Plans for development and foreign investment may be at the expense of the rural poor, writes Craig Bishop
‘The Eastern Cape development train is in motion – don’t be left behind” was President Nelson Mandela’s rallying cry at the International Investors Conference in East London late last year.
It was designed to build confidence in the province and lure major foreign investment in the two spatial development initiatives (SDIs), which are centred on Coega, near Port Elizabeth, and the Wild Coast.
But, just two months into 1998, the train timetables are hopelessly muddled, the engine is running out of steam and the carriages are once again besmirched by gravy.
Local businesspeople and economists are not convinced SDIs are the answer in the race towards development. With the rural economy stagnating, the province is pinning its hopes on Port Elizabeth’s proposed industrial development zone.
A deep-water harbour – one of three in the country – is proposed for Coega, 20km north of Port Elizabeth. The three-year construction period is expected to create 26 000 jobs, and it is estimated local income will be R6-billion.
But Outspan International’s Richard Hamley says the Coega development might have a negative impact on the country’s main citrus-growing area – Sundays River Valley, 13km from Coega, which earns R800-million a year and employs some 30 000 people.
“Fluoride emissions and halogen gas are absolutely lethal to citrus growing, but there is no work being done on this. A lot of our producers are worried and the environmental assessments have not allayed their fears about crop damage,” says Hamley.
The Department of Trade and Industry is offering tax incentives for industry to settle in Coega. A foreign investment grant is also on the cards to cover the expense of foreign industries relocating to South Africa.
The chief executive officer of the Port Elizabeth Chamber of Commerce, Kevin Wakeford, says his is “the most competitive city in South Africa”. He points to production expansion to the value of R4- billion in the past two years.
The publicity given to projected short-term and medium-term benefits of the Coega development may be well timed politically for the 1999 elections, but those benefits may do little to address the plight of the marginalised rural sector, says Leslie Banks, of the Institute for Social and Economic Research at Rhodes University.
“Patterns elsewhere in the rest of Africa show that high hopes pinned on urban industrialisation, foreign investment and job creation have not materialised. In Ghana, there are huge crisis discussions about the failure of this Eurocentric-style industrial development, which ignores local, integrated development from below,” Banks says.
Stephen Hosking, economics professor at the University of Port Elizabeth, says development economists would prefer to see capital investment in the region, in the form of roads and bridges. But, he adds, “work such as mine doesn’t find its way into government thinking”.
Bad roads isolate areas such as Butterworth where development is needed the most, he says. “Chinese consortiums came to South Africa in 1996 with the express intention of finding sites in which to invest R10-billion. They took one look at the treacherous Kei Cuttings, and said they could not go further on this road.”
Hosking says the Coega development will generate less than half the income of an agri-tourism option, with six times as much capital expenditure. “I don’t think they have done their long-term, cost-benefit sums properly. They have underestimated the crowding-out effects and overestimated the spin-offs.”
Idutwa used to be the boom town of the Eastern Cape. But, says Idutwa businessman Mazizi Ntisana, if the Kei Cuttings are not overhauled, the migration to Port Elizabeth will destroy its economy. “The Coega development is focused on already developed areas, so the underdeveloped areas are going to suffer. If any more people leave Idutwa, all we will be left with are criminals.”
Pumzile Ndendela, president of the Butterworth Chamber of Commerce, says industrialisation of Port Elizabeth is “definitely not the right strategy. Butterworth and Idutwa used to be the heart of industry in the province. Now factories and businesses are moving out, destroying the economies of these local towns.
“Money has to be spread into the rural towns, because if you focus on just one point, it will see a return to the old days when the residents of the Transkei were cut off from development.”
8The Wild Coast SDI focuses on agri- tourism, but the proposed R1,9-billion Wild Coast toll road – the linchpin of the R3-billion SDI – was shelved late last year because it was “not a viable economic proposition”. And with security of land tenure still very much a “paper right”, little if any delivery has materialised.
Rhodes University’s Leslie Banks is sceptical about the long-term benefits of SDIs to rural areas. He says SDIs are “imported, millennium solutions imposed on the Eastern Cape.
“The fixation with miracle solutions should be replaced by local economic development, where analysis is done into how people are actually making money at the moment, and capitalising on that.
“We are talking about more about participatory initiatives – for example, linking traditional subsistence farming with urban marketing – rather than the top- down approach of the SDI.” – Development Media Agency