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A DYNAMIC AND CREATIVE ECONOMY IN SOUTH AFRICA:

EXPLORING RURAL-URBAN LINKAGES

Paper presented by Yusuf Patel, Department of Cooperative Governance and Traditional

Affairs, South Africa, at a Rural Development Conference in India, 14-16 April 2010, to share

lessons between India, Brazil and South Africa

INTRODUCTION

In the call for papers to a conference on Spatial Justice, the organisers posed the following

questions:

“Is it the function of public policies (planning, management …) to establish spatial equity? Is their aim to treat all spaces equally? Are these issues the pre-condition for - or even for the definition of - spatial justice? Is a “just” policy a policy which rebalances spatial inequalities, through some forms of positive discrimination? Or, should “just” policies be non-interventionist and allow spatial dynamics to balance processes such as those of the market? If we question universalised claims to justice, is it still possible or even desirable to build “just” and stable spatial structures? Alternatively, should we focus on ways to establish flexible regulation, with the aim of reducing spatial injustice in a responsive and context driven manner, without privileging any particular (utopian) spatial pattern? But does action not require spatial images - even if they prove illusory - of how it will accomplish greater justice? To pose the question potentially threatens the validity of attempts to spatialise the implementation and effects of public policies” (Gecko Laboratory, 2007).

These questions are extremely relevant to the situation in South Africa, more so, because of

the unique and deliberate apartheid spatial engineering that has left an enduring legacy which

is proving difficult to overcome. Thus far there has not been an adequate public policy

response to deal with the question of spatial justice. South Africa is faced with the twin

challenge of redressing spatial inequalities, especially in the rural areas, whilst at the same

time accelerating overall national growth and economic development which currently

originates out of a few concentrated urban growth points.

These growth points themselves require spatial redress internally to deal with the global

challenge of “urbanisation of poverty” whose underlying causes according to the Head of the

United Nations Habitat include, “rapid and unprecedented urban growth, inequitable

distribution of wealth, and the inability of the formal economy to create sufficient jobs,

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combined with the failure of public policy to secure people’s access to basic needs”

(Tibaijuka, 2005 in Pieterse, 2008).

Therefore, despite major delivery programmes and redistributive measures initiated since the

start of the democratic era in 1994, South Africa remains one of the most unequal societies in

the world. The country also has a large structural unemployment problem especially amongst

the youth which is accompanied by high levels of spatial inequality. Part of this spatial

inequality is a huge legacy of under investment in infrastructure in many rural areas, and

inadequate provision for the poor within urban areas.

Half of the close to 50 million people in South Africa survives on only 8% of the national

income. The official unemployment rate is 24,3%. One in four adults and almost half of the

youth aged between 15 and 24 has never worked. Those under the age of 35 account for

73% of the unemployed. (Budget Speech 2010, South Africa)

The metropolitan regions and cities which are the engines of economic growth are coming

under enormous pressure to provide land, infrastructure, housing and services to a growing

population. This is exacerbated by the growing trend in these areas of reduction in household

size and increase in in-migration of especially poor people from within the country and

outside.

This paper contends that both under-investment in rural areas as well as inadequate planning

and funding of growth in cities is a critical constraint on faster and shared economic growth in

South Africa, thus constraining the country’s ability to promote spatial justice. A mutually

reinforcing framework that builds rural-urban linkages is necessary together with a system

that incentivises sub-national or regional level economic growth and development.

It is argued that such a system should be premised on unleashing creativity of sub-national

spaces (regions) rather than promote reliance on competition between regions for scarce and

limited investment resources. There must be synergy between the top-down investment

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prioritisation and endogenous (bottom-up) models that encourages and supports “people’s

participation” across every municipality and ward through community economic development

and sustainable livelihood programmes.

It is further argued that spatial inequality should be addressed as a subset and result of the

larger political and economic considerations in respect of developmental state and

governance objectives, macro-economic policy, industrialisation and the role of the financial

system.

SPATIAL AND SETTLEMENT STRUCTURE IN SOUTH AFRICA

South Africa is a unitary constitutional state consisting of three elected spheres of

government, namely national, provincial and local. The provincial sphere consists of nine

provinces and the local sphere consists of 283 municipalities in a wall-to-wall system. The

283 municipalities are made up of six metropolitan municipalities (Category A), 46 district

municipalities (Category C), and 231 local municipalities (category B) each of which falls

within a particular district in a two-tier system.

