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South Africa’s President Thabo Mbeki is standing in the eye of a storm. Neighbouring Zimbabwe is daily slipping further into chaos. Each week hundreds more refugees pour in across the Limpopo River to escape Zimbabwe’s hyperinflation and the violent crackdown orchestrated by President Robert Mugabe’s repressive regime.

Yet Nelson Mandela’s successor seems unperturbed during a two-hour interview with the Financial Times at Mahlamba­ndlopfu (“when the elephants bathe”), his residence in Pretoria. This is where apartheid-era presidents, including hardmen John Vorster and P.W. Botha, took other fateful decisions affecting southern Africa, including the dispatch of troops to Angola.

From his earliest years, as the son of one of the leading intellects of the African National Congress, Mr Mbeki has been steeped in the brutal politics of the region. Yet he has always been a diplomat by temperament, a behind-the-scenes fixer who favours a softly-softly approach. Zimbabwe is no exception.

For Mr Mbeki the key to resolving the crisis is to establish the conditions for free and fair presidential and parliamentary elections there next March. With a new mandate from fellow regional leaders, he is pinning his hopes on brokering a compromise between Zimbabwe’s ruling Zanu-PF and the opposition Movement for Democratic Change. “We would not ever support any proposition about regime change,” he says. “So that is not an option for us, whatever other people might think in the rest of the world.”

Critics in and outside South Africa counter that this sounds all too familiar. Back in 2003, on a visit to South Africa, US President George W. Bush designated Mr Mbeki as the “point man” on the crisis. The following year the South African leader helped to initiate talks between Zanu-PF and the MDC, before these broke down in failure as Mr Mugabe for the umpteenth time ran rings around his adversaries.

But Mr Mbeki insists that the approach is new because it is regional and not exclusively South African. He sees his role as the “Good Shepherd” rather than as a latter-day Teddy Roosevelt, who famously advocated talking softly and carrying a big stick. Indeed, he volunteers as an aside: “We don’t have a big stick.” Economic sanctions are out of the question, Mr Mbeki argues, and South Africa cannot cut off the electricity it supplies, because that would bring further misery to the Zimbabwean people.

Throughout the conversation he barely mentions Mr Mugabe by name. Nor does he speak directly about the dire conditions in Zimbabwe, where inflation is 1,700 per cent and predicted to reach 4,000 per cent within the year. But he does hint at a tougher approach if the veteran autocrat once again tries to scuttle a compromise. “We have a possibility to say this particular player in Zimbabwe is obstructing the possibility of finding a political settlement,” he says.

Asked if he believes that after 27 years in charge of Zimbabwe, Mr Mugabe, 83, would ever peacefully renounce power, he replies: “I think so. Yes, sure. You see, President Mugabe and the leadership of Zanu-PF believe they are running a democratic country. That’s why you have an elected opposition, that’s why it’s possible for the opposition to run municipal government (in Harare and Bulawayo). You might question whether these elections are genuinely free and fair …But we have to get the Zimbabweans [to a position that they] do have elections that are genuinely free and fair.”

On Monday there was a reminder of the complexity of South Africa’s engagement in the crisis. Morgan Tsvangirai, the MDC leader, who bears the scars of his beating by Harare’s security forces last month, travelled to Johannesburg and delivered a fiery denunciation of the Mugabe regime. Yet he said he had had no approach from the government in Pretoria, just under 40 miles away.

Mr Mbeki concedes that the intertwined histories of the liberation struggle in South Africa and Zimbabwe have created a tortured relationship between the ANC and Mr Mugabe’s ruling party. He recalls how Mr Mugabe was educated in the eastern Cape, at Fort Hare University, the intellectual incubator of many black leaders. He remembers, too, how the ANC was inspired by Mr Mugabe’s post-independence moves towards national reconciliation, including the retention of white Rhodesian incumbents as head of the army and the intelligence agency.

“It encouraged the adoption of a similar position. So we have this history in common,” he says. “When things go wrong in Zimbabwe, we feel that. I am not talking about refugees coming in here …I am talking about marching in step.”

Zanu-PF is not the only former liberation movement struggling to avoid a showdown over the leadership succession. The ANC this year is in the throes of a fierce battle over ideology, policy and the identity of the party’s next leader. In December the party is due to elect a new president. In the past this has been a foregone conclusion. But Mr Mbeki, who has led the party since 1997, is locked in a bitter behind-the-scenes contest with Jacob Zuma, the firebrand who is the party’s deputy president.

