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Local Economic Development Agencies for governance and internationalization of local economies
Which problems do LEDAs solve?

A LEDA helps to solve complex problems, such as the negative impact on living conditions caused by poverty, unemployment, economic transitions, and the disadvantages of the local economies in the current global arena. The key issues of their success depend on:

• the inclusion of a comprehensive response to the mains need of the population for human and sustainable development under a single system of governance

• strong local ownership, so that local public and private actors can finally decide their own future

• the technical capacity of promoting and realizing complex projects, initiatives and partnerships

According to the specific problems of each different territory and the conditions of the country, the LEDA elaborates the different strategies that best fit the aim of promoting local economic development.

The LEDA pursues and provides specific solutions for the reduction of poverty, gender equality, micro and small enterprise development, exploitation of local resources, revitalization of local economy and reconstruction after conflicts, liaison with national contexts and policies, and the internationalisation of local economies.

FIGHT AGAINST POVERTY AND SOCIAL EXCLUSION

A LEDA can provide emarginated and poor groups of the population with the chance to participate actively in the process of territorial development, to find permanent jobs and income, overcoming traditional strategies such as micro-credit, which generally has a very low impact on poverty reduction and sustainable development. It can also organize comprehensive services to help include women in the economic circuit, empower their capacities, and assist them in implementing business and specific projects.

Impact on gender

In 2006, the LEDAs of the Departments of Huehuetenango and Chiquimula (Guatemala), Sonsonate (El Salvador), Valle (Honduras) and León (Nicaragua), established the Service for Women Entrepreneurship (SWE). This service is aimed at enhancing female entrepreneurship in each territory, by providing information, orientation, and technical support for business creation. It organises events about women entrepreneurship and leadership at the departmental level, in collaboration with the local and national institutions, and with women’s associations network. This service represents an important instrument in the hand of the Municipal and Departmental Development Councils in order to promote equal opportunities, to design territorial integrated development strategies and to adopt planning mechanisms, involving the population in their actions, through information and training activities; the SWE conducted a study of the endogenous potential of each territory, in collaboration with universities, and came up with a map of women’s economic activities, analysed through the chain of value approach. The Chiquimula LEDA SWE established a strategic alliance with the university and the Vice/Ministry of the micro, small and medium enterprises, for realising training activities on the issues of local economic development, marketing, and gender. The LEDA SWE provides technical and financial assistance to women and female student to promote new female-run sustainable businesses included in the territorial competitive value chains, and a new equitable entrepreneurial culture.[/color]

SMALL ENTERPRISE DEVELOPMENT

A LEDA supports micro, small and informal entrepreneurs, without an easy access to the services and to the instruments for their enterprises growth, and with difficulties of maintaining their own competitiveness. It allows them to operate within an organized territorial environment that enables the infrastructure development, the innovation, the labor market, the services, and the finance.

The development supported by the LEDA of Ixcán

The LEDA of Ixcán (Guatemala), established in 1993, played an important role in the promotion and growth of micro and small entrepreneurs, paying particular attention to women. The LEDA adopts an integrated approach, because the main need was identified in the creation of an enabling environment where economic local investment could be realised and developed in a sustainable way. Technical and financial support to businesses, information about suppliers of raw materials and other products, markets and technologies, information about legal, financial and fiscal aspects, promotion of productive networks and correspondent productive associations, support to the internationalization of the local economy, social development, and institutional framework were, therefore, the main working areas of the LEDA for achieving the above-mentioned results. The LEDA carries out these actions through specific capacity building and through a radio (Radio Ixcán), which the LEDA itself established and manages. It facilitates communication with the more marginal communities and makes them aware of opportunities and how to exploit them. The LEDA manages its own credit fund; it established agreements with the SIM, Fonapaz, and Fis projects, and implemented specific projects for facilitating credit to women. As a result of all these actions, a credit of 1,700,000 USD was disbursed, with a return rate of 95%, benefiting almost 2100 persons in the last five years. Technical assistance and project financing are the LEDA’s commitments in this area for the development of social infrastructure such as water, environment protection, housing, natural parks. Nevertheless important support to SMME development is provided through the relationships that the LEDA maintains with the local administration and the development council, which creates financial opportunities for SMMEs, and facilitates the channelling of projects to sustain them. An agreement with the University of San Carlos and with the National Secretary for Planning (SEGEPLAN) led to the establishment of a business development centre, aimed at enhancing the technological innovation. As result of all these combined and integrated actions, more than 9000 jobs were created in the last five years, of which 3100 for women and more than 400 SMMEs were created or supported.[/color]

EXPLOITATION OF LOCAL RESOURCES

A LEDA helps to create territorial added value: industrial products from raw materials, tourism and industry from natural resources, economic activities from local culture and environment, etc, mainly by organising and implementing comprehensive value chains including small and medium enterprises, cooperatives, financial and non financial services, universities and research centres, education and training structures.

