Author: Efraim Chalamish
Zuma fights back despite public dissatisfaction with his presidency.

Despite allegations of corruption and public dissatisfaction with high levels of unemployment, the African National Congress party sailed to victory in South Africa’s early May elections with a strong 62% majority. The ANC’s reelection means president Jacob Zuma will serve another five-year term.

Zuma’s election success, however, cannot disguise high levels of unemployment and crime, which many attribute to the country’s serious economic and social problems. According to Evian Group founder and International Institute for Management professor Jean-Pierre Lehmann, 58.6% of females and 54.9% of males in South Africa fall below the poverty line. “Not only is inequality very high,” he says, “but it is as high if not higher than at the time of apartheid.”

South Africa’s struggling economy may also impact its rising political role in multilateral organizations and international institutions. Nigeria, which now boasts Africa’s highest GDP after rebasing it on 2010 figures, is threatening South Africa’s regional economic supremacy.

The ANC’s main economic policy agenda for Zuma’s second term, according to public statements, is the National Development Plan, a detailed program that proposes several critical structural reforms and puts more emphasis on increasing foreign investment, improving infrastructure and reducing the role of South Africa’s traditional state-run corporations. Yet, the actual execution and effectiveness of this strategy remains to be seen.

Zuma’s ability to deliver better results also depends on the composition of his new cabinet and its members’ quality of leadership. “Not only has Mandela passed away, but also former Finance minister Trevor Manuel, who exerted such a steady hand and a clear head in government, has now retired,” says Lehmann.

With respect to external economic diplomacy, while Zuma has identified foreign investment as an important driver of economic growth in South Africa, governmental policies and proposed legislation offer mixed signals to global markets. For example, the extensive South African bilateral trade and investment agreements program is on hold as the government is looking for ways to keep its market open to foreign investment while preserving its right to pursue policy objectives. The South African government recently terminated several bilateral agreements with leading European allies, such as Germany and Spain.