Category Archives: Stephen Greenberg

SACSIS: South Africa and the World Development Report: Urbanisation or Balanced Growth?

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South Africa and the World Development Report: Urbanisation or Balanced Growth?

Date posted: 24 July 2009
View this article online here: http://sacsis.org.za/site/article/322.1

The World Bank’s recently released 2009 World Development Report – titled Reshaping Economic Geography – suggests South Africa may be out of step with mainstream thinking on economic development approaches. But what is this ‘mainstream’ thinking, and is South Africa really so out of step with it? In the report, the Bank argues that successful development will result from increasing economic concentration in urban areas, and that the role of the state is to enable urbanisation and the integration of their economies with ‘world markets’.

Some time around 2007, so we are told, more people lived in urban areas than in rural areas for the first time in history. This is defined as a turning point and a justification that urbanisation is the only game in town. According to the report, the reason why urban areas have grown so rapidly, especially in the past 30 years, is that agglomeration and economies of scale have created massive wealth. This wealth, we are led to believe, could be shared amongst all if only market forces were allowed to prevail. If the state wants to intervene at all, it should do so by encouraging urbanisation and economic concentration.

Three primary mechanisms for realising this are suggested. First, states should invest in urban areas where the potential for agglomeration exists. Agglomeration means spatially dense interconnections between economic agents. Second, states should facilitate labour mobility by improving transportation infrastructure. Third, states should encourage regional integration to scale up supply, and global integration to scale up demand.

It is not a coincidence that the ‘urban revolution’ – the sharp growth of urban populations – occurred at precisely the time of neoliberalisation, from the early 1980s onwards. The rise of finance capital, deregulation of capital flows, a systematic and ongoing attack on wages and working conditions for the majority, and the destruction of rural livelihoods all resulted in a rapid, unprecedented concentration of resources and power in the hands of a small elite. The report unabashedly states that it focuses on economic development and does not consider social or environmental impacts in any detail. From a purely economic point of view, the global economy has undoubtedly grown as a result of these policies of urbanisation and concentration. But it has also created vast economic inequalities, and ongoing social, spatial and economic dislocation and marginalisation for billions of people.

Let us take at face value the suggestion (even if based on dubious statistics) that the urban population is now larger than the rural population for the first time. This ‘milestone’ is the lynchpin of the analysis in the report: that urbanisation is now an inexorable trend and rural areas are destined to die off. But other statistics also generated by global agencies (including the International Fund for Agricultural Development and UN Habitat) suggest that while the rural population might be declining as a proportion of the total population, it is likely to remain at around 3.25bn people in the decades ahead. That is an awful lot of people to consign to the dustbin of history.

The same sources note that poverty is most definitely still a rural phenomenon. Of the estimated one billion people living in poverty (arbitrarily defined as those living on less than US$1/day), 75% live in rural areas. These people are numerically concentrated in Asia, but the poverty is deepest in sub-Saharan Africa. The depth of this poverty in Africa was in no small measure the direct result of structural adjustment programmes (SAPs) forcibly imposed on African governments by no other than the World Bank. It is a similar story to the logic of privatisation: first you destroy the public sector’s capacity to provide services by imposing deregulation and the shrinking of the state, and then you argue that the state is unable to provide quality services so the private sector must be tasked with the job. In this case, first the SAPs destroy any potential of a sustainable rural economy by narrowly focusing on export-oriented cash crop production to the exclusion of all other support. Then when those policies drive millions off the land and into the cities in a desperate attempt to find some source of sustenance, the argument is that the rural economy is not ‘natural’ and that the future is urban.

More: the very flow of these desperate, impoverished people into the cities is used as proof that people want to move to areas of economic concentration. Then the report tells us that the state should facilitate this process, because it is the only chance for successful development. Provide transport for those who want to come to the cities. Those who have the skills required by the owners of the concentrated resources will benefit from the wealth. This is another self-fulfilling prophecy: as skilled people leave the rural areas because of lack of economic investment by the state or capital, they enhance the power of the economic core, and simultaneously further impoverish the rural periphery. And those who don’t have the skills to make it in the capitalist city…well, development will inevitably be uneven, we are told.

