Publication: Cape Argus Issued: Date: 2008-08-10 Reporter: Mark Gevisser

Why Mbeki Went for the Arms Deal



Cape Argus



Reporter Mark Gevisser

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Mark Gevisser considers the president's role in what has become a most insalubrious affair

If the arms deal has become the poisoned well of post-apartheid South African politics, then it was Thabo Mbeki himself who initially contaminated the water - even if this was done with the best of intentions. He championed the deal from the outset, with an ardour quite remarkable in one so sceptical of military expansionism during his own time as a freedom fighter. And as the allegations multiplied, he became increasingly strident in his defence of it.

Langston Hughes wrote: "There's liable to be confusion when a dream gets kicked around." Nothing in the South African transition illustrates this line from Hughes's poem, The Dream Deferred, more trenchantly than the spectacle of an ANC government committed to redistribution and "a better life for all" dropping nearly R60 billion on submarines, frigates and fighter jets at a time when it was trying to cap spending on everything else. We live with the consequences.

While Mbeki was strong-arming the South African economy away from state spending and towards fiscal austerity, he presided over a parallel process that did exactly the opposite. From 1996 to 1999, he chaired the cabinet subcommittee on arms procurement that put together and approved the purchase of R30 billion worth of military hardware. The arms deal eventually cost the South African taxpayer almost double that figure owing to the unstable rand; it also mired the ANC government, at the very moment when it was re-establishing moral rule in South Africa, in an interminable bog of messy corruption scandals and investigations, forcing Mbeki to fire his deputy, Jacob Zuma, in 2005, and implicating Mbeki in multiple allegations of impropriety.

It has not yet been alleged that Mbeki is personally corrupt, although it is clear that he played a key role in steering the state away from the navy's original preference for Spanish corvettes, which were much cheaper, and towards the German ones. The German media revealed that a R130 million bribe was paid in this deal, but authorities there have dropped their investigation - apparently because of lack of co-operation from the South Africans.

Now the Sunday Times has alleged that Mbeki received a R30 million kickback for the submarine contract, and that he channelled the money to the ANC and to Zuma. But there is not, yet, any hard evidence to support this.

Mbeki has repeatedly insisted that there has been no foul play in the primary contracts entered into by the government and that if there was corruption in the secondary contracts the government bears no responsibility for this, as it had nothing to do with these contracts. *1 This last point has been effectively challenged by evidence before the state's own investigations and by the testimony of players such as Andrew Feinstein.

But even if Mbeki is right, he must surely be questioning, now, the political wisdom of having embarked upon the arms deal. Given the very nature of arms procurement, it could not but cast "long shadows", as Mbeki himself put it, over a new and idealistic government; with high expectations for socioeconomic transformation and simultaneously the need to tighten belts and cut back on state spending, it was inevitably going to attract scrutiny and opprobrium.

Was Mbeki naive in leading a fledgling government into so deep a morass? Did he really believe that a righteous ANC would be able to do clean business in so notoriously insalubrious a marketplace as the arms trade? Those close to him say that he understood the risks, but decided that they needed to be taken anyway.

In the beginning, the ANC government seemed ill-disposed to spending money on arms: Nelson Mandela projected himself, with the reconstruction and development programme (RDP) and his message of reconciliation, as a "butter" president rather than a "guns" one. And Mbeki himself had written, in 1991, that "South Africa would have to reduce the size of its armed forces very sharply" to counteract its reputation as a belligerent and to "release resources for development".

And yet the reality of the ANC's inheritance countered such righteous aspiration. Suddenly the Mandela government found itself responsible not only for a voracious defence force suffering from serious fatigue, but also for integrating the demobilised liberation movement armies into it too: even before 1994, the generals had made it clear to their political masters that their ongoing quiescence was dependent on the upgrading of the force.

Mbeki took on the role of arguing, most forcibly, for increased defence acquisition, warning in 1996 that South African military hardware would be obsolete in a decade *2 if action was not immediately taken. In the end, he led his cabinet subcommittee towards inflating the defence acquisition budget from R8 billion (a figure to which the military brass themselves had willingly assented in 1995) up to the R30 billion announced in 2000.

