Marsh Data, OMR, Chennai GIF © by Author
The economic liberalization in India, 1991 opened the doors for the country’s economy to the world. End of the millennium created massive disruptions and opportunities in terms of information and technology. Chennai, once a colonial city which served as a gateway for exports of raw material and goods to the colonizers now saw an opportunity to do the same but under the guise of development and supposed urbanization. TIDEL Park (OMR), a massive IT Park built by the state of Tamil Nadu in 2000 was the largest IT Park in Asia then. The establishment of TIDEL Park in 2000 marked the beginning of Chennai’s transformation into an IT hub, particularly along the Old Madras Road (OMR) (Kennedy et al, 2014). Chennai became the service hub for multinational corporations and right now it has touched more than a million people as employees in the software and services industry. It is the third largest contributor to the Software and Services industry in India. Chennai city is a significant nodal point in the global economic system, characterized by its ability to attract and integrate global capital, business services, and highly skilled ‘low wage’ workers (Sassen, 2005). Despite being a key player of the global network of economic, cultural, and political activities, Chennai still remains a world city as it is a hub for multinational corporations, financial institutions and other entities of global significance (Robinson, 2006). The transnational flows of capital, information, and people that characterize global cities (Sassen, 2005). Chennai’s economy is deeply integrated into global supply chains, with multinational corporations outsourcing services and manufacturing operations to the city. This creates interdependencies and vulnerabilities, as the city is affected by global economic fluctuations and policies. Chennai falls lower in the hierarchy of cities and acts as an imitator of the exemplar (Robinson, 2006).
The OMR’s growth and transformation in the past can be seen as a result of capitalist-driven development, where economic activities, real estate speculation, and infrastructure projects play a significant role in shaping the urban landscape as referred to as production of space (Lefebvre, 2003). The declaration of OMR as an IT corridor and the accumulation of land by the State Industries Promotion Corporation of Tamil Nadu (SIPCOT) implemented the concept of Spatial Fix (Harvey, 1985). “Spatial fix” describes how capitalism seeks to overcome its crises and contradictions by spatially reorganizing production and investment. These initiatives aimed to attract investment, stimulate economic growth, and create new urban spaces for capitalist expansion in OMR and that being successful resulted in massive urban sprawl.
The total production value of OMR is equated to the value of software and services produced and provided via the IT corridor. A key component of this production is the labor force (Harvey, 2006). Unlike any other input the labor force is a living commodity that moves around and engages with the urban space. As Harvey states the labor force has to go back home and create life. It was an unchecked planning when the housing sector of OMR grew proportionally with respect to the growth of software service structures. The urbanization of OMR under neoliberal capitalism saw immense migration of labor force occupying the spaces of OMR (Sekar & Kanchanamala, 2011). Urbanization driven by capital in OMR involved the displacement of local communities, particularly those living in informal settlements or on valuable land. Land acquisition for infrastructure projects, real estate development, and industrialization resulted in the dispossession of vulnerable populations (Harvey, 1985). The justification for doing so was time-space compression (Grundrisse 1858; Harvey, 1990) Chennai and its labor force was a viable option for the colonial capitalists because of low-cost labor and service implementation. This was guaranteed by the accumulation of labor force around the service centers which enabled minimal travel expenditure and availability with respect to time.
Chennai transitioned as a world city through urbanization and capitalism. A raise in GDP numbers, global recognition, development in terms of massive structures and wider roads, access to technology and innovation and an increase in per capita income are the indicators that govern development and prosperity under capitalist urbanization. All of the above were layered on exploitation of both land and labor which is what this case study situated in OMR, Chennai intends to address.
Qualitative Exploitation: Labor in Situated World City
An illusion of participation and the imposition of cultural shift imitating the Global North are presented and consumed as parameters of better lifestyle to the labor forces of OMR. In reality, Chennai is just an industrial city (Lefebvre, 2003) that is a service hub for multinational corporations that provides cheap low wage labor that inturn produces higher profits (Harvey, 1985) for the colonial capitalists. Chennai plays a significant role in global services outsourcing, particularly in IT and business process outsourcing (BPO) sectors. Many companies outsource their back-office operations, customer support, software development, and other services to Chennai-based firms. This enables global businesses to access cost-effective and specialized services. (Sevilla-Buitrago, 2015) The introduction of shopping complexes, entertainment centers, housing apartments and high-rise buildings cement this illusion of being a participant and removes the reality that they are just contributors who fail to recognise this structural and orchestrated exploitation. This phenomenon is closely associated with the Marxian economic theory of exploitation of labor. The open door economic policy, ease of cross state migration and the availability of cheap labor creates surplus labor in Chennai and it is correlated with feudal societies. What the modern neoliberal urbanization has mastered is to mask this state by creating an illusion of development but at a grass root level it is still modern colonialism and the construction of systems for better exploitation (Marx, 1894). The consequences of capitalist-driven urbanization in OMR, Chennai include the erosion of cultural identity and the adoption of a Western-oriented lifestyle, which can lead to a perceived sense of inferiority towards the Global South. The rapid urbanization and displacement of agrarian communities into low-wage labor contribute to this dynamic in OMR. As a result, the labor force in OMR, Chennai may view the global North as a benchmark for development and validation, further perpetuating the cycle of exploitation (Marx, 1894; Lefebvre, 2003).