This flood of the desperate into the cities – mostly into slum conditions – gives rise to the notion of ‘the urbanisation of poverty’, another term used by the World Bank and its ilk to justify their focus on the cities. It is as if those people carry poverty around with them on their backs, first polluting the rural areas and then the urban areas with it. But poverty is a product of the environment, not the individual. The World Bank’s prescriptions over the past 50-odd years have had a lot to do with the way the conditions for poverty have been reproduced and expanded, drawing more and more people into its sphere. Forget the Millennium Development Goals. Poverty is increasing, in both urban and rural areas.

The basic assumption in the report is that economic concentration is a necessary feature for development. This flies in the face of overwhelming evidence that shows that poverty grows side by side with wealth creation in a capitalist system. It is in fact a necessary counterpart to the generation and concentration of wealth in the hands of a few. This is the logic of uneven development: concentrated growth in some places necessarily leads to the impoverishment of others. This is true both within cities, between urban and rural areas, between sub-national regions and between countries and international regional blocs.

At times reading the report feels like we are back in the days of George Bush and the World Trade Organisation (WTO). Not surprising, perhaps, since Robert Zoellick, Bush’s appointment to head the Bank, is still in place. This is the same guy who spearheaded US agricultural negotiations at the height of the WTO’s power. The report bangs away at the need for countries to open their borders and embrace the ‘world market’ – blatantly identified with the markets of the US and the EU. Finance Minister Pravin Gordhan correctly noted that the report views markets as static, with “existing markets always remaining the same ones”. The logic of the report is for greater investment where investment already exists. At a global as much as an intra-city level, this means never breaking out of the inherited investment and growth logic that has taken us into these times of economic, social and ecological crisis.

Is the World Bank’s policy advice really contrary to the South African government’s approach? Two very important policy initiatives will give us the answer. First, we will have to wait to see what happens to the National Spatial Development Perspective (NSDP), which was the ANC’s macro-investment strategy in the era of Thabo Mbeki. This strategy almost precisely mirrors the World Bank’s current prescriptions, in focusing public investment in 26 identified areas of economic concentration across the country. Unsurprisingly, all are urban nodes. Those members of the population who happen to live outside these nodes will be provided (theoretically speaking, of course) with skills development to enable them to move to areas of economic activity. This is based on the rather far-fetched assumption that the urban areas will generate employment at a fast enough pace to absorb job seekers. Those who cannot or will not move will be offered basic welfare support but no more. We can only hope that this strategy will fall by the wayside in the new administration. For that to happen, major existing strategic frameworks at provincial, metro and local levels will need to be unravelled and redone.

Second, we will have to wait and see (since government tends to disdain input from the mere citizenry) whether all the talk about a rural development strategy will actually materialise into some kind of coherent vision and plan, and how it will relate to the urbanisation dynamic. From the dribs and drabs emerging out of government so far, the chances do not look promising. At this stage, talk of an “ambitious rural development plan” is going a bit far. Yet the opportunity precisely for the government to go against the disastrous ‘mainstream approaches’ of the World Bank is present. Whether government can carry the process through to its logical conclusion remains to be seen.

SACSIS: Rural Local Government at the Crossroads

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Rural Local Government at the Crossroads

by Stephen Greenberg

http://sacsis.org.za/site/article/236.1

Local government is the interface between the state and citizens in any country. In rural South Africa, this interface is extremely weak as a result of the power of sectional interests and a local government system that reinforces accountability to party rather than constituency.

The lack of legitimacy and responsiveness of local government was a weak point under apartheid, and the widespread struggle for democratic local representation was one of the most important factors in the downfall of apartheid. It was no surprise, then, that the democratisation and transformation of local government was a central element of the victorious liberation movements in the early 1990s.

In the rural areas, rebellion against traditional authorities in some parts of the country, and widespread consumer boycotts against white-owned businesses in small towns showed that dissatisfaction was not confined to the urban areas. In other places, lack of overt resistance was not always an indication of satisfaction, but rather of a tight and often violent control of the population.