The significance of the wall-to-wall system is that municipalities encompass both urban

centres as well as rural hinterlands to varying extents. This together with the developmental

mandate of local government which includes facilitating local economic development allows

(in its intent and design at least) for integrated rural and urban management at a local

government level.

On the other hand the wall-to-wall system does place municipalities under financial strain

having to administer a much larger area spatially. The differentiated capacities and revenue

base of the 283 municipalities means that in many cases there is insufficient capability to

adequately confront basic service delivery matters let alone see to the more difficult task of

facilitating local economic development.

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This factor together with a range of accountability concerns has led to a review of the situation

through the Local Government Turnaround Strategy (LGTAS) approved by national Cabinet in

December 2009. The Turnaround strategy is aimed at addressing root causes of problems

facing municipalities. These root causes originate both from outside of municipalities and from

within municipalities. The external root causes include financial viability concerns and the

need to develop a more spatially responsive intergovernmental fiscal regime. Within such a

reconstructed regime better capacitated municipalities can be encouraged to improve their

financial standing to enable responsible borrowing for infrastructure development thereby

freeing up greater state resources for funding infrastructure in weaker municipalities, many of

which are located within rural areas.

The 283 municipalities are highly differentiated spatially and in terms of capacity. A recent

Local Government Turnaround Strategy (LGTAS) adopted by the national Cabinet in

December 2009 makes this point strongly and provides the following more detailed

classification of municipalities based on their spatial context:

• A: Metros : Large urban complexes with populations over 1 million and accounting for

56% of all municipal expenditure in the country

• B1: Local Municipalities with large budgets and containing secondary cities

• B2: Local Municipalities with a large town as a core.

• B3: Local Municipalities with small towns, with relatively small populations and significant

proportions of urban populations but with no large towns as a core.

• B4: Local Municipalities which are mainly rural with communal tenure and with, at most,

one or two small towns in their areas.

• C1: District Municipalities which are not water service authorities.

• C2: District Municipalities which are water service authorities.

Table 1: Municipal differentiation in South Africa

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Universal Household Access to all 4 Basic Services, 2007 (water, sanitation, electricity, refuse removal)

Category Number of Municipalities

Total number of households (million)

Number of poor households

Total GVA (2004) % of national (2004)

More than 90%

Bet. 60-89%

Bet. 30-59%

Less than 30%

A 6 4,7 35,5% 58,9 1 5 - - B1 21 2,2 41,5% 18,4 1 13 5 2 B2 29 1,1 43,9% 6,9 3 13 10 3 B3 111 1,6 51,8% 9,1 4 53 34 20 B4 70 2,9 73,5% 6,4 - - - 70 C1 25 (3,8) (44,4%) 0,3 C2 21 (3,9) (66,1%) 0,0 Total 283 12,5 55,9% 100% 9 84 49 95 Source: CoGTA, Local Government Turnaround Strategy (2009)

This categorisation shows that majority of households are found within municipalities located

in more urban settings. The economic output of the country is also concentrated in these

municipalities and calculated using the Geographic Value Add (GVA) metric.

Almost 59% of the economic output of the country is generated in the six metropolitan

municipalities. These municipalities also contain over a third of all the households in the

country. Whilst the percentage share of poor households (income levels) of the entire

municipality is less in metropolitan municipalities than B4 (rural), it is still extremely high in

absolute numbers amounting to over 1,6 million households.

This shows that poverty is concentrated both in urban and rural areas. In the urban areas

poverty is located in areas of relatively high economic output but which is not sufficient to

provide everyone with decent jobs and incomes. In the rural areas poverty is accompanied by

low and even declining levels of economic output.

The level of access to basic services in rural areas is extremely low in comparison to the rest

of the country. Less than 30% of households in all 70 of the B4 (rural) municipalities have

access to all four basic services, namely, water, sanitation, electricity and refuse removal.

Superimposed on this administrative or geo-political spatial structure is an economic-

settlement structure that more closely describes the territorial pattern of development in South

Africa.

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Whilst strict definitions of urban and rural are difficult to apply, guidance is provided by the

(UNDP, 2000):

“‘Rural’ and ‘urban’ areas are often conceptualised in opposing terms to each other.

