You are on page 1of 73

The role of Local Economic Development on Poverty eradication in South Africas rural municipalities.

Case study of Greater Tubatse Municipality

Master of Business Administration (MBA): Corporate Strategy & Economic Policy

Candidate: Bethuel Sephaka Motswiane

Republic of South Africa

Supervisor: Professor Meine Pieter van Dijk (UNESCO)


This paper was submitted in partial fulfilment of the requirements for the masters of Business Administration (MBA) degree at Maastricht School of Management (MSM) Maastricht, Limburg Province, the Netherlands, August, 2009

Dedication
I dedicate this work to my entire family for their love and support throughout the days of my life, my mother in Particular, Mrs Mangetane Rebecca Motswiane who raised and educated me, my brother Mr Mathule Motswiane for his continued support and inspiration during my academic life and my daughter Mangetane Pride Motswiane for her continued intrinsic motivation in me to succeed during my studies at MSM. I also dedicate this paper to all South Africans who are directly and indirectly affected by poverty.

ii

Acknowledgements
Above all, I would like to thank my almighty God to guide me through to the end of this study. I also want to express my sincere gratitude to the entire MSM staff and my supervisor Professor Meine Pieter van Dijk for his assistance and availing his time to read and correct my draft. Their support cannot be measured in monetary terms.

My profound thanks go to the Netherlands government, Nuffic and Maastricht School of Management for affording me the opportunity to do my studies. I would like to express my sincere thanks to the Greater Tubatse Municipality (GTM) Management in particular Mr S Malepeng for accepting my request to use GTM as a case for this research and for the provision of all the data required to carry out this study.

My appreciation and thanks goes to my mother Mangetane, my family and Kgotlopong community for raising me and giving me a solid foundation without which I would not have reached this level. I would wish to thank my daughter, sisters, brothers, uncles and aunts for the encouragement they gave me when I was tired and home sick. God bless you all.

My sincere thanks and appreciation goes to my MBA25 colleague Herieth Ligate for her positive criticisms and guidance throughout the whole study and the entire MBA25 for their undivided support in all group works and team works during the studies. May God bless.

iii

Acronyms

ANC ARC DPLG GTM IDP LED LIMDEV LIBSA MQA NDA NGO NPO PC SADC

African National Congress Agricultural Research Council Department of Provincial and Local Government Greater Tubatse Municipality Integrated Development Planning Local Economic Development Limpopo Economic Development Enterprise Limpopo Business Support Agency Mining Qualification Authority National Department of Agriculture Non Government Organisation Non Profit Organisation Project Consolidate Southern African Developing Countries

iv

Map of South Africa

Map of Greater Tubatse Municipality

List of Figures
2.1 Three spheres of government in South Africa 3.1 Performance evaluation model in LED.

List of Tables
2.1 Three waves of LED 2.2 Philippines LED 2.3 Bulgarian case conclusion 2.4 Togo case 3.1 Sample 4.1 Education information in GTM 4.2 Awareness & Promotion of LED 4.3 GTM staff competency 4.4 Private Public Partnerships at GTM 4.5 Community involvement in LED 4.6 Annual household income at GTM 4.7 LED impact at GTM 4.8 GTM labour market

vi

TABLE OF CONTENTS

Dedication .................................................................................. ii Acknowledgements .................................................................. iii Acronyms.................................................................................. iv Map of South Africa ................................................................. v Map of Greater Tubatse Municipality .................................... v List of Figures .......................................................................... vi List of Tables ............................................................................ vi Executive Summary ................................................................. ix CHAPTER 1.............................................................................. 1
1.1 Background and Overview .................................................................................. 1 1.2 Problem Statement ............................................................................................... 3 1.3 Research Objectives and Questions ..................................................................... 5 1.3.1 Research Objectives ...................................................................................... 5 1.3.2 Research Questions ....................................................................................... 5 1.4 Research Methodology ........................................................................................ 5 1.5 Assumptions, Problems and Limitations ............................................................. 6 1.6 Conclusion ........................................................................................................... 7

CHAPTER 2.............................................................................. 8 LITERATURE REVIEW ........................................................ 8


2.1 Introduction and Background .............................................................................. 8 2.2 What is Local Economic Development (LED)? .................................................. 8 2.3 South African Local Government and LED ...................................................... 12 2.3.1 South Africas LED Framework ................................................................. 14 2.4 The Role of Municipalities on LED................................................................... 18 2.5 LED Strategic Planning ..................................................................................... 19 2.6 Some Countries LED cases................................................................................ 20 2.6.1 Philippines Case .......................................................................................... 23 2.6.2 Bulgarian Case ............................................................................................ 24 2.6.3 Togo Case ................................................................................................... 27 2.6.4 Russian case ................................................................................................ 27 2.7 Conclusion ......................................................................................................... 30

CHAPTER 3............................................................................ 31 THEORETICAL FRAMEWORK AND RESEARCH DESIGN ................................................................................... 31


3.1 INTRODUCTION ............................................................................................. 31 3.2 PROBLEM DEFINITION ................................................................................. 31 3.3 RESEARCH OBJECTIVE ................................................................................ 33 3.4 THEORETICAL FRAMEWORK ..................................................................... 33 3.4.1 Structure (External Factors) ........................................................................ 35

vii

3.4.2 Agency (Organizational/Internal Factors) .................................................. 35 3.4.3 Independent Variable .................................................................................. 36 3.4.4 Dependent Variables ................................................................................... 36 3.4.5 Moderating Variables.................................................................................. 36 3.5 RESEARCH ASSUMPTIONS .......................................................................... 37 3.6 RESEARCH LIMITATIONS ............................................................................ 37 3.7 RESEARCH QUESTIONS ............................................................................... 37 3.7.1 Major Research Question............................................................................ 37 3.7.2 Minor Research Question ........................................................................... 38 3.7 RESEARCH METHODOLOGY....................................................................... 39 3.8.1 Data Collection ........................................................................................... 39 3.8.2 Sampling Method ........................................................................................ 40 3.8.3 Data Analysis Method................................................................................. 41

CHAPTER 4............................................................................ 42 DATA ANALYSIS, FINDINGS AND DISCUSSION ......... 42


4.1. INTRODUCTION ............................................................................................ 42 4.2 LED AWARENESS, COMMUNICATION AND PROMOTION ................... 43 4.3 LED SUPPORT SYSTEMS .............................................................................. 44 4.3.1 Municipal LED unit. ................................................................................... 45 4.3.2 LED Strategic Plan ..................................................................................... 46 4.3.3 Public Private Partnership (PPP) ................................................................ 46 4.3.4 LED Budget ................................................................................................ 47 4.4 COMMUNITY INVOLVEMENT IN LED ...................................................... 48 4.5 IMPACT OF LED AT GTM ............................................................................. 49 4.6 FINDINGS ......................................................................................................... 53 4.6.1 Findings on Structure .................................................................................. 53 4.6.2 Findings on Agency .................................................................................... 54 4.7 CONCLUSION .................................................................................................. 55

CHAPTER 5............................................................................ 56 CONCLUSION, RECOMMENDATIONS AND FUTURE RESEARCH. ........................................................................... 56


5.1 CONCLUSION .................................................................................................. 56 5.2 Recommendations .............................................................................................. 58 5.2.1 Community Involvement ............................................................................ 58 5.2.2 LED Budget ................................................................................................ 58 5.2.3 Monitoring, Control and Evaluation ........................................................... 59 5.2.4 Skills development and Illiteracy reduction ............................................... 59 5.2.5 Municipal LED unit .................................................................................... 60 5.3 Future Research ................................................................................................. 60

6. References and Bibliography ............................................. 61

viii

Executive Summary

The focus of this study is to find out the role of Local Economic Development on Poverty eradication in rural municipalities of South Africa. The paper gives a background of LED and practices in different countries.

Poverty is a challenge that many South Africans are facing. The rural areas are also highly affected with this problem. LED has been practiced in many countries from way back. In South Africa the ANC led government also introduced LED in the municipalities to fight the rising poverty level. Since the ANC government took over in 1994 different interventions have been made to fight poverty which resulted from the apartheid government. Many rural areas seem not to have benefited from those interventions. I intended to answer to the following research questions: How does LED assist in problems such as poverty eradication, employment development? To what extent does the local government implement LED? How does private business get involved in the LED? What is the major LED challenges facing the local government? How does the local community get involved in the LED process? What support system exists for LED? generation, skills development and infrastructure

In an attempt to answer all the questions an LED performance measurement model was used to assess the structural and agency factors which affect LED towards effectiveness and efficiency. The researcher used primary and secondary data and the data was drawn from 50 respondents from GTM. The data has been analysed, interpreted and related to the literature. The findings have been made also from the analysed data. The researcher had come up with the following findings which are categorised as structural findings and agency findings. Under structural findings the first finding is that there is high

ix

level of illiteracy and skills shortage in the communities and this will distort many LED activities. The second finding is that there is insufficient LED awareness, communication and promotion from the municipality and this result in community not being involved in LED activities. The third finding is that there is lack of infrastructure such as roads, electricity, etc. Under agency the first finding is that the municipality has insufficient human capacity to execute LED activities.

The second finding is that the municipality have no budget for LED activities. The third finding is that there is insufficient control, monitoring and evaluation of LED activities at GTM. The fourth finding is that there are insufficient reliable private partners to the municipality who will help achieve effective and efficient LED. The researcher finds that the combination of all findings results in LED not having impact on poverty eradication at GTM. From the findings the researcher also made some recommendations.

The researcher recommends that the municipality should involve communities in all steps of the LED process. Secondly the municipality should have special budget for LED activities and should also market the municipality to potential investors and donor organisations.

Thirdly the municipality should develop an LED control, monitoring and evaluation program for all LED activities. Fourthly the municipality should create and increase partnership with universities, colleges, research institutions and training and skills development institutions for vocational training to fast track on solving the problem of illiteracy and skills shortage.

