Beyond local economic development? Exploring municipality-supported job creation in a South African city

Abstract

Unemployment levels have been high in South Africa for many decades, despite periods of relatively high economic growth in the mid-1980s, mid-1990s and mid-2000s. Since the country's first democratic elections in 1994 there has been debate about the failure of national policy frameworks to increase employment substantially and reduce unemployment. Attention is being focused on municipal government's role in tackling persistent high levels of unemployment beyond the economic growth-oriented local economic development strategies favoured by most of the larger city administrations. This paper explores recent responses to employment related challenges by the eThekwini Metropolitan Municipality in Durban. It suggests that despite their firm commitment to increasing employment, municipal authorities see their role as secondary to national programmes. It is observed, however, that growing attention is being paid to employment creation outside traditional LED programmes.

Keywords:

• local economic development
• employment
• unemployment
• municipalities
• urban development
• eThekwini

1. Introduction

Processes of urbanisation in developing countries have generated unprecedented growth in urban settlement in recent decades. This has been accompanied by the increasing concentration of economic activity in major urban settlements. However, levels of employment in many of these countries remain low, and there are high concentrations of unemployed, underemployed and informally employed people in the major cities (UN Habitat, 2004). In the bulk of southern African countries formal employment in major cities makes up only a small proportion of total employment, with the majority of economically active people sourcing income through forms of informal employment (UN Habitat, 2004). In contrast to much of the rest of the subcontinent, South African cities have relatively high levels of formal employment but they are still facing major problems of high levels of unemployment and significant numbers of people earning meagre incomes through informal economic activities (South African Cities Network [SACN], 2006).

This paper examines the way the municipal government of one of South Africa's largest cities, Durban, deals with matters of employment and unemployment. To describe and assess the approaches that have characterised the eThekwini municipal agenda in recent years, the paper draws on a combination of interviews with municipal officials, a review of documents, including a report prepared by the author for the International Labour Organisation (Robbins & Hobbs, 2009), and some analysis of data on economic trends in the eThekwini metropolitan area.

Matters of employment have been examined from a variety of perspectives in the literature on urbanisation. It has been widely argued that the character of urban labour and national markets and their evolution has been substantially influenced by the nature and degree of urbanisation (Marshall, 1961 [1890]; Walker, 2003). According to Jane Jacobs (1969), processes in the division of labour have been central in creating opportunities for ‘new work’ in urban spaces. Kuiper & Van der Ree (2005) argue that a lack of access to employment and the consequent income is the main factor behind persistent high levels of poverty in many cities in developing countries. There exists a relatively rich literature in North America and Europe on labour market initiatives by municipal governments and the impacts of national policies on labour markets in urban spaces (Clarke & Gaile, 1998). However, in the developing world somewhat less attention has been paid to matters of employment in terms of the roles that local government carves out for itself in relation to labour market factors. For example, in Devas's (2000) review of urban governance and poverty in developing country contexts, little mention is made of the contribution of labour market failures to urban poverty and how labour market interventions might offer an opportunity to broaden and deepen the impact of pro-poor urban policies. Some would suggest that where policy-makers for cities in developing countries are relatively silent about labour matters, this reflects a tendency by policy-makers to adopt an approach where they caution against possible distortions from state interventions (Brenner, 2006).

However, there are two fields where it is advocated that local governments should take a more active role in labour market programmes. The first is reflected in the growing literature on the trend towards informal employment in cities and how this relates to urban policy (Helmsing, 2003; Lund & Skinner, 2004; Kuiper & Van der Ree, 2005). Helmsing (2003) argues that cities in developing countries in Africa need approaches ‘that recognise that self-employment and household based economic activity are the predominant form of livelihood rather than wage employment’ (Helmsing, 2003:71). The second is the policy realm related to public works-type opportunities linked to public sector capital projects and services in cities in developing countries, where local governments are often recognised as having a direct interest in labour markets (Kuiper & Van der Ree, 2005).

