South Africa's FDR? Mbeki may try his own 'New Deal'

In one sense there's blessedly little suspense or drama surrounding Wednesday's election in South Africa. As the nation celebrates a decade of democracy, election violence is down dramatically from 1994. Fraud isn't likely this time, so there will be no Western election monitors. And the outcome is virtually guaranteed: a second term for President Thabo Mbeki, the man who succeeded Nelson Mandela in 1999.

But the big surprise of this election may be Mr. Mbeki himself. For five years, he's been an ardent disciple of globalization. He's tightened budgets and slashed foreign debt. He's seen South Africa's currency strengthen and inflation fall. But now the man who was trained as a classical economist in Britain is hinting at a significant shift - toward socialism. The reason: persistent poverty and joblessness. About 40 percent of South Africans are unemployed. In some townships, 8 of 10 blacks wanting jobs can't find them.

So Mbeki may start drawing on another part of his past - one that includes meetings at a Soviet dacha once used by Joseph Stalin and a charter membership in the politburo of the South African Communist Party.

He's campaigning on a "people's contract" that would make Franklin Roosevelt proud. If he continues on this path, it will put him in league with leaders like Brazil's Luiz Inácio Lula da Silva. They're skeptical that globalization's will help the poor, yet they're pragmatic enough not to opt out of the global trade system a la Cuba or North Korea.

"He's trying to stabilize the middle class, and he knows the economy needs some socialist handling to do that," says Allister Sparks, author of several books on South Africa. "He knows you really need a New Deal" like Roosevelt's, but he has to do it within the "realities of a globalized world" that frowns on big government programs, Mr. Sparks says.

In his first term, Mbeki has been a tight-lipped technocrat often seen as aloof from the people - a man who likes playing chess with a computer more than mixing with the masses. His first priority was economic stability - and proving to the world, observers say, that black leadership in Africa doesn't mean corruption and economic decay.

In some ways, his approach extended the "miracle" of South Africa's peaceful political transition to the economic realm. Interest rates are at a 23-year low. One block of apartheid-era debt, totaling $25 billion, has been erased. And the government's Black Economic Empowerment program - voluntary affirmative action for the private sector - is creating legions of BMW-driving black millionaires.

But none of it is creating many jobs. Some 17.6 million citizens don't have formal work. "His economic policy has only benefited those who are investing in stocks and bonds," says Bantu Holomisa, a former member of Mbeki's African National Congress, who now leads the opposition United Democratic Movement. South Africa's government bonds were among the world's best-performing in 2002 and 2003.

Now, as he heads into a second term on April 27 - the day South Africa's celebrates its 10th anniversary of democracy - Mbeki appears ready to hark back to his socialist roots. In 1970, in his twenties, he studied at the Lenin International School in Moscow and attended secret meetings of the South African Communist Party (SACP) in one of Mr. Stalin's former homes. Later, as the ANC's public-relations man for Western media, he downplayed these Soviet ties.

But now the trade unions and communists in the ANC alliance are pushing for job creation. And there's a rising class of what Sparks calls "yummies" - young, upwardly mobile Marxists.

Mbeki has pledged to spend $15 billion over five years on infrastructure - everything from rural electrification to better rail links. He's promising 1 million new jobs, and the ANC says it will halve poverty and joblessness by 2014.

But Mbeki probably won't become a radical socialist. He was the pragmatist who, in the 1990s, helped convince the ANC to disband its military wing. And his recent initiatives to jump-start good governance in Africa - through the New Partnership for African Development and the African Union - reflect the practical view that Africa must improve its image with rich nations.

But Mbeki's new emphasis may reflect his growing distrust of the globalized system - and of rich nations' commitment to helping the global South. "He's realized the North is not tripping over itself to assist Africa," says Jeremy Cronin, deputy general secretary of the SACP.

His controversial battle over AIDS in South Africa may have added to the attitude. Many say he felt bullied into accepting Western pharmaceutical firms' costly AIDS drugs, when he and others were looking for African solutions.

It may even help explain his reluctance to push Zimbabwe's President Robert Mugabe to resolve the political crisis there. "He has ambitions," adds Sparks. After his second term, he may want to head the African Union - and use it as a platform to tackle Africa's problems. "To get there," says Sparks, "you don't cross an African icon like Mugabe."

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