LD in Developing Countries

1. Introduction

Most of the chapters in this book concern local development in the EU or the “European Model” of local development. The present chapter looks into LD outside the EU, excluding the highly developed countries of the OECD. It therefore concerns countries known, in the broadest sense, as “developing countries”.

The paper addresses the scope and limitations of addressing LD in such a vast field (section 2). It then considers specific LD experiences (issues, approaches and, to a lesser extent, results) in Africa (section 3), Latin America (section 4) and Europe outside the EU (section 5). It concludes with a discussion of transversal themes (section 6).

2. Diversity and common features

This chapter looks into the emergence and the main characteristics of LD in developing countries. Even if this involves a cursory look, it is a very ambitious task that can only partially be fulfilled due to the large number of countries and regions involved, and their great diversity. This diversity can be expressed in several ways, at least in terms of income levels/degree of economic development, governance (institutional and cultural traditions), and rural or urban context.

Still such an overview, albeit incomplete, is attempted here in a single chapter for several reasons. First, it is beyond the scope of the early editions of this e-book to include detailed separate papers on different countries or regions outside the EU. Second, it is considered important to complement the EU approaches and practices with even brief references to other experiences. Third, and possibly most important, there are only few strands as to how LD is emerging and unfolding outside the EU and they are found in all continents, notably:

• a spontaneous LD process;
• a dissemination process of “the European Model”;
• a programmatic support for LD in particular countries or groups of countries.

The dissemination approach has built mainly on Leader. In introducing Leader in the EU, the idea was to enlist the energy and resources of all who could contribute to the rural development process, by forming partnerships at a local level between the public, private and civil sectors. This and the area based approach enshrined in Leader, have been seen as making Leader of relevance to developing countries.

There are also other valid reasons as to why Leader should be disseminated: its overall success despite the limited funding, the similarities in rural challenges faced both in the industrialised world and the developing countries (rural ageing, out-migration, unbalanced territorial development), the fact that the principles and values of the Leader method are embedded in traditional societies and that Leader through its bottom up feature can provide local solutions to global problems (such as the increasing food prices and dependence on costly imports of basic commodities).

These reasons have inspired initiatives to disseminate the Leader approach to countries beyond Europe (see sections 3 and 5). New provisions on transnational cooperation introduced in the period of Leader+, have greatly assisted such initiatives since 2000.

Exchange and cooperation with European partners and structured support for LD is also provided through a number of other the programmes of international organisations and donors. The UNDP aims to develop strategic alliances with European regions and local authorities for decentralised cooperation. The aim is to set up structures for local governance and development.

Regions and local authorities can form partnerships through several programmes, such as the ART GOLD Programme (Governance and Local development), the LEDA Programme (Local Economic Development Agency) and the WACAP Programme (World Alliance of Cities Against Poverty). EU programmes, in addition to Leader, support local governance (see section 4 on URB-AL). Several other multilateral (e.g. Inter-American Development Bank, IDB) and bilateral donors (e.g. Spanish Agency for International Development Cooperation, AECID) actively support local development (see below).

By its nature, the present chapter is strongly focused on experiences in developing countries which are of relevance to the EU, either because of they are based on the dissemination of European approaches and/or due to the involvement of European partners. It is expected that spontaneous LD processes and indigenous policy approaches will receive fuller attention in future editions of the e-book.

3. Local Development in Africa

Results from Leader in Mozambique

International cooperation is one of the seven core principles of the LEADER methodology. It has helped European practitioners also build links to the Developing Nations and other rural areas outside of the EU. In many cases the national or regional authorities in these countries have taken a chance to test and pilot LEADER in their territories too. Mozambique, the Republic of South Africa, Cape Verde, Benin and Tunisia are well documented cases from Africa for example. The methodology has also been introduced to many Latin American countries (see section 4 below). Some EU Member States have assisted the initiative to spread across the Eastern border, for example to Russia and Ukraine (see section 5 below). Many of these cases were presented in the “LAGs’ Global Networks” seminar, organised in Finland in June 2011 by the European LEADER Association for Rural Development (ELARD).

