INLSA
Finance MEC Ina Cronje hosted the KZN Economic Symposium recently, and organiser Clive Coetzee was able to assemble an array of experts to address various aspects of the economy by analysing the state of play in the international, national and provincial arenas.
I have to admit that I am not averse to “talk shops”, especially if they are as interesting as this one was. It is problematic, I think, to develop action plans for the sake of avoiding the “talk shop” criticism without giving due attention to being properly informed.
Moreover, economic issues are complex, beyond the full understanding of any single person or homogeneous group of individuals, and the exchange of opinions and perspectives is essential for those making decisions to get a better grasp of the issues.
In speaking about the economy of the province and its potential for future growth, Professor Jeff McCarthy referred to “the elbow”. This is a development corridor which runs from Howick to the Port and northward to Ballito. It seems to have superseded the “T-bone” which was the N3 to the provincial border and the N2 from south to north.
Recent experience is that development has been more concentrated in “the elbow” and research shows that when such a focus occurs, the particular area is likely to experience even more accelerated growth in the future. Whereas “the elbow” accounts for about 70 percent of provincial GDP now, we may expect this to rise to more than 80 percent in the years ahead.
This sort of relative growth may be expected, even without the huge impetus that will be added by the dig-out port. Business logic suggests that effort must be expended in not only securing this growth, but enhancing it. Improving strengths rather than addressing weaknesses is a popular and justifiable modus operandi.
I’m not sure that we should consider this as a case of either/or, however, and it occurred to me that what was missing from all presentations was the importance of local economic development and the towns in which this takes place. Experience shows that prosperity and growth neither spread themselves out nor trickle down, as is often thought to be the case.
Indeed, this is an acute problem which we face. In the boom years of the last decade, the lot of the poor was hardly improved. While business is acutely aware of the difference between boom and recession, one wonders if rural or small-town dwellers experience it at all.
Surely they notice it, however, because the prosperity is plain to see, but no less remote to feel. So, while we are making our concerted pitch to strengthen “the elbow”, we cannot ignore parts of the province not so favoured by their localities.
In some way, although not completely, the provincial economy is an aggregate of local economies. If one area’s growth rises by a substantial percentage, the implication is that growth to be found in other areas declines. The demand, therefore, is for growth in the less favourable part to increase as well, so that the biggest slice of the economic cake doesn’t get bigger at the expense of the rest.
We need a bigger cake altogether, and I believe that this will not happen unless due attention is given to more remote areas. This is not a simple matter of ratio, but one which has serious implications for the welfare of people in the province. We cannot support a vigorous “elbow”, and economic desertification elsewhere.
It is understandable that the province should focus its attention on that part which is attractive to major developments and investment, while municipalities attend to their local economies. Unfortunately, there is a crisis of capacity and many attempts to revive the economic fortunes of small towns have ended as dismal failures.
Among the reasons for this is the failure on the part of municipal decision-makers to recognise the economy that is already there. They have set up new enterprises, without notable success, and they have tried to entice Far East investors in defiance of logic. While they have been doing these things, they have failed to engage the business community in consultation about how they (the businesses) can be stimulated to grow.
