Emerging South

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1. Dec 22 2007

   Jacob Zuma new leader of South Africa’s Ruling ANC Party

   By John Baeyens | Share This | 1 Comments

   As follow-up on the post of last Wednesday: Jacob Zuma has indeed been elected as new president of the ANC Party. Below is an overview of the press-reactions:
   
   December 19: The Economist: Zuma comes out on top
   “Whatever happens, the relationship between the government, dominated by Mr Mbeki's faithful, and an ANC led by Mr Zuma will be awkward. The next few months could see either a patching-up of the rift over the succession or a purge inside the party of Mbeki loyalists. There are even questions over whether Mr Mbeki will finish his full term as the country's president, although Mr Zuma has said that he sees no reason for his early departure.”
   
   December 19: UBS analysis: Jacob Zuma won leadership of South Africa’s Ruling ANC Party
   “Looking at ZAR and equity levels before and after the announcement, it appears that the markets have not priced in a big political risk premium on South Africa, despite Zuma's background in trade union politics, legal wrangles (prosecutors to decide about charges soon), and less than clear stance on free market policies. Zuma did pledge not to change the country's economic policies if elected as president. It seems the market views him in the same vein as Lula in Brazil, the Congress coalition in India and PM Fico in Slovakia, all of who were initially feared to be populist, but eventually stuck to free market policies in practice. We think this is a reasonable base case view for Zuma as well, but we would not get complacent on this, and point to one big risk. Lula, Fico and India's communist backed coalition have governed through times of strength in the economic cycle. By contrast, the next ANC leader may find himself at the helm of a slowing South African economy, and potentially also facing more tricky international credit conditions. In our view, this increases the risk of populist policies.”

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2. Dec 19 2007

   Zuma choosing the Lula or Chavez scenario?

   By John Baeyens | Share This | 0 Comments

   This weekend, the ruling South African party, the ANC, will decide the leadership of the party. By monday we know who the ANC will put forward in the presidential elections of 2009. Current ANC president Mr. Thabo Mbeki is not eligible for re-elections, since he is currently in his second term; but as ANC president he could keep on controlling the powers and handpick himself his successor in 2009. Technically, the new president of South Africa will only be voted in 2009. But since the ANC controls more than 70% of the votes, the decision will be made this weekend. Current president Mr. Mbeki is the most prestigious political leader on the African continent. He has done well in managing the South African economy, which has achieved an unprecedented growth the past 8 years. Yet, despite this success, the benefits of this growth have not reached the poor. Poverty remains an increasing major problem of South Africa. Currently Mr. Jacob Zuma, 65 is the frontrunner for this weekends elections. He was fired by current president Mr. Mbeki as deputy president of the country last year over corruption allegations and positions himself as a champion of the poor. He is also a Zulu, the largest black tribe. The last two presidents Mr Mandela and Mr Mbeki were both Xhosas.

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