Thursday, June 27, 2013

THE LOCAL ECONOMIC DEVELOPMENT PROCESS FOR REDUCING URBAN POVERTY

1.1 Introduction
The issues of local economic development (LED) and urban poverty are intricate and dynamic. In the past eight publications of the Local Economic and Urban Poverty series, discussions have encompass several issues of theory and practice related to these concepts. Discussions have been informed mainly by literature drawing on key issues of strategy and critical issues affecting urban planning processes that focus on LED and urban poverty. All these previous discussions have also concentrated on the substantive issues with less emphasis on the process of LED and urban poverty management. In all, critical questions for decision making as well as implications for planning and policy have been articulated. For several weeks, the issues have spanned case studies of LED and urban development in both developed and developing countries, financing local, mega projects, micro and macro LED strategies, tourism development, historic preservation,  gentrification, among others. 

In this paper, and the last in the series, attention is focused on the procedural issues of LED. Three main approaches are considered. However, two have been compared to a suggested approach advocated by Blakely and Leigh (2010). To do this comparison, two local economic development plans have been examined with reference to Blakely and Leigh (2010) framework for preparing a local economic development plan. According to Blakely and Leigh (2010), there are six phases in the local economic development process; namely data gathering and analysis, selecting a LED strategy, selecting LED projects, building action plans, specifying project details, overall development plan preparation and implementation. Subsequently, the various expectations articulated by the authors have been used as indicative reference points in comparing these plans. The first plan reviewed is the LED Plan for the City of St. Michael in Alaska and this is aimed to guide LED interventions from 2011 to 2015. The second is the LED for the Municipality of Shkodra. This plan spans between 2005 and 2015.

1.2 St. Michael Local Economic Development Plan 2011-2015
1.2.1 Background of the Plan
The city of St. Michael is located on the east coast of St. Michael Island in Norton Sound in Alaska. It is about 125 miles southeast of Nome and 48 miles southwest of Unalakleet and encompasses 21.8 sq. miles of land and 6.3 sq. miles of water. Historically, the City was a trading area where Yup’ik, Inupiat, and Indians would come to do business. The Native Village of St. Michael was incorporated in 1948 and the city government was incorporated in 1969. 
1.2.2 Review of the Plan
The LED plan as presented is similar to a comprehensive plan. For instance, in the planning process and public involvement discussion section of the documents, the city explains how this current plan is not their first comprehensive plan. According to the city, “St. Michael’s first Comprehensive Plan was completed in 1998. The St. Michael IRA Council and the City of St. Michael regularly updated the priorities of the community and the tribe” and this current plan is an update of the earlier plan prepared.
Participation was central in the data collection stage and the city explains that their planning sought a planning process based upon: “technology of participation methods developed by the Institute of Culture Affairs; Denali Commission, United States Department of Agriculture, Rural Development; and Alaska Humanities Forum Community Strategic Plan Guide and Form” (City of St. Michael, 2011). The sense of a strong participation process and linkage of the LED to the comprehensive plan establishes a strong legitimacy for the components of the plan. This would thus enhance community acceptance and implementation of the proposed intervention. Again, the implementation would be enhanced as there would be strong stakeholder support.
The content of the plan relates to the framework presented by Blakely and Leigh (2010). However, the difference is the steps and the focus on a multi-sectoral process. Figure 1 presents the relationships between Blakely and Leigh (2010) with the city’s framework.