Population density and economic activity are the predominant criteria that have been used to

define ‘urban’ versus ‘rural’ areas. However, related criteria such as administrative functions

and infrastructure development are also used. Rural areas are generally regarded as places

of low population densities with predominantly agricultural economies whereas “urban” areas

are regarded as places with high population densities distinguished by a service economy.

Hence small towns with even a minimum of ‘urban’ characteristics are regarded as urban.”

In the case of South Africa it can be argued that the functional metropolitan-city regions

together with the secondary cities and regional service centres make up the “urban”

component since they match the characteristics of having dense population profiles and more

diversified economies. Many of the small towns and niche settlements are located within vast

rural regions and have therefore not been classified ‘urban” for the purpose of this paper.

Using this definition the urban component comprises 58% of the South African population and

makes up 84% of the economy. It also houses 44% of the country’s poor (Table 2).

The urban component comprises the 4 city regions (which include the metropolitan

municipalities) that contain populations of well over 1 million each; 5 cities which contain

population sizes of between 400 000 to 1 million, and 41 regional service centres (large

towns) which contain populations in access of 100 000 people.

The Gauteng city-region which evolved out of the Johannesburg gold mining activity is by far

the largest concentration of population and economic activity in the country. It alone contains

22% of the population, contributes 39% to the national economy and is home to 14% of the

population that is classified as poor (earning below the minimum living level). It is also by far

the largest job creator in the country.

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The rural component comprises some 44 small service towns, 600 local niche settlements,

and various dispersed and dense settlements and farms that altogether contains 42% of the

population, 56% of the poor, and contributes only 16% to the national economy.

The current reality is that the urban component is experiencing increasing growth and in-

migration mainly from the rural areas. The city-regions experienced an average economic

growth rate of 3.7% per year from 1995 to 2007. The average growth coinciding with the

accelerated national growth period between 2002 and 2007 was 4.7% per year. These

relatively high growth rates, though not sufficient to meet the objective of halving

unemployment by 2014, show that it is the urban sector that benefits most or is able to take

best advantage of favourable economic conditions. During this period of accelerated national

growth the rural areas have either experienced limited growth, stagnation or even negative

growth. The converse also holds in the sense that urban areas have been able to cope better

with the recent economic recession and downturn.

Table 2: Provisional typology of settlements in South Africa Number

of places Population

(% of national) Economic

activity (% of national

GVA)

People living under a minimum level of

living (% of national)

Gauteng city region 1 22 39 14 Coastal city regions 3 16 25 10 Cities 5 6 5 6 Regional service centres

41 14 15 14

Sub total URBAN as a % of National

58% 84% 44%

Service towns 44 4 3 5 Local and niche settlements

600 9 5 12

Clusters and dispersed rural settlements

21 2 31

Farms/rest of SA 8 6 8 Sub total RURAL as a % of National

42% 16% 56%

Source: Adapted from research produced by the CSIR (2008) to inform a national urban development framework. Note that a stricter definition of “urban” is applied in this adaptation than that used by the CSIR. Endnote i contains the names of all the larger settlements.

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CONCENTRATED GROWTH PATTERN

All of this data and information indicates that the economy, skills and resources are highly

concentrated in the metropolitan areas and their wider functional regions. It also shows that

these regions are the engines of growth on which there is a high level of dependence for jobs

and for revenue income to drive government’s redistribution objectives. Institutionally,

government (or the “Developmental State”) at all levels is weakest in the areas that require

the most attention (rural areas). The point also needs to be made that institutional capacity in

the cities or for the cities, whilst much better than the rural areas, is equally vulnerable due to

the nature and scale of the growth challenge confronting the cities.

More critically the data shows that poverty and inequality is an interlinked urban and rural

problem. There are high levels of poverty in both urban and rural areas, and the poor tend to

move between these areas as part of a rational household survival strategy. These are

referred to as multi-spatial households (Pycroft, 2002).

Studies conducted by the Forced Migration unit at the University of the Witwatersrand (April,

2009) on in-migration to Johannesburg provide empirical evidence suggesting this. It was

found that in a sample of respondents in informal settlements, 82% of households had links

with the rural areas they came from. It also showed that the most important driver for leaving

rural areas is to seek income opportunities. Does it automatically mean if rural areas are

developed then people will not leave for the city? This is not a straightforward matter. The

evidence suggests that raised income levels will remain the main concern for rural

households. The income differential will be the biggest factor. Investment in rural areas will

have to be of a sufficiently large scale to halt migration out of rural areas completely.

