ANC told to get to work

Building on dismay over high unemployment in South Africa, a new party is putting jobs before market credibility. Karina Robinson reports

TWO WEEKS ago in a black township in Port Elizabeth, a crime-ridden city where unemployment is more than 30 per cent, the United Democratic Movement got together 352 delegates and more than 1,600 observers to try to change South Africa's political landscape.

This new party, only eight months old, is making inroads into the governing ANC's support, growing disillusioned with present economic policies.

These policies have received a thumbs-up from financial markets. Inflation is falling and the budget deficit is expected to come in at 3.5 per cent in 1998/99, down from 4.1 per cent last year. The Johannesburg All-Share Index is up over 40 per cent from mid-January, in spite of concern about the Asian financial crisis and its effect on emerging markets.

However, the story for the average black South African is very different. "Commodities, and especially gold, haven't had a good history and companies have been downsizing," said Graham Frost, a senior executive at Fedsure Asset Management. "And, with South Africa opening up to the world economy, companies, to become internationally competitive, have to buy new equipment which is more automated and uses less labour."

The national unemployment rate is officially 33 per cent, as slow economic growth - forecast at 1.8 per cent this year - fails to create jobs. Crime is so commonplace it no longer makes headlines and education suffers from a lack of teachers and textbooks.

This hurts the so-called "third society" - the 40 per cent of the population who are unemployed or under-employed, the elderly poor, and rural peasants. The UDM is seeking their support and criticises the government for not improving their lot.

One focus is the ANC's pledge on house-building. Three weeks ago the director-general of housing, Mpumi Nxumalo-Nhlapo, admitted that her department's budget, at 3.6 billion rand (pounds 450 million), was 30 per cent lower this year.

"Capital flows are more mobile so the government has to play the international game and it's playing that part very well," said Hugo Kleyn, economist at brokers SGFP. "Expectations on the ground may be too high. I don't think the ANC has particularly failed."

However, the UDM claims that keeping the budget deficit under control is not the only reason the ANC is not delivering results. "The ANC has lofty ideas but no implementation strategy on the ground. They are pussyfooting around," said Bantu Holomisa, co-founder of the UDM and a former senior figure in the ANC.

Even business has realised that the lack of new jobs is politically unsustainable. The think-tank, the South African Foundation, recently admitted that the government's growth, employment and redistribution strategy, known as Gear, failed to create jobs. It argues for tax breaks and subsidies for job creation, as well as measures to promote medium, small and micro-sized enterprises.

This is a strategy close to the UDM's heart. Roelf Meyer, UDM's co-founder and a former secretary-general of the National Party, said: "The key is to avoid the passive approach of: 'Who can give me a job?' and instead have an attitude of: 'How can I create a job'?" Mr Meyer is best-known as the chief government negotiator who, with the ANC's Cyril Ramaphosa, helped bring apartheid to a peaceful end.

The UDM's economic policy puts jobs above everything. "Without jobs, crime will increase, there will be no need for education, and people will never be able to afford to take care of their own needs."

The party advocates creation of small businesses. Government would implement "policies which jump-start market forces and enable small enterprises to take root and grow," said Mr Meyer. Access to capital - the single most important barrier to small business development - would come through the formation of local stock exchanges and the development of non-bank financial institutions, modelled on the Grameen Bank, which provides capital to groups of women in Bangladesh.

The chances of the UDM implementing these strategies are minimal because the ANC is forecast to win the spring 1999 elections. However, it could influence policy by becoming a strong opposition, despite being dismissed by top ANC officials.

"I've heard the UDM say ANC policies are correct. The grudge they have with us is that we don't implement them. I don't know how you can establish a political organisation on such a basis," said Thabo Mbeki, the deputy president.

But the UDM, despite its youth, has been doing well. It now ranks alongside the long-established Democratic Party and Inkatha Freedom Party in terms of support, according to a poll published on Friday by Markinor, an independent market research company. These gains have been achieved on the back of losses suffered by the ANC and the National Party.

"The UDM has clearly made significant inroads into the ANC's support base in the Eastern and Western Cape," saidHennie Kotze, a professor at the University of Stellenbosch.

The UDM came second in a recent by-election, and a string of local councillors from the National Party - including mixed-race and Indian people - defected to it. The UDM insists it is multi-racial, unlike other parties which, it says, have a clear race bias.

The party's support base at the moment is 72 per cent black, 16 per cent white and 12 per cent mixed-race and Indian, figures that mirror the racial composition of South Africa. Its two co-founders, one black, one white, insist that the next step in South Africa is for politics to be split along lines other than race.

But opinion is divided as to what difference the UDM can make. "They only started less than a year ago and they don't have the election machinery or any money behind them," said Mr Kleyn of SGFP.

This may well mean that the UDM will form an alliance with other opposition parties. The National Party is probably out of the question, say political analysts, because Mr Meyer was forced to leave it when his attempts at reform were rejected.

The Democratic Party, despite being perceived as representing the interests of a white elite, might be an option. Mr Holomisa said the UDM's national conference in June would debate the issue of alliances.

"In the final analysis, we are likely to see either the DP or UDM assuming the official opposition status," said Sipho Maseko, senior lecturer at the University of the Western Cape.

The Eastern Cape is the one province where the UDM is expected to do well in the elections. It has always been Mr Holomisa's stronghold from his days as leader of the Transkei homeland. Mr Mbeki dismissed even this, though. "The ANC in the Eastern Cape is much older than Bantu Holomisa," he said.

The Transkei became a byword for financial mismanagement, although some commentators insist that Mr Holomisa was not entirely to blame, as it was not in the then ruling National Party's interests to have prosperous homelands.

"The jury is still out on the political integrity of Holomisa, though his moral integrity isn't in question. He's very unpredictable," said Moss Leoka, former president of the Johannesburg Chamber of Commerce and Industry and a member of the black business elite.

The ANC officially dismisses the UDM. Yet a clearer indication of its real thoughts may be that it thought it worth while to send supporters to disrupt the UDM's Port Elizabeth event.

Copyright: IOS & Bloomberg

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