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PROVINCIAL SPATIAL ECONOMIC DEVELOPMENT STRATEGY

(PSEDS)

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National Spatial Development Perspective (NSDP)

The key objectives of the NSDP are: Provide a framework for future development Common reference point Identify key areas to achieve positive spatial

outcomes with government spending Provide strategic response for a given time frame

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Categories of Development PotentialCategory DescriptionInnovation and Experimentation R&D

Application of technology to production processes

Production: High value differentiated goods

Production of niche markets (eg manuf, specialised agric

Production : Labour-Intensive Dependent on proximity of good, cheap transport linkages to natural resources & unskilled and semi-skilled

Retail and Services Retail, catering & personal services. Requires enterprises and people willing and able to pay for services

Tourism Tourist attraction, good transport routes, safety & high-quality restaurants & hotels

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NSDP Instrument for policy co-ordination Contributing to the principle of co-operative

governance Ongoing process of elaboration, refinement and

revision Informed consensus on nation’s spatial priorities Normative principles to guide all spheres in

infrastructure investment & dev spending: Economic Growth Govt spending on fixed investment Focus on people not places Opportunities channeled into activity corridors and nodes

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Intergovernmental planning principles

Local govts IDPs –identify comparative advantage National guidelines & principles should inform

planning Each sphere own distinct dev and planning tasks Spirit of co-operative governance whereby plans of

one sphere support those of another

Critical synchronization of IDPs to NSDP objectives

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Govt’s National Spatial Dev Vision “SA will become a nation in which investment

in infrastructure & dev programmes support govt’s growth & dev objectives: By focusing eco growth & employment creation in

areas where most effective &sustainable By supporting restructuring where feasible to

ensure greater competitiveness By fostering development to the basis of local

potential By ensuring that dev institutions are able to

provide basic needs”

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Provincial Growth and Development Strategy (PGDS)

The Objectives of the PGDS are: Eradication of extreme poverty and hunger Achievement of universal primary education Promotion of gender equality & empowerment of

women Reduction in child mortality Improvement of maternal health Combating HIV-AIDS, malaria and other diseases Ensuring environmental sustainability Dev a global partnership for development

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Provincial Priorities of the PGDS Sustainable governance and service delivery Sustainable economic dev and job creation Integrating investment in community

infrastructure Dev human capability Dev comprehensive response to HIV-AIDS Fighting poverty & protecting vulnerable

groups in society

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Cluster Programme: Implementing Agents

Sustainable governance and service delivery

Sustainable Economic Dev & Job Creation

Integrating Invest in Community Infrast

Dev Human Capability

Fighting Poverty and HIV-Aids and Protection of vulnerable

PROVINCIAL PRIORITY CLUSTERS:

Governance & Administration

Economic Development

Community Infrastructure

Human Capability

Health & Social Support

Provincial Projects: Water & Sanitation, Electrification, Corridor Dev, DTP

Programmes of Action

CROSS-CUTTING PRIORITIES:

BEE SME HUMAN RIGHTS INNOVATION TECHNOLOGY RISK MGT

PROVINCIAL PRIORITIES:

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The Provincial Spatial Economic Development

StrategyIntroduction

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Policy framework for a SEDS in KZN SA and KZN face two main challenges - reducing poverty & inequality, & tackling

unemployment

Main challenge for KZN is that of POVERTY and UNDERDEVELOPMENT based on the legacy of INEQUALITY

KZN’s objective to improve the quality of life of all citizens is premised on objectives flowing from both the MDGs & national policies & social delivery targets

Broad National Goals for the medium term from both ASGI-SA and MTSF are: Accelerated growth in the economy Halving poverty and unemployment by 2014 Reduction of the gap between the 1st and 2nd Economies

Overall target of economic growth of over 4.5% pa to 2009 and up to 6% thereafter

PSEDS flows from (and the next logical step from) the KZN’s PGDS – is therefore aligned both to MDGs and national objectives

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Pillars of the economic development strategy Increasing investment in the province Improving skills and capacity building Broadening participation in the economy Increasing competitiveness

All these require government intervention in a “stepwise rise to prosperity”

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Problem statement There is a disconnect between national,

provincial and municipal planning and implementation

Weak understanding of the geographic profile of the areas we intend to improve

Weak impact as a result of uncoordinated interventions

No clear end goal for each geographic area (DM) after interventions

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SEDS must: Provide spatial context to PGDS Address spatial imbalances, curb urban sprawl and

ensure sustainable interventions Identify priority areas and types of development Align to municipal spatial development frameworks Guide budgeting processes of the province and

municipalities Influence investment decisions of the private sector

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PROVINCIAL SPATIAL ECONOMIC DEVELOPMENT STRATEGY

The PSEDS is intended as a guide to service and to achieve the goals set in ASGI-SA to halve poverty & unemployment by 2014

