Transcript Session 5 - Parliament of South Africa

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LG Week
31 July - 03 August
Role of LG in Rural and Local
Economic Development
Session 5: 31 July 2012
Cllr D. Mazibuko – NEC member &
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Chairperson of Econ. Dev &Planning Working Group of SALGA
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Outline
•
Overview
•
Rural Development
– Background / Context
– Problem Statement
– Key Issues
– Conclusion
•
Local Economic Development
– Background
– Problem Statement
– Key Issues
– Conclusion
•
Recommendations
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1. Overview
• There has been much debate in the last few years on the role
of LG in stimulating or facilitating economic development and,
even more recently, its role in developing rural communities
and areas.
• In the context of LG’s now well established developmental
mandate, these two areas are relatively new ground and
exploratory in nature.
• This presentation, as the discussion document, contextualises
the debate on, firstly, the role of LG in the rural development
priority of govt and, secondly, in stimulating local economic
development .
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2. Rural Dev Background & Context
• In order to articulate the role of LG, it is important to understand how
rural dev is contextualized from a legislative/policy and implementation
framework & how concept of rural development has evolved.
• Rural development has been defined as “positive advancement of
communities in rural areas through improvement of rural institutions and
systems, expansion of rural infrastructure and growth in rural economic
activities”
• While rural development includes provision of physical and social
infrastructure programmes-it is more about developing systems and
process to enable the empowerment of rural people.
• Because rural development has a spatial dimension and get
implemented in “municipal” spaces, the role of LG cannot be
overemphasized.
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2.1 Problem Statement
• In terms of schedule 4 Part A of the Constitution, “Urban and Rural
Development” is identified as a functional area of concurrent national and
provincial legislative competence. Part B of schedule 4 also identifies
“Municipal Planning” as an area of competence of LG.
• Key issue lies in defining or determining the role of LG when the prov and
nat spheres are performing their constitutional mandate with regard to
“urban and rural development”, given that actual project execution occurs in
municipal spaces.
• Furthermore there are overlaps between the Comprehensive Rural
Development Programme initiatives and LG initiatives that fall under
“municipal planning”, which requires better alignment and coordination
• Municipal IDPs are still the best tools to coordinate and align the various
rural development initiatives by the other spheres of government–
strengthening of IDP process is therefore key.
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2.2 Key Issues
2.1.1. Defining the role of municipalities in Rural Dev
• Notwithstanding the legislative framework, any rural development
initiative should clearly articulate the role and expectations of
municipalities in the short- and long-term.
• Lack of resources at municipal level to plan and implement rural
dev programmes, should be used as an indicator of areas where
the LG sector requires support in order to fulfil its developmental
mandate
• Building of municipal capacity should form an integral part of the
rural development strategy.
• Municipalities must therefore play a central role in project
identification, planning, implementation and management .
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Key Issues
2.2.2 Rural dev institutional arrangements
• The multi-dimensional nature of rural development and associated
complexities require appropriate and sustainable institutional arrangements
that empower the rural communities to fully participate in rural
development.
•
The role of the various stakeholders in the current rural development
initiatives has not been adequately articulated.
• Some of the sector departments’ programmes are being implemented in a
top to bottom fashion with varying degrees of participation by municipalities,
and this has implications on the sustainability of such programmes
• Sustainable institutional arrangements should be able to respond to the
specific dynamics of the particular project community and where possible
should avoid a “one size fits all” approach.
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Key Issues
2.2.3 Building mun capacity to plan, implement and manage Rural Dev
• The dev of municipal capacity is key to long term sustainability especially
in cases where the initial project resources are provided by sector
departments or non-governmental organisations, whose involvement will
be for a limited period.
• There is little evidence of systematic municipal capacity development as
integral part of current rural development initiatives.
• There is more emphasis on visible “projects” as opposed to developing
systems and strategies that are aimed at supporting the rural people in
their fight against rural poverty.
• There is need to focus on the development of municipal capacity to
manage dev initiatives is therefore critical for long term programme
sustainability.