Quantitative Exploitation: Land in Situated World City
Chennai is a neoliberal city because it primarily focuses on privatization and growth oriented/market-controlled development and infrastructure led development (Theodore; Peck; Brenner, 2011). Capitalism should be understood as a world-ecology, a social and ecological system in which human societies are entangled with nature. This perspective emphasizes the interconnectedness of capitalism and the environment, highlighting how capitalist expansion and accumulation depend on the appropriation and transformation of nature. The concept of commodity frontiers, which refer to the geographical spaces and resources that capitalism continuously expands into, seeking to extract and commodify them for profit. In OMR, this could be seen in the expansion of industrial zones, urban development, and infrastructure projects that require the acquisition of land and the exploitation of natural resources. (Moore, 2015). This phenomenon is called ‘Commodity frontiers and accumulation’. The urban landscape of OMR was predominantly a marshland that was home for approximately 45 species of fish, 10 species of frog, 21 species of reptiles, 110 species of birds and 10 species of mammals according to the study conducted by Community Environmental Monitoring: A Program of the Others Media (2005; Gajendran, 2016). At the beginning of 90s – the period when India liberalized its economic policies, the total area of marshlands around OMR was 5500 ha. Now, it is less than 550 ha (Gajendran, 2016). This occurred via planetary land grabs which is the privatization of common resources, such as water and land which are common pool resources (Ostrom, 2000) through capitalist processes. In Chennai, the privatization of water resources and the encroachment on common lands have been observed. The rapid urbanization and industrialization have led to the conversion of marshland into real estate projects or industrial zones, restricting access to common resources and affecting local communities. (Sevilla-Buitrago, 2015).
The marshland once used to be the livelihood for the local communities as they were the major areas of fishing and the agrarian economics that was associated with it. The accumulation of capital that enabled the land grabs was via Gentrification and Urban Redevelopment. The processes of gentrification and urban redevelopment as strategies for capital accumulation (Harvey, 1985). In OMR, there have been instances of gentrification in older neighborhoods, where original residents are displaced to make way for upscale housing, commercial developments, and infrastructure projects. The accumulation of capital for the land grabs was enabled and made easier through foreign investments and the irregularities in the circular flow of economy are obvious. The investments are in OMR, Chennai but the end product and profits are elsewhere – The power center for the technology organizations which remain in the global north (Sassen, 2005). This process led to the loss of affordable housing and the erosion of local cultures and communities and replaced them with the labor forces of the neoliberal capitalists.
The consequence of exploitation of the common pool resources was not just about the local cultures and communities being displaced. The livelihood of the new inbound urban sprawl was and is threatened. The Chennai floods 2015 acted as a major eye opener and the natural way of water was to settle down in the once marshlands which were now concrete jungles. Urban floods have been a significant issue with the new world cities of the Global south (Gajendran, 2016). The loss was estimated at USD 3 billion (NIDM – National Institute of Disaster Management India) in terms of livelihood and services offered during the period of the floods in 2015 (Devi et al, 2019). There are estimations on similar flooding before 2030. The dominant ideology of competitive capitalism continues to drive the economic machine, with little regard for ethical planning or sustainable practices. The exploitation of land was opportunistic, but it can by evidence reverse and strip every opportunity it offered. The land that provided the opportunity for the corporate structures to come into existence in OMR, took the same away by submerging in water in 2015. The utilization of marshland for various purposes such as housing and waste disposal has resulted in the gradual disappearance of the local community’s connection with the marshland ecosystem (Gajendran, 2016). This situation highlights the destruction and pollution of the ecosystem and environment in OMR. Consequently, the local people residing in the context feel disconnected from their once vibrant community life associated with the ecosystem. The above sections have provided an elaboration on the occupation of OMR area for real estate development, as well as the exploitation and depletion of natural resources and the environment to meet the needs of capitalist forces.
Conclusion
While capitalism can lead to exploitation, it also has the potential to drive economic growth, innovation, and development. However, addressing the negative impacts and ensuring a fair and equitable society requires measures such as labor rights protection, environmental regulations, social safety nets, and policies promoting inclusive growth. The exploitations mentioned in the case study are to emphasize on the shortcomings and blindsided nature of development under neoliberal capitalism. Chennai has consistently provided its resources over a period of time to colonial rulers, the elites and now OMR, Chennai is being exploited for ‘development’ by both global and local players. (Gajendran, 2016).
The idea of Global City (Sassen, 2005) should not be a benchmark or aspiration for the cities of the global south. The neoliberal development and the transition it offers is destructive instead of constructive. The operations of the colonial capitalist in the exploitation of the industrial cities for economies of scale (Smith, 1776) and the transition it creates strips the land and labor of identity. There is an emphasis on power and inequality (Sassen, 2005). As we move towards the future of sustainability, economic equality and preserving identity, it is a necessity to consider the hidden layers of transition. The naked eye consumes a simulation and the perception of development which is driven by a consistently fed opinion that the global north is an ideal world. The critical reflection in this essay through the lens of transition in the situated world city, Chennai and the particular case study OMR showcases the apparent lack of focus beyond GDP growth, structural development, and access to global economy.
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Introduction to Urban Economics 