Popular civil society and community participation in local government decision-making and implementation was central to the Reconstruction and Development Programme (RDP). However, compromises during the negotiations limited the possibilities for this before it even started. The ‘sunset clauses’ allowed local government officials to retain their jobs until 1999. The formation of transitional rural councils gave the minority white rural population inordinate power in local government. Together, these ensured that the status quo in rural areas was maintained.

In the bantustans, traditional authorities dominated the undemocratic local structures under apartheid. In a bid to consolidate its support base, the African National Congress (ANC) wooed traditional authorities in the lead-up to the first democratic elections in 1994. The ANC contributed to the formation of the Congress of Traditional Leaders of South Africa (Contralesa), which systematically encroached on the space of democratically elected local government. The result is a continuing contestation over legitimate authority, including the critical issue of land allocation and use. The difficulties in delivering quality services, already a challenge in geographically dispersed and sometimes sparsely populated rural areas, are deepened because of the institutionalisation of competing authorities. In many cases, the ongoing contest between traditional authorities and elected local government has bogged down development activities. Government favours working ‘in partnership’ with traditional authorities, which in practice has meant an emphasis on control rather than delivery.

The gradualist approach adopted by the ANC to local government transformation may have been the product of the real balance of forces on the ground. Commercial farmers, together with the commando system in parts of the country, retained a lot of power. The sanctity accorded private property gave those with property de facto authority over those living on their property. In the midst of the difficulties of setting up responsive and democratic rural local councils (combined with the compromises already made), traditional authorities were able to present themselves as an already-functioning authority in the rural areas, rooted in the living practices of the population.

History is not static. Processes did not stand still while the sun was setting. The technocratic turn under the leadership of Thabo Mbeki snuffed out the activist spirit in local government. Managerialism and economics trumped politics and social reality. The great potential of the Integrated Development Plans (IDPs) was reduced to bureaucratic procedures and checklists. In the lean years of restructuring following the adoption of GEAR, budgets were slashed. Local governments, without any meaningful tax base, were required to contribute to the national fiscus. At the same time, potential sources of revenue such as surpluses generated from electricity sales came under attack from the central state. Local government was given massive responsibilities for service delivery, but with neither the funds nor the capacity to match.

Government adopted proportional representation as the electoral system. The logic was sound, because it allowed for a fair reflection of support in a geographically segregated population. But it had the unanticipated effect of limiting downward accountability and strengthening upward accountability, i.e. to the party. By the time the sunset clauses expired, local councillors were accountable to the centre for their political survival. That accountability meant towing the technocratic line and adopting policies that constrained spending and reduced active participation of the population to occasional consultation. In many areas, instead of allowing local structures to decide who their candidate was to be, the party parachuted in candidates who were unknown by the constituency. This caused grumbling on the ground, but the ANC’s reputation held sway.

By the time the 2000 local government elections rolled around, community structures were gutted. The once-vibrant civics movement that had led resistance to apartheid in rural areas was no more than a shell. Sporadic service delivery protests were isolated and contained in local areas. The top-down managerialism of the Mbeki-era had singularly failed to meet the development goals the ANC had set itself, especially in the rural areas. There is no coherent plan for rural areas. Rural local government is locked into small towns and reactive to initiatives from the top.

To what extent can this be turned around? The ANC is pledging a new focus on rural development after the upcoming elections. The role of government is also emphasised, including promises to improve effectiveness and accountability of councillors. However, this remains trapped within a managerialist ethos. Instead of councillors being accountable to the movement on the ground, they will be made accountable through signing codes of conduct and performance agreements. Despite a renewed emphasis on popular participation, this is likely to remain within a tightly controlled framework driven by the party and state.

What is needed is a rebuilding of grassroots movements with a progressive, transformative agenda. This is painstaking work that must be carried out in very different conditions from those pertaining at the end of apartheid. From our own history of struggle we can learn the importance of strong, democratic grassroots structures that are effective in holding leadership to account. Active participation of citizens in issues that concern them is crucial, but this should go beyond responding to and participating in government initiatives. Citizens must also set the agenda and determine the issues. The only way to do this is to be organised and have immediate control over leadership. A change from proportional representation to a constituency-based system is long overdue. This requires action from above in the form of changes to policy, as well as from below, in the form of citizen coalitions for more accountability. Councillors can also play a part by adding their voice to local calls for a closer link between citizens and elected representatives, one that allows for real partnerships between local government and citizens rather than a passive vote every five years.

