Zuma: Poor needs fired up economy

Johannesburg - South Africa must accelerate economic growth to ease the impact of the global economic crisis which has hit the poor hardest, said President Jacob Zuma.

Africa's largest economy is in the grips of its first recession in 17 years, while the government faces pressure to ease poverty among millions of blacks still living in grim townships, glaring reminders of apartheid, which ended in 1994.

"Although it took a bit longer before affecting South Africa, the economic crisis has bitten deep," Sapa news agency quoted Zuma as telling the National Economic Development Labour Council on Saturday.

"The growing job losses during this year and rising indebtedness have made it clear that the effects of the crisis have hit hardest at the poor and vulnerable, thereby deepening poverty and inequality."

Trade unions which helped Zuma's rise are pushing him to boost government spending, a policy which would worry investors watching to see if he steers the economy to the left.

Labour unions across sectors have gone on strikes demanding double-digit wage hikes and most settlements have been above the inflation rate, which stood at 6.7% year-on-year in July.

The country lurched into recession in the first quarter of this year as depressed local and global demand hit mining and manufacturing.

South Africa's unemployment rate ticked up to 23.6% in the second quarter of 2009.

"Lower growth poses substantial challenges for trade and industry, employment and training, income distribution and social security. But we will have to rise to the challenge and seek opportunities to speed up the recovery and lay the basis for a more equitable long-term growth and development path," Zuma said.

Last week, a South African court blocked the dismissal of 1 300 soldiers who had clashed with police over pay and working conditions. The government and army had moved to fire soldiers who protested violently in the capital Pretoria, accusing them of mutiny.

Zuma criticised the soldiers in his address on Saturday, saying they displayed "a lack of social responsibility when exercising one's right to strike and protest".

- Reuters