After a decade of optimism and growth, many South African cities now face new challenges compared with competing international locations, Cape Town mayor Helen Zille said on Wednesday.
These include perceptions of instability and uncertainty, growing urban poverty, increased crime, conflict and corruption, she told the United Nations Commission on Population and Development in New York.
Governments, especially local governments, have a key role to play in halting and reversing this trend.
”But, neither the state nor the private sector can reverse this cycle on their own — both have a role to play in the right mix,” she said.
The challenge is to ”right-size” the state to fulfil its functions, facilitate competitive market entry both by producers and consumers and build partnerships with ”civil society”.
This model has become known as the ”developmental state” approach.
It requires high skills levels in government and dedicated cooperation with the private sector to fuel economic growth — the single greatest priority, Zille said.
Cape Town’s infrastructure is under great strain. That is why the five-year Integrated Development Plan has a central key focus: ”Infrastructure-led economic growth.”
Cape Town has just been through a 10-year positive cycle where skills and capital chose to stay and invest. Confidence in South Africa’s macroeconomic policies and financial management resulted in an investment, property, services and construction boom.
”We have also become known for having academic institutions that ‘turn out the kind of skills the global contemporary knowledge economy demands’ — both universities and top schools. We have a functional [private] health system.”
The city also benefited from the effective management of its natural environment in terms of tourism, she said.
However, remaining challenges include relatively slow economic growth of about 5% a year for the past decade, 25% unemployment (broad definition), a growing population of political and economic refugees and a skills shortage, which is the biggest brake on growth.
About 1,5-million citizens of Cape Town have not finished school, and the city is simultaneously facing an escalating skills exodus.
”We also have a housing waiting list of about 460 000, 222 informal settlements around the city [150 000 shacks compared with 28 000 in 1994] and a growing crime rate,” Zille said. — Sapa