South Africa’s largest trade union federation was quick to break into stirring songs of class struggle during its recent congress and COSATU members showed an impressive ability to sign along in unison.

But the question of what it is fighting for these days and its role in the ruling tripartite alliance with the African National Congress and the South African Communist Party has never been under such great scrutiny as it has since President Jacob Zuma took office in May.

Zuma’s struggle for power would have been much harder to win – perhaps even impossible – without the support of the unions and he was happy to take centre stage at the COSATU conference in a bright red Mao-style suit.

But while ever ready to promise support for fighting poverty, Zuma has shown scant sign of agreeing to union demands for everything from big increases in spending to the nationalisation of the central bank.

Unions are now preparing to do battle over the fate of Trevor Manuel, who won the respect of markets as finance minister for policies that unions see as too pro-business and who now heads a planning commission in the presidency.

As well having little love for Manuel, unions feel his role is undermining one of their own in the government - Economic Development Minister Ebrahim Patel.

But the argument highlights the difficulty for COSATU of being both within a broad government it helped bring to power and trying to then pressure that government for changes in the name of a working class struggle.

The face of the union is changing too. Although the theme of the congress was “Consolidating Working Class Power in Defence of Decent Work and for Socialism”, a steady stream of high end German cars made it easy to spot the way to the conference venue.

During the darkest days of apartheid, COSATU leaders struck fear into the white minority ruled-state - they had the ability to bring the country to a grinding halt and they knew it.

Now their power appears more limited over a government they did as much as anyone to put in place.

Picture: A COSATU member marches in Durban in protest against high prices, August 6, 2008. REUTERS/Rogan Ward

South African President Jacob Zuma has a tough balancing act to perform as he begins his term in office.

 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?

After South Africa’s unions came close to blocking the listing of mobile phone group Vodacom, new President Jacob Zuma may want to keep a closer eye on his left wing allies.

The attempt to sink the $10 billion bourse debut of Vodacom, which went ahead on Monday after an 11th-hour court ruling, hurt the rand currency and revived investor concerns over Zuma.

There was no doubt the bid had undermined Zuma’s strenuous efforts before last month’s election to assure business and investors that there would be no policy shift towards his left wing allies once he took office.

Lawyers for the government opposed union federation COSATU’s attempt to stop the listing in court and made clear the Zuma administration stood by what had been agreed already.

But investors still want reassurance from Zuma that other deals would not face similar challenges by his allies.

COSATU, which has 1.8 million paid-up members in the country of nearly 50 million, said it was angry and disappointed at the court allowing the listing to go ahead and called on South Africans to boycott Vodacom.

But by taking a strong stance on the Vodacom listing, the labour federation may be positioning itself to play a bigger role and could intensify its protest action against other businesses.

Will that be good for South Africa? How successful will the unions be? What will Zuma do about it? What can he do?

Given that the leaders of the world’s most firmly capitalist countries are splashing around unprecedented billions to nationalise banks, prop up industry and try to get economies moving, it might seem churlish for anyone to question South Africa’s ruling ANC for planning to spend a bit more freely.

This weekend, the African National Congress set out its election manifesto priorities of creating jobs and improving education and health - promises interpreted by many as marking a generally leftward shift under the leadership of president in waiting Jacob Zuma.

But the plan raises the questions of how the spending will be paid for and how dramatic a shift to the left there will be - of major interest to investors as well as South Africans.

“Zuma did not attach a price tag to the manifesto, but ANC leaders privately admit, to allay fears of a tax hike, that it would be too costly to implement,” said this article in the Sunday Independent.

Africa’s biggest economy has grown significantly since the end of apartheid in 1994, although the dynamism had started to falter even before the global financial crisis spread gloom around the world.

South Africa’s poor and its workers had long complained that the benefits were not being shared around fairly and that only those in a new elite were thriving. The leadership under Zuma, widely expected to become president this year, was always going to be under pressure for more social spending from the ANC grassroots and the party’s union and Communist Party allies.

The pressure may have increased further with the emergence of the new COPE party after the ousting of President Thabo Mbeki. Although COPE’s electoral impact is uncertain and it has not yet spelled out its policies clearly, the fact that close allies of Mbeki are behind it has suggested it is likely to align more with the former president’s stance, seen as ‘pro-business’.

Zuma has always been at great pains to spell out to business leaders and foreign investors that there would be no dramatic changes under his rule. Flight of investment could further weaken the rand, mean job losses just at the moment when the ANC wants to create more and force up government borrowing costs.

That could make it even harder to finance populist pledges without resorting to measures that might create even more financial instability.

This article in South Africa’s Times raised questions over the ANC’s plans for the central bank and whether that would damage its standing as a pillar of macroeconomic stability seen as vital for growth.

It is certainly going to be a very tricky time. How substantial do you think any shift to the left is and would it be for the best? If conflicting promises have been made to different interest groups then which are going to be met? Can they all? If not, then what will be the reaction of those who feel disappointed?

(Picture: President of the ruling African National Congress Jacob Zuma dances on stage at his party’s election campaign launch. Reuters)