Magazine article Business Credit

Hot Spots: South Africa

Magazine article Business Credit

Hot Spots: South Africa

Article excerpt

It is now a little more than two decades since Nelson Mandela was released from prison, marking a critical turning point in South Africa's affairs. But in comparing the incumbent President Jacob Zuma with his illustrious predecessor, one could not come up with a greater contrast in personalities, and this is one reason why the incumbent has much more difficulty holding the diverse African National Congress together, which has dominated the country's political scene ever since the end of Apartheid.

Zuma, who has three wives and is engaged to a fourth, confessed recently to fathering a child (his 20th) with another woman 28 years his junior. Liberal opinion in South Africa has been angered by his latest indiscretions and has begun to question aloud his fitness for office.

Nothing could underscore more starkly the contrast between the austere self-sacrifice and moral leadership of Mandela and Zuma's self-indulgent record. By becoming himself a source of division, moreover, the president has highlighted many of the factional struggles that have been clawing at the fabric of the African National Congress.

The ANC has always been a big tent combining people of greatly diverse views and having to deal with complex internal struggles. These are partly based on ideological clashes between the pro-market nationalists, who have dominated policy since the mid-1990s, and the socialists and labor unionists who want to see a much more interventionist approach and who have been primarily responsible for bringing Zuma to office. The ANC's left-wing allies in the Communist Party and the main labor organization, the Congress of South African Trade Unions (COSATU), want the government to loosen its fiscal and monetary policies to create more jobs. They are in favor of stripping the Reserve Bank of what independence it has left. They are highly critical of the way in which Black empowerment policies have allowed a small group of businessmen with political connections to enrich themselves while the mass of the people was left behind.

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The Youth League is pushing for a nationalization of the mines. This is being strongly resisted not just by Zuma but also by the Communists and the labor unions. Behind it all, much of the tension simply emanates from rivalry for the spoils of office--national or municipal posts, public sector jobs and lucrative government contracts--which pull people this way and that. Zuma has tried to contain these centrifugal forces with the help of cabinet appointments (to reward particular factions) while delaying especially divisive decisions.

Many observers think that he has the capacity to recover from his recent personal travails, but this cannot change the fact that he is presiding over an economy that has lost an estimated 900,000 jobs during the global downturn and is saddled with an unemployment rate that even official figures put at 24.3% of the labor force (the number is far higher among young people). Also, one of the key questions to be asked from a longer-term perspective is whether the administration of President Jacob Zuma will be willing and able to deal decisively with what is arguably one of South Africa's gravest problems, the pervasive corruption that stains the police, the courts, public contracts, welfare benefits--in short, every aspect of government. …

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