The LEADER pilot in Mozambique is among the best documented ones in the Developing Nations. It was inspired by the LEADER Dissemination Guide Book and launched in 2006. Since then the project has been supported by the Finnish Ministry of Foreign Affairs as part of Governmental Development Aid Programme to the country.

The project outcomes were presented in the ELARD seminar by Francisco Graciano from the Zambesia Province Government. The pilot LEADER group was created in Alto Ligonha in central part of Mozambique, the Province of Zambesia. An isolated, extreme poverty inland area has a population of 170 000 (38/km2). The average age of the population is only 15 years and the life expectancy 35 years. The bottom-up LEADER development strategy was finished in 2008, focusing on agricultural cooperatives, local trade structures and community forestry. In the first project evaluation meeting in July 2009 11 micro-projects were approved. In the second meeting the LEADER group approved 15 new micro-projects. The projects prioritised by the locals have developed agriculture, food-processing, aquaculture, furniture production and local trade among other things. The average budget is only 1 000 Euros per project and the LEADER Manager is hired locally. This has resulted in very low annual costs, only 30 000 Euros for the whole project.

A mid-term evaluation of the project carried out by the Eduardo Mondlane University in Maputo was published in 2011. The evaluation of these projects indicated that some of the funded associations have managed to contribute to an increase in production and to create new jobs. The next three-year phase of the project in 2012-2014 will extend its geographic coverage to new territories.

There are also other positive impacts that worth noting : empowerment of the community and improvement of gender and youth equality. As regards to the first, LEADER has provided the local population with hope in their fight against poverty and has made them realise the power and potential impact of their own ideas and initiatives. Moreover the locals see the benefits of working together in associations and have become more confident to make demands to their authorities despite the difficulties in reaching them. Regarding the improvement of gender and youth equality, despite of the deeply ingrained societal power relations the Local Action Group has started to include young members and women. Other initiatives illustrating progress in this area include the opening up of an association teaching carpentry to orphan students and a small plantation called Esperança de Vida which is used to feed HIV positive patients and encouragement for people to test for HIV.

Cooperation with Cape Verde

Since the changes applied in cooperation in LEADER +, that included the possibility to cooperate with non EU-countries, Portuguese LAGs have carried forward 14 cooperation projects in mainly Portuguese speaking countries. Some of these projects focus on exchange of information and experience on local development processes, joint promotion of rural tourism as well as training of associative leaders and other development agents.

In the case of Cape Verde, a Programme of Poverty Alleviation in Rural Areas (PLPR) adopted by the Government of Cape Verde was designed between (1997-99) by a team of consultants participating in the Animation Unit of the Portuguese LEADER II Network (NGO) and in LEADER II European Observatory (AEIDL). As such, the PLPR was inspired by the LEADER methodology and its central idea was that the fight against poverty is a matter that concerns not only the specialised agencies but the whole society (i.e. social cohesion as a tool for eradicating poverty).

The programme has involved, inter alia, the creation of partnerships under private law, known as Regional Commissions of Partners (CRP), integrated by local communities, development partners, capable of designing and implementing local programmes based on their own priorities in order to fight poverty – a good example of emulating the LAG structure. Portuguese LAGs have been heavily involved in the implementation of the PLPR over the years and this cooperation has been fruitful.

The LEADER spirit and specificities (participation, bottom-up, partnership) are well integrated in the PLPR programme, and it has been remarked that the PLPR has even upgraded some LEADER features, such as self-evaluation and participatory monitoring.

4. Local Development in Latin America

A challenging context for LD

Latin America has a long track record of LD initiatives, responding to very different and diverse reasons and causes, but, in general terms, responding to “spontaneous” answers emerging from civil society. Latin America is the continent of the social breach, where social inequalities and high rates of poverty are generalised. Therefore, LD often is concerned with poverty reduction and self-organisation of local societies to tackle social exclusion. In other words, unlikely to EU context, LD in Latin America is less concerned with public policies and public money and more with social auto-organisation.

