CHAPTER FOUR: LED IN SOUTH AFRICA
CHAPTER 9: SUMMARY OF RESULTS, RECOMMENDATIONS AND CONCLUSION
9.6 RE-ENGINEERING LED TO ALLEVIATE POVERTY
9.6.3 Re-engineering LED Strategies
LED cycle. It is a means of identifying areas which need further improvement and areas which can be replicated elsewhere. Monitoring and evaluation reports will also be a means of providing feedback which can be used for future targeting of LED strategies, projects and programs. Moreover monitoring and evaluation should not be a preserve of technocrats and LEDA‘s such as the INK ABM. It should also include the community‘s meaningful participation, since it is their lives that are affected. Thus the community should be able to tell a story on how LED programs are affecting their livelihoods.
vi. Step seven: Research and Consultation
Monitoring and evaluation can also be coupled with research and consultation wherein research would ensure that trends and needs of the people are captured so that LED programs become relevant. The research component is also a means of gathering relevant data and statistics about the community which is useful in planning for LED programs.
Moreover having such information is also a soft factor in attracting investors in an area since it is easier for investors to look at records rather that venturing into an area where there is little or no information at all. This data can be updated on a regular basis so that it is always remains relevant all times. Furthermore the information can be put in a database which can be easy to access. It is important to note that, the stages discussed in the cycle do not occur in isolation. This means that all the stages are interlinked and can be occurring simultaneously, for example during implementation indicators can be revisited and redefined. Thus the cycle is interactive and reinforcing.
one sector depends on investments across other sectors. The investments in capital need not be undertaken though LED only but other policies and strategies as well.
The strategy of investing in all forms of capital is defined by the researcher as ―clinical LED‖, wherein all the causes of poverty are addressed and strategies put in place to address them.
Clinical LED is borrowed from the medical field where when a doctor is treating a patient he/she considers all the possible causes of illness. Likewise clinical LED goes beyond just focusing on one area/sector and assuming that there will be trickle down effects and more recently trickle plus effects as Sachs (2005) argues. Clinical LED targets the core causes and roots of poverty. For example firstly educating and training the entrepreneurs (for instance in KwaMashu) before bridging finance would lead to better management of financial resources. Clinical LED as such focuses on investing in all forms of capital which the poor lack. The investments in capital which it targets are described below.
i. Human Capital
This includes key investments in the well being of human beings such as health, education, skills, literacy and good health needed for each person to be economically productive (Sachs 2005). For example the study revealed that that the SMES and the residents of KwaMashu are in need of investments in human capital particularly, education and skills development for SME‘s to be able to grow and escape poverty. As such LED strategies should target investments in these areas.
ii. Infrastructure
This includes the provision of hard infrastructure such as electricity, provision of safe water, information and communications technology, transport networks and energy which are critical inputs into business productivity (Sachs 2005).
iii. Social capital
Social capital is the values and norms within a society which makes it possible for people to network and link with each other and it‘s also a way of bridging. It is through networks that information is gained and it is through linking that society can engage in collective
action. Through interaction it is crucial to build trust which is key for the success for any endeavour, including poverty alleviation.
iv. Business-capital
Business capital refers to equipment needed to run an enterprise successfully for example an internet café requires computers. It also includes the financial resources required for any project. From the research it also emerges that lack of equipment is prohibiting the growth of SME‘s.
v. Knowledge capital
It entails the scientific and technological know-how, which raise productivity in business output and the promotion of physical and natural capital (Sachs 2005). The knowledge capital also includes doing research, monitoring and evaluation of programs so that the information is used to enhance future LED programs.
vi. Public Institutional Capital.
This includes reforming the current institutions managing LED programs such as municipalities and the government departments and laws that impact on the successful implementation of LED as a poverty alleviation tool.
Investing in all forms of capital acknowledges that poverty alleviation is not undertaken through one sector or strategy only, but requires investments across board so that gains in one sector are not lost in another sector (Sachs 2005). Investing in all forms of capital takes cognizance of the fact that there is no one decisive instrument that will turn the tide against poverty (ibid). There needs to be investment in all of the forms of capital listed above to escape the poverty trap where success in one area depends on investments elsewhere. In essence Clinical LED is comprehensive or holistic, where LED strategies invest in all forms of capital. Furthermore this approach acknowledges that for economic growth to occur poverty needs to be addressed first as the World Bank (2003) argues. Investing in all forms of capital also acknowledges that trickle down effects do not trickle to other sectors thus the need to invest in all forms of capital. For instance just as a doctor runs a series of tests on a patient likewise clinical LED targets all the causes of poverty so as to fully alleviate it.