At the same time there is also evidence suggesting that in many cases people remain trapped

in rural areas because they do not have sufficient resources or networks to migrate. Once

they do have these resources they tend to leave but do not necessarily break links with their

rural homes, and in certain cases also prefer to return to the rural areas to retire.

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Poor people migrating into cities tend to tolerate living in squalor and earn some income

rather than remain in rural areas that offer no income generating opportunities. The Minister

for Human Settlements, Tokyo Sexwale, heard these views first hand from residents of

informal settlements when he engaged in a fact finding mission to understand their needs and

desires. He points to the economic nature of the migration problem by calling for

industrialisation of the country. Such industrialisation must address the problem of

urbanisation of poverty (Sexwale, 2009).

So the spatial structure and movement patterns are much more complex and require policies

that are responsive to the diverse decision-making of different households in both rural and

urban areas. Addressing the macro-structural constraints and the industrialisation needs of

the country are critical instruments to promote a more dynamic and sustainable spatial

economy pattern.

This complexity and the need to look at rural-urban linkages within a sustainable national

economic growth and development perspective is captured by the following quote regarding

the main growth centre of the country, the Gauteng city-region. It also captures the nature of

these linkages and how they manifest themselves in the South African context:

“There are important policy questions about Gauteng’s burgeoning position and nation-wide impact through remittances, migration and demand for agricultural produce, raw materials and recreational amenities. It also has a sizeable ecological footprint through the consumption of energy and other non-renewable, scarce resources. A very large volume of water has to be piped a considerable distance from a different water basin in Lesotho at the taxpayers expense. Much of the country’s land with highest agricultural potential is in Gauteng and Mpumalanga, but is threatened by urban sprawl. Gauteng’s inland position means that the international competitiveness of its industries is reduced by rising oil and logistics costs for raw materials, components and finished goods. There are many unknowns about Gauteng’s position in the national space economy. How far do its positive and negative spillovers reach? What are the relative benefits and costs of this concentration of activity in one place, and what is the appropriate stance for the government to take in relation to further consolidation? Would a more balanced regional approach involving selective deconcentration of jobs and services to secondary cities be worthwhile, or indeed feasible? What opportunities exist for enhancing the connections with coastal city regions and would this lead to further concentration or dispersal of activity? The relocation of Old Mutual’s head office from Cape Town to Johannesburg in 2007, after 160 years in the city, illustrates the issues. It moved to get closer to the volume of potential clients and skilled labour available in Jo’burg.” (CSIR, 2008)

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RURAL DEVELOPMENT AS GOVERNMENT PRIORITY

One of the emerging policy responses of Government to the unemployment and spatial

inequality challenge is to make rural development a key priority. The framework for this is

provided by the Ruling Party policy resolutions (African National Congress, 2007) and

subsequent 2009 election manifesto which informs the mandate of the current term of

government.

The rural development priority has to be seen within the overall economic transformation goal

of the ANC which recognises that:

“Skewed patterns of ownership and production, the spatial legacies of our apartheid past and

the tendencies of the economy towards inequality, dualism and marginalisation will not recede

automatically as economic growth accelerates” (ANC, 2007).

The ANC therefore argues that this situation calls for a Developmental State that can engage

private capital strategically and be rooted amongst the people. Such a State must adapt

lessons from abroad but be based upon the South African context.

The economic transformation goal of the ANC aims to realise:

• “A thriving and integrated economy, which draws on the creativity and skills that our

whole population can offer, building on South Africa’s economic endowments to

create decent work for all and eliminate poverty”; and

• “A mixed economy, where the state, private capital, cooperative and other forms of

social ownership complement each other in an integrated way to eliminate poverty

and foster shared economic growth”. (ANC, 2007)

In calling for a comprehensive rural development strategy the ANC explains the rural-urban

nexus in the following way:

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“The challenges of urban poverty and migration to cities are inseparably bound with the struggle to defeat poverty, create work and build a better life in rural South Africa. The poorest amongst the urban population have the strongest connections with rural areas. Limited opportunities of sustainable livelihoods in rural areas, insecurity of tenure and widespread evictions contribute directly to the growth of informal settlements in cities and towns. Moreover, the predominance of capital intensive farming on vast tracts of land in 'white' South Africa is directly linked to the reproduction of high population densities and land degradation in former bantustan areas.

