Local economic development, an emerging reality in sub saharan africa

CHAPTER 5: ANALYSIS, CONCLUSION AND PERSPECTIVES

5.1: Analysis

The world has observed decades of unprecedented development policies aimed at solving poverty yet there is an increased gap between the rich and the poor. Poverty remains widespread while world leaders have never relented efforts in abetting poverty eradication. In this light, the government of SA is concerned enough to engage new development policy agenda that will adapt with the exiting economic challenges facing localities. The extent of poverty as a socio-economic and political problem within SA cannot be over emphasized. This is why the government decided to take the bull by the horns in introducing LED with the intention of strengthening the economic capabilities of localities and improving their quality of life in an attempt to eradicate poverty. This is to be achieved through the evaluation of local potentials for the development of localities thus creating a situation where local solutions can be found to solve national problems. The intention was to create an enabling environment for the use of the enormous local economic potentials to jump start the economic advancement of localities. The guiding policy behind this vision is that, the complex global economic structure is unable to solve problems that are peculiar within specific localities. Therefore people living in communities in SA were concerned about their own economic future through the application of LED. Thus LED became a veritable economic possibility in the eyes of South Africans competent to propel job creation, improve income, greater participation of the poor in decisions and most especially in directing the social, economic and political destiny of their localities. Achieving all this is not a day’s job nor is it the responsibility of a selected few; the participation of all stakeholders is required for the achievement of this lofty ambition.
Although the RSA has the largest economy in SSA, the highly dualistic nature of its economy precipitated an increase in the gap between the poor and the rich thereby creating a situation where the country’s wealth is in the hands of a few. The deeply entrenched imbalances caused by decades of apartheid are intended to be reversed through LED thereby eradicating poverty. As such it is no surprise that 40% of the population is unemployed and the new government had to institute new policies which will not only transform the economy but also reconcile racial divide and poverty alleviation. The corner stone in achieving this is the LED strategy embarked on by the state through local municipalities. The significant attention attached to poverty as expressed in the millennium development goals cannot be underestimated that is why the government of SA thought, through LG in their LED endevours poverty could easily be overcome. It is no wonder that local governments were given greater responsibilities through decentralization to enable them accomplish their LED ambitions. The pursuit of LED was because of its ability to address poverty through job creation, social inclusion and the re-orientation of economic policies from “top-down” to “bottom-up” approach. This could not be achieved without an appropriate legal framework. Not only was the constitution of SA in favour of LED, there are equally other related legislations such as the White Paper on Local Government of 1998 and the reconstruction and development programme which was a direct policy instruments aimed to beef up LED programmes. Furthermore there was the pro-poor LED paper sponsored by the WB through the Netherlands Cooperation and Development Bank of SA, which is intended to guide LED towards poverty alleviation.
The role of LG is further amplified as a developmental local government became self evident. Not withstanding the policy support for local governments through the constitution, other related legislation and the considerable devolution of power to municipalities; the government’s free market thinking in a dominant neo-liberal era seems to compromise the basic philosophy in LED. This has incited remarks on how the government intends to reconcile these positions. Armed with the necessary legal support, LG’s were at the forefront in maximizing social development and economic growth, integrating and coordinating community activities, democratizing development, empowering and redistributing resources in favour of the poor. This makes municipalities more strategic, creative and influential in the way they function. All these will eventually enhance the advancement of LED within SA and poverty alleviation.
Therefore, LED requires more talented and skilled personnel to direct its activities, such as designing a monographic study and strategic plan for councils. This will enable a more focused development strategy which is to be achieved through a participatory economic analysis of the development needs of the municipalities. The merits of a participatory economic analysis are that, the community own and design their development goals by involving all stakeholders. This is to enable the identification of economic poles that are very competitive in terms of quality, quantity, price, delivery, better services, regular supply and guaranteed markets. Establishing all this is not an easy task for the municipalities because most often, these municipalities lack the technical know-how in implanting LED policies. Considering that LG’s are mandated on a political basis rather than shared technical experience, the development of any municipality becomes predicated on the dynamism and competence of the local administration. This is why some of these LED programmes are bound to fail shortly after take-off or because of poor coordination and lack of competent personnel to run the programmes.
