African business, politics and lifestyle
Zuma’s balancing act
On the one hand, Zuma is anxious to assure investors that there will be continuity in the economic policies that have secured the country’s status as the regional powerhouse.
On the other, he has to address the increasingly vocal demands of his allies in the labour movement, whose support propelled him first to the leadership of the ruling ANC and then to the country’s top government job after April 22 elections.
But what the unions want – increased social spending to cushion their members against the ravages to the global recession that has now also landed in South Africa – would mean veering away from the prudent fiscal stance that has ironically cushioned the country from the worst of the world crisis.
Investors are also keen to see whether Zuma bows to pressure not to renew the contract of central bank Governor Tito Mboweni, loved by financial markets but vilified by unions that say a pre-occupation with inflation targeting has seen the Reserve Bank maintain a tight monetary policy at the expense of economic growth, impoverishing millions.
Can Zuma please one side without alienating the other? And if it comes down to choice, will the President opt to sacrifice his alliance with the Left to maintain South Africa’s international standing? How essential is union support for his success as President and can the ANC stay in power without it?