In South Africa the body of literature on the experiences of local economic development (LED) in the country's towns and cities has been growing (Bond, 2003; Nel & Binns, 2003; Nel & Rogerson, 2005; Xuza, 2007). In the tradition of the Reconstruction and Development Programme (Republic of South Africa [RSA], 1994), Bond (2003) argues that ongoing attention to the delivery of affordable services to the poor will have both direct and indirect employment benefits, but warns that poor quality services with prohibitive user charges will severely curtail prospects for self-employment. Nel & Binns (2003) say their research makes it apparent that a major motivation for local government to initiate LED programmes has been the high levels of unemployment. Although this research relies on unverified self-reporting by municipal officials, it is nonetheless interesting to note that in 31 per cent of the LED initiatives it reports, employment creation had been noted (Nel & Binns, 2003:176).

In a more recent article, Nel & Rogerson (2005:16) describe a similar policy orientation to direct interventions in support of job creation in LED in the late 1990s. They report on the frustrations of municipal officials in a context where there was recognition that growth-oriented policies were essential to make LED sustainable while being aware that for much of the previous decade economic growth had delivered little in the way of job creation. They go on to suggest that a greater commitment of resources and targeting the needs of the poor would help enhance the ‘pro-poor’ orientation of municipal LED (Nel & Rogerson, 2005:20). Rogerson (2009) refers to ongoing debates in policy circles about whether local government roles should focus on creating an enabling environment for improved job creation led by the private sector, or whether local government should make more direct interventions in support of job creation. Avoiding direct endorsement of a more interventionist approach by local government with regard to job creation, Rogerson suggests that improved capacity of LED teams and more effective coordination with the private sector are needed to avoid failings in past programmes (2009:73–4).

In exploring the experience of Durban in the light of these perspectives, the present paper first outlines the national employment context and then discusses specific labour market dynamics the city faces. It then explores the city's policy experience, and in conclusion offers some comment on the national and subnational implications of this analysis of the Durban experience.

2. Employment and unemployment in South Africa

According to calculations from Statistics South Africa (2008), during the period 2001–07 South Africa had an annual average of 12.4 million employed and 4.3 million unemployed. The trend during this period was generally positive for employment, with the figure rising from 12.5 million in 2001 to 13.3 million in 2007. However, despite some fluctuations in intervening years, national unemployment stayed above the level of 4 million for the period 2001–07. As a percentage of economically active people, unemployment fell from 24.6 per cent to 23.6 per cent during this period, showing that, for a time at least, the rate of increase of employment was faster than that of unemployment. It is noteworthy that the number of discouraged work seekers (i.e. those not having actively sought work in the four weeks preceding the survey) increased from 1.7 million to 2.5 million during this period, demonstrating the degree to which people continued to be excluded from consistent exposure to employment. Although specific measures of informal employment remain somewhat problematic, it is significant that, on average, during the 2001–07 period 21 per cent of those employed were in informal employment.

3. Employment and unemployment in Durban (eThekwini Metropolitan Area)

KwaZulu-Natal is the country's second most populous province, and the eThekwini Metropolitan Area has the second largest population of South Africa's cities (SACN, 2006). Like South Africa's other major urban centres, the city has high levels of poverty and inequality. Significant numbers of people make a living from the informal activities that have become a feature of urban life as the processes of urbanisation have accelerated (Skinner, 2005, 2006). Estimates drawn from available sources suggest that at least 15 per cent of employment in Durban is informal and a further 6 per cent of those employed work on the fringes of formal employment as domestic workers (eThekwini Municipality, 2006b:19).

During the 1990s Durban's economy grew at a relatively meagre 2.3 per cent, compared with 4.5 per cent for Johannesburg (SACN, 2004:50). Only since 2001 has Durban's growth performance caught up with and overtaken the national Gross Domestic Product growth, growing at 4.2 per cent between 2001 and 2002, and rising to 5.3 per cent in 2006 (eThekwini Municipality, 2008c). This lagging growth performance can be attributed to Durban's relatively high proportion of traditional manufacturing and commodity-oriented sectors (such as clothing, textiles, footwear, and primary processing of sugar cane and timber), many of which suffered heavily with the opening up of the economy and the related increases in competition and weak commodity prices during this period (Morris et al., 2002).