Although there is a significant policy and legal basis for the application of LED in other to alleviate poverty in SA, there is no formally approved policy frame work for LED. This has led to mixed results from one municipality to another or from one LED programme to the other thus hindering a consistent LED success story within the country. The lack of an embracing poverty alleviation LED policy document geared towards the poor weakens the strength of its achievement especially within rural communities where the populations are most vulnerable. In this dilemma, some municipalities caption their LED programme pro-growth while other municipalities titled their own programmes pro-poor. There is no denying the fact that mainstream LED planning in SA is dominated by market-led activities aimed at achieving economic growth, which is re-echoed by the new government’s neo-liberal thinking. What is so fundamental is the fact that economic growth is a means to an end and not an end in itself. That is why it does not amplify poverty alleviation but gives a general projection as to the overall economic situation of the locality or economy which makes it impossible to address poverty directly. The Johannesburg case study had to reconsider its focus from pro- growth to pro-poor with the need to enhance the quality of life for the urban poor. This recommended that the institutional framework of LG’s safeguard needs to be devoted to alleviate poverty. This is because economic growth from both economics and development stand point is not a precondition for poverty alleviation. The HACOP project which is pro-poor and community-led, has witnessed considerable successes in job creation, improved income and household food sufficiency. Although both case studies have achieved considerable job creation, these ventures have been unable to contain poverty due to the high entrants of job applicants within SA.
Although many LG’s understand the importance of LED and larger municipalities have assigned staff to apply the policies; some local authorities are yet to develop appropriate LED programmes. On the other hand some LG have developed LED policies but the practical applications are slow within their localities. Therefore, LED does not always enjoy direct support at local council level and investments in LED are insufficient to overcome poverty due to lack of funds.
Due to the high incidence of poverty in SA, LED in rural municipalities are focused on poverty intervention, yet this is also undermined by the severe poverty situation and the limited capacity and limited resources to overcome poverty. This explains why, despite the considerable priority given LED by the South African LG, there is uneven and unreliable delivery in the programmes poverty alleviation outcome. It is for this reason that writers such as Regerson asserted that “there is a strong pro-poor focus of LED in rhetoric than it has been in practice within SA”.
The emerging reality of LED in SA with its significant achievements in terms of policy, application on the field has been undermined by the absence of a guiding national policy; lack of direct political links and a weak institutional support hinder its objective to alleviate poverty within municipalities. The political will should even be stronger to complement the policy objectives of LED for a more remarkable outcome.
From empirical observation starting LED initiatives is not a simple undertaking, as it involves overcoming the constraints present. LED implies learning at more than just one level. It is more of an interdisciplinary venture and focuses on collaboration between government, non-governmental organization and the community to promote business development at local level. Learning all this at the same time is quite a challenge to municipal authorities. Yet their LED initiatives tend to be overambitious, i.e. addressing multiple and or highly complex projects which cannot be realized within a short period. Even when LED programmes are not overambitious and complex, we often fail to notice these projects require much time, expertise and it may take more than ten years for concrete achievements to be realized. That is why development endevours aimed at alleviating poverty may span from 1 to 25 years within the short term, mid-term and long-term development plans. Nonetheless, both the community and observers often expect instant results. Whatever the case, LED initiatives could be a sign of relief to the previously excluded or the economically poor within localities because their involvement in ventures that concern them directly helps to better plan, manage and control local development processes and resources for their own common good.
With regards to the theories alongside LED programmes, it looks like a white elephant conceptualize to solve the economic situation within communities. These theories are western designed and fail to take into consideration old socio cultural practices which have been engraved into third world. This is worsen by the fact that theories are idealistic and abstract meant to arouse the feelings and curiosities of academic philosophers in their critical thoughts which sometimes do not comply to the practically realities of localities. That is why theoretical perceptions are always tampered with by field researchers and they run at variance with conceptual thinkers because altering the theory per se undermines the very essence on which these theories were predicated thus watering down the vigor in the theory. This makes field researchers not able to evaluate the theory in its own right as the distortion in the course of its application may not be able gauge the extent of its merit.
