South Africa's Zuma sets help for poor as priority

By Wendell Roelf

CAPE TOWN (Reuters) - South Africa must act now to minimise the impact of the global financial crisis on the poor, but still has to spend wisely, President Jacob Zuma said on Wednesday in his first state-of-the-nation address.

Zuma is under increasing pressure from union allies who demand more spending, but is also wary of scaring off investors as Africa's biggest economy suffers its first recession in 17 years.

He pledged to create half a million job opportunities by the end of the year, but it was unclear how that would happen.

"We take as our starting point the framework for South Africa's response to the international economic crisis, concluded by government, labour and business," Zuma said.

"We must act now to minimise the impact of this downturn on those most vulnerable," he said in a speech to parliament that lasted more than one hour.

Demand for South Africa's minerals and manufactured goods has suffered from the global downturn, making it harder for Zuma to satisfy the demands of the unions who helped his rise to power in April elections.

Eurasia Group analyst Mike Davies said Zuma could have done more in his speech to address the biggest problems.

"I think it actually misses the opportunity to provide some clarity on setting targets, setting out an agenda," he said.