Tension at the Top

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Foreign investors and South African businesses are anxious as ideological divisions amongst the country's rulers raise questions about the sustainability of market liberalisation.

Recently, cracks have appeared to widen within the tripartite alliance between the ruling African National Congress (ANC), the trade union confederation COSATU and the South African Communist Party (SACP).

Tensions were high last week, after the National Union of Mineworkers (NUM) threw its weight behind the embattled former deputy president, Jacob Zuma, and criticised President Thabo Mbeki's desire to have a woman succeed him as the next head of the ANC.

The NUM is a key member of COSATU, with the union's dissatisfaction with the tripartite alliance coming to fore at the opening of the NUM's 12th congress.

Gwede Mantashe, the union's general secretary, claimed Mbeki's aim to promote a woman to be the next president of South Africa was nothing more than an attempt to block the legally embattled Zuma from a run at the position.

Mantashe also accused the ANC of becoming a party for the rich business classes and not championing the causes of workers.

Mantashe gave Zuma a ringing endorsement of the behalf of the NUM's 300,000 members, declaring that the ANC had not made a mistake by electing Zuma to the senior leadership of the party - he recently resumed official duties as deputy president of the ANC.

Addressing the congress on May 24, Zuma himself declared that there was no crisis within the ANC. However, he also issued a thinly veiled rebuke to Mbeki's attempts to "modernise the party", warning of forces attempting to change the ANC from within.

The congress served to highlight the deep ideological divisions that exist within the ANC and its coalition partners, a number of them directly related to the economy. Given that COSATU and the SACP, along with the ANC, were the principle forces of opposition during the era of apartheid, it was natural that they should form a governing alliance when Nelson Mandela came to power in 1994.

However, since then it has been an increasingly rough ride, with ideological differences coming to the fore. While the ANC leadership implemented left-leaning economic reform packages, like the Growth Employment and Redistribution Act (GEAR), in reality the changes have tended to be free market in orientation.

In the lead up to the congress, both the NUM and COSATU attacked the Mbeki-led government's record on job creation and job preservation, with the mining union complaining that up to 50,000 jobs had been shed in the industry in recent years.

Patrick Craven, a spokesman for COSATU, went further, belittling government claims that any losses had been offset by newly created positions.

"At a time when we are told the economy is booming, it is disgusting that so many of our citizens are living in abject poverty, primarily because they cannot find work, or have to survive in low-paid, insecure, temporary jobs," he said.

Foreign investors will be watching closely to see whether the government's free market changes stay on track. Any swing back towards nationalisation would likely have a profound effect on market confidence, which has been carefully nurtured over the course of the last decade, as would any spread in the recent round of strike action called by unions.

South African businesses will be hoping that any split in the ANC, should it come to that, passes off as amicably as possible and without tarnishing the party's good record of governance, widely considered the best in Africa.

Any split would probably be traumatic, as most COSATU and SACP members are also card-carrying members of the ANC and feel that it is their party. It is unlikely, however, that the left will have much chance of re-gaining control of the ANC with their talisman, Zuma, fairing poorly in a recent nation wide poll that asked whether South Africans would like to see him installed as president.

The left is looking increasingly weak in South African politics, with many of its leading lights having moved over to the business or centrist wings over the course of the last decade.

Zuma's leftist credentials are relatively weak in any case, with him having been an exile during the apartheid years and a committed Mbeki supporter until relatively recently. Many believe Zuma has become COSATU's champion by default. In recent years, he became a go-between for the SACP, COSATU and Mbeki after they fell out.

Given that the ANC's leadership is unlikely to shift from its social democratic third-way politics, cracks within the alliance may widen. Therefore, the road ahead looks increasingly difficult to map, especially for potential foreign investors looking on from outside.

Whatever the outcome it looks as though there will be plenty of acrimony to come as the battle for the heart and soul of the ANC intensifies.

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