CHAPTER 1 INTRODUCTION

1.1 Background and Overview


I was the Projects Co-ordinator in the Agricultural Research Council (ARC) a sub structure of the National Department of Agriculture (NDA) in South Africa. My role is facilitation, coordination and management of agricultural projects for small scale farmers through local governments which are mostly found in the rural areas. Before joining NDA I also worked for the Department of Provincial and Local Government (DPLG) which is the overseer of both the provincial and local government in South Africa.

While working at the DPLG I started learning about the aspect of Local Economic Development (LED). I became more interested in the subject of LED since some of my projects which were aimed at developing farmers in rural areas would be classified under LED and I also aspired to know how it is being practiced by different local governments that I have been in contact with. I also became a member of LED network of South Africa and continued to receive monthly newsletter.

According to Tamasane (2002) the aim of local economic development is to produce higher standards of living, improve the quality of life, alleviate poverty, create more and better jobs, advance skills and build capacity for sustained development in the future for local communities. According to Lafferty (2001) many of the challenges concern lifestyles and a constructive dialogue between many groups in society is needed, not only between experts and political decision makers. With all my past interaction with different local government I found it difficult to really relate to what Tamasane says in his explanation. While there is such a good explanation by Tamasane,

I found lot of contrary situations in different communities in South Africa, situations where poverty is very high and the standards of living are very low.

The study by Wandschneider (2004) shows that the much economic activity in rural municipalities is closely linked to the surrounding villages economy through consumption, production, employment and various types of economic and social service provision. This indicates that economic growth for local authorities is dependent on the developmental dynamics of the villages.

As a new democracy South Africa is faced with the challenges on issues such as rising poverty and unemployment. According to Nel (2001) municipalities are charged with responsibility of creating an enabling environment for communities in South Africa through LED.

Greater Tubatse Municipality (GTM) is a local municipality according to the municipal structure act (DPLG). GTM with its seat in the small town of Burgersfort is a local municipality in the Limpopo province in South Africa. The municipality has an estimated population of 290 000 which is spread over 29 wards. The main economic activities in the municipality are mining, agriculture and service sector.

The municipality has a high number of natural resources such as Platinum, Chrome, Vanadium, Andalusite, Silica and Magnetite. There are also fourteen mines in the area of which some dates back to the 1920s. GTM is one of the 136 municipalities in South Africa which are targeted for Project Consolidate (PC). PC is a hand on local government support engagement programme which targeted municipalities that needs support to enhance service delivery and LED is one of the key performance areas of Project Consolidate (DPLG).

I however believe that this research will help me and other South Africans in finding the role of LED on poverty especially in rural local governments in South Africa. The significance of this study will be geared towards identifying if the LED is relevant in poverty eradication in South Africa. This will help to

redefine the current LED documents and will also help identifying the gaps in the local government structures.

The other benefit of the study will be derived from the evaluation and assessment of the practices used for LED if they are really effective towards poverty eradication and if not how should corrective measures be taken in such situations. This benefit will extend to local communities through improved LED that will curb poverty.

1.2 Problem Statement

South Africa is among the countries with better economies in Africa; it is also the country in Africa with advanced level of infrastructure and regarded to be the hope to other African countries especially the SADC region (Mbeki. 2005). Over the past fifth teen years of democracy, South Africa has been restructuring and implementing different developmental programmes and initiatives at National, Provincial and Local government level.

At local government level one of the interventions that were introduced is local economic development (LED). Local economic development is about economically empowering the local communities and also a participatory process which encourages social dialogue and public-private partnerships in a defined geographical area with intentions of eradicating poverty and creating jobs.

Persky (1993) recognizes that urban places have a greater variety of production than rural areas and these rural areas are likely to specialise in relatively few local economic development activities. Given such interventions and the strategies, majority of South Africans are still found to be living in deep poverty characterised by high level of unemployment, skills shortage, etc. This poverty situation is happening in both rural and urban areas.

Current situation of the marginalisation of poor people from the formal mainstream economy and opportunities for income generation has increased dramatically especially in rural communities. Poverty seems to be increasing even more, the level of unemployment is also very high and the skills shortage is severe in rural communities. On the other hand Prahalad (2006) says what is needed is a better approach to help the poor, an approach that involves partnering with them to innovate and achieve sustainable win-win scenarios where the poor are actively engaged.

Many rural communities have been engaging in demonstrations in different local government offices in need of addressing the high level poverty and poor service delivery in those areas. This situation has been rising than declining, yet there is LED that is supposed to be addressing these issues at community level. The general standards of living in rural areas are very low. Access to health facilities is difficult. People have to travel for as far as eighty kilometres to access health facilities. In many cases rural communities still continue sharing drinking water with animals from the streams. There is also one source of employment which is mostly mining.

During rainy seasons many rural villages have no access to roads and some many people still living in mud houses becomes victims since the houses fall from heavy rains. All these challenges bring a very big question into the role that intervention strategies such as LED are bringing to the rural communities. Does LED as an economic development strategy serve as an answer to the communities?

1.3 Research Objectives and Questions

1.3.1 Research Objectives

1. Assess the impact of LED on poverty eradication and local government development. 2. To assess whether LED strategies are well coordinated in rural municipalities. 3. Assess the role of private enterprise on LED. 4. Assess the depth of local community participation on LED.

1.3.2 Research Questions Main Research Questions 1. How does LED assist in problems such as poverty eradication, employment development? 2. To what extent does the local government implement LED? generation, skills development and infrastructure

Minor Research Questions

1. How does private business get involved in the LED? 2. What is the major LED challenges facing the local government? 3. How does the local community get involved in the LED process? 4. What support system exists for LED?

1.4 Research Methodology

A qualitative study based on a survey research, with a questionnaire as a data collecting tool was undertaken to determine the impact of LED on poverty. Telephone interviews were also conducted to supplement the questionnaires. There was also some data collection through reading of various publications.

The research questionnaires was targeting twenty young

and ten old

residents for the local communities of the selected municipality, ten employees both managers and non managerial staff of the same municipality, ten Non Governmental Organizations (NGOs) and local business people in the municipality was also targeted with questionnaires and telephone calls. The total number of my sample was 50.

The existing documents from the municipality and articles were also used for data collection. Information, documents and articles from the LED department in the municipality were also used for gathering data. The LED Performance measurement framework was used as a tool of analysis.

1.5 Assumptions, Problems and Limitations

The study focused on rural communities. A sample of 50 people was selected. The problem of access to communication facilities is a reality in these villages. So the researcher had a difficulty of having all people electronically accessing the questionnaire. However the researcher hired and sent a person who will physically circulate the questionnaire in those villages.

The other alternative was the use of telephone interviews to people who might not be able to access the questionnaire. Another foreseeable limitation would be data availability with particular reference to LED in Greater Tubatse Municipality. The researcher therefore had to move faster with the research so that the data collection does not get delayed.

1.6 Conclusion
Poverty is a reality in the rural areas of South Africa after 15 years of democracy. The strategies that the ANC government has put in place to promote economic development and address the past imbalances are stake given the increase in poverty and unemployment. The study assessed the impact that one of the strategies for economic development is having on poverty eradication.

CHAPTER 2 LITERATURE REVIEW


2.1 Introduction and Background

Over the past century the world has experienced significant political and economic changes. This resulted with high level of economic growth and inequality. Those inequalities resulted in governments in both developed and developing countries having to introduce policies of decentralising power and resources to address the inequalities.

The broader macro economic policies had to be downsized into district and regional policies that would address the economic needs of those districts. This resulted into different localities having different economic needs and resulting in different economic policies and thus resulting into local economic development (LED) being adopted in different countries as a local economic development policy.

2.2 What is Local Economic Development (LED)?

LED is a process where local actors shape and share the future of their territory (Pretorius. 2005) LED is an ongoing process by which key stakeholders and institutions from all spheres of society work jointly to create a unique advantage for the locality and its firms, tackle mark failures, remove bureaucratic obstacles for local business and strengthen the competitiveness of local firms (MunicipalIQ. 2009)

Local economic development (LED) is a participatory process in which local people from all sectors work together to stimulate local commercial activity, resulting in a resilient and sustainable economy. It is a way to help create decent jobs and improve the quality of life for everyone, including the poor and marginalised (UN-HABITAT. 2005).

It is a process by which public, business and non-governmental sector partners work collectively to create better conditions for economic growth and employment generation (Swinburn et al. 2006). Local economic development is about local people working together to achieve sustainable economic growth that brings economic benefits and quality of life improvements for all in the community (World Bank. 2004).

Local Economic Development (LED) is an approach towards economic development which allows and encourages local people to work together to achieve sustainable economic growth and development thereby bringing economic benefits and improved quality of life for all residents in a local municipal area (DPLG. 2006).

Different writers and researchers define LED in different ways but the concept behind it is the development and empowerment of local people and improvement of the standard of living for the local citizens.The issue of local economic development is a very popular issue in both developed and developing countries. According to DPLG (2006) as from the late 1970s LED increased its popularity and took different forms ranging from the public sector led Local Enterprise Boards in the UK to the flagship projects of private sector led entrepreneurialism in the inner cities of Europe and North America.

LED is about local people working together to achieve sustainable economic growth that brings economic benefits and improvement in the quality of life for all in the community (Davis. 2005). What is referred to as LED dates back to the 1960s and 1970s and since then LED went through a number of stages and waves; 9

Table 2.1: Three waves of LED.

