Mon séjour en Afrique du Sud (Cape Town)

FROM THE ECONOMIST INTELLIGENCE UNIT 

SUMMARY

South Africa's political environment is stable. No major challenge to the position of President Thabo Mbeki is expected from within the ruling African National Congress (ANC). The overwhelming political dominance of the ANC is also unlikely to be threatened in the next few years. The re- emergence of extreme right, white elements poses some threat to political stability, but it is not likely to become significant. Their capacity to engage the state in any kind of protracted struggle is limited. Small- scale political protests over the next year cannot be discounted, however. These could arise from the slow pace of housing provision or general union agitation. The greatest threat to political stability in the next year could come from Zimbabwe: if the political tensions there spiral out of control, large numbers of refugees could flood across the border into South Africa.

ANALYSIS

* Political instability in Zimbabwe, especially following the fraudulent March elections, spills over into South Africa (Moderate risk).

On March 13th President Robert Mugabe of Zimbabwe was declared the winner of presidential elections that observers widely dismissed as crooked. A week later, the leaders of South Africa, Nigeria and Australia suspended Zimbabwe from the Commonwealth, an association of mostly ex- British colonies. While the 12-month suspension carries few practical consequences and no economic sanctions, it was a sign that Mr Mbeki was willing to take a public stand against Mr Mugabe's regime. The South African government continues to insist that there can be a negotiated solution to the current political impasse. It will try to encourage a constructive dialogue, but a positive outcome to this process continues to be unlikely. At some point, the South African government and the international community will be forced to act decisively. If Mr Mbeki fails to take the lead, he might lose Western support for his own personal policy priority, the New Partnership for Africa's Development (Nepad), and face growing domestic criticism. Developments in Zimbabwe will also continue to cast a shadow over South Africa's attempts to attract foreign direct investment inflows.

* The political dominance of the ruling ANC undermines democracy and, over time, increases political instability (Low risk).

The ANC, which took power after the first all-race elections in April 1994, completely dominates the national government. The ANC won a crushing victory in the 1999 national election (but fell fractionally short of a two-thirds majority) and also controls seven of the nine provincial governments. This overwhelming dominance has led to a style of governing that can be abrupt and arrogant. The government, perhaps not surprisingly, is extremely sensitive to criticism. Mr Mbeki's control of the ANC is strong, and this is reflected in the fact that little critical debate or discussion takes place on controversial policy issues. All of this has led to growing frustration on the part of the opposition, with potential risks to political stability. Foreign businesses should maintain contacts across the political spectrum, but take care not to be closely associated with any of the opposition parties; this could lead to reprisals from the government. Companies also should not over-react to initial government statements on policy issues, which, owing to the ANC's strong grip on power, can sometimes seem extreme. Often, the government's positions are toned down at a later date or opened up to a consultation exercise.

BACKGROUND

Political Forces

The dominant party in South Africa is the African National Congress (ANC), the chief focus of extra-parliamentary opposition to minority rule since it was founded in 1912. A defining feature of the ANC has been its commitment to non-racial democracy. However, it is a coalition of diverse interests. Differences are apparent between members associated with the movement in exile, such as Mr Mbeki, and those who worked in the underground movement and the United Democratic Front (UDF), which acted as a domestic political surrogate for the ANC in the late 1980s.

The ANC has a long tradition of exceptional leaders. Most attention has focused on Nelson Mandela, who was imprisoned from 1963 to 1990, but many other members are also impressive. His successor, Mr Mbeki, virtually ran the day-to-day business of government during the final year of Mr Mandela's presidency. He was one of the architects of the government's Growth, Employment and Redistribution (GEAR) strategy in January 1997, and was elected unopposed to the ANC presidency at the party's national congress in December 1997.

Since Mr Mbeki's assumption of the presidency there has been more tension in the organisation around the leadership than there was during Mr Mandela's five years in office. These became apparent in the public domain when in April 2001 the minister of safety and security accused three leading members of the ANC of plotting to overthrow Mr Mbeki. The plot in fact turned out to be nothing more than standard internal politicking. However, the fact that a number of prominent ANC members presently outside government were considering returning to the political fray suggests that there is some discontent within the ANC with aspects of Mr Mbeki's leadership.

