Local economic development for urban resilience: The South African experiment

Introduction

Since the end of the 20th-century, research shows that the global socio-economic system is gradually becoming an urban one (Jacobs, 1984). Increasingly, urban systems began providing the backbone for national development. The era of ‘urban revolution’, according to Lefebvre (2003), introduced significant interest in the ‘wickedness’ of environmental problems, rapid urbanisation and the dynamics associated with local governance. Glaeser (2011) in this respect recommends establishing a field of study, namely ‘urbanology’, to enable robust analyses of interdependent and interrelated dimensions for urban governance in general and urban resilience in particular.

As economic hubs, urban areas function as pull factors encouraging migration to cities. In Sub-Saharan Africa, already 62% of the total population resides in urban areas (cf. UNHabitat.org). Rapid resettlement in urban areas places significant pressure on cities to provide basic services to its populace. This includes appropriate strategies for longer-term LED. If the relevant authorities fail in this obligation urban resilience could be severely compromised. Such resilience generally refers to the ability of the local sphere of government to develop the necessary capacities that can help absorb future shocks. Scholars such as Edwards (1993: 80), Levy and Fukuyama (2010: 1) and Wantens (2010: 30), concur that development is a multidimensional concept that encompasses economic, social and environmental dimensions.

Regarding the economic dimension, this typically refers to a sustained improvement in the living standard, general well-being and prosperity of communities. Local government has a significant responsibility in this regard as catalyst for socio-economic development. However, the successful execution of this responsibility requires political commitment, institutional competency and capacity, as well as implementing the national economic growth strategy and trajectory.

In light of the situation above, LED has become a popular socio-economic development intervention strategy on the African continent. Literature generally describe this as an urban plan that outlines development objectives and actions. As such, LED outlines a local agenda to promote and develop a local community’s economic, physical, social and environmental dimensions.

The interface between urban resilience and LED is often implied in scholarly literature but seldom investigated explicitly – especially within the African context. The purpose of this article is to explore the significance that strategies for LED hold as instruments for urban resilience. This is done by assessing the case of urban development in South Africa. Such a case study thus investigates the way the country approaches development in general and urban resilience in particular. As such, successes and failures of LED as applied in various rural and urban settings are uncovered. These examples are examined as best practice for employing LED strategies as instruments for urban resilience. Such best practices could provide valuable lessons for countries from a similar context, especially from within the Southern African Development Community (SADC).

Contextualising urban resilience

Currently, countries have to cope with global issues are prevalent such as climate change, loss of biodiversity, ecosystem degradation and depletion of natural resources. These problems have been exacerbated largely by the unsustainable ways in which urban society interact with its environment. Major cities around the globe are projected to grow to well over 10 million inhabitants by 2025 (World Commission on Environment and Development, 2015). Such rapid urbanisation holds enormous challenges such as pollution and raising waste levels, increased housing and transportation needs. This situation entails the ‘new normal’ of urban stresses and ecological tension (Bovaird, 1992: 345). It can safely be deduced that resilience thinking and pro-active urban socio-economic planning are essential if municipalities are to address slow-onset crises (Bicknell et al., 2009: 56).

Sustainable local governance is increasingly regarded a key success factor in countries to deal with natural as well as human-made crises (cf. Emdon, 1997; Lafferty and Meadowcroft, 2000: 5; Underdal, 2010: 387). Urban areas thus form the nucleus of sustainable society and are regarded as ‘breeding spaces’ for creativity, innovation, socio-economic progress and strategies that could help ensure sustainable development (Glaeser, 2011; Rydin, 2012; Van Geenhuizen and Nijkamp, 2012).

