2.2 Defining LED and understanding the relationship between LED and poverty
2.2.1 Role players in Local Economic Development
In the above section LED is viewed mostly as the initiative that emphasizes partnership with stakeholders. Meyer (2013) provides the service delivery triangle that relates to LED consisting of local government, private sector and local communities and he indicates that local government must take a leading role. The question one may ask is who is local government? Ramukumba (2014) states that local government refers to an administrative body for a small geographic area, and the focus of local governments in South Africa is to structure and manage their administration, budgeting, and planning processes to give priority to the basic needs of the community and to promote economic development of communities, which is central to LED. Through the service delivery triangle mentioned above, Local Economic Development can be viewed as the process in which the role players, which include local governments, the private sector and various community organizations engage in order to stimulate business activities (Park and Wang, 2010).
A Local Economic Development Officer (LEDO) can play a key role in identifying stakeholders, forging partnerships and engaging the wider community around the LED process. The LEDO’s role can range from that of a resource person who provides technical assistance and support in communities where there is an existing strong local governance infrastructure to being the key driver of the LED process in communities where a strong catalyst is needed to bring about broad community and stakeholder engagement (Park and Wang, 2010).
21 Figure 2.2:Role of the Local Economic Development Officer
A LEDO must be able to tap into knowledge of the local economy as well as knowledge of the wider national and international economic context. A LEDO’s primary role is to foster and support productive relationships and effective partnerships (illustrated in figure 2.2 above). In an environment of limited time and resources, a LEDO’s effectiveness is directly related to his or her ability to tap into professional and community networks for resources, advice, exchanges and partnerships.A LEDO facilitates the process whereby communities identify and act upon economic opportunity. More than that, the LEDO helps to build capacity within a community to find collaborative approaches to addressing economic and social challenges. The lasting impact of a LEDO’s work is only partly reflected in specific projects or initiatives. The true legacy of the LED process is a stronger, more self-sustaining community that is able to problem-solve and implement innovative solutions to economic challenges beyond the life of specific projects or interventions. In this process, local governments, community organizations, and private firms have to play the essential role (Park and Wang, 2010).
The role of LEDO Provide leadersheep through broad
community involvment
Promote economic well- being in a context
of community
Provide technical expertise and
analysis
Support visioning and goal setting Communicate
effectively in order to build
strategic partnerships and
engage with the community Monitor, evaluate and report on the impact of projects
and activities
22 Moreover, Ramukumba (2014) states that partnerships [should] focus on managing the existing resources so that they can create jobs and stimulate the economic growth of an area. This idea is supported by Park and Wang (2010) who elaborated that placing [the responsibility of] local economic development authority on public-private organizations is a more cost-effective way of carrying out development activities, and by using cooperative mechanisms creates faster performance in economic growth than relying solely on either public or private organizations. Therefore, local people, with assistance from local government, play an active part in planning their own economic future and when local business is involved in the process they are more open to playing an active role in partnerships with local communities and acknowledging the importance of LED in their community through providing markets for local products and training. Koma (2014) states that LED initiatives are seen as being important for various reasons, for example, to create jobs and create other new economic opportunities to increase income levels thereby enabling municipalities to pay for services and broadening the tax and revenue bases of the municipality.
LED initiatives intend to empower the most vulnerable, marginalized and poorest sectors of local communities to raise sufficient income to meet their basic needs and aspirations.
According to Clark, Huxley and Mountford (2010), Local Economic Development builds the capacity of a defined territory to improve its economy and the quality of life of its people. Moreover, through the effective administration on the part of the role players in Local Economic Development, disparities between the rich and the poor can be reduced and there can be an increase in private sector investments, which then contributes to local and national Gross Domestic Product (GDP). The KZN Department of Co-operative Governance and Traditional Affairs (2016) indicates that municipalities can play a crucial role in promoting LED as a coordinating body through the Integrated Development Programme (IDP) to draw together developmental objectives, priorities, strategies and programmes of the municipality to ensure that LED initiatives are coordinated within the municipality together with other municipal programmes linked to national and provincial initiatives. Municipalities also serve as facilitators to improve investment in the area and as stimulators for business creation and expansion. Seduma (2011) and Madumo (2015) state that LED activities are legally mandatory for every municipality in South Africa as an important part of the municipal IDP. The success of LED role-players in South Africa has been due to the provision of short-term jobs that are not sustainable and this has