There has been an increasing agreement within donors, governments, CSO’s and NGO’s that economic liberalism is necessary to replace state-led development for greater international competition. Free markets and free trade will produce the greatest social, political and economic gains for everybody in SA. Where the market is self regulating it allows the trickle down notion of wealth distribution in society. An unregulated market is the best way to increase economic growth and ultimately alleviating poverty in the country. What ever the case, the above assumption of neo-liberalism is incomplete. Polanyi in his Book “The Great Transformation” contends that any modern market requires extensive political and legislative intervention. This is because when economic restructuring has severe consequences on the poor, the role of the state is to give capitalism a human face by empowering the poor in both markets and politics - social safety nets. He justifies his argument by stating that “free markets could never have come into being merely by allowing things to take their course…laissez-fair itself was enforced by the state”. It is an unobtainable dream to talk of an entirely free market system which is without social relations. A self-regulated market requires the continuous interference and monitoring by the state in other to protect the society against the dangers inbuilt in a self-regulated market. Therefore it is untenable for the neo-liberals to think of completely “rolling back the state” instead of increasing intrusion and regulations by the state to regulate economic processes in a way that will overcome poverty. The consequences of an unregulated market may lead to social destruction or even war within the society. This therefore makes the case for LED more acceptable as local communities need the assistance of state apparatus to strengthen localities. Williamson clearly acknowledges the fact that enforcing market fundamentalist policies could not provide an effective framework in combating poverty. There is therefore an unavoidable connection between the market and social relations which creates an avenue for both market forces and government intrusion to coexist in any civilized system worth its name.
With regards to the empowerment theory, it is a practical concept which is used by many organizations in their operations especially patterning to poverty alleviation programmes. The hallmark of the theory is that it is a practical concept which is not only used at the level of strategic intent for academic purpose. The manifestation of the empowerment theory to LED is very evident as it blends the practical reality and the theoretical framework within which LED operates. It encompasses all the facets of LED in relation to poverty alleviation. The theory lays emphasis on participation, capacity building, economic improvement, democracy and transparency which are the watch words for any successful LED programme capable of overcoming poverty in SA. It seeks to give power to those who do not have power in a system by taking them out of poverty. This theory also looks at empowerment through self-awareness, transparency, democratization and empowerment through gender balance. The theory recapitulates poverty alleviation through LED in SA by incorporating some basic attributes of the concept of good governance such as transparency and democratization, which strengthens the practical application of the theory. What is startling is the enforcement of the empowerment theory within the South African society. The theory has not yet acquired a socially agreed content thus making it a sanitized buzz-word divorced from the real understanding of power and its implications. If the full meaning of the theory is to be applied it will mean equalizing or near equalizing power by empowering those who do have power in the system which becomes the practical difficulty in SA. Power is usually monopolized by the elites and powerful politicians who control the system. The theory has been co-opted by those in power so as to enable them rob it of its threatening meaning by managing power in their favour as they fear the theory will take the unempowered into positions of power or equalize power which will be against their interest. Empowerment through participation is often taken to mean engaging local people at the grassroots through their paid labour or informing them of top-down directives without the people having the power to decide on any critical issues relating to the projects. Elites in the third world appropriate wealth to themselves by monopolizing power at the political level and through corruption at the administrative level, as such they acquire political, economic and social power for their personal gains and looking at the process of empowering the unempowered as ceding aware what is within their exclusive prerogative. This has been compounded by the fact that empowerment has become a strategic objective of social change yet the project remains the instrument to effect change rather than the people. This is because the success of the project is very central in drumming support. Therefore empowerment goes beyond policy papers or design programmes aimed at empowering communities by elites, NGO’s and other multi lateral bodies. Rather, it requires the concerted efforts of all the stakeholders and most especially the unempowered within communities. However, political manipulations by elites to control power for their selfish interest will be compromised where the concept of good governance is highly respected. This concept guarantees legitimacy of government, popular participation, accountability, transparency, political and social pluralism in a genuine democracy. The strength of the empowerment theory in its practical dimensions to overcome poverty in a country like SA is that the theory does not operate in isolation but functions within defined code of conduct of the concept good governance. Building local capacities like any development process takes time as it involves other institutional development within the system. It will be naive to think local capacity building can be achieved with a single project or instantly. Capacity building is a process and like any social process, it relates to other institutional measures which must be developed for its efficient implementation in SA.
