department of provincial and local government
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Department of Provincial and Local Government. Local Economic Development Policy Re-focusing Development on the Poor Presentation to SA Cities Network, Cape Town November 19, 2002. Purpose. Describe current policy thinking on LED Locate policy within 5 scenarios - PowerPoint PPT PresentationTRANSCRIPT
Department of Provincial and Local Government
Local Economic Development
Policy
Re-focusing Development on the Poor
Presentation to SA Cities Network, Cape Town November 19, 2002
Purpose
• Describe current policy thinking on LED
• Locate policy within 5 scenarios
• Issues for taking city economic development forward
Current Draft LED Policy
• Pro-poor policy approach aimed at promoting developmental LED interventions by cities
• The mix of interventions should take into account the unique context of each city in respect of geographic and physical setting, local economy and employment structure, local population and labour market, and possibilities for social partnerships given the broader political context.
Current Draft LED Policy
• Economic opportunities and projects should be identified through the Integrated Development Plans (IDPs) of cities
• IDP is an intergovernmental planning instrument and should align national/ provincial economic interventions and local priorities and opportunities.
• LED Units are emphasised as institutional vehicles for the implementation of LED initiatives.
Current Draft LED Policy Developmental LED Interventions
Fostering community economic development Community businesses and cooperatives Local exchange and trading systems Savings collectives and informal lending systems Support community institutions
Promoting linkages between wealthy and poor areas Development permissions linked to requirement to invest in poorer areas
Investing in human capital General and customised education and vocational training Basic and advanced skill development programmes Targeted placement Thinking skills, people skills and self-confidence development Fast-tracking business and technical skills
Current Draft LED PolicyDevelopmental LED Interventions
Delivering and maintaining infrastructure and services Maximise economic linkages Reliable, cost effective municipal services Job-creation and enterprise development Affirmative procurement and BEE
Plugging leaks in the local economy Stem outflow of money from poor areas within city Fund special events Promote use of local labour “Buy local” initiatives
Retaining and expanding existing business Special support for existing businesses Developing under-exploited sectors Fast-tracking development applications and permits Identification and adoption of new markets and technologies
Policy Refinement
• Institutional integration, roles of other role players other than government in LED and funding framework.
• Micro/ Macro-economic development linkages
• Policy/ programme linkages• Current Govt funding/financial review of
LED• Strategic use of donor support programmes
Policy Refinement
• LED financing mechanisms: grants/credits/• SMME support/BEE/ partnerships/ equity
issues• Implementation/ Institutional assessment• Donor support, alignment to policy &
implementation• Economic development agencies &
investment institutions and private sector bodies
Policy Refinement
• Municipal collaborative governance/govt spheres
• Civil society/ Non-governmental participation
• Capacity and resource requirements for all spheres
• Competency requirements of economic development institutions
Policy Refinement
• Competency and capacity development mechanisms
• Considerations of key instruments such as SETAs in the capacity building of LED
• Appropriate synchronisation of donor programmes
• Key performance indicators / cycle assessment
• M&E Strategy
LED
City
Private Sector
N/PGov’t
Comm./NGO
Policy Refinement
Five Scenarios for the Future
• More of the same• The corporate millennium• Careful communities• Hell on earth• Sustainable abundance
Bernard Lietaer, 2001, The Future of Money-Creating new wealth, work
and a wiser world, Published by Century
Scenario 1More of the same
This is unlikely to happen due to four mega trends• Age wave• Information revolution• Climate change• Monetary instability
And due to the transformation of money• What money is?• Who creates it?• How people behave towards each other when using it?
Scenario 2Corporate Millennium
From the information age to corporate millennium• Monopoly over information• The power of advertising• Hyper concentration of wealth• Of the 100 richest economies, 51 are now corporations (Sales
by General Motors are greater than the GDP of Denmark)• The world’s 200 largest corporations now control 28% of the
global economy, yet need to employ only 0,3% of its population to achieve it.
• American corporations pay less in US taxes than they receive in public subsidies from US taxpayers.
Scenario 3Careful communities
Driven by a collective reaction to retreating to safety
Extreme forms of “localism” can occur when there
are breakdowns in the financial system
Control over local currencies used negatively to
lock people into a safety cocoon
Globalisation forces fuelling new emphasis on local
priorities and local cultural homogeneity
Scenario 4Hell on Earth
Instead of people organising themselves in self-
contained communities, a highly individualistic
“free for all” ensues A world where there is a lot of work but not
enough money around to bring the people and the work together
Vicious cycle of homelessness, joblessness,
bankruptcy and financial failure Having a full-time job at minimum wage does not
provide someone a home anywhere in the US
Scenario 5Sustainable Abundance
A golden age of sustainable abundance within our lifetime is possible:
Balancing financial capital and social capital Complementary currencies Developing systems that incorporate the poor and
allows the poor to exchange their time and social capital for goods and services
Systems and value approach to development rather than a financial and “affordability” approach.
Developmental LED
Government’s 3 Main Policy Thrusts for social and economic development
o Establishing a job-creating economic growth path
o Embarking upon sustainable rural development and urban renewal
o Bringing the poor to the centre of development
Finding Synergy between the different approaches to LED
Traditional ApproachCities attract external investment as a means of
boosting the local economy
Endogenous ApproachDevelopment from within based on growing skills
and mobilising local resources, creativity and innovation
Finding Synergy between the different approaches to LED
Traditional Approach (Supply-side) Urban efficiency Urban attractiveness Focus on getting the basics right Incentives to industry Place marketing
Endogenous Approach (Demand-side) Community empowerment approach Human resource development Redistributive and targeting poverty Unleash and promote local innovation and creativity Local resource mobilisation
Developmental LED vs
Non-Developmental LED
Developmental LEDLocal Government and communities working together to find sustainable ways of addressing social, economic and material needs of citizens
Non-Developmental LEDSocial objectives are secondary to investment attraction at all costs
Aiming LED at developmental outcomes
Policy Thrusts
Establishing a job-creating economic growth path
Embarking upon sustainable rural development and urban renewal
Bringing the poor to
the centre of development
Traditional Approaches
Endogenous Approaches
Developmental LED
Developmental LED is the Key
Developmental LED
Non-Developmental LED
Traditional Approach xEndogenous Approach x
What is LED?
LED is a process in which local role players and
stakeholders engage to stimulate business
activity and employment within a specifically
defined area.
City scale Sub-city scale Ward level Neighborhood level Enterprise level Entrepreneur level
City Scale
“Macro-economic” management – Managing the city economy
City fiscal policyCity monetary policy?Revenue generation and expenditure strategiesBorrowing frameworkCity-wide planning (IDP), budgeting, service delivery, monitoringCity industrial policy, SMME policy, etcSpatial targeting
City Scale
“Macro-economic” management –
Managing the city economyGGP indicators
Localise national economic information
Localise national/provincial economic
policy
City identity and marketing
Building credibility
Ward/Neighbourhood/enterprise Scale
• Linking community initiatives with city-wide initiatives
• Linking enterprise and entrepreneurs with city-wide plans and initiatives
• Community empowerment focus• Creating work for the poor through new forms of
exchange
(eg. provide poor with bus tokens in exchange for removing rubbish)