There is a significant minority within the ANC and its alliance partners who feel that Mr Mbeki has shown poor judgement on a number of issues. These include, most recently, the handling of the Zimbabwe situation, the HIV/AIDS epidemic, the controversial arms deal and racial reconciliation, on which Mr Mbeki has been more Africanist than Mr Mandela.

However, many of Mr Mbeki's critics support the generally orthodox economic policies that his government has followed. Some even suggest that greater progress should have been made on privatisation, labour market reform and microeconomic stimulation of the economy. Others, especially within the alliance, are critical of the government's orthodox economic policies.

However, Mr Mbeki's control over the ANC remains strong as reflected in the fact that little critical debate or discussion takes place on controversial policy issues. This is a significant departure from the historical culture of the organisation. If Mr Mbeki is not to serve his permitted two terms in office he will have to be replaced as president of the ANC at the party's conference in 2002. However, the strong backing given to Mr Mbeki by former president Nelson Mandela is most likely to help him fend off any challenge to his leadership at the Congress and, thus, he seems certain to serve two full terms as president until 2009.

One of the most important non-party political forces in the country is the Congress of South African Trade Unions (COSATU), which emerged in the mid- 1980s as a force of political opposition while the ANC was banned. Its most talented leaders have been absorbed into the government, leaving COSATU with weak leadership. The South African Communist Party (SACP) has lost 80% of the members gained since its unbanning in 1990, but it continues to provide the intellectual arguments for the left. Both the SACP and COSATU have a number of ministers in the present government, actively defending the conservative economic framework within which the government operates, illustrating the complex relationship between and within the three organisations.

Tensions between the ANC and SACP-COSATU, which formed a formal political alliance to take part in the country's elections, have been mounting as the ANC's partners demand a stronger voice in policymaking, while being critical of the ANC's policies towards macroeconomic policy, labour reform and privatisation. However, to date, the issues keeping the alliance together are stronger than their differences, suggesting that the alliance will continue in its present form. This acts as a drag on the government's wish to reform the labour market, privatise more speedily and continue to keep South Africa open to international economic forces. On the other hand, the alliance has resulted in a much more stable labour environment, by comparison to the situation before 1994, and has enabled certain sector-specific accords to be put in place in the quest for global competitiveness.

The Inkatha Freedom Party (IFP) was the ruling party in the KwaZulu homeland from 1974, under the leadership of the unpredictable Chief Buthelezi. Improved relations between the IFP and ANC, who have had a bloody history, became a critical factor determining whether South Africa would successfully negotiate its way into the post-apartheid era. The IFP's strong support base in rural KwaZulu-Natal allows it to play a national role, and both Mr Mandela and Mr Mbeki have sought to cultivate Mr Buthelezi, who retains the home affairs portfolio he has held since 1994. His refusal to accept the position of deputy president in June 1999 in exchange for an ANC premiership in KwaZulu-Natal shows that he will continue his struggle for regional autonomy. There exists discontent within the IFP over Chief Buthelezi's autocratic style and failure to respond to political trends, but it is suppressed. The future of the party when Chief Buthelezi (who is now in his 70s) goes is uncertain.

The Democratic Alliance (DA) is the official opposition party. It was formed in June 2000 by a merger between the Democratic Party (DP), which became the official opposition after the 1999 general election, and the New National Party (NNP). The partnership between the DP and the NNP followed a marked shift to the right by the DP in the 1999 election, when it attracted much of the NNP's conservative support base. The articulate DP leader, Tony Leon, leads the new grouping. Viewed against the two parties' historical background, the union was somewhat strange, as the DP is the successor to the white liberal political movements which were the only parliamentary opposition to the apartheid regime, whereas the NNP is the successor to the National Party, which institutionalised apartheid. Therefore, it is perhaps not surprising that in November 2001 the NNP left the DA. What is perhaps even more odd is that the NNP opted to join the ANC in an alliance to control Western Cape province and the City of Cape Town, formerly the DA's main area of political power. Whether the DA will use this break-up to build a wider support base is not clear, but it is likely to continue trying to develop its support among the black population. The NNP, meanwhile, will have to make the most of the new alliance to raise its profile and show that it is interested in promoting multi-racial development in South Africa.