It is true that LED and poverty alleviation are best applicable through democratic devolution of power to local municipalities, which enhance participation, greater control over local programmes by the stakeholders, increase resource mobilization by the communities, democracy and good governance. That is the bases of Wolman’s arguments for the decentralization under the efficiency values and governance values. This will lead to greater maximization of social welfare and greater reaction of public authority to the needs of the people such as the application of LED programmes to alleviating poverty. Local people in SA will be bound to control the processes of development within their localities in order to alleviate poverty. This theory may not achieve its full potential in that decentralization creates disparity between more resourced and less resourced regions in SA. Secondly, democratic devolution of power is not always accompanied by the available financial and technical resources to enable municipalities bolster their development potentials. Local elites tend to monopolize the political processes at the local level for their personal gains. The argument for resource disparity may not be tenable because the national government in SA gives financial and technical assistance to LG who act in sub-national capacity to guarantee balance development within the less resource regions. There is greater ability to solve problems of poverty at local level within a decentralized LG system than at national level because local politicians are directly answerable to their citizenry. At the local level there is greater legitimacy of government through local elections, popular participation accountability and transparency which is beefed up by a legal framework that assures the rule of law at local level. Corruption and abuse of public office at the local level in SA cannot be stopped completely, what is important is a regulatory system that will guarantee checks and balance in the conduct of public authorities at local level. This strengthens local public administration and gives citizens the trust in their system as public authorities are answerable for their acts or omission in rendering public duties. This enhances the prospects of poverty alleviation within SA through LED.
From the above analysis it is eminent that there is no clear cut model in achieving poverty alleviation through LED. This is because the various theoretical arguments advanced are manifested by problems inherent in their application. This creates an avenue to reconcile how the concept of LED can achieve its goal of poverty alleviation. Therefore, the concept of good governance creates an enabling environment for the guiding principles of a successful development agenda in SA. This is not predicated on economic reforms or on perceived academic theories to guide development processes but rather on prescribed rules to enable development policies achieve its maximum potentials. In this light, scholars, development organizations and governments have consider the concept of good governance as an end in its own right for the achievement of the development goals of a country such as SA – LED and poverty alleviation. Although the concept of good governance is so broad, when applied meticulously it will lead to maximum results. The concept prescripts how issues such as democracy and development, popular participation and development, corruption and development, state capacity, transparency are applied within the development domain. The attributes of good governance which comprise: legitimacy of government, appropriate legal framework to guarantee the rule of law, popular participation, political and social pluralism, accountability etc when applied in the socio-economic and political reform process in SA will lead to admirable outcomes of the LED and poverty alleviation.
These tenets of good governance are generally aligned with genuine democratic governments at both national and local level and should be applied with all the fairness to achieve the expected results. However, it will be no aberration to point out that some elements of the concept of good governance can be found within authoritarian governments and the same time, democratic systems may show some weaknesses which does not comply with the concept.

This analysis points to the most important problems facing LG’s but the evidence set out above and the theoretical framework which supports it identify effective democratic representation and corruption as the most urgent challenges municipal governments face in achieving poverty alleviation through LED. Lack of local capacity problems are of secondary concern and could easily be solved by designating the appropriate competent administrators to direct local activities. However the main concern of LG’s programs centre on finance, capacity building measures and implementation. These activities relate to the management of municipal governments and ignore the profound problems of public accountability and legitimacy of LG. We need not ignore these problems because we may jeopardize all efforts of LED and poverty alleviation within localities by putting resources and knowledge in the hands of those bent to impede local development.

Efforts should be geared towards the promotion good governance and public responsiveness to local needs and demands. There is no society that is void of corruption and as corruption cannot be completely eliminated within SA, they should be legal instruments to hold public authorities fully responsible for their actions. Such a system will produce a breed of politicians who are interested in turning popular needs into municipal outputs and will ensure that poverty is an integral part of LED. They will shun the temptation of using public goods for their personal gains or the use of public offices for their selfish political interest. Such a system does not come about suddenly but depends upon a number of minimum political and social conditions. There is need for an open, just political system free to all political parties with free and fair elections. Transparency in local political and economic affairs that enable access to information on the political and economic dealings of LG is necessary. There is need for social cohesion to enable the people to galvanize their existing potentials by agreeing on desired developmental options for their localities. The role of the central government to serve as an impartial administrator in the local government process is so fundamental in the success of LED overcoming poverty in SA. Not withstanding the role of the central government, significant degree of local autonomy is crucial if LG’s are to take control of the process of LED and poverty alleviation.