Fooled by smartness

Thinking Cities
By Thinking Cities July 28, 2016 16:31

Fooled by smartness

The smart city project seeks to build islands of cutting-edge urban infrastructure ring-fenced from the sea of dysfunctionality that has come to epitomise urban India

The Smart Cities Mission is a flagship programme of the ruling National Democratic Alliance. One year after its official launch, while expectations have been scaled down, the rhetoric has largely escaped political scrutiny.

Generally, the term ‘smart city’ denotes networked informatics writ large on a cityscape. There are, however, few examples of cities built to ‘smart’ specifications. The most famous are New Songdo City in South Korea, Masdar City in the UAE, and PlanIT Valley in Portugal. But these are more brand ambassadors of the smart city ideal than living embodiments.

The vast majority of so-called smart cities are the same old cities but with a ‘smart solution’ tacked on. This could be, say, the layering of data capture devices such as sensors and CCTV cameras over existing infrastructure to create a ‘smart’ grid. The ‘smartness’ is derived from the data captured by the sensors and analysed by algorithms to aid decision-making in real time.

But the really smart thing about ‘smart solutions’ is that once installed, it makes the city permanently dependent on the private service provider, much like how your dependence on your smartphone is far greater, and of many dimensions, than it ever was with your non-smartphone. Whether or not an urban problem is solved by a smart city project, a market would have been created.

In other words, smart city projects have a lot to do with opening up municipal services to private capital. But that’s not all. There is also a broader agenda at work. The first clue to the nature of this agenda lies in the origin of the smart city idea itself.

Seven segment division

Unlike what one might expect, the ‘smart city’ concept did not originate in the field of urban design or city planning. The American urbanist Adam Greenfield traces its earliest usage to a bunch of technology firms. IBM, with its ‘Smarter Planet’ campaign, was one of the first movers. So was Cisco with its Smart+Connected Communities initiative, Siemens with its CityCockpit, and Microsoft with its CityNext programme.

This raises an obvious question: Is it possible that the push for smart cities in India has anything at all to do with market creation? The consultancy firm Frost and Sullivan estimates the global smart city market to be worth $1.56 trillion by 2020. It divides the smart city market into seven segments: smart governance and education, smart security, smart energy, smart infrastructure, smart mobility, smart healthcare, smart building.

The Government of India, too, in its parliamentary reference note on smart cities, identifies six characteristics of a smart city: smart governance, smart mobility, smart people, smart economy, smart environment and smart living. While not quite market segments, the otherwise vaguely worded document’s sudden descent into definitional clarity makes the business connection explicit: “Smart cities are those that are able to attract investments.”

The smart dynamic in India

U.S. Deputy Secretary of Commerce Bruce Andrews captured this sentiment perfectly in his speech at the Smart Cities Summit in Mumbai this year: “I am joined today by representatives from 18 leading American environmental technology companies, all of whom are looking for new business opportunities in India’s growing infrastructure market.”

Debates about the smart city in the West tend to focus more on the dangers posed by digital colonisation of the analog cityscape. These include fears about loss of privacy, the rise of a surveillance society, and the possibilities of authoritarianism unleashed by the normalisation of biometric control. These concerns, while valid, do not fully capture the political dynamic of the smart city agenda in the Indian context.

To begin with, the problem with Indian cities is not that they are ‘unsmart’ but that they are dysfunctional. Making them functional entails expanding their infrastructure. To do so for every Indian city would cost a sum of money the Indian state will not spend. To do it for even one entire city would entail costs that no government will bear.