Furthermore, the notion of ‘place governance’ as a new urban model is proposed to draw into municipal decision-making those communities affected by development (Kent, 2013: 1). Given this context, various international treaties, conventions, protocols, agencies and think tanks have shifted attention from general sustainable development to targeting urban resilience. Some of the most prominent initiatives, according to Van der Waldt (2016: 56), in this regard are:

Earth Summits, Agenda 21 and Local Agenda 21;

Institutions and agencies that specifically focus on urban resilience include:

The Cities Alliance;

These initiatives and organisations have produced several white papers, strategies and models to disseminate guidelines and practical solutions. Similarly, in South Africa the South Africa Cities Network (SACN) shares forms of best practice for sustainable development between metropolitan municipalities (i.e. cities) (Van der Waldt, 2015: 38).

Urban resilience can be regarded as an umbrella term for strategic and spatial planning as well as strategies for urban design required in local government and which develops the capacity necessary to meet future challenges (Nijkamp, 2010: 101; Sjöstedt, 2015: 23). A resilient village, town or city is one that has developed the necessary capacities to help absorb future shocks and stresses to its social, economic and technical systems and infrastructures. This would enable such an urban area to maintain essentially the same functions, structures, systems and identity (Resilient City.org).

For purposes of this article, it is important to distinguish urban resilience from that of local/city-government as follows:

Urban resilience denotes a much broader context, namely the total environmental, social and economic dimensions of the urban setting (Fiorino, 2012: 19).

In other words, local-government resilience refers to a municipal council’s structural, systemic and administrative response to deal with issues that may affect its resilience. It is furthermore important to note that problems endemic to urban areas typically have a ripple effect and thus impact peripheral areas as well. Resilience thinking is essential in this regard to ensure urban failures will not cause the cascading collapse of other areas such as (cf. Sadoway and Shekhar, 2014: 3). Duit (2016) emphasises the complex and interconnected nature of urban resilience, whilst Flannery (2005) adds that urban areas are ‘vulnerable ecologies’ characterised by ‘invisible interdependencies’.

In addition, Duit and Galaz (2008) propagate new values for urban governance such as ‘robustness’, ‘flexibility’, ‘agility’ and ‘adaptability’. In this regard, Roseland (1997: 197) and Newman and Matan (2013) contribute by identifying core dimensions of the ‘eco-city’ to make it resilient, ‘greener’, and sustainable. Glaeser (2011: 220) analyses the external and internal dimensions of ‘smarter environmentalism’. These entail urbanisation trends, safety and security, availability of natural resources, statutory obligations and levels of satisfaction (or dissatisfaction) with community services.

Internal dynamics in particular point to strategic vision and city leaders’ perspectives and assumptions about future realities that may confront the urban area. Further internal dynamics may entail levels of corruption and maladministration, which may include existing structures, systems, policies, regulations, processes, procedures and methods as well as skills. Furthermore, the focus is on competency and the staff’s capability levels as well as political factionalism and distrust in city councils. Regarding ‘green’ economics, scholars generally emphasise the need to fast track the production of renewable energy, environmental education and eco-tourism (Hahnel, 2014; Hutchinson et al., 2002).

It is evident that urban areas (i.e. cities) are increasingly becoming central topics in resilience thinking. This point was especially emphasised during the United Nations Conference on Environment and Development (UNCED), commonly known as the ‘Earth Summit’, in Rio de Janeiro (1992) where approximately 180 states signed ‘Agenda 21’. Agenda 21 refers to the agenda for the 21st-century whereby member countries pledge to coordinate their endeavours to address the globe’s most urgent and complex sustainable development challenges. Countries thus have to work both individually and collaboratively. As far as the individual work is concerned, Local Agenda 21 refers to the policies, strategies and programmes that member countries need to pursue to achieve the development targets set. Local Agenda 21 is thus critical since the local government spheres of member countries have to give effect to the targets set by means of development programmes and projects. Agenda 21, in Chapter 28, thus makes specific provision for guidelines for local authorities to implement key aspects of the plan. Currently, approximately a thousand major cities, towns and counties in 88 countries participate in Local Agenda 21. Chapter 28 of Local Agenda 21 further outlines a vision for how local governments can develop their own sustainability and resilience initiatives. Furthermore, Local Governments for Sustainability (ICLEI), an international association of local and metropolitan governments dedicated to sustainable development, provides consulting, training and knowledge services to build the resilience capacity of cities around the globe. ICLEI currently represents 12 mega-cities, 100 super-cities, 450 large cities and urban regions as well as 650 small and medium-sized cities and towns in 80 countries (see archive.iclei.org/index.php?id = 12366).

