Local Economic Development Programs in India
An essay by Judith Rietveld, Rotterdam School of Management, The Netherlands
In this essay, I try to find an answer to the following question: How can the private sector best serve the unmet needs of India’s people in a sustainable way? I will answer this question from a local economic development perspective. Local economic development is “a process by which public, business and nongovernmental sector partners work collectively to create better conditions for economic growth and employment generation”. (The World Bank, 2010) The purpose of local economic development programs is to build up the economic capacity of an area to improve its economic future and the quality of life for all. Partners from different sectors work together to collectively achieve goals, although the initiative for LED programs usually comes from the governmental sector.
I believe the LED perspective is an excellent viewpoint from which to address the issue of serving the unmet needs of the Indian people, as its focus is not only on economically improving the region, but also on improving the life of the people within that region. Thus, successful implementations of LED programs may enable the Indian people to reap more benefits from globalization.
Within the LED perspective, I will not focus on the Indian domestic private sector, but on private enterprises from foreign countries, and how they should act in order to support India in serving the unmet needs of its people. I believe that the involvement of foreign multinational enterprises in local economic development will enhance the welfare of the Indian people. These MNE’s could come from any country, as long as it has funds available for investing in India and has interest in serving the big Indian market.
Three questions form the foundation of this article. Who exactly are the actors in a LED program, and how is a successful LED program developed? What exactly is to be gained by the participation of MNE’s in local economic development programs, both for the MNE’s and for India? And how exactly should MNE’s participate in Indian LED programs? The essay comprises a general discussion of LED programs in emerging countries, complemented by the implications for both the Indian government and foreign MNE’s in this country.
By writing this essay I hope to increase the awareness of multinationals regarding the Indian possibilities in the field of LED, and to motivate the Indian country to attract foreign multinationals in LED programs. Although the essay is theoretical in character, I hope to convince both the Indian country and foreign MNE’s of the potential in this area, and to provide the reader with an answer to the question of how to serve the unmet needs of the Indian people.
1. Actors in local economic development
LED is usually strategically planned by the national government. Implementation is carried out by the public, private and nongovernmental sectors according to their abilities and strengths. (Helmsing, 2001) Actors from the public sector may be the national government, regional governments, public universities and governmental organizations. Actors from the private sector include multinational, national and regional enterprises and private universities; the nongovernmental sector covers nongovernmental organizations.
2. The development of a successful LED program
Good practice suggests that local economic development should always be guided by a strategy. (Swinburn, Goga and Murphy, 2006) Typically, this strategy exists of five stages that are described below as separate stages but which, in reality, may occur simultaneously.
Stage 1: Organizing the Effort
The initiative for LED programs usually comes from national governmental bodies. This means that the national government makes the overall plan and decides on the main objectives of the program, and subsequently searches for partners...
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