By Glenn Hollands

EAST LONDON long ago acquired the unfortunate nickname “slumtown” or more affectionately “slummies”. The label is benign but has become so pervasive that its even been used to market some of the city’s more unique products. I for example, have an excellent custom-made surfboard that carries the label “Slumtown Surf Designs”. Clearly many of East London’s residents are drawn to its slightly run-down holiday town atmosphere and its proud indifference to the fickle dictates of modernity. But most also dread any further deterioration in the city’s services and economic infrastructure. Small businesses open and close at about the same rate as the unpredictable weather patterns. In short, slumtown cannot afford to get any slummier and its “salt of the earth” reputation presents limited marketing options.

To some extent the city seems to be trapped within its peculiar frontier legacy; the fact that we refer to ourselves as “border” is no coincidence. There is almost a sense that the region perpetuates its own peculiar brand of hardship. Historian Clifton Crais writes of the “grinding poverty, premature deaths, stunted lives have been constant features of the Eastern Cape for well over a century.” It does little good to dramatise the problems of the region but clearly Buffalo City is unable to fully shake off the social and economic fallout of a region in long-term crisis. By way of example, in the period from 2001 to 2004 Buffalo City experienced the largest increase in cases of public violence reported at police stations of all the country’s nine major cities. BCM’s figures matched those of Johannesburg and the huge increase contrasted strongly with Nelson Mandela Metro where public violence cases had been in steady decline since 1996.

There is danger in continuously pleading the city’s case on the basis of its poverty indices and that dreaded political cliché “the development challenges”. The risk is that Buffalo City and the surrounding region begins to take on a welfarist character in the minds of national decision-makers. By way of example, of the nine cities that comprise the Cities Network, BCM was most reliant on operating grants and subsidies with 17% of its revenue coming from this source compared to 6,4% in NMM. Regional political squabbles and endless turf wars in the eastern half of the province only reinforce this perspective. Since apartheid ended there has been an increasing sense of common purpose amongst the city’s leadership and residents but it is a fragile consensus and frequently collapses into bitter diatribe.

A refreshing break from this pattern has been the thinking generated by the City Development Strategy (CDS) and the articles by Executive Mayor Zintle Peter in the local media in early November 2006. Mayor Peter candidly acknowledged that Buffalo City had no long-term and clearly defined development strategy and that existing approaches to planning, whilst recognising the need to roll out infrastructure and services to poor citizens, did little to assure the economic growth of the city and give it the increased revenue that it desperately needs. The mayor pinpointed the city’s key vulnerability, namely its dependence on a handful of big industries and the risk, in an era of globalisation, that these businesses could relocate overnight if local operating circumstances were to remain less than ideal or even to worsen. This new plain talk in Buffalo City focuses, not just on the medium-term challenge of creating an increasingly diversified and more service-based economy but the very real and immediate imperative to retain Daimler Chrysler as the core of the city’s manufacturing industry. That appears to hinge on upgrading the port and the city’s unique car terminal to handle much larger ships and ensuring that Buffalo City fits into a national transport network. Potential rail services to Alice or even Mthatha frequently make headlines but the drivers of the CDS process make it clear that Buffalo City needs to go further. We need to get a commitment from the nation’s top economic strategists that  the city be re-admitted into the country’s mainstream and somewhat concentrated economy. The 2006 State of the Cities Report notes that 21 urban areas spread over just 2% of the national surface area generate nearly 70% of the Geographic Value Added (GVA). Buffalo City is part of those urban areas but its contribution is tiny.

In East London, the development of the port and associated rail networks are beginning to emerge as the crux of Buffalo City’s future strategy. Without resorting to outright competition, Buffalo City needs to find a strategy that will prevent the inevitable marginalisation that almost certainly results from a national prioritisation of Port Elizabeth and Coega. As Mayor Peter noted, “This can only be done with national government support and support from Transnet. Persuading government to see the developmental logic of this will be one of Buffalo City’s most important challenges.” Mayor Peter faces a daunting task in winning this commitment. National government will fund R68 billion worth of investment in housing and municipal infrastructure over the next 3 years. Some of this money, for example portions of the R23 billion integrated housing and human settlement grant and part of the R21,5 billion of the Municipal Infrastructure Grant, will flow to Buffalo City.  These however represent normal intergovernmental transfer patterns.  New and more strategic public spending like the R12 billion to be spent on commuter rail infrastructure, including Gautrain and the grants for upgrading soccer stadiums for the 2010 World Cup are more specifically geared to economic growth, but do not target  Buffalo City. The Accelerated Shared Growth Initiative for South Africa launched by President Mbeki in 2006 has two significant underpinning budgetary allocations, firstly the R84 billion to Eskom and secondly the R47 billion allocation to Transnet. Both will clearly  influence the economic growth of cities but the latter seems particularly important. The CDS process in Buffalo City revealed that Transnet does not consider the connectivity of the City to the region and the country’s economic heartland as one of its investment priorities. Unless Buffalo City can have this perspective reversed, its position in Asgi-SA would appear to be minor.

The 2006 State of the Cities Report suggests that Asgi-SA documentation is flawed in its tendency to associate municipalities with second-economy programmes. The implication is that, apart from providing quality services and good infrastructure, the formal economy remains impervious to municipal influence. The report contests this view and suggests that cities may influence the complex relations between formal and informal economies in ways that benefit both. The basic problem however may be that municipalities, and in particular their political leadership, may be much better at engaging second economy issues. Ensuring decent infrastructure and services for existing industry does not necessarily  win votes and is only the first step in growing the local economy of Buffalo City, but it’s a critical and unavoidable first step and no amount of urban agriculture or brick-making projects can take its place.

Published in the Local Government Transformer Vol 12. No. 6 Dec 2006/ Jan 2007