concern however relates to the large deficit on our current account. Was this issue discusses at the IIC meeting? If so, does the council support our attempts to increase foreign direct investment and export to reduce the deficit on our current account?

Thank you, Madam Speaker.

President Mbeki: Madam Speaker, in our own account to the members of IIC on the performance of the South African economy, yes, we raised this matter because obviously it is an important part, it is a feature of the contemporary economy of South Africa. Yes indeed the matter was discussed, arising out of that report that we presented.

I do not believe that we have sounded alarm bells that need to frighten anybody about this. It is an important matter that needs to be addressed. And in that context indeed the point was raised earlier that it is important to increase the volume of exports from South Africa.

An interesting point was made by members of the IIC about the need to focus on technological innovation. I do not know whether this is allowed; this is not to be treated as advertising for instance specific mention was made of Sasol, about the fact that with this technology, the best in the world, we ought to be communicating this message to the population of South Africa so that this must become part of the national heritage. We must generate a sense of national pride that South African brains and engineering and science and technology has been able to do this in order to inspire others to focus on this matter so that you do indeed get a national movement for innovation as a matter of one of the national tasks that we have got to carry out precisely so that among other things we are able then to address this challenge of increasing our exports.

The point was made that there is a sense among some of the members of the IIC that a lot of our businesspeople are too accustomed to importing things rather than producing things. That we need as part of innovative discussion to find a way of saying we should take greater pride in producing something on a competitive basis rather than finding it so easy to import something else because it is available elsewhere.

Certainly, a response to these challenges that arise from this deficit on our current account which derive in part anyway from the weakness of our industrial structures as a result of which we have got to be importing all sorts of things. So, that indeed is related very directly to the matter that they raised which we will come back to at the next meeting, which is: What are these sectors of the South African economy on which we should focus, including with regard to this innovation issue, so that indeed these become the sectors that make certain that we are indeed competitive both domestically and internationally?

Thank you, Madam Speaker.

Issued by: The Presidency
31 May 2007