However, in Latin America the state has a long tradition of centralisation, including strong traditions of central planning throughout the continent. There is still a strong and historical vision of a “top-down” approach linked to development issues. This is now changing and decentralisation is growing but with enormous problems and obstacles. If we have to differentiate LD in Latin America from LD in EU countries, we have to underline the huge differences regarding the role of decentralised and territorial governments. In the EU context local and regional authorities play a strong role in tackling the problems and challenges of territorial development. And, of course, in Latin America there is no ERDF or ESF available to support LD.

One of the biggest challenges of development and of LD in Latin America is about linking economic growth (as is now taking place in the so called “emerging economies”) with a reduction of poverty. The concepts of social cohesion and inclusive economic development are growing in importance, leaving behind the idea of the “trickle down” process enunciating that once economic growth takes place, it will eventually be distributed among the excluded people. Inclusive economic development assumes that excluded people participate from the beginning in the economic activities as an actor, entitled to economic and social rights.

Support for aspects of LD in Latin American countries has come from a number of programmes and cooperation frameworks operated by international organisations and other institutions including the following:

• The UNDP initiative ART GOLD is a tool for local partnerships, stimulating local strategic planning, involving local actors and linking local initiatives with international cooperation trying to search financial resources to finance local projects. It is based on national agreements between central government and local authorities, focused on a bottom up approach. ART GOLD currently works in Ecuador, Cuba, Bolivia and Uruguay.

• URB-AL III is a programme of the EU on urban development, aiming to link local governance with social cohesion in Latin American cities. URB-AL promotes projects where European and Latin American cities share experiences and good practices.
• The FOMIN programme of the Inter-American Development Bank provides support to local initiatives, including private sector-led development benefitting the poor – their businesses, their farms, and their households. The aim is to give low-income populations the tools to boost their incomes: access to markets and the skills to compete in those markets, access to finance, and access to basic services, including green technology. It also offers training and new skills to start up Local Development Agencies.
• Various Leader and other cooperation projects by REDR (Spanish Network for Rural Development) with various countries and by Portuguese LAGs with Brazil, as well as a more general cooperation between rural networks.

LD as a participatory strategy

We can distinguish different approaches and policies that are present in Latin American LD and often apply to both urban and rural areas.

We can mention a much extended idea of LD as a participatory strategy, linked to popular movements at urban and neighbourhood level, and as an answer to the weaknesses of democracy in most of these countries. Citizen participation, participative public budgets, self-organisation of local communities and grass roots community groups that implement local solutions to material and social needs of people suffering poor conditions (at rural and at urban level) are different aspects of this approach. There is a very extended and rich experience of good practices in citizen participation at local level and municipal policies that include the participation of local people in the implementation and monitoring of local policies and programmes.

Of course there is a weakness of institutional decentralisation and lack of power of local authorities, as we have already mentioned. Local authorities suffer a lack of resources (human and financial resources) and legal competences. The central state still has a huge authority with difficulties to share responsibilities with regional and local authorities. The bottom-up approach is still weak, but it is growing, linked with new public regulations and legal frameworks that drive and reinforce decentralisation and local decision making in different countries.

We should also note the successful transformation of several Latin American cities, that become examples of “good urban practices” because they solved local problems with the leadership of local authorities with a strong public–private partnership involving different local stakeholders, and using strategic planning tools. Sustainable development avoiding pollution or using new methods of collecting waste, reduction of crime, job creation for young people, recovering abandoned urban areas or creating new economic zones, were achieved in cities as Guayaquil (Ecuador), Medellin (Colombia), Curitiba (Brazil) or Santa Tecla (El Salvador).

In contrast to the above local partnership approach, we should note the significance of “populism”; political and social movements that promote and reinforce a paternalist way of doing things, trying to influence and control social movements mainly in precarious human settlements in suburbs of Latin American cities. Often, these populist movements implement their strategies and actions on behalf of a “local development” approach, feeding a “popular” vision of LD. In several countries there are public “social funds” that are used as “emergency” resources to tackle social needs with a charity approach.

