* South African president urges economic transformation
* Says post-apartheid economy still mostly in hands of
* Calls for "equitable share" of mineral wealth, land reform
(Recasts, adds details, quotes)
By Jon Herskovitz and Peroshni Govender
JOHANNESBURG, June 26 South Africa's economy is
still largely under the control of whites who held power under
apartheid, President Jacob Zuma said on Tuesday, and he called
for a "dramatic shift" to redress the wealth balance more evenly
in favour of the black majority.
Such calls have been a staple of ANC strategy documents for
years and Zuma's policy speech comes months before he will seek
re-election as leader of the faction-ridden movement in
December. He has also been facing demands from the party's youth
wing to nationalise mines and seize white-owned farmland.
Zuma, speaking at the start of a major policy meeting of his
ruling African National Congress, said the challenges of
poverty, unemployment and inequality posed long-term risks for
Africa's richest country 18 years after the end of apartheid.
"The structure of the apartheid-era economy has remained
largely intact," Zuma told several thousand ANC delegates.
"The ownership of the economy is still primarily in the
hands of white males as it has always been," he added.
Without giving details, he called for a "dramatic shift and
giant leap" in coming years to spread the country's wealth more
equitably, mentioning the distribution of mineral resources and
land ownership as areas which needed to be overhauled.
Zuma said this proposed "second transition" was necessary to
complement the negotiated end of apartheid in 1994, when he said
"certain compromises" over economic ownership had been made to
ensure a smooth political transition from white minority rule.
While draft proposals to be considered at the conference
advocate a greater role for state-owned enterprises, Zuma made
clear however that the ANC's strategy has been to seek to boost
growth and create jobs through "a thriving mixed economy".
The former liberation movement ANC has had a spotty record
in ending economic disparity that is among the highest in the
world. It has brought housing, electricity and running water to
millions, but almost half the population still lives in poverty.
According to Statistics South Africa, 29 percent of blacks
are unemployed compared with 5.9 percent of whites, while IHS
Global Insight, an economic consultancy, estimates that whites
have an average income nearly seven times that of blacks.
Zuma's government has been criticised by three global
ratings agencies for ineffective leadership in tackling a broken
education system, rigid labour market and chronic unemployment
eroding the country's economic competitiveness.
The ANC has drafted a raft of policy documents that call on
mining firms to pay more to the state to help finance welfare
spending. The proposals also advocate relying on state-owned
enterprises to be engines of job creation and growth.
But Zuma may be more focused on lining up support for an ANC
party leadership election at the end of the year than in
policies, analysts said. If he wins the party race, he is poised
to also win a second term as president, serving until 2019.
"His speech did not convince me that he was serious about
cleaning house. It was half-hearted considering that corruption
is a very serious problem in government," said Susan Booysen, a
political analyst at Wits University in Johannesburg.
"His first priority is not to make enemies."
DEBATE OVER MINES AND LAND
Zuma acknowledged rising anger and frustration in deprived
communities about the poor delivery of basic public services
such as electricity, water, sanitation, transport and health.
His government has faced an increasing number of protests, some
of them turning violent, against defective public services.
"You can't sit and say 'it's fine'. We are in government, we
have to do something about it," the president told delegates,
although he added violent lawlessness would not be tolerated.
Zuma said the debate over how the country's mining wealth
should be used must go beyond simply the question of "to
nationalise or not to nationalise." Calls for nationalisation
from some sectors of the ruling ANC have stirred investor
concerns in the world's No. 1 platinum producer.
The party produced a research paper earlier this year saying
nationalising mines could bankrupt the state, but it suggested
increasing taxes on windfall mining profits.
This countered calls from firebrand ANC Youth League former
leader Julius Malema who was a vocal nationalisation advocate.
He was expelled from the party for indiscipline this year in
what was widely seen as a political boost for Zuma.
Zuma said the conference should consider how the state can
obtain an "equitable share" of mineral wealth, which could be
used more to benefit poor communities.
He also called for a new programme for land reform, saying
the current "willing buyer-willing seller" policy had been too
slow in returning white-owned farmland to blacks dispossessed by
the apartheid state. But he did not spell out what alternative
mechanisms of land ownership transfer should be adopted.
South Africa's black economic empowerment policy designed to
give disenfranchised blacks greater ownership of the economy
should be strengthened, Zuma added.
This policy has been criticised from within the ANC and by
its governing allies in organised labour as only benefiting a
small sliver of the population with political ties to the party.
The policy conference will end on Friday and its
deliberations are being held behind closed doors.
(Reporting by Jon Herskovitz and Peroshni Govender; Editing by
Pascal Fletcher, Ron Askew)