The previously influential political groups of the white right (such as the Conservative Party and the openly racist Afrikaner Weerstandsbeweging) have become completely marginalised. The Afrikaner cause, including some form of Volkstaat - a white homeland within South Africa, has been promoted since 1994 by the Vryheidsfront. However, the combined vote for the white right was barely more than one-tenth of the white vote in 1999. At the other end of the political spectrum, the radical Pan Africanist Congress and the Azanian People's Organisation performed dismally in the 1999 elections.

Main political figures

Thabo Mbeki: The president of South Africa (and former deputy president), he succeeded Nelson Mandela as ANC leader in 1997 and led the ANC to a resounding electoral victory in 1999. Mr Mbeki is expected to speed up the pace of transformation within the South African economy while maintaining strong executive control over the direction of macroeconomic policy. Not as popular as Mr Mandela, Mr Mbeki has strong Africanist credentials and has increasingly raised race as a political issue. Although Mr Mbeki's reputation has been battered by the controversy over his handling of the HIV/AIDS issue, he is a sophisticated, intelligent politician who is likely to remain unchallenged until his constitutionally required retirement as president in 2009.

Nelson Mandela: The former president has said that he will attempt to stay out of the limelight now that he is retired, but he remains an overarching figure in South African politics. A man who played a key role in bringing about national reconciliation, he remains widely popular throughout the country among blacks as well as whites. Mr Mandela has publicly praised Mr Mbeki, but caused a stir in late 2000 when he expressed reservations about Mr Mbeki's highly controversial views on HIV/AIDS. He has also publicly espoused a much more critical view of Zimbabwe's President Mugabe than Mr Mbeki has done. In addition, Mr Mandela came to the defence of the three ANC leaders turned businessmen who were named in the "plot" against Mr Mbeki.

Jacob Zuma: An ANC loyalist elected as party vice-president in December 1997, he was named Mr Mbeki's deputy president in June 1999. The position has become largely ceremonial, indicating the growing strength of the president's office in policy formulation. He was pivotal in bringing peace to KwaZulu-Natal, which suffered political violence in the late 1980s and early 1990s. Generally regarded as a "lame duck" deputy president at both party and national level, Mr Zuma has suddenly emerged as a potential challenger to Mr Mbeki in the ANC leadership elections in December 2002. It is highly unlikely that Mr Zuma will challenge Mr Mbeki for the presidency, but he may be used to test the waters before genuine candidates emerge. Mr Zuma has professed his loyalty to Mr Mbeki but, according to insiders, he has forged some useful alliances in key ANC structures that would allow him to mount at least a token challenge.

Jeff Radebe: After a quiet start as the new minister of public enterprises, Mr Radebe, once a member of the SACP, is now the driving force behind a revitalised privatisation programme, which will see the role of the state in the South African economy fundamentally altered by a stream of privatisations and strategic partnerships. Despite the resistance of organised labour, Mr Radebe has put in place a four-year plan to privatise the most of South Africa's state-owned enterprises, including Eskom, Telkom, Denel and Transnet--the four largest. Mr Radebe has considerable influence within the ANC, and is an important member of Mr Mbeki's transformation inner cabinet. He is well respected and highly regarded in the ANC, giving him the political weight necessary to carry out an often politically unpopular task.