WAVE

FOCUS

TOOLS

First

During the first wave the focus was on To achieve this cities used; manufacturing attracting especially of foreign outside the direct Mass grants Subsidized usually inward loans at

1960 to early the attraction of: 1980 Mobile investment, investment, attraction investment. Hard infrastructure development.

aimed

investing

manufactures. Tax breaks Subsidized infrastructure investment. Expensive low road industrial recruitment techniques. hard

Second

During second wave the focus moved To

achieve

this

cities

1980 to mid towards; 1990s The retention and growing of existing local businesses. Still with an emphasis on inward investment attraction but usually this was becoming more targeted to specific sectors or from certain geographic areas.

provided; Direct payments to individual businesses Business incubators Advice and training for small and medium size firms. Technical support Business support. Some hard and soft infrastructure investment. start-up

10

Third Late onwards

The focus then shifted from individual To achieve this cities are; 1990s direct firm financial transfers to making the entire business environment more conducive to business. During the current wave of LED, more focus is placed on; Soft infrastructure investments. Networking and leveraging of private sector investments for the public good. Public Private Partnerships Highly targeted inward Developing a holistic strategy aimed at

growing local firms. Providing competitive a local

investment climate. Supporting encouraging networking collaboration. Encouraging workforce development education. Closely targeting and and and

investment attraction to add to the competitive advantages of local areas.

inward investment to support growth. Supporting quality of life improvements Source: World Bank (2004) www.worldbank.org/urban/led/ cluster

Despite the different approaches, the common theme was about local actors in defining their autonomy. Over the past decade, the local economic development (LED) has being a major policy issue in many developing countries of Europe, North America, Australia and Asia (Rogerson, 1999). In many countries economic policy has become a very important and central issue in all spheres of governance.

It is no longer the responsibility of the central government only to deliver on economic growth and poverty eradication it is a decentralised responsibility

11

that goes to provinces, cities and local governments. LED seeks to empower local participants to effectively utilise business enterprise, labour, capital and other local resources to achieve local priorities (e.g. promote quality jobs, reduce poverty, stabilise the local economy, and generate municipal taxes to provide better services).

The turbulence of the U.S. economy in the late 1970s, the recession of the early 1980s, the rise of federal budget deficits, and the cutback of federal aid to the states and localities have forced states and local governments to broaden their efforts in economic development (Dere, 2001).

2.3 South African Local Government and LED

Since the downfall of apartheid in 1994 South Africa has been moving for change in the political and economic structure of government. The fall of apartheid as a system of governance paved a way for the ANC led government to introduce new policies to address the imbalances caused by the apartheid government. One major area that the apartheid government had left a mark is in the economy of the country.

While people from other parts of the world see South Africa boosting better economic in Africa, the reality is that majority of South Africans still leave in severe poverty, as a results of the injustices of the apartheid government. The fall of the apartheid gave rise to a new constitution of South Africa where in chapter 7 define the responsibilities of the local government (Municipalities) (SA constitution, 1996). Municipalities forms part of the three spheres of government in South Africa.

12

Figure 2.1 Three spheres of government in South Africa


THREE SPHERES OF GOVERNMENT IN SOUTH AFRICA

NATIONAL GOVERNMENT

PROVINCIAL GOVERNMENT

LOCAL GOVERNMENT

Source. GCIS. www.gcis.gov.za

As early as 1995, constitutional debates on the future form and shape of local government stated clearly of the proactive role of municipalities. In South Africa municipalities are the lowest level of government structures. The municipalities are governed and defined by separate municipal structures acts adopted by parliament.

Municipalities are classified into three categories, category A referred to as Metropolitan municipalities, this are large regions which are mostly urbanised, category B, District municipalities which are main divisions in provinces and category C, Local municipality which are small municipalities that makes a district (Municipal Structures Act. 1999).

According to the constitution of South Africa there are objectives that a municipality should strive to achieve; first to promote social and economic development, secondly to encourage the involvement of communities and

13

community organisations in the matters of local government (SA Constitution. 1996).

The DPLG (2006) highlighted the great lack of literature on LED in the Southern part of the world, however stating that lot has been written from regions such as Latin America, East and South Asia adding to the available good literature from Brazil which describes the emergence of economic clusters including the Campinas high technology cluster noted for its strong linkages between research institutes and local firms. Since then South Africa has developed an LED framework to work as a guiding tool towards a successful LED.

2.3.1 South Africas LED Framework

The aim and role of the LED framework in South Africa is to support the development of sustainable local economies through integrated government action (DPLG. 2006). The LED framework in South Africa has been encouraged and shaped by the evolution of LED internationally and is based purely on the South African context.

According to Department of Provincial and local Government the LED framework contextualises the move towards new institutionalism that breaks down the distinction between economy and society, showing how economic decision making and action is shaped by the shared values, norms, beliefs, meanings, and rules and procedures of all stakeholders in the society.

The framework has been influenced also by the following policy papers; South African constitution (1996), white paper on local government (1998), municipal systems act (2000), policy paper on integrated development planning (IDP) (2000), municipal structures act and LED strategies and instruments. According to the constitution of South Africa (chapter 7) municipalities have the following objectives:

14

to provide democratic and accountable government for local communities; to ensure the provision of services to communities in a sustainable manner; to promote social and economic development; to promote a safe and healthy environment; and to encourage the involvement of communities and community organisations in the matters of local government.

Objective b, c, d, and e are purely aligned to the definition of LED as discussed previously. The LED framework comes as support mechanism for the realization of these constitutional objectives of the local government. The achievement of sustainable socio-economic development for local people in the municipalities is very important on poverty eradication.

While poverty is stated as a state in which people cannot have access or afford the basic needs like healthcare, water, sanitation, roads, electricity, employment, etc (World Bank. 2004) the objectives spell out what municipalities should do and if well implemented then poverty will not be an issue in South Africa.

According to the framework LED is seen as one of the five key performance areas for the local government. As a KPA it is therefore seen as interrelated to other four KPAs; Municipal Transformation and Organisational development, Basic Service Delivery, Municipal Financial Viability and management, and Good Governance and Public Participation. The LED framework promotes an approach of developmental economies through partnerships and a shift away from narrow municipal interests focused only on inputs from government.

15

The following are the guiding Principles of the LED Framework (2006):

Through a developmental approach, Government has a decisive and unapologetic role to play in shaping the economic destiny of our country.

Creating an environment in which the overall economic and social (structure) conditions of the locality are conducive to the creation of employment opportunities is the responsibility of local government.

Local Economic Development is an outcome of actions and interventions resulting from local good governance (agency) and the constant improvement and integration of national priorities and programs in local spheres.

Inward investment from the state or private sector will only be effective where the potential and competitive advantage of each area are known and exploited.

Promoting robust and inclusive local economies requires the concerted, coordinated action of all spheres and sectors of government.

Locally owned appropriate solutions and strategies must emerge to support national frameworks in both rural and urban local spheres. Private companies, including social enterprises and cooperatives form the heart of the economy and have a crucial role to play as partnerships with the public and community role players that will ultimately stimulate robust and inclusive local economies.

People are the single greatest resource and including all citizens in development and increasing their skills leads to increased opportunities for stimulating local economies.

Local initiative, energy, creativity, assertive leadership and skills will ultimately unlock the latent potential in local economies and will shape local spheres.

The principles of LED spread well to cover very important issues for the success of LED on addressing poverty. These issues range from good

16

governance, intergovernmental relations, consultation with local communities, stakeholder relations and public private partnership. The above factors seem to be very central towards the success of LED in combating poverty and are keys to an effective and efficient LED as per the researchers theoretical model.

However some principles are contradictory towards a successful LED in all municipal categories. Not all of the above mentioned principles do seem to be practical especially in rural municipalities where there is no competitive advantage for such small municipalities. Therefore it means less or no investment at all for these municipalities from private and government investors. Central government support becomes very important in enforcing and supporting the existence and growth LED in all areas in such rural municipalities

South Africa created and demarcated new democratic municipalities after the 1994 elections, to redress the massive imbalances of service provision and redirecting services towards eradicating poverty through growth and economic development. The apartheid government municipal structures were under resourced and not able to serve the needs to the poor communities. There are disparities between rural and urban communities.

According to Davis (2005) the social situation of historically disadvantaged population of South Africa lives in rural areas and is characterised by low standards of living and high rates of unemployment and poverty. There is high level of illiteracy, poor infrastructure and severe skills shortage. Many people do not have enough income or no income at all, are resource poor and have no access to basic services to satisfy their basic needs.

The government has lamented good on achievements over the past ten years on addressing poverty, however concerns still remains about the sustainability of those interventions (Bond. 2003). There are various policy documents and white papers in South Africa aiming at poverty eradication and 17

all those documents are aided by the Reconstruction and Development Program (RDP) of 1994 and Growth, Employment and Redistribution (GEAR) policy of 1996.

All these are aimed at Poverty alleviation and economic growth. GEAR policy emphasises the need for fast growing economy which creates enough jobs, redistribution of income and opportunities in favour of the poor (Bond. 2005)

2.4 The Role of Municipalities on LED

Both small and medium sized rural towns are an important part of the Local Economic Development. The employment opportunities in such locations and the standard of living of its population are very important for local economic development (Wandschneider. 2004). The municipalities are very important in developing LED strategies and providing rural and urban linkages.

Municipalities may draw their LED strategies based on the socio-economic status of the region and villages in the location of a particular municipality. A municipality may be in a form of a district therefore the LED strategy has to be aligned with the socio-economic needs of the district taking in to consideration the individual village needs. In the Indian context, the district may be an appropriate unit for planning and implementation purposes (Wandschneider. 2004).

The South African policy document (Refocusing Development to the Poor) recalls on developmental and pro-poor responsibilities that local government are facing in South Africa. The municipalities have the responsibility of working hand in hand with communities in the development of working and sustainable pro-poor strategies for LED. According to Bond (2004) investment is all very well, but the benefits are unlikely to be visible to the needy unless the very needy are the active participants in the development process.

18

Municipalities have the role to bring all stakeholders, resources and the necessary planning together towards a sustainable, effective and efficient LED.

