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EVALUATING LOCAL ECONOMIC DEVELOPMENT INITIATIVES IN SOUTH AFRICA: EVIDENCE FROM THE CITIES
Etienne Nel and Tony Binns

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Unpublished paper presented at the Africa Studies Association Conference, Birmingham, UK. September 2002-11-09
(for SA Cities – 9/11/02)
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Abstract

The demise of apartheid in the early 1990s has left South Africa with an indelible social and economic legacy which is characterised by racial division and discrimination. Various efforts have been made to bring about economic regeneration and social reconciliation in South Africa's towns and cities. Within the broad parameters of what is termed 'developmental local government', these development initiatives aim to address apartheid-created social and economic divisions, whilst simultaneously attempting to stimulate broader economic growth and address issues of social justice and pro-poor development. In general, the results thus far been somewhat mixed, but as case-study evidence suggests, it is clear that some significant improvements have taken place in certain urban centres, particularly in terms of market-driven initiatives. The paper critically examines selected initiatives to promote ‘developmental local government’ in some of South Africa’s cities, and attempts to assess the degree to which such endeavours are addressing issues of economic development, social justice and pro-poor development.
Key Words

Developmental Local Government, Decentralization, Devolution, Local Economic Development, South Africa, social justice.

Introduction

Economic and urban regeneration are clearly dominant themes in contemporary urban, social and economic development as are associated issues of social justice and the degree to which developmental interventions can impact positively on social well-being. Throughout the world, cities are struggling to grapple with the often conflicting forces of globalism, localism, neo-liberalism, marginalisation, technological and economic change and decentralization, which have variously advantaged and peripheralised urban centres. Overlying this context are a range of social and ethnic considerations, which are themselves often an outcome of global integration, which can variously lead to conflict and accommodation (Goetz and Clarke, 1993). Issues of globalization, such as the search for global investment, marketing cities as global centres, together with the provision (or attempted provision) of facilities and infrastructure of a so-called ‘global standard’ are being pursued by cities around the world. These processes are occurring with remarkable vigour in South Africa’s metropoles, which, after decades of isolation are endeavouring to cater for the needs of global commerce and tourism as rapidly as possible (Rogerson, 2000). According to the South African Minister of Provincial and Local Government, ‘…Increasingly, cities are the focal points of international finance and labour markets, as they (cities) become key nodes in a global economy’ (Mufamadi, 2001, p2). As cities seek to ‘re-image’ and ‘re-create’ themselves in a global era, often as a result of deep-rooted economic and social changes, some notable and innovative economic regeneration initiatives are evident. In the developing world, however, where poverty levels are frequently of a different order of magnitude from developed countries, and where globalisation has often had a devastating effect, it is often survival, rather than prosperity that is a more dominant theme (Binns and Nel, 1999).

This paper focuses on the cities of South Africa, which for decades have been the locus of violent racial conflict, and which now, in the post-apartheid era, are faced with the dual challenges of adapting to a rapidly changing global and national economic and urban context, whilst simultaneously trying to address the desperate legacy of racial and class inequality and conflict and in so doing, hopefully address issues of social justice. In facilitating a response to these multi-faceted challenges, the South African government has, since 1994, initiated a noteworthy battery of policies which have been designed to promote reconciliation, decentralisation, local empowerment, participation and development at the local government level. Broadly referred to as ‘developmental local government’, this multi-faceted strategy marks a significant shift from the previous dispensation of ‘top-down’ development and represents a serious attempt to deal with the apartheid legacy (Pycroft, 2000a). In the light of the fact that the majority (53.7% in 2000 – StatsSA, 2000) of the country’s population is urban-based, and that the bulk of those people stay in the largest cities and metropolitan areas, developments within these areas are significant in setting the tone for the country’s future (StatsSA, 2000). As the Minister for Provincial and Local Government has stated, ‘...Our cities are the engine rooms of economic growth in our country. They generate over 80% of South Africa’s gross domestic product and are the key source of the bulk of government revenue. The ten largest cities in South Africa have a combined municipal revenue of R40 billion per annum, which constitutes 75% of all municipal revenue in this country. For these reasons alone, it is critical from a national government perspective that our large cities are well managed’ (Mufamadi, 2001,p1). In contrast to local government policies in many other parts of the world, it is apparent that South Africa’s policy and government resources are targeted primarily towards addressing issues of poverty relief, with broader economic development as a secondary focus, a reality reflected in the recent draft Local Economic Development policy (DPLG, 2002). At the local government level, however, whilst this focus is clearly acknowledged, actual practice suggests that economic development is much easier to pursue and achieve than are issues of poverty relief. This suggested difference between policy and practise unfortunately serves to reinforce the perception of South Africa as being a country of ‘two-nations’, one wealthy and one destitute, an observation that has been frequently made by President Thabo Mbeki (Daily Dispatch, 2 June 1999). The paper considers the broad conceptual framework of urban development and then examines South Africa’s apartheid legacy and post-1994 local government and development policy. With reference to the country’s major urban centres, the paper then examines how they are coping with the twin challenges of economic growth and poverty alleviation. Resulting policy and practise is assessed in the light of the economic success achieved and the impact which such interventions are having on social justice considerations.