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South Africa's Zuma sets help for poor as priority
Wed Jun 3, 2009 8:52am EDT
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By Wendell Roelf
CAPE TOWN (Reuters) - South Africa must act now to minimize the impact of the global financial crisis on the poor, but still has to spend wisely, President Jacob Zuma said on Wednesday in his first state-of-the-nation address.
Zuma is under increasing pressure from union allies who demand more spending, but is also wary of scaring off investors as Africa's biggest economy suffers its first recession in 17 years.
He pledged to create half a million job opportunities by the end of the year, but it was unclear how that would happen.
"We take as our starting point the framework for South Africa's response to the international economic crisis, concluded by government, labor and business," Zuma said.
"We must act now to minimize the impact of this downturn on those most vulnerable," he said in a speech to parliament that lasted more than one hour.
Demand for South Africa's minerals and manufactured goods has suffered from the global downturn, making it harder for Zuma to satisfy the demands of the unions who helped his rise to power in April elections.
Eurasia Group analyst Mike Davies said Zuma could have done more in his speech to address the biggest problems.
"I think it actually misses the opportunity to provide some clarity on setting targets, setting out an agenda," he said.
Despite Zuma's pledge on creating job opportunities, he tempered expectations for what the government could do.
PRUDENCE
"Since the implementation of our program will take place in the face of the economic downturn, we will have to act prudently -- no wastage, no rollovers of funds -- every cent must be spent wisely and fruitfully," said Zuma.
"The economic downturn will affect the pace at which our country is able to address the social and economic challenges it faces. But it will not alter the direction of our development."
The charismatic Zuma managed to get out of numerous tight spots on his path to the presidency, including an eight-year corruption case dropped just before the election and a bruising power struggle within the ruling African National Congress.
His greatest challenge now is meeting the demands of supporters who say not enough has been done to help the poor since the end of white minority rule in 1994.
"If you are listening to what he is saying, it outlines how difficult the task facing this government is. How extremely limited their room for maneuver is," said independent analyst Nic Borain. Continued...
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