Local economic development: Difference between revisions

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'''Local Economic Development''' (LED) is an approach to [[economic development]], of note in the [[developing world]] that, as [[local economy|its name implies]], places importance on activities in and by cities, districts and regions. This involves added micro-economic measures at the local level to complement macro-economic measures at the national level. LED encompasses a range of disciplines including physical planning, economics and marketing, all with the goal of building up the economic capacity of a local area to improve its economic future and the quality of life for all.<ref>http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EXTURBANDEVELOPMENT/EXTLED/0,,contentMDK:20185186~menuPK:399161~pagePK:148956~piPK:216618~theSitePK:341139,00.html</ref>

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===LED in South Africa: pro-poor vs. pro-growth===

Many LED interventions in South Africa have taken a direct pro-poor intervention, leading to questions regarding whether this approach is more effective in terms of poverty relief than the spin-offs of more pro-growth focused endeavours.The Microeconomic Reform Strategy is a central component of the 2005 policy guidelines for implementing LED in South Africa.<ref>World Bank-Netherlands Partnership Program (BNPP), 2005. "Investigation of Pro-Poor Local Economic Development in South Africa."</ref> This strategy seeks to address the inequalities in the country and to build on the RDP (Reconstruction and Development Program), by focusing on issues of the geographical spread of activity, integration, black economic empowerment, knowledge-led growth, skills development and state responsiveness.

responsiveness.

In addition to the laws and policies directly supporting and encouraging pro-poor

LED, other instruments, such as Integrated Development Planning, provide additional support for implementation. Integrated Development Planning is a key process used within LED, which looks toward the use of planning to situate pro-poor development and LED specifically.<ref>World Bank-Netherlands Partnership Program (BNPP), 2005. "Investigation of Pro-Poor Local Economic Development in South Africa."</ref> The South African Forum for Effective Planning and Development in 1995 defined Integrated Development Planning as, ‘A participatory approach to integrate economic, sectoral, spatial, social, institutional, environmental and fiscal strategies in order to support the optimal allocation of scarce resources between sectors and geographical areas and across the population in a manner that provides sustainable growth, equity and the empowerment of the poor and the marginalised’(DPLG, 15).<ref>Department of Provincial and Local Government Affairs (DPLG), 2000: Local Economic Development: Guideline to Institutional Arrangements, Local Economic Development Manual Series Volume 1, DPLG, Pretoria.</ref>

====Integrated Development Planning====

In terms of what an 'Integrated Development Plan' (IDP) should include, the Municipal Systems Act clearly brings out the pro-poor dimensions of government thinking. The Act states that an integrated development plan must reflect:<ref>RSA, 2000a: Local Government Municipal Systems Bill, Government Gazette No. 21071 of 13 April 2000.</ref>

* The municipal council's vision for the long-term development of the municipality. Special emphasis is to be placed on the municipality’s most critical development needs

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* The council's spatial development framework, which should guide the way in which the physical area will be developed

It is suggested that IDP can assist in the promotion of socio-economic development in at least three ways; first, in helping to attract funds from other spheres of government, donor organisations and investors through defining and packaging attractive projects and programmes; secondly in helping to create an environment that is conducive to private sector investment and the general promotion of LED; and thirdly, by proposing direct interventions in the economy through, for example, providing incentives, developing economic infrastructure, and buying, developing and leasing/selling land,(DPLG 2000, 25).<ref>Department of Provincial and Local Government Affairs (DPLG), 2000: Local Economic Development: Guideline to Institutional Arrangements, Local Economic Development Manual Series Volume 1, DPLG, Pretoria.</ref>

====Public participation====

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Variables to be considered when conducting this inventory should reflect the components of a functioning economy, such as human and social capital, financial capital, physical capital and [[natural capital]] (UN Habitat,10).<ref>UN Habitat, Eco-Plan, 2005: "Promoting Local Economic Development through Strategic Planning". Volume 1.</ref>

In South Africa, municipalities are specifically required to involve communities in the affairs of the municipality, to provide services in a financially sustainable manner and to promote development.<ref>RSA, 2000: Local Government Municipal Systems Bill, Government Gazette No. 21071 of 13 April 2000.</ref> For instance, public participation is a key element of the Systems Act, and municipalities are obliged to establish mechanisms for public participation and participatory governance.

====Conclusions====

There is entrenched policy support for pro-poor development in South Africa – often being the primary focus of municipal vision/mission statements. In many cases it is treated as the partner of pro-growth/economic growth interventions. This situation is to be welcomed and reflects both local imperatives and responsiveness and local adherence to nationally identified objectives.

Given the dual challenges faced by South African society of needing to address both [[chronic poverty]], yet also to achieve economic growth and global competitiveness, from a policy perspective it would seem that the approach adopted by Mangaung, Cape Town and eThekwini is most appropriate. These municipalities took a middle of the road approach, focusing their LED strategy on addressing both issues of poverty and growth and the fundamental linkages between the two (World Bank, 2005, 75).<ref>World Bank-Netherlands Partnership Program (BNPP), 2005. "Investigation of Pro-Poor Local Economic Development in South Africa."</ref> The following case studies present pro-growth endeavours that have led to tangible pro-poor driven growth:Johannesburg’s Fashion District; eThekwini's<!--?--> regeneration projects; Ingwe's rail-based tourism initiatives.<ref>World Bank-Netherlands Partnership Program (BNPP), 2005. "Investigation of Pro-Poor Local Economic Development in South Africa."</ref>

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==References==

{{Reflist}}

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<references/>

==External links ==