An assessment of local economic development as a mechanism for poverty alleviation: a case study of Blue Crane Route Municipality in Cacadu District Municipality in the Eastern Cape

Prior to 1991, the development concept and strategy of Local Economic Development (LED) was not part of the development lexicon in South Africa. With the exception of some very limited local government advertising campaigns and the work of NGOs, the concept of locally –based and driven development interventions was an alien one in South African practice. The rigidities of the apartheid state, both in terms of its racial controls and its centralized management of all affairs precluded local development initiatives. What spatial economic development there was, focused on the flawed pre-1991 Regional Industrial Development Programme, which was tainted by failure to promote the former Homelands, corruption and faulty economic logic (Reflections on the Evolving Nature and Prospects of Local Economic Development in South Africa: 1990-2007). The post-apartheid government in its quest to alleviate poverty formulated a number of policies and legislation to guide developmental local government initiatives. Thus local government committed itself to, among others, building local economies and creating jobs for the people. By the end of Apartheid, South Africa’s economy was facing a variety of serious structural problems. The final two decades of the National Party’s regime had been particularly damaging to the economic climate, with stagnant economic growth (the average over the entire period was just 1.7%), declining per capita income (averaging -0.7% annually), increasing unemployment (using the broad definition, up from around 20% at the start of the 1970s to around 30% by 1994) and a spiraling debt problem (under the De Klerk government (1989-1994) alone, debt had increased from less than 3% of GDP to more than 9%, and total government debt more than doubled. Facing this “deep-seated structural crisis”, the government attempted to put together a policy framework that could begin to address the variety of problems being faced both economically and otherwise. The RDP White Paper, presented to Parliament in 1994, identified economic, social, legal, political, moral, cultural and environmental problems that the country faced