LD in tackling poverty and social exclusion

High economic concentration in the territory is another key element that defines the development in Latin America. The big cities (usually national capitals) are the core of a polarised development. Amongst other factors, the lack of power and capacity of intermediate structures and institutions (regional and provincial) limits the dissemination of economic growth. This pattern of development increases the migration from rural to urban areas and feeds the precarious human settlements in the suburbs of the big cities.

The significance of high degrees of poverty and social exclusion (in rural and in urban areas as well) is one of the main elements of Latin American LD. This is very significant issue for LD because there is a huge population living and working in precarious human settlements and suburbs of urban areas. In these contexts covering basic social needs (housing, nutrition, education, drainage, health, etc.) becomes a central component of the LD strategies. LD policies are real strategies to fight against poverty trying to find real and effective way to avoid social exclusion.

Informal economy occupies around 50 or 60% of people in several countries. It has to be argued that urban poor are not really unemployed. They are working, often for low returns. This unregulated economy is a significant part of urban economies that had grown up largely without official knowledge or control. We are dealing with a sort of self-organised economic activities. In several countries public bureaucracy makes it very difficult for migrants to the cities (coming from rural areas) to set up business or establish formal property rights in their possessions.

In this context one can observe several aspects of relevance to local development.

First, the importance and significance of the third sector, as an intermediate sector that produces public goods appealing to private management. Usually the organisations of the so-called “economy of solidarity “ become the tool for covering basic social needs that the public sector cannot cover with public money. The social economy is a key actor in local development initiatives and usually plays a central role and leadership in the LD processes in Latin American countries. Often, the solidarity economy ensures local services as water provision, housing, retail trade, transport, etc. It plays a main role in the local “markets”.

Second, regarding the high rates of social exclusion and poverty prevailing in the continent, job creation is a clear priority as a key factor for social and economic inclusion. But the formal labour market is unable to absorb the huge excluded population. Micro enterprises, informal economy and self-employment become a dominant solution to tackle unemployment. That’s why several support programs for micro enterprise creation and development are growing and using a myriad of tools, resources and devices to facilitate the start-up of these micro initiatives.

Third, Latin America has a successful experience in using micro-credit systems for the poorest. It is a usual tool used in LD policies to create jobs beyond the formal labour market. Millions of poor people in rural and urban areas, mainly women, accede to small micro credits to start up or to consolidate their microenterprises that provide them the principal income for their families. This strategy of financing the initiatives of the poorest people entails a big investment in trust and in networks of social capital, reinforcing reciprocity and self-help among poor families, as a key asset to overcome poverty. Social capital becomes the capital of the excluded people that allows them to get jobs and incomes.

Fourth, the significance of the production of commodities. The agro industrial activities are growing as an asset to add value to the primary goods. Promoting value chains and clusters of agro industrial activities interacting to produce new added value, is a very relevant strategy of LD in Latin America. LD policies try to create supporting services for those “arranjos productivos locais” (local production agreements) as in Brazil where public services such as the SEBRAE, play a strategic role in promoting those clusters with a very clear local economic development approach. In this framework, territories are a key asset for competitiveness and innovation, because it facilitates cooperation between small firms belonging to the clusters located in the local area.

5. Local development on the EU’s doorstep

LD unfolding through an unstructured process: the case of BiH

Bosnia and Herzegovina (BiH) is a case where widespread local development initiatives and structures have emerged in a largely uncoordinated bottom-up way. A good way to capture their breadth and characteristics of LD in BiH is by reference to the numerous local development agencies (LDAs).

