Shahana Chattaraj

2. Shanghai: Mumbai’s Rival and Aspiration “When we talk of a resurgent Asia, people think of the great changes that have come about in Shanghai. I share this aspiration with the Chief Minister and senior Congress leaders to transform Mumbai in the next five years in such a manner that people would forget about Shanghai and Mumbai will become a talking point.” Manmohan Singh, Prime Minister of India Mumbai, 2004

3. Where do they stand today?

4. Where do they stand today?

5. What about human development?

6. Why hasn’t Mumbai become more like Shanghai?  Why did Mumbai and Shanghai, with similar goals - to build “world-class” cities, attractive to global capital and national and international talent – and a similar set of strategies, end up with such divergent outcomes?

7. My argument:  The critical variable that explains differences in outcomes is local state capacity  A strong, effective and cohesive state is essential to large-scale urban restructuring  “Jugaad” state in Mumbai; effective in governing informality; ineffective in implementing planned urban transfromation

8. What are Globalizing Cities?  Globalizing cities are cities that aspire to become “global” cities  Globalizing cities integrate into the network and compete to acquire “global city” functions  Disconnect between parts and functions of city oriented towards the global economy and the rest of the city

9. What is at stake?  Cities are engines of growth and innovation – “humankinds greatest invention”  Globally-oriented urban restructuring adopted by cities in advanced and emerging economies but not all succeed  Complicates dichotomies of states vs markets; global forces vs communities; spaces of flows vs spaces of places

10. Methodology  Six-month ethnography of Bombay First  Six months of semi-structured interviews with key actors in different levels of government, the private sector, media, non-governmental organizations  Attended public and closed-door meetings related to urban planning and governance

11. Urban Planning as a Lens  “Urban Planning/Policy” as a focus of inquiry o spatial re-structuring through large-scale state-supported redevelopment and infrastructure projects. o changes in urban governance and planning arrangements

12. Findings  Pro-business state that has embraced business as a ruling ally in governance and planning; but  At best a tenuous and ineffective partnership- there is no “Growth Coalition” in Mumbai

13. Findings  A strong business sector is unable to effect transformative change without an effective, cohesive state partner  The state in Mumbai is internally fragmented, with a managerial-bureaucratic elite aligned with corporate civil society and its lower- rungs embedded in the “informal” city

14. Key Findings: The Jugaad state in Mumbai  The “jugaad” state is an outcome of the contradiction between the legal and regulatory frameworks of a centralized, high- modernist bureaucracy and the need to govern a city where a large proportion of economic activities take place on the margins of state regulations

15. Findings  “Jugaad” governance works – it allows the city to function and enables the state to govern a largely informal city - 65% residents live in slums; 75% of workforce in “informal” sector and growing  Urban restructuring in Mumbai is thus sporadic, piecemeal, uncoordinated and contested, rather than a whole-scale planned redevelopment

16. An Illustration: Slum Redevelopment/Urban Renewal  The SRS approach features minimal state coordination and relies on informal governance structures – it’s a “jugaad” state innovation that has become the predominant mode of slum renewal in Mumbai  The Dharavi redevelopment project attempts to centralize, plan and coordinate redevelopment – remains in limbo

17. My research demonstrates:  States are being qualitatively transformed. not dismantled by globalization  Sub-national states matter more than they did before; weak local state capacity in Indian cities has wide-reaching consequences  Informality fundamentally shapes the nature of urban governance in Indian cities

18. Conclusions  Given what we know about state capacity in Mumbai, Shanghai is an unsuitable model  Urban Policy and governance approaches should be cognizant of existing political realities  Mumbai needs more rather less local democracy  More research needed to understand the urban political economy in India

Notas do Editor

Both Mumbai and Shanghai are globalizing cities and the financial capitals of dynamic emerging economies. Beginning in the late-80s and early 90’s, both cites embarked on elite projects of urban restructuring in order to manage and take advantage of the opportunities of growing global integration. What’s remarkable about Shanghai is that in a relatively short space of time ( a decade), it has transformed itself from “a dusty, unpainted” backwoods into a major global actor, rapidly catching up with more esablished Asian cities – Hong Kong, Singapore, Seoul. For this reason, it has become an aspiration for Mumbai’s policy and business elite. Read quote: Today, the differences between the two cities are obvious to any visitor, beginning very dramatically as you fly into their airports. Mumbai’s airport is famously located amidst the city’s largest slum and chances are you will be stuck in a traffic jam on your way out. Shanghai’s new Pudong Airport boasts a high-speed rail connection that gets you into the city in 8 minutes. If you haven’t visited either city, their coverage in the popular meida tells very different stories – Mumbai portrayed as a city of slums, corruption and, on the positive side, thriving, entrepreneurship; Shanghai as a city of architectural marvels, double-digit growth and advanced infrastructure.
Two decades later, the outcomes in Mumbai and Shanghai have been widely divergent. Shanghai has been far more successful than Mumbai in making progress towards its global ambitions. On Foreign Policy’s Global City Index, which ranks city according to their Business activity •Human capital •Information exchange •Cultural experience •Political engagement – Shanghai is number 21 and Mumbai 46, just below Delhi.
Looking at specifically at business activity (this index compiles flows of goods and services, the size of capital markets, the presence of top global firms)– Shanghai is within the worlds top-ten cities. Another index -Global Financial Center Index, based on a survey of London’s finance professionals, Shanghai is rated one of the six places when respondents indicate where their organizations are most likely to open new offices. In this ranking, Mumbai languishes in the 50s. These rankings, both to the extent that they capture reality and, in turn, influence perception, show that Mumbai – despite its considerable advantages – its history, its geographic location, the presence of a large English speaking work force, its “entrepreneurial culture” – is not meeting its potential.
Bombay is not doing very well on the human development front either. It not only ranked lower than other global cities, but also falls below Colombo, with a lower lower per capita income and located in a country ravaged by a civil war. The 2009 Mumbai HDR reports an urban poverty rate of 40%, well above the national average, and a proportion of residents living in slums as 55%. Other statistics report that 65%-70% of Mumbai’s households live in slums and dilapidated housing. Not all these households in slums are poor. Interestingly, Mumbai also has the highest number of billionaires of any Indian city – 23.
In other words, why did Mumbai , despite the efforts of pro-redevelopment state actors and private entrepreneurs, not become much like Shanghai, remaining stuck or even worsening on several indicators (from “ease of doing business” – the World Bank ranks it below 10 other Indian cities- to “human development” )?
Democracy and Corruption, the two answers that dominate popular wisdom do not provide an adequate explanation for why Mumbai is “stuck”.Electoral competition between parties, some argue, make elected officials beholden to vote banks and hesitant to undertake changes that will might be the informal majority, choosing instead to pursue populist measures like free houses for slum dwellers. But Mumbai, in terms of local governance, is far from democratic. Its municipal governance system is run by a state-appointed bureaucrat and is little changed from its birth in colonial times. Planning institutions and practices remain centralized and top-down. A large number of the citizenry are, for various reasons, excluded from formal state institutions, protections and services due to the informal nature of their work or residence and changing “cut-off dates” that govern access to various programmes. If you are poor and arrived in Mumbai before 2000, you will be eligible for a free house under urban renewal programmes or a taxi-drivers license, if not you are more or excluded from urban “citizenship”.Corruption is no doubt a major problem –The nexus between political leaders and real estate industry in Mumbai is powerful and influential. But Shanghai’s leaders are far from immune corruption and real estate and state agencies have if anything, even closer ties. Corruption in itself need not impede major urban transformations; in fact, large-scale projects provide opportunities for corruption. Finally, Mumbai’s migrants are frequently blamed for its ills by a popular nativist political party as well as state bureaucrats. They point to China’s restrictions on mobility as key to its success. I won’t go into the details of Mumbai’s demographics, point out that Mumbai’s population growth rate is well below that of smaller cities that have done a better job of meeting infrastructure needs (Nagpur and Surat). Its GDP growth rate is well above population growth, and its per capita GDP is well-above the Indian urban average.
