Development Studies Working Paper, no. 66

This paper examines the implementation and effects of regional development planning in the former Border-Ciskei-Transkei region of South Africa. State planning strategies were utilized for more than 30 years to further the ends of apartheid by trying to turn the black 'Homelands', into independent economic entities. In addition, the results of the dubious strategies applied and their implications receive particular attention. This is particularly significant in terms of the recent closure of numerous firms in the region as a result of exposure to market forces. The study aims to document and analyse what happened in the area, to detail the conclusions that can be derived from the experience and, by implication, to raise issues which future planners need to take into consideration. The experience of decades of politically-based planning of the economy led to a situation which subsidised inefficiency, encouraged exploitation and failed to leave a sustainable industrial base. Firms were drawn in by the incentives offered and not by inherent locational advantages. The weak economic linkages which resulted and the current disinvestment in the wake of the termination of incentives are an indictment against the policy. The saga of regional development in the Border-Ciskei- Transkei region vividly illustrates the need for future planners to take cognizance of key economic realities when contemplating such strategies. The new government should not repeat the mistake of attracting and subsidising industrial firms which have only tenuous links with the host economy and which require state support to operate profitably. Appropriate policies to assist the most needy remain an urgent necessity which the new government has yet to address properly. This study is based on surveys of manufacturing firms in the region which received state support, interviews with government and development agents, chambers of commerce and municipalities as well as a detailed review of published reports, academic articles and research projects. The time frame of the study extends from the early 1940s when the first attempts at regional development planning were made, through to 1993, the latest year for which data is available. This permits a broad sweep to be made of policies from the apartheid to the post-apartheid period.Digitised by Rhodes University Library on behalf of the Institute of Social and Economic Research (ISER