What had happened to convince Mbeki to do this, at the very time that he was leading the growth, employment and redistribution (Gear) austerity campaign? One compelling argument - promoted most forcefully by Alec Erwin - was around "offsets *3", euphemisms for a time-honoured and controversial practice in arms procurement bidding that amounts to a form of legal bribery: take our bid, and we promise to invest in your economy.

They are illegal in many other industries, precisely because they are so difficult to monitor and quantify. The promises were alluring indeed: an amount in the region of R104 billion pledged in investment, creating an estimated 65 000 jobs. Put it on a balance sheet, and how could you say no - particularly given the investment strike South Africa seemed to be facing everywhere else, and the subsequent macroeconomic crisis?

With his trade union background, Erwin had always been less doctrinaire than Trevor Manuel about state spending and he persuaded Mbeki that the government could use the arms deal to attract vital industrial development. Mbeki and Erwin believed they had done their research: they had heard how arms dealers had abused the mechanism in the past, and set terms in their tender documents calculated to bring real value back to South Africa.

But the South African experience has seemed to prove the international evidence with respect to counter-trade: that its promises are unenforcable and inevitably broken, and that it does little more, in the end, than inflate the purchase price of the goods. The government was forced to admit in 2006 that only 13 000 of the promised 65 000 jobs had materialised, and it became clear that many of the offsets would be rolled out entirely at the discretion of the sellers; in the end, arms companies seemed to find it cheaper to be fined for non-compliance than to have to deliver on their promises.

Mbeki and his committee were fully apprised of these risks. Manuel was opposed to the arms deal from the start, because it ran so counter to Gear principles and because he was convinced that the rand would depreciate and this would raise the value of the deal considerably - something on which he was ultimately proven correct. When Mbeki was presented with an economic affordability report in 1999, he shrugged off its pessimistic scenarios and told his officials that the government had no choice but to risk it, given South Africa's continental obligations *4. To make his point, he quoted Jacques Chirac, whom he had recently seen and who had sneered, "What's the matter with you Africans? Why can't you sort out your own problems?" It was in this context, Mbeki said, that South Africa needed a state-of-the-art military *5.

The offsets argument might have tipped the scales towards the more expensive German and British deals for Mbeki, but it was not the clincher. Far more significant was his ideological commitment to African self-determination and his promotion of South Africa as a continental powerhouse influential enough to keep the peace in a restive neighbourhood *6. There were two components to this: firstly, South Africa had to prove to a sceptical world that it, at least, was a big enough player to do the kind of high-level trade implied by the arms deal; secondly, it actually had to amass the firepower to warrant being respected, as the region's giant, by both its neighbours and the global community. This was the cornerstone argument of his African renaissance: South Africa's own growth and development was not possible on a decaying, conflict-ridden continent, and so investment in the neighbourhood must be an essential component of the country's own growth strategy.

One could well understand Mbeki feeling this in late 1998, as his cabinet was finalising the terms of the arms deal. It had been the most conflict-ridden year in Africa since the ANC had come to power - from the alleged assassinations in Nigeria of both Sani Abacha, the military dictator, and Moshood Abiola, his main challenger, to the threat of civil war on South Africa's borders in Lesotho and the beginnings of a tumultuous Congolese war which would claim 3 million lives. Through all these conflicts, Mbeki had been building a profile, for South Africa as the continent's peacemaker. In the case of the Congo, South Africa had in fact facilitated the transfer of power from Mobutu to Laurent Kabila the previous year: the deal had been struck, off the coast of the then Zaire, by Mandela and Mbeki on a hulking South African Navy supply ship named the SS Outeniqua, and one can imagine Mbeki cringing at how insalubrious the vessel was for a country claiming to be Africa's regional power; a country with aspirations to represent the continent on the United Nations security council.

But the "regional peacekeeper" argument has clear holes: what good would those frigates do, after all, in keeping the peace in Darfur or in the landlocked Great Lakes region? And the Gripen and Hawk fighter jets acquired from British Aerospace are far better suited to conventional military activity than to peacekeeping functions. No: the very nature of the hardware acquired by South Africa in the arms deal suggests that forces other than South Africa's desire to keep the regional peace were at play in Mbeki's cabinet subcommittee on defence's acquisition; forces less quantifiable, perhaps, than the economic value of offsets or the geopolitical imperatives of asserting firepower, but perhaps even more compelling, given the vulnerability of both the South African democracy and Mbeki's own authority in the first years of ANC rule.