The United Nation’s Transforming Our World: The 2030 Agenda for Sustainable Development (Agenda 2030) proposes 17 goals and 169 targets that are universal, integrated and indivisible. These outcomes address, in a balanced way, are the three dimensions of sustainable development: economic (profit), social (people) and environmental (planet). The post-2015 Sustainable Development Goals (SDGs) further emphasise the fact that local governments in general and cities in particular, are essential to promote inclusive sustainable development in countries. SDG 11 refers to ‘Sustainable Cities and Human Settlements’ and argue that the resilience capacity of local authorities should be strengthened to facilitate broad-based ownership and community commitment and accountability as far as economic growth and sustainable development endeavours are concerned. Local authorities should thus link the SDG with local communities and in so doing localise the SDGs. In this regard, the United Cities and Local Governments (UCLG) agency supports international cooperation between cities and associations and facilitates programmes, networks and partnerships to build the resilience capacity of local governments (see https://www.uclg.org/en/organisation/about).

Innovative approaches and strategies, including local economic development (LED), are essential to attain these goals and targets, thereby functioning as instruments for urban resilience.

Resilience thinking on the African continent

Africa’s socio-economic development remains relatively low on the global agenda. Nevertheless, there is a tendency to scrutinise cases on the continent in search for best practice, successes, but also failures. Comparative analyses with other countries also offer explanations about possible root-causes of development successes and resilience failures. These analyses reveal certain root-causes for low levels of development. Such causes include a number of countries’ colonial past; geographical and political isolation; poor leadership; limited direct foreign investment; political turmoil and armed conflict; corruption; climate change and cultural issues.

Kabede (1999) argues that Africa needs a programme of ‘cultural adjustment’ that would transform the inhabitants’ mentality to one consistent with global development imperatives. In the same vein, Chabal and Daloz (1999) and Ntibagirirwa (2016) point out that certain African cultural mentalities are not conducive to longer-term development. According to Easterly and Levine (1997), high ethnic and linguistic fragmentation hampers economic development planning. It is evident that successful practice in developed nations cannot simply be super-imposed on developing countries (Chabal and Daloz, 1999: 132). The cultures involved in these practices are principally incompatible (Kabede, 1999).

Fortunately, the World Development Indicators (World Bank, 2014), which is a compilation of relevant, high-quality and internationally comparable statistics about global development and the fight against poverty, reflects a trajectory of steady growth in several African countries. Furthermore, the African Peer Review Mechanism has been effective in facilitating socio-economic development planning. This was done by developing the monitoring and evaluation (M&E) mechanisms and countries’ statistical systems. In addition, there was a recent shift from development based on economic growth to more pro-poor and community-based targets. Such a development focus enabled certain countries on the continent to set in motion home-grown initiatives that could achieve sustainable socio-economic development (Rogerson, 2006: 39). Generally speaking, community-based development was the catalyst for self-initiated development activities (Kanyenze et al., 2011: 56).

An assessment of resilience thinking on the African continent should be guided by robust analyses of the content and resolutions from various initiatives by Africans in their quest for an Afrocentric approach to sustainable development. Adebayo (1995: 27) in this regard contends that Africans accepted that only ‘home-grown’ ideologies, concepts and practices will succeed on the continent. The underlying reason for this realisation, according to Adebayo (1995: 128), is the need to overcome overlarge reliance on foreign aid and donor funding, and thus become physically and mentally independent. Some of the most significant initiatives in this regard include:

Monrovia Strategy (1979);