Many rural areas still lack basic infrastructure such as roads, water and electricity supply. This lack of infrastructure entrenches the problems of chronic poverty and limits the potential of communities to sustain economic growth, rural livelihoods and social development. Our efforts to extend free basic services to all our people are slowest to reach rural areas and farm-dwellers, even while the majority have access to free basic services in the urban areas. Moreover, access to government services such as education and health care are the weakest in rural areas.” (ANC, 2007)

Taking this guiding perspective into account, the challenge for South Africa will lie in

designing a new rural development strategy that is mindful of the broader objectives of

stimulating faster and shared growth in the overall economy, by addressing constraints and

structural impediments to industrialisation. The danger may be to focus on spatial redress in a

narrow or oversimplified sense by top-down prioritisation rather than stimulating and

unleashing endogenous creativity of various municipal areas or regions.

The other associated danger with ‘balanced development’ is to spread out public sector

resources too thinly across too many areas, thereby not creating a critical mass of investment

to catalyse long-term sustainable development and not crowding in private sector investment

of a sufficient scale in an identified set of decentralised localities where massive and

sustainable growth can be catalysed. Linked to this is the risk of diverting public resources

away from “growth points” and “killing the goose that lays the golden egg” so to speak.

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In this regard the National Spatial Development Perspective (NSDP) (see Box 1 below) of

South Africa has been a contentious subject.

Critics argue that it is inevitably urban-biased with its focus on investing in areas of potential.

However a closer reading of the NSDP indicates that there are 26 regions in the country

identified where there is a confluence of economic potential and high concentrations of poor

households. Some of these regions include the dense former homeland areas where properly

conceived and resourced rural development programmes is both necessary and fulfils the

requirement of investing beyond the basic levels of infrastructure.

Box 1: National Spatial Development Perspective (NSDP) principles

In order to contribute to the broader growth and development policy objectives of government, the NSDP puts forward a set of 5 normative principles:

Principle 1: Rapid economic growth that is sustained and inclusive is a pre-requisite for the achievement of other policy objectives, amongst which poverty alleviation is key. Principle 2: Government has a constitutional obligation to provide basic services to all citizens (e.g. water, energy, health and educational facilities) wherever they reside. Principle 3: Beyond the constitutional obligation identified in Principle 2 above, government spending on fixed investment should be focused on localities of economic growth and/or economic potential in order to gear up private sector investment, stimulate sustainable economic activities and create long-term employment opportunities. Principle 4: Efforts to address past and current social inequalities should focus on people, not places. In localities where there are both high levels of poverty and demonstrated economic potential, this could include fixed capital investment beyond basic services to exploit the potential of those localities. In localities with low demonstrated economic potential, Government should, beyond the provision of basic services, concentrate primarily on human capital development by providing social transfers such as grants, education and training and poverty relief programmes and reducing migration costs by providing labour market intelligence so as to give people better information, opportunities and capabilities to enable people to gravitate, if they chose to, to localities that are more likely to provide sustainable employment and economic opportunities. Principle 5: In order to overcome the spatial distortions of Apartheid, future settlement and economic development opportunities should be channelled into activity corridors and nodes that are adjacent to or link the main growth centres. Infrastructure investment should primarily support localities that will become major growth nodes in South Africa and the SADC region to create regional gateways to the global economy.

(Presidency, 2006)

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The other argument is that the NSDP is constructed within a supply-driven top-down

perspective. Again, a closer reading together with an understanding of the implementation

methodology shows that it is rather a guiding instrument to construct more strategic and

realistic development paths at regional level that is informed both by national knowledge and

local experience, culture and institutions. It is therefore neither a top-down nor a bottom-up

approach but rather one of finding the appropriate consensus and alignment amongst multiple

and competing priorities and interests, and ensuring decisive implementation.

This approach is elaborated upon by (Patel and Powell, 2008) using the concept of “shared

space” and outcomes based Intergovernmental Relations wherein it is posited that district and

metropolitan municipal areas in South Africa are the ideal regional arenas where alignment

across government and local civil society can be expressed in the District and Metropolitan

level Integrated Development Plans (IDPs). It is recognised that regional planning and

development extends beyond administrative municipal boundaries and irrespective of the

future of district municipalities1 the geographical areas of focus at this or other similar scale is

still relevant due to their demarcation on the basis of fulfilling some level of economic

functionality criteria.