Figure 1: Local Economic Development Plan Process Comparison, City of St. Michael
Source: Blakely and Leigh (2010) and City of St. Michael (2010)
Through the process, the city identified Saint Michael’s economy as “based on subsistence food harvests and supplemented by part-time wage earning. Most employment positions are found through the city, the IRA council, Village Corporation, school, clinic, local fuel company, and local store. Six residents hold commercial fishing permits, primarily for the herring fishery”. The techniques and tools adopted are mainly trend and descriptive analysis. The use of location quotient, shift share analysis and cluster analysis are absent but these feature strongly in Blakely and Leigh (2010) approach. This may be as a result of the approach which looks at community development approaches to LED as the aim is focused on improving from within and not based on forces from outside the city. Hence, technical processes were marginal in the framework.
The goals and strategies that were identified in the plan focused more on multi-sectoral issues rather than the sector-wide framework that Blakely and Leigh (2010) suggest. This is because of the perspective from which the city is coming from. They see the LED plan as a comprehensive development plan thus issues relating to social development planning (education, health, etc.) environmental planning (sanitation, water, sewerage, etc.) as well as economic issues of infrastructure, enterprise zones, quality and affordable housing, micro enterprise, etc. were identified. This presents a strong complementary framework that allows for economic issues to be approached from different perspectives. In addition, using SWOT (strength, weakness, opportunities, threat) analysis, the city was able to establish their capacity and feasibility for implementing projects identified and this formed the basis for prioritizing projects to be implemented.
Overall, this approach to LED planning allows for strong community input and linkages with the comprehensive plan. Secondly, as a requirement by the state, it establishes enough legitimacy for state funding and support for identified projects. Thirdly, the linkage to other sectors of the city allows for projects to complement each other in the process of improving the welfare of the people in the community. Lastly, because the framework allows for periodic updates of development priorities, it integrates changing circumstances into LED  processes for actions to be more responsive to the needs of the residence.
1.3 Municipality of Shkodra Strategic Plan for Economic Development (SPLED), 2005 – 2015
1.3.1 Background of the Plan
The city of Shkodra is located in Northwest Albania (45.03N, 19.31E), at an altitude above sea level, in a line running from south-west to north-east, from 9.5m to 24m. The local economic development planning process forms part of a World Bank support to facilitate the structural transformation of the local economy by ‘Developing Enterprise Locally through Techniques and Alliances’ (DELTA) program (Municipality of Shkodra, 2006). The municipal government is guided by the philosophy of the SPLED which helps to identify “the vision and strategic goals the city has for its development and to guide and consolidate the efforts made by the municipality and community to develop an environment that is both supportive and favorable for the development of businesses” (Municipality of Shkodra, 2006). This LED approach adopted by the Municipality of Shordra is similar to Blakeley and Leigh (2010) approach. It is predominantly a sector-wide approach and focuses only on the projects and programs to enhance the economic development of the municipality directly.
1.3.2 Review of the Plan
Fundamentally, the process adopted the World Bank’s framework for LED planning. Nonetheless, this is not different from the Blakeley and Leigh (2010) approach where strategies and discussions are presented within the context and in relation to economic development. For instance, in the plan, even though demographic characteristics are presented, they are explained in terms of the potential labor force and their characteristics such as educational attainment, literacy level, and how these variables are either a constraint or a potential for LED.
There are five main phases of their implementation process namely: organization of the efforts; evaluation of the competitiveness of the local economy; development of the strategy; implementation of the strategy; and revision of the strategy. Figure 2 compares the Municipality’s approach to Blakely and Leigh (2010) approach.
Figure 2: Local Economic Development Plan Comparison, Municipality of Shkodra 
Source: Blakely and Leigh (2010) and Municipality of Shkodra (2006)
The first stage relates to the preliminary phase identified by Blakely and Leigh (2010), where the organization and capacity for implementation and the geographic scope of implementation are identified. The plan has a comprehensive economic profile that discusses the natural resources of the Shkodra region, tourism, labor force, private businesses, services and infrastructure. In addition, discussions on the topography, demography and municipal government (institutional capacity) are presented and all these are similar to what Blakely and Leigh (2010) suggests in the second stage of their process.
The vision of the plan is that, “Shkodra will be an important economic, educational and regional exchange centre that will develop in harmony with the city's history, culture and people, becoming, with its outstanding natural environment, an attractive place in which to live and work and to visit.” This is supported by five economic related goals. The third stage uses SWOT, Consolidated analysis, matrix of plan goals, objectives, program and projects, matrix of plan implementation, and matrix of prioritization of projects that would be implemented as well as the preparation of the various action plans. This is similar to stages two to five of Blakely and Leigh (2010) approach. For the implementation plan matrix, projects are presented in the columns whiles, the cost, funding sources, implementation agencies, and the project target groups are identified. Matrices are also used to summarize the prioritization of the projects in relation to the fulfillment of the plan vision using indicators such as sources of funding, guarantee of funding, expertise availability, risk level, target group, and fulfillment of objectives. These are supported by feasibility analyses. Project implementation schedules including project goal, project description, development programs, cost estimations, duration of implementation are also presented by the Municipality.
The overall plan preparation and implementation of Blakely and Leigh (2010) approach relates to the last section of the fourth stage of the municipality’s framework where issues of institutional partnerships and marketing of plans and the overall implementation framework are presented. Strategies identified also relate to the four components by Blakely and Leigh (2010) namely: local development (e.g. improvement of the electricity supply within Industrial Zone), business development (e.g. Establishment of a ‘One-Stop-Shop’ in Shkodra City Hall), human resource development (e.g. development by the Economics and Law Faculty of Luigj Gurakuqi University of curricula for tourism and for public administration training) and community based employment development (e.g. creation of novel activities and promotional materials to facilitate the development of new SMEs).
One difference in the approach is the revision of implementation strategy section that the Municipality identifies. Since the plan spans over a period of ten years, the Municipality have adopted short, medium, and long term assessments to evaluate the impacts of projects and to revise the strategies in the course of LED plan implementation. The municipality has therefore prepared monitoring and evaluation frameworks for the plan and re-evaluation to track progress and impacts of project interventions. Preparing and adopting these plans provide impetus that enables the municipality to objectively track the impact of their efforts as well as identify key areas of improvements as well as when changes need to be made in the course of the implementation.
1.4 Conclusion
Overall, even though both frameworks are unique in terms of the approach adopted, they hold their strengths and weaknesses. Judging how best a LED Plan is cannot simply be based on the documents and its content only but the impact of projects implemented. The important issue is that the urban planner must appreciate the regulatory and policy framework within which he/she is mandated to operate and how feasible the approach is for adoption. In addition, the expediency and need for direct focus my require a sector-wide approach for short to medium term planning for LED while a long term may favor multi-sector approach. Nonetheless, these must respond to the needs and aspiration of communities and cities specifically to promote increase in production, jobs, income levels, poverty reduction and the overall growth of the local economy. 

Forthcoming
A series on "Development, Planning and Politics" in Ghana. The series will discuss issues of development and poverty reduction from policy, implementation to impacts of development interventions in Ghana. Discussions will encompass local, national and international issues and will include sector-wide and/or multi-sector wide issues. Similar to the Local Economic Development and Urban Poverty series, theory and practice will feature in the discussions. However, issues of practice will feature prominently. 

Thank you.

REFERENCES
Blakely, Edward J. and N. G. Leigh (2010): Planning Local Economic Development: Theory and Practice, Fourth Edition. Thousand Oaks, CA: Sage Publications.
Municipality of Shkodra (2006): Municipality of Shkodra Strategic Plan for Economic Development 2005 – 2015. http://siteresources.worldbank.org/INTLED/Resources/339650-1122490529659/Shkodra.pdf [Accessed on November 28th, 2012]
City of St. Michael (2011): St. Michael Local Economic Development Plan 2011-2015. http://www.kawerak.org/ledps/st_michael.pdf [Accessed on November 28th, 2012]


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