Local economic development: A South African perspective

The origins of local economic development (LED) can be traced back to more than a century in countries of the North. However, LED only attracted attention in government and policy circles after democratisation in South Africa in 1994 (Nel and Humphrys, 1999: 277). From a political perspective, LED resonated with the post-apartheid government’s pursuit of an economic strategy and a commitment to devolve decision-making powers to the local sphere and support community-based programmes (Nel, 2001: 1008). The Cape Town City Council was the first to investigate LED applications in 1986 and other traces of early LED adoption was first noted in the early 1990s in municipalities such as Stutterheim, Johannesburg and Atlantis (Nel, 2001: 1008). Community-based and non-governmental organisations (NGOs) played a significant role in the more formal design of LED strategies in local government. In addition, the support and training provided by private organisations such as the National Business Initiative (NBI) and the Friedrich Ebert Stiftung (FES) were of particular value (Nel, 2001: 1008).

The mandate to pursue LED in local government is sanctioned by the Constitution of the Republic of South Africa, 1996. According to Section 152(c), local government must ‘promote social and economic development’. Furthermore, the Local Government Transition Act of 1993 (as amended in 1996) was the first form of legislation that officially requires the current 8 metropolitan, 44 district and 205 local municipalities to promote economic and social development. Chronicles of LED thinking and approaches can also be traced through other development initiatives of Government such as the following:

Reconstruction and Development Programme (RDP) (1994) as Government’s national strategy to combat poverty and unemployment;

Only as late as 2000, the national government released foundational guidelines for particular institutional arrangements and strategies that guide local governments to begin investigating LED (DPLG, 2000). Typical strategies proposed for LED were: marketing the local area; investment support; assistance to small firms; ‘one-stop-shop facilities’; land release; public works; local procurement; promoting labour-based programmes; and linking development with research and training. Municipalities have the prerogative to decide on particular LED strategies and ensure these are aligned with the IDP process. National and provincial governments only provide support for municipalities which develop such tailor-made, local economic strategies.

The former Department of Provincial and Local Government (currently Department of Cooperative Government and Traditional Affairs) identified the following as key principles underlying LED:

Formulate strategies that prioritise job creation and poverty alleviation.

The period of 2005–2014 was characterised by the proliferation of LED strategies, plans and guidelines. LED is regarded as a critical contribution to the success of Government’s promotion of an enhanced national economy for the benefit of all citizens (DPLG, 2005: 4). Koma (2014: 15) points out that Government succeeded largely in mainstreaming LED by aligning the National Spatial Development Perspectives (NSDP), Provincial Growth and Development Strategies (PGDs) and municipal IDPs. Scholars such as Tomaney et al. (2011: 620) and Hofisi (2014: 127) argue that this alignment brought about an inclusive local government-driven ‘bottoms-up’ approach for development.

Currently, LED aims to build the economic capacity of a specific locality (Nkwinika and Munzhedzi, 2016: 76). It is generally regarded as a ‘cross-cutting’, participatory process that involves the private and public sector within a defined local area (Trousdale, 2005: 29). Furthermore, LED strategies are perceived as key municipal ‘drivers’ (Blakely, 1994: 9) that facilitate growth and promote social and economic development (Scheepers and Monchusi, 2002: 82). Swinburn and Yatta (2006: 5) point to generally-accepted global principles of LED, namely:

processes based on strategic planning;

The global principles above indicate that an LED strategy should be guided by established, integrated parameters. This will help municipalities understand the context and application of the strategy within its communities. Rogerson and Rogerson (2010: 484) attribute the general lack of an integrated approach for delivering LED to the systemic weaknesses in municipalities. These include issues such as ineffective organisational arrangements and systems; poor situational assessments and strategic planning; limited resource allocation to pro-poor strategies; and ineffective management practices.

In this regard, Koma (2014: 41) points out that although aspects of LED are perceived as key mechanisms to address issues of socio-economic development in municipal areas, it is not implemented adequately. This is due to a range of challenges on municipal level. Luka (2017) adds that limited alignment between the three spheres of government as well as inter-departmental relations impede the designing of prioritised projects for social and economic development. Thus, it is important that development, support and coordination are integrated with strategies of municipal departments. The lack of cooperation, coordination and alignment of LED initiatives between adjacent municipalities are major obstacles that makes it difficult to deal with problems of socio-economic development in a region.

