Washington, DC — With African issues high on the agenda of the summit of the leaders of the world's largest industrial nations next month, President Thabo Mbeki of South African appealed to President Bush for a "results oriented" session when African leaders meet heads of government from G8 nations in Gleneagles, Scotland.
Speaking to reporters at the end of an Oval Office meeting, Mbeki thanked Bush for the U.S. contribution to Africa, then added: "I'm going to ask for more." Bush said he wants "to advance the African agenda that has been on the G8's agenda for -- ever since I've been the President," but he said the British proposal for an International Financing Facility to fund African development "doesn't fit our budgetary process."
Whatever mechanism is used to finance Africa's development, Mbeki said during a briefing for reporters following a White House luncheon, "It is important that the G8 Summit this year should come out with specific decisions." Among the priorities, he said, are debt forgiveness, increased flows of assistance and improved market access for African products. He also argued that the issue of 'absorptive capacity' was exaggerated, saying Africans have strategic plans to target funds towards improved infrastructure and other capacity-building initiatives. Following are extended excerpts from the briefing, beginning with Mbeki's introductory remarks:
We have been speaking to all of the G8 Heads of Government, indicating, in the first instance, our view that indeed this particular session of the G8 and the African leaders must be very much results oriented. We have a commonly agreed set of priorities reflected in the NEPAD program but also reflected in the G8 Africa Action Plan.
A lot of work has been done with regard to elaborating specific projects to do with infrastructure of all sorts, to do with agricultural development, to do with debt, international trade and so on, and therefore that our view has been that the G8 summit this year should come to specific decisions for the implementation of the G8 Africa Action Plan.
And as we know, Jeffrey Sachs was asked by the United Nations Secretary General to look at what needs to be done practically. Prime Minister Blair put together the Africa Commission focused on the same matter. So this has been the principal focus of our discussion here with President Bush.
We agree that it's necessary to find resources to strengthen the capacity of the African Union to carry out its responsibilities with regard to matters of peace, stability, and so on. And I think all of us have seen what has happened around the Darfur issue, the deployment issues that have attached to deploying African troops in Darfur, maintaining them there, giving them operational capacity and so on. It's shown the need to strengthen the institutions of the African Union with regard to that.
There's general agreement - you'll see it for instance reflected in the Africa Action Plan - to move a little bit more decisively on the issue of debt. We are canvassing for some specific decisions to take this debt matter beyond the HIPC [Highly Indebted Poor Countries] Initiative, and we're discussing it with all of the G8.
We are also discussing with them the WTO [World Trade Organisation]. It's clear that the trade matters relating to the African continent - a lot of the issues - are matters to be dealt with in the context of the WTO. We're interested that the G8 should take some firm positions within the context of WTO negotiations, some firm positions related to the matter of the agricultural subsidies. So that's a matter we are discussing with all of them.
On the African continent we've made progress identifying specific programs that are defendable, whether they have to do with agricultural development or infrastructural development. We must make sure that the results are there to be able to fund these programs. It includes the issue of larger commitments with regard to development assistance by the G8, and so we are talking to all of them to say that they must set a program to increase the development assistance other than the funds that are already available to finance these programs that we are talking about.
I must say that President Bush has responded extremely positively to all of the suggestions that we've made. All of them. And indeed he's very concerned - I think he said that this would be the fifth summit of the G8 he would be attending including African leaders. He's very keen that we shouldn't, at the end of the summit, make generalized statements but should have some practical outcomes. So he's responded very positively. I think that the meeting we just had here with President Bush sends a very, very strongly positive note in favor of those practical outcomes.
Mr. President, would you please address the issue of absorptive capacity. One frequently hears officials, particularly here in the United States, when asked about aid targets, say that Africa lacks the capacity to utilize large increases in assistance.
Our own view is that we shouldn't exaggerate that. We want to proceed on the basis, as I was saying, of actual programs that we've worked at to the point of business plans. So what we say, it is possible, with regard to agriculture, to deal with issues of irrigation in this region in the following way: we are quite certain that it is possible for the region to absorb all the funds that will be needed to develop that kind of irrigation.
We're not asking for funds to be committed [for] general purposes. We don't think that there is a problem in that sense. If the problem of absorption arises, it's more a question of appearance rather than actuality. And it arises where you deal with the matters globally, generally. If we say infrastructure requires modernization of a number of important parts around the African continent to be able to service important exports into whole regions, you'll never find there is a problem of absorption.
Did you discuss Zimbabwe with President Bush?
For sure we discussed the issue of Zimbabwe. What I said to the president is that both the ruling party and the opposition at the end of the elections in Zimbabwe - these last elections now at the end of March - said that they need to address issues that have got to do with the Constitution of Zimbabwe. That they needed to look at that and change whatever constitution-making process in Zimbabwe. Both of them have said that publicly and we agree with that. they need to focus on that and deal with the issues that have been in contention between them, which will relate to the electoral system and ensure that at the election we've got an independent electoral commission and so on; issues that have to do with the enforceability of the Constitution and therefore the possibility of the institution of a Constitutional Court. There's a whole range of issues that they've both raised, these major political parties in Zimbabwe.
