Imperatives of alignment

1
Imperatives of alignment

• iKapa Elihlumayo Growing Sharing the Cape
• Preparatory Premiers Intergovernmental Forum
• Spier Conference Centre
• 1 June 2005

2
Overview

• Manifestations of weak alignment
• Development challenges of the Cape
• National Imperatives for alignment
• Tools and institutions for alignment
• Priorities for moving forward

3
Evidence of weak alignment

• Contradictory and divergent development policies
  and plans within and between municipalities
• Unstrategic competition to attract inward
  investment
• Disconnect between local development plans and
  regional economic and environmental systems
• Limited information and knowledge sharing on
  effective service delivery and management of
  growing demands
• Inability to achieve triple bottom-line outcomes
• Political tensions that arise from the lack of
  synergy between municipalities and spheres of
  government

4
Consequences of weak alignment

• Moderate economic growth (and decline in some
  areas)
• Limited job creation (and job shedding in some
  areas)
• Limited to zero impact on the second economy
• Unsustainable development policies and practices
• Growing services backlog
• Loss of political legitimacy (and support)
• Increased unhealthy competition between areas

5
Weak alignment set in context

• Economic growth trends prospects too modest
• Employment/Unemployment Crisis increase
• Poverty and inequality levels on the up
• Access to basic services rising demand

6
WC Macro-Economic Outlook, 2004/05 - 2007/08
2003/4 2004/5F 2005/6F 2006/7F 2007/8 F
GDPR (Rbn) 185.4 203.1 222.8 244.8 263.8
Real GDPR growth 3.3 4.1 4.3 4.0 3.9
CPI inflation 4.6 2.3 4.5 5.5 3.7
GDPR inflation 6.3 5.3 5.1 5.7 3.8
RSA GDP growth 2.6 4.2 3.9 3.5 3.2
7
WC Sectoral Real Economic Growth, 2004/5 2006/7
8
Cross-sectoral economic trends

• Outperforming SA in output, poorer in employment
  (due to low informal sector growth)
• Growth from tertiary sectors which holds
  implications for those with/without skills
• Importance of finance and business services
  output and employment generation
• Decline in manufacturing employment, especially
  textiles and clothing
• Effects of tourism critical but also uncertain

9
Unemployment Rates
2000 2000 2003 2003
WC SA WC SA
Total 22.6 35.9 26.1 41.7
By Race
- African 39.1 41.9 42.9 48.7
- Coloured 21.9 27.5 24.2 29.3
- White 5.8 8.3 9.4 7.6
By Gender
- Male 19.2 30.8 23.3 35.7
- Female 26.4 41.1 29.2 47.7
By Age
- 16-25 years 43.8 59.3 49.4 69.2
- 26-35 years 19.9 38.7 23.7 43.1
- 36-45 years 14.2 24.2 16.8 28.3
- 46-55 years 14.8 19.4 13.1 23.4
- 56-64 years 10.3 13.2 14.1 15.5
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W-Cape Poverty Levels by Race
  1995 2000 2000
WesternCape H/C H/C Poor
R174    
African 0.21 0.17 191 798
Coloured 0.09 0.08 180 515
White 0.00 0.01 7 521
R322
African 0.48 0.53 597 957
Coloured 0.33 0.27 609 240
White 0.01 0.01 7 521
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W-Cape Household Services Access by Income
Quintile, 2000
  20 40 60 80 100 Total
DWELLING TYPES            
Formal 61.4 77.2 84.0 93.6 98.4 82.9
WATER ACCESS            
Piped in dwelling 44.1 60.0 75.8 90.9 97.6 73.7
Piped on site 32.5 25.8 14.9 5.2 1.3 15.9
Public Tap 21.3 11.8 8.9 3.9 0.5 9.3
ENERGY LIGHTING            
Electricity 72.1 81.9 90.1 96.3 98.8 87.8
Paraffin 12.3 7.0 3.9 1.7 0.1 5.0
Candles 15.2 10.1 5.4 1.7 0.5 6.6
ENERGY COOKING            
Electricity 48.7 68.2 79.8 93.8 94.8 77.0
Paraffin 34.8 18.7 12.5 4.7 0.7 14.3
Wood 10.8 6.4 1.9 0.2 0.0 3.9
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W-Cape Household Services Access by Income
Quintile, 2000
  Quintiles 2000 Quintiles 2000 Quintiles 2000 Quintiles 2000 Quintiles 2000 Quintiles 2000
  20 40 60 80 100 Total
SANITATION            
flush in dwelling 37.4 54.6 71.9 89.3 98.5 70.3
flush/ chem on site 34.6 26.6 16.9 7.2 1.0 17.3
pit on site 2.0 4.1 1.4 1.1 0.1 1.7
bucket on site 4.2 1.9 1.9 0.9 0.0 1.8
any offsite 16.7 8.3 4.6 1.3 0.5 6.3
none 5.0 4.4 3.4 0.2 0.0 2.6
             
TELEPHONE            
cell only 2.5 5.2 5.7 9.3 11.9 6.9
landline only 17.4 30.1 44.6 45.3 20.2 31.5
cell landline 1.3 3.8 9.2 30.6 62.3 21.5
other 78.6 60.5 40.4 14.2 4.9 39.7
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Implications of contextual trends

• Development Crisis
• Massive and stubborn unemployment due to
  restructuring of the economy and insufficient
  growth
• Deepening inequality, which exacerbates poverty
• Growing services backlogs due to rapid growth of
  households
• Social dysfunction and implosion, especially in
  poor communities