Trevor Manuel and Tito Mboweni: The minister of finance and the first black governor of the South African Reserve Bank (SARB, the central bank), respectively, have the joint task of ensuring that the newly implemented system of inflation targeting does not become a market embarrassment. The two have seldom seen eye-to-eye and were bitter rivals for the post now occupied by Mr Manuel. Now they are mutually dependent, as South Africa attempts to meet its first fairly modest target of 3-6% core inflation within three years. Both men are fiercely independent thinkers who have proved to be extremely fast and adept learners, and both would admit a tendency towards conservatism in fiscal and monetary matters. Mr Mboweni has expressed doubt about meeting the inflation targets, but he is clearly committed to the process and few in the financial world believe that the two will not meet their stated objective. Mr Mboweni has largely continued the low-inflation aim of monetary policy, as practised by his predecessor, Chris Stals, and for the most part the transition at the SARB has been smooth. Mr Manuel has already distinguished himself as one of South Africa's better finance ministers, and his fiscal discipline in the face of often substantial ANC constituency pressure has won the respect of the financial markets. Moreover, Mr Manuel's decision in late June 2001 to remain as minister of finance and the South African cabinet's decision to extend the contract of the director-general of the National Treasury, Maria Ramos, for another three years, was greatly welcomed by both the public and private sector.

Alec Erwin: Another former communist with an important cabinet portfolio, Mr Erwin, as minister of trade and industry, carries much of the responsibility for restructuring South Africa's manufacturing sector and boosting export earnings. Mr Erwin believes that the manufacturing sector is uncompetitive and outdated, and that it is in urgent need of an overhaul if it is to produce the goods demanded by the global economy. He is unpopular with workers and factory owners alike, because of his emphasis on trade-tariff reduction and his refusal to offer protection for industries that he believes are no longer viable, such as textile and clothing manufacture. He has designed a set of incentives to attract manufacturers of "new economy" products, and has championed the cause of deregulating the labour market to promote job creation.

Cyril Ramaphosa: A former trade-unionist and the ANC's secretary-general from the organisation's unbanning until he left representative politics in 1997; ANC chief negotiator in the constitutional negotiations; and co- chairman of the Constituent Assembly that drafted South Africa's new constitution. Mr Ramaphosa remains one of the most popular members of the ANC's National Executive Committee. Now a successful businessman on the fringes of politics, he is still many people's favourite to succeed Mr Mbeki in 2009.

Nkosazana Zuma: The former health minister and now minister for foreign affairs is reportedly very close to President Mbeki. He is considered to have outside chance to succeed him in 2009.

Tony Leon: Heading the recently formed Democratic Alliance (DA), Mr Leon remains by far the most effective opposition leader. His style is aggressive and confrontational, and he often irritates friend and foe alike. He carries much of the responsibility for transforming a weak, fragmented political opposition into an effective check on state power. Despite its limited scope for attracting large numbers of new voters, the DA's strong showing in the local authority elections in 2000 gave proof of Mr Leon's leadership skills.

Mangosuthu Buthelezi: Leader of the Inkatha Freedom Party (IFP) and minister of home affairs. He decided to turn down the deputy presidency under Mr Mbeki to retain the IFP's control of KwaZulu-Natal. He will continue to push for as much autonomy as possible for the province.

Bantu Holomisa: The former military ruler of the Transkei homeland formed the United Democratic Movement (UDM) with a former National Party reformer, Roelf Meyer, in 1998. He is considered the only popular African opposition politician. He led the UDM to a fairly strong showing in the election, but still has to define his party's position in South African politics.

Political Development

After centuries of white rule, South Africa held its first all-race election in April 1994, which was won by the African National Congress (ANC). The party's leader, Nelson Mandela, became president. The ANC increased its share of the vote in the second all-race election in June 1999. Thabo Mbeki, who replaced Mr Mandela as ANC leader in December 1997, was chosen as the new president and formed a national government in partnership with the Zulu ethnic-based Inkatha Freedom Party. The ANC also controls seven of the nine provincial governments. The official opposition is the Democratic Alliance, led by Tony Leon. The next ANC leadership elections are to be held at the end of 2002, and the next general election is in 2004.

Important recent events

April 1994: The African National Congress (ANC) wins a clear majority in the country's first fully democratic general election; the new National Assembly elects Nelson Mandela as president and the three-party Government of National Unity (GNU) coalition is formed.

November 1995: The ANC wins clear majorities in most local councils in the country's first fully democratic local elections.

