Local economic development as a poverty alleviation tool : a case study on the urban renewal program in KwaMashu, Durban.

Abstract

The study sought to establish the impact of LED strategies employed by the Inanda Ntuzuma KwaMashu Area Based Management program(INK ABM) in alleviating poverty in KwaMashu.The objectives of the study were: to identify aspects of poverty that has been reduced in KwaMashu; assess the extent poverty alleviation is influenced by demographic characteristics namely age sex and income in KwaMashu; to compare levels of poverty before and after the INK ABM in KwaMashu; to identify the positive and negative impacts of the LED strategies within the INK ABM in KwaMashu; to establish the effectiveness of the structures put in place in the INK ABM project in KwaMashu in achieving the ultimate goal of poverty alleviation, and to use the results to recommend further initiatives. The methodology used in the study to asses‘ impact was Poverty Social and Impact Assessment. The study revealed that LED strategies have had a significant impact in improving infrastructure and service delivery at KwaMashu town center and KwaMashu in general. LED strategies have had marginal impact in improving the income, assets indicators, human capabilities, market share and employment creation of SME‘s and residents in KwaMashu. Moreover the study revealed that there is a strong positive correlation between education levels and success of entrepreneurs. Entrepreneurs who have better skills can leverage themselves to LED strategies than those with poor skills. LED has had a marginal impact on poverty alleviation due a myriad of factors which reinforce and interact with each other thereby trapping entrepreneurs and residents in poverty. A major finding is that LED strategies in KwaMashu do not target all the segments of the poor in a meaningful way. As such the study suggests a new LED agenda in KwaMashu which is: holistic, targets all the segments of the poor, fosters skills development and consists of various investment packages which would ensure that poverty in its multidimensionality is alleviated. The study contributes to knowledge by developing a model LED cycle and the concept of clinical LED which can assist in translating policy into meaningful practice so that LED has a high impact on alleviating poverty.