Zuma's In, What Now?
It seems to me that the Polokwane conference has been like a newsprint and analysis vortex, sucking in all commentary into an incessant stream of words around a central thesis of "Will he or won't he?". Well, now we all know the answer to that question, and we need to drag ourselves out of Polokwane and start looking forward to the 2008, 2009 and beyond.

This has been the most hotly contested ANC election in more than 50 years, and undoubtedly has been a battle between contrasting styles and principles. There is much disillusionment within the ANC ranks, and the stench of fear emanating both from traditional business circles and suburban dinner tables is palatable.

The first question is thus, how will South Africa react? In the near-term, much of the nation of South Africa will react with unbridled joy, whilst others will naturally react with gloom. In the middle, the realists will react with a sense of inevitability. Zuma's appointment should largely be factored into the stock market, and while there may be some panic moves on the Rand in the short term, these should be muted. There will be those who in their gloom will make plans to leave the country, and I wish them well, although I will not be sad to see them go.

The second is, how will the world react? We've already seen Zuma doing the international rounds, visiting influential business conferences and key investment banks to share his views of a Zuma presidency. Much of the response from these business leaders has been positive, and one may see a muted response from global business and consequentially, I hope, in FDI outflows. They will all wait for that first major move. Governments will react with plastic smiles and announcements of congratulations for Zuma, whilst privately using fleets of interns to find out anything they can about the new president's likes, dislikes, and (gasp) policies.

Zuma will have to clarify his positions on key economic fundamentals quickly, and I would expect him to come out in 2008 and 2009 expounding a commitment to the status quo. He will announce some small potential alterations, adjusting budgets to target poverty alleviation, restructuring the police force, or calling for stronger sentences for criminals. There will be much talk of the strength of the Constitution and the need to improve Government's response to HIV-AIDS. There will be no sudden moves, as he will be watched like a hawk. He will rely on Motlanthe and the NEC heavily for much of his policy direction, as well as using the widely respected Motlanthe as a bulwark against those that distrust him. He will undoubtedly schedule imbizos with a cross-section of business leaders, social luminaries and other important national figures, all the while entrenching his "man of the people" status.

Zuma will also look to make moves to unify the party quickly, and this may be his biggest challenge. I would imagine Zuma will pay great respects to Mbeki, showering him with praise and hugging him at any and every opportunity. Mbeki will be visibly sick. Zuma will probably use the newly elected NEC to draft a strategy document on the future of the ANC, subsequently calling a series of regional party conferences to debate the document, and thus draw out some unity behind it.

The 2009 elections will be a critical bell-weather of the damage done to the ANC, and the numbers to watch will not necessarily be the ANC's total share of vote, but potentially the poll turnouts. The ANC has never faced such a split in member wishes, but there will undoubtedly be few members that will be able to stomach voting for another party, such is the strength of "freedom party voting". Markinor studies have shown that Zuma holds only 40% of the ANC base, and this will prove a heavy burden to carry. How we gauge this trend will be in voter turnout, in how many ANC members will essentially abstain from voting, as a show of their lack of support for JZ.

Mbeki on the other hand, will now be trapped in a classic lame-duck presidency, having staked his legacy on this leadership battle. He has used every ounce of his rapidly diminished political in this one, alienating many in his party, and he is now in extreme deficit. There will be segments of the alliance that will act vindictively, and some that will be more magnanimous. Mbeki, however, will be hamstrung, as the NEC will likely stall any new initiatives until a new party strategy has been set.

It will be a sad end for a man who has given his life for the party, and it will diminish his importance in the relative success of post-Apartheid South Africa. To write-off Mbeki for his last two years of paranoid leadership will be a mistake. He has done more to advance South Africa domestically and internationally than any other president barring Mandela. Yes, there have been errors in judgement, notably on AIDS and Zimbabwe, but South Africa could have been a very very different country without his steady hand at the tiller.

The eight hundred pound gorilla in the room is the NPA decision to prosecute Zuma, which looks very likely early in the new year. This will drive Zuma underground, and will play havoc with the party's attempts at unity as old wounds are reopened. How he, and the ANC, reacts to this may well be the most important indicator of the next decade of ANC rule.