LED, Community Development and Community Involvement

An issue that comes up in every place where local stakeholders start to do something about LED is the confusion between LED and community development. This goes back to the fact that there seems to be a more general confusion of these two issues. For instance, a document by the Department of Provincial and Local Government in South Africa states the following in the executive summary:

"From central government's perspective, the most important objectives for municipal LED are job creation, sustainable urban and rural development, and explicitly pro-poor approaches within a holistic LED strategy. The LED approach promoted in this policy paper is innovative, creative and redistributive. LED is to be broadened and deepened to meeting, first and foremost, the needs of the poor, women, children, disabled and people living with HIV/Aids. Within newly-demarcated districts, small towns should be given higher priority."

In other words, in the perspective of this Department LED means bringing together employment policy, urban development policy, rural development policy, social policy, family policy and health policy. But what about the E in LED, i.e. Local Economic Development? There are at least two perspectives:

1. Central government (in this case in South Africa) is worried that LED degenerates into smokestack chasing, i.e. throwing incentives and subsidies at large corporations to lure them into a location. The logic behind the emphasis on social issues in LED is a tactical one: to make sure that at least some social issues are addressed by LED.

2. LED has been captured by non-economic actors in the political-administrative system who want to promote issues which are not directly linked to economic development.

In any case, it is notable that the situation in South Africa is unique. Elsewhere in the world, the purpose of LED is clearly not to meet, "first and foremost", the needs of marginalised people living with HIV/Aids, since this is the objective of health and social policies. LED is rather about creating vibrant local economies which generate, directly or indirectly, the tax income so that government has the funds necessary to pursue effective health and social policies.

The problem resulting from this confusion tends to be gridlock, that is a constellation where neither economic nor social objectives are met:

• Developmental activities do not tend to have a business focus, and as a result they often rely on subsidies, which effectively means that they are not economically sustainable. Subsidies and insufficient target group differentiation have on the other hand shown to jeopardize attempts in SME promotion. In the design of development activities in pursuit of equally legitimate aims such as democratisation, institutional development or local self-organisation, the distinction to business oriented economic development approaches is crucial.
   
• Many initiatives are addressing entrepreneurship in a manner which is hardly serious, where emerging entrepreneurs are encouraged to present vague ideas as business plans - which, for good reason, are flatly rejected if the individual tries to receive some kind of support.
   
• Skills development courses train people for nonexistent jobs in industries with no projected growth.

A constructive way of dealing with this confusion is by distinguishing between community development and community involvement. There cannot be any doubt that community involvement in the LED process is most desirable, and indeed necessary - not just of the local business community but also other segments of the local society, such as the school and academic community and non-governmental organisations must be involved in the overall work on LED. In fact, the more effectively these communities are organised, the better are the pre-conditions for a successful LED process - provided that they understand the distinction between local economic development and other fields of local development.

In other words, LED cannot be separated from the community. But community involvement and community mobilisation are distinct from community development. Community development is effectively part and parcel of social policy. Its objective, target groups and incentives are quite different from those of LED. Community development is about supporting and empowering the weak and disadvantaged, whereas LED is about business and competitiveness.

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