Transcript IMPLEMENTATION AND OWNERSHIP OF PCC RESOLUTIONS

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
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Locate policy within 5 scenarios
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Issues for taking city economic
development forward
Current Draft LED Policy
•
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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
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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
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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
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Development permissions linked to requirement to invest in poorer
areas
Investing in human capital
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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 Policy
Developmental LED Interventions
Delivering and maintaining infrastructure and services
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Maximise economic linkages
Reliable, cost effective municipal services
Job-creation and enterprise development
Affirmative procurement and BEE
Plugging leaks in the local economy
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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
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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
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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
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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
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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
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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
Policy Refinement
N/P
Gov’t
Comm./
NGO
Private
Sector
LED
City
Five Scenarios for the Future
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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 1
More of the same
This is unlikely to happen due to four mega trends
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Age wave
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Information revolution
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Climate change
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Monetary instability
And due to the transformation of money
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What money is?
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Who creates it?
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How people behave towards each other when using
it?
Scenario 2
Corporate Millennium
From the information age to corporate millennium
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Monopoly over information
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The power of advertising
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Hyper concentration of wealth
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Of the 100 richest economies, 51 are now
corporations (Sales by General Motors are greater
than the GDP of Denmark)
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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.
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American corporations pay less in US taxes than
they receive in public subsidies from US taxpayers.
Scenario 3
Careful 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 4
Hell on Earth
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Instead of people organising themselves in selfcontained 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 5
Sustainable Abundance
A golden age of sustainable abundance within our
lifetime is possible:
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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
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Establishing a job-creating economic growth
path
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Embarking upon sustainable rural
development and urban renewal
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Bringing the poor to the centre of
development
Finding Synergy between the different
approaches to LED
Traditional Approach
Cities attract external investment as a means of
boosting the local economy
Endogenous Approach
Development 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)
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Urban efficiency
Urban attractiveness
Focus on getting the basics right
Incentives to industry
Place marketing
Endogenous Approach (Demand-side)
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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 LED
Local Government and communities working
together to find sustainable ways of addressing
social, economic and material needs of citizens
Non-Developmental LED
Social objectives are secondary to investment
attraction at all costs
Aiming LED at developmental
outcomes
Policy Thrusts
Establishing a jobcreating economic
growth path
Embarking upon
sustainable rural
development and
urban renewal
Bringing the poor to
the centre of
development
Traditional
Approaches
Developmental
LED
Endogenous
Approaches
Developmental LED is the Key
Developmental
LED
Traditional
Approach
x
Endogenous
Approach
x
NonDevelopmental
LED
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 policy
City monetary policy?
Revenue generation and expenditure
strategies
Borrowing framework
City-wide planning (IDP), budgeting,
service delivery, monitoring
City industrial policy, SMME policy, etc
Spatial targeting
City Scale
“Macro-economic” management –
Managing the city economy
GGP indicators
Localise national economic information
Localise national/provincial economic
policy
City identity and marketing
Building credibility
Ward/Neighbourhood/enterprise Scale
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Linking community initiatives with citywide 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)