2.5 LED Strategic Planning


According to UN-HABITAT (2005), municipalities, private sector and communities are looking for improved ways to achieve LED, which is a cornerstone of sustainable development. The UN-HABITAT round table participants showed a common view about the success of LED, which included local leaders and economic practitioners need to have access to a range of tools (structural and agency), ideas and experiences which will help them to address their own issues at local level since local challenges require local solutions. Therefore municipalities are required to have their own LED strategic plan which will address local issues.

The strategic planning should be an all inclusive process of businesses, government, labour and the poor. According to UN-HABITAT if a strategic planning is well done, it provides a way to clarify competitive advantages, identify cooperative opportunities and generate strategies that better achieve local priorities. With lot of programmes and projects, LED practitioners need to bring all stakeholders for the projects to succeed.

LED is centred on three pillars Local values (poverty reduction, basic human needs, local jobs, integration of social and environmental values), utilises Economic drivers (value-added resource use, local skills training, retention of income, regional cooperation) and considers Development (the role of structural change, quality of development) (UN-HABITAT. 2005). Since the success of LED is dependent on all stakeholders and both internal and external factors, it is very important that even the people living in poverty should be included in the LED planning process.

19

People living in poverty are the most marginalised in strategic decisions that affect them and the result is that such decisions fail to make a difference in their lives. LED should be seen as an important element towards poverty reduction. Poverty alleviation strategies need to be included in the LED plan.

According to UN-HABITAT (2005) at strategic level, experience indicates that economic initiatives for poverty reduction are most effective and sustainable when they are also incorporated into a broader economic development strategy because pro-poor strategies alone may not lead to the development required to alter the situation of the poor.

It is important to combine both broad local economic strategies and poverty reduction so that a balanced economic development can be achieved. LED should better ensure that those who have been marginalised get access to opportunities. Therefore the poor should be invited to take part in shaping their own destiny.

2.6 Some Countries LED cases

Besides many economic changes in the world, countries still believe in integrations and strategic partnerships. According to Capkova (2005) there has been significant growth and differences in foreign investment especially between central and eastern European countries and different areas in the world, it is also evident that at the same time regions and municipalities face difficulties that have arisen under conditions of rapid restructuring, increased international competition and lack of experience which puts pressure on a need for an all inclusive strategic plan for economic development.

Municipalities and regions like in South Africa are still undergoing similar transformations and restructurings. Municipalities in South Africa were demarcated after 1994 elections with an aim of redressing the imbalances of

20

the then apartheid homelands which left lot of inequality among the citizens. Capkova (2005) further outline the following points as difficulties that municipalities face in economic development and poverty eradication:

Increased unemployment especially among unskilled people A general lack of business know-how as well as a lack of working capital which inhibits firms from acquiring the new technology. Lack of business management expertise among small and medium sized enterprises.

All these points are mostly applicable to rural municipalities in South Africa. The government is mostly concerned of that and in the LED framework of South Africa, some limitations are also stated which also include the location of the municipality. According to the LED framework of S.A (DPLG. 2006) there are municipalities that due to their location and history are not in a position to create and generate growth in their economies.

The framework share the same view with Capkova, when he states that many localities in the central and eastern Europe are distressed because in the past, central governments manipulated their economies by installing a single large employer regardless of its long term economic viability. This is exactly the case in many South African municipalities. The GTM is depended largely on mining. While many people in the GTM are unskilled, they are found doing unskilled jobs in the mines with little income.

Because mining is the greatest supplier of quality or formal job in the GTM municipality, the sector also become strained and the employment need of the communities are not met. With little on service sector, most of the unskilled people are found unemployed and these result in poverty since the government social grants are not enough. According to Capkova (2005) localities with narrow or declining economic bases such as agriculture and

21

mining face severe economic problems and have to deal with specific difficulties such as long term poverty and youth unemployment.

The economic growth of South Africa has been growing slow in the past ten years (Statssa. 2008). This also impact on the economic growth of municipalities. The introduction of GEAR as economic policy has also put a lot of strain for the rural municipalities because many people lost their jobs as a result of privatisation. Capkova also states that economic restructuring also has an impact on the economic performance of municipal economic growth because it results in distressed socio-economic environment.

Local Economic Development is closely tied with availability of infrastructure. Most localities in Bulgaria and Poland failed to achieve their economic growth strategies because of lack of supportive infrastructure. In comparison, large cities perform better on LED than the small municipalities because of their disparities in their level of infrastructure.

This is evident in South Africa. Johannesburg municipality has lot of supportive infrastructure which gives it more opportunity for economic growth than a small rural municipality Greater Tubatse Municipality in Limpopo province. Infrastructure plays a very important role especially in investment attraction. According to Capkova (2005) there are three important elements that a firm considers when making investment decision, those elements are transportation, labour and energy.

In the GTM we still find many areas without proper roads, without electrification and high level of unskilled labour and this put a strain on LED. Studies shows that urbanised municipalities do well in local economic development than their rural counterpart. This is related to the capacity in terms of capital and labour. Rural municipalities have a less pool of labour

22

force most rural residents migrate to urbanised municipalities to seek survival and this result in brain drain in the rural localities.

The success of LED is highly associated with the size of the municipality as well. However even in the urban municipality there is high level of poverty due to high level of urbanisation. At the end both skilled and unskilled labour become overcrowded in the urbanised municipalities and makes it impossible for every person to the employed.

According to Capkova (2005) hundreds of small municipalities in Europe lack the technical, professional and financial resources to undertake discretionary activities and economic growth. That results in less economic development in the municipalities and resulting in poverty. However many small municipalities in Europe creates partnerships and collaborations with other small municipalities in their region and private sector to overcome their limited resource and economic growth difficulties.

According to Capkova (2005) co-operation in the promotion of LED has started recently on a voluntary basis and several solutions in organising cooperations have been created. This resulted in agencies which have been established for LED purposes.

2.6.1 Philippines Case Table 2.2: Philippines LED

National Support for LED Micro-Businesses Enterprise Act, Philippines In 2002, the government of the Philippines enacted the Barangay [town]

23

Micro Business Enterprises (BMBEs) Act. This act seeks to promote a business enabling environment for micro-enterprises and states: As much as possible, BMBEs shall be subject to minimal bureaucratic requirements and reasonable fees and charges.

This includes exemptions from many taxes, fees, and minimum wage laws. It also includes a range of micro-small business support: Market development and access, Skills development, Access to capital, Credit delivery, Technology transfer, Production and management training, Marketing assistance and Trade and investment promotion. Philippines Department of Trade and Industry: http://www.dti.gov.ph.
Source: UN Habitat (2005)

2.6.2 Bulgarian Case

According to the Bulgarian constitution, municipalities are local role players in terms of governance and service provision. Municipalities are vested with provision of public services to the communities. However municipalities operate on limited budgets which are centrally passed.

According to Damianova et al (2005) the municipalities are also governed by legal frameworks which give it limited power and responsibilities over local economic development. The Bulgarian municipalities are also characterised by severe socio-economic disparities as a result of the past government policies.

According to Capkova (2005) there are disparities in economic development, employment, income and the general quality of life. However different municipalities have progressed in different paces as a result of their sizes, management capacity and potential, economic partnerships and SME development (Capkova. 2005)

24

Conclusion on the Bulgarian Case study.

Table 2.3 Bulgarian case conclusions

The analysis leads to several conclusions, which can serve as reference points for basic polices and recommendations for ways local governments can encourage economic development: There is currently only one level of local self-government in Bulgaria municipalities. The basic responsibilities of local authorities are highly limitedbrought down to mere distribution of the scarce budget funds and delivery of a limited number of services. Bulgarian municipalities are characterized by significant variation in levels of social and economic development. These differences are most pronounced in terms of investment capacity, poverty, and general social and economic status. Many municipalities suffer from geographic and transport detachment as a result of underdeveloped infrastructure and highly reduced public transport; absence of developed and effective economic activities; heavy

unemployment; the depopulation of some towns and villages; impeded access to information, contacts, and markets; and low public services support. These differences, along with reactions to the transition process, determine different priorities of individual municipalities and the guidelines of their economic policy. Demographic factors have a serious effect on municipal economic development potential. Depopulation of certain regions, migration, and different levels of education and qualification among the labour force all come to bear on implementation of economic policy. Many municipalities are characterized by a lack of entrepreneurial skills and an indisposition to operate in a market environment, conform to the processes of globalization, or become successfully involved in international production networks. Consequently, the business community cannot actively partner with municipal authorities in developing and implementing specific economic policies.

25

General social and economic status is low and central, prompting local authorities to support competition among local business as a way to promote sustainable economic growth. Foreign investment is geographically concentrated in only a few regions, leaving most municipalities with little of its benefit. Decentralization of local government, though already launched, is still in its initial stages. Expansion of reform is expected to provide local authorities with wider opportunities to influence economic developmentgreater freedom in making decisions on economic development, more high quality business and public services, greater opportunities to implement projects and improve infrastructure. Source: Capkova. 2005

Bases on the conclusion from the box, the municipalities in Bulgaria have almost similar circumstances which limits them into actively promoting LED. The scarcity of funds is a major problem, most LED interventions needs lot of capital investment and because of the size of the municipality and management potential many municipalities fail to do well when it comes to poverty eradication through LED.

Infrastructure is also a constraint for successful LED in the Bulgarian municipalities. Lack of skills, poor standard infrastructure, competitive advantages among municipalities, poorly coordinated PPP, migration, etc are common causes for LED to fail to function well and municipalities should when drafting LED policies and strategies consider all the constraints.

26

2.6.3 Togo Case Table 2.4 Togo case Case Reference: Business Development to Reduce Poverty and Unemployment, Togo In Togo, poverty has led to more creative ways of developing employment opportunities. AVEBETO, a non-governmental agency is working to address the situation of unemployment by advocating and training young people to become entrepreneurs.

