PROVINCIAL SPATIAL ECONOMIC DEVELOPMENT STRATEGY (PSEDS)

1. PROVINCIAL SPATIAL ECONOMIC DEVELOPMENT STRATEGY (PSEDS)

2. 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

3. Categories of Development Potential

4. 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

5. 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

6. 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”

7. 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

8. 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

9. Cluster Programme: Implementing Agents PROVINCIAL PRIORITIES:

10. The Provincial Spatial Economic Development StrategyIntroduction

11. 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

12. 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”

13. 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

14. 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

15. 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

16. 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

17. 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

18. Classification of Economic Potential • 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.

19. The Agricultural Sector: Agriculture & agri-processing: • 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

20. The Industrial Sector: Industrial Development: • 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

21. The Tourism Sector: • 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

22. The Services Sector: • The 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.

23. 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

24. Poverty Levels: • Poverty levels measure the 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

25. Poverty Densities: • Poverty density measures 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. 4 3 2 1

26. Nodes & Activity Corridors • 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.

27. Categories of potential set out in NSDP • Production of high value, differentiated goods not strongly dependent on labour costs, focused on local & global niche markets – i.e. manufacturing • Production of labour intensive, mass produced goods more dependant on labour costs, affordable transport linkages – i.e. agriculture and mining • Innovation and experimentation – research and development • Retail and private sector services – large employer of skilled & semi skilled workers in advanced economies • Tourism – dependant on tourism attractions • Public service and administration

28. 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

29. Definition of corridors The 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.

30. Nodes and Corridors The key investment nodes and activity corridors over the next 5 years have been identified. Primary Purpose of Activity Corridor Multi-Sectoral Activity Corridor Tourism Activity Corridor Agriculture Activity Corridor Existing Corridor

31. 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. Primary Purpose of Activity Corridor Multi-Sectoral Activity Corridor Tourism Activity Corridor Agriculture Activity Corridor Existing Activity Corridor

32. 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

33. 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 • Services Sector: • Unsustainable urbanisation • Lack of spatial development framework to guide investment 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.

34. 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

35. Critical success factors in implementing PSEDS The 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

36. In Conclusion: • 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.