Mbeki on tightrope

2008-02-15 23:03

Johannesburg - South Africa's left is riding high as the government prepares to unveil a budget that is expected to raise spending on social programmes and shift policy more towards fighting unemployment and poverty.

Powerful trade unions and the South African Communist Party have seen their influence within the ruling African National Congress rise since the election of the populist Jacob Zuma as party president.

Zuma, now the frontrunner to succeed President Thabo Mbeki when he leaves office in 2009, has pledged that his main focus is to battle the economic and social inequalities that remain in the nation 14 years after the end of white minority rule.

Strong labour support was instrumental in helping Zuma defeat Mbeki for the ANC leadership at a conference in Polokwane in December, where delegates passed dozens of resolutions urging the ANC-led government to intensify its battle on poverty.

Among their demands was for Mbeki's government to work more closely with the Congress of South African Trade Unions and the SACP. Both are in a coalition with government and have been angered by its centrist, pro-business direction.

"We are very encouraged by the atmosphere since Polokwane and we see much greater interaction now," Cosatu spokesperson Patrick Craven said.

Leftist breeze coursing through ANC

"We certainly hope that the budget will reflect the resolutions from Polokwane, which clearly indicate that attacking poverty is the main priority."

Mbeki, who is in danger of becoming a lame duck in his last full year in office, indicated last week that he would bend somewhat with the leftist breeze coursing through his party, which is now dominated by the Zuma camp.

In a State Of The Nation Address last week, the South African leader pledged to lower the pensionable age for men to 60 from 65, introduce an expanded public works programme aimed at boosting employment and intensify an anti-poverty campaign.

He also signalled a sizeable budget allocation was in the offing to address the power crisis that has decimated the mining sector and stoked fears of a slowdown in economic growth, which averaged five percent annually in the past four years.

A wave of rolling blackouts forced large gold and platinum mines to shut down for five days last month, prompting a sharp drop on the mining-heavy Johannesburg Stock Exchange and a corresponding rise in global precious metal prices.

Although production has resumed, Eskom is limiting mining firms and other industrial customers to 90% of their normal electricity supply and warning that the restriction could last for some time.

All eyes on Manuel

The power crisis, coupled with Mbeki's speech, has rattled investors who were already nervous about Zuma's possible ascension to the presidency and a subsequent move away from the policies that have guided the government for the past decade.

South Africa's volatile currency, the rand, fell as Mbeki unveiled his plans.

All eyes now are on Finance Minister Trevor Manuel who delivers his budget for fiscal 2008/09 on February 20.

Although labour has expressed delight at the prospect of a more socialist tinge to government, its ability to exercise radical influence cannot be taken for granted.

So far Mbeki has been able to resist the left's far-reaching demands, such as the introduction of a basic income grant for all South Africans, and has consistently warned Cosatu and the SACP against attempts to steer the ANC and his government.

Mbeki said last week there would be no changes to macro-economic policies.

'A small shift'

For his part, Zuma says he will be bound by current ANC policies if he wins the state presidency, which is far from certain. Zuma is due to go on trial for corruption in August in a case that could end his presidential ambitions.

"I don't see a big shift in the government but a small one," said Keith Gottschalk, a political analyst at the University of the Western Cape.

"They (the ANC) are sticking to the belief that South Africa cannot afford to be a welfare state and that it is rather a developmental state."

- Reuters