Students are encouraged to brainstorm on various business ideas and to start a business before the end of their training. In 1988 and 1998, nearly 10,000 university and college graduates were trained and about 70 per cent of them manage their own businesses today. This programme has been replicated in other countries in Africa. Source: Source: UN-HABITAT Best Practice Database http://www.bestpractices.org/

2.6.4 Russian case The Russian municipalities have high responsibilities. According to Vizgalov (2006) the Russian government has decentralized lot of responsibilities to municipalities, including housing and economic development. However municipalities still face constraints of implementing good poverty eradication economic activities due to the regional authorities strong influence on the formulation of the budget.

According to Vizgalov (2006) some significant challenges facing LED in municipalities in Russia are:

narrow economic base (tax base in particular), strong dependence of budgets on a limited number of enterprises

27

lack of economic expansion in municipalities, especially monoprofiled ones(excluding those where hail growth is based on oil and gas production and processing, showing steady income)

necessity to support social infrastructure despite the fact that municipal, social, cultural, and housing facilities are relegated to municipalities without provision sufficient funds.

However as economic crises grows municipalities are now granted freedom to choose the available means for the economic development. Performance of LED differs greatly from one municipality to another. Vizgalov (2006) further state that the execution of effective LED in Russia is delayed by both organisational problems (agency) and the system (structure) itself.

Those problems include imperfection of municipal legislative base, structural imperfection of governing institutions, poor democratic control, size and status. All the stated problems are mostly in relation to the LED performance measurement framework as developed by Lindblad. Socio-economic conditions, organisational performance and competition for economic development are used to measure the competitiveness of LED in Lindblad framework (2006).

In Russia the internal factors seems to be the growing cause of ineffective LED. The factors are mostly about capacity of local government institutions, both management and capital. However according to Vizgalov (2006) there are backbone factors that can lead to a well productive LED activities:

The transformation of local government system in Russia Provision of good financial base for local government.

The revenues of many municipalities in Russia are not enough to facilitate the needed economic development this is not only the case in Russia, but a similar case in Poland, Ukraine, South Africa and many other countries of the world. In South Africa for example we find a rural municipality that has 70

28

percent of its annual financial allocation going for salaries while there is no other means to raise revenue.

Therefore it means that only 30 percent will be left for the execution of mandatory municipal programmes including LED which makes it difficult to be effective. For that reason job creation by municipalities in Russia result in non prestigious and low remuneration jobs. The level of unemployment continues to grow. Vizgalov (2006) states that most managers participating in local elections are not community oriented, but rather use the municipality as a springboard which can help them satisfy their career ambitions in various state structures on a high level.

This is very true in many municipalities in South Africa. Local government is used as a stepping stone to the top. Most of the municipalities are left without capacity because of managers and leaders who move from local government to either private sector or other higher public offices.

There is also an emerging good partnership for LED form local authorities and businesses in Russia. The private businesses also want to play a fair share in local economic development. A good private participation stand to be an important condition for the successful development of LED. In strategy formulation it is very important to have input from all stakeholders and this is what is happening in Russia. According to Lafferty (2001) transparency in development plays a major role in stakeholder participation especially at local government.

The Russian municipalities have the same challenges that other discussed countries have in achieving the best LED for poverty alleviation. However the Russian case is different because there are also reported case of success in some small towns. However agency problems are classified high on the determinants for failures in the municipalities on LED because there are no means of accounting for local government activities by state and local

29

authorities. The freedom of municipalities is high and result in anarchy and dictatorship on economic development by municipalities.

2.7 Conclusion

The studies conducted on LED shows that LED is an important economic strategy for the development of local communities. There is constraint which comes with this strategy and these constraints can be internal and external depending on the locality. The better the internal and external positions of the municipality is the better the performance of LED.

Success cases of LED have been reported in different countries and the researcher in this study is looking into the effectiveness of LED on poverty especially in rural municipalities. The use of Performance Measurement in Local Economic Development theory by Lindblad (2006) by the researcher will help in putting the research on the right side of furthering the research on Local Economic Development.

30

CHAPTER 3 THEORETICAL FRAMEWORK AND RESEARCH DESIGN

3.1 INTRODUCTION
Different researchers and Local Economic Development practitioners are continuously searching for different strategies to pull resources that will result in greatest employment gains. According James et al (2002) the traditional LED policy strategies used by municipalities are tax benefits, low interest loans, labour force training programs and other strategies used to promote economic growth.

The efficiency, effectiveness and success of these efforts could be measured with a reduced unemployment rate, numbers of successful economic development projects, number of people trained, level of infrastructure development and number of loans given for business purposes. Poverty in rural municipality is still at alarming rate in the South Africa, unemployment rate is high and the disparity between the skilled and unskilled labour is very high. Although the metro areas are enjoying economic growth since 1994, the case is different in the small rural municipalities.

3.2 PROBLEM DEFINITION

With the most advanced infrastructure in the African continent, South Africa is also still experiencing severe poverty especially in the rural areas where majority of the population is found. The ruling African National Congress (ANC) has lamented on their success since their first term in government in 1994 however there are still majority of citizens who cannot point to a single

31

benefit. As part of their programme of action the ANC led government introduced a new constitution in 1996. The constitution also has in chapter 7 the responsibilities that local governments should carry which among others include the promotion of social and economic development within the communities. The department of Provincial and Local government (DPLG) is charged with responsibility over the municipalities. The South African government have also indicated its intention of halving poverty level in the country. However when looking in the rural area it seems the government is not succeeding. Strategies have been put in place to help local governments to realise the government mission of economic growth. Local economic development as a policy tool has been introduced in South Africa for local government to use as a tool towards economic development of the citizens at the municipal level. The DPLG has also supported the usage of LED as an economic development tool by drawing up an LED framework to serve as a guiding tool for municipalities in South Africa. However poverty level seems to be increasing, the level of unemployment is also high and skills shortage is severe especially in the rural communities. This poses lot question about the validity of LED as an economic development tool especially in the rural areas. As Prahalad (2006) says what is needed is a better approach to help the poor, an approach that involves partnering with them to innovate and achieve sustainable win-win scenarios where the poor are actively engaged. Citizens in South Africa have resorted to mass demonstrations and public protests about the inability of local governments to provide better services that will improve the standards of their lives. Many citizens feel like the municipalities are not doing anything for them. The question is that is LED useful in poverty eradication in those rural municipalities? Does LED as an economic development strategy at local government serve as a solution for poverty to the communities?

32

3.3 RESEARCH OBJECTIVE

1. The researchers first objective is to assess the impact that LED has in eradicating poverty and economic development. The researcher wants to establish if LED would eradicate poverty in the rural municipalities. 2. To assess if LED strategies are well coordinated in rural municipalities. There seems to be better coordinated LED strategies in urban municipalities because there is more economic growth than in rural municipalities, so assessment of LED strategies is very important. 3. LED definition talks about the participants in the locality taking part in economic development, now assessment of private sector in partnering with the local authorities in achieving economic growth has to be checked. 4. Local governments are the extension of National and Provincial governments in South Africa. These three spheres are politically constituted. Ward representatives are politically voted to represent their constituencies. Assessment of political interferences in the execution of LED is also important. 5. The definition of LED talks about the community participation in their own development, so it is very important to assess the involvement of communities in the rural municipalities when implementing LED.

3.4 THEORETICAL FRAMEWORK

This is a framework of how the key concepts in the study relates and lead to good LED that can eliminate poverty. The model used by the researcher was developed by Lindblad (2006) for measuring the performance of LED. Poverty reduction is one of the key performance indicators (KPI) of LED. Usage of poverty to measure the performance of LED is a very relevant tool. The

33

researchers choice of Structure and Effects model (Lindblad. 2006) relates to the definitions made on LED.

Figure 3.1: Performance Evaluation Model in local Economic Development.


Local Economic Development Performance Evaluation Model

STRUCTURE 1. Socioeconomic Conditions Skilled labour Infrastructure 2. Policies and acts 3. Community PERFORMANCE EVALUATION Both Effectiveness (e g. Jobs created, SME, Successful Community projects, Skills level) & Efficiency (e g, costs/ benefits) Either Effectiveness or Efficiency Neither Effectiveness nor Efficiency AGENCY 1. Organizational Characteristics: ED Staff size ED Budget Formal Planning 2. Partnering & pooling resources (PPP) Incentives

Source: Mark Lindblad (2006)

The model shows both Structural (external) and Agency (internal) factors having an impact on LED performance in the municipality.

34

3.4.1 Structure (External Factors)

The structure represents external factors of the organisation. The structural factors are socioeconomic conditions of the municipal jurisdiction. Socio comes from the word social and include conditions like education, age structure, race, health, population, crime and violence. The economic conditions are such as saving rate, unemployment rate and income. Competition for economic development refers to the municipalitys

competitiveness to attract investments for economic development. Other factors that determine the competitiveness of the municipality include infrastructure, political stability, tax and lease rates. A municipality that is on structural good standing will be on a better position to have a good performance on LED than the municipality that is not.

3.4.2 Agency (Organizational/Internal Factors)

The agency is defined as an organisation providing a specific service in this case it is the municipality. Agency represents the organisational

characteristics of the municipality. These include the economic development staff size, economic development budget and activities in place to promote economic development. Inside the organization there are things like formal planning (e.g. LED strategic plan) and partnering and pooling resources which refers to things like public, private partnership with businesses, NGO, and communities to bring together the necessary resources for economic development. The organisation should also consider the incentives given towards the achievement of economic development.

The combination of the structure (external factors) and agency (internal factors) should result in either effective and efficient LED performance or ineffective and inefficient LED performance. When the LED performance is effective, there will be enough job creation and that will lead to the reduction of both unemployment and poverty. When the LED performance is efficient, 35

the costs will be low and the LED benefits will increase. But when there is neither effective nor efficient performance, LED will not be able to create jobs, both unemployment and poverty will rise, the costs will be high and there will be no benefits on LED.

3.4.3 Independent Variable

This is the variable that influences the behaviour/ pattern of the dependent variable in a negative or positive way. LED program is an independent variable that influences poverty level in the locality.

