2.2 Defining LED and understanding the relationship between LED and poverty
2.2.2 Pro-poor LED strategy in South Africa
24 the catalyst to improve the overall quality of life of the people while facilitating the reduction of unemployment, poverty and inequality. LED programmes bring about job creation and poverty alleviation so in a practical sense it is very important to ensure that the programmes are optimally managed and that the goals of LED are met since they contribute to the overall development of the communities which in practical terms means that fewer people will be dependent on government handouts. However, this goal remains unattainable when programmes are delivered at a slow pace. The current rate at which new jobs are being created is insufficient to absorb the increasing levels of unemployment (Midgley, 1997; Facts, 2015).
The slow implementation of LED programmes also resulted in South Africa not achieving the Millennium Development Goal (MDG) “to eliminate poverty and hunger [and] reducing by half the proportion of people who suffer from hunger” by the set date of 2015 (Budlender, 2005; DESA, 2009; Duflo, 2011). Jamal, Muhammad and Sasaki (2015) contend that this mandate has been followed up by a number of strategies to enable local communities to empower themselves through pro-poor LED initiatives. Local government has a mandate to find solutions to alleviate poverty and LED has been identified as part of the solution. Income generating projects represent one of the strategies to alleviate poverty (Dlodlo and Dhurup, 2010). In order to achieve economic development, poor and marginalized people must be included in the LED projects so that they can be empowered by means of economic opportunities. It is the efforts of local government and the local people themselves that are neededto develop the community and to improve social, economic, physical and cultural conditions.
Miranda (2005) and Duflo (2011) points out that economic development forms the major part of community development and this cannot be achieved through force but through the equal and democratic participation of all role players sharing their ideas, vision and responsibilities in the LED projects of their local communities. Local government has a role to play in empowering and supporting pro-poor LED initiatives in contributing to the Sustainable Development Goals (SDGs). The expected outcomes of LED initiatives can make a crucial contribution to the realization of SDG 1, that is, moving towards ending povertyand SDG 8, which is creating decent work and economic growth. Furthermore, pro-poor LED is about the local citizens taking control of their own situation and being responsible for the improvement of their conditions through the creation of employment
25 and economic growth (Tomlinson, 2003). No-one knows more about their situation or their needs than the beneficiaries themselves, and this means that the community should decide on what development is necessary, and how, when this development should take place, working together with local government. This in turn will ensure sustainability of pro-poor LED initiatives (Nwankwo and Ozor, 2008). The involvement of all stakeholders including the marginalized ─ as they, too, are part of the community ─ is crucial. This development cannot happen if there are no support institutions such as local government and private institutions. LED stakeholders need to create capacity by promoting a positive attitude and a sense of ownership and participation (Swinburn and Murphy, 2006). Local citizens should get involved in the initial stages of the proposed development mainly because of their knowledge of the local area, together with its strengths and weaknesses; involving them at an early stage should promote a better understanding of what is needed in the area.
Nel (2005) argues that LED in South Africa tends to focus more on the development of urban areas and neglects rural areas and small towns. Abrahams (2005) thus indicates that LED practices should focus on both urban and rural areas, and should be both integrative and collaborative, as LED is an outcome-based initiative driven by all the stakeholders. The literature reviewed shows that there really is a need for small towns and rural areas to take the initiative in the implementation of sustainable pro-poor LED programmes. Xuza (2005) calls for small towns and rural areas to be vehicles of economic growth and sustainable rural development. LED should be relevant to local communities, it should be appropriate and realistic so as to achieve the South African development agenda. Bond (2003) argues that LED intervention strategies should be well planned in such a way that they respond to local needs.