Principles of development and growth underpinning PSEDS:

• Government has a constitutional obligation to provide basic services to all citizens. Basic services include health, education, housing, transport

• All areas of the province require development

• Certain areas of the province will drive economic growth

• The PSEDS attempts to indicate where different types of investment should be directed in order to achieve development and/or economic growth

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• The PSEDS therefore sets out to:

• Focus where government directs its investment and development initiatives

• Capitalise on complementarities and facilitate consistent and focused decision making

• bring about strategic coordination, interaction and alignment

• The PSEDS recognises that:

• Social & economic development is never uniformly distributed

• Apartheid created an unnatural distortion of development

• This distortion must be addressed

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The PSEDP is built on the principles of the National Spatial Development strategy (NSDP), namely:

Principle 1: Rapid economic growth that is sustained and inclusive is a prerequisite for the achievement of poverty alleviation

Principle 2: Fixed investment should be focused in localities of economic growth or economic potential

Principle 3: Where low economic potential exists investments should be directed at projects and programmes to address poverty and the provision of basic services in order to address past and current social inequalities

Principle 4:Future settlement and economic development opportunities should be channelled into activity corridors and nodes that are adjacent to or link the main centres

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Four key sectors have been identified as drivers of economic growth in the province. These sectors are:

• The Agricultural sector (including agri-processing) and land reform

• The Industrial sector

• The Tourism sector

• The Service sector (including government services)

The logistics and transport sector (including rail) in the services sector are important sub-sectors underpinning growth in all four sectors.

Sustainable and affordable water and energy provision is crucial to the economic growth & development of the province.

A classification of potential is shown in the following discussion and maps.

Classification of Economic Potential

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• Massive potential for growth

• Largest existing or potential employer in rural areas

• Can make greatest impact on reducing poverty levels in rural areas

• Require better linkages with 1st economy commercial agriculture to develop 2nd economy subsistence agriculture

• The sector urgently needs transformation and land reform is the key lever of transformation of the sector

The Agricultural Sector: Agriculture & agri-processing:

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• Durban and Richards Bay harbours anchor industrial potential

• Dube Trade Port creates huge opportunities

• Corridor linking two nodes & extending to Howick form primary zone of industrial potential.

• Newcastle, Ladysmith and Port Shepstone are important secondary nodes of industrial development potential

The Industrial Sector: Industrial Development:

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Primary sectors of tourism potential are beach, cultural and eco-tourism.

Provincial tourism priorities are:

• Greater Durban & Pietermaritzburg area

• Drakensberg region

• Greater St Lucia & surrounding big five reserves

• South and north coast beach tourism

• Zulu Heritage & Cultural Trail

• Battlefields Route

The Tourism Sector:

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atalThe tertiary sector is the largest

contributor to the economies of all except for the Ilembe and Uthungulu district municipalities.

The tertiary sector comprises:• Wholesale / retail trade• Transport / storage• Communication• Financial / insurance• Real estate• Business / Community / social /

personal services• Government services

This sector is vital in supporting development in poor rural areas.

The Services Sector:

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Water and Energy National targets for water, sanitation and energy are:

By 2008 all households will have access to clean water By 2010 all households will have access to decent sanitation

facilities By 2012 all households will have access to electricity

These targets must be driven provincially as well – therefore an integral part of this (PSEDS) strategy

The DLGTA is coordinating a water and sanitation strategy for the province

The electricity distribution industry (EDI) is currently being restructured and the 1st RED is to be established in the metro

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proportion of persons living in a state of poverty within an area

• The highest levels of poverty are found in the former KwaZulu homeland areas

Poverty Levels:

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the number of persons in a state of poverty within an area

• The highest densities of poverty are located in eThekwini, Msunduzi Newcastle and Umhlatuze

Urbanised poverty is established and wont relocate back to rural areas. It needs to be addressed in parallel to rural poverty.

1

3

2

4

Poverty Densities:

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The NSDP guides that settlement & economic development should be channelled into activity corridors and nodes.

Taking the analysis of potential and need the PSEDP identifies nodes and activity corridors which would:

• Facilitate increased growth of existing centres & corridors of economic development

• Ensure that the economic development potential in areas of high poverty levels and densities is realised

The nodes and activity corridors don’t cover the whole province. They focus only on those nodes and corridors which could have the most impact in halving poverty and unemployment by 2010.

The rest of the province cannot be neglected but the major focus of fixed investment should be directed at these nodes and development corridors.