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Key Issues
2.2.4 Coordination and Alignment of Sector Dept Initiatives
• Nat and prov departments as well as LG are all involved in
rural development programmes that require careful
coordination.
• IDPs are supposed to provide an opportunity for project
coordination, but are compromised by the lack of meaningful
participation by other key stakeholders.
• It is therefore important that policy proposals that are aimed
at improving the livelihoods of rural communities be
developed in a manner that strengthens the IDP process as
a single window for projects coordination and alignment.
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2.3 Conclusion
• The development of sustainable strategies requires systematic and targeted
institutional capacity building to deal with matters such as project
management and coordination of the activities of various players in the rural
development agenda.
• The articulation of the role of municipalities in rural development as well as
municipal capacity building should be at the core of any sustainable rural
development strategy.
•
It is recommended that:
– Municipalities be capacitated to play a leading role in rural development
as a way of addressing the challenges associated with alignment,
coordination and sustainability of rural development programmes.
– Sector Departments focus more on municipal capacity building initiatives
as an integral part of rural development programmes, in order to ensure
programme sustainability.
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3. Role of LG in
stimulating LED Background
• Key Questions for Consideration:
– What is local economic development / LED?
– What are the national, provincial and municipal roles
and responsibilities in supporting LED?
– Why the successes in LED so low? Why are LED
strategies not executed? What are the root causes?
– What is SALGA’s role in supporting improved
municipal LED practice?
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3. Role of LG in
stimulating LED Background
What is LED?
• “Process by which public,
• “To build robust and inclusive
municipal economies at district
and metropolitan level
exploiting local opportunities,
real potential and competitive
advantages, addressing local
needs and contributing to
national development
objectives, such as economic
growth and poverty
eradication”
DPLG’s 2005 LED Policy Guidelines
business and non
governmental sector
partners work collectively
to create better conditions
for economic growth and
employment generation.”
World Bank Definition
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Traditional development policies
Top-down approach in which
decisions about the areas where
intervention is needed are taken in
the centre
Managed by the central
administration
Local economic development
Promotion of development in all
territories with the initiative often
coming from below
Creating a
conducive
Decentralized,
vertical cooperation
environment
between
different tiers of government
and horizontal cooperation between
public and private bodies
Sectoral approach to development Territorial approach to development
(locality, milieu)
Development of large industrial
projects to stimulate other
economic activity
Pro-poor LED
Financial support, incentives and
subsidies as the main factor for
attracting economic activity
Maximising the development potential
of each are to stimulate a progressive
adjustment of the local economic
system to the changing economic
environment
Provision of key conditions for the
development of economic activity
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“STRATEGIC REVIEW OF LOCAL ECONOMIC DEVELOPMENT IN SOUTH AFRICA” Prof Christian M. Rogerson May 2009
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3. Role of LG in
stimulating LED Background
• The Constitution mandates municipalities to play an important
role in the socio-economic development of their local
communities.
• However, as a concept, LED still remains relatively new and, as
a result, some of the more good practices, contemporary ideas
around the role and implementation of LED are either not
known or embraced.
• Making LED “work” in South Africa is critical in enabling
economic development as well as addressing poverty and
inequity. However, there are a number of key issues to be
addressed before this will be a reality.
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3.1 Problem Statement
• Govt has released the various economic policies (New Growth
Path and National Development Plan in particular) aimed at
enhancing growth, employment creation and equity.
• There are expectations from all spheres of govt, including
municipalities, to play a role in enabling employment creation
• More needs to be done to ensure that LG becomes a partner in
national policies that will require implementation in cities, towns
and communities.
• There needs to be a substantial re-think of approach towards
the current LED approaches
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3.2 Key Issues
3.2.1 Importance of LED
• Core purpose of LED is to mobilise and unlock the local
economic potential by:
– Bringing innovation to all its growth dimensions including
local resources, infrastructure, to local skills and SMME’s
– Attracting local and foreign investment
– Fostering territorial competitiveness
– Strengthening local institutions
– Ensuring better and more inclusive and sustainable
developmental outcomes
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3.2 Key Issues
3.2.3 Consultation on national policies impacting on LED
• The lack of consultation with OLG on national policies
impacting on LED is a concern.
