LED Programme: Rural Economic Development Initiative (REDI)

Since 1994, South Africa has made great strides towards achieving many of the socio-economic goals outlined in the RDP. However, whilst the country is predicted to remain on a growth trajectory of over 4 - 5%, millions of South Africans continue to live in poverty, excluded from the benefits of increasing prosperity. The continuing prevalence of apartheid spatial settlement patterns that consign the majority black population to the periphery of economic activity and access to opportunity is a key contributant to this phenomenon. Such marginalization not only ensures that the asset base of the poor is weak – which is why growth does not ‘trickle-down’ – but that base continues to be eroded through high transportation costs etc.

Hence, whilst the government has embarked on a number of initiatives aimed at promoting shared growth (e.g. ASGI-SA), ultimately all these initiatives must be played out in a geographic space. Thus, the characteristics of the national as well as local space economies become very important as enablers or disablers of economic growth as well as social and economic inclusion.

In terms of the national space economy, the three primary economic cores of Gauteng, greater Cape Town and eThekwini-uMsunduzi remain economically dominant, whilst there are a number of other areas with high levels of economic potential which have yet to be fully realized. From a shared growth perspective, the implications of this are three-fold:

• Firstly, within the context of the increasing urbanization of poverty, we have to find a way to ensure that the economies of our major urban areas act as spaces of inclusion not exclusion, of economic integration and not growing marginalization and inequity.
• Second, we need to find a way of spreading opportunity through maximizing the economic potential of areas outside the dominant cores, through fostering local space economies that drive shared growth.
• Third, we need to take advantage of high-impact, quick-win investment opportunities that could have a catalytic ripple effect on economic growth.

However, Local Economic Development (LED) initiatives in South Africa to date have not risen to these development challenges.