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Questions for the mall-builders

Shopping centres are a foolish, destructive investment destination
Patrick Bond 17 September 2012

This week, Durban’s International Convention Centre hosts 1300 delegates to a Shopping Centre Congress sponsored by one of South Africa’s most environmentally-destructive financial institutions. (As the country’s second largest coal lender and a proponent of failed carbon trading, also known as the “privatisation of the air”, Nedbank advertises extra aggressively to brainwash us into thinking it’s a “green” bank.)

Delegates to “the largest gathering of retail and retail property people in Africa” will discuss how to spread social alienation, intensify economic distortions and amplify ecological decay. Damages from the US-style mall model are severe, and South Africa has an especially pernicious role, with our retailers also polluting other African countries with malls. It could get far worse with the invasion of Wal Mart.

Consider some questions that likely won’t be asked at the ICC: What are the eco-social costs? Isn’t South Africa massively overbuilt for retail, coming off a 1997-2008 real estate bubble that was highest in the world – twice as high as even my native Ireland’s?

In Gauteng especially, there was massive recent expansion at Sandton City, The Zone, Eastgate and Menlyn Park. “Without a doubt we have an oversupply of shop space in this country at the moment,” remarked leading property guru, Erwin Rode, on SAfm’s Business Update in April.

The regional escape route is dodgy, according to Human Sciences Research Council official Darlene Miller, whose John Hopkins University doctoral thesis analysed the spread of malls in Southern Africa. “Wittingly or unwittingly, SA retailers followed the path of European colonial traders,” she observed, and their “promises of ‘renaissance’ can be elusive.”

In spite of job creation, “regional exclusion and deprivation may be enhanced”, Miller argues, citing Shoprite’s encounter with labour and farmer resistance in Zambia, not to mention the deindustrialization of local manufacturing when bulk-produced goods are imported more cheaply via SA retailers.

Our pension funds continue to fuel this madness, since major institutional investors favour shopping centre construction over the low-cost housing which our country so desperately needs, as Marikana just demonstrated.

But according to Rode, the malls’ middle-class clients are becoming financially stressed: “I think the consumer is going to be under the whip for many years in this country. There are structural reasons for that, it’s not just a cyclical thing. If you agree with me on that score then you must also be sceptical about prospects for shopping centres.”

Finance Minister Pravin Gordhan also worries that South Africans are overborrowed. By the third quarter of last year, the National Credit Regulator reported an annual rise in unsecured credit of 53% to more than R100 billion rand.

Who gets these loans? Three out of five go to households with less than R10 000/month income, and repayment is harder thanks to usurious interest rates, such as the 40% rate charged by Capitec on a typical six-month loan of R3000, resulting in a total repayment of R4082. Last month, the National Credit Regulator begged Parliament for new regulations to deter such loan-pushing.

Other questions: aren’t shopping centres major contributors to pollution, a problem so extreme that we rank amongst the five worst countries for environmental management in the world, according to recent Yale/Columbia research? Don’t our deficient rail freight and inadequate public transport to shopping malls contribute to preventable climate change?

What about the labour, social and ecological conditions under which consumer goods are produced before we import them, especially from East Asia? What blame does centralised retailing and shopping-globalisation deserve for the demise of our labour-intensive manufacturing industries?

Likewise, aren’t mega-malls like Durban’s Gateway - biggest in the Southern hemisphere - responsible for an irrational shift of urban planning towards new class-segregated edge cities? Can struggling Main Street shops survive new malls?

What kinds of people are scoring most from our shopping addiction? Last weekend’s Sunday Times richest-South Africans list put Shoprite/Pepkor owner Christo Wiese’s wealth at second highest. Forbes estimates he’s worth at least R25 billion, while Fin24 remarks that Wiese “had over years declared a relatively negligible taxable income that was in sharp contrast to his obvious wealth.”

Christo Wiese

Wiese became notorious after being stopped at a London airport in 2009 with R8 million he wanted to physically transport to a Luxembourg bank (normal billionaires do this by wire transfer, but then the tax man might find it). He only got it back three months ago, admitting it was “cash taken out of South Africa in the form of travellers’ cheques to avoid exchange controls” in the bad old days.

Back home, the South African Revenue Service has estimated that by using a “network of trusts and offshore companies”, according to a reliable report, Wiese still owes the society R2 billion in unpaid taxes, the most ever in a country notorious for unpatriotic tycoons running money to overseas shelters.

With the likes of Wiese pushing shopping down our throats, aren’t SA’s most laudable social values – ubuntu, democracy, ecology, a better economic balance – threatened by ubiquitous US-style marketing and consumption?

It’s long overdue we begin talking about a post-shopping centre society in which social, environmental, community, family and friendship relations take precedence over the shallow ‘retail therapy’ buzz that some acquire in malls. In Durban, an inspiring precedent at the historic Warwick Junction came from Early Morning Market vegetable traders who repelled former City Manager Mike Sutcliffe’s destructive mall plan, even at the cost of being teargassed and beaten by brutal Durban police one winter night in 2009.

A genuine transformation is needed to maximise life satisfaction and minimise our vast eco-destructive footprints, along with creating “a Million Climate Jobs”, as the Cape Town-based campaign – – insists be done through meeting basic needs and building a low-carbon infrastructure. And from California where post-mall culture is thriving, the team at “The Story of Stuff” offers a new internet film showing another way forward: “The Story of Change – Why citizens, not shoppers, hold the key to a better world” (

(Patrick Bond directs the University of KwaZulu-Natal’s Centre for Civil Society.)

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