3.4.4 Dependent Variables

Dependent variables are all the factors and attributes that are responsive to the independent variable. The researcher is interested in the impact of LED on poverty in the local government. Then poverty becomes the dependent variable for the researcher. The dependent variable are the outputs from the LED program under which its performance towards poverty eradication can be measured in different ways such as employment rate, skills level, infrastructure development, establishment of SME to mention but few, would be very important to determine LED effectiveness and efficiency.

3.4.5 Moderating Variables

These are the variables other than the independent variable which might have an effect on the dependent variable (Hussey et al. 1997). The moderating factors which influence the performance of LED on eradicating poverty will be environmental factors like socioeconomic conditions, availability of resources,

36

location and competitive attractiveness of the area as factors outside the municipality (organisation).

3.5 RESEARCH ASSUMPTIONS


The researcher made a major assumption that rural based municipalities are not able to alleviate poverty through LED. The assumption is based on the following: Majority of people in rural areas live in poverty. Many rural municipalities dont have financial and human capacity to carry economic development There are small chances for rural municipalities to attract investors.

The assumption is also based on extended exploration of literature about limited funding of local government activities.

3.6 RESEARCH LIMITATIONS


The researcher is limiting the study to one rural municipality of Greater Tubatse Municipality (GTM). GTM is a rural municipality in Limpopo province where poverty is still high. The limitation is based on the time constraint and financial resources allocated for the study.

3.7 RESEARCH QUESTIONS


3.7.1 Major Research Question

1. How does LED assist in problems such as poverty eradication (employment generation, skills development and infrastructure

development) in the rural municipality? Poverty in South Africa is still high even after the much said achievements by the ANC led government. Municipalities are charged with

37

responsibilities among others is the development of economic activities in their area of jurisdiction to eradicate poverty and the imbalances of the past apartheid government. The government introduced LED as a tool to help municipalities to facilitate economic development in their areas, yet poverty is still high especially in the rural municipalities. The researcher needs to find out if LED as a tool to facilitate economic development is doing well especially to eradicate poverty.

2. To what extent does local government implement LED?


The success of LED will go with the level at which it is implemented. The local government is the coordinator of all local economic development activities. Therefore the local government should go an extra mile in encouraging the communities, the business and NGO to full participate in LED.

3.7.2 Minor Research Question

1. How does private business get involved in the LED? 2. What is the major LED challenges facing the local government? 3. How does the local community get involved in the LED process? 4. What business support system exists for LED?

The minor research questions seek to find ways of answering to the main research question. For LED to succeed on eradicating poverty there is a need for government to create a policy framework that will guide municipalities know what and where LED should go in the municipality. As the LED definition says that all local role players needs to be involved in the process it is important also to check the level of PPP and community involvement towards achievement of economic development. Lastly all the challenges and constraints facing the rural municipalities in achieving LED have to be explored also.

38

3.7 RESEARCH METHODOLOGY


Research methodology is the reflection of the entire approach for the research process (Hussey et al. 1997). The research methodology in this research is concerned with the data collection, the sampling and data analysis methods.

3.8.1 Data Collection

The researcher will have the data collected from the primary sources, through respondents, individuals and selected groups that will provide data. In these case sources of the primary data are the citizens of the GTM from different villages, municipal employees, NGOs and business people.

A structured questionnaire has been designed for this research. The questionnaire has been developed based on the research objectives and questions so that it provides answers to the research question. The questionnaire is divided into four sections that cover the youth of GTM, the elders at GTM, GTM employees and business and NGOs.

The researcher hired a consultant to facilitate the data collection process because the rural areas do not have infrastructure such as internet that can fast track the data collection process. The sample of 50 people filled the questionnaire and all respondents are assured of confidentiality of their information. The research questionnaire is compiled by the researcher for this study.

39

3.8.2 Sampling Method

Table 3.1 Sample

CATEGORY 1. Youth 2. Elders 3. GTM Employees 4. Business & NGO

NUMBER 20 10 5 15

The researcher decided to use a sample size of 50 due to limited resources on conducting this study. The researcher divided the sample into four categories: 1. youth is the future of the country and is the active human resource in the economy. Youth are also eager for economic opportunities and they still have long live ahead so they looking forward to work and provide for their needs, 2.

Elders have responsibility over their families, when there is no income in the house its the elders who suffer most because they have to find a way of providing for their families therefore they are also the relevant source of economic development, 3. GTM employees knows all their economic development programmes and know the strengths and weakness of their organisation and getting information from the main sources is very important, 4. Businesses and NGOs are the central part of PPP and are very important for the growth of the economy and it is therefore relevant to also get information from them.

40

3.8.3 Data Analysis Method The researcher used the data reduction analysis method and explaining analysis method. Data reduction method is about sorting, categorising, prioritising and interrelating data through the use of matrices (Hussey. 1997). Explaining method is about understanding the coherence of meaning and action in the case under study (Hussey. 1997).

41

CHAPTER 4 DATA ANALYSIS, FINDINGS AND DISCUSSION


4.1. INTRODUCTION

The analysis of the researcher is made from data collected using questionnaires filled by the youth, elders, businesses and NGO, and employees of the Greater Tubatse Municipality. Ten questionnaires were received from the GTM youth, eight received from the GTM elders, five received from the GTM NGO and businesses and five received from the GTM employees.

The respondents to the questionnaire come from different villages around GTM and each person filled the questionnaire independently. The discussion on the analysis has been made based on chapter 3 of this research in collaboration with the research objectives and questions of the study.

Table 4.1 Education information in GTM.

Population Education of over 20 years old No Education/ schooling Primary Schooling Complete Primary schooling Secondary schooling Matriculation Tertiary education Source: Gaffney 2008

270 122 119 507 40% 13% 5% 28% 10% 4%

There is high level of illiteracy in the communities of the GTM. Only 10% of the population manages to obtain school leaving certificate/ matriculation. This is a very small number considering the shortage of skills that the region

42

is experiencing. There is only 4% of the population that manages through the universities and colleges it is also a very small number looking at the size of the population. However most respondents are cite shortage of money as a resultant factor to this small number of people reaching through tertiary education. This result in highly skills jobs being taken by people outside the municipality.

Education is very important in LED. When the structural environment has educated people there are always many alternatives towards problem solving and economic development. People without education find it hard to understand basic requirements for economic development. Most villages in GTM are found without educated people who can also help the municipality towards unleashing the LED potential.

The 4% of people who reach through tertiary education are mostly migrating to bigger cities for jobs and end up leaving their communities being brain dry. People with no education to those who reach secondary schooling without matriculating are mostly people who find it difficult to acquire skills. They become hopeless jobseekers.

4.2 LED AWARENESS, COMMUNICATION AND PROMOTION


Communication, promotion and making the communities and stakeholders aware of LED are one step towards achieving an effective and efficient LED. This answers to the researchers objective of assessing the depth of local community participation in LED. Participation comes with being aware of what is happening around you. The local community participation becomes easier when good efforts are made to communicate and promote LED.

This also extends to potential investors, donors and other possible private partners. The investors and other private partners respond mostly to promotions and communication made by the municipality on LED. Some

43

municipalities in Russia have a dedicated marketing and public relation offices that promotes economic development. The researchers analysis on promotion of LED is based on the four categories that were chosen through the questionnaire. The following table shows how different categories rate the level of awareness, communication and promotion of LED.

Table 4.2 Awareness and Promotion of LED

PROMOTION YOUTH STATUS YES NO 35% 65%

ELDERS

GTM

BUSINESS TOTAL & NGO 40% 60% 46% 54%

10% 90%

100% 0

The researchers data shows that 54% of the people who answered the questionnaire seem to not agree that there is enough effort from the municipality to promote, communicate and make people aware of LED in the municipality. There is 46% who are saying that there is awareness, communication and promotion of LED.

4.3 LED SUPPORT SYSTEMS

Successful LED also needs well organised and coordinated support systems. These systems can be both within the organisation (GTM) and outside the organisation (community). As I can define a system to be a set of interrelated components that forms a unit, when good support systems are in place then LED will show its effectiveness and efficiency by reducing the levels of poverty, reducing unemployment and increase skills development.

44

4.3.1 Municipal LED unit.

This is the central point of LED. Its role is to coordinate the whole LED process for the municipality.

Table 4.3 GTM staff competency

STATUS

YOUTH

ELDERS

GTM

BUSINESS TOTAL & NGO 0% 40% 60% 0% 3% 25% 52% 21%

EXCELLENT 10% GOOD FAIR POOR 20% 50% 20%

0% 0% 37% 63%

0% 40% 60% 0%

The analysis from the respondents on the researchers questionnaire shows that people see small percentage (3%) of excellence from the municipal staff when it comes to LED execution. 25% of the respondents are saying that the municipality is good in LED delivery while 52 percent is saying that the municipality is only fair and 21 percent says that the municipality is poor in executing LED.

This is attributed to the comments made by respondents in which the respondents shows two reasons for the problem; one thing indicated is that the municipality do not have well skilled staff to execute LED and the second comment is that there is shortage of staff for the LED unit to carry out an excellent job on LED.

The LED performance measurement model that the researcher is using for theoretical framework shows under agency that the local economic

45

development unit has an important role towards achievement of efficient and effective LED. The finding by the researcher is that the municipality is not well capacitated and shaped to deliver on the effective and efficient LED. This finding answers to the researchers objective of assessing whether LED strategies are well coordinated in rural municipalities.

4.3.2 LED Strategic Plan

The GTM has a well developed LED strategic plan. The respondents from the municipal side are aware of the current strategic plan in place towards achieving a successful LED. The GTM LED strategy follows a four stage process. Stakeholder mobilisation and baseline review Development potential analysis LED strategy formulation Implementation plan and institutional options.