“The district and metropolitan scale, it can be argued, is ideal for de-concentration and for intergovernmental coordination. It is large enough for national and provincial government to organize their capacity spatially, and small enough to respond to local/regional conditions and unique requirements.

Governments’ efforts can be measured against the ability to develop a shared understanding of the needs and opportunities of these areas and the realization of sustainable human settlements and robust economies in these areas. Coordination is organized at district and metro scale and it informs the implementation in local municipalities, wards and sub-metro administration areas. It does not mean that districts become the main implementers even of economic development initiatives. Depending on the actions the best place for locating implementation functions should be determined on a case by case basis.

Organizing government around these 52 areas referred to as IGR impact zones is a strategic way of addressing capacity challenges. It is about mainstreaming and institutionalizing hands-on support rather than managing it in an ad-hoc way through arbitrary support interventions. It is also about getting a better fit between policy and implementation through spatially focused needs assessment, and to build accountability amongst municipalities and line departments around the responsiveness to these needs.” (Patel and Powell, 2008)

1 There is a debate in South Africa about the need or role for district municipalities mainly due to the unrelenting conflict and turf battles between district and local municipalities in the two-tier system. (Local government policy review process 2008)

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Coordinating at district and metropolitan scale must not be interpreted to mean an

overshadowing of the importance of working at other scales such as ward or neighbourhood

level. It is just that the nature of coordination and focus is broader at the district scale and this

allows for mediating the sometimes narrower interests at ward level.

There has to be an interrelation between ward, municipal and district scales of development

with each process informing the other in order to develop and strive for mutually reinforcing

objectives. It is not possible to develop appropriate plans and programmes at district level

without understanding the needs and opportunities on the ground across all the local

municipalities and wards. Likewise it is not possible to develop appropriate ward-based plans

and projects without understanding the broader regional dynamics, opportunities and

constraints.

It is in this context that the Minister for Cooperative Governance and Traditional Affairs in

South Africa, Sicelo Shiceka, has called for a refinement and reinvigoration of the ward

development system. The focus on a new ward governance and community development

model is central to the Local Government Turnaround Strategy. The rationale is both to invest

in local democracy and community involvement, and to coordinate community development

structures better in order for there to be better implementation and oversight of government

programmes that in one way or the other find expression in a ward.

Investing in local democracy and community development is to be done with the aim of

transcending the current “government service delivery to a passive citizenry” model or

paradigm to “government facilitating opportunities for active communities to shape their own

destiny”.

This shift together with an appreciation of the continuum of planning and working across

different scales is important as new approaches to rural development are conceptualised.

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RURAL-URBAN LINKAGES

As mentioned earlier, the wall-to-wall system of Local Government in South Africa lays the

basis for integrated urban and rural development within the district and metropolitan regions.

The need for rural-urban integration goes beyond the confines of these regions and has to

managed at provincial, national and even international levels.

In this regard the establishment of a National Planning Commission with a mandate to

develop and manage a long term development plan for the country is crucial. The long term

planning ought to focus on strategic development choices which should include spatial

development strategies. The development and oversight of an integrated national rural and

urban development framework by the National Planning Commission will play a key role in

ensuring that both rural and urban development interventions are undertaken within an

overarching framework that seeks to enhance overall national economic growth and

development.

Again, such an integrated rural-urban development framework should be aimed at ensuring

that national strategic choices and endogenous local/regional driven development are

mutually reinforcing.

The National Planning Commission holds up high hopes for sharpening coherence in shaping

South Africa’s development future. Its work will need to be mindful of bridging the rural-urban

divide and providing clear development objectives and targets for different provinces, district

and metropolitan regions.

Maintaining a critical focus on rural-urban linkages and finding the mutually reinforcing

synergies will be important. The need for this is well elaborated by the (UNDP, 2000). Rural

and urban areas are first of all economically interdependent. Cities depend on rural areas for

food, industrial crops and other natural resources. Similarly, rural economic expansion

depends on urban places, markets and networks. Secondly, in order to improve the overall

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performance and resilience of the national economy it is imperative for nations to tap into the

full range of resources across the entire territorial space of a country. Depending solely on

urban growth has not yielded optimal results. Thirdly, the often unintended environmental

impacts that urban and rural areas have on each other has to be mitigated. For example, the

chemical run-off from modern agriculture can contaminate urban water supplies. Fourthly, is

the need for decentralising governance and participation across local territories enabling both

urban and rural communities to have representation, voice and involvement in planning,

budgeting and development. Finally, in order to address poverty alleviation and economic

growth it is necessary to address over reliance on urban growth points. Remittances from

these points play an important role in boosting rural household incomes but they do not

readily translate into rural infrastructure and economic development. At the same time

migration to urban areas contributes to urban economies but also to slum and squatter

conditions with a reliance on suppressed wages at below sustenance levels. (UNDP, 2000)

NEW ROLE OF REGIONS

In the face of globalisation there is increasing importance for the role of regional development.