The two preceding sections highlighted urban resilience and examined principles and approaches for LED as applied in the case of South African municipalities. In the following section, the critical interface is explored between LED and urban resilience. The eventual purpose is to assess the successes and failures of implementing LED as an instrument to enhance urban resilience.

Local economic development and urban resilience: The critical interface

Approaches on economic growth, based mainly on Adam Smith’s classical economic theory of capitalism, emphasise the need for society to develop. Other conventional theorists generally uncover four requisites for such development, namely: increase in income, production of goods, services and wealth creation (Aliyu and Dansabo, 2017: 923). Furthermore, development scholars such as Coetzee et al. (2003: 1) and Kingsbury et al. (2004) found that modernisation and the dependency theory provide the general theoretical foundations for an in-depth analysis of development. In the same vein, scholars such as Evans (cited in Sunkel, 1969: 23), Smith (1981: 756) and Todaro and Smith (2006: 12) maintain that the dependency theory provides the necessary meta-perspectives to view a country’s economic development status.

Recent adherents of development thinking recognise the fact that urban areas are the ‘economic engines’ and centres of innovation for national economies (cf. Drobniak, 2012). Leftwich (1996) argues that local government is a significant actor in a country’s development process since it establishes conditions conducive for growth and prosperity. Despite this economic role, urban areas are plagued by challenges to internal and external resilience. These include chronic poverty, rapid urbanisation, the depletion of natural resources, pollution, urban decay and climate change. It is evident that unbridled economic development should not be allowed to exacerbate these resilience challenges. Instead, such development should assist urban councils in their efforts to curb the impact of these issues on the cities’ long-term survival. In this respect, Leftwich (1996) cautions that several countries may experience significant economic growth, but do not always present characteristics of good urban governance.

Thus, evidently these cases lack a positive correlation between resilient urban governance and socio-economic development, including LED. Drobniak (2012: 6) argues that global interest may involve issues related to sustainable cities, smart growth and ‘green’ cities. However, as yet there is limited understanding about ways in which economic growth could facilitate urban resilience. There is an underlying growing awareness that a positive relationship should be formed and maintained between LED and urban resilience. This awareness generally stems from the realisation that issues of LED in effect may cause obstacles to urban resilience. These challenges are: the risks of periodic economic recession; urban areas struggling to attract investment; and competition from other municipalities. It may also include migration, loss of a skilled labour force including entrepreneurs, decrease in tax revenue, and unexpected closure of major industries or business enterprises.

The way municipalities respond to the above-mentioned disruptions may ultimately influence their resilience. Batty et al. (2004) in this regard, view municipalities as complex adaptive systems that are dynamic, connected and evolving. Urban economic resilience thus would entail municipalities’ capability to absorb environmental shocks without losing their ability to grow and provide essential services. In contrast, a non-resilient urban area will fail to transform itself and could become ‘locked-in’ within outmoded structures, systems and processes, which may result in economic decline (Drobniak, 2012: 10).

Thampapillai (1991: 5) cautions that the environment is an important component of the local economic system to factor in. Urban governments should therefore treat the natural environment as a resource in the same way as labour, infrastructure and capital. However, it seems that the environmental dimension of development does not receive the attention it deserves, which ultimately threatens the resilience of urban communities. LED strategies should be designed that take into account the potential detrimental consequences it hold for the environment.

Mainly due to high levels of poverty and unemployment, local authorities often argue that LED initiatives such as new business development, mining and infrastructure development, should be promoted at all costs. Scholars such as MacNeill (1989) and Pratt (2015: 62) point out, however, that unbridled economic development may threaten the very resilience of communities it aims to help. Market forces should thus be balanced carefully with social and environmental concerns in the design of LED strategies and programmes. It is usually the poorest of the poor who suffers the most from careless development.