We can also learn that using the state can be a strategy but should not be a principle. The most successful progressive local government experiments in Porto Alegre in Brazil and in Kerala in India have shown that parties that spend some time out of power can use this time to consolidate their organisation and renew their values. The goal should be to build a citizen-based movement that can use the structures of government and engage with government without losing its intellectual and practical independence. The ANC is in danger of becoming dependent on state power for its survival, like Zanu-PF today, or the National Party of years’ gone by. This is not to say the Congress Alliance should abandon its position in the state and government. But it should place this in a broader approach that has as its primary function the active involvement of the poor and marginalised in determining and realising a progressive political agenda.

SACSIS: Where To For Rural Development After Polokwane?

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http://sacsis.org.za/site/news/detail.asp?iData=216&iCat=253&iChannel=1&nChannel=News

Where To For Rural Development After Polokwane?

Rural development was identified as one of the top five priorities for the next five years at the African National Congress’s (ANC’s) Conference in Polokwane in December 2007. This will be translated into the ANC’s 2009 election manifesto to be launched in January. But will this lead to practical changes in the ANC’s approach to rural areas since 1994?

The historical roots of the ANC lie in the urban areas. The organisation first represented an aspirant urban middle class and this class base later teamed up with the rising movement of industrial workers. The ANC’s overall policy in the past 14 years attempted to manage the contradictions of this multi-class alliance, with its multiple, conflicting interests. In the rural areas, this translated into attempts to improve the conditions of workers and the rural poor, while simultaneously consolidating a, slightly restructured, rural elite. In essence, the ANC’s rural programme has championed the cause of ‘modernising’ and export-oriented, capital-intensive agriculture on the one hand, and has strengthened the power of traditional authority on the other. Land reform has been no more than a poorly executed welfarist tinkering on the edges of the rural economy.

The ANC’s contradictory class base has resulted in a gap between its rhetoric and its practice. The ANC’s 1994 election manifesto, the Reconstruction and Development Programme (RDP), essentially saw rural development as happening through a combination of land reform and rapid delivery of infrastructure and services to the rural population. Both of these strategies faltered as resources dried up following the adoption of GEAR in 1996, and as top-down technocratic methods of delivery replaced mass participation as the driver of development. The 1997 Rural Development Framework emphasised governance issues and local economic development in the context of an export-oriented economy. However even this framework had no institutional home and fell by the wayside.

In 2001 the Presidency launched the Integrated Sustainable Rural Development Programme (ISRDP), the main aim of which was to support integration of existing policies and programmes of government, focusing on 13 priority ‘nodes’ with the greatest levels of poverty. In this way, rural development became no more than the sum of disparate and sometimes contradictory national-level departmental policies and plans. The Department of Land Affairs (DLA) transferred land, but other departments had their own priorities set in separate plans. The result was land transfers without extension support, water supply or electricity. The ISRDP singularly failed to overcome this ‘silo’ working in government. The reasons for this are structural and include an emphasis on quantitative over qualitative targets and a consequent focus on establishing as many ‘projects’ as possible without regard for their long-term sustainability or overall contribution to a broader plan. There was – and remains – no statutory institutional responsibility for co-ordinating implementation. While local government is responsible for integrated planning, this does not extend to implementation.

All the while, the ANC was moving full steam ahead to deregulate and liberalise the agricultural sector. The result was intensified consolidation and capital intensity in a sector that even the World Bank recognised as over-capitalised, a large scale loss of farm jobs and casualisation of farm work. Rural industrialisation subsidies were eliminated without providing alternatives, leading to further job losses in already seriously impoverished areas. This two-pronged restructuring of the rural economy threw the baby out with the apartheid bathwater. In the current context of high food prices, agricultural economists who favoured radical deregulation and trade liberalisation are belatedly recognising that these policies have had a negative effect on many farmers and on food security. In October 2008, Simon Roberts, senior economist at the Competition Commission, said: “it looks like the outcome of the [agricultural] deregulation process was undesirable”. In 1994, the vast power of commercial agriculture was being brought into question. But in 2009, the big, vertically-integrated export-oriented companies are seen in government as the only viable option for the rural economy. This is so to such an extent that even land reform is increasingly built around models of share equity and joint ventures that leaves power relations between corporate entities and the rural poor fundamentally intact.

