Important note: Information in this article was accurate in 2009. The state of the art may have changed since the publication date.

Reuters NewMedia - May 9, 2009

Below are key issues in South Africa, the continent's biggest economy and a regional diplomatic power:

ECONOMY

-- The economy shrank by 1.8 percent in the fourth-quarter of 2008, as manufacturing output plunged in the wake of the global financial crisis.

-- Manufacturing output fell 15 percent in February, a record year-on-year drop, having slumped by 12.9 percent in the year to January, making the first recession in 17 years likely.

-- Inflation has been above the central bank's 3 to 6 percent target band since April 2007. It peaked in August 2008 and stood at 8.6 percent year-on-year in February.

CORRUPTION

-- Corruption cases have tainted South African politics. Prosecutors last month dropped corruption charges against Zuma on a technicality. He denies any wrongdoing. Suspended national police chief Jackie Selebi faces trial for corruption and fraud.

CRIME

-- South Africa has one of the world's highest rates of violent crime. There were 18,487 murders, 36,190 rapes, and 14,201 reported carjackings in 2007-2008, according to police. Critics say the government has failed to fight crime and progress requires an overhaul of the criminal justice system.

AIDS

-- Some 5.5 million people (or about 12 percent of a population of 47 million) have HIV. There are 500,000 new infections every year, including 100,000 children. Around 1,000 die every day from AIDS-related illnesses. South African government officials have infuriated AIDS activists by questioning accepted science around the virus.

POVERTY

-- Millions of black South Africans still live in townships lacking basic services, glaring reminders of decades of apartheid. Zuma will be under pressure from his union and communist allies to increase government spending on the poor while trying to reassure foreign investors nervous about him steering the economy to the left. The latest U.N. Human Development Report ranks South Africa at 125 of 179 countries.

UNEMPLOYMENT

-- The official jobless rate stood at 21.9 percent at the end of 2008, but South Africa will meet a 2014 target to halve unemployment despite the prospect of rising job losses in the global financial crisis.

-- Slumping global demand has placed thousands of jobs at risk in the key labour-intensive mining, manufacturing and automobile sectors, potentially swelling the ranks of about 3.9 million who are already unemployed.

MINING

-- Mining accounts for nearly 7 percent of gross domestic product and employs half a million workers. Mining companies in South Africa are cutting thousands of jobs as the prices of most metals fall, adding to high unemployment and triggering strike warnings by unions.

-- About 24,000 mining jobs are at risk in mining alone.

ENERGY

-- State-owned utility Eskom [ESCJ.UL] has been rationing electricity since January 2008 when the national grid nearly collapsed, forcing mines to shut down and costing the economy billions of dollars.

-- The crisis was caused by the government's failure to invest in new power generation plants and surging demand. As a result, mines, smelters and big industrial operations receive about 90 to 95 percent of their power requirements.

-- Eskom plans to spend 385 billion rand ($43 billion) over five years to boost power generation. The largest emitter on the continent, South Africa uses coal to produce 90 percent of its power.

BLACK ECONOMIC EMPOWERMENT

-- The government has said it is committed to affirmative-action to bring blacks into the mainstream economy, still dominated by whites. Critics say it has made a few black businessmen rich but failed to help poor blacks.

LAND

-- The ANC plans to speed up land reform to help end poverty among the poor black majority but the ruling party says it will not forcibly seize farms from white landowners, as in Zimbabwe.

IMMIGRATION

-- South Africa's ultra liberal immigration and refugee policies make it a haven for Africans lured by work in its mines, farms and homes. Some 3 million Zimbabweans have fled economic collapse to South Africa in the past decade, stoking tensions that led to xenophobic attacks last year. (Writing by David Cutler, London Editorial Reference Unit; Editing by Sophie Hares)

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