The key question is does regional development offer opportunities for addressing inequality

by enhancing rural-urban linkages?

(Rogerson, 2008) summarises the literature explaining the move towards new regionalism

very aptly. Whereas old regionalism is associated with top-down spatial planning that

emerged in Western Europe in the 1950s, new regionalism is associated with endogenous

development approaches where regions themselves are positioned competitively in the global

economy and the “Nation State” plays a less significant role.

Old regionalism sought to achieve ‘balanced development’ at all cost by often providing

unsustainable incentives for growth and development in lagging areas. In this case each

regions role is seen as part of contributing to a national division of labour. In new regionalism

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the competition between regions is the key feature and the role of regions themselves in

determining development is highlighted. The agglomeration and clustering of firms is a major

conceptual foundation of new regionalism with emphasis on networking, learning, innovation

and endogenous development. Appropriate physical infrastructure and built environment is a

critical underpinning of regional economy and of agglomeration.

The criticism of new regionalism presented in the literature review by (Rogerson, 2008)

includes several aspects. Firstly, the unimportant role of the “Nation State” is an exaggeration

or even a misrepresentation. Nation States remain important and are critical in creating

conditions for regions to compete globally. Secondly, new regionalism can lead to the belief

that any region can make itself competitive. It overlooks the need for redistribution, welfare

and spatial justice. Thirdly, there is a danger that without national or supra-national forms of

regulation new regionalism may accelerate wasteful forms of territorial competition where

regions seek to promote their own development at expense of others. Finally, new

regionalism excludes consideration of power structures and conflicts amongst regional

players. It also is based on building trust and networks amongst regional players which are

not clearly measurable concepts.

Of significance to the South African situation are Marxist-based critiques of new regionalism.

These critiques follow from the dependency theory of Andre Gunder Frank which states that

there is an exploitative relationship between the core and the periphery. In the Case of South

Africa this exploitative relationship was shaped by colonialism and apartheid which sought to

destroy black farming and has left a legacy of spatial inequality, displacement and rural

underdevelopment especially in the former Bantustan areas.

“Over time, however, the industrialisation of South Africa ushered in by diamonds and gold engendered new needs in the economy, specifically for more labour on both farms and mines. White mine owners and farmers, desperate for labour, petitioned parliament to intervene. The result was taxation, pass laws, vagrancy laws, location laws and the restriction of African access to land, culminating in the 1913 Land Act, all aimed at undermining the independence of black farmers and making them wage-labourers.” (Graaf, 1996)

Flowing from this, (Satgar, 2005) presents the view that the Gauteng global city region is

dislocated from the rest of the country and placed off-shore, integrated into the world capitalist

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system. For him the Gauteng global city-region is perhaps a version of South African new

regionalism that is based on the notion of “competitive advantage” and not on a

developmental vision. This is why there is problematic intra-state competition between

departments and levels of government. The fragmented capitalist mode of production is what

requires addressing rather than its manifestation which has been described as a “two

economies” reality.

Others such as (Legum, 2005) argue that money is sucked out from rural areas and hoarded

in the global economy. This points to the need to look at the functioning of the financial

systems and to look at broader instruments and processes when addressing spatial

development policies and strategies.

(Fine, 2009) refers to the “financialisation” of the world economy and how this is leading to

rising inequality. The recent banking and financial crisis shows the increasing dependence

and reliance on a financial system that is not serving the needs of the poor. It in fact mobilises

the savings of ordinary people and invests this wastefully and inefficiently.

“Another way of seeing the scale of the rescue is to note that the total cost of constructing sewers and water systems throughout the world’s cities, to provide household connections for water and sewerage for over ¾ of the urban population in developing countries, would require only about €280billion – about 5% of the guarantees already given to the banks.”

