South African President Jacob Zuma is being pushed into confrontation by unions demanding an economic policy shift to the left even though they have little chance of emerging victorious.
Zuma’s biggest challenge was always going to be balancing the interests of his restless union allies with those of foreign investors who want market-friendly policies to remain.
Any thought the unions might sit quietly now they have their man in office has disappeared less than a month after Zuma’s inauguration, causing friction as he tries to lead South Africa through its first recession in 17 years.
The Congress of South African Trade Unions, with 1,8-million paid-up members in the country of about 47-million people, has backed a strike call to demand deeper interest rate cuts to help lift growth and save jobs.
The union’s president said it would also seek the departure of central bank Governor Tito Mboweni, respected by markets for transparent policies and efforts to fight inflation.
”The honeymoon ends,” said Razia Khan, regional head of research, Africa, at Standard Chartered. ”The unions will probably have brought this on themselves.”
Zuma has made no direct comment on the unions, but the signs of tension have been growing.
Last month, Cosatu nearly blocked the listing of phone company Vodacom, one of the biggest stock exchange debuts in South Africa, in part because of fears of job losses. The challenge was only defeated through a vigorous response by government lawyers.
The African National Congress (ANC) soon afterwards warned the unions not to push Zuma too far, saying protests were making the president look weak and indebted to the interest groups who backed him.
But there is no indication of them heeding the message.
In a sign of growing assertiveness, Cosatu general secretary Zwelinzima Vavi told media that Zuma would serve a second term as president even though he has said he plans to step down after five years.
Murkey promises
Aside from calls for bigger interest rate cuts — which are out of Zuma’s control in any case because they are decided by central bank policymakers — he faces threats of public service strikes over a 2007 wage deal with unions.
”It’s just important those issues do not spill over into more generalised resentment and hostility and for them to keep those communications channels open,” said Mike Davies, Middle East and Africa analyst at Eurasia.
”The test will come very quickly in the sense of the ability to maintain balance.”
Zuma, a shrewd political operator, has so far tried to appease labour to avoid the kind of tensions that weakened his predecessor, president Thabo Mbeki.
His first state of the nation address this week, described by critics as an ambitious wish list, was filled with promises that may give Zuma breathing space but could be hard to meet with very limited resources.
”It outlines how difficult the task facing this government is,” said independent analyst Nic Borain.
While Zuma may not be the type of president to vigorously criticise the unions in public, he and his aides can be expected to make clear that they see no room to be swayed by the demands given the tough economic environment.
The economy shrank by 6,4% in the first quarter, the biggest decline in 25 years, and recovery will depend on a global recovery in demand for South Africa’s minerals and manufactured goods.
Borain predicts the government will approach business and labour to try and secure an agreement that can calm nerves.
”I think government is getting ready to ask the unions to come to the party of building the economy,” he said.
Zuma may also look to other support bases within the ANC, such as the rural poor, who may be less costly to please than the unions and are vital party supporters if less visible than Cosatu.
”Given that the choice of initiating market-unfriendly policy will be constrained by the need to achieve longer term development, it is ultimately the unions who will have to give in,” said Standard Chartered’s Khan.
”They do not represent the only or even the main constituent of the ANC.” — Reuters