As the crisis of unemployment and poverty continues to grow in South Africa, specifically in rural areas, citizens are compelled by hunger to take action towards self- generating income for survival since employment cannot be justified as the only way of making a living. With inefficient and overwhelmed municipal and public services, local governments and public institutions are hard pressed to provide even basic services to low-income informal settlements and disadvantaged people. In such cases, LED should
92 respond to such basic needs by converting the challenge into sustainable economic opportunities that will assist the poor to be financially independent and generate income that will improve their quality of life. Abdulrahman and Abdelmalik (2015) define income generation as an intervention which attempts to address poverty, unemployment and a lack of economic opportunities to increase the participant's ability to generate income and secure a livelihood. Niesing, Scholtz and Kruger (2015) state that the problem of poverty is multi-dimensional and the lack of jobs in South Africa is adding to the problem. South Africa is one of the countries with the highest income gap between those who are rich and those who live below the poverty line. This goes back to the apartheid era where people were deprived of economic resources. For the past few years the government has tried to redistribute income to the poor. The majority of population are unable to afford a minimum standard of living such as access to shelter, food and healthcare. In response the government introduced LED projects to assist people to generate a sustainable income.
The question of whether those projects continue to generate a sustainable income still needs to be answered. Developed and developing countries adopt and practise LED for different reasons. Nel (2001) confirms that the reasons for practising LED in developed and developing countries may differ. However, Geddes (2003) indicates that it all began after World War II, when both developed and developing countries were obsessed with industrialisation and economic growth. There is, however, a wide economic growth gap between developed and developing countries. In developed countries the main concern is about maintaining a high standard of living, while in developing countries the population is achieve and maintain a minimum standard of living and in trying to do so, LED is seen as the tool to alleviate poverty through job creation and income generation. Ramukumba (2012) states that LED came into being in an attempt to create employment, alleviate poverty, and boost economic growth in a sustainable manner.
LED initiatives were implemented to generate income for the poor, not just short-term income but a sustainable income which would enable the poor to benefit in the long term.
Nel and Binns (2001) point out that LED utilises local resources and skills in order to increase economic growth and alleviate poverty in local areas. The White Paper on Local Government (1998) promotes and recognises the role that can be played by local resources such as tourism that involve and employ local people in order for them to generate income (Department of Environmental Affairs and Tourism (DEAT), 1996).
93 Binns and Nel (2002) support the view that locally available resources such as agricultural projects and tourism should be recognized by local municipalities in South Africa as a way forward through which development can be achieved and the host community can benefit. However, Ramukumba (2012) suggests that the main focus of LED is to encourage economic growth and to diversify the local economic base. This calls for a variety of income generating activities such as agriculture, craft work and other activities. Nel (2001) recognises the importance of complimentary investment within the private, community sectors and between the public and private agents, which, when properly managed, could result in important economic gains and external benefits. The use of local resources and skills is recognized by government as a key vehicle for bringing about economic change and alleviating poverty.
Oldewage-Theron and Slabbert (2010) state that the South African government uses income generation strategies because they result in an immediate cash inflow and skill development for the participants who are involved in LED projects once they have been implemented. Economic improvement and poverty alleviation can be achieved through the implementation of income generating projects. Income is important for the functioning of any household in a society. Without income one cannot afford basic needs such as food and shelter. Income is power; however, Ansari, Munir and Gregg (2012) dispute this by pointing out that income can increase capabilities but that it must not be seen as a panacea to improve the livelihood of the people. Meanwhile Berner, Gomez and Knorringa (2012) recognise the need to take both LED projects and the development of small businesses in order to create job opportunities and provide income. Thondhlana, Vedeld and Shackleton (2012) indicate that households still derive higher income from natural resources.
Ansari, Munir and Gregg (2012) indicate that income and consumption are a means of achieving what people value in life; however, the wellbeing and empowerment of people do not result from an increase in income. The majority of poor people are situated in semi-urban and rural areas which are the focus of the current study; LED strategies seek to generate income for them through projects and are thus more focused on these areas.
Neves and Du Toit (2013) state that the majority of people in rural areas derive their income from land based grants, informal economic activities and links to urban resources.
Furthermore, Kline and Moretti (2014) point out that policies such as LED were focused on disadvantaged areas in the hope of improving their income generation. Meanwhile the
94 question that still arises is whether those poor people ae really benefiting from such projects. In many cases the projects target maybe 20 individuals and that doesn’t cover even half of the people in a particular community. What happens to the other half of the population within that particular community? Niesing, Scholtz and Kruger (2015) define the concept of LED projects’ sustainability according to the following elements:
exposure, being able to export products, growth and empowerment, ownership being transferred and sufficient income. Kline and Moretti (2014) also reveal that LED projects tend to target a small percentage of the people within a particular community.
Furthermore, Niesing, Scholtz and Kruger (2015) observe that only a few of these projects remain active for a period longer than 10 years and sustainability is one of the obstacles that income-generating community projects need to overcome. Goduka (2012) suggests that building strong networks and partnerships as well as the self-reliance of communities can lead to the sustainability of projects.
Kline and Moretti (2014) express the opinion that there is a need to investigate whether LED projects have the ability and capacity to create local jobs in order to generate income. Moreover, Niesing, Scholtz and Kruger (2015) further propose that participants in projects should be empowered through education and access to resources in order to maintain the sustainability of projects and maximise their ability as agents of change in their communities. Income generation interventions may not only lead to changes at an individual level, but could affect many people but only if they are implemented effective and efficiently. They can alleviate poverty and income inequality at a societal level. Lee, Richard and Lee (2012) identify the importance of strong collaboration among various stakeholders and actors in LED in order to address the issues of income disparity and repetition of policies and services.
Furthermore, Abdulrahman and Abdelmalik (2015) maintain that providing support for income generation activities can lead to local economic development because income generation programmes provide new skills, services and opportunities for the communities and therefore stimulate the local economy.Wang et al. (2012) confirm that experiences from projects in China and India highlighted key societal factors influencing successful implementation of pro-poor LED such as market size, informal competitors, availability of legislation, financing and trust between industrial players. Seyfang, Park and Smith (2013) additionally emphasise that in order to grasp the range and extent of key factors and issues that have influenced the development of a community, a SWOT
95 analysis was practised by asking groups to identify the key internal and external factors, which had both positive and negative impacts on their projects.