In terms of employment, the eThekwini Metropolitan Area (EMA) has seen an absolute growth in the total number of people employed in the last decade. Data suggest the figure rose from just under 900 000 people in 2000 to just over 1 million in 2007 before contracting again in 2008 and 2009 to just below the 1 million figure (Robbins, 2009). The stronger performance can be attributed to the growth in transport and logistics related employment associated with the city being host to Africa's most significant cargo port and the growth in retail employment. Figure 1 shows how the EMA increased its share of total South African formal employment from around 10.1 per cent in 2000 to 10.5 per cent in 2006 in a context of absolute growth in numbers employed in the country (Robbins, 2009). The EMA has been a contributor to national employment growth but certainly not a major driver of change in national employment patterns, as the change in share has been marginal (see Figure 1).

Figure 1: eThekwini/Durban shares of KwaZulu-Natal and South Africa employed (2000–06)

However, it is the increase in unemployment that has been the most striking aspect of labour market performance in South Africa in the last few years, and this is also true for Durban, as can be seen in Figure 2. While new jobs have been created and the absolute level of the formally employed has increased over these years, this limited growth has been overshadowed by a substantial increase in the numbers of unemployed – as evidenced not only by the data, but also by the growing numbers of people resorting to informal activities for survival.

Figure 2: Unemployed (broad definition) as a percentage of South Africa, KwaZulu-Natal and eThekwini/Durban economically active persons (2000–06)

4. Approaches to employment and unemployment in municipal policy and programmes in Durban

The preceding section of this paper set out some of the dominant trends in labour market dynamics in Durban in recent years. Essentially, these trends have tracked those of the national economy in that, for much of the post-2000 period, levels of employment have shown only limited growth while unemployment, bar a short period of time, has remained stubbornly high. This section describes the character of the municipal government response in Durban to these challenges.

4.1 Institutional profile

The eThekwini Municipality is a metropolitan local council in terms of South African local government legislation (RSA, 1998). This gives the elected council and municipal authority a considerable degree of autonomy in formulating and initiating development related interventions. The eThekwini Municipality employs in the region of 18 500 staff and in the 2008/09 budget year had a total budget of R23.4 billion, comprising R5.9 billion in capital projects and R17.5 billion in operating spend (eThekwini Municipality, 2008b). These figures show that it is a major employer and also that it has considerable human and financial resources to wield in response to major societal challenges. It is notable that the Municipality is often cited as a success story of sound institutional management and innovation, not just by its own spokespeople but also by national government departments in recognising the achievements of the city of Durban (eThekwini Municipality, 2006a).

4.2 eThekwini's strategic frameworks and employment

The eThekwini Municipality has in the past, and in its most recent strategy documents, identified economic development challenges as the core of its strategic approach. This is reflected in essential strategic documents such as the Long Term Development Framework (eThekwini Municipality, 2001) and the Integrated Development Plan: 2010 and Beyond (eThekwini Municipality, 2007a). The Long Term Development Framework identified three key strategic focus areas for the Municipality in contributing to the sustainability of the city: meeting basic needs, strengthening the economy, and building skills and technology. This document states that ‘Building increased prosperity of all citizens, sustainable job creation and a better distribution of wealth are central to the [municipal] challenge’ (eThekwini Municipality, 2001:10) The current Integrated Development Plan (IDP) outlines eight major challenges, the first being ‘low economic growth and high rate of unemployment’ (eThekwini Municipality, 2007a). To realise the Municipality's vision, the IDP sets out eight priorities, one of which is that all citizens, the business community and visitors must have access to economic opportunities (eThekwini Municipality, 2007a).

Municipal strategy documents focus on the broader economic challenges. Shortages of employment and skills are raised as details within challenges related to poverty or competitiveness. The Municipality's strategic response talks of seeking to support ‘economic opportunities’ – a phrasing which falls some way short of committing specifically to job creation and decent work. The common message from municipal officials is that they see employment gains as an output from a range of city endeavours such as supporting restructuring sectors or providing training to informal economy workers. In other words, they see these endeavours as the routes through which the Municipality can influence labour market outcomes. It is for this reason that officials say the focus of attention in strategic documents is more on the programmes that might yield employment gains as one of a number of impacts rather than on employment matters by themselves (interview, eThekwini PMU officials, 18 November 2008). A municipal official from the Economic Development Department (EDD) stated that ‘job creation is national government's role – we can play our part through public works and the like and through an environment in which the economy can grow, but we are not in a position to be job creators’ (interview, EDD official, December 2009).