June 1996: Local elections in KwaZulu-Natal are held, with an astonishing lack of political violence.

July 1996: The National Party leaves the GNU.

February 1997: South Africa's new permanent constitution comes into force.

December 1997: The ANC congress elects Thabo Mbeki as head of the party, to replace Mr Mandela, and Jacob Zuma as deputy head.

June 1999: South Africa's second multiracial general election is won easily by the ANC. The Democratic Party becomes the official opposition. Mr Mbeki is sworn in as president and the coalition with the Inkatha Freedom Party is renewed.

June 2000: The Democratic Party merges with the New National Party to form the Democratic Alliance. With the help of other electoral pacts, the party, led by Tony Leon, has 70 of the 400 seats in the National Assembly and governs Western Cape province.

November 2000: In a poll marked by poor turnout among African voters, the ANC wins 62% of the vote in local elections and controls most of the country's larger cities with the exception of Cape Town (which until November 2001 was controlled by the Democratic Alliance and since then has been controlled by an ANC-New National Party coalition).

July 2001: The Organisation of African Unity summit in Lusaka approves the presentation of President Mbeki's Millennium Africa Plan (backed by the presidents of Algeria and Nigeria and amalgamated with the Omega Plan of the Senegalese president, Abdoulaye Wade) to the G8 summit in Genoa. Following the presentation in Genoa, it was agreed to establish a high- level liaison officer to work with committed African leaders to develop a concrete plan of action (renamed the New Partnership for African Development--Nepad) to be presented to the G8 summit in Canada in 2002.

June 2002: On June 27th 2002, G8 representatives met in Kananaskis, Canada, with four African leaders from the Nepad steering committee, including Mr Mbeki. At the end of the meeting, the committee issued an official statement, noting with appreciation the intention of the G8 to offer US$1m of aid in support of Nepad. The G8 sees the assistance as part of its commitment to get African nations to commit themselves to reform in return for aid, trade opportunities and help in resolving conflicts. At the same time, they earmarked for Africa US$6bn of the US$12bn the G8 promised all poorer countries at an earlier conference in Mexico.

July 2002: On July 22nd 2002, the Congress of South African Trade Unions (Cosatu) called a two-day general strike for October 1st and 2nd as part of what it calls a "full-frontal assault" on the government's privatisation policies. The announcement illustrates the widening rift between Cosatu and the ruling African National Congress (ANC), with which it is ostensibly allied.

F W de Klerk, who became president in 1989, set about trying to save Afrikaner interests while dismantling apartheid structures. In February 1990 he lifted the ban on the African National Congress (ANC) and other proscribed organisations and released political prisoners, most significantly the ANC leader, Nelson Mandela, who had spent 27 years in prison. In 1992 Mr de Klerk won a firm mandate for change in a whites-only referendum, although it was Mr Mandela's demanding but conciliatory style that dominated the negotiations, institutionalised in the Convention for a Democratic South Africa (Codesa). The main challenge to the transition process came from the Inkatha Freedom Party (IFP), the ruling party in the defunct KwaZulu homeland, which had been engaged there in an unofficial war with the ANC since the mid-1980s. The war spread to the huge townships around Johannesburg and Pretoria, which were torn by violence during much of the early 1990s.

In spite of threats to boycott the general election in 1994, the IFP did take part at the last minute. The election, held in April, defied widespread fears of violence; the turnout in most areas was high and the buoyant public mood carried the voting over a number of organisational hurdles. After some delay, final results gave the ANC nearly 63% of the vote, leaving slightly more than 20% to the NP and just over 10% to the IFP. This appeared fair and, most significantly, ensured that the IFP had the 5% of the vote required to secure cabinet representation. The mainly white liberal Democratic Party and the Pan Africanist Congress (one of the historical anti-apartheid movements) failed to win 5% of the votes; the white Conservative Party boycotted the election. There are suspicions that the actual vote count was distorted by political negotiation in order to defuse potential violence and carry the IFP along in the sweep of transition.

