InfoAnda - Insight: Economic horizons darken for ANC-ruled South Africa |

Pakistanis angry over detentions in Times Sq. case
Monday, May 24, 2010
ISLAMABAD – Relatives of three men detained by Pakistan for alleged links to the suspect in the attempted Times Square bombing say the men are innocent.
They

Taiwan denies boycotting Australian film festival
Thursday, August 6, 2009

AFP - Thursday, August 6TAIPEI (AFP) - - Taiwan's Beijing-friendly government on Wednesday denied boycotting an Australian film festival amid a row over the e

Merkel's support dips, regional ally resigns International
Thursday, September 3, 2009

By Sarah Marsh and Noah Barkin

BERLIN (Reuters) - Chancellor Angela Merkel suffered a double blow on Thursday as a senior party ally in east German

Minister seeks closure of anti-Berlusconi websites
Wednesday, December 16, 2009
ROME (AFP) - – The Italian government moved Tuesday to close down Internet sites encouraging further violence against Prime Minister Silvio Berlusconi, who

Asian markets mixed after Wall Street rally
Wednesday, March 18, 2009

By ELAINE KURTENBACH,AP Business Writer AP - Wednesday, March 18SHANGHAI - Asia's stock market rally seemed to be running out of steam Wednesday, despite an

New 'smart' electrical meters raise privacy issues | 6 November 2009
Isaac Julien's art seeks to 'allegorise' news tragedy | 6 September 2010
Gabon President Omar Bongo dead: France | 8 June 2009

Nigeria's Jonathan set for victory in election | | 17 April 2011

Forum Views () Forum Replies ()

Read more with google mobile : Insight: Economic horizons darken for ANC-ruled South Africa |