Perhaps, if we are to understand the pull of upgrading the defence force among the ANC's leaders, we need to return to May 10 1994, the day of the inauguration of Nelson Mandela and Thabo Mbeki, with its signal moment heralding the transfer of power: the old apartheid army saluting its new commanders-in-chief as the Impala fighter jets swooped low over the Union Buildings, literally raising the hair off the backs of the necks of South Africa's new leaders with the revelation, "Oh my Lord, those are ours now!"

The sovereignty of the modern nation state resides as much in its ability to defend itself against aggressors, real or perceived, as in its monetary currency, its heraldry or its national language. How much more so this must have been for the ANC, given both its own martial history and the sheer weight of the hardware it was inheriting - not to mention the expectations of the uniform-clad men who operated it.

Mbeki's own particular history in the martial ANC must figure in this equation. He was never fully accepted as a military man: he did not talk the talk, he did not wear the combat fatigues, he never spent time in the camps and he was always sceptical about Umkhonto weSizwe's capabilities and the possibilities of armed struggle. He was, instead, the "black Englishman", the softie, the sellout, his insistence on a negotiated settlement viewed by many ANC soldiers as a function of cowardice rather than of savvy.

But you could not lead the ANC-in-exile if you did not have the support of the military. And, in this respect, the patronage of one particular man played an indispensable role in Mbeki's ascendancy: Joe Modise. Partly because of his own bad relationship with Chris Hani and partly because he was an early believer in a negotiated settlement, Modise became an ardent defender of Mbeki, both in exile and in the turbulent first years back home.

Now, in his role as the ANC government's first defence minister, Modise had become the most passionate advocate for upgrading the defence force. Perhaps this was a function of his office: he needed to represent his generals, new and old, and their needs. Perhaps it was his comfort zone: he had been a military man all his life. Perhaps too, as Feinstein suggests, it was his determination to cream some fat off the top of the deal in his twilight years of public service.

Whichever: within Mbeki's cabinet subcommittee on defence acquisition, the battle lines were drawn between Modise and Manuel, who was determined to keep defence spending as low as possible. Mbeki found himself in the role of adjudicating between these two powerful advocates - and favoured Modise from the start. Was this a function of Mbeki's own insecurity with the hard men of war? He knew he would one day be commanding the generals: could he be certain of their loyalty, or would it have to be earned by showing commitment to their defence force?

Modise told me that the vulnerability Mbeki was concerned with was not so much his own as that of the fragile new democracy: "Thabo and I understood something that maybe others didn't, because of our dealings with the generals [during negotiations]. We could not be sure in those first years of their absolute loyalty."

Mbeki himself is adamant that such considerations had nothing at all to do with the decisions of his cabinet subcommittee. But Erwin told me about a meeting at the deputy president's Cape Town residence, where Mbeki said - as Erwin recollects it - that "a discontented, uninspired military is dangerous. If you don't re-equip this defence force then it starts disintegrating and it becomes a tiny defence force and you've got a lot of discontented soldiers who feel they are not part of the future...".

Mbeki claims that his commitment to arms procurement was motivated primarily by the government's constitutional obligation to maintain the integrity of the country's defence force. Certainly, too, it was driven by his sense of continental responsibility (or aspiration) and by his anxieties about the lack of foreign direct investment in South Africa. It was also driven by a sense that the security Mbeki was buying South Africa with R30 billion was not against external aggressors, but against the internal threat of a disaffected military, still sceptical - on both sides - about the negotiated settlement and still carrying, in its increasingly obsolete arsenal, the serious threat of destabilisation. On top of this, Mbeki's ANC needed to demonstrate the capacity to govern: to command, to spend.

Was graft, too, one of the reasons why Mbeki was so passionate about the arms deal? Of course, if Mbeki did hand a kickback on to his movement, or to a comrade in financial trouble, this makes it no less corrupt. But the allegations levelled against Mbeki still need to be proven.