Mr Mandela was elected president in May 1994 at the first sitting of the all-race National Assembly. A government of national unity (GNU) was formed, bringing together the ANC, the NP and the IFP, which was to govern South Africa through the first five years of its transition. Thabo Mbeki of the ANC and Mr de Klerk were made first and second deputy presidents respectively. Mr Mandela's commitment to national reconciliation resulted in a delicate truce with elements of the white right wing, and allowed the leader of the IFP, Chief Mangosuthu Buthelezi, to remain in his cabinet post despite controversial outbursts. The ANC's position was strengthened by local council elections in November 1995, in which it won 64% of the vote (it also strengthened its position in the local elections in KwaZulu- Natal by performing well in urban areas). The ANC quickly became the dominant partner in the GNU over the NP and the IFP, and Mr de Klerk led the NP out of the coalition in July 1996. The IFP also threatened to leave the GNU before the 1999 election, but remained in place.

The second multiracial election was held on June 2nd 1999. This time, the Independent Electoral Commission was able to organise a largely free and fair election, although several million South Africans did not register on the voters' roll. The major question was whether the ANC would achieve a two-thirds majority, which would allow it to unilaterally change portions of the constitution. In the end the ANC won a crushing victory, but fell fractionally short of the required two-thirds majority. The Democratic Party (DP) increased its support to almost 10% of the vote, displacing the renamed New National Party (NNP) as the official opposition. The NNP was soundly beaten in most white areas, maintaining its support only in the Cape coloured areas, and won only 7% of the total vote. Contrary to expectations, the IFP obtained almost 9% of the vote. The United Democratic Movement (UDM), a new multiracial party, gathered some 3% of the vote; extremist white, black and mixed Christian parties gained only minimal support. In the provincial elections, the ANC won seven of nine provinces outright, but failed to win KwaZulu-Natal, where it entered into a coalition with the IFP, and the Western Cape, where a coalition was formed between the NNP and the DP. This was formalised into a new political entity, the Democratic Alliance. However, in November 2001 the NNP left the DA to enter into an alliance with the ANC, which will now control the Western Cape.

Mr Mbeki was inaugurated as president on June 14th 1999 and appointed a 22-member cabinet. He strengthened his position by merging the offices of deputy president and the president into one apparatus. This probably prompted Mr Buthelezi to turn down the position of deputy president, which would have consolidated the ties between the ANC and the IFP. Instead the ANC's deputy leader, Jacob Zuma was appointed deputy president. The IFP retained three cabinet posts, including the home affairs portfolio for Mr Buthelezi. None of the other parties is represented. Most of the appointments were for party loyalists but the economics team, consisting of the minister of finance, Trevor Manuel, and the minister of trade and industry, Alec Erwin, remained unchanged. Mr Mbeki's administration initially gained a reputation for being more businesslike than its predecessor, concentrating on the restructuring of the economy as opposed to social reconciliation.

Under President Mbeki the macroeconomic fundamentals have improved even further. However, hoped-for bold initiatives on the economy (such as increasing the pace of privatisation and deregulating the fairly inflexible labour market) have failed to materialise. Relatively slow progress on key areas of social delivery has undermined Mr Mbeki's reputation as an efficient technocrat. The reduced emphasis on reconciliation has created unease in the white community. Mr Mbeki's international reputation has also been damaged by his conciliatory stance towards the Zimbabwean president, Robert Mugabe, both in the violent run- up to Zimbabwe's general election in March 2002, and in the continuing-- and sometimes violent--occupation of white farms. The distancing of the two following Zimbabwe's suspension from the Commonwealth after the fraudulent elections may have more of an effect--but this will largely be determined by the ultimate political outcome in Zimbabwe. Mr Mbeki's leadership of the New Partnership for African Development (Nepad) has also positioned him as perhaps Africa's foremost international statesman.