The promotion of local value chains by the LEDA of Nariño in Colombia

The LEDA of the Region of Nariño in Colombia (1,700,000 inhabitants), established in 2002, placed great importance on the promotion of territorial value chains for sustainable development strategy, which it carried it out by uniting the actors to be involved in value chains and organise them into a network and associations, providing all the information and the support for value chain network operations, providing financial and non financial support, enhancing territorial brands, facilitating the marketing of the territorial products, promoting information and knowledge sharing. Five chains were prioritised: tourism, milk production, potatoes, coffee, and “panela”. Through the “Semilla” Project, financed by the FORD Foundation, the above mentioned value chains were strengthened: more than 2000 producers were involved, 43 projects realised, more than 700 productive units and 50 service providers were supported. The “Tourism Marketing” Project, financed by SENA (Servicio Nacional de Aprendizaje) was launched, and it benefited 120 structures of the Tourism Value Chain. This project led to the formulation of the strategic development plan for tourism, to the design of territorial products for tourism, to the promotion of producers associations, and the design of territorial brands, such as “Nariño Cheese”; “Papa Pastusa”, “Turismo Nariño”, “Emprende camino conoce Nariño”, “Café de Nariño”. Territorial marketing was also carried out by promoting the organisation the fairs “EXPOANDINA”, “EXPOLAGOS” and the handicraft fair of Bogotá, supporting business marketing, and organising two Business Forums for tourism operators in Pasto and Ibarra. [/color]

REVITALIZATION OF THE LOCAL ECONOMY AND RECONSTRUCTION AFTER CONFLICTS

Helping to build an institutional environment after long periods of armed conflicts or disasters, which generally produce destruction of natural and productive resources, fragmentation of social context, greater distances between population and institutions, reduction of professional skills, and pollution.

The Mozambican LEDAs in the fight against poverty in the post war situation

The LEDAs of the Manica, Sofala, and Maputo Provinces had to face primarily the serious problem of extreme poverty and marginalisation in their territory: the absence of an organised civil society, except for small groups of women, widows or alone because of the war; the absence of basic infrastructure, destroyed or abandoned after the long conflict. The LEDAs first commitments were to coordinate the actions of various provincial institutions and associations, in order to identify and carry out business projects aimed at reconstructing the economy, to rehabilitate local commercial infrastructure, including shops, small markets, grinding mills, etc., to promote associations, to promote and commercialise agricultural products (sunflowers, fruit and vegetables, dairy products, fish, coffee, honey, chicken, salt, tomatoes, grapefruit, garlic, goats, wood), to implement new financial mechanisms, to increase the number of training courses, so as to create a new class of local entrepreneurs, and to enhance territorial marketing. Specific support was then given to improve the organisation of women’s clubs, fruit farmers, artisans, and the relationship between micro, small and medium companies. A credit mechanism was established and comprehensive support was given for creating new businesses. In the first 5 years, 359 micro and small enterprises were created, mainly by previously very poor people, 2500 jobs were created, and 600,000 USD credit disbursed. In the Province of Manica, a specific program - ASCA (Accumulation of saving capital and credit) - was carried out, which in 2005 delivered 95.000 USD worth of credit to 1839 very poor people, organised into 91 groups. From 2003 to 2005, 26 credits were disbursed worth 160.000 USD for very poor people in the province of Sofala.

Strategic projects were then realised, through the participation of local actors, the most being: in Manica, a transport company, territorial marketing and regeneration of trade marts, including a business forum; in Sofala, the furniture market, the handicraft centre, the transport company, the alternative energy project, the promotion of “fair trade”; the apiculture sustainable development plan, and a public library; in Matola, the tourism development plan. The publication of provincial reviews “Ten reasons for living and investing in our province” was carried out by all the territorial marketing agencies.[/color]

IMPACT ON NATIONAL POLICIES AND ORIENTATION OF NATIONAL AND INTERNATIONAL RESOURCES

A LEDA can stimulate and enhance national policies for strengthening local economies and making them more sustainable, and it is an invaluable benchmark for realizing international cooperation projects and partnerships, because it orientates initiatives within a territorial strategic development framework and according to needs and opportunities; it avoids duplication of efforts and waste of resources, assures project elaboration support, provides qualified technical support for implementation, involving the actors and the specialized local structures and institutions, provides financial support through credit funds, and monitors the project development.

The Mozambican LEDAs in the fight against poverty in the post war situation]

A significant process of for the institutionalization of LEDAs has been in place in Mozambique since 2002. The Ministry of State Administration constituted a Led Unit, which set up a national commission made up of several ministries, working on a LED National Platform (LNP) in the framework of the national policy for the Local Economic Development and Poverty Reduction. The Led Unit supports the LEDA operations in the Provinces of Maputo, Nampula, Manica, Sofala and Zambesia and promotes the constitution of new ones in the other provinces of the country.

The presidents and executive directors of LEDAs participate in the respective provincial councils, advising on LED.

The LEDAs constituted a National Network in 2003, to support their activities, to open new ones in more territories, to dialogue with central institutions in order to orient their resources towards the territories and the LEDAs. A LEDA Network collaborates with the National Commission in the elaboration of the national platform. In 2005, the LED NP was included in the National Policy for Rural Development, under the coordination of the Ministry of Planning and Development. Since then, LED became part of the national development strategy, and LEDAs were seen as local instruments in support of the decentralization process in economic issues.

The LEDAs currently also benefit from the national budget distribution. The LEDA Network is the central government’s partner in LED analysis and negotiations.

LED as a policy for development is seen as a cross-cutting issue, providing suggestions and recommendations for several other national policies and strategies and creating enabling environments for sustainable and balanced territorial economic growth.