'BEE no solution to poverty'

"Redistribution can actually accentuate poverty and create social conflict," he said.

"I was one of the first to oppose Black Economic Empowerment (BEE), because if they're going to redistribute wealth, who is going to get what? Where are you going to get that wealth from?"

Broad Based BEE had only benefited top ANC leaders, Mbeki said.

"It benefits the people in power, but what about the poor? BEE is more of a problem than a solution."

He suggested that the government look at wealth creation rather than "fight the ghosts of the past. The ANC expends a lot of energy with BEE in an attempt to correct the past".

The only way to go bridge the gap between rich and poor was to sort out the education system and concentrate more on the development of small and medium businesses.

"BEE stops black from becoming entrepreneurs," Mbeki said.

"Black people are not necessarily against capitalism," he said, adding that it was only the model of capitalism that the apartheid National Party had promoted that blacks did not like.

He was however unsure if the ANC could market capitalism to the electorate.

"The ANC leaders are afraid of the unions - groups like Cosatu and the SACP - they think these groups deliver a huge constituency but they don't."

He said that the ANC had been "very good" at establishing a political system and the Constitution, but had not done well in economics.

"I never expected them to because they have never run a business."

He said that at least he and his brother, President Thabo Mbeki, had worked in the family's spaza shop as children.

"But when my brother gets kicked out as head of government, you won't have anyone there who has actually managed even a spaza shop."

- Sapa