Phago (2005) points out that the reason for the unsuccessful LED practices in local communities is that there is lack of capacity and skills in local government.Ondrik (1999) and the European Commission’s report (2011) indicate that local government bodies must have an Integrated Development Plan (IDP) as a strategic approach that responds to pro- poor LED. The success of LED practices depends on both the local communities and local government bodies themselves regardless of the location or size. It is up to the local community to harness the strengths of their area to improve their standard of living and local government should empower the people with skills and resources that will assist the
26 people to be more productive. The government is not responsible for creating jobs but is it responsible for creating an enabling environment for job creation. Local government is there to assist existing and start-up LED projects to ensure more sustainable and effective development (Dlodlo and Dhurup, 2010). LED is a solution to improve the quality of life of local residents therefore it should be the concern of everyone, from the government to the traditional leaders who govern most rural areas and to the people themselves. LED has become a global concept that is used as a tool to address poverty and create employment opportunities for local people (Mohan and Stokke, 2000).Nel et al. (2005) also state that in order to develop poor and disadvantaged people LED needs to be holistic, innovative, creative and redistributive.
The Global Entrepreneur Monitor Report (2014) maintains that the main challenge is to provide jobs and opportunities for the youth, where the estimated unemployment level is in excess of sixty percent. Furthermore, the report reveals that education was seen as a tool that could assist South Africans to develop skills; however, the quality of the education system in South Africa is not of good quality and there are no jobs hence more graduates are unemployed. The purpose of LED is to build up the economic capacity of a local area to improve its economic future and the quality of life for all. The ability of communities to improve their quality of life, create new economic opportunities and fight poverty depends upon them being able to understand the processes of LED and act strategically in the changing and increasingly competitive market economy (Swinburn et al., 2006). Economic development has been defined as the capacity of a national economy, whose initial condition has been more or less static for a long time, to generate and sustain an annual increase in its gross national product (Todaro, 1994).
From a policy perspective, economic development can be defined as efforts that seek to improve the economic well-being and quality of life of a community by creating and/or retaining jobs and supporting or growing incomes and the tax base (Sullivan and Sheffrin, 2003). Economic development is, therefore, a process by which a nation improves the economic, political and social well-being of its people. The success of a community largely depends upon its ability to adapt to the dynamic local, national and international market economy. Each community has a unique set of local conditions that can either enhance or reduce the potential for Local Economic Development and it is these conditions that determine the relative advantage of an area in its ability to attract, generate
27 and retain investment (Swinburn et al., 2006). South Africa as a young democratic state has a conservative economic history strongly rooted in commodities (e.g. minerals and agricultural produce). During the apartheid era, the majority of South Africa's citizens were deprived of land, skills and opportunities to establish businesses, the consequences of which are deep-seated challenges to rebuild the economic competence of the country.
In an attempt to address the inequalities of the past, the South African government has implemented a number of economic policies. At the heart of economic transformation has been the adoption of a Local Economic Development framework, which underpins planning and employment creation at the local level (DPLG, 2003).
According to Madumo (2015), the apartheid system was characterized by a robust focus on central planning and control with no role for local authorities to play in economic planning and development. Moreover, since local authorities were excluded from participating in issues affecting their community, there was a clear policy of marginalizing the townships and rural areas where the populace was non-white in favour of urbanization (Worden, 2011). To maintain the system, the apartheid government used a top-down approach which did not yield a progressive result on development (Rogerson, 2009). The democratic dispensation of inclusive government is in the spirit of constitutional democracy that emphasizes community participation, the foundation of the Constitution together with the Bill of Rights.
Local government is a sphere of government vested with a varied range of activities to enable the local environment to face up to the demand of its populace without compromising its mandate of autonomy (Madumo, 2015). Rogerson (2010) articulates that the White Paper on Local Government, 1998 also paved the way for various pieces of legislation. Asmah-Andoh (2009) states that the White Paper on Local Government, 1998 defines developmental government as a local entity dedicated to work with the local populace to find progressive ways to implement social and economic development to sustain the quality of lives of the people. The White Paper on Local Government, 1998 promotes local government as an essential tool for cooperative, good governance and to encourage socioeconomic development.
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