South Africa should focus on combating poverty and unemployment, its ruling alliance said on Sunday, priorities likely to worry foreign investors hoping for continued business-friendly policies.
The ruling African National Congress, the Congress of South African Trade Unions and South African Communist Party also called for more government intervention to restructure the economy as a shield against global economic turmoil.
”Decisive action is required to transform the patterns of wealth production and distribution,” said the alliance in a statement at a news conference after holding an economic summit.
”Macroeconomic policy needs to support economic development and employment creation.”
The pledge was made during the biggest political shake-up in the history of the ANC, which has ruled since the end of apartheid in 1994.
The ANC forced president Thabo Mbeki to step down last month at the climax of a power struggle between him and ANC leader Jacob Zuma, a move that prompted the resignation of Defence Minister Mosiuoa Lekota.
”Former defence minister and former national chairperson of the ANC Mosiuoa Lekota has announced that a new party will be formed during a national convention,” said SAfm, referring to a convention that Lekota has called for November 2
The creation of a new party would be the most serious division in the 96-year history of the ANC and would raise questions about the direction of Africa’s biggest economy.
Mbeki was replaced by former trade unionist Kgalema Motlanthe, who along with Zuma, has said the country would stick to economic policies which won Mbeki praise.
Investors
But investors are cautious.
They worry Zuma will bow to pressure from his trade union and SACP supporters to steer the economy to the left if he becomes president after a general election due around April next year, which is widely expected.
The alliance said the global financial squeeze will ”pose challenges for job creation and other developmental goals” in South Africa.
”All of these challenges require fundamental … interventions that transform the structural character of our economy,” said the statement.
The alliance also said the formation of a two-tier Cabinet structure should be considered.
”The restructuring of government must be handled in a way which ensures that government’s developmental agenda is not unduly disrupted,” it said.
It is not clear how much support Lekota has, though he has said hundreds of local party supporters have resigned and that regional and provincial ANC branches are contemplating leaving the party.
One heavyweight, the former premier of South Africa’s richest province, Mbhazima Shilowa, resigned from the ANC and joined Lekota’s campaign to the political landscape.
Although the ANC still enjoys political mileage from its fight against apartheid, some South Africans have become increasingly frustrated with party power struggles that have overshadowed crucial issues such as poverty and crime.
They may welcome a new political party, which could also comfort markets if it sticks to Mbeki’s business-friendly policies as expected. – Reuters