Edition: U.S. Africa Arabic Argentina Brazil Canada China France Germany India Italy Japan Latin America Mexico Russia Spain United Kingdom Home Business Business Home Economy Davos 2012 Technology Media Small Business Legal Deals Earnings Summits Business Video Markets Markets Home U.S. Markets European Markets Asian Markets Global Market Data Indices M&A Stocks Bonds Currencies Commodities Futures Funds peHUB World World Home U.S. Brazil China Euro Zone Japan Mexico Russia India Insight World Video Politics Politics Home Election 2012 Issues 2012 Candidates 2012 Tales from the Trail Political Punchlines Supreme Court Politics Video Tech Technology Home MediaFile Science Tech Video Opinion Opinion Home Chrystia Freeland John Lloyd Felix Salmon Jack Shafer David Rohde Bernd Debusmann Nader Mousavizadeh James Saft Lucy P. Marcus David Cay Johnston Bethany McLean Edward Hadas Hugo Dixon Ian Bremmer Mohamed El-Erian Lawrence Summers Susan Glasser The Great Debate Steven Brill Geraldine Fabrikant Breakingviews Equities Credit Private Equity M&A Macro & Markets Politics Money Money Home Global Investing MuniLand Unstructured Finance Linda Stern Mark Miller John Wasik Analyst Research Alerts Watchlist Portfolio Stock Screener Fund Screener Personal Finance Video Life & Culture Health Sports Arts Faithworld Business Traveler Entertainment Oddly Enough Lifestyle Video Pictures Pictures Home Reuters Photographers Full Focus Video Article Comments (0) Full Focus Editor's choice A selection of our best photos from the last 24 hours. Full Article Images of December Best photos of the year Follow Reuters Facebook Twitter RSS YouTube Read Employment growth picks up pace 10:23am EST Fidel Castro says world marching into abyss with shale gas 9:14am EST Analysis: Will Panetta stave off deeper cuts to military? 05 Jan 2012 Iran plans more war games in strait as sanctions bite | 9:50am EST Special report: Romney's steel skeleton in the Bain closet 8:21am EST Discussed 148 Obama to help unveil ”realistic” military plan 131 Iran threatens action if U.S. carrier returns: IRNA 81 With 48 hours left, Romney eyes Iowa breakthrough Watched World's first chimeric monkeys are born Thu, Jan 5 2012 Anti-malaria drug produced from tobacco plants Wed, Jan 4 2012 iPhone look-alike flies off shelves in China Tue, Jan 3 2012 Insight: Economic horizons darken for ANC-ruled South Africa Tweet Share this Email Print Factbox ANC rules South Africa with apartheid struggle mantle 5:35am EST Analysis & Opinion Yes, we’re creating jobs, but how’s the pay? Is regulation really impeding employment? Related Topics World » Special Reports » A picture of former South African President Nelson Mandela is seen on memorabilia sold in Bloemfontein January 6, 2012. Credit: Reuters/Siphiwe Sibeko By Jon Herskovitz JOHANNESBURG | Fri Jan 6, 2012 7:01am EST JOHANNESBURG (Reuters) - Trevor Ghavala has grown up in post-apartheid South Africa, and like nearly half his young adult contemporaries he is unemployed and has little chance of escaping a social underclass in which millions are trapped. "I don't have a job ... I've never had a job. I've been asking people, doing crime," said Ghavala, 24, chewing on a piece of bread as he squatted with his back to a wall in a central street in Johannesburg's Soweto township. South Africa's African National Congress (ANC), the anti-apartheid liberation movement turned ruling party, came to power in 1994 promising to help people like Ghavala. But after 17 years running Africa's biggest economy, critics say it has done more to enrich its leading members and allies than to help the poor masses. At the weekend, it will hold a lavish birthday bash to celebrate its 100th anniversary with a golf tournament, banquets and concerts by the biggest stars in South African music while people like Ghavala struggle to eke out a living. "I wish that Madiba was fresh back," Ghavala said, referring to the popular clan name of former president and anti-apartheid icon Nelson Mandela who, in a blaze of international goodwill, led South Africa into a new era of multi-racial democracy. ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ For a graphic on education: r.reuters.com/peg87p For a graphic on services: r.reuters.com/gyx49r ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Mandela, elected president of the ANC after it was unbanned and he was freed from jail, led the country from 1994-1999. His departure from power was seen as an example to African leaders although the movement sees itself ruling for years to come. It beat its nearest rival by more than 40 percentage points in elections last year, but analysts warn the party faces a defining moment in the next three years or so. They say that if the ANC government keeps up its current policies, South Africa risks slipping to new depths of unemployment, debt and corruption that could swell the ranks of the destitute like Ghavala and undermine long-term prospects. Critics say President Jacob Zuma, an ANC veteran and political backstreet brawler both before and since taking office in 2009, has been a virtual bystander when it comes to tackling the country's deep social and economic problems. "We are deeply concerned about the current trajectory. A rapid turnaround would be required in Zuma's next term," said Neren Rau, the chief executive of the South African Chamber of Commerce and Industry. ANC PUT TO THE TEST The ANC says it has made big strides in erasing the economic and social injustices caused by decades of oppression of the black majority by a white minority under apartheid. The government says that when the ANC took over in 1994, 62 percent of households had access to clean water and about 50 percent had access to electricity. This has increased to nearly 95 percent and about 80 percent, it says. Underpinning the economy is the most advanced infrastructure on the continent, the strongest banks and a well-developed rule of law and judicial system, making South Africa a stepping stone for investment in Africa's quickly emerging states. One constant that has kept the ANC government on the fiscal straight and narrow and reassured investors has been the National Treasury, led since 1994 by just two finance ministers highly praised for their fiscal discipline. The World Economic Forum's Global Competitiveness Survey ranks South Africa as top in the world for its regulation of its security exchanges, number two in the world behind Canada for the soundness of its banks. It is also one of the easiest places for a firm to raise money by issuing shares. But the same survey also said South Africa has some of the world's most rigid labor laws, one of its least productive workforces and a broken school system that is staggeringly bad at educating its students, given the money spent on it. At the end of 2012, Zuma faces a party leadership election. Despite a leadership style criticized as lacking vision and ineffectual, he is widely expected to