For investors and the business community, as well as the ANC grassroots, this is a vital moment in South Africa’s post-apartheid journey. Such is the ANC’s electoral dominance – it won 70 per cent of the vote in 2004 – that the party leader is virtually guaranteed two five-year terms as president of the country. Mr Mbeki is barred from another term in office but he could stand again for the party post, thereby allowing him to be the power behind the throne of the next president.

Asked whether he will run for the party leadership, Mr Mbeki gives a resounding chuckle and for the first time settles back into his chair. He claims that ordinary South Africans are not interested in the leadership race. They want action on bread-and-butter issues. At an imbizo (public meeting), “no one ever says, ‘Who will be the next president of the ANC?’. They say, ‘President, our children are matriculating from school, they are sitting at home because there is no money to go to university and there are no jobs, so do something’. We have to respond and the ANC has to respond.”

Nevertheless he admits that some (unnamed) people are campaigning. While some party insiders say he has already decided to run – to protect his legacy and thwart Mr Zuma – in public he is keeping his options open. One option being floated within the ANC envisages “two centres of power”, with Mr Mbeki retaining the ANC presidency and a hand-picked candidate assuming the national presidency. He carefully avoids committing to that outcome. But he agrees it could work in practice, citing 1997-99, when he was party president and Mr Mandela was serving out his last two years as national leader.

Many ANC-watchers would argue that the analogy is flawed. The handover from Mr Mandela to Mr Mbeki was fairly seamless, whereas now party branches are being lobbied by rival camps and scarcely a day passes without headlines about rifts in the ANC.

The president, however, is unequivocal that the world need have no fear about the future direction of the country. He draws a parallel with 1997, when there was speculation that the ANC’s longstanding alliance with the trade unions and the Communist party would fracture over his newly adopted commitment to macroeconomic stability with a tighter fiscal policy. “I am quite certain that whatever happens this year [at the ANC conference] and in 2009 [general elections], the ANC will not change its fundamental positions.”

South Africa’s economy has shown 5 per cent annual growth for the last two years, a vastly improved performance from the last days of white rule. Mr Mbeki and Trevor Manuel, his able finance minister, have comprehensively allayed fears that South Africa would follow the path of other independent African states to fiscal ruin. Instead, investor confidence is at an all-time high and South Africa is running a fiscal surplus.

But he is not so confident that he thinks South Africa is ready to abolish the last of the apartheid-era financial defences. Exchange controls, he concedes, will in due course have to go – but that must be step by step. In particular, he expresses concern that, in a sign of lingering doubts about the future, some big South African companies are holding “abnormally large” amounts of cash. “It suggests that you want to keep some nest-egg that you want to ferret out of the country if something goes wrong.”

Overall, when addressing the economy Mr Mbeki cuts an assured figure. But he readily concedes that ideally South Africa would be growing even faster if it were to reduce unemployment, which is variously estimated at between 20 and 40 per cent. “South Africa is not India or China or even Brazil …[But] we need to achieve these high rates of growth.” To do that, he says, South Africa needs to focus more on industrial policy – identifying sectors, such as tourism, that should deliver the improved growth.

Businesspeople have in recent years been frustrated by bottlenecks in infrastructure and the labour market. Mr Mbeki accepts the criticism and decries the shortcomings in government that lead to underspending of capital budgets. After volunteering that “the ports can’t cope”, he goes on to list weaknesses in railways, roads, water and electricity.

He reserves his strongest criticism for telecommunications, whose high costs are holding back growth. In a rare display of presidential ire, the quietly-spoken Mr Mbeki singles out Telkom, the dominant state telecommunications company, accusing it of profiteering. “The charges are absolutely phenomenal.” [In South Africa householders pay R500 ($69, £35, €51) a month for a basic broadband service.]

Just about everyone in South Africa would agree with Mr Mbeki on Telkom but some of his more recent public pronouncements have been less well received. In January he provoked outrage in sections of the media – and not just conservative newspapers – when he suggested it was just a perception that crime was out of control.

His aides said later it would have been political suicide to support the contention that control of crime had been lost. But in a country with one of the world’s highest rates of violent crime, Mr Mbeki’s comments touched a raw nerve and revived his reputation for having a political tin ear.

