<<Opposition is increasing to the market-oriented economic policies of South African President Thabo Mbeki. But the resistance is coming from the ruling African National Congress (ANC) - Mbeki's own party. ... Facing a struggling economy and eroding party, the ANC will likely force Mbeki to back away from his free-market economic stance.>> ----- Original Message ----- From: <[EMAIL PROTECTED]> To: <[EMAIL PROTECTED]> Sent: Thursday, July 20, 2000 8:16 PM Subject: South Africa - Politics > Stratfor.com's Global Intelligence Update - 21 July 2000 > __________________________________________ > Know your world. > > Phantom Mercenaries Inflame Caucasus Tensions > http://www.stratfor.com/CIS/commentary/0007210000.htm > > Mahathir to Strike a Blow at Radical Muslims > http://www.stratfor.com/asia/commentary/0007202346.htm > _________________________________________ > > South Africa's Political Contradiction > > Summary > > South African President Thabo Mbeki's economic policies are coming > under fire - from his own party, the African National Congress. > Under pressure from a slow economy and upcoming elections, Mbeki > will likely retreat from his market-oriented stance. But a larger > issue remains - the deep ideological divide that may split the > African National Congress. > > Analysis > > Opposition is increasing to the market-oriented economic policies > of South African President Thabo Mbeki. But the resistance is > coming from the ruling African National Congress (ANC) - Mbeki's > own party. The ANC's general council met last week for a mid-term > soul-searching session and emerged with plans to wrest control from > the government's bureaucrats and technocrats, and therefore > increase its influence over economic policy. Facing a struggling > economy and eroding party, the ANC will likely force Mbeki to back > away from his free-market economic stance. > > The African National Congress has been the dominant political force > in South Africa since the abolition of apartheid in 1991. It > controls just less than two-thirds of the seats in parliament and > has produced the last two presidents. Often called "The Party of > Mandela" the ANC has essentially run South Africa's government > since 1994. > > But times are tough for the party. Its paid membership is down 50 > percent from five years ago, local branches are beset with scandal, > and - by Mbeki's own admission - the party is becoming increasingly > alienated from voters. Bad news, since the party faces local > elections in November. > ________________________________________________________________ > Would you like to see full text? > http://www.stratfor.com/SERVICES/giu2000/072100.ASP > ___________________________________________________________________ > > The crisis within the ANC is occurring in the midst of South > Africa's continued economic malaise. The country is in the fourth > year of an economic program designed to encourage foreign > investment and stabilize South Africa's economy. The GEAR (Growth, > Employment, and Redistribution) policy has decreased government > spending, reduced inflation, cut tariffs and trimmed the national > debt. But it hasn't made things better for the average worker. In > fact, more than half a million jobs have been eliminated in the > last decade. South Africa's GDP is growing, but slowly, at about 3 > percent this year. Unemployment is around 30 percent, and the > poverty rate is nearly double that. > > The tough economic medicine prescribed by the government has always > been hard for ANC party leaders to accept. It spent most of the > apartheid years as a socialist political organization - and had > economic notions to match. Many of its top leadership were even > educated in Moscow. This ambivalence is reinforced by the ANC > political alliance with the South African Communist Party and the > Congress of South African Trade Unions (Cosatu) - South Africa's > powerful labor union. Both of these groups want the government to > focus on job creation and social spending, not investor climate. > > Thus South Africa's political contradiction - technocrats, > appointed by the ANC, have overruled the ruling party's ideas about > economics. > > But the ANC has begun reasserting itself against the technocrats. > It backed a Cosatu-organized national strike May 10 - a strike that > protested against job losses from the government's economic > program. In essence, the ruling party endorsed a protest against > the policies of its own government. > _______________________________________________________________ > > For more on South Africa, see: > http://www.stratfor.com/MEAF/countries/SouthAfrica/default.htm > __________________________________________________________________ > > Besides pushing the government from the outside, the ANC has > apparently decided to increase its hold over the government from > the inside. In fact, this was a specific policy decision announced > by ANC Secretary-General Kgalema Motlanthe after last week's > council meeting, according to the Mail and Guardian, a South > African daily. > > The party will apply pressure in at least two ways. It is setting > up a policy institute to breed ideas, stimulate debate and develop > talent - a small step, but useful in the long term. The ANC also > has plans to "redeploy" senior politicians, including Cabinet > ministers, from their current positions and into local governments. > Although touted as a means to revive the party at the grassroots, > the move smells like a purge. > > President Mbeki is a pragmatist and will likely compromise under > concentrated pressure from his own party. He might be forced to > give up his hope for tax-free zones for foreign manufacturers, or > at least trade it for increased social spending and job creation. > In any event, South Africa's economic policy will shift away from > the free market doctrine it has embraced. > > But a larger problem exists in the longer term. A fundamental > division exists within the ANC between free-traders, who occupy > many top government posts, and old socialists, who carry much > weight with the rank-and-file. This division is deep, ideological, > and unlikely to be bridged easily. It may be enough to split the > ANC. > _______________________________________________________________ > > For more on the Middle East & Africa, see: > http://www.stratfor.com/MEAF/default.htm > __________________________________________________________________ > > > (c) 2000 Stratfor, Inc. > _______________________________________________ > SUBSCRIBE to the free, daily Global Intelligence Update. 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