However the strategic plan process is very quiet on important issues such as monitoring and evaluation. Most respondents from the interviews the researcher has conducted shows that there is no proper control, monitoring and evaluation of economic development initiatives and this results in LED initiatives losing track and failing. The findings here answers to the researchers objective of finding out if the LED strategies are well coordinated and also the research question on what LED support system exists.

4.3.3 Public Private Partnership (PPP)

PPP is an economic development support mechanism in which private business is funded and operated by partnering with government. According to Van Dijk (2006) this is also called Public Private Community Partnership (PPCP) in countries like Indonesia. This stresses the need to bring all stakeholders into the process of economic development.

46

Table 4.4 Public Private Partnership at GTM. STATUS YES NO GTM 38% 62% BUSINESS & NGO 57% 43% TOTAL 28% 72%

The respondents shows that PPP is practiced (28%) at GTM towards the achievement of LED, however there is also a high (72%) number that shows that PPP is not practiced. Most commented partners of GTM are LIBSA, LIMDEV, Modikwa Mine, MQA and Anglo-Zimele mines. These help the GTM with entrepreneur training and funding, and funding for community development projects. However the problems are that the mines most of the time do not work with municipality instead directly link with communities which results in conflicts between the mines and the communities.

The other resultant factor is that funding is not well administered or monitored and result in failing economic development projects. The findings here answers to the researchers objective of assessing the role private enterprise on LED and answer the research question on how do the private business get involved in the LED.

4.3.4 LED Budget

LED budget is very important towards the realization of effective and efficient of LED. The higher the budget especially in rural disadvantaged municipalities, the higher the chances of achieving a poverty eradication economic development. GTM has no money budgeted for LED purposes. The municipality is however depended on the money that the private businesses like mines are offering for economic development purposes.

47

Since there is no formal partnership agreement the mines are most of the time overlapping the LED office in the municipality and directly interacting with the communities on LED matters. Therefore the municipality has no financial capacity to carry LED in the communities except by just coordinating training on entrepreneurial skills with the help of LIBSA and LIMDEV.

4.4 COMMUNITY INVOLVEMENT IN LED


The communitys involvement and reaction towards LED is very important towards the successful LED at GTM. The municipality has to have the support of the community and the community should show a will to be part of the process towards economic development in the locality. At GTM this will be villagers from all the villagers of GTM. After being made aware and communicated to about the LED, there should be a direct involvement from the community.

The involvement according to UN-HABITAT has to start from the LED strategic planning by involving and getting the views of the community regarding the economic development needs that will benefit the communities, participating in projects implementations and rewards structures.

Table 4.5 Community Involvement

STATUS

YOUTH

ELDERS

GTM

BUSINESS TOTAL & NGO 25% 43%

YES

52%

15%

80%

NO

48%

85%

20%

75%

57%

48

The results from the filled questionnaires shows that less (43%) than half of the respondents have been involved in LED, the respondents shows that community is highly not involved in the LED. However the municipality shows 80% confidence that the community is involved while the elders in the community disagree 85% that the community is involved in LED. There is 52% of the youth who says that the community is involved in the LED while 48% says there is no community involvement. This result is not inline with the objective of South African LED framework (see chapter 2), which states about encouraging the involvement of communities and community organisations in the matters of local government.

The findings by the researcher answers to researchers objective of assessing whether LED strategies are well coordinated and also the assessment of the depth of local community participation on LED. Coordination of LED without full involvement of the community is not enough therefore the researcher finds that not much effort is put to coordinate well the LED. The other finding is that participation of the communities is very minimal.

4.5 IMPACT OF LED AT GTM


LED as economic development activity should have a positive impact in the society. This will be reflected through increase in employment, skills development, increase in income and general increase in the standard of living.

Table 4.6 Annual Household Incomes at GTM INCOME NO INCOME R1- R4800 R4801- R9600 R9601- R19200 R19201- R38400 NUMBER 24065 4228 12536 6426 4637 PERCENTAGE 42.8% 7.5% 22% 11% 8%

49

R38401- R76800 R76801- R153600 R153601- R307200 R307201- R614400 R614401- 1228 801

2688 1077 350 106 28

4.7% 1.9% 0.6% 0.2% 0.04%

The general annual income per household at GTM shows a high level (42.6%) of the people who have no income at all. This reflects the level of poverty that people are exposed to. There is very limited number of people (28) people who have a high income of R614401 R1228 801. This shows a great gap between the people living in poverty and those who can afford a luxury lifestyle. The impact of LED should be shown with the benefits that communities are getting towards improving their economic status.

Table 4.7 LED Impact at GTM STATUS YES NO YOUTH 20% 60% ELDERS 20% 80% GTM 60% 40% BUSINESS TOTAL & NGO 10% 90% 27.5% 72.5%

The respondents do not seem to be happy with the impact that LED has on their life. 72.5% of the respondents do not see the impact of LED raising reasons that they are not communicated of the LED, that some projects are targeted at individual, friends and relatives of the municipal employees, that LED is targeted to some few villages around the municipality. Most of the projects were on sawing, poultry, bricks making and agriculture and they created few jobs and later the projects could not be sustained and as a result they collapsed.

50

The respondents also argue that there is still low level of skills in their communities and that the trainings and funding taking place were not well and fairly coordinated in the municipality, leaving many people not being aware of such possibilities. One example given by the respondents is the car wash project at Praktiseer which was not well coordinated and was given to the community leaders relatives.

The same projects value was far below the money that was allocated. Other arguments raised by the respondents are that most of the activities taking place from the municipality are not aimed at the poor people and therefore their live has not improved since 1994. There is still lack of infrastructure such as roads, transport, electricity, telecommunication and water.

While there is also 27.5% of the respondents who are saying that LED has an impact on their lives, however they are also highlighting that most of the projects such as agricultural projects are not big enough to provide enough employment and income, therefore there is generally an imbalance between the communities economic needs and the provision by the municipality as a result of lack of enough funding and poorly coordinated LED activities.

The researchers findings on this part answers to the researchers objective of assessing the impact of LED on poverty and according to the respondents LED is not helpful at GTM on poverty eradication.

Table 4.8 GTM Labour Market

Employed Unemployed Strict Unemployed Rate Strict Labour Force Discouraged Workers

19227 30678 61% 49905 21530

51

Expanded Labour Force Expanded Unemployment Rate

71435 52208 (73%)

Source: GTM strategic plan. (www.tubatse.co.za)

The level of unemployment at GTM is standing at 73%. This statistic is inclusive of all sectors and age groups at GTM. This number is in relation to the education status of the citizens in the municipality. These education and unemployment rate puts lot of strain on LED. The respondents indicates that there is some training on entrepreneurship skills which is coordinated by GTM and its partner organisation (LIBSA, LIMDEV) however the challenge is that the rate of people leaving school before matriculation is high and therefore making the structural environment for LED success very difficult.

The findings here are that unemployment is still high (73%) at GTM, 59% of the total unemployed is actively looking for a job and 41% is discouraged people, many people (42%. See table 4.6) still have no income at all, the communities are less involved in LED activities and as a result LED does not help in poverty reduction.

According to the respondents the municipality has no sufficient human capacity to carry effective and efficient LED. The LED unit has only two personnel (LED Manager & LED officer) to facilitate LED activities. The unit is not equal to the poverty status at GTM. The respondents also comment that the projects that are carried are of little capacity and they are unable to create many jobs. The respondents also are raising the problem that there is very poor infrastructure at GTM, most villages do not have electricity, poor roads and communication facilities are also poor and therefore makes LED difficult to achieve efficiency and effectiveness.

52

4.6 FINDINGS
The researchers findings are in relation to the research objectives and questions in chapter one. The findings are also made based on the framework in chapter 3 of the research.

4.6.1 Findings on Structure The structure represents the external environment of the municipality, the important part of a successful LED. The findings on labour shows that there is high level of illiteracy and skills shortage in the communities with a small percentage (10%) being able to obtain school leaving certificate and 4% able to reach tertiary education. This finding put a strain on capacity to achieve effective and efficient LED. The finding answers to the assessment of community participation on LED. People in these communities take long to understand basic concepts of economic development because of their illiteracy level.

The second finding is that there is no sufficient LED awareness, communication and promotion from the municipality which result in community not being well informed and not involved in LED activities. The community is the one in need of economic development therefore it is very important that they get involved fully in addressing their economic needs. This finding answers to the depth of community participation on LED.

The third finding is that there is still lack of infrastructure such as roads, electricity, telecommunication, water and sanitation which makes it difficult for the achievement of effective and efficient LED. Infrastructure is very important in the development process. Without good infrastructure many projects might fail because the cost of operating such projects might be high when infrastructure is poor. Infrastructure is a basic support system in any development and with poor infrastructure development might be slow because even investors will not be attracted to invest where there is poor infrastructure.

53

4.6.2 Findings on Agency These are findings which are internal to the municipality responsible for LED coordination. The first finding is that the LED or municipality does not have sufficient human capacity to achieve effectiveness and efficiency. This result in LED activities not being well coordinated to the fullest and result in projects collapsing. This finding answers on the objective of assessing LED strategies and answers to the question on what LED support system exist and what are the major LED challenges facing local governments.

The second finding is that GTM has no budget allocation for LED unit and activities except sourcing funds from mines which happens slowly. Therefore the question on LED support system is answered by this finding. LEDs success is based on the availability of funds and without proper and reliable funding the chances of achieving effective and efficient LED are very less.

The third finding is that there is formal planning in a form of LED strategic plan however the strategic plan does not state anything about control, monitoring and evaluation of LED. This resulted in lot of projects failing and funds channelled into wrong hands. There has been a collapse of projects as a result of lack of clearly stated monitoring and control measures. This finding answers the objective on whether LED strategies are well coordinated and the question on to what extend does the local government implement LED.

The fourth finding answers the role of private enterprises on LED. There is a little interaction between the municipality and the private business. However the mines most of the time creates a direct link with communities than the LED unit in the municipality. As a result there is little monitoring when the municipality is not involved which result in projects not having a positive impact on the lives of the citizens.

