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Bond, Patrick (2012) Questions for mall-builders. Eye on Civil Society : -.

Over-built shopping centres are the wrong destination for investment

From today through Friday, 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 will get far worse with the coming 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 the 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 South Africa’s leading property guru, Erwin Rode, remarked on SAfm’s Business Update in April.

The regional escape route is dodgy, according to senior Human Sciences Research Council scholar Darlene Miller, whose John Hopkins University doctoral thesis analysed the spread of malls in Southern Africa. “Wittingly or unwittingly, the South African 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 through South Africa.

My own pension fund continues to fuel this madness, since major institutional investors enjoy shopping centre construction more than they do the low-cost housing which our country so desperately needs.

Yet according to Rode, the malls’ middle-class patrons 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.”

As even Finance Minister Pravin Gordhan has been worrying, South Africans are hugely 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 because of 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 make such loan-pushing harder.

Other hard-to-hear questions for delegates: aren’t shopping centres major contributors to pollution, a problem so extreme that South Africa ranks amongst the five worst countries for environmental management in the world, according to recent Yale/Columbia research? Aren’t the lack of rail freight and our deficient public transport to shopping malls contributing to preventable climate change?

What about the labour, social and ecological conditions in which consumer goods are produced before we import them, especially from East Asia? What role has centralised retailing and shopping-globalisation had in destroying South Africa’s labour-intensive industries?

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

And will Durban’s planned port expansion from 2 to 20 million containers per year by 2040 exacerbate these ecologically and economically catastrophic processes?

And what kinds of people are scoring most from our shopping addiction? Last weekend’s annual 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.”

Wiese became notorious after being stopped at London City Airport in 2009 with R8 million in cash he wanted to transport to a Luxembourg bank (normal billionaires do this by wire transfer, but then the tax man might find it). He only got the funds back three months ago, after 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 investigated his “network of trusts and offshore companies”, according to a reliable report, estimating that Wiese still owes the society R2 billion in unpaid taxes, the most ever in a country notorious for unpatriotic tycoons running money to overseas tax shelters.

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

It’s way overdue that we begin talking about a post-shopping society in which our social, environmental, community, family and friendship relations take precedence over the shallow ‘retail therapy’ buzz that some acquire in malls.

A genuine transformation is needed to maximise life satisfaction and minimise our vast eco-destructive footprints, so if you’re here for the ICC event, boycotting the ridiculous shopping centre hoopla would be a good place to start. Enjoy this great city’s outdoors instead, and when night falls, watch a new internet film: “The Story of Change – Why citizens, not shoppers, hold the key to a better world” (

(Patrick Bond directs the UKZN Centre for Civil Society.)

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