14
Response Shared Growth Development

• Critical overarching outcomes to pursue
• Enhancing provincial economic growth above 6
• Advancing broad-based provincial economic
  participation (unemployment below 20 in 5yrs
  below 10 in 15 yrs)
• Increasing provincial employment
• Reducing transaction input costs of doing
  business in Province (esp. SMMEs)
• Strengthening social inclusion cohesion (social
  capital)
• Improving human development potential in terms of
  access to quality basic social services
• Enhancing environmental resource sustainability
  in relation to provincial growth development
  path

HOW?
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National imperatives for alignment

• Ten Year Review captured impressive progress in
  first decade, but not sufficient to achieve
  overall objectives of the Peoples Contract
• Vision 2014 sets the course for more strategic
  agenda to achieve a more dynamic growth path
• Primary priorities
• GROW THE ECONOMY
• Establish sustainable livelihoods that involve
  the marginalised
• Extend grants but also move away from dependency
  to economic self-reliance
• Improve the capacity and performance of the state
  for growth and development

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National imperatives (2)

• there are hundreds of thousands of things that
  government does and should continue to do but it
  should define a new trajectory of growth and
  development, identify the key things required to
  attain it, and make strategic choices in
  expending effort and allocating resources in
  order to blaze along this new trail (MTSF
  2004-2009)
• NB Making the right strategic choices requires
  sound information and analysis about development
  trends, opportunities and challenges

Peoples Contract Manifesto
Vision 2014
MTSF 2004-2009
NSDP
PGDS
PSDF
IDP
MSDF
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Rationale for greater alignment (1)

• Persistent and widespread poverty unemployment
  foremost challenges

• In the last 9 years we have been

• Less successful in growing the economy or
  creating jobs although more positive changes
  recently

Better at providing services and grants
?
?

• Four major social trends (demographics, labour
  market, household size, migration) in last decade
  affected ability to make a sustainable impression
  on unemployment poverty despite substantial
  government intervention
• Key Better Performance by the State

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Rationale for greater alignment (2)
Need to include a geographical dimension to
growth and employment.
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Elements of alignment and harmonisation
PROCESS
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Improving the performance of the state through
greater alignment

• A system for coordinated government priority
  setting, resource allocation and implementation
  requires a strategic basis moving beyond mere
  structures and procedures

2. A shared agreement on the nature and
characteristics of the space economy
1. Alignment of strategic development priorities
and approaches in all planning and budgeting
processes
3. Strategic principles for infrastructure
investment and development spending
21
Elements of alignment system
Space economy
National priorities and objectives
The normative principles and guidelines embodied
in the national spatial perspective provide the
central organising concept for facilitating
alignment and serve as the mechanism and basic
platform for better coordination and alignment of
government programmes.
22
NSDP Principles

• Economic growth is a prerequisite for the
  achievement of other policy objectives, key among
  which would be poverty alleviation.
• Government spending on fixed investment, beyond
  the constitutional obligation to provide basic
  services to all citizens (such as water,
  electricity as well as health and educational
  facilities), must target localities of economic
  growth and/or economic potential in order to
  attract Private-sector investment, stimulate
  sustainable economic activities and/or create
  long-term employment opportunities.
• Efforts to address past and current social
  inequalities should focus on people not places.

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NSDP Principles, cont

1. In localities where there are both high levels of
   poverty and development potential, include fixed
   capital investment beyond basic services to
   exploit the potential of those localities.
2. In localities with low development potential,
   government spending, beyond basic services,
   should focus on providing social transfers, human
   resource development and labour market
   intelligence.
3. In order to overcome the spatial distortions of
   apartheid, future settlement and economic
   development opportunities should be channelled
   into activity corridors and nodes that are
   adjacent to or link the main growth centres.

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NSDP leads to a strategic approach
Economic Dev.
Basic Services
Citizenship political empowerment
Safety Net
Sustainable Human Settlements
25
IDP/PGDS

• IDP compiled through
• bottom-up consultative processes
• Inputs from line functions
• Sectoral imperatives
• Filtering of communities needs into strategic
  objectives of municipality and available
  resources and capacity to deliver
• Provinces PGDS in process through
• Outcomes of Prov Growth Devt Summit Agreement
  (PDC)
• iKapa elihlumayo strategies
• Contributions of 30 IDPs
• Analysis that flow from the Provincial Economic
  Review Outlook (PERO)
• Sustainable Development Implementation Plan
• Provincialisation of NSDP guidelines and research

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iKapa ElihlumayoEight Strategic Thrusts

• Micro-economic Development Strategy
• Strategic Infrastructure Plan
• Prov. Spatial Development Framework
• Building Human Capital
• Social Capital Formation/Building
• Effective Financial Governance
• Coordination and communication (intra
  inter-government)
• Provincial-Municipal Interface towards integrated
  government

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IGR Priorities

• Practical alignment of NSDP, PGDS IDP
• Establishment and operationalisation of PIF
• IDP Hearings Processes
• MFMA operationalisation
• Coherent Human Settlement Policy and Strategy
• PCC Priority Programmes Projects
• Urban Rural Nodes
• Community Development Workers
• Priority Mega-Development Projects
• World Cup 2010 planning
• Public Transport, esp. Klipfontein Corridor
• N2 Gateway

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Enkosi

• www.capegateway.gov