The last finding answers to the main research question on the impact of LED on poverty at GTM. The researchers finding is that there is very little success of LED on poverty. There is very few skills trainings coordinated, some 54

funding have been secured for economic development projects although some were not sustainable. Most of the projects results in little income which does not make a difference in the standard of living for the citizens. There is still a huge number of unemployment and infrastructure backlog. The finding is that there is very little that LED is doing on poverty eradication.

The researcher finds that the combination of all findings results in LED not having impact on poverty eradication at GTM.

4.7 CONCLUSION
The researcher has analysed the data in relation to the research objectives and research questions stated in chapter two. The researcher also made the analysis in this chapter basing on the theoretical model used in chapter 3. The findings in this chapter reflect the data received from respondents to the questionnaires and the telephone interviews conducted during the course of the research.

55

CHAPTER 5 CONCLUSION, RECOMMENDATIONS AND FUTURE RESEARCH.

5.1 CONCLUSION
The purpose of the research was to study the role of LED on poverty in rural municipalities. In earlier chapters it was stated that municipalities in South Africa have constitutional mandate to promote socio-economic conditions of the citizens. The researcher raised four research objectives with research questions.

To answer to the objectives and questions a theoretical model of LED performance measurement was used with the concept that if the municipality carrying LED (agency) and the environment where LED is carried (structure) are all well organised then there will be effective and efficient LED that will eradicate poverty.

Looking at the earlier assumptions the respondents agree that there is still poverty in communities and that there is lack of capacity in the municipalities to deliver LED. The human capacity is both internal and external. Looking at earlier chapters as stated that many small municipalities are not well funded to deliver their expected mandate then it becomes difficult for LED to be fully functional. In chapter 2 the Bulgarian case states well that the municipalities are brought down to a mere distribution of scarce budget funds and delivery of limited resources.

The researcher has established that the LED unit at GTM has no budget aiming at projects for economic development except through seeking funds from mines and other potential funders. Adding to that is that the municipality

56

is small and has very little revenue that it generates for itself. While one of the principles of LED framework in chapter 2 states that through a developmental approach, Government has a decisive and unapologetic role to play in shaping the economic destiny of our country, this theory seems not to be true, because not putting a budget to achieve one of your principles shows a compromise to that principle and therefore it becomes apologetic.

The researcher also managed to establish that private business do not want to be abide or play openly on PPP agreements with the municipality and that sometimes the private business prefer to deal directly with the communities than going through municipality except when there is conflicts between the businesses and the communities. The researcher also found that the strategies for LED are developed at GTM however there is no clear monitoring, control and evaluation of processes and as a result LED projects become unsustainable. LED processes can start but will not end with their intended results as a result of lack of monitoring and evaluation.

The researcher learned also that there is high level of illiteracy and skills shortage in the communities and result in many citizens being unemployable, however the skills development programmes are not communicated enough as such many communities are not aware of such programmes. Therefore the skills development interventions do not make a much of a difference because many people are still found unskilled. However in Philippines (see chapter 2) the case was achieved very well through skills development and production management trainings.

The GTM does not fund projects but coordinate private funders to fund potential economic development project and there is slow funding from private funders because funders are sceptical to fund people without skills necessary for the proposed projects. In Togo as stated in chapter 2 many young entrepreneurs emerged as a results intensive training and skills development that was carried for young students. This also helped creating more opportunities and avoided mono profiles in many municipalities in Russia. Therefore low skills its a problem for GTM, when it comes to LED. 57

The unemployment rate and the disparity in income level clearly reflects that many citizens live in poverty and since the introduction of LED in South Africa with the ANC government very less is being said to have been achieved within GTM in fight against poverty. In general looking at the statistics from the respondents LED is failing in poverty eradication because none of the structural and agency factors are favourable for the achievement of effective and efficient LED.

Therefore in conclusion poverty is still high at GTM. The municipalities should be looked at especially for the lack of human capacity especially in their recruitment system. The central government since is the one responsible for allocating resources to the municipalities should give a better look at the rural municipalities since they can hardly generate their own revenue. The rural municipalities are as a result of apartheid system and needs special financial and human resource attention from the national government otherwise the problem of poverty will not be reduced in the rural areas.

5.2 Recommendations

5.2.1 Community Involvement LED is about developing economy for the communities in the locality. It is very import that the GTM involve and encourage the communities in all steps of the way in the LED. As practised in the Philippines, the GTM should move for a PPCP (Private Public Community Partnership). The municipality should take in to cognisance the educational status of the communities and bring measures that will match the status of the communities in economic development.

5.2.2 LED Budget

58

Without a reliable funding source for economic development, LED will not succeed. The municipality should find a way of creating a specific budget for LED purposes only. That could be achieved by applying funds with national treasury, the province and department of provincial and local government and also by marketing the municipality to attract local and international donor organisations and investors in LED projects. This will help the municipality to acquire more private funding because there will be ongoing projects that potential funders will see that their funds will not be taken for a waste.

5.2.3 Monitoring, Control and Evaluation The municipality should develop an LED monitoring and control program for all LED intended projects. There is no meaning of giving money that you will not know if it is used for the intended purpose. With clearly set monitoring and control systems in place that should form an integral part of the LED strategic planning all LED projects will be geared towards community development.

5.2.4 Skills development and Illiteracy reduction

The municipality should accelerate on skills development and reduction of illiteracy level. This can be done by creating and increasing partnerships with universities, colleges, research institutions and training and skills development institutions for vocational training to fast track the pace of reducing illiteracy and skills shortage. This will help communities to have understanding of their economic development responsibilities and be in a position to also add value in the LED process. This can also be enhanced by developing infrastructure to support things such as internet access where communities will be able to access information without the municipality having to directly visit the communities.

59

5.2.5 Municipal LED unit

The municipality should expand the LED unit so that the staff can be equal to the challenges facing the unit. Currently the LED unit has only two staff. Therefore it is needed that the current structure of the unit be reviewed and additional posts should be created and filled so as to enable the unit to execute its tasks. The current staff should also be further trained and developed.

5.3 Future Research


Rural areas are large in South Africa and this study covered only a small part. The remaining parts need to be researched. This study was carried in a very short time and there is a need to further extent the time for this study so as to cover all aspects necessary in LED. The researcher recommends that further research should be carried out in a more detailed manner, in the area with the use of a more detailed quantitative and qualitative analysis. Future research should also look into including various municipalities and the sample be expanded.

60

6. References and Bibliography


ANC (1999) Election Manifesto www.anc.org.za

Bond .P. (2002) Local economic development debates in South Africa.

Capkova .S. (2006) Local government and economic development. Open Society Institute, Budapest. http//lgi.osi.hu

Constitution of the Republic of South Africa, 1996. www.info.gov.za. Retrieved 30 May 2009

Davis J.R (2005) Addressing poverty through local economic development. www.nri.org

Davis J.R (2006) Evaluating and Disseminating Experiences in Local Economic Development: Observations on Integrated Development Programmes of the Free State, Republic of South Africa.

Davis J.R & Rylance .C. (2005) Addressing poverty through local economic and enterprise development: A review of conceptual approaches and practice. www.nri.org

Domianovo .A, Tzvetkovska .M & Ivanovs .S. (2005). The role of local government in local economic development in Bulgaria. http//lgi.osi.hu

DPLG (2006) National Framework for local economic development in South Africa. www.dplg.gov.za

DPLG (1999) Municipal structures act. www.dplg.gov.za

DPLG (2004) Project Consolidate www.dplg.gov.za

DPLG Local Economic Development www.dplg.gov.za

Dijk .M.P (2006) Managing cities in Developing Countries. Renmin University Press 61

Gaffneys Local Government in South Africa Official year book. 2008. www.gaffney.co.za

Hussey .J & Hussey .R. (1997) Business research: A practical guide for undergraduate & post graduate students. MacMillan press LTD.

Lafferty .M.W (2001). Sustainable Communities in Europe. London, Earthscan Publications Ltd.

Lindblad .R.M. (2006) Performance measurement in local economic development. Urban affairs review, Vol 41. Nr 5. p 653.

Mufamadi. S. DPLG (2006) Stimulating and Developing Sustainable Local Economies. www.dplg.gov.za retrieved on 05 March 2009.

MunicipalIQ. (2009). The state of local economic development in South Africa. www.municipaliq.co.za retrieved 16 July 2009

Nel.E.L (2001) Local Economic Development: A review assessment of its current status in South Africa.

Nel E.L & Bins T (2002) Evaluating local economic development initiatives in South Africa: Evidence from the cities.

Persky. P, Ranney. D and Wiewel. W. (1998) Import substitution and Local Economic Development. Economic Development Quartely, Vol. 7 No, 1, p 4, February 1993.

Prahalad .C.K (2006). The fortune at the bottom of the Pyramid. USA, Wharton School Publishing

Pretorius .A & Blaauw .D (2005) Local Economic Development agencies in South Africa- six years later. Durban

Rogerson C.M (1999) Local Economic Development and Urban Poverty Alleviation: The Experience of Post-Apartheid South Africa. Pergamon. www.elsevier.com

62

Swinburn .G. (2006) Local economic development quick reference. Urban Development Unit. The worldbank. Washington DC. www.worldbank.org/urban/led

Swinburn .G, Goga .S & Murphy .F. (2006) Local economic development: A primer developing and implementing local economic development strategies and action plans. Cities of Change. Worldbank. www.worldbank.org

Tamasane.T. (2007) Sustaining Livelihoods in Southern Africa. www.khanyamrc.co.za retrieved 11 January 2009

Visgalov D.V. (2005). The role of local government in local economic development in Russia. http//lgi.osi.hu

Wandschneider.T. (2004) Small rural towns and Local economic development: National Resources Institute. www.nri.org retrieved 22 February 2009

63

You might also like