garner enough support in the fractious party to win a second term as party chief and then stay on as national president until 2019. Against this background, analysts do not expect him to rock the boat and upset left-leaning allies with pro-business reforms such as loosening the labor market and state economic controls. "As it approaches almost two decades in power and demands for economic delivery grow more strident, the party's ability to hold together in the same way will increasingly be put to the test," Standard Chartered Africa analyst Razia Khan said in a research note. BOWING TO THE UNIONS Unemployment has been a chronic problem for the ANC and has also contributed to an alarmingly high murder rate, among the highest in the world outside a war zone. About 40 percent of the adult population is jobless - a percentage expected to rise substantially in the coming years - and this is seen driving crime and widening economic inequality. "If the same pattern of job loss continues, we will reach very shortly, in three to five years, a situation where more people are unemployed than employed," said Andrew Levy, who heads a leading private South African labor research group. "Economically, there will be a continually higher burden on those who are working because government will try to do more and more to ease the lot of the unemployed," Levy said. ANC governments have poured billions of dollars into job training programs only to see much of it lost to corruption or incompetence and the education system fails to provide basic skills. The country has lost about a million jobs in the past two years, with the manufacturing sector the hardest hit. Many of these jobs will not come back because labor has priced itself out of the market. The average factory worker in South Africa earns about six times as much as a factory worker in China and is less efficient. Industries in sectors which were once internationally competitive, such as footwear, have faded. South Africa adopted rigid labor laws in large part because of the governing alliance between the ANC and the major union federation COSATU, a pact which was formed in the anti-apartheid struggle and continued after the ANC formed a government. Zuma and other ANC leaders have tried to keep COSATU and its 2 million members close to them, not wanting to alienate a major source of votes by enacting labor reforms that would make it easier for firms to hire and fire workers. There are four major measures before parliament aimed at appeasing COSATU that will be at the heart of the legislative agenda this year. The bills place more burdens on employers, make it more difficult for them to hire seasonal labor and drive up personnel costs. BUDGET UNDER STRAIN While joblessness looks set to rise, so too does the country's growing debt as pressure mounts on the ANC to open the taps to still more welfare spending. The squeeze on state finances will likely push South Africa's debt-to-GDP ratio above 50 percent in the next three years for the first time under ANC rule, economists said. This would put the country's credit rating under pressure and could make it more expensive to borrow money. "Debt levels will continue to rise as a percentage of GDP until 2016 when they should plateau at around 55 percent," said Peter Attard Montalto, emerging market economist at Nomura. The budget is already under strain to pay the wages of more than 1 million civil servants, many of whom belong to COSATU-affiliated unions. "South Africa's debt position will likely become more precarious, especially if economic growth continues to disappoint," said Anne Fruhauf, a specialist on Africa at political risk consultancy Eurasia Group. If the global economic crisis leads to slower growth in South Africa, and lower tax revenue as a result, the government wage bill could well reach about 50 percent of tax revenue within three years, leaving even less money for other spending. On top of this, the government plans to begin rolling out a National Health Insurance program it said will cost 125 billion rand ($15.6 billion) this year, about 13 percent of the state budget. "PREDATOR ELITE" There is also a growing clamor from ANC supporters to improve delivery of electricity, running water, schools and other basic services to the poor. Analysts say this is undermining the ANC's voter support. Improvements the ANC has made so far have not satisfied the poor black majority, which sees progress as too slow and complains of incompetent local officials. Scores of violent protests have added to the pressure for better services. The country has also slid in Transparency International's highly regarded gauge of perceived corruption, from 38th in the world in 2001 to 64th in 2010, a trend that worries many citizens, long-time ANC supporters among them. "The problem is the leaders. They must deliver, They are corrupt," said Soweto resident Mzwandile Sifile, expressing a widely held view. Corruption has also undermined investor confidence. There is also growing anger with ANC economic empowerment policies that were nominally designed to reverse apartheid era curbs that had largely shut blacks out of the economy. Many see the programs as benefiting just a few people with ANC connections. COSATU has said they have lined the pockets of a corrupt "predator elite." "We are still waiting for the delivery," Soweto resident Sifile said. "We are still hoping for the best." ($1 = 8.0343 South African rand) (Additional reporting by Pascal Fletcher; Editing by Pascal Fletcher and Philippa Fletcher) World Special Reports Tweet this Link this Share this Digg this Email Reprints We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/ Comments (0) Be the first to comment on reuters.com. Add yours using the box above. Edition: U.S. Africa Arabic Argentina Brazil Canada China France Germany India Italy Japan Latin America Mexico Russia Spain United Kingdom Back to top Reuters.com Business Markets World Politics Technology Opinion Money Pictures Videos Site Index Legal Bankruptcy Law California Legal New York Legal Securities Law Support & Contact Support Corrections Advertise With Us Connect with Reuters Twitter Facebook LinkedIn RSS Podcast Newsletters Mobile About Privacy Policy Terms of Use Our Flagship financial information platform incorporating Reuters Insider An ultra-low latency infrastructure for electronic trading and data distribution A connected approach to governance, risk and compliance Our next generation legal research platform Our global tax workstation Thomsonreuters.com About Thomson Reuters Investor Relations Careers Contact Us Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. Thomson Reuters journalists are subject to an Editorial Handbook which requires fair presentation and disclosure of relevant interests. NYSE and AMEX quotes delayed by at least 20 minutes. Nasdaq delayed by at least 15 minutes. For a complete list of exchanges and delays, please click here.

