“They're burning tyres and logs,” Sergeant Sam Tshabalala of Balfour police said. “Our officers are monitoring the situation. The whole place is being kept under surveillance.”

Local media reported that the Ethiopian, Pakistani and Indian shopkeepers whose premises were looted had taken refuge in apartments near Balfour's police station.

More than 60 people were killed in a wave of anti-foreigner riots that swept across the country in 2008.

Balfour, 80kms southeast of Johannesburg, became a flashpoint last year during widespread demonstrations against poor public services in Africa's biggest economy.

Many poor black South Africans complain that their lives have not improved since Mr Mandela's African National Congress (ANC) swept to power in 1994, promising to provide jobs, housing and medical care for all.

Despite a decade of strong economic growth up to 2009, official unemployment has remained above 20 per cent and millions of blacks still live in tin-shack shanty towns with little access to running water, sanitation or electricity.

The ANC says 2.7 million new homes have been built since it came to power, but acknowledges it faces a backlog of 1.1 million units.

With the economy only just emerging from its first recession in 17 years, the government is not flush with cash, and is also worried about discouraging local and foreign investment with policies overly slanted towards the poor.

President Jacob Zuma is expected to dwell on the fight against unemployment and poverty in a state of the nation speech on Feb 11 that marks 20 years since anti-apartheid icon Nelson Mandela was released from prison.—Reuters