Mr Mbeki's reputation, however, continues to be weakened both at home and abroad by his highly controversial stance on HIV/AIDS and the possibly related inability of his government to deal effectively with the spread of the epidemic within South Africa. Investigations into irregularities surrounding the R43bn arms procurement deal are continuing; the ANC's chief parliamentary whip, Tony Yengeni, was arrested and charged with corruption after a police investigation in mid-October 2001. Further details will embarrass the ANC over the next few months, as the various official inquiries look a little deeper in the controversial arms deals. The former minister of defence, Joe Modise, is among those who may be linked to the high-profile scandal, but serving cabinet ministers are not expected to be drawn into the controversy. Initial frustration with Mr Mbeki's leadership might have been the cause of significant apathy in local government elections in November 2000. Although the ANC secured just over 60% of the votes polled nationwide, almost 45% of ANC supporters from the 1999 general election did not bother to vote.

International Relations and Defence

The election in 1994 represented not just a transformation of domestic politics but a shift in South Africa's position internationally. At the regional level, economic and political co-operation is driven by Mr Mbeki's vision of the African Renaissance. South Africa actively engages with its African neighbours at both the political and commercial level, both bilaterally and as a member of regional bodies such as the African Union (previously known as the Organisation of African Unity) and the Southern African Development Community. However, South Africa has to tread a fine line. There are mixed feelings among business people and politicians in southern Africa about South Africa's dominant role in the region ranging from great expectations that the neighbourhood giant will spark off a region-wide recovery to fears that South Africa will steal a competitive march on the nascent industries of other countries. At a political level, South Africa has had to play a difficult non-intrusive yet firm role to encourage the peaceful resolution of conflicts in Angola, Mozambique, Rwanda and Burundi, Congo and, most recently, Zimbabwe. The political crisis in September 1998 in Lesotho, which prompted a South African military intervention to support that country's government, reinforced the difficulties South Africa faces in establishing itself as a pivotal force in regional politics.

New Partnership for African Development

The government won the approval of the Organisation of African Unity conference in Lusaka to present President Mbeki's Millennium Africa Plan (MAP) to the G8 summit in Genoa in July 2001. Although driven forward by Mr Mbeki, the MAP was closely supported by the presidents of Algeria and Nigeria. Following the MAP's merger with the Omega Plan of the Senegalese president, Abdoulaye Wade, and its presentation in Genoa, it was agreed to establish a high-level liaison officer to work with committed African leaders to develop a concrete plan of action to be presented to the G8 summit in Canada in 2002. The plan, renamed the New Partnership for African Development (Nepad), received aid commitments of US$1bn from the G8 countries during that meeting on June 27th 2002.

The Nepad argues that Africa needs to involve itself much more closely in the global economy. To do this it needs to implement a series of reforms, which will be supported by the G8 through a combination of external debt relief and improved trade access to the developed world. Increased financial aid is mentioned, but is deliberately downplayed in the Nepad to emphasise that much of the thinking behind the plan is that the onus for change should lie with African leaders. The key reforms proposed by the Nepad include the following:

* the establishment of civil order and more democratic government;

* the prevention and reduction of conflict throughout Sub-Saharan Africa;

* wider respect for human rights;

* increasing investment in human resources through health and education;

* policies aimed at diversifying African economies and boosting trade with the rest of the world; and

* ensuring that Africa is in a position to adopt new technologies and able to combat the range of diseases that afflict the continent, from AIDS to malaria.

A central idea of the plan is that although none of the above is a new idea or concept, African governments should not think of them as being imposed by donor governments, but as the basic rules of the new global economy. Not surprisingly, scepticism about the Nepad abounds. In particular, the key factor that is supposed to drive it forward is peer pressure based on clearly agreed timetables and targets drawn up by African governments. However, the idea that this will encourage many older, and essentially autocratic, African leaders such as the presidents of Gabon, Kenya, Togo and Zimbabwe, to implement reform is probably fanciful. However, that should not consign the plan to failure. President Mbeki has constantly stressed that, although his goals may be ambitious, there is still a strong moral obligation to push such ideas forward and to keep striving to promote African development. Moreover, though many African governments may be recalcitrant, if some countries do adopt the Nepad and start to grow rapidly, these will serve as a trail-blazer for others to follow. They could then act in mutual support of each other, promote African issues on the global agenda and be able to talk to other African leaders from a much stronger political and economic base. Promoting the Nepad will be an important part of the country's foreign policy in 2002-03.

