Statement/Question of March 2010: Local Governments can and should play an influential role in combating the Global financial crisis.
March 1, 2010 in Statement and topic of the month by Moderator Marlies
The international economic slowdown has had a deep impact on local governance. It challenges local governments to improve their economic policies and increase their efforts to promote local economic development. However, local governments are also an important part of the solution to the crisis, by offering an effective lever for economic development. These are some of the main conclusions of the recent report ‘the Impact of the Global Crisis on Local Governments’ of United Cities and Local Governments (UCLG).
The UCLG report provides a global vision on the impact of the economic slowdown on local governments. According to the UCLG, the crisis has had a direct influence on the size and composition of local government finances. However, this impact varies from country to country, depending on the level of decentralisation and exposure to global markets. National governments in countries with relatively low levels of decentralisation, for example, utilise most of the available sources to improve the economic situation on the national level. This leads to serious strains on and budget gaps in local government finances.
Nonetheless, there are some positive outcomes of the economic slowdown. The report highlights initiatives from countries such as Colombia, Mali and Chile. In these countries local leaders have seen the crisis as an opportunity to embrace strategic thinking about the future and to focus on building sustainable, adaptable and more distinctive local economies.
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Probably one should depart from the point that re-emphalised the centrality of local governments spheres in facilitating and creating an enabling environment for local ecenomic development and growth through policy formulations and programmatic intervention.
The question therefore, in responce to the issue raised that local government can and should play an influencial role in combating glogal ecenomic meltdown, is that does, in the context of a developing nation, local government have the necessary authority and human and infrustructural resources to be a player in programmes and activities that are meant to combat global financial crisis?
Illustrating these aspect with two worlds in one nation, a typucal example would be a role played by city of Cape Town and city of Johannesburg and eceonomic powerhouses of Africa vis-a-vis a small town of Tzaneen, both as local government authorities.The face value responce would then be that the two megalopolitans could therefore fit within the concept and analysis of the report by UCLG, and that to the contrary, a small farming town like Tzaneen (of which shares the same charactor and size, both economically and resource wise, with many towns and cities in the majority of African, Carribian, and Asian nations)cannot be able to fit into the options and projections as rasied by the report.
What one could therefore suggest in pursuit of striking a balance between the realities and challenges that were brought by these ecenomic crisis globaly, particularly with respectr to the provision of and the ability to continue providing service delivery to the poor, is that these rural metropolitans and farming towns should rather create and facilitate for sustainable local economic development. This would enable the local rands and cents (dollars and shellings) to circulate within the local markets, thereby creating sustainabilitiy to local livelyhood.
Without necessarily compromising the integrity and image of small town and cities, local laws and regulations should be relaxed such that systems and processes could be accessible. All these and many others will stimulate local growth and thereby mitigate the effects of global financial meltdown which has greately affected government service delivery which was to a larger extend the only source on bread and batter.