Then he courted controversy again late last month when, in his weekly online letter to the ANC, he used lurid language to suggest that whites’ fears of crime were fuelled by racist suspicion of their black compatriots. He went on to single out the case of a young black graduate who had complained that the bank he had joined was rife with racism. This prompted a heated debate in the media over the role of the president and even accusations that he was re-racialising South African politics.

Mr Mbeki acknowledges that such interventions were not popular. But he has always eschewed the politics of the soundbite. He makes clear that he does not intend to bow to demands for slicker public relations. While he is careful to stress that crime is a huge problem, he goes on to repeat his message of last month that whites’ prejudice reinforces their fear of crime.

“The people who built the apartheid system say, ‘We did all of this to try and build a wall around ourselves, because here we are sitting in this continent surrounded by black hordes and we don’t know what they are going to do, so we needed to protect ourselves – whether it is prohibiting sexual relations between black and white, delineating residential areas, saying this is black and this is white’.

“It all had to do with a fear that ‘one day we would be swamped, that one day they would just come and devour us’. It would seem to me that some of the communication you get around crime is driven still by this notion of fear.”

As a riposte to whites who believe he picks on them, he says he has also been criticised by the new class of black bureaucrats when he has lambasted them for aping the corrupt old order. But he makes clear he will not pander to those who would like a “Nelson Mandela Lite” as president. “People say, ‘No no no, that is not the task for the president. The task of the president is to make sure he is loved by everybody and therefore you can’t say this.’ I think it’s incorrect.”

The most controversial of all his presidential interventions has been in the debate over HIV/Aids. South Africa has one of the highest rates of infection in the world. But in recent years Mr Mbeki’s government has been repeatedly accused at home and abroad of a slow and obstructive response to the crisis. His health minister has been ridiculed for her apparent reluctance to endorse anti-retroviral drugs even as hundreds of South Africans die each day of Aids complications. He himself has been accused of denying the link between HIV and Aids.

In recent years Mr Mbeki has unofficially excused himself from the debate and allowed his deputy, Phumzile Mlambo-Ngcuka, to take the lead. Under her guidance the government last month adopted a plan endorsed by the world’s Aids experts.

Mr Mbeki picks his words carefully when addressing this most sensitive of subjects. He says he is “not a denialist” and rejects that he ever said there was no connection between Aids and HIV. Instead he says he was misunderstood and just wanted a more comprehensive approach to immune deficiency by looking at other factors, such as poor nutrition, syphilis and tuberculosis.

Mr Mbeki is visibly more comfortable talking about world affairs. The outgoing Chinese ambassador has just come to the house to say goodbye, ending a productive six-year relationship. China has been playing an increasingly influential role in the continent, proffering cheap loans and vast infrastructure projects in return for raw materials. Mr Mbeki has encouraged this engagement but last year he pointedly warned of the risks of a new “colonial relationship”.

It is not enough to allow ­Chinese demand for oil, coal and gas to be left to the market, he says. Nor can Africa allow China’s manufactured goods to swamp its own fledgling industries. “That’s what the market will do. Not because they are evil Chinese sitting in Beijing plotting something bad. That is what objectively will happen …China surely must be interested in a more stable non-antagonistic relationship with the African continent precisely because of its own needs.” He draws confidence from the attitude of Beijing at a groundbreaking African-Chinese summit last November. But he concludes: “It’s a matter that both China and ourselves have to watch all the time, so you don’t have a kind of slippage.”

In recent months South Africa has irritated the US and its allies with its stance on a series of international crises. Since taking up a seat on the United Nations Security Council in January, South Africa has blocked debate on Burma’s human rights abuses and called for a complete rewrite of a resolution on Iran – although it subsequently backed down and voted for the resolution. Mr Mbeki believes in a multi-polar world where it is impossible to “ring-fence” contentious issues. For example, Iran’s nuclear ambitions cannot be separated from its role in Iraq or the wider Arab-Israel dispute in the Middle East, he says.

Mr Mbeki still has two more years in Mahlambandlopfu, with its tasteful blend of old Cape Dutch furniture and African art. His legacy as the post-Mandela president who has consolidated the transition from apartheid seems all but secure. But if he wishes to go down as more than a gifted if somewhat aloof technocrat, he has to smooth the way for the next generation of leaders and resolve the crisis in Zimbabwe. These are two nettles for Mr Mbeki to grasp.

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