Nodes & Activity Corridors

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Categories of potential set out in NSDP

1. Production of high value, differentiated goods not strongly dependent on labour costs, focused on local & global niche markets – i.e. manufacturing

2. Production of labour intensive, mass produced goods more dependant on labour costs, affordable transport linkages – i.e. agriculture and mining

3. Innovation and experimentation – research and development

4. Retail and private sector services – large employer of skilled & semi skilled workers in advanced economies

5. Tourism – dependant on tourism attractions6. Public service and administration

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Definition of nodes:The nodes are defined as follows: Primary Node (PN): An urban

centre with very high existing economic growth and the potential for expansion thereof. Provides service to the national and provincial economy.

Secondary Node (SN): An urban centre with good existing economic development and the potential for growth. Services the regional economy.

Tertiary Node (TN): A centre which should provide service to the sub-regional economy.

Quaternary Node (QN): A centre which should provide service to the localised economy

5th level Node (5N): A centre which provides service to a ward

The first 2 levels of nodes have been identified for priority interventions of the cluster over the next 5 years

No. Node Classification

Main Categories of Potential

PN1 eThekwini Primary Node

1, 3, 4, 5, 6

SN1 Richards Bay

Secondary Node

1, 3, 4, 5, 6

SN2 Msunduzi Secondary Node

1, 3, 4, 5, 6

SN3 Newcastle Secondary Node

1, 2, 4, 5, 6

SN4 Port Shepstone

Secondary Node

1, 4, 5, 6

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Definition of corridorsThe development corridors have been identified for priority intervention over the next five years. The corridors identified do not include all existing corridors within the province – only those corridors with the potential to greatly impact on economic growth and the development of impoverished areas have been prioritised.

The corridors are defined as follows: Primary Corridor (PC): A corridor with very high economic

growth potential within all three sectors which serves areas of high poverty densities.

Secondary Corridor (SC): A corridor serving areas of high poverty levels with good economic development potential within one or two sectors

The priority corridors identified are listed in the written document.

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Nodes and Corridors

The key investment nodes and activity corridors over the next 5 years have been identified.

Multi-Sectoral Activity Corridor

Tourism Activity Corridor

Agriculture Activity Corridor

Existing Corridor

Primary Purpose of Activity Corridor

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PROVINCIAL SPATIAL ECONOMIC DEVELOPMENT strategy

New Activity Corridors

There is a need for investment in several roads in order to support new activity corridors. Such investment can act as a catalyst to developing activities along these corridors.

Multi-Sectoral Activity Corridor

Tourism Activity Corridor

Agriculture Activity Corridor

Existing Activity Corridor

Primary Purpose of Activity Corridor

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THREATS TO THE PRIORITISED SECTORS

The potential in the province is under threat. Visionary leadership & decisive action is required to address these threats.

Agriculture and land reform:

• Loss of productive commercial agriculture to residential development

• Loss of land with agricultural potential in rural areas to dispersed settlements

• Unsupported land reform resulting in a collapse of commercial agriculture

• Inappropriate implementation of municipal rates on agricultural land

• Threats to provision of sustainable water supplies to agriculture

Tourism:

• Safety and security

• Land invasion

• Illegal / inappropriate development

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THREATS TO THE PRIORITISED SECTORS

Industrial Development:

• Unreliable / expensive services (water, electricity, transport)

• Lack of Social support services (housing, education, transport, health, leisure)

• Destructive inter-municipal competition for development

• Inappropriate implementation of municipal rates on industrial development

Failure to act on these threats will result in the province not achieving its goals of reducing poverty and unemployment. If these threats are not addressed timeously and with the required urgency, the province will not achieve these goals and may even see an increase in poverty and unemployment.

Services Sector:

• Unsustainable urbanisation

• Lack of spatial development framework to guide investment

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Complementary Provincial strategies to the PSEDS

The tourism strategy for the province to capitalise on the potential along the defined corridors

Finalisation of the provincial cooperatives framework The review and realignment of the industrial

development strategy The development and approval of a provincial safety

and security strategy The development of a rail strategy that will benefit

from the SWC 2010 infrastructure investment

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Critical success factors in implementing PSEDSThe successful implementation of the PSEDS is dependent

on a number of factors: Implementation at local level (LED planning) Centralised coordination & full time support systems Clustering of packages and investment protocol Impact measurement & monitoring and evaluation

systems Common planning boundaries Political decisions on rural settlement patterns Prioritising of safety & security strategy for the province

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• The PSEDS does not negate the need for social development of poor areas

• The PSEDS emphasises the need to invest the province’s strengths in order to address poverty and create employment

• Unless decisive action is taken against the threats listed the Province will not see growth or a reduction in poverty.

In Conclusion: