Neo-colonialism or great leap forward?
The Daily Mail and Gurdian
14 November 1997
The Investors' Conference into the Wild Coast Development unveiled
R12-billion worth of new projects but critics argue only a chosen few
will benefit, writes Craig Bishop
`The Eastern Cape development train is in motion - don't be
left behind," was the advice given by President Nelson Mandela to
more than 500 delegates at last weekend's Investors' Conference in
East London. Not everybody was impressed, however. The United
Democratic Movement leader, General Bantu Holomisa, says the
"gravy from this train" will go to "a new black elite, who
are being used by foreign multinational corporations to get land under
the guise of black-led companies".
Over 150 projects were presented to the delegates,
representing Eastern Cape investments totalling R12-billion, which are
set to add R4-billion to the gross domestic product (GDP) of the
The flagship projects are Billiton's plans for the
seventh-largest zinc smelter in the world (at a total cost of
R2,7-billion) and a R1,5-billion deep-water port based at either Coega (near Port
Elizabeth) or East London.
The zinc plant is expected to employ 4 000 people in the
two-year construction stage, and create 600 permanent jobs thereafter,
adding 10% to regional GDP.
Meanwhile, the Eastern Cape motor industry is set to enter a
new boom era. Delta expects to spend R1,2-billion on new products and
VW announced its successful bid for a R400-million export order to
Britain. Mercedes-Benz SA also announced major expansion plans for the
And tourism projects totalling more than R1-billion could
double the present value of international tourism once the unrealised
potential of the Wild Coast is tapped.
The Eastern Cape projects are poised to deliver a much-needed
investment into the country's poorest province, but Holomisa says he
is "sick and tired" of the latest trend in ANC-led
"SDIs are tantamount to neo-colonialism of a special
kind. The so-called empowerment models create a whole lot of mini
black Oppenheimers with minimal benefit to the larger majority,"
Meanwhile, Justice Willem Heath, head of two of South Africa's
most powerful investigation forces, the Heath special investigation
unit and the Heath tribunal, has warned that his work in the province
is "far from finished", and that the next few months would see
a string of "high profile political surprises".
"We are investigating virtually every holiday resort on the
Transkei coast. We have warned the initiatives on numerous occasions
that they have a serious problem.
"In that area no survey was ever done - no property is
registered in the Deeds Office, which means that you cannot sell or
lease that land. I can't imagine that any reasonable businessman from
overseas would be interested to invest once they know that." But,
these same "reasonable businessmen" are integral to the
success of the developments. The government can invest only 10% of the
total investment required, forcing it to look to foreign multinational
corporations for help.
Department of Trade and Industry's special projects
co-ordinator, Paul Jourdan, says that the initiative concept is a
"proven means of giving government more job- creating bang for its
Jourdan says that the temptation for the government to ride
roughshod over community or environmental concerns is "tempered by
a commitment to consultation with interested parties", where the
government is "bound by its own belief in progressive
environmental and labour practices".
But, despite trade minister Alec Erwin's assurances that the
government is "being as rigorous as we possibly can" over
community consultation and environmental concerns, information-starved
communities are still far from being full participants of what Erwin
describes as "the shrinking global economy".
Small Projects Foundation's managing director, Paul Cromhaut,
has been involved in the establishment of 21 information centres and
shops, designed to give access to information on government
legislation and initiative proposals so that communities can make
informed decisions about their options.
"To prevent total community disruption, we need
dissemination of information so there is scope for people to make
rational decisions about whether development in their area is good or
Wits University Graduate School of Public and Development
Management lecturer, Patrick Bond, says the investors may be looking
in the wrong place.
"Studies by the Industrial Development Corporation show
that the Eastern Cape is the main provincial loser from globalisation,
with all the key sectors except tobacco and chemicals expected to lose
output and jobs.
"Since a well-balanced economy requires both backward and
forward linkages, it's going to be crucial for provincial officials to
replace the top-down megaproject with a bottom-up, basic-needs
infrastructure strategy if they want to withstand coming economic
Meanwhile, Holomisa, who is claiming 25% of the provincial
electorate, is playing on this frustration.
Holomisa, who did not attend the conference because "no one
invited me," says that the majority will not benefit from "yet
another lofty, wonderful idea by the African National Congress, which
is looking at leveraging in investment from countries with proven
human rights abuses, such as Indonesia".
Holomisa says the conference comes at an opportune moment for
the ANC in the Eastern Cape, traditionally seen as the ANC's strongest
"They need to boost their image because people are starting
to write them off."
Holomisa says that unlike the foreign aid that was poured into
the Reconstruction and Development Programme in 1994/95 and then
allowed to "quietly disappear into Thabo Mbeki's office", SDI
money is invested directly.
"But they are talking the language of consortiums and
privatisation to communities where around 70% do not even have bank
accounts. How will communities be able to buy shares?"
Cromhaut replies by saying that black entrepreneurs are
critical to sustainable job creation and creating value in previously
"If we are looking at long-term development in these
communities, then risk takers are needed to set the example. They are
the change agents that bring about innovation and make it work."
Umtata and Port St Johns real estate agent, Leon Fourie
agrees. He says that the trend of migration away from Eastern Cape
towns to Gauteng could well be reversed by the projects.
"Instead of Gauteng gold mines, the Wild Coast is starting
to be seen as the new site of gold by people in Port St Johns."
No one disputes that development and job creation are well
overdue in the Eastern Cape, particularly the Transkei. But, it
remains to be seen if SDIs can meaningfully welcome communities into
the global socio-economic community.