It is clear then that regional development, especially in a developing country context, has to

be pursued within a broader national framework wherein a synergy between national priorities

and decentralised endogenous initiative are mutually reinforcing.

CREATIVE REGIONAL ECONOMIES

A pragmatic and adapted approach to new regionalism that is mindful of the various

criticisms discussed above and that is applied to address country specific conditions, presents

an opportunity for the construction of strategic pathways for development at

district/metropolitan (inter-district/metropolitan) scale in South Africa in a manner that

transcends the rural-urban divide.

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In this context it is argued here for a move towards developing “creative” regional/local

economies in South Africa. The definition of “creative” here is much broader than a reference

to promotion of creative industries such as music, fashion or design. It is rather about building

regional economies that are in a creative state. This enables these territories to focus

inwardly on local resources, culture, and history to both meet local demand and to be

positioned outwardly taking advantage of global trends and needs.

This approach implies a shift of emphasis from competition with other regions to creativity

wherein regional needs are addressed and potential is optimised. The region in a sense

competes with itself to be the best that it can be and national government facilitates this

process rather than introduce arbitary, artificial or generalised spatial investment

interventions.

The United Nations issued a Creative Economy Report in 2008 that highlights the major

contribution been made by the “Creative Economy”. It states that, “creativity and human talent

are fast becoming powerful engines for economic growth and development, and calls for the

adoption of effective cross-cutting mechanisms and concerted inter-ministerial policy action.

Developing countries around the world can find ways to optimize the potential of the creative

economy for generating economic growth, job creation and export earnings while at the same

time promoting social inclusion, cultural diversity and human development.”

This approach reinforces the shared space concept wherein synergy between endogenous

self discovery and broader state support unlock the optimisation of regional economies on the

basis of unleashing creativity. It thus provides an opportunity to build rural economies in a

more diversified way by tapping into social and cultural assets, and using technology to

generate various linkages and innovation. The “creative economy” approach is still evolving

and can be rooted in South Africa’s own conditions and opportunities. The National

Framework for Local Economic Development (2006) in South Africa together with emerging

practice on the ground by a range of municipalities as part of their constitutional mandate

already serves as a sound platform to position regional economies more effectively.

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“For some people, the “creative economy” is a holistic concept dealing with complex

interactions between culture, economics and technology in the contemporary globalized world

that is dominated by symbols, texts, sounds and images. Others are more sceptical about this

fashionable label, voicing concerns about its overstated importance and the way it may

exacerbate cultural and technological divisions. Against this background, the creative

economy has become a topical issue of the international economic and development agenda,

calling for informed policy responses in both developed and developing countries. There is no

unique definition of the “creative economy”. It is a subjective concept that is still being shaped.

There is, however, growing convergence on a core group of activities and their interactions

both in individual countries and at the international level.” (UN, 2008)

CONCLUSION

The question of spatial justice is critical in addressing structural unemployment and inequality

in South Africa. The move towards prioritising rural development is important in this regard.

This paper shows how rural development will have to occur within a broader spatial strategy

that unlocks creative regional economies. Such a strategy has to be shaped through mutually

reinforcing processes of national prioritisation and local endogenous development.

The facilitation role of national government has to be more direct in the South African context

where there are still large infrastructure and capital investment backlogs. Such intervention

must seek to reinforce rural-urban linkages and serve to enhance the overall performance

and efficiency of the national economy that serves the needs of communities.

i City-regions are Gauteng, Cape Town, eThekwini and Nelson Mandela Bay (Port Elizabeth) Cities are Msunduzi (Pietermaritzburg), Mangaung (Bloemfontein), Buffalo City (East London), Polokwane (former Pietersburg) and Mbombela (Nelspruit) Regional Service Centres are Welkom, Tzaneen, Newcastle, Klerksdorp/Stilfontein, Thohoyandou, Richards Bay/Empangeni, Rustenberg, Phuthaditjhaba, Witbank, Port Shepstone, Kimberley, Ladysmith, Kings Williams Town, Mthatha, Paarl/Wellington, Makopane, Secunda, Stanger, Mmbatho, George, Vryheid, Potchefstroom, Hazyview, Middleburg, Kroonstad, Worcester, Bethlehem, Upington, Grahamstown, Oudtshoorn, Queenstown, Ermelo, Parys, Brits, Mossel Bay, Knysna, Hermanus, Harrismith, Plettenburg Bay, Springbok, Makhado.

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