Do you think the United States is doing enough for South Africa, and Africa in general? And did you get any specific commitment from President Bush on how the United States would help, any concrete suggestions from him?
We've got to get a common, practical commitment by all the G8. I'm absolutely certain that President Bush is committed to contribute whatever the United States has to contribute with regard to the common outcome. You take, for example, this issue of market taxes that are dealt with by the WTO, and the issue of agricultural subsidies. We want the United States to move on this matter, but we also want the Europeans to move on the matter. So it's an issue that must be of common concern and I don't think we could ask either one of those parties to move without the other. When we say to President Bush we have to move over this matter of agricultural subsidies he says 'OK I agree.' We, now, we need to say to the Europeans we need to move on this matter of agricultural subsidies and hopefully they are going to say they agree.
Did President Bush indicate he would put pressure on his partners in Europe?
Yes he would. He would certainly indicate the commitment of the U.S. to move so that indeed we get these practical outcomes that I'm talking about.
One area where the United States and President Bush differ from their G8 partners is over gold and debt relief. The United has been the odd country out on that. Did the President give you any indication that he would be willing to sell gold in the IMF plan or that he would be willing to go along on debt relief at the G8 in Scotland?
No. The principal matter we are focusing on is indeed the commitment to move on the debt relief issue. First of all we need everybody to agree 'let's go for cancellation of debt for at least the least developed countries.' Cancellation of debt.
And the US government has raised a second important element with regard to that. That in terms of future financing, for example in education, health or so on, it would be incorrect to build up a new debt. Therefore the World Bank for instance needs to be giving the resources to be able to finance development in areas of education and health without rebuilding debt. We agree with that. It's a combination of things that links debt cancellation and grant financing for certain kinds of social and economic development.
The issue that therefore needs to be addressed is, how do you finance it? It's not necessarily so that the gold thing is the only way. The point we are making to all of them is that let's all of us find a common mechanism to finance that debt relief. And indeed there's a discussion that's going on right now among the G8 again, so that by the time we get to Gleneagles this matter of how you finance that debt relief, that matter is resolved.
Mr. Wolfensohn, in his the last press conference before he left the World Bank, said that because there's no common agreement, he doubts that debt relief can be resolved at Gleneagles.
The matter that we discussed with Jim Wolfensohn for a long time was not so much about the willingness to move on this debt forgiveness. The issue that has always been outstanding is, how do you finance it?
And he was concerned, not that people are against, that it was impossible to resolve the matter of forgiving the debt. The issue that had to be sorted out was, how then do you finance it so that, for instance, when the World Bank says we forgive our debt, you don't bankrupt the World Bank. You've got to do some refinancing. So I'm saying that that's precisely what is being discussed among the G8 now. How do we, given that we agree that we should move on the debt issue like this, how then do we do with the refinancing?
I would be confident that it is possible to resolve the matter in the next four to five weeks. Jim Wolfensohn may think otherwise, and he may be proved correct.
Did Mr. Bush give you the commitment that it would be?
No, I'm saying that there's currently a process going on, consultation among the G8 to say, given that we all agree that we need to move on this debt issue, let's therefore solve the second question, how do we finance it? That process is going on. It includes the United States.
On Darfur, what is the position of African leaders on the question of genocide and what are you telling the leaders in Khartoum?
Well, you know that on the 10th of this month, negotiations between the Sudanese government and the rebel movements SLM and JEM in Darfur will resume in Abuja. We are all hoping that those negotiations will provide the political settlement of the Darfur region. You know that there has been quite a long break in terms of those negotiations, but lots of things have been happening in between to try and prepare for the conditions for the success of those negotiations. So we are all hoping that the negotiations as they resume in Abuja on the tenth of June will produce this political outcome that we want.
What has made African leaders hesitate to, like the Americans, declare the situation a genocide so they can marshal the necessary help from the international community?
What the African Union is doing is to say, let's ensure that the peace agreement that was concluded in Chad, that this peace agreement is observed- the ceasefire and all that. And therefore let's deploy in the way that the African Union is deploying and to the extent that we need assistance, let's ask for assistance from the rest of the world, including NATO and so on. So that the killings stop and all of that stops. Let's find the political settlement so that fundamentally we resolve the problem as a whole. That's what we've got to do as the African continent.
You see, it might be fine for somebody in the United States to be making all sorts of statements. We've got to work with the Sudanese government, for instance, so that it becomes part of the solution there; we've got to work with the rebel movements in Darfur so that they become part of the solution there. So that the outcome we get is a stable political settlement and end the violence and return of the people of Darfur to their homes, and villages, and so on. That's what we've got to do. To the extent that there has not been a sufficient response in terms of the resources, I don't think that it's because we haven't spoken about genocide.
