South Africa heads into uncertainty with Zuma victory

POLOKWANE, South Africa Wed Dec 19, 2007 11:57am EST

1 of 8. Former ANC president Thabo Mbeki (L) congratulates newly elected ANC president Jacob Zuma during a leadership conference in Polokwane December 18,2007. South Africa's ruling ANC elected Jacob Zuma as its new leader on Tuesday, dumping President Thabo Mbeki and putting the populist politician on course to lead the country in 2009.

Credit: Reuters/Siphiwe Sibeko

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POLOKWANE, South Africa (Reuters) - South Africa faced deep uncertainty on Wednesday after the greatest political shake-up since the end of apartheid set populist Jacob Zuma on the road to leadership of the country.

Newspapers described Zuma's stunning victory in an election for leader of the ruling ANC as a tsunami, and said the defeated party boss, President Thabo Mbeki, had been humiliated. The tabloid newspaper Sowetan carried the headline "Zunami Rules".

Zuma not only defeated Mbeki but swept aside the entire old guard of the party, filling all top positions with his allies.

His victory was seen as ushering in a new era in Africa's biggest economy, sweeping aside the monolithic centralism of the ANC and opening the way for more democracy and dissent.

Despite fears by some investors that Zuma, who is backed by trade unions and the Communist Party, will push the country to the left, markets remained unmoved and there was little change in the rand. Investors said they had priced in a Zuma win.

The trade union federation COSATU said it would not push Zuma to change policy, which was up to the whole ANC anyway.

Zuma has given no clear idea of his economic policies.

Economists said the ANC would have to quickly convince investors that the policies that have led to nine years of continuous economic growth would not change under Zuma, and say whether respected financial leaders would remain in office.

There was also concern that Zuma's victory, splitting South Africa's two most powerful jobs for the first time since apartheid ended in 1994, could paralyze decision-making.

Mbeki now has no position in the party that dominates the country and could become a lame duck for his remaining 18 months in power.

Zuma is the prime candidate to succeed him at the next election in 2009 unless he is ambushed by pending corruption charges.

South Africa can ill-afford a period of paralysis as it faces an AIDS crisis, one of the world's worst crime rates, and poverty still blighting the lives of millions of blacks more than a decade after apartheid ended.

Mbeki's downfall was caused to a large extent by anger in the ANC rank and file at what they saw as neglect of these problems, particularly poverty, while he pursued business-friendly economic policies.

CORRUPTION CHARGES

Adding to the mood of uncertainty is the threat of charges against Zuma over an arms buying scandal, which could possibly see him jailed before he succeeds to the presidency.

"We expect a lengthy period of political noise and uncertainty in South Africa, characterized by tensions within the ANC and between the party and the government," said investment bank Goldman Sachs.

Prosecutors said this month they had new evidence that could lead to renewed charges against Zuma.

The ANC's traditional discipline, which critics called a Stalinist relic, was replaced by noisy barracking at the party conference from young militants representing millions of black South Africans who feel left behind as Africa's biggest economy has boomed.

The 65-year-old Zuma, an ethnic Zulu, has made a remarkable comeback after setbacks that would have buried most politicians.

Apart from the corruption scandal, he was acquitted of rape in 2006. Evidence in that case, including his admission that he showered after sex with an HIV-positive family friend to avoid infection, tarnished his reputation.

But these issues have not undermined Zuma's popularity in a traditional, male-dominated society. "I am happy Zuma won because under his rule women will have fewer rights," said Johannesburg parking attendant Brilliant Khambule.

(Additional reporting by Marius Bosch, Phumza Macanda, Paul Simao, Ron Derby and Thandi Lekeba; Writing by Barry Moody; Editing by Janet Lawrence)

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