I propose instead that state capacity - the ability of the state to formulate and implement strategies to achieve economic and social goals, rather than global economic forces or policy choices, is the critical variable that explains the difference in outcomes between Mumbai and Shanghai. The literature on neoliberal development and global cities minimizes the role the state plays in these processes. I demonstrate instead that the state is central to the project of “globalizing” cities in emerging economies. Instead of becoming obsolete under globalization, its functions are transformed and sub-national states grow in importance.
In the rest of this presentation, I’ll talk about some of my key findings in Mumbai, which I’ll illustrate with a brief discussion of the city’s attempts to become a “slum free” city .You can’t talk about Mumbai and avoid discussing the slums, particularly since Slum Dog millionaire. In fact, as part of my research, I went on a slum tour – now a “must-do” on the itinerary of most foreign tourists. I was according to the tour guide, the first Indian tourist – most Indian visitors to the city prefer to hang out outside the homes of Bollywood stars!
Early theories of globalization assumed that it would have an equalizing effect, with capital and talent moving to where it was scarce and the returns higher, and information technology rendering the need for physical proximity – space- obsolete.Instead, as Sasksia Sassen articulated in The Global City, globalization concentrated the high-level financial, managerial, legal and other services activities of global corporations within a few “command” centers for the global economy– New York, London and Tokyo. In these cities, providers of financial and producer services agglomerate in order to take advantage of information, innovations, organizational complexity and infrastructure. Their highly-skilled, mobile work force avails of high-quality educational, recreational and cultural services these cities offer provide in order to attract human capital.Global Cities tend to have a polarized work-force – high-skill and high-wage on top, low-wage and informalized at the bottom, increasing inequality and wage disparity. This socio-economic polarization has a characteristic spatial expression – luxury real-estate development, gentrification, increasing class and racial segregation
As the financial system expands , “globalizing cities” integrate into a complex, hierarchical and distributed network that constitutes the architecture of globalization. Cities in this network not only serve to coordinate globalization, they also compete and seek to improve their position vis-à-vis other cities.Globalizing cities aspire to acquire a greater share of highly-profitable “global city” functions – providing financial, managerial or technical services, or specialized services such as IT (Bangalore) or research and development (Boston) . What’s central to this project is that these cities aim to serve a regional or global market. Spatially, “global” city functions concentrate in enclaves disconnected from much of the city’s economy and its hinterland.
Cities are engines of growth and innovation – “humankinds greatest invention” as Edward Glaeser’s new book puts it. Globalization offers them opportunities to grow, innovate, specialize and compete. As a result, urban restructuring projects aimed at becoming more “global” have been adopted by cities in advanced as well as emerging economies as a globally-oriented strategy for growth. Not all cities succeed – some like Detroit, have been decimated by the effects of the globalized production, others like Cleveland and Manchester have succeeded to a certain extent at re-inventing themselves. By focusing on the role of the sub-national and its relationship with social actors, this project offers insights into why some cities do better than others.A familiar theme in the literature is the tension between the pressures of globalization and the needs of local communities. This dichotomy between defensive local resistances to inexorable global forces fails to capture the ways in which different local actors, including the state, various business interests and diverse communities interact with and mediate these forces. My project offers a close look at how these actors shape the direction of urban change in specific sites.
I spent a year in Bombay, beginning with six months of participant observation with Bombay First. Bombay First is an organization sponsored by the Bombay Chamber of Commerce that has spearheaded restructuring efforts and works closely with the Maharashtra government, the Bombay Chamber and top multi-national consulting agencies. It was formed in 1992, modeled on London First (which represents London’s finance and successfully lobbied to “restructurie” in order to keep London competitive and attractive to global finance. However, Bombay First’s influence on urban policy and close relationship with the state is more recent. I also conducted on-going interviews with key actors at various rungs in the government bureaucracy, elected officials, the private sector including real estate, finance and media, consultants and experts, NGOs and community organizations, and attended public and closed-door meetings related to urban planning and governance.Finally, and not least, I lived in Bombay for a year, commuting in the massively crowded but still efficient trains, being stuck for hours in traffic jams at odd-hours of the day, experiencing strikes that put the city to a stand-still and negotiating municipal services and the police apparatus, talking to street vendors, taxi drivers and commuters, taking detailed field notes.
I use urban planning, the primary mechanism through which social actors, whether business, state or civil society, shape urban socio-economic space, as a lens to compare Mumbai and Shanghai. Urban planning is a function of local/sub-national states, though the role of the central state, in both India and China, remains key.By “urban planning/policy”, I’m not referring to the preparation of a master plan (which in Mumbai more or less sits on a shelf) but systematic efforts to (a) spatially re-structure the city through large-scale infrastructure, urban renewal and development projects, (b) to change governance arrangements and planning processes, for instance to give business or civil society a greater role, and and regulations and adopt policies such as deregulation, tax incentives, land subsidies and special economic and industrial zones in order to attract capital.
What indeed can Mumbai learn from Shanghai? Most commentators have assumed that a Shanghai model means creating a city of gleaming skyscrapers and cutting-edge infrastructure; a single-minded focus on economic growth, heavy emphasis on urban renewal and slum clearance, and a squelching of democratic participation. I argue that these elements are very present in Mumbai’s recent efforts at urban transformation but have failed to result in the desired outcomes – a “World-Class” city, improved infrastructure and quality of life, and a city free of slums.
When I first went to study Bombay First, I imagined it to be the lead actor in a state-business “growth coalition”, something like its model, London First. In theory, economic competition and market forces align local state and business interests to undertake growth-promoting redevelopment, usually at the expense of local communities and a number of new studies referred to Mumbai “growth machine” or growth coalition that was transforming the city. While the Maharashtra has embraced business as a ruling ally in governance, a marked shift in government policy from earlier decades, this partnership is tenuous at best, rather than a stable, institutionalized coalition that was able to achieve specific goals. In terms of influencing overall policy directions and discourse, they have some influence. The central ideas of “Vision Mumbai” a brief policy document created by Bombay First and McKinsey that laid out a strategy for the city to become “World-Class” over a 10-year period, was adopted by the Maharashtra state government as a guiding document for its planning and urban policy goals. The state elite had regular meetings with the group, and set up a special coordinating unit, The Mumbai Transformation Support Unit, that acted as a liaison between the state and private sector. The Transformation Support unit, however, had no real powers or responsibilities. It was located not in the CMs office, but in a state research institution. There has been little progress towards most of Vision Mumbai’s goals – whether it is to reduce the proportion of slum residents to 10% (the wishfulness of thinking in this target reflects in many ways the disconnect between the global policy elite and real world conditions), or to build “300 public toilets through public-private partnership” – both amongst 20 “quick wins” outlined in Vision Mumbai.
The fact that an elite business organization is offering the state suggestions on about slum redevelopment and public toilets, rather than what its core mission is – to push the state to improve the physical and business environment in order to meet the needs of corporate industry, is in itself telling. The Maharashtra state shows limited capacities in balancing various interests and priorities; arguably the central role of public agencies in urban planning.The weakness of the local state means that, despite a relatively strong private sector (as well as civil society), neither of these groups are able to work with the state to produce large-scale transformative changes, whether its large-scale urban renewal or democratic decentralization. The local state in Mumbai is fragmented and weak. The different levels of the state – central, sub-national and municipal, its political elite and the bureacratic elite, and then the vast lower rungs of state officialdom and political class, operate often at cross-purposes and with different interests and agendas. In this context, planning decisions are never technocratic, but always politicized, negotiated and re-negotiated. To illustrate, a central element of Mumbai’s transport upgradation plan is to build an expressway linking the island city with New Bombay, a planned suburb on the mainland, that, due to poor transport linkages, hasn’t taken off as a new business district. Conflicts centered around which parastatal would be in charge of the project. The Urban Development Agency, MMRDA, belongs to the ruling Congress; the State Road Agency, on the other hand, belongs to its partner the, NCP. Both parties want to take credit for building a highway that exists so far on paper.
