There are two broad approaches to LED. One is about developing a strategy for a location, mainly through planning. This is often the preferred approach by international development organisations and governments in developing countries. According to the ILO, national and local governments, as well as enterprises and other organisations have to rethink development strategies to cope with ongoing events such as
globalization. In contrast to traditional development policies, local economic development strategies promote local dialogue and enable people to be more proactive; help to make local institutions better contribute to development; make economic activity dependent on the comparative advantages of a specific territory, generating development by firms more capable to withstand changes in the global economic environment rather than top-down development imposed by national planners. Economic development activities in developing countries tend to be unidisciplinary, initiated and implemented by just one ministry or agency. An advantage of LED approaches is that they facilitate a multidisciplinary approach.
South Africa has been particularly active in promoting the concept.
Local economic development responses to the COVID-19 pandemic With the COVID-19 pandemic and associated restrictions impacting the economies of many cities and towns, local economic development responses played a particularly important role. Key approaches included support to keep businesses afloat during lockdowns and other restrictions, efforts to reactivate cities after restrictions eased, and a focus on long-term economic development. Lessons that emerged from the experience of the pandemic include the need to respond and iterate rapidly, the importance of collaboration between stakeholders and different tiers of government, and the need to maintain a focus on multiple time horizons, even in the midst of the crisis.
LED in South Africa: pro-poor vs. pro-growth Many LED interventions in South Africa have taken a direct pro-poor intervention, leading to questions regarding whether this approach is more effective in terms of poverty relief than the spin-offs of more pro-growth focused endeavours. The Microeconomic Reform Strategy is a central component of the 2005 policy guidelines for implementing LED in South Africa. This strategy seeks to address the inequalities in the country and to build on the RDP (Reconstruction and Development Program), by focusing on issues of the geographical spread of activity, integration, black economic empowerment, knowledge-led growth, skills development and state responsiveness. In addition to the laws and policies directly supporting and encouraging pro-poor LED, other instruments, such as integrated development planning, provide additional support for implementation. Integrated development planning is a key process used within LED, which looks toward the use of planning to situate pro-poor development and LED specifically.
Integrated development planning In terms of what an 'integrated development plan' (IDP) should include, the Municipal Systems Act clearly brings out the pro-poor dimensions of government thinking. The act states that an integrated development plan must reflect: • The municipal council's vision for the long-term development of the municipality. Special emphasis is to be placed on the municipality's most critical development needs • An assessment of the existing level of development in the municipality. This should include the identification of any communities which do not have access to adequate basic services • The council's long-term development vision and should consider the need for social and economic advancement of disadvantaged sections of the community • The IDP must describe in detail how the municipal council will realise its development objectives and the time frame within which those objectives will be realised • The council's spatial development framework, which should guide the way in which the physical area will be developed It is suggested that IDP can assist in the promotion of socio-economic development in at least three ways; first, in helping to attract funds from other spheres of government, donor organisations and investors through defining and packaging attractive projects and programmes; secondly in helping to create an environment that is conducive to private sector investment and the general promotion of LED; and thirdly, by proposing direct interventions in the economy through, for example, providing incentives, developing economic infrastructure, and buying, developing and leasing/selling land. Variables to be considered when conducting this inventory should reflect the components of a functioning economy, such as human and social capital, financial capital, physical capital and
natural capital. In South Africa, municipalities are specifically required to involve communities in the affairs of the municipality, to provide services in a financially sustainable manner and to promote development. For instance, public participation is a key element of the Systems Act, and municipalities are obliged to establish mechanisms for public participation and participatory governance.
Conclusions There is entrenched policy support for pro-poor development in South Africa – often being the primary focus of municipal vision/mission statements. In many cases it is treated as the partner of pro-growth/economic growth interventions. This situation is to be welcomed and reflects both local imperatives and responsiveness and local adherence to nationally identified objectives. Given the dual challenges faced by South African society of needing to address both
chronic poverty, yet also to achieve economic growth and global competitiveness, from a policy perspective it would seem that the approach adopted by Mangaung, Cape Town and eThekwini is most appropriate. These municipalities took a middle of the road approach, focusing their LED strategy on addressing both issues of poverty and growth and the fundamental linkages between the two (World Bank, 2005, 75). Land use planning and development control are essential for the existence and operation of land and property markets (Alexander, 48). For instance, the assignment of and control over land uses will generally reduce transaction costs and can create or enlarge markets (Lai, 1994, 91). ;Zoning by-laws Zoning by-laws are used to specify matters such as density, uses of land, parking requirements and form-related standards – including building heights, lot coverage, setbacks, minimum lot sizes, and other building envelope specifications. To keep pace with market conditions and to create higher-quality built environments, flexible and context-relevant standards can be implemented to support economic development goals. ;Height and density exchange Municipalities can require that facilities, services and matters, as set out in an official plan and by-law, be provided in return for an increase in building height and/or density. This exchange might include streetscape and design elements – for example, protected bicycle parking, outdoor seating, non-slip pedestrian surfaces or public art – in support of municipal placemaking and economic development objectives. ;Minimum and maximum standards More efficient built forms can be achieved through by-law standards for minimum and maximum building height and density. Community resources such as nearby services, public transit, utilities, and existing road and sidewalk networks and greenspaces, can be used more effectively while expanding the number of potential customers for area businesses. ==References==