LED as urban resilience instrument: assessing applications in South Africa

Municipal councils often aspire to transform their towns and urban areas into ‘world class’ cities. Such councils can often leapfrog other councils and gain a competitive advantage by learning lessons from successful practices of urban resilience.

In this section, certain best practices are uncovered from a literature survey of case studies about LED applications within the South African local government sector. The cases broadly represent low-capacity, deep rural local municipalities and high-capacity metropolitan municipalities. The cases also largely represent the various provinces geographically. The literature survey was based on a thematic content analysis of data sources, which contained the following sources:

annual performance reports of development agencies and economic development departments in municipalities;

The findings are reported in two components, namely LED successes and failures based on its contribution to urban resilience. It should be noted that the analyses of LED applications and initiatives are complicated by the lack of any LED model in South Africa. The literature review indicated generally four ways in which LED initiatives are currently initiated, designed and executed. These are, namely:

municipal initiatives aligned with their integrated development plans and service delivery and budget implementation plans;

An analysis of best practice is also complicated by the fact that only the four largest metropolitan areas, namely Johannesburg, Durban, Pretoria and Cape Town, have world-class, integrated, broad-based LED strategies in place. Their LED departments were found to be generally well-equipped, -staffed and -funded. In contrast, rural local municipalities have virtually no established practices of LED and those that do exist are often only in early stages of maturity. The successes and failures identified in the literature are thus confined largely to metropolitan municipalities.

Successes

The following successes were registered:

Councils that promote strong community participation in decision-making are more likely to respond to the needs and priorities of communities and experience more legitimacy in the design of LED projects. It is evident that the ward committee system in municipalities is an ideal instrument in this regard. Furthermore, there are significant reports from provinces where traditional leadership is prevalent, for example, Limpopo and KwaZulu-Natal. The municipalities report that the buy-in from these leaders and the incorporation of indigenous knowledge systems, generally result in a more successful design and execution of LED strategies.

From the successes and gains above, the following guidelines can be drawn for LED best practice:

Divide the municipal budget between different wards. In this way, decisions on economic development priorities can be varied, which provides for unique, differentiated aspects.

Failures

The following possible failures with LED must be considered:

The provincial government and individual municipalities may be controlled by different political parties or internal party factions. This often hampers co-operative governance, coordination and regional resilience. The result may also be that the respective LED initiatives of local municipalities within a district municipality are not aligned. It is further evident that political factionalism impedes the integration of sectoral government policies and strategies on provincial and local spheres.

From the failures in LED mentioned above, it is evident that local, district and metropolitan municipalities should follow a more comprehensive and integrated approach to foster urban resilience.

Conclusion

The strategy of LED is a responsibility attributed to local government. This strategy was introduced recently within South Africa, and as such is often viewed as a secondary priority. Service delivery protests, non-payment of services and political factionalism often place low-capacity municipalities in a spiral of economic decline. A strong economic base is critical for sustained resilience. Especially poverty alleviation, job creation and skills development is crucial.

In light of the discussion in this article, it is apparent that LED could and should function as instrument for sustainable development, community prosperity and ultimately, urban resilience. The contribution of LED in this regard is currently, however, rather muted – especially in district and local municipalities within South Africa. The ‘big-city’ bias of economic development does not address the unique challenges in rural areas.

More efforts should thus be invested that provide the necessary support for low-capacity municipalities when they design and execute LED strategies and programmes. Furthermore, partnerships between municipalities, business, community-based and non-governmental organisations, as well as development agencies is important. This would help strengthen the ability of municipal LEDs to enhance the resilience of communities.

Urban resilience requires municipalities to maintain a healthy balance between the environmental, economic and social systems. Since municipalities function as catalysts and facilitators for development, a coherent policy framework should be designed to help integrate these dimensions. Such a framework should incorporate the use of LED as resilience instrument. Issues such as urbanisation, climate change and the decline of natural resources, demand that municipalities become more agile and adaptive. They must adjust to rapidly changing conditions and circumstances. This capacity for resilience will be a critical aspect of successful urban governance particularly for developing countries in the coming decades.