• While it is municipalities that deal with the realities of
development in implementation, there is limited upfront
consultation with OLG.
• Only with greater participation from the wider LG sector that will
result in effective participation and impact on such development
policies and programmes, for example:
– Amended Preferential Procurement Regulation, the DBSA Jobs Fund
and the Cooperatives Amendment Bills
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3.2 Key Issues
i- Preferential Procurement
Regulations
• Most municipal Supply Chain Management Policies (SCM)
encouraged procurement from within a local municipal environment.
This is to ensure that the municipality itself supports companies and
SMME’s from their local community where possible.
• The imperative of promoting local small and enterprise development
is constantly reinforced at local imbizos and IDP consultation
processes.
• The new preferential procurement regulations do not allow SCM
policies to provide or set-aside and targeting of local (geographical)
supplier including co-operatives, SMME’s and CBO’s.
• While municipalities will have had to amend their policies, but it is
the local businesses themselves who will potentially suffer the most.
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3.2 Key Issues
ii- DBSA Jobs Fund
• The objective of the Jobs Fund is to co-finance projects by public,
private and non-govermental organisations that will significantly
contribute to job creation.
• Besides concerns on the limited communication or clarity from the
first round of applications for municipalities, for the majority of
municipalities the “infrastructure window” is the most obvious /
legitimate place for municipalities to apply.
• However with the matching funding for Infrastructure Window being
1:1 with a minimum of R10million – it effectively makes it impossible
for most municipalities to apply.
•
With this in effect, there is practically no reason for municipalities to
participate and assist in achieving the objectives of the Jobs Fund.
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3.2 Key Issues
iii- Co-operatives Amendment Bills
• Organised Local Government was not consulted on the
Bills.
– Nor were COGTA or other lead LED departments
• Implications:
– Only with greater participation the local government sector that will
result in their effective participation on the Co-operative
programme
– When municipalities are made aware, understand and agree to
their role will it result in improved to co-operatives support /
development
• This is a flaw in the process of the policy makers.
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3.2 Key Issues
3.4 SALGA’s role in supporting municipal LED
• SALGA advocates various principles to support good LED
practice, these include:
–
–
–
–
Councillor awareness, accountability and leadership on LED
Donor alignment, capacity building & support
A greater focus and national position on informal economy
The mainstreaming tools from of tried and tested LED programmes
(CLGF, GIZ, P3 and LED Maturity) that support more sustainable and
locally-owned LED strategies
– Building a pool of the right LED capacity at the local level (CENLED &
DTI)
– Supporting LED Dialogue & Partnerships (e.g. SALGA assisting
establishing business forums)
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3.2 Key Issues
3.4 SALGA’s role in supporting municipal LED
• SALGA has already been working with the Sweden, Namibia and Botswana
in the P3 Project, with municipalities across the Commonwealth in the CLGF
Good Practice Project, the SA LED Network has been a project hosted by
SALGA since February 2010. It is the central portal and forum for the
exchange of knowledge and successful LED practice and for municipal peerto-peer support.
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3.3 Conclusion
• The constitutional and legislative framework clearly places an
obligation on municipalities with regard to LED.
• There can, as a result, be little doubt that while LED is a LG
function (in keeping with the purposive interpretation of the
Schedules and the developmental character of LG under the
new constitutional dispensation) making LED work should be
national priority.
• Municipalities, therefore need to have the right people, policies
and support in their LED agenda.
• National Govt in turn needs to reinforce, rather that undermine,
the role of developmental LG
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4. Recommendations
• Through the support of the NCOP, it is clear that better coordination and
engagement with sector departments on developmental policy initiatives
will ensure that LG is:
– Considered and consulted at the outset so that
– The sector can play a meaningful role in the implementation of
effective and innovative rural and local economic development
programmes.
SALGA invites delegates to:
• Debate the issues and proposals for discussion; and
• Assist in the formulation of recommendations which will address the
challenges and enhance the role of LG in local economic and rural
development.