It is notable that the IDP (eThekwini Municipality, 2007a) also sees a number of other fields of activity that are outside the conventional economic development programme areas as influencing employment. Much is made in the documentation of intentions to densify the city and avoid urban sprawl, with the case being made that this would ensure a more productive city and one where the livelihood costs to citizens would be reduced (in the form of, e.g., cheap transport, more accessible services) and where such densification would generate new opportunities from the higher economic thresholds.

Table 1 provides specific details of employment-related responses within the eight IDP planning areas. These details make it clear that, in strategic terms, it is the economic development-related programmes that are expected to have the largest impact on employment issues. Of the eight programmes, only three (Programmes 2, 4 and 5) make specific reference to labour market related interventions.

Table 1: Employment-related commitments in the eThekwini IDP

Plan	Response to employment issues
1. Sustain our natural and built environment	No specific mention
2. Economic development and job creation	The goals are ‘strong economic growth and sustainable job creation’ and ‘to halve unemployment and poverty by 2014’ (eThekwini Municipality, 2007a:20). The following programmes are specified:
	1. Develop a strategic plan and scenarios of the City's economy
	2. Stimulate key sectors that promote economic growth and create jobs
	3. Support and grow tourism and related industries
	4. Create an integrated procurement management and monitoring system
	5. Facilitate and promote investment (including mention of a focus on labour-intensive investors)
	6. Develop a logistics platform
	7. Drive the 2010 World Cup soccer event for eThekwini
	8. Create a City/Port partnership
	9. Implement Dube Trade Port Implementation Strategy (mentioning the job creation impact of the project)
	10. Manage informal trade (mention of regulation of public space trading areas and enterprise development services)
	11. Promote and stimulate entrepreneurship
3. Quality living environment	No specific mention
4. Safe, healthy and secure environment	The Zibambele Public Works programme is identified as providing income for poor urban/peri-urban households through provision of work opportunities to maintain public infrastructure
5. Empowering citizens	The Municipality is to encourage improved human capital formation, improve skills provision and enhance the employability of those unemployed. A further role is identified for the Municipality to actively support scarce skills and to encourage development of its staff
6. Promoting cultural diversity	No specific mention
7. Good governance	No specific mention
8. Financial viability and sustainability	No specific mention
Source: Drawn from eThekwini Municipality (2007a).

Moving from the strategic to the operational level, the next section provides some insights into the fields of activity where the Municipality has sought have a direct impact on employment creation and to reduce unemployment within these IDP programmes.

4.3 Employment in economic development programmes in eThekwini Municipality

Since the 2000 local government elections there has been a steady increase in both resource and institutional commitment to economic development initiatives in eThekwini Municipality. In the early 2000s, capital projects such as the Point Waterfront and the Riverhorse Valley Industrial Estate reached the peak of their capital expenditure. The Municipality also became more ambitious in terms of support investment, tourism and event tourism (Robbins, 2005).

In 2008 the Municipality adopted an economic development strategy entitled ‘Hands of Prosperity’ (eThekwini Municipality, 2008a). The document states that:

Economic development can be defined as a set of activities undertaken to improve the economic well-being and quality of life for a society. It encompasses the will to create and/or retain jobs and supporting or growing incomes and the tax base. It is about improving the economic wealth base of countries, or regions for the well-being of their inhabitants. (eThekwini Municipality, 2008a:1)

It is notable that the core strategic goal identified in the strategy document is to halve unemployment by 2014, in line with the Millennium Development Goal commitments (eThekwini Municipality, 2008a:15). In order to work towards this goal the Municipality has identified a number of strategic choices to inform its focus area. These are:

• specialised investment and sector support,

• spatial integration and efficiency of priority nodes and corridors,

• strategic industry skills development,

• strategic economic infrastructure development, and

• specialised enterprise development and innovation support for emerging and informal businesses (eThekwini Municipality, 2008a:16).

Municipal officials said that, as the strategy has been in preparation for a number of years, it has been effectively guiding economic development activities for a considerable period of time (interview, EDD officials, 19 October 2009). The discussion which follows draws from analysis of official sources and interviews to examine specific fields of activity that municipal officials identified as having an impact on employment. (Space does not permit discussion here of small business support, tourism marketing, investment facilitation and knowledge and research processes.)

