June 3 (Reuters) - Newly elected South African President Jacob Zuma delivers his first state of the nation address on Wednesday, faced with the challenge of managing a recession and appeasing unions that want more government spending.
These are some of the key issues he faces:
ECONOMY
Africa's biggest economy plunged into its first recession in 17 years in the first three months of 2009, succumbing to the global crisis in its sharpest economic contraction in a quarter of a century. Recession in developed countries has slashed demand for South Africa's minerals and manufactured goods, and first quarter data showed record falls in output in these sectors. Analysts and the treasury say recovery will depend on a revival of the world economy.
TRADE UNIONS
Powerful unions which helped Zuma's rise are pushing him to shift economic policy to the left. In one sign of labour frustrations, the metalworkers' union has threatened mass strikes over central bank monetary policies and vowed to take their battle to commercial banks. The mine workers' union backed calls for deeper interest rate cuts but said it would give the central bank time to change monetary policy before considering strikes.
Zuma is in a quagmire. He is indebted to labour and communist allies while trying to reassure foreign investors who want market-friendly policies. He has promised policy continuity. The ruling African National Congress has told unions to be patient because the government must be cautious during a recession.
CORRUPTION
This is one area where Zuma will be under close scrutiny. He has promised to stamp out corruption by ensuring politicians do not tamper with tenders and introducing stronger accountability of public servants. However, Zuma is still trying to improve his own image after prosecutors dropped an eight-year corruption case against him.
CRIME
One of the most overwhelming problems. 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. Zuma has promised to overhaul the criminal justice system, be tougher on criminals and improve police recruitment and training. Police are under pressure to ensure streets are safe before the 2010 soccer World Cup.
AIDS
About 5.5 million people (about 12 percent of a population of 47 million) have HIV. There are 500,000 new infections every year, including 100,000 children. About 1,000 people die every day from AIDS-related illnesses. Government officials have angered AIDS activists by questioning accepted science concerning the virus.
POVERTY
Millions of black South Africans still live in townships lacking basic services, glaring reminders of decades of apartheid. The government hopes to halve poverty by 2014. The ANC has said creating jobs will be a focus of economic policy.
MINING
Mining accounts for nearly 7 percent of gross domestic product and employs half a million workers. Mining companies are cutting thousands of jobs in South Africa as the prices of most metals fall, adding to high unemployment and provoking strike warnings by unions. About 24,000 jobs are at risk in mining alone.
ENERGY
The state-owned utility Eskom 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 generating plants and surging demand.
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. Three million Zimbabweans have fled economic collapse to South Africa in the past decade, causing tension that led to xenophobic attacks last year. (Writing by Michael Georgy; editing by Andrew Dobbie)