LDAs have been established in almost every part of the country since the 1990’s and there are now some 30 organisations at the local level performing this role. They vary in status and form though the majority have been created as the “executive” agencies of municipalities to address the challenges of economic transition by facilitating local economic development processes, acting as the interface with local business and initiating and supporting the implementation of local development projects. For example the City Development Agency Banja Luka (CIDEA) was set up by the City Council to encourage and foster local economic development in Banja Luka. Similarly, the Agency for Economic Development of Prijedor Municipality (PREDA PD) was created by the municipality on the occasion of agreeing its Economic Development Strategy in 2004. Its mission is to promote entrepreneurship, support SME development, assist job creation, and the improvement of the local economic environment.

There is also a significant group of LDAs in BiH – approximately one-third of the total – which have the status of NGO and clearly distinguish themselves from the municipal agencies. An example is the Independent Development Bureau (NBR), a non-governmental organisation (NGO), founded in 1996 by citizens of the Gradačac and Modriča municipalities. The establishment of the association was a response to the government’s inability to create adequate conditions for local economic development (LED). Another example is TALDI, a citizens’ association for local development initiatives in the Tuzla Canton, which was established in 1995 as a non-governmental and non-profit organisation. TALDI’s operational focus is the implementation of projects that influence, promote and support local development initiatives and increase local capacities through the strengthening of the non-governmental and private sectors. Furthermore, TALDI operates as a business service provider of consulting and training services.

Overall, the activities of the LDAs are mostly focused on local economic development due to the growing need to respond to the significant contraction in local employment and business opportunities experienced in BiH. The practical experience of these agencies has been just as varied as the form, structure and activities of the organisations themselves.

Most of the municipalities in BIH have a local development strategy, often developed in cooperation and with the assistance of international donor organisations, such as UNDP and GTZ, and without adequate understanding or commitment from local actors. A lack of skills and experience of local government staff to drive and support the process of local development is seen an impediment. “In the field of training, the whole problem is left to donors’ projects and the entrepreneurship of a few organisations from non-governmental sector.”

Moreover, the existence of a strategic document to inform local development does not guarantee that its strategic priorities will be followed and will be realised. This is a matter of both political will, which is not always in line with the strategic priorities expressed in formal documents, and available resources. In BiH the activities of the LDAs are not supported by a specific national or donor funded programme and, therefore, local development in practice depends on the ability of the LDAs to access project funding from different programmes and other sources.

The capacity to develop quality project proposals which can secure funding from the substantial programmes funded by the EU’s IPA is thus a central concern for all LDAs in BiH.

Two other common and inter-related issues stand out. The first concerns the role of LDAs in policy delivery and, in this matter, there are two distinct approaches in the two entities of BiH. On the one hand, in Republika Srpska there is a clear tendency to “integrate” the LDAs in an overall hierarchy which links government departments with regional development agencies and through them with the LDAs. In the case of the Federation of Bosnia and Herzegovina there are no upwards links for LDAs and this leaves local development in an almost pure bottom-up role with the concomitant longer-term uncertainties.

The second issue concerns the sustainability of the LDAs. The EURELSMED project conducted an overall assessment of sustainability with the participation of local economic development actors. It assessed the sustainability of an organisation as related to the continued demand for its services, its ability to meet the demand, and its relationship with its founders and its clients. The conclusion highlighted the substantial challenges facing LDAs in BiH: with demand for services scored at 100% (reflecting the very large employment needs of local communities throughout BiH) the score against the other criteria was only in the region of 50% (capacity to supply services, institutional relationships).

Spreading LD through cooperation: the case of RF/Karelia

There are several cases where LAGs and other bodies from EU Member States have been working in neighbouring countries in the context of transnational cooperation, spreading the Leader approach.

One such project in the Russian Federation, operates in three districts in the Republic of Karelia (Lodeinoe Pole, Olonets and Pitkaranta). The overall aim of the project is to promote rural development in these districts on the basis of knowledge transfer from the Finnish partner LAG Sepra and the LEADER approach. On the Russian side, financial support is available from the EU’s ENPI and Local Initiative Groups (LIG) equivalent to LAGs have been set up.