4.3.1 A focus on economic sectors

During the late 1990s, the then EDD of the erstwhile Durban Metropolitan Council carried out a series of action research studies to consider the scope for contributing to inter-firm networking to make important local sectors more competitive (Durban Metropolitan Council, 2000; eThekwini Municipality, 2006b). The sectors where the studies took place were clothing and textiles, the automotive sector and chemicals, with the most successful being the automotive sector (Morris & Robbins, 2006). These studies provided opportunities for the Municipality to engage with key role players in these sectors and improve common understanding of problems. Similar studies have been done in other sectors – maritime, waste reduction, furniture, craft and film – to add to the suite of sector-oriented programmes.

A senior manager in the EDD said the clothing and textile, furniture and automotive sectors were motivated in part by the direct effect they had on employment (interview, 18 November 2008). All three were significant employers in the local economy. However, of these three, the officials could point to only the automotive sector as having increased employment during the early to mid-2000 period.

4.3.2 Capital projects in support of economic development

The late 1990s and early 2000s in Durban were characterised largely by public sector capital projects, with the aim of supporting economic growth. These included, among others, the International Convention Centre, the Point Waterfront and a major new industrial estate. In some years funds for these amounted to as much as one-fifth of the total eThekwini municipal capital spending. A senior EDD official pointed out that major capital programmes provided a boost to construction employment during a period of weak economic growth and generated streams of new business or tourism visitors that in turn helped secure growth in employment and investment in related sectors such as tourism (personal communication, eThekwini EDD official, 23 October 2009). Municipal officials mentioned three important characteristics of these initiatives: they were undertaken in such a way as to maximise employment and skills transfer during construction, they were the first large-scale initiatives to support the development of black-owned and women-owned enterprises that had previously had little access to public contracts, and they had a wide-ranging commitment to capital spending to support and develop existing or emerging business nodes.

Today the bulk of economic development-related capital expenditure in the city is being allocated to preparations for hosting the 2010 FIFA World Cup, backed by substantial central government allocations for new stadiums and transport upgrades. These preparations have almost doubled total municipal capital spending in the last few years (with total stadium costs alone amounting to over R2 billion). They were initiated in a context of expanded national public spending on infrastructure and in a stronger period of economic growth and are said to have contributed, together with major projects such as the construction of a new airport and a range of private sector projects, to a doubling in construction employment in the city in the period 2003–07 (personal communication, eThekwini EDD official, 23 October 2009). However, not one of the municipal Project Management Unit officials pointed out that time pressures on the 2010 FIFA World Cup projects were so tight that that the scope to enhance the labour intensity of construction beyond the norm would be compromised (interview, 18 November 2008).

4.3.3 Informal economy support

The eThekwini Municipality's commitment in the past to providing infrastructure for public space traders has been documented elsewhere (Lund & Skinner, 2004; Dobson et al., 2009). An official involved in the Durban Informal Economy Policy project (eThekwini Municipality, 2000, adopted by the eThekwini Municipality in 2001) pointed out that infrastructure and services (shelter, and storage and ablution facilities, and training to improve health services and access to organisational support) were provided not only so that trading in public spaces could be better managed but also to improve conditions for those working in the sector (interview, former eThekwini Municipality official, 24 August 2009). However, the Municipality has effectively set aside this much vaunted project, arguing that it lacks relevance as a guiding plan as the city evolves (interview, EDD official, 19 October 2009).

4.4 Employment creation through other municipal processes

Beyond the specific economic development programmes, the Municipality has also sought to leverage the potential across its core service delivery programmes to support some economic development goals and in some cases to improve forms of employment support. By far the largest part of its capital and operating spend is allocated to the traditional municipal service categories (water, electricity, parks, roads, housing, etc.). In these functions, therefore, it can use its own revenue streams and various grant programmes from national and provincial government to help create employment both directly and indirectly. The two most common ways cited were procurement reform and labour intensive construction through public works-oriented work programmes.

