Local/Regional Economic Development in South ... - Value Chains

90 most of them moved back into their comfort zone. To our
knowledge, the only exceptions are the PACA practitioners
in a small rural community in Vojvodina who continued
the PACA process despite patchy support. In this
case, their perseverance was due to their entrepreneurial
spirit and their determination to improve the economic
prospects of a collapsing rural economy.
So can you expect smooth sailing if a donor organization
is sold on PACA and consistently propagates and supports
it? Unfortunately, that is not the case. PACA offers a realistic
opportunity to launch a sustained LED process, but
it still has to battle with a number of serious obstacles that
mutually reinforce each other:
• Low credibility of the public sector in the private sector:
The public sector is perceived to be a source of
trouble – registration, permits, taxes; insufficient provision
of basic services like roads, water, electricity;
bribes and politically motivated interference.
• Fragmentation of the private sector between the old
statist system, the criminal economy, and micro and
small enterprises that have come up since the 1990s.
Talking about the private sector makes little sense.
The enterprise sector still consists to some extent of
state enterprises that are passing through a slow privatization
process, and it consists of private businesses
that do not want to be lumped together with state
enterprise. It is thus unlikely that the business sector
will speak with one voice, let alone be organized in a
single association.
• Lack of contact between public and private sector is a
logical consequence of the two issues mentioned before.
Both the public and the private sector will respond
skeptically to the suggestion that public-private
partnership may be the most appropriate way to drive
LED.
Conclusion
At present LED is very much concentrated on supporting
LED offices and the strengthening of municipalities. International
donors as well as the national public agencies
are supposed to develop their support of municipalities
and LED offices into a wider and more holistic approach
to LED.
An understanding of local economic development as a
process-oriented and participatory approach of territorial
change management, based on the integration of local and
regional actors from the business sector, civil society and
public representatives, is still very weak in the region. LED
aims at companies, and it therefore must pursue a business
logic, not a planning logic. Encouraging LED with a business
logic will be one of the main economic challenges in
South-Eastern Europe.
LED is generally organized in a network of different actors.
In EU countries LED is only rarely a mandatory
role of the government. Much more it is a voluntary activity
based on networks that consist of various government
agencies, the private sector, trade unions, NGOs,
and other players at the local and regional level. Yet LED
will not be successful if the private sector will have to participate
in endless meetings without concrete results. But
without the participation of the private business sector,
LED will be an ineffective approach. Urban planners are
happy with planning horizons of five to ten years, businesspeople,
especially owners of small businesses, are decidedly
not. Therefore, it is crucial to employ methodologies
like PACA that appeal to the private sector: action
oriented, practical, business minded, efficient.
Recommended reading
Products and publications related to LED concepts and instruments
www.mesopartner.com
Contacts
Dr. Jörg Meyer-Stamer, Mesopartner
jms@mesopartner.com
Frank Wältring, Mesopartner
fw@mesopartner.com