The National Spatial Development Perspective (NSDP), a document formulated in 2003 and updated in 2006, takes the logic of support to capital to the extreme. The framework, hatched by technocrats in the Presidency, identifies 26 nodes of economic potential across the country. Unsurprisingly, given the assumptions underlying the methodology of the framework, these are all urban areas. The framework directs government to focus resources on these nodes, in the belief that economic growth in these areas will reduce poverty. Government welfare and training will be provided to the rural, small town and peri-urban poor to enable them to migrate to these economic centres. The long-term vision is one of rural areas depopulated of everyone but commercial farmers and a small core of workers. In essence, through the NSDP, government concedes defeat in any attempt to create thriving rural economies built on anything other that capital-intensive agriculture.

In the former bantustans and homelands, traditional authorities have won the battle to be seen as the representatives of the almost one-third of the total South African population who live in these areas. A brave attempt to institute wall-to-wall, democratically elected local government was compromised in a series of political trade-offs and the consolidation of a rural elite with bantustan roots. This is part of the same ‘class project’ responsible for the ‘narrow-based’ black economic empowerment of recent years.

If transformation is about a fundamental alteration of power relations between the dominant and the marginalised, there has been little if any transformation in rural South Africa since the ANC’s ascent to power in 1994. It may be said that the vision and approach of the past 12 or 14 years was precisely the product of the capturing of state power by the aspirant capitalist fraction of the ANC, led by Thabo Mbeki and realised by the technocrats gathered around him. So do the apparent class shifts in the ANC and the evident emphasis on rural development at Polokwane signify a real change in government’s commitment to transformation in rural areas?

There are reasons for not feeling too hopeful. First, the entrenched power of large scale agricultural capital and the power of traditional authorities will not be challenged through legislative fiat, but through the presence of a strong, independent and organised movement of the poor. Such a movement currently does not exist and it is certain that the ANC and its alliance partners will not support the formation of a movement with the power to challenge these forces, lest it also challenge the power of the state. Any efforts at rural mobilisation will be tightly controlled from the centre, and will not be designed to threaten the fundamental interests of economic and political elites.

Second, as good as the statements of intent sound, there is likely to be limited change from an implementation point of view. A rapid scaling up of land reform, and even a scrapping of the ‘willing-buyer, willing-seller’ clause, is likely to compound the problem of failure if the programme continues to be locked into a technocratic, unresponsive, capacity-constrained and top-down implementation framework. Rhetoric aside, the ANC is highly unlikely to allocate the R74bn the DLA says it needs over the next 5 years just to meet current targets (the 2008/09 Medium Term Expenditure Framework allocates just R18.5bn over the next 3 years). Apart from a few additions to the woefully inadequate agricultural support programme and the enhancement of social welfare, plans for meaningful practical changes seem few and far between.

Third, it is false to characterise the post-Polokwane ANC as having a fundamentally different power base than the pre-Polokwane ANC. It is quite possible that sections of the middle and upper class will shift their support to other political formations in elections. But elites will gravitate towards parties that wield state power, and there is no doubt that the ANC will continue to hold the reins of national state power after the forthcoming elections. The current ANC leadership’s support base remains a contradictory alliance of different interests. Big and aspirant capital alike will remain core to the alliance, including existing and new rural elites. Jacob Zuma’s known closeness to traditional authorities, the overall social conservatism of his trajectory, his support base in KwaZulu-Natal and the ANC’s need to consolidate core constituencies in what is a very fragile alliance, suggest that traditional authorities will be feted rather than challenged in the foreseeable future.

The ANC’s need to assert its hegemony will put it in ongoing conflict with alternative organisational expressions with the potential to challenge its authority. Internal class tensions and contradictions may manifest in ways that occasionally spill into a radicalisation of policy or action, but not systematically or sustainably. All of this suggests the possibility of some alterations to policy here and there, a few limited attempts to provide support to the rural poor, but no fundamental change in strategy and no essential challenge to the existing rural power elites.