Procurement agendas have aimed in particular to ensure that municipal projects are allocated beyond the established firms, with the result that these firms have gradually changed their ownership and management structures to be more representative of the country's demographics and thus qualify for municipal contracts, and there has been more subcontracting between larger firms and emerging businesses. Important innovations in these processes, outlined by EDD officials, have been the establishment of protocols on training and mentoring in larger projects as well as the breaking up of larger contracts which can be allocated to emerging businesses (personal communication, EDD Official, 23 October 2009). The Municipality also initially encouraged, and later required, businesses to take up municipal contracts in historically disadvantaged areas to increase their proportions of local employment on site.

The launch of the Expanded Public Works Programme at a national level in 2003 intensified the focus on using municipal service provision to create jobs. Although no new significant national government funding was allocated to this, the National Treasury did agree to use existing conditional grant programmes, such as the Municipal Infrastructure Grant programme, to require a level of public works delivery by municipal users of these grants. The eThekwini Municipality has been a major recipient of such application-driven conditional grants and identified a benefit in aligning its delivery strategy in various business plans to meeting these obligations.

After about a year of less than successful implementation experiences in the context of what municipal officials described as weak and patchy national support, the Municipality established a dedicated Project Management Unit (PMU), staffed by experienced engineers and supported by some administrative capacity, to drive the public works components of infrastructure-led projects (interview, PMU officials, 18 November 2008). Projects initiated by the PMU have included peri-urban road building, laying of pipes and the construction of sanitation facilities. The PMU used its dedicated capacity to support application processes and to help line departments implement public works-oriented projects. PMU staff pointed out that their specialised knowledge and full-time focus on such initiatives enabled them to offer useful forms of support to ensure a measure of success.

In 2006, the PMU tabled a proposed policy framework for public works in eThekwini Municipality. This was confirmed in April 2007 as the eThekwini Expanded Public Works Programme (EPWP) Policy (eThekwini Municipality, 2007b). The aims of the eThekwini EPWP policy are to:

• guide the activities of municipal departments in how they can support public works,

• secure formal municipal support for the programme as a project within the broader municipal socioeconomic and poverty reduction programmes,

• secure a commitment to public works in the Integrated Development Plan, and

• ensure integration between municipal programmes and the re-engineering of planning, design and delivery processes (eThekwini Municipality, 2007b:5–6).

The policy framework confirmed the Municipality's commitment, in principle, to the four key sectors of activity shown in Table 2. The framework argues for a more concerted effort by municipal departments that have not taken up opportunities such as those related to environmental services (e.g. Working for Water). It does not set a common standard for the form of public works employment when it comes to length of the job opportunity, wage rates, training and labour conditions. However, the PMU officials reported that generally the Municipality exceeds the minimum standards of the EPWP national framework. Officials did admit, however, that the PMU attention to these standards is not necessarily replicated in all eThekwini public works-type programmes, such as the cutting and clearing of grass verges.

Table 2: National EPWP categories and proposed fields of activity

Infrastructure	Environment/tourism and culture	Social	Economic
Low-volume roads	Working for water	Early childhood development	Catering
Sidewalks	Working for wetlands	Home/community-based care	Security
Storm-water management	Working for the coast	Food security/nutrition	Uniform manufacturing
Trenching	Domestic waste collection		Municipal building cleaning
Materials supply	Agribusiness		Municipal building refurbishment
Source: Drawn from eThekwini Municipality (2007b).

In recent years PMU officials have been making the case for the Municipality to shift its focus towards an approach less reliant on labour-intensive construction, since they recognise that capital programmes will begin to taper off and the imperative to raise maintenance spending will receive more attention. One example of this shift is the Municipality's adoption of KwaZulu-Natal's acclaimed Zibambele road maintenance scheme, which has been running in the province for close on a decade. This scheme gives poor households a contract to maintain a section of road, including clearing stormwater drains, removing vegetation and filling potholes. The household is allocated 2 days' work a week and can decide which adult member will do it. Households are given some basic training and equipment and paid above the minimum wage. By October 2008 some 4500 beneficiaries were employed in the scheme in 50 of the city's 100 wards, and the intention was to increase the number by a further 2000 by the end of December 2008. The scheme has a particular focus on women-headed households because they are seen to make up the bulk of the poorest households. The Municipality has also provided a range of other support activities to run alongside the scheme, which include facilitating the creation of savings clubs, and offering guidance for obtaining identity documents and opening bank accounts.