To date, the most that can be said about Mbeki is that he must carry political responsibility for the arms deal and the extremely deleterious effect it has had on South African political life.

This is an updated and edited extract from Thabo Mbeki: The Dream Deferred (Jonathan Ball), which won the 2008 Sunday Times Alan Paton Award.

With acknowledgements to Mark Gevisser and Cape Argus.

*1       There is now a wealth of incontrovertible evidence that Mbeki was deeply involved in these very same secondary contract.

Not only that, but lied and continues to lie about his involvement with Thomson-CSF.

This is because he has no explanation for his long enduring and secret, but quite thoroughly documented, interaction with Thomson-CSF over a period of over two years before the contracts were signed on 1999-12-03.

*2      Another lie.

With a decade of 1996 is 2006 (maybe 2005).

The Cheetah C jet fighters would become obsolete between 2012 and 2015 (they only went into service in 1997).

The Daphne coastal submarines would become obsolete in 2010 (the SA Navy was spending money on them to keep them going until then).

We were not replacing strike craft with frigates, we were replacing Type 12 frigates that had gone out of service in 1982 with new frigates (the SA Navy was spending money on them to keep them going until 2005 to 2010).

We were replacing Wasp maritime helicopters that had gone out of service in the early 1980s with new maritime helicopters.

The BK 117 utility helicopters only went into service in 1994 and were not close to obsolete. Indeed they are good until at least 2016.

They only major weapon system that would truly have been obsolete by 2006 are the Impala jet trainers and light fighters.

But exactly how many Hawk 120 lead-in fighter trainer aircraft are flying and in service today? My information is two.

And how many Impalas are flying in service and how many more are still capable of flying?

*3      Chief of Acquisitions Chippy Shaik said clearly and on the record that the acquisition was only about countertrade.

Since then he has been contradicted by Alec Erwin who said under oath that the armaments acquisitions were on the strength of their own intrinsic defence requirements.

This is logically false because otherwise, and it is on the record, that the DoD and SANDF in nearly all cases had not completed its formal needs analysis and staff requirements (the LIFT, ALPHA and submarine acquisitions are the clearest examples).

It is also clear and incontrovertible that it was the government telling the DoD and SANDF that it had to have new weapon systems, not the other way round as it is meant to be.

*4*5*6  Unfortunately simple facts and simpler logic show this to be false.

If Mbeki really wanted a strong defence force then he would not only have found the wherewithal to fund the acquisitions, but he would have found the money to properly operate the equipment at least for the duration of paying for its acquisition. This payment period extends until 2018.

Yet the SA Navy and SA Air force have almost no money to operate and maintain their equipment. It's on the record repeated by generals and admirals in on-the-record public statements and by the DoD in Parliament.

The SA Navy acquired 4 frigates yet it only has the budget for operating 2.

It wanted 5 or preferably 6 so that it could operate at least 3 continuously.

The SA Navy acquired 3 submarines yet it only has the budget for operating 1, sometimes 2.

It wanted 4 so that it could operate at least 3 continuously.

All this was known prior to acquisition, indeed it's all simple stuff - it's called system availability and cost of ownership.

Our ownership of some of the advanced weapon system in the entire world, i.e. the MEKO 200AS frigate and the fourth generation Gripen JAS39 (of which this country only has one aircraft at present) is clearly not for any current or forseeable defence need, neither is it for any political posturing.

Neither can it really be that the Arms deal was about offsets, otherwise this country would not have been so inept in choosing viable NIP projects or about ensuring that these came to fulfillment.

It cannot also be about DIP because almost no defence company in this country got either a good deal out of DIP and certainly not a sustainable business. The submarine DIP and corvette platform DIP were infinitesimal and the corvette combat suite DIP was for something that had in any case being going on locally for 10 years or more.

So if it is not for national strategic needs, nor for national defence needs, nor for NIP nor for DIP, then what was the Arms Deal for?

It is very simple - the Arms Deal was for :

It's criminal and the prosecuting authorities should investigate all the clearly unlawful conduct that is involved in the Arms Deal and prosecute accordingly.