South Africa's ANC debates economic policy

June 25, 2012 - 1:57 PM

JOHANNESBURG (AP) — Leaders of South Africa's governing African National Congress are fiercely debating how Africa's largest economy can create jobs, attract foreign investment and stave off social unrest in a global recession.

They're also competing for influence at a party policy conference that opens Tuesday.

Over the next four days, populists and fiscal conservatives will be wrestling over the ANC's soul at the policy conference midway between Johannesburg, South Africa's economic hub, and Pretoria, seat of its government.

The ANC then meets in December in the country's heartland to choose the party leaders who will take the ANC into 2014 national elections. The party is unlikely to face major opposition at national polls. Politicians will use the resolutions hammered out this week as their campaign platform.

President Jacob Zuma is expected to face a tough fight to remain party president in December. Observers will be watching him closely this week to see whether he can maintain discipline among the more than 3,500 delegates. They'll also be assessing his efforts to push his vision, which some say is fuzzy on details such as how he will pay for planned infrastructure development and a national health program, while labor says he's not moving far or fast enough to the left.

Thami Mazwai, who oversees a university program designed to give some of South Africa's poorest citizens the skills to run their own businesses, said he worries that ANC policymakers aren't getting beyond academic debates.

"Right now, we're not having a lot of acting. We really don't understand that we are in crisis mode," said Mazwai, director of the University of Johannesburg's Soweto-based Centre for Small Business Development.

The ANC will this week, for example, debate whether the government should offer private companies subsidies to encourage them to hire and train young workers. A section of the ANC that includes the country's finance minister is pushing for the youth wage subsidy, but unions say it will encourage employers to replace existing workers with younger employees. Mazwai says that it will get young people into the workforce, and that the ANC should stand up to labor.

South Africa's unemployment rate has been stuck at 25 percent for years. This country of 50 million has not seen the political turmoil or wide-scale strikes and protests that have occasionally erupted into violence in Europe as economies there melt down. But scattered protests over the ANC government's failure to deliver enough after 18 years in power have broken out in some of South Africa's poorest communities. Mazwai said the risk of broader upheaval can't be ignored, particularly because so many of South Africa's unemployed are young and impatient.

"That is the ticking time bomb that a lot of us are worried about," Mazwai said.

ANC spokesman Jackson Mthembu said that among the tough questions to be confronted this week is why, a generation after apartheid's end brought democracy to the black majority, ANC members don't face consequences when they fail in government posts.

Going after ANC members seen as under-performing, whether in the Cabinet or the civil service, could raise already high tensions within the party. Among the dozen policy documents ANC leaders have circulated to prepare members for the conference is one warning against letting "factional battles over power and resources define the political life of the movement."

Top ANC policy makers can show decisiveness. Despite calls by unions and the ANC youth wing to nationalize mines, seen as a key area in which jobs can be created, the documents that make up the conference agenda portray nationalization as politically and financially impractical. They instead propose using taxes and other means to ensure the nation gets the most from its mineral wealth.

Last week at a Group of 20 meeting in Mexico, Zuma pledged to contribute $2 billion to a fund the IMF can use to help ailing economies. Some within the ANC who are skeptical of globalization said the money would have been better spent at home, illustrating the kind of bickering among moderate and more radical ANC members that can worry foreign investors. Zuma, head of the only African country in the group of the world's 20 top economies, stood firm, saying he was acting to head off deepening a global crisis that could see more jobs lost in South Africa.

Leading South African businessman Brett Dawson wants policymakers to concentrate on competitiveness, in part by improving education and infrastructure. Dawson's Dimension Data, which provides IT technology and support to major South African financial services, mining and other companies, employs thousands. It could employ more if the nation's communications infrastructure and costs allowed entrepreneurs to compete with Indian and other companies for international contracts.

"It is about nations making sure that they can compete. It's the only way we can create jobs," Dawson said.

Dawson is hopeful. South Africans, he said, showed they were capable of innovative thinking and decisiveness when they defeated apartheid.

"The challenge we're facing here is a lot smaller than that kind of challenge," Dawson said,

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Associated Press Writer Kim Chakanetsa in Johannesburg contributed to this report.