4.5 Some general reflections on the eThekwini case

In interviews, municipal officials identified a variety of difficulties they were experiencing in boosting job creation in the city. Those working in economic development were concerned that funders' and politicians' demands for rapid results often weakened not only the possibility of employment gains but also the impact on those actually employed. Demands for rapid completion left little space for designing and implementing employment-generating initiatives in other projects. Furthermore, there appeared to be a general lack of interest in tracking actual employment impacts of various programmes, with municipal officials having their eye on total formal employment and unemployment in the city as the main indicators.

Officials in the Municipality's PMU, responsible for public works programmes, were much more in tune with the employment leverage role they played, since the process of accessing a constant flow of grant funding from national government required a measure of consistent reporting. As a result, programmes were designed with specific employment impacts in mind, and tracking of results was a requirement. However, these activities had, for some time, been limited to a narrow set of infrastructure projects funded by the Municipal Infrastructure Grant. PMU officials also pointed to shortcomings in existing contracting procedures and the bureaucratisation of national government funding as being obstacles, and argued that the creation of a dedicated unit for increasing employment in selected municipal functions had been one of their successes.

A further difficulty reported was an inadequate grasp of the dynamics of employment and unemployment in the local economy. Data were often not sufficiently informative for the needs of policy-makers and programme planners and were limited to a handful of indicators. For instance, officials said information on informal employment and underemployment or low-wage work was not readily available to them, and they made a case that access to such data was a costly luxury and that they had to get used to working somewhat in the dark when it came to developing strategies and programmes.

Nevertheless, despite these difficulties, municipal officials in eThekwini believed they had done more than most South African cities to initiate programmes sensitive to the country's employment challenge. The Municipality had been the most effective at applying for, receiving and spending the Municipal Infrastructure Grant for a number of years with its EPWP requirements. It had also consistently been a leader in spending on major economic development projects. The officials argued that this displayed a strong dual concern with economic growth and employment issues and was the more remarkable considering that Durban had a lower per-capita income than the other major cities.

In 2005, 538 610 people were unemployed in the eThekwini municipal area and 1 029 342 were employed (eThekwini Municipality, 2006b:18). To meet the Municipality's objectives of halving unemployment by 2014 or 2015 would mean that something in excess of 50 000 new jobs would have to be created per year in the local economy, taking into account new labour force entrants and exits. As the Municipality sees its future plans, it will need to get to grips with these challenges in a more substantial manner.

5. Reflections on the role of city government in responding to South Africa's crisis of unemployment

Since the country's first democratic elections in 1994 there have been a number of shifts in policy for programmes to boost employment. In the immediate post-1994 period, the government adopted the Reconstruction and Development Plan (RDP) to mobilise public resources to meet the basic needs of the majority of citizens disadvantaged by apartheid. It was expected that this mobilisation of fiscal resources would increase employment both directly and indirectly. Key RDP programmes were aimed at providing housing, electricity and water. Thus at the outset it was expected that activities carried out at the local level would be central to job creation.

However, by 1996 the government had chosen to curtail the scale of some of its commitments and to extend the delivery periods of others in an effort to limit public borrowing and reduce the perceived crowding out of private investment. Alongside the RDP the government adopted the Growth, Employment and Redistribution (GEAR) strategy (Department of Finance, 1996), which created a platform for a monetarist macroeconomic policy system, and proposed the opening up of the economy through exchange rate reforms and trade liberalisation. However, despite the government's optimism, employment gains as a result of GEAR were, at best, limited.

In the late 1990s and early 2000s, the economy showed signs of recovery, with economic growth rates breaking through the 3 per cent level and the first tentative signs of a reduction in unemployment figures. This was accompanied by a government commitment to a major expansion in public investment, primarily in transport infrastructure. During this period a number of economic summits were called, at organised labour's request, to place employment creation at the centre of government policy.

Such initiatives were supported by two important expanded fiscal commitments: an expansion of the social grant system, and an increase in allocations to municipalities to fund infrastructure, housing and service expansions at an accelerated rate. Once again attention shifted to local government as a site of job creation. While these developments were taking shape, the government made a commitment to the national EPWP to secure greater levels of public works projects through initiatives implemented, to a large degree, at the local level.

