JOHANNESBURG - Violent riots and threats of a fresh wave of crippling labor strikes may force South African President Jacob Zuma to deliver quickly on election promises and risk scaring investors in Africa's biggest economy.

Just three months after his African National Congress's sweeping election victory, township violence is boiling over in scenes reminiscent of unrest during apartheid.

Charismatic and persuasive, Zuma raised high hopes in his election campaign, vowing to help millions of blacks still living in shacks 15 years after the ANC came to power.

Now the riots have injected urgency into the task, and Zuma is limited by the first recession in Africa's biggest economy in 17 years. He must also reassure foreign investors he will be cautious about spending and not steer the economy to the left.

Now we are seeing an early test. We are seeing a very visible sign of the extent of discontent, something that hadn't really been on investors' radar screens, said Razia Khan, regional head of research for Africa at Standard Chartered.

This is something that will sit uncomfortably over the longer term for anyone really concerned about potential next steps, what can be done given the extent of discontent.

TROUBLE ON MANY FRONTS

Zuma faces trouble on several fronts. Labor union allies who helped his rise have wasted no time in pushing hard for leftist economic policies that could unnerve investors.

Labor demands are piling up by the day as frustrations spread in townships where police fired rubber bullets and teargas this week at protesters who hurled stones at them.

A fuel sector union agreed to an improved 9.5 percent wage offer on Thursday but warned it may yet strike in sympathy with paper and chemical workers who downed tools this week.

Council workers are threatening to stay at home from Monday, action that could keep tens of thousands of local government employees at home, crippling the public sector.

Gold and coal unions are considering a pay offer. If they reject it stoppages will hit some of the world's biggest mines.

New strikes could delay efforts to improve basic services, raising the possibility of new riots erupting.

Township residents are calling for the removal of local ANC officials they accuse of corruption and gross neglect of communities lacking jobs, housing, sanitation and medical care.

Even if Zuma had the resources, throwing money at the problem would not help because of the extent of incompetence and corruption in local government, analysts say.

Even if they put together a Marshall plan at this stage we know that local government capacity is a huge problem, said political analyst Susan Booysen.
It's almost a brick wall into which all excitement about democracy and participation and improvement of life just crashes.

So far, the rage is focused on local authorities and township residents say it is too early to judge Zuma.

But the long-term credibility of the man who portrays himself as the champion of the poor may rest on whether he takes decisive action against local government officials.

That was clear in flashpoint Siyathemba township. When local mayor Lefty Tsotetsi arrived in an armored police vehicle to address thousands of seething residents, it was too risky for him to step out of the vehicle.

Young men, some carrying clubs and pipes, said they had been unemployed for years and accused him of living a life of luxury and handing out jobs to relatives and friends.

He later promised to improve services. No one seemed to believe the mayor and a new house he is building was torched.

Zuma told businessmen late on Thursday that although the government acknowledged problems with delivering basic services, looting, violence and the destruction of property could not be justified. [nLO074648]

Tough security measures could deepen alienation.

In Siyathemba, some spoke of a policeman named Doctor who they say was brutal in dealing with the unrest. He will die like a dog, several young men threatened.

A crackdown is often going to be difficult, Zuma has to maintain his approach in being more open, more consultative and try to utilize the space that is open, in terms of engagement, that is where the short term solution can come about, said Eurasia Group analyst Mike Davies.

For now, a weak opposition and South Africa's peculiar political system could work in Zuma's favor. The same incensed people who protest against poor services are the biggest backers of the ANC, mainly because it led the fight against apartheid.

They don't just vote they throw bricks as well. It's a very awkward type of political culture we have. We have practiced that now for quite a number of years. And protest in South Africa does not necessarily mean instability, said Booysen.

(Additional reporting by Alison Raymond; Editing by Louise Ireland)

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