By Michael Georgy
JOHANNESBURG, July 28 (Reuters) - South African council workers went into a second day of strikes for higher pay on Tuesday in the latest stand-off between President Jacob Zuma and labour unions that helped him to power in April.
But the country's biggest union agreed a wage deal with gold and coal producers, averting a strike in the crucial mining industry and easing pressure on Zuma. Following are questions and answers on how the strikes will affect the economy and challenge Zuma.
WHAT IS THE IMPACT ON THE ECONOMY?
Now that the South Africa's biggest union agreed a wage deal with the crucial gold and coal sectors, the economy is not under any serious threat unless municipal workers' strikes explode.
They are unlikely to drag on. Markets have so far been unfazed. However, sustained labour unrest could raise concerns because the government will feel growing union heat while Africa's biggest economy suffers its first recession in 17 years.
HAS ZUMA BEEN HURT BY THE STRIKES?
Unions who helped bring Zuma to power are seen as flexing their muscles. They have put pressure on Zuma to live up to his election promises to spend money on millions of black South Africans still living in poverty 15 years after his African National Congress (ANC) came to power.
Violent riots in townships over unemployment and poor housing and healthcare have also highlighted Zuma's quagmire -- how to boost social spending while trying to guide the country through an economic downturn.
Zuma, who has portrayed himself as a champion of the poor, has not showed any signs that he will cave in to unions and adopt leftist policies, and he has made it clear that the government would not tolerate violence.
A weak opposition and the popularity of the ANC may give him some breathing space, at least for now. And anger in townships -- the main trouble spots -- is focused on local officials, not Zuma. But in the long term he may have to appease unions and his grassroots supporters or lose credibility.
WILL THE UNREST SCARE AWAY INVESTORS?
Highly unlikely. It is strike season in July and August and investors have no reason to be alarmed unless industrial action spreads and rocks the country. There is no sign of that and more wage agreements are expected this week.
Unless Zuma indicates he intends to shift policies to please his union allies, foreign investors will take the unrest in their stride.
While township riots were erupting last week, the rand surged to an 11-month high against the dollar, extending gains for the year to more than 20 percent. Led by a recovery of appetite for riskier emerging markets, Johannesburg stocks hit their highest since early October.