A WAVE of strikes by South African trade unionists in many industrial and service sectors of its economy, together with widespread protests by poor shanty-town dwellers against atrocious living conditions, present new president Jacob Zuma with a frontal political challenge. Elected on a left-wing platform last April, with pledges to raise living standards for ordinary people, Mr Zuma’s populist rhetoric is now being tested for results by his core supporters.
Unfortunately for him this comes just as the economy goes into its first recession for 17 years, widening state deficits, deepening the already heavy unemployment and making it all the more important for international investors in South Africa to know the basic thrust of its economic policy. Mr Zuma is equally pledged not to alter the main elements of that policy, in place for the last 15 years, in which financial stability, economic growth and macroeconomic orthodoxy were given priority over egalitarian redistribution. Tension between the two objectives is dramatised by these events.
Already, election pledges to improve child support grants and national health insurance have been postponed for lack of funds. Economic contraction makes it much more difficult to find the money needed for basic infrastructural projects that bring water, electricity and housing to millions of the rural and urban poor. Substantial progress has in fact been made with these, but the pace of change is too slow for two of the forces making up the tripartite alliance that rules along with the African National Congress – the Congress of South African Trade Unions (Cosatu) and the South African Communist Party. They want to see a realignment of economic policy towards a “developmental” model less open to international financial flows and with more scope for social spending and state direction.
These industrial and community conflicts play directly into that strategic policy debate earlier than Mr Zuma would have preferred. Since being elected he has been much less active with his political base but must now show where his preferences lie. In a tightly constrained financial setting he needs to deliver better government, with less corruption and high-handed executive action, as well as delivering high-profile initiatives to address poverty directly. South Africa’s dual economy, divided between an international sector based on huge mineral wealth and commodity exports, and a weaker domestic manufacturing one, is being squeezed between these conflicting demands.