The political turmoil in neighbouring Zimbabwe has been the ANC government's most important foreign policy challenge to date. President Mbeki's quiet diplomacy has not worked, and it is now clear that the president and the South African government have adopted a harder line against the Zimbabwean government, which may pacify their critics (domestic and foreign) over the issue. The change in policy built gradually in 2001, as Mr Mbeki found himself under increasing pressure both at home and abroad to take a harder line with President Robert Mugabe. The last straw may have been when Zimbabwe's so-called war veterans turned their attention from the invasion of commercial farms to invading businesses and industries in urban areas. The war veterans claimed a variety of reasons for their actions, such as workers' long- standing grievances over industrial conditions. At least 16 South African companies were targeted by them, and the South African government summoned the Zimbabwean high commissioner, Simon Moyo, to demand an end to the attacks. South Africa's action, along with protests from most other leading investors in Zimbabwe, had a swift effect: the Zimbabwean authorities quickly moved in to arrest the war veterans directing the invasions. Mr Mbeki's public comments became slightly more critical in early 2002, but the perception persists of reluctance to denounce an old ally. The Zimbabwean situation remains South Africa's most significant foreign affairs challenge.

The real crisis in Zimbabwe is yet to come, however. On March 13th President Robert Mugabe of Zimbabwe was declared the winner of presidential elections that international observers widely dismissed as fraudulent. After early signs of recognising the results as legitimate, South Africa joined Nigeria and Australia in suspending Zimbabwe from the Commonwealth (an association of mostly ex-British colonies). Efforts by South Africa and Nigeria to find a solution to the political impasse through negotiations between Robert Mugabe's ruling party, the Zimbabwe African National Union-Patriotic Front (ZANU-PF), and the opposition Movement for Democratic Change (MDC) collapsed acrimoniously in May 2002. Nonetheless neither Mr Mbeki, nor the Nigerian president, Olusegun Obasanjo, has given up on this approach, although it is unlikely that they will convince either Mr Mugabe, or the leader of the MDC, Morgan Tsvangirai, to form a government of national unity. There is a slight chance that they could eventually persuade Mr Mugabe to moderate some of his more extreme policies.

Since the end of apartheid the biggest challenge for South Africa's armed forces has been the integration of former members of the ANC's armed wing, Umkhonto we Sizwe (MK). This began slowly and has generated some resentment among MK cadres. An estimated 35,000 members of MK and other South African resistance movements--as well as 11,500 members from former homeland forces--were to be absorbed into the South African National Defence Force (SANDF), but only 28,000 were taken in, of whom only 16,600 remain. The SANDF has nevertheless undergone a substantial transformation since 1994, and 70% of the soldiers are now black (African, coloured and Indian). However, more than 60% of senior officers are white and the apparent disorganisation of SANDF troops when they entered Lesotho in September 1998 has been attributed to a lack of cohesion among the integrated army. The task of the new chief of the defence staff, General Siphiwe Nyanda, who was appointed in 1998, has been to accelerate transformation, maintain professionalism and renew antiquated equipment, despite much-reduced defence budgets. Although the defence force has received a controversial R30bn new weapons package, it has warned that budget cuts may force the closure of three air force bases, and that most of its units are at less than 50% readiness. The issue of HIV/AIDS in the defence force is also an increasing source of concern.

Comparative military forces, 2000                          South Africa  Zimbabwe  Nigeria   Egypt Algeria  Army                          41,750    35,000    62,000  320,000 107,000  Air force                      9,250     4,000     9,500   29,000 10,000  Navy                           5,000         0     7,000   19,000 7,000  Total(a)                     150,689    39,000    78,500  443,000 274,000  Paramilitary forces              n/a    21,800    82,000  325,000 181,200  Defence spending (US$ bn)        1.9       0.2       0.3      3.4 1.8  (a) Includes reserves.  Source: International Institute for Strategic Studies, The Military