President appoints deputy to ensure success of ‘second economy' upliftment

President Thabo Mbeki has appointed Deputy President Jacob Zuma as the government's watchdog on programmes to grow what he has dubbed "the second economy" and integrate the poor into the economic mainstream.

Chief government strategist Joel Netshitenzhe's Policy Coordination and Advisory Service is preparing the first report for Zuma and expects to hand it over within about two weeks.

Zuma's job will be to determine the success of the programmes, discuss shortcomings with relevant ministers, propose solutions and, if necessary, report stubborn problems to the full Cabinet.

Zuma, 63, who is widely regarded as a leading candidate to succeed Mbeki in 2009, already has a huge portfolio of responsibilities. These include:

Member of the ANC's national executive, working committee and political committee;
Leader of government business in Parliament;
Executive responsibility for the Moral Regeneration Movement, the SA National Aids Council (Sanac) and Traditional Affairs; and
Peace negotiator in the Great Lakes region.

But nothing he has done so far has required or demonstrated a knowledge of economic theory.

His new task makes him the guardian of projects designed to combat the marginalisation of those without the skills or the means to participate in the First World market economy.

Political and economic analysts broadly welcomed the appointment, though some said Zuma had failed to drive the campaign against HIV/Aids in his job as chairman of Sanac and had given a poor lead to the Moral Regeneration Movement.

"Frankly, it seems a bizarre choice," said one analyst of government performance.

Opposition Democratic Alliance finance spokesman Ian Davidson said it was extraordinary to give this level of responsibility to someone whose reputation was still on the block as the trial of his financial adviser, Schabir Shaik, moves towards a conclusion.

Wits University political analyst Tom Lodge said the job could be the "poison chalice" that would kill Zuma's aspiration to succeed Mbeki.

He added, however, that Zuma's interpersonal skills could make up for his lack of economic theory. "One should not be misled by his homely manner. If his job is to make other people do their jobs, he will probably do it quite well," Lodge said.

Cosatu economist Neva Makgetla said that while the labour federation did not accept the two-economies analysis, it welcomed any initiative to promote development among the economically marginalised.

"I'd be happy for anyone to do that. Zuma understands the issues that directly affect the poor and will be sensitive to them," she said.

Hassen Lorgat of the NGO coalition Sangoco said a senior watchdog to oversee the second economy was welcome, but only if he was backed up with resources, researchers and the authority to make things happen.

"We have to get beyond the new managerialism that is coming up in government and revive the institutions that can get things done," he said.

Officials in the Presidency said the decision to give Zuma the responsibility was taken last year, but had taken time to implement.

"We are just getting it going now. We are working on the first report and it should be ready for him within the next week or two," said a senior official.

Zuma's responsibilities would include overseeing skills development; basic training under the expanded public works programme; financial services for the poor, including the proposed Apex fund and the Agricultural Credit Scheme; and access to information about economic opportunities, community development workers and infrastructural development.

The official said Zuma would be expected to monitor rather than develop strategies to help the estimated 40% of the workforce who cannot find work.

Idasa analyst Jonathan Faull said the notion of two economies grew out of Mbeki's two-nations thesis and was defined in the Policy Unit's book Towards a 10-Year Review in 2003.

"The first is an advanced, sophisticated economy, based on skilled labour, which is becoming more globally competitive. The second is a mainly informal, marginalised, unskilled economy, populated by the unemployed and those unemployable in the formal sector," the Policy Unit said.

Mbeki has put programmes to bridge the two economies higher and higher on his agenda.

With acknowledgements to Brendan Boyle and the Sunday Times.