LOCAL ECONOMIC LOCAL ECONOMIC DEVELOPMENT : A REVIEW OF THE DEVELOPMENT : A REVIEW OF THE COMMONWEALTH EXPERIENCES COMMONWEALTH EXPERIENCES

BYPROF PS REDDY (UKZN) and PROF M WALLIS (DUT)

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1. INTRODUCTION1. INTRODUCTION

- Not a new concept : originated 30 - 40 years ago in response to socio – economic challenges of localities.

Several disciplines contributed : 1970s : interest and ideas kept it alive : implementation a challenge : varying levels of success

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2. TOWARDS AN 2. TOWARDS AN UNDERSTANDING OF LEDUNDERSTANDING OF LED

- World Bank : “Build up the economic capacity of a local area to improve its economic future and the quality of life for all. It is a process by which the public, business and ngo sector partners work collectively to create better conditions for employment generation”.

- No blueprint for LED : complementary to provincial/national driven programmes : decentralisation strategy

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3.KEY STAKEHOLDERS 3.KEY STAKEHOLDERS

3.1.LOCAL AUTHORITIES - Key actors : facilitate business

development : retention, marketing, incentives, education and training, small business development , infrastructure, reviewing regulatory procedures. Local governance : creative and adopt collective approach

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3.2. CIVIL SOCIETY3.2. CIVIL SOCIETY

- Residents fully involved for successful LED : legitimise process/depoliticise projects; increase effectiveness/ efficiency; widen consensus/support; foresee problems by engaging key partners/ stakeholders; secure volunteer efforts and incorporate low income/informal economy groups

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3.3.PRIVATE SECTOR3.3.PRIVATE SECTOR

- Good understanding of local economy; importance of co – operating with government; support small business development and feasible expansion strategies

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4. ROLE OF NATIONAL, PROVINCIAL /STATE AND LOCAL GOVERNMENT

- Leadership in LED is not confined to single sector

4.1. NATIONAL GOVERNMENT- Robust inclusive local economies : high

level of IGR : micro/macroeconomic policies : diffuse thinking.

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- Single vision for LED : access to finance/ national tools/instruments : facilitate growth. Universities important.

- Key to unlocking potential of locality. UNCDF : develop capacity of local governments to manage development. /support of private sector.

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4.2.PROVINCIAL/STATE GOVERNMENT4.2.PROVINCIAL/STATE GOVERNMENT

- Co – ordinate resources transferred to departments : priorities/initiatives at local level. LED : major delivery area. Departments dealing with LED/local government adequately capacitated/ empowered : develop capacity of municipalities

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4.3. LOCAL GOVERNMENT4.3. LOCAL GOVERNMENT- Dynamic implementation of national,

provincial/state policies/instruments : key to promoting LED : develop capacity/skills base. Not sole perogative to promote LED, but leadership important : direct/indirect/critical roles.

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5. COMMONWEALTH EXPERIENCES5. COMMONWEALTH EXPERIENCES

- Caribbean : Economic liberalism and globalisation : socio – economic challenges. “Third Economic Way” : transformed local government. New concept : challenges

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- Africa : LED assimilated with community/ local development to achieve socio - economic goals : short term survival as opposed to sustainability/economic growth. Africa Report : private/ngo sector growing. Challenges : lack of capacity, transparency/accountability/difficult development environment.

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- Asia : Financial crisis : decentralised governance : promote LED.: economic growth with private sector/civil society. Asian Development Bank : six strategic principles : partnership, decentralisation, participation, capacity building, networks and communication technology

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6. LED PROSPECTS& CHALLENGES6. LED PROSPECTS& CHALLENGES Differences : developed/developing states

: general situation of local government rather than problems specific to LED

6.1.Unfunded Mandate : gap : what national government/society expects and resources allocated

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6.2.Uneven Development& Consequences: Impact of colonial rule/economic history/.environmental considerations/ locational features

6.3.LED Policy Transfer : inappropriate transfer : policy failure. Economic/ social/ political and ideological contexts important. Local realities : skills/investment climate/ limited funding : conditions

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6.4.Rural Local Government Challenges : Traditional leadership : integral part of local governance : key participants : land tenure : politically fuelled tensions.

Deconcentration rather than devolution model more suitable for rural areas

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6.5.Integration and Difficulties: integrated action/planning and working interepartmentally : appropriate structural arrangements/model for business development

6.6.Competing Priorities : Various functions : competiting priorities : demands on budget : challenges. Energising LED : prejudiced by other forms of LED.

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6.7.Need for Business Skills, Capacity &Attitudes : capacity/ entrepreneural leadership /business skills. Links with educational/training institutions.

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6.8.IGR : Role of National/ 6.8.IGR : Role of National/ Intermediate Governments and Intermediate Governments and Constitutions : Constitutions :

Centralised approach critiqued. Constitutions : powers and functions to local government : stronger role in implementing socio – economic policies : need support for LED

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6.9. Planning &Related Obstacles:6.9. Planning &Related Obstacles:

Difficult local/regional development environment : limited capacity/ resources/ poor accessibility and weak civil society : viability of LED

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6.10.Global Financial Crisis6.10.Global Financial Crisis

2007 Crisis : challenges : Less dramatic than Europe and Asia.

Crisis for LED : Greater scarcity of revenue for public sector spending/.

private sector funding difficult to obtain; donors cautious; debts relief/cancellations more difficult. Crisis : local action : LED

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7. INTERNATIONAL/NATIONAL/LOCAL 7. INTERNATIONAL/NATIONAL/LOCAL NETWORKS AND DONOR SUPPORTNETWORKS AND DONOR SUPPORT

- Networks/donors involved in LED : share experiences. Strengthen business communities through public private partnerships, decentralisation and LED.

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– Moyo :aid dependancy. Many localities : basic conditions in place for LED : some external top down support : main supporters are GTZ; UN &World Bank.

UNCDF three objectives : subnational focus; local level institutional development; performance linked and national policy relevance.

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- Donors : supporters of LED : over a decade : from structural adjustment of 1990s : strenghten business communities/national policy relevance.

- CLGF and other international ngos/

donor agencies : support LED by sharing knowledge, insights and best practices. Dangers of policy transfer : inadequate grounding in local realities

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8.CONCLUSION8.CONCLUSION - Practised internationally for three

decades : not sole perogative of local authority but collaborative partnership. Several roleplayers : firm commitment, supporting and enabling political environment. Local partnerships/ linkages/networks can facilitate the process.

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Way forward &Recommendations :- The legislative framework including

national constitution reviewed to ensure that LED is local government function;

- LED must not be allowed to fall foul of the unfunded mandate syndrome;

- National government : determine what role it can play/action taken to support LED;

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- Need for entrepreneural style of leadership;

- Multiplicity of actors : networking/co-ordination

- Most countries are trying to cope with the long term effects of the global crisis : LED : part of way forward and not casualty;

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- Enabling environment at local level for companies to succeed and business to flourish;

- Active and consistent participation of private/ngo sector for recognition and exploitation of local development opportunities

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