13 February 2014

South Africa: Zuma Looks to May 7

Johannesburg — President Jacob Zuma on Thursday tempered warnings on the economy with reflections on the gains of a 20-year democracy in an upbeat state-of-the-nation address, ahead of the May 7 general elections.

Zuma veered off his scripted address to warn that the strife besetting the mining industry should not be allowed to destroy the country's biggest foreign exchange earner.

"In no way can we have conflict that destroys the economy," he told MPs during a joint sitting of the National Assembly and National Council of Provinces.

Zuma said while mine owners sought to keep their mines running, unions, representing workers, sought to ensure good working conditions, decent wages and secure jobs for their members.

"It's very important that as we negotiate and try and find solutions, to take all these matters into account. Because in the end, if these two sides don't work together... it affects the economy of the country."

Zuma began his address by paying tribute to former president Nelson Mandela whose death on the eve of two decades of political freedom, he said, had caused the nation and many outside its borders untold pain.

"We have a duty to take his legacy forward," he added, before making a rallying cry for different sectors of society to work together to overcome unemployment, poverty, and inequality.

"We have to work together as government, business and labour to grow our economy at rates that are above five percent to be able to create the jobs we need."

The president acknowledged it was an uphill battle, saying pressure on the rand, which had seen it weaken by 17.6 percent against the dollar, would make government's infrastructure programme more expensive.

However, exporters, particularly in manufacturing, should take advantage of the weaker rand and the stronger global recovery.

"While we have these difficulties, we know that we can cope with this period of turbulence. We have done so before in the past five years. We will, in fact, emerge stronger if we do the right things."

Zuma enumerated the achievements of two decades of majority rule, ranging from better social services to economic stability and the recent record figure of 15 million people in jobs for the first time.

"On average, the economy has grown at 3.2 percent a year from 1994 to 2012 despite the global recession which claimed a million jobs. Working together as government, business, labour and the community sector, we nursed the economy to a recovery."

He said the country could claim gender equality, a free press, independent judiciary, and strong chapter nine institutions.

"All these attributes have made South Africa a much better place to live in now than it has ever been... We buried the undemocratic, unrepresentative, oppressive and corrupt state that was serving a minority."

Turning to problems certain to feature in the opposition's election campaign, Zuma sought to minimise the increase in service delivery protests and said government was taking firm action to fight corruption.

He said it was worrying that protests were increasingly marked by premeditated violence, but insisted better delivery was fuelling impatience.

"The dominant narrative in the case of the protests in South Africa has been to attribute them to alleged failures of government," he said.

"However the protests are not simply the result of 'failures' of government, but also of the success in delivering basic services. When 95 percent of households have access to water, the five who still need to be provided for, feel they cannot wait a moment longer. Success is also the breeding ground of rising expectations."

He conceded that some communities "especially in informal settlements and rural areas" still lacked basic services, but said government was intensifying efforts to change this, especially in the 23 municipalities with the greatest number of backlogs.

The president said government planned to proceed soon with issuing licences for shale gas exploration in the Karoo and procuring nuclear energy.

"The development of petroleum, especially shale gas, would be a game-changer for the Karoo and the South African economy. Having evaluated the risks and opportunities, the final regulations would be released soon and be followed by the processing and granting of licences.

"We expect to conclude the procurement of 9600 megawatts of nuclear energy," he added.

The Democratic Alliance faulted Zuma for failing to tackle the job crisis convincingly. DA leader Helen Zille said claims of success in the past year in the form of half-a-million jobs rang hollow because it fell so far short of the five million target he had set.

Political analyst Judith February termed Zuma's speech pedestrian and said the best part was his off-the-cuff comments on the problems facing the mining industry.

University of the Witwatersrand economist Kenneth Creamer said this was a sincere call from the president and he hoped the industry would heed it.

"One has to hope that the mining industry and mine workers were listening carefully when President Zuma spoke from his heart about the important role that mining plays in creating jobs and exports for the South African economy."

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