Johannesburg - The left-wing allies of the ANC are itching for change, but its new leaders may spurn their demands and keep both Finance Minister Trevor Manuel and central bank governor Tito Mboweni next year.
In a bid not to upset investors say analysts, market
pragmatism will see the ANC retain them after elections in 2009,
which could usher in populist leader Jacob Zuma as the nation's
president.
Manuel and Mboweni, central figures in South Africa's
economic gains in the last decade but criticised by trade unions
for being too aligned with President Thabo Mbeki's pro-business
stance, have both said they are willing to stay on, if asked.
"The ANC knows policy continuity is important after the
election," said Professor Susan Booysen a political analyst at
the Witwatersrand University.
"(ANC Secretary General) Gwede Mantashe was two weeks ago
asking politicians not to prematurely announce their retirement
and the ANC knows these two are highly rated by international
investors and are associated with South Africa's stability."
Mboweni said last week he had spoken to Mantashe to counter
speculation that he did not want to stand for a third five-year
term after August 2009.
The ANC - which enjoys overwhelming electoral support -
has baulked against rocking the boat in the past, particularly
in key economic posts.
The party did not immediately change key economic officials
when it took over government at the end of apartheid in 1994.
When Derek Keys, Finance Minister of the last apartheid
government resigned in late 1994, the ANC replaced him with
non-aligned commercial banker Chris Liebenberg. Manuel was
appointed in 1997.
They also left central bank governor Chris Stals in his post
and replaced him with Mboweni only in 1999, when the former
retired.
Analysts say that tradition lives on.
"You cannot say the new ANC leadership has gone completely
left. There are other influences there and many of them want to
see the governor and the Minister stay in their jobs, but it's
too early to tell," said Stephen Friedman, senior research
fellow at the Centre for Policy Studies.
The ANC has also so far kept mum on possible successors.
Policy direction
However, Cosatu and the communist party - ANC allies that helped Zuma oust Mbeki for the party presidency last year - will push the new leaders to dump links to the previous administration.
They want a more expansionary fiscal policy and an end to
inflation targeting, which they blame for higher interest rates
that have risen 500 basis points since June 2006.
Cosatu spokesperson Patrick Craven would not discuss the
federation's view on the extended stay of Manuel and Mboweni.
"That will be a matter for the ANC to decide but we argue
very strongly that there must be policy change, whoever is in
those two positions," he said.
The SACP (South African Communist Party) wants to limit the
Treasury's authority in determining how the budget is spent and
has threatened to go contest the election as a separate party if their proposals are dismissed.
The ANC's new leaders, though, have been at pains to assure
investors there will be no major economic policy changes.
South Africa's economy has enjoyed its longest ever period
of economic expansion over the past decade.
Interest rates were at a historic low until 2006, which
boosted spending and lifted growth to an average 5% a year for the past four year, enticing foreign investors into record capital inflows.
Lefitist gains limited
But unemployment, officially put at around 23% but unofficially thougth to be some 40 percent, and income inequalities remain a blight on the country's economic landscape.
An alliance economic summit next month should give more clues on the direction of policy in a new dispensation.
Analysts say leftists' gains may be limited.
"In the past (Cosatu and the SACP) have said a lot but have
achieved very little. Time will tell whether the future is more
of the past," said Iraj Abedian, chief executive of Pan African
Advisory Services.
But even in the absence of a major policy shift, the real
test will be how Manuel and Mboweni deal with pressure from left
wing critics.
"I believe we are likely to see some pressure on them to toe
the line if they stay on, but Mboweni can field it off, he's
done that so far," said Booysen.
Mboweni has scoffed at suggestions to abandon inflation
targeting, saying he has a "thick skin" and can take criticism.
The charismatic central banker added he is still young at 49
and saw no reason why a Zuma government would not want him back.
Despite cries from the left, Manuel announced another budget
surplus in February with the full backing of the new ANC guard
and he has stuck to his guns resisting Cosatu calls for
subsidies to help the poor cope with high food prices.
Even Zuma gave his tacit support, telling delegates at the
World Economic Forum in June that the government had few options
to ease their burden.
- Reuters