Other News on Friday, 6 January 2012
Screws tighten on Iran as big buyers shun its oil |
Iraq Shi'ite militia says ready to lay down weapons |
Israel, Palestinians to meet on Monday, U.S. says |
Italy PM Monti takes stability message to Europe |
Kenya seizes explosive equipment near Somali border |
AT&T says will complete wireless network upgrade by end 2013 |
Zynga releases first mobile game since IPO |
Hacker mounts second attack on Israeli credit cards |
Social media threat to adopted children grows in UK |
GM offers fix to Volt to prevent fire risk |
Mila Kunis is newest face of Dior |
Jeremey Renner unscathed in bloody Thai bar brawl |
U.S. photojournalist Eve Arnold, 99, dies in London |
Bridesmaids, The Help among Writers Guild nominations |
Iron Lady or monster? Thatcher film stirs UK passions |
Screws tighten on Iran as big buyers shun its oil |
Turkish ex-army chief ordered held in jail for trial |
Fidel Castro says world marching into abyss with shale gas |
Gunmen kill 6 in Nigeria church attack |
Mexico turns up the heat on drug lord Guzman |
Libyan soldiers demand salaries |
Myanmar's Suu Kyi, UK's Hague in tune on sanctions |
Woodford to sue Olympus for unfair dismissal |
Smartphones power Samsung to record Q4 profit |
LG Elec says joins Google to roll out Google TV |
Digital music service Grooveshark sued by EMI |
Analysis: Molly, Crackers and consumer power gone viral |
Contest seeks world's most energy-efficient TV |
Kanye West floods Twitter with train of thoughts |
Singer Etta James leaves hospital |
Mila Kunis is newest face of Dior |
Joe Jackson's tribute perfume gets new launch date |
Jeremy Renner unscathed in bloody Thai bar brawl |
Bridesmaids in, War Horse out of writers awards |
Suicide bomb kills 25 in Damascus: Syrian agency |
Pakistan's former envoy to U.S. caught in web of scandal |
Latest Egypt vote brings Islamists closer to win |
Van der Sloot to plead guilty for murder in Peru |
Pope names new cardinals who'll choose successor |
Insight: Economic horizons darken for ANC-ruled South Africa |
London volunteers warned over social media use |
HTC quarterly net lags forecast amid tough competition |
Israel concerned may be under cyber attack |
Green cars headline auto show, but India not ready |
Harry Potter conjures up a Golden Tomato |
Rolling Stones' Keith Richards has eye surgery |
MUSIC: Can punk or rock push divas off the top? |
Van Halen to kick off tour, album in February |
British PM Cameron criticizes Thatcher film's timing |
Greece at new risk of being pushed off euro
Bodies of missing Tenn. mom, Jo Ann Bain, and daughter found
Female Breasts Are Bigger Than Ever
AMD Trinity Accelerated Processing Units Now in Volume Production
The Avengers (2012 film), made the second biggest opening- and single-day gross of all-time
AMD to Start Production of piledriver
Ivy Bridge Quad-Core, Four-Thread Desktop CPUs
Islamists Protest Lady Gaga's Concert in Indonesia
Japan Successfully Broadcasts an 8K Signal Over the Air
ECB boosts loans to 1 trillion Euro to stop credit crunch
Egypt : Mohammed Morsi won with 52 percent
What do you call 100,000 Frenchmen with their hands up
AMD Launches AMD Embedded R-Series APU Platform
Fed Should not Ignore Emerging Market Crisis
Fed casts shadow over India, emerging markets
Why are Chinese tourists so rude? A few insights

USD EUR - 1 year graph	VPN on MacOSX	BlogMeter 1.01