In 2006 the Presidency announced the Accelerated Shared Growth Initiative of South Africa, which sought to mobilise coordinated government action and investment to enable the economy to reach growth levels at above 7 per cent, which was seen to be central to commitments to halve unemployment by 2014. During this time the Presidency also initiated processes to develop what was called a Second Economy Strategy (Philip, 2008), with a particular focus on improving the economic prospects of households and individuals who were deemed to be marginalised in one way or another from mainstream economic processes.

Other relevant national policy frameworks, such as those produced by the Department of Trade and Industry recently (DTI, 2007a,b,c), have been largely silent about the role of major cities in crafting policy responses to the employment challenge. There is little in these frameworks for local government operating in subnational spaces to meaningfully hook into, beyond the rare mention of issues related to the need for national policy to respond to the needs of areas denuded of economic activity.

Probably the most significant policy angle worth taking note of is the National Spatial Development Perspective being promoted by The Presidency (2007). This ‘perspective’, states that, ‘Beyond the constitutional obligation[s] … Government spending on fixed investment, should be focused on localities of economic growth and/or economic potential in order to: gear up private sector investment; stimulate sustainable economic activities; and create long-term employment opportunities’ (Philip, 2008) However, to date this initiative has received little in the way of public support by the relevant national ministers and their spokespersons since the elections earlier in 2009.

Subsequent to the 2009 national elections, the African National Congress Government has been claiming it will give priority to employment matters. Steps such as the proposed banning of labour broking have been mentioned, as have commitments to create 500 000 jobs a year (Zuma, 2009). However, the global recession has dealt a blow to these intentions, as unemployment has once again been gaining and employment has shrunk.

In the case of Durban, as discussed above, national policy and legislation has played a role in mobilising local government to respond to some dimensions of the urban employment crisis in the country, partly by creating an environment supportive of municipalities that make commitments to local economic development. However, national policy has also involved directing municipal governments to use national grant funds to support national public works programme objectives.

However, despite this support and funding, some major problems remain at both local and national government levels. On the metropolitan city level, the case of Durban reveals a fairly consistent commitment to action on employment matters, but, apart from the rather limited direct gains from public works, the rest of the activities tend to be devoid of any serious drive to reduce unemployment, create jobs and improve working conditions for the growing informal sector. All too often, municipal skills – already in short supply – are aimed at rapid delivery of projects and the sustained work needed to leverage lasting employment gains, even if on the margins, is neglected in favour of trickle-down processes that produce only ephemeral gains.

At the national level, some aspects of policy tend to play down the role of major cities as active players in tackling unemployment and generating employment. The Department of Provincial and Local Government's Local Economic Development Framework (DPLG, 2006) states in no uncertain terms that local government does not have a direct role in creating jobs. Although much of the public works-related employment that has been generated has been at the municipal level, the impacts on municipalities have tended to be limited to just a few fields of municipal action. The bulk of national and provincial capital investment remains somewhat removed from direct local government influence and is often devoid of specific employment goals, apart from those used to motivate the expenditure in the first place. Furthermore, national industrial policy has tended to be more concerned with issues of spatial redistribution, and so an opportunity to harness the potential of cities in industrial policy and its related employment imperatives is neglected.

6. Conclusion

The above reflections on the eThekwini Municipality's responses to persistent high levels of unemployment, low employment growth and a prevalence of forms of work that are marginalised from the economic mainstream provide a complex and challenging picture. The context has been one of considerable economic upheaval and where mainstream economic change in a small open economy is likely to continue to be something of a roller-coaster ride. In this environment, household patterns have changed, urbanisation processes continue to place pressure on the city and conditions of poverty remain the daily experience for almost half the citizens. Developing policy in such a context is no easy task, and putting it into meaningful practice is equally daunting. However, the somewhat subdued local response to the huge unemployment challenge is not just a matter of the municipal rabbit being caught in the headlights; it is also a matter of ill-informed and weakly framed national policy frameworks that either ignore the scope and potential of a local role in well-capacitated cities or reduce this role to restrictive frameworks for public works activity and LED programmes. What is required is a comprehensive and more creative response, informed by local knowledge and unique local conditions as well as global dynamics. The experience of Durban shows that where resources and capacity are allocated with specific employment goals in mind a significant contribution can be made by local government, not merely at the margins, but as a central pillar of a much-needed national strategy to reduce unemployment and create decent jobs.

Notes