Is Zuma good for the business?
Dec. 6th, 2007 08:45 pm![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
nairiporterhttp://www.reuters.com/article/reutersEdge/idUSL0624811220071206
Investors nervous over the possibility of a populist left-leaning president in South Africa are hoping Jacob Zuma will turn out like Brazil's Lula rather than Venezuela's Chavez.
Zuma, a survivor of scandals that would have buried most politicians, is favorite to win party elections this month, largely because of grassroots support from trade unions and members of South Africa's poor black underclass.
A win would put him on course to become president of Africa's biggest economy in 2009.
But investors are not thrilled.
His trade union and left-wing links make him suspect in many investors' eyes. They fear he will be pressured to up spending on social programs and relax the fiscal discipline of the last decade.
Some hope Zuma's track record of centrist voting and his attempts to reassure investors -- most notably, during a recent private visit to the United States -- are signs he may turn out more like Brazilian President Luiz Inacio Lula da Silva, who came to power on a leftist platform then proceeded with reforms that have made Brazil an emerging markets darling.
"It is definitely a risk, the news that Zuma may be the next president. He is not a market-friendly candidate, his reputation is worse than Lula's ever was," said Maarten-Jan Bakkum, portfolio strategist at ABN AMRO Asset Management, which runs almost $2 billion in emerging markets investments.
"But on the plus side, institutions are very strong in South Africa, there is a solid policy direction and we don't see that one man can completely change that," he added. .....