In the end, you see, if you can denounce the government of Sudan as genocidal, what next? Then don't you have to arrest the president and do something? We are looking for a solution to the problem. And the solution doesn't lie in making radical statements, not for us as Africans. The solution lies in mobilizing all of the people who must contribute to the solution; mobilizing them so to contribute to finding a solution.
How concerned are you about a strong Rand and its impact on South African manufacturing sector and other sectors that are losing jobs. And what steps are you prepared to take in regards to strengthening the currency?
The value of the Rand is really, basically, determined by the market. And generally we've said we want to maintain that position. It will help us to find its value in terms of the market. Certainly we are not thinking in a way of finding huge resources to keep the value of the currency at a particular rate. We don't have them. There's no way that we can find billions of dollars to compete with the market in order to set the value of the currency at a particular point. That's the first point.
The second point is that, with regard to monetary policy, we've set the inflation target as government. It's a matter for the Reserve Bank, for the central bank to handle the rest in terms of interest rate policy and so on. And again, that's an independent institution, and they set that.
So, in truth, the capacity of the government to intervene to say the currency should be at such and such an exchange rate, I think, is very limited. And also the value of the currency actually represents the strength of the South African economy. To some extent it doesn't make sense for us to say let's weaken our economy so that we weaken the currency so that the exporters - and so on. It doesn't make sense.
You know very well that for commodity-producing countries like ourselves, like Australia, and so on, there are two elements that are very important with regard to the determination of the level of the currency.
One is the price of the commodities. So long as you've got good prices for gold and platinum and this kind of thing, that strengthens the currency. That's beyond our control. We don't determine these prices on the global market. The other matter of course is the value of the dollar. Again, that is something we don't influence. So you see it when the commodity prices move in a positive direction and the dollar weakens, the Rand strengthens. There's nothing we can do about those sorts of movements. So indeed we express concern that we can see that in certain instances, like, for instance, in mining.
In South Africa, it's gold mining that is suffering as a result of the strength of the Rand. It's gold, in particular, because of the nature of the South African goldmines and the depth of mining and that kind of thing. So we speak and say we think that the currency is too strong, but the instruments to address that practically are very limited.
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Mr. President, on the issue of the G8 again, given that President Bush has said that the International Financing Facility is not part of America's budgetary processes, does this not close consultations among the G8 partners on the issue?
No. The matter that is of interest to us as Africans is generating the results that are required in order to fund this program that we are talking about. That's what we're interested in. Now the British government have said they believe that the International Financing Facility route that is the best route to take. That's fine. Indeed I don't think there's anybody standing in the way of the British government going the route of the international financing facility.
President Chirac has raised the question of some new international taxes to generate these funds, and the matter is now being taken up by the European Union. Again, that is fine, if the EU believes that the way to generate those funds is that route. What we're interested in is that they must generate the funds.
The United States has spoken about the Millennium Challenge Account, and what we're saying to the United States and to President Bush today, today is that they've got to make sure that the Millennium Development Account generates the resources that are necessary for development. Fine, he accepts that.
The end result for us is to make sure that the resources are there. I do not believe that whatever debate might be among the G8 would affect this outcome. If people believe, more than the UK, if other countries believe, that this is the correct way to go - the financing facility - we would encourage that. We are interested in the end result of it.
There have been violent protests this week in Cape Town over the lack of housing. How concerned are you, just over a decade after the end of apartheid, about people who feel there's been too slow a pace of moving towards economic empowerment, particularly for the poorest members of society ?
Of course we are concerned about that and understand very well somebody who says: "I've been living in a shack in the last ten years and my situation has not changed." Indeed, we would be concerned about that. The practical reality of course is that it's not possible to solve the housing problem in South Africa in a period of 10 years.
In this period, in terms of public housing, we've built nearly one and half million homes. That's a lot of homes, but because of the backlog that was there, it's absolutely impossible to have completely wiped out that backlog in this period. So, I think what is important with regards to these communities, who are raising a legitimate point - "Whatever's happened to my neighbor? I can see that my neighbor has got a house but I don't have." It's such a legitimate complaint to make.
I think the important point is better engagement, particularly by the municipalities - the mayor and the councilors - better engagement with these communities, so that the communities can themselves get a better understanding of what is possible and what is not possible. If I give a lecture on the housing situation in the United States, you could see that it is pretense to eradicate slums in South Africa in 10 years. It can't be done.
But I think it is necessary that the communities must get a better understanding of what is possible. An important element of these demonstrations, and even the demands that people are making - "The mayor has not spoken to us. The counselors here who represent our ward, this counselor, we have not seen this counselor for the last three years " So I think it's a major complaint from the communities. And I think a better engagement by the government structures, a better engagement by the people, would help to address this.
To communicate the honest message that however miraculous South Africa is, it's not possible to have sorted out the housing backlogs that are in South Africa in ten years. It just can't be done. We continue to work at it.
