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G-20 nation profile: South Africa
Thursday, September 17, 2009

Here is an overview of South Africa, one of the Group of 20 countries attending the upcoming summit in Pittsburgh.

WHO IS THE LEADER FROM SOUTH AFRICA ATTENDING THE G-20 SUMMIT?

President Jacob Zuma, a man of humble origins who herded goats as a boy, has devoted his adult life to the African National Congress. Imprisoned for 10 years on Robben Island for his anti-apartheid activities, Mr. Zuma later led the organization's underground structures from Zambia. Chosen as deputy president to President Thabo Mbeki in 1999, Mr. Zuma was sacked in 2005 over corruption allegations. He staged a spectacular comeback in 2007, beating Mr. Mbeki to lead the ANC, and was elected president after the ANC's victory in April elections.

WHAT ARE THE CURRENT ECONOMIC CONDITIONS IN SOUTH AFRICA?

South Africa originally sidestepped the financial crisis as its heavily regulated banks had mostly avoided the risky investments that caused the fall of some of their American and European counterparts. The global economic slowdown eventually hit South Africa, however, as demand for its manufacturing and mining output fell sharply. As a result, South Africa's economy contracted for the first time in a decade in the fourth quarter, and a 6.4 percent decrease in gross domestic product in the first quarter confirmed that the country had entered its first recession in 17 years. A lower negative growth rate of 3 percent for the second quarter seems to suggest that the worst is now behind it, and economists predict South Africa could return to positive growth as early as the fourth quarter of this year.

WHAT IS THE GENERAL MAKE-UP OF THE SOUTH AFRICAN ECONOMY?

The size of South Africa's economy, Africa's largest, is about $277 billion, making it the world's 32nd largest economy, according to the International Monetary Fund. Major contributors to the country's GDP include financial and business services, manufacturing, government services, retail and mining. While a slowdown in manufacturing continues to weigh heavily on the economy, mining expanded 5.5 percent in the latest quarter, indicating a newly found vigor in this crucial sector. Construction continues to be helped by infrastructure spending related to next year's soccer World Cup, and the sporting event is sure to boost tourism significantly in 2010. Obstacles to resuming steady economic growth will include an electric grid in dire need of investment and a strong local currency that will hamper exports.

WHAT IS MR. ZUMA HOPING TO GET OUT OF THE G-20 SUMMIT?

As the only African member of the G-20, South Africa will bear the responsibility of defending the interests of the continent. At the G-20 meeting in London in April, one of the main ambitions of the South African delegation was to ensure that financial reforms envisioned by the summit's working groups sought to boost trade opportunities and maintain credit availability for African countries.

WHAT ELSE SHOULD WE KNOW ABOUT SOUTH AFRICA'S CURRENT POLITICAL AND ECONOMIC SITUATION?

Because Mr. Zuma owed his political comeback in part to the support of trade unions and the South African Communist Party, many observers feared his administration's policies would shift markedly toward the left. So far, those fears have proved largely exaggerated. Mr. Zuma has retained several economic pragmatists in his new cabinet, including Trevor Manuel, the main architect of the pro-growth strategy South Africa has adopted over the past decade. Mr. Zuma also chose Gill Marcus, the chair of Absa Bank, to replace outgoing Tito Mboweni as Reserve Bank governor, and he has occasionally condemned the behavior of strikers, thereby going a long way to reassure investors nervous over the country's economic stability.

GlobalPost, a Web-based news organization with 70 correspondents in more than 50 countries, is working with the Post-Gazette on G-20 coverage.
First published on September 17, 2009 at 12:00 am