Phila Xuza

1
Economic Development Prospects for Development
Corridors Small Towns

• Phila Xuza
• LED Conference, Mthatha
• 9 November 2007

2
What are Small Towns?

• No re-examination of what constitutes a small
  town
• Popular definition population size (sector
  mining town, agric town, resort town, educational
  centre etc.)
• But a functional and relative definition rather
  absolute centers that are small in the context
  of their respective national urban and economic
  systems
• Like in most African countries, RSA has a big
  number (about 500) of these centers (high
  concentration in the FS?)

3
What is happening in Small Towns?

• Home to millions of South Africans (social
  networks, social capital, productive, consumptive
  and investment linkages)
• Economic and service hubs for rural communities
• Reservoirs for labour (skilled or semi-skilled)
• Production centers for raw material (cotton)
• Primary hubs for manufacturing (timber)
• Centers of many industries (agriculture,
  heritage, culture)
• Strongholds of government assets (land, water,
  buildings
• Naturally growth point areas

4
Challenges of Small Towns

• Out-migration of young people
• Undefined role in economic development (base for
  rural industrialization?)
• Social response to economic decline
• Conduits for services and goods (spatial issues)
• Diminishing status in the urban economic
  hierarchy (ruralization of small towns)
• Disinvestment (due to single sector dominance,
  lack of holistic development approach)
• Neglected economic centers (infrastructure)
• No strategic intervention (urban renewal
  ISRDP?)
• Impacts of apartheid urban planning uncontrolled

5
Opportunities for Small towns

• Dormant government assets (role of the State?)
• Linkages with urban economies
• Symbiotic relationship with the rural hinterland
• Seats of local (and provincial) government
• Public good investment
• Launching pads for small businesses
• Institutions of higher learning (technology,
  research, vocational training)
• Compelling sites for sustainable development
  techniques
• Low levels of crime (increasing alcohol abuse!)

6
Approaches in Amathole

• Amathole one of six districts in the EC
• Home to 1,8 million people (mostly rural)
• Mix of former homelands (Ciskei Transkei) and
  CPA areas
• Concentration of small towns 25 regional towns
  2, city 1 and hundreds of villages)
• Improving urban economy (port expansion, property
  development)
• But suffering from high dependent rural economy
  (State of the Cities Report, 2006?)

7
Interventions by Amathole District

• ADM established a Dev Agency, AEDA in 2005
• First task co-manage with ADM the economic
  analysis of the district (not of AEDA)
• This led to the GDS in March 2007 and an adoption
  by Council of a 20-year economic vision known as
  Amathole Regional Economic Development Strategy
  (AREDS) in May 2007
• Overall aim of AREDS to increase the number of
  HH earning income above MLL
• AREDS strategically positioned AEDA corridor
  development approach, anchored by regeneration of
  small town economies

8
Vision
AEDA is a pioneer in the stimulation of spatial
economic development
9
Strategy

• Strategically position ourselves as a trusted
  advisor, stimulator and partner in the regional
  economic environment
• Concentrate efforts on building economic
  potential inherent in the corridors created by
  the regions 4 primary routes N2, N6, R72, R63
• The impact will spill over and be manifest in the
  regeneration of small town economies

10
Why Corridor Approach
The coordinated approach along corridors ensures
a greater economic development return than
individual projects

• AEDA concentrates on economic activities along
  the districts primary logistic corridors R63,
  R72, N2, N6
• Why.
• to evaluate their significance and potential as
  investment destinations
• to cluster-in public good infrastructure and
  drive down transaction costs
• to unlock potential opportunities for economic
  value adding and vertical integration
• to improve communication, prioritization of
  resources to investment leveraging
• to enhance their ability to contribute to the
  economy of Amathole district

11
Amathole Towns Corridors
12
Example of Projects and Interventions

• R63 (KWT to Bedford) manufacturing
  agro-processing adventure heritage tourism
• R72 (EL to Port Alfred) tourism
• N2 (EL to Dutywa) tourism mining (potential)
  livestock
• N6 (EL to Cathcart) timber and forestry tourism

13
Corridor, Town Regeneration Initiative

• R72, Hamburg Arts Residence promotion of arts
  as tourism traffic generator
• R63, Alice Heritage promoting towns heritage
  to attract tourist and student spending
• N6, Stutterheim Tourism/Timber increase timber
  production and value-addition and linking local
  skill and product with the tourism market
• N2, Butterworth Spatial Configuration to retain
  retail market, and diversify the economy
  (student, tourism Gcuwa Dam, opportunities for
  property market)

14
Impact Chain of AEDA Strategy
15
Conclusion

• AEDA defines small town economies as development
  of sectors with comparative advantage in
  localities that are linked both spatially and
  along value chains,
• If this is so, then small towns play a decisive
  role in the regional development process
• We cannot separate place poverty from people
  poverty
• As much as we cannot separate space from other
  social, economic and political spheres
  shortcomings of conventional spatial
  development
• Regeneration of small town economies an
  alternative approach to rural development?