The Finnish promoters of the project have launched it expecting that, given the negative conditions in the regions in question, a LEADER-like approach to rural development would potentially generate positive and lasting outcomes. For that reason, the project in question has also got as an aim to help learn about the possibilities and problems of adapting the LEADER approach in Russia. They have so far encountered some significant challenges in their work, specifically: insufficient state support of rural areas causing structural problems, no real support from local authorities, lack of associations at local level and, most importantly, a very small number of active local people.

Nevertheless, the project is progressing and the next steps include the organisation of village meetings (so as to encourage participation), the formation of LIGs, the training of LIG members (by the Finnish LAG Sepra), the drafting of an Action Plan, the establishment of the criteria for the selection of small projects, the drafting of all necessary documentation (application form, guidelines etc.) and of course the opening of a call for proposals for small-scale projects.

Introducing LD in a top-down way: Leader in EU candidate countries

The dissemination and promotion of the Leader approach has not relied only on specific projects by individual LAGs. A process of information, dissemination and cooperation has been fostered since the late 1990s by the PREPARE Network throughout the countries of Central and Eastern Europe.

The main activity of the partners is to run the PREPARE programme. The aim of this programme is to strengthen civil society and to promote multi-national exchange in rural development, with a main focus on the new EU member states of Central and Eastern Europe, as well as accession countries and the “new neighbours” of the enlarged EU.

Candidates and potential candidate countries of the EU are also recipients of EU support to introduce the Leader approach. This is a top-down approach supported by institutional capacity building projects under Component I of IPA, such as the LEADER Initiative Serbia (LIS) project. Moreover, in Candidate countries, there is additionally scope for funding support under Component V for rural development (IPA-RD). Within this component, support for LEADER initiatives and projects is possible through the second priority axis: preparatory actions for implementation of the agri-environmental measures and local rural development strategies.

The implementation of this top-down approach is still in progress and it will be very useful to obtain feedback from its lessons and especially those on its confluence with the dissemination and cooperation initiatives of PREPARE and the various LAGs.

6. Key Issues and Conclusions

Reviewing LD in developing countries poses a key question as to whether it is possible to present a “general view”. Big differences exist in development, traditions and contexts. Nonetheless, the basic concept of LD, concerning mobilisation of local actors from different sectors working in partnership to develop strategies and actions for the development of their area is applicable in all continents. It applies to all regions considered above and other regions which are not covered in this paper. For instance, in South Asia as illustrated by recent work on LD in Sri Lanka, or great potential for LD unleashed by the Arab Spring in North Africa and the Middle East. In a way this is not surprising since much of the foundations or background thinking (e.g. empowerment, endogenous development) and many of the tools (e.g. micro-credit) are common / widespread.

However, it is also clear that there are two key issues that differentiate LD in developing countries from the EU (and other highly developed OECD countries) regarding governance and poverty.

Regarding governance, developing countries are more centralised countries, and multi-level governance hardly exists. In several development countries the central government is still a core actor regarding economic planning and institutional competences in the field of economic development. Cities and regions in Europe are strong actors with territorial strategies and also in “the European model” there is an institution like the EU that has framed the LD. Still, as witnessed in the example of Leader in Mozambique and in local partnerships in Latin American cities there is a significant movement towards more participatory forms of local governance.

Poverty reduction has centre stage in local development in developing countries. LD strategies are far from uniform, varying significantly according to the particular economic and social processes which they seek to influence, e.g. poverty reduction through livelihoods development and income generating activities in rural areas of low-income countries, or poverty and social exclusion in deprived areas of large cities, or promotion of districts or clusters and SME competitiveness, mainly focused on local industries and agri-industrial activities.

It can therefore be argued that at a very general level there is a common thrust in LD in developing countries, based on a territorial approach and local partnership, and striving for better/local governance and poverty reduction. Having said that, it is important to acknowledge that in seeking to share relevant experiences and good practices on specific themes, it will be necessary to do it with reference to particular contexts. Attempting to do so at a more generalised level, from shanty towns in Latin America or India to very poor rural areas in Sub-Saharan Africa, will not be productive.

December 2011

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