SECTION I 7.21.1.14 Policy
3.19 LOCAL GOVERNMENT ROLE INITIATIVES
Local government has five important role initiatives to play especially in local economic development. These role initiatives are as follows:
• Entrepreneur/ developer;
• Co-ordinator;
• Facilitator;
• Stimulator/Inducer; and
• Strategic leader.
3.19.1 Entrepreneur/ Developer
Local government serves as an entrepreneur or a developer. It acts like a business in the sense that it buys the land and develops it. The income from this development is used to develop infrastructure and services where they are mostly needed. Maharaj (1998:4) argues that development opportunities must break with the past and should include the ethic of equality income groups, and maximise opportunities for participation of all people as users entrepreneurs and investors.
At the same time, it has to make sure that its projects create jobs for the unemployed. The example of this is the development of the beachfront or a civic centre. Local government
decides on good ideas whether to spend money on buying or developing land and also weight the benefits against from the uses of the money.
When a local government has as its objectives, the redevelopment of depressed industrial or commercial areas in order to increase local trade, employment revenue, and so on, it can take an active role either industrially or in partnership with community based groups or private enterprise. Use of planning expertise, compulsory acquisition powers and provision of incentives for relocation or upgrading of premises is some of the options available (Blakely 1994:72).
The developing role of local council will be determined by the institutional arrangements, which they choose to undertake in the process of local economic development. Local governments have various options in this regard, which could vary from taking full responsibility for the operation of a business enterprise to establishing a joint venture partnership with the private sector or an NGO (Department of Provincial and Local Government 2000(a): 2). These options will also be influenced by the needs and circumstances of a particular local government, its perception of the role of local government in LED and other constraints such as limited expertise, weak economies, and infrastructure backlog and so on. The decision to take full responsibility for the operation of a business enterprise would, for example, normally occur in a larger or well-resourced local government, where financial resources are more available and the institutional capacity is well developed. Department of Provincial and Local Government 2000(a): 7).
The options available to local governments in terms of institutional arrangements for LED are as follows:
• municipal LED unit;
• community development trust;
• section 21 companies; and
• partnership with other stakeholders.
148
Local government may choose to establish municipal LED units or departments to develop and promote LED. These local governments are characterised by the comprehensive nature of their organisation, highly skilled staff, and also the financial and personnel capacity to run these units. There are, according to the Applied Fiscal Research Centre ([S.a.]: 12), usually three areas in a local government's organisation where these units can be established.
The first option is to establish it at the centre of the municipal administration, which is usually the office of the chief executive officer, giving such a unit the opportunity to play a highly strategic role and influencing policy in support of LED. The second option is to place it within a line department and giving it an operational rather than a strategic role.
The third option is to place the unit in a planning and development department where the focus is on the development of a policy agenda through such department's integrated planning functions.
The Durban Metropolitan Council chose to establish a fully-fledged municipal LED department to develop and promote LED. The Economic Development Department (ED D) of the Durban Metropolitan council has as its mission to advise and guide the Metropolitan Council on how it should promote LED. Some of the activities undertaken by EDD have to do with policy and strategy formulation skills in the areas of private sector development, investment promotion, SMME development, the support of economic activities in low-income areas, tourist promotion, the design and management of economic development research projects and the creation of effective development institutions (Applied Fiscal Research Centre, [S.A]; 13; Department of Constitutional Development [S.A];14S.) A few of the achievements of EDD include building a partnership with other stakeholders to develop an innovative beach management plan, guiding the allocation of an RS million fund to SMME development project and the facilitation of the Durban International Convention Centre Development (Department of Provincial and Local Government, 2000(a): 11).
3.19.2 Co ordinator
Local government acts as planner and co-ordinator in situations where it has to co- ordinate the actions of many different groups or stakeholders, such as organised labour, Community Based Organisation (CBOs). In relation to local government acts as a co- ordinator when calling meetings where stakeholders are infonned of the present economic problems and opportunities, and where common goals are developed. Local government establishes policy or proposes strategies for areas of development, for example, Point Redevelopment Project. Local government ensures that all sectors focus their approaches and resources on similar goals. An example could be if local government decides to concentrate development in a corridor. In one area, local government co-ordinates the efforts of business and community based organisation and where stakeholders could agree that mixed-use development is important. The business could invest money and the community-based organisation could supply labour to ensure future maintenance.
3.19.3 Facilitator
Local government also serves or works as a facilitator or an enabler. As facilitator local government plays the role of creating and improving the environment of an area. The example of this is the ICC itself, which is the case study of this research study. Local government makes sure that regulations obstructing development are changed. It ensures that application procedures are simplified and also ensures that common standards are set.
Local government conveys to other spheres of the government the problem and opportunities that are present within the area, so that laws can become enabling, for example, procedures to develop houses can be made easy by local government. This might mean that local government will have to change its zoning regulations and its application procedures to facilitate development, this might also mean that local
150
government lobbies national government to increase housing subsidy. Local government facilitates or enables local economic development processes by supporting local economic development, community based organisations with funds and training.
The positive use of planning powers may also include establishing employment or development zones, and standards that encourage a particular class, scale or character of development. Although this is often related to environmental conditions, they can also have objectives. These opportunity areas, then, have the potential to be marketed to prospective business clients through direct approaches and advertising in one form or another.
Finally, local council members, as elected community representatives, can advocate local concerns and bring economic problems and opportunities to the attention of higher levels of government. Their advocacy role will be strengthened to the extent that local government can demonstrate community and business sector support for this position and put forward realistic and achievable remedies (Blakely 1994:72).
3.19.4 Stimulator/Inducer
In South Africa, the private sector has not invested in building housing and other local economic development strategies, as much as expected. For this reason local government plays a role as a stimulator in trying to stimulate private sector to invest in housing with the aim of promoting private investments and community resources. This means that local government produces brochures calling on private sector to invest and this also means that local government invests in, for example, building houses. This is based on the idea that investment by the public sector will attract investment by the private sector.
Another example is the Spatial Development Initiative (SDI) and government plans and design the development corridor and community then invest a major proportion of the outstanding resources requirement (finance and labour to complete the project).
In some cases, approaches have been included providing industrial building. In at least one state, small manufacturing workshops have been built and leased to operators at reduced rents for the first few years of operation. This is an option for local government in areas where the provision of suitable premises is a problem.
In tourism a local government may itself promote a particular 'theme' or activity in a key venue when private sector action is not forthcoming. Outlets for crafts, craft demonstrations, or a periodic market are some of the possible uses for council-owned premises. In numerous overseas areas, for example, local government has provided premises to reduce rents to community-based enterprises and co-operatives to help meet local employment objectives. The course of action of local council decides to take will depend on the local situation. It would be inappropriate for a council not to use its resources in intelligent ways to benefit the total community. Although local development initiatives are not a panacea for local government or solution to all local problems, they are significant complements to state as well as federal efforts to stimulate economic and employment development. The issue is seldom whether the council should or should not act, but what action to take and how to take it (Blakely 1994:72).
3. 19.5.Strategic Leader
As the elected representatives of the entire community, municipalities, can playa leading role as policy makers and innovators, and as institutions of local democracy. They seek to mobilise a range of resources to meet basic needs and achieve development goals. This implies a fundamental shift from being a traditional administration to being a decision- maker, clearly delineating the future of the area (Urban Sector Network 1998: 112).
Local government has to be seen not as an inhibition to the exercise of choice but as a prime means of providing choices of both individual and communities.
152