South African President Mbeki criticized by international businessman

JOHANNESBURG, South Africa (Reuters) -- George Soros, the international financier and philanthropist, has criticized President Thabo Mbeki for damaging South Africa by helping to keep Zimbabwe's President Robert Mugabe in power.

In an interview with South Africa's Independent on Sunday newspaper, Soros said Mbeki had misjudged political developments in Zimbabwe and the effect they had on how the region is viewed by international business.

MESSAGE BOARD Reforms in South Africa

"It is doing damage to South Africa," he told the newspaper during a brief philanthropic visit to Johannesburg.

"Yet South Africa continues to help Mugabe stay in power...Mugabe has poisoned the neighborhood. This had done considerable damage to South Africa. This is one point where I am actually critical of the policy followed by President Mbeki."

Turmoil and political unrest in Zimbabwe, centered on land redistribution, contributed to a sharp weakening of the rand in May this year.

Soros said that he was "shocked" that South Africa's power utility Eskom had reduced the cost of its electricity to the cash-strapped Zimbabwe Electricity Authority (ZESA) by 25 percent while rates for local consumers were increasing.

"It (Eskom) has also allowed Zimbabwe to run up arrears," he added.

Zimbabwe is experiencing its worst political and economic crisis since independence from Britain 20 years ago, with most of the blame heaped on government mismanagement and land seizures.

The ruling ZANU-PF party won June parliamentary elections, but saw its majority eroded by the year-old opposition Movement for Democratic Change (MDC), which won 57 seats in the 120-seat parliament. A small opposition party took the remaining seat.

At least 31 people, mostly MDC supporters, were killed in the run-up to the elections and during the invasion of white-owned farms by war veterans which began in February.

Mugabe, who has been head of state since the former Rhodesia gained independence, was endorsed as the ruling ZANU-PF's leader at a party congress on Friday despite increasing unhappiness with his rule.

He closed the congress with a pledge to finish his government's seizure of white-owned farms for black settlement by next year.

While other leaders have lambasted Mugabe, Mbeki has remained relatively uncritical, saying he chose quiet diplomacy over open criticism.

"I understand the position that he (Mbeki) felt that, through constructive engagement, he would be able to persuade Mugabe to modify his behavior," Soros told the Independent on Sunday.

"I give him full credit for having tried, but clearly it has not succeeded."

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