Local economic development, an emerging reality in sub saharan africa

2.3: Alternative Theory

The locality theory: The locality theory could have been one of the theories treated in this report but due to limited time and space, it is only mentioned as an alternative theory that ought to have been part of this research work. The locality theory states that, a locality is a descriptive term for a place where people live their daily and domestic lives. The theory has been refined to also focus on social processes occurring within particular localities or places and the important role of governance operating within that locality (Nel, 1999: p. 24). This leads to a shift from the view that a locality is a passive location of economic activities to an endogenous approach that lays emphasis on the unique factors of the location in determining economic processes within such localities. It focused on the distinctive attributes found within specific communities and the degree to which the natural characteristics and social conditions in such places determine future development (Ibid, p. 26).

2.4: The aim of the Thesis

Until now, most research on LED has been biased by focusing predominantly on the developed world. As such, this research intends to break new grounds in applying LED and practices to problems specific to the developing world - LED in the RSA. Because of the upsurge in LED, it has created a new power relationship between the various actors in conceiving, defining and implementing developmental issues within localities. With the new role in the implementation of developmental issues there are bound to be new actors assuming different responsibilities within this context. This in effect creates new challenges and new responsibilities. This therefore makes it important to explore how best the stakeholders can better manage processes of LED and foster its growth there by alleviating poverty in SA.
This report also aims at considering LED as a tool that can be used to unlock economic opportunities and make them available to people within their communities. It intends to look at how LED projects have been applied to a more thoughtful response to conditions of poverty in the case study in question which will be examined subsequently in this research.
This report seeks to look at the increased attention focused on LED and its emergence; how local action interacts with the legal, institutional and structural factors to provide possibilities and constraints for the development of LED.
Furthermore, this research intends to look at the international experience which suggests that the opportunities arising from economic globalization benefit economies that are globally competitive. The threats of globalization are more severe for economies in low and middle-income countries especially the marginalized areas within them. The logic of globalization is not only of integration; it is also of greater exclusion and differentiation within less competitive communities. As such it becomes imperative to investigate other measures to mitigate these globalization adversities (LED) within communities in SA.
This report equally aims at looking at how the new government of SA embraces LED and what strategies they have put in place towards empowering people within communities who had been brutally disempowered by apartheid for many decades.
This will in effect widen our views on development and international relations and increase our knowledge on policies of LED and poverty. With the emergence of LED, we will find out if this economic approach has the ability to overcome the weaknesses inherent in conventional economic policies within communities, thus alleviating poverty in SA.

2.5: Literature

This research work will make use of the following literatures: The “White Paper on Local Government” in South Africa which outlines the role of LG in the social and economic development of municipalities. The LG is captioned “developmental local government” with the special mandate to promote LED (DPLG, Content, 1998). Furthermore, this research will make use of “The Investigation of Pro-poor Local Economic Development in South Africa”, a policy paper that outlines an investigation into the LED situation of SA funded by the World Bank through the Netherlands Trust Fund and the Development Bank of South Africa. The constitution of SA, text books, academic publications and other internet materials relevant to LED shall be used in this report. When used cautiously, they will provide updated and current information for this research topic. However, this report will rely predominantly on secondary data relevant to this research topic because it will save time and money. Considering that the project has to be submitted within four and a half months, it makes it even more appropriate to rely on secondary data so as to meet up with the deadline. This will enable a better formulation and understanding of the research problem and broaden my views on other research work within the same field. It will facilitate the verification process of the material and the reliability of the information and conclusions will be greatly enhanced (Ghauri and Gronhaug, 2002: p. 78).

2.6: Definition Terms

For the purpose of clarity, it will be necessary to attempt a definition of certain terminologies used in this report. This will give a more focused meaning of the words and their contextual meaning.
Local Economic Development

Imperative to this research is the need to clearly attempt a definition of what LED is. Like most definitions in the field of social sciences the term is far from being unequivocal. Nel Etienne presents the definition of LED as advanced by Zaaijer and Sara as “essentially a process in which local governments and/or community based groups manage their existing resources and enter into partnership arrangements with the private sector, or with each other, to create new jobs and stimulate economic activity in an economic area” (Nel, 1999: p. 5).

Furthermore, Nel uses the works of Bennett and Stohr to give a more definitive value of LED as “an initiative and entrepreneurship, which can occur in both urban and rural areas having a sub national or sub-state action” (Ibid, p. 6). The first definition did not qualify the sphere of LED but rather referring to an economic area which may be a country or a trade bloc.
According to Blakely and Bradshaw, LED refers to “the process in which local governments or community-based organizations engage to stimulate or maintain business activity and /or employment. The principal goal of local economic development is to stimulate local employment opportunities in sectors that improve the community using the existing human, natural, and institutional resources” (Blakely and Bradshaw, 2002: p.xvi). Although these definitions cannot be taken as the final statement of what LED is, they do provide a broad insight into the overall orientation of the concept.
Local or locality is used here to mean a geographic area composed of municipal institutions under a local government administration (DPLG, Section D, 1998).
Local Government: Local government will refer to municipal level government irrespective of whether they are metropolitan governments, district governments or local municipalities (Blakely and Bradshaw, 2002: xvi and DPLG, Section D, 1998).
Poverty

Diverse notions of poverty underpin the mainstream and alternative views of the definition of poverty. Most governments, international organizations and citizens around the world adhere to the orthodox conception of the definition which refers to a situation “where people do not have the money to buy adequate food or satisfy other basic needs, and are often classified as underemployed.” This main stream view of poverty based on money evaluation has arisen as a result of globalization of western culture and the expansion of the market. Thus since 1945, the meaning of poverty has almost been universalized and poverty is seen as an economic condition dependent on cash transactions within the economy. This refers to those living on less than a dollar per day. What ever the case, there is a basic consensus on the material aspects of poverty such as the lack of food, clean water and sanitation, etc (Baylis and Smith, 2005: p. 647).

According to Sen, “poverty can be sensibly identified in terms of capability deprivation”. This is a more resounding definition of poverty as it emphasizes on the deprivation of basic capabilities rather than merely lowness of incomes (Sen, 1999: p. 87).
The above definition is in compliance with the definition put forward by the Copenhagen Declaration of the World Summit for Social Development which defines absolute poverty as “ ….a condition characterized by sever deprivation of basic human needs, including food, safe drinking water, sanitation facilities, health, shelter, education and information”. This definition does not only rely on lack of income but also dispossession or deprivation which undermines human well-being either in civilized societies or primitive societies where cash transactions are virtually unavailable for economic dealings (Spicker et al, 2006: p. 8).