For some experts in international development, urbanisation is seen as a path to sustainable economic growth, as 80% of the world’s gross domestic product (GDP) comes from cities. This notion is reinforced by the 2018 UN-Habitat report, which emphasises the role of Foreign Direct Investment (FDI) into African cities as key drivers of growth, productivity, and development, as well as the achievement of the UN Sustainable Development Goal (SDGs) number 11 (sustainable cities and communities). This sets the stage for urban development being largely led by multinational corporations (MNCs).

However, urban growth needs planning for infrastructure, housing, transportation, and other resources to sustain the levels of consumption and demand that large cities bring. Not to mention, a plan to address climate change as land development impacts environmental and ecological systems. Typically, when urban planning is driven by FDI or MNCs, these resources are thought to follow economic growth instead of being created first to attract economic investment. This mirrors the same problematic pattern of the Structural Adjustment Programme of the 80s and 90s, where experts claimed that growth in productivity would lead to a higher quality of life and development for all. In reality, it exacerbated income inequality and resulted in uneven socio-economic advancements. Case in point, American retail giant Amazon has just gained approval to construct its first African-based office.

Amazon’s plans for a new, mixed-used development in Cape Town is estimated to cost 4 billion Rand (about £200 million) and will be completed over the next three to five years. However, this plan is not without contention, as local environmental and cultural activists are opposed to the expansion. According to Reuters, the land that Amazon and its developers plan on using has historical significance for the San and Khoi communities; it was where both communities defeated Portuguese soldiers in the 16th century but then lost it to Dutch settlers in the 17th century in a land dispossession campaign.

“research indicates that privatised housing developments in low income and emerging countries tend to entrench pre-existing class inequalities rather than eradicate them”

River Club Development: An artist’s impression of the planned Amazon HQ in Cape Town South Africa

Proponents of the buildout write that this would bring 19,000 jobs to a city recovering from the financial effects of the COVID-19 pandemic, as well as other attractions such as hotels, restaurants, and bar spaces. Increased residential housing units are also part of the project, of which 20% is promised to be affordable housing. According to Liesbeek Leisure Properties Trust (LLTP), the entity managing the urbanisation process, the balance to appease culture and history has been achieved through a planned garden and heritage centre within the development.

Yet, after visiting the websites and social media pages of the main groups that oppose the plans, this is about more than cultural remembrance. The Observatory Civic Association, which represents a nearby community, had lodged over 50,000 objections to the City of Cape Town in June 2021. Cape Housing Activists have also opposed the plan on the grounds that it does not do enough to provide social redress, according to a lawyer for the group. He further argued that the proposed affordable housing scheme is actually just 4% of the entire development. Indeed, research indicates that privatised housing developments in low income and emerging countries tend to entrench pre-existing class inequalities rather than eradicate them. Thus, one could see this as a 21st-century version of land dispossession, where economic opportunities from this proposal will mainly benefit those already in power.

Environmental conservationists also argue that the area should be preserved due to its ecological sensitivity, as it sits between the Liesbeek and Black rivers. They claim that paving over areas of the marshlands will destroy natural habitats for many animals and displace the descendants of the Khoi communities. Appeals against the development have, so far, been submitted by Goringhaicona Khoi Khoin Indigenous Traditional Council Heritage Western Cape, Two Rivers Urban Park Association, The Observatory Civic Association, The South African Astronomical Observatory, The Cape Institute for Architecture, and The Rosebank Mowbray Civic Association.

Contrastingly, environmental experts hired by LLTP suggest that redevelopment would be a benefit for the birdlife and wildlife in the area. We must be mindful of who’s behind this source when assessing these claims, given the commercial interests behind the latter’s research. Furthermore, Cape Town, in particular, has just recovered from a two-year long water shortage crisis. Residents had to line up everyday to receive rations of potable water. It was only at the end of 2020 that the city’s reservoirs were 100% full for the first time in six years.

While much of the international media has positioned this battle as one of preserving cultural heritage, we see there are deeper issues of displacement, disenfranchisement, pollution, and dispossession. However, no one has asked if an MNC-sponsored development can bring sustainable and equitable growth.

A woman works at a distribution station at the 855,000-square-foot Amazon fulfillment center in Staten Island, New York, on February 5, 2019. Johannes EIsele | AFP | Getty Images

Interviewed by Bloomberg, Tauriq Jenkins of the Goringhaicona Khoena Council, a Khoi traditional group, says: “Companies like Amazon are expatriating particular kinds of menace which they would not do in their own countries.”

Unfortunately, this is not the case. Amazon is notorious in the United States for its terrible and dangerous working conditions. It also recently defeated an unionisation effort in Alabama with questionable tactics, such as using mandatory meetings to pass anti-union messaging or intimidating employees about the possibility of closing factories if workers were to unionise.

“We can not sacrifice communities for the promises of commercial enterprise; our economies and our cities are built by people, not corporations”

This is an urgent crossroad for Cape Town: it is possible that an Amazon complex may boost GDP figures, but economic development encompasses more than this one indicator. An area expanding on the grounds of an exploitative corporate culture does not lead to affordable housing, inclusive communities, and sustainable development – as imagined by the SDG 11. Amazon is expatriating neoliberal capitalism that is self-destructive to the environment, communities, and people. It is, in turn, promoting a business model that favours productivity and efficiency over sustainable urbanisation. This is partly why New Yorkers fought against a headquarter office in Queens, despite the promise of 25,000 jobs.

We can not sacrifice communities for the promises of commercial enterprise; our economies and our cities are built by people, not corporations. And often, when corporations destroy local economies, the burden is placed on the people to save them. Thus, cities need to focus on people-centred policies that invest in human security to lead to socio-economic growth, not bank on the promises of GDP boosts.

Written By: Sabine Franklin – born and bred New Yorker, she earned her Ph.D. in Economics from the University of Westminster in 2020. Her expertise is in international development, global health governance, and political economy. She tweets @SabineFranklin

Header Image: River Club Development: An artist’s impression of the planned Amazon HQ in Cape Town South Africa