Although the state is weak and ineffective in terms of large-scale restructuring, it is able to control a largely informalized city - - where a significant proportion of jobs, factories, homes and business activities fall outside the bounds of formal state institutions. There is a system of informal regulation - localized, stable but flexible practices of social control. As a result, many have slum dwellers have tenure security and access to services; street vendors, the majority of whom are unlicensed, have informal temporary permits and contribute to municipal revenues. I call this form of governance “jugaad” governance. “Jugaad” is a concept that some of you may have heard – it has become popular in business and social sciences to describe a way of making do or even innovating with limited resources. Mumbai’s slum dwellers have “jugaad”; business houses like Reliance and Tatas extol it as one of their key virtues. When I use to refer to how the state governs, however, I’m referring to the words original meaning of something “cobbled together”. The various parts of the state do not function as a cohesive whole, but more like something cobbled together out of various bits that don’t fit together very well but never the less run.Given this characteristic of the state, Urban restructuring in Mumbai is sporadic, piecemeal, uncoordinated and contested and is likely to continue in this way
Finally, I come to Mumbai’s famous slums.Since the 1990s, when market-based approaches gained favour, two models of slum redevelopment or urban renewal have been attempted in Mumbai. The SRS scheme began in 1995 after a new government came to power on the election promise of free housing for 4 million slum dwellers. At this time, real estate prices in Mumbai were amongst the highest in the world. The plan, which is innovative, allowed cooperatives of slum residents to approach a developer who could build a high-rise apartment and sell the units at market rates, provided the original slum residents were provided new housing. This programme has become has become the predominant approach to urban renewal although it has failed to make a significant dent in the number of slums or substantially increase the housing stocks. It has generated massive profits for mostly local real estate developers and various intermediaries in the state and community. The problems with this approach are that developers “cherry-pick” centrally located slums, responsibilities for upgrading infrastructure are unclear, and its highly-dependent on fluctuating property values.A private place entrepreneur, Mukesh Mehta, sensing an opportunity, came up a new model to redevelop the entire slum of Dharavi, sitting on prime real estate next to the new BKC financial center. This would be redeveloped as a whole, rehouse the slum dwellers on a small portion of it, and develop “world-class’ facilities in the heart of the city. The state elite liked the idea, while residents and civil society organizations protested that it was a “land grab”. Although “successful Dharavi model” is referred to in the Maharashtra housing policy, the project remains stalled. The difficulties in proceeding with Dharavi’simplemenntation are not the result of civil society opposition so much as an outcome of Mumbai’s fragmented, power structure.I’ll use the idea of “rents” just to illustrate my point – the SRS distributes “rents” (in an economic sense) widely within the community that chooses to implement it and amongst the numerous local brokers and fixers involved along the way. The Dharavi project, on the other hand, centralizes rents – it is managed directly by the CMs office and a few large scale developers gain to benefit from the project – which is why it is opposed by local power brokers. The state elite needs their support to implement the project – to gain support, to manage evictions and resettlement.
To sum up, my research argues that States continue to matter – globalization has not rendered them obsolete. As Neil Brenner argues, states are being qualitatively transformed, not dismantled by globalization. Sub-national states matter more than they did before; there is a process of “re-scaling” of state projects to the urban/metropolitan rather than the national or local scale – thus globalization has both centralizing and decentralizing tendencies. Finally, the acquisition of “global functions” shapes socio-spatial differentiation and urban politics in emerging cities like Mumbai and Shanghai in different ways than in core global cities like New York, which have experienced a hollowing out of the middle-class. In Mumbai and Shanghai, there is growing middle-class.
Shanghai, where urban restructuring was implemented by what has been described as a “local developmental state”, with central government support and significant autonomy as well infrastructural, administrative and technocratic capacities, thus provides a particularly unsuitable model for Mumbai. The nature of the state, and its relationship to society, is unlikely to change, although its specific administrative and technocratic capacities can and should be improved. Urban restructuring plans that call for massive state-interventions are unlikely to succeed. Instead of a developmental state, a more effective and inclusive regulatory state – that works with both business as well as community actors- more like New York or Johannesburg– might provide a more appropriate model. Rather than technocratic planning, planning strategies that are cognizant of political realities and conflicts and the emphasize negotiation and consensus-building may work better.More, rather than less local democracy is needed. In Mumbai, in addition to partnerships between state-elites and corporate industry, formal and institutionalized partnerships between state, business and civil society actors should be empowered.

Shahana Chattaraj

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