And yet, without adequate infrastructure, foreign capital, which the Indian state desperately seeks, will not come to India, or at least not in the volumes sought. But India needs foreign capital to upgrade its infrastructure. The smart city is the way out of this impasse. Not the whole country, not the entire city, just one small area in select cities will get the infrastructure developed to first world specifications — and this is where the bulk of the smart city funds will go. The document which encapsulates government policy on smart cities, the Smart City Guidelines (SCG), yields three obvious conclusions. One, there will be no big public investment in expanding urban infrastructure. Two, the state will support the construction of smart city enclaves where businesses and smart (read: prosperous) citizens are welcome to create the kind of urban infrastructure they want, and for which they will pay from their own pocket. And three, the only kind of city-wide public investments would be those that satisfy at least one of two criteria: help create a market for ICT (Information and Communications Technology) service providers; are necessary to address security concerns.

All this still doesn’t explain why we should aim for a ‘smart city’ and not ‘smart country’ or ‘smart state’. This brings us to the political core of the ‘smart city’ phenomenon, what’s come to be known as “institutional bypass”.

Over the past decade, democratic resistance to economic reforms have been getting stronger in countries around the world, prompting serious rethink on whether it is worth expending resources on pushing them at the level of national governments. Perhaps a more efficient strategy would be to bypass the national government and go directly to the States. This was the idea behind competitive federalism. It was expected that while the Centre cut public expenditure, States would be forced to compete with each other to attract FDI and implement pro-business reforms in a race to the bottom.

But State governments, too, are tainted by democratic limitations. The need of the hour, therefore, was to create a whole new governance structure that would bypass both State and Central governments, and insulate political decision-making from interference by any elected body whatsoever. Enter smart cities, with its creepy little baby, smart governance.

Special purpose of the vehicle

The SCG states that all smart city projects will be implemented (and the funds administered) by a Special Purpose Vehicle (SPV). The SPV would be a company incorporated under the Companies Act, 2013. The State government and the urban local body (ULB) will be equal shareholders of this company. But the private sector can take equity stake in the SPV. It is also possible for a private investor to be the biggest single shareholder of an SPV, so long as the combined shareholding of the State government and the ULB is greater.

Along with transfer of financial control, the SPV, to be headed by a CEO, is also a mechanism for transfer of political control. The SCG calls for “delegating the rights and obligations of the municipal council with respect to the Smart City project to the SPV” as well as “delegating the decision-making powers available to the ULB under the municipal act/Government rules to the Chief Executive Officer of the SPV.” The SPV will even have the powers to collect taxes and surcharges, and enter into JVs and PPPs. A city that has become a company with shareholders cannot but treat its citizens as anything other than sources of revenue.

In the Smart City Proposals (SCP) of the 33 cities that have been chosen so far, the bulk of proposed investments are earmarked for area-specific development, and not city-wide infrastructure. This is as per the SCG mandate, and is a win-win for both foreign and domestic capital. The former gets a first world haven to operate from without having to contend with the nuisance of India’s unreliable infrastructure. The latter gets to park their funds in real estate with the certain knowledge that they can make a killing once the area is ‘smartified’.

Thus the smart city paradigm signals a momentous shift that takes the agenda of privatisation beyond the takeover of public utilities such as water supply or sanitation, and inaugurates the formal privatisation of governance itself. The tendency to focus exclusively on technology in discussions of smart cities can blind one to the real driver of the smart city paradigm — the global crisis of capital accumulation.

Under a section titled ‘Financing of smart cities’, the SCG advises cities to mobilise funds from municipal bonds, leveraged borrowings from financial institutions, and Tax Increment Financing (TIFF), a toxic instrument already discredited in the West. These are precisely the mechanisms that caused an epidemic of crippling debt in cities across the U.S. The most well-known example is Detroit, which, in 2013, filed the largest municipal bankruptcy in American history. Does the Smart Cities Mission want Indian cities to replicate the same mistakes?

The smart city agenda, at its core, is not an urban but a political project. In the name of frictionless service delivery, it combines a neo-liberal political economy with authoritarianism using ICT tools. It doesn’t address the basic infrastructural needs of Indian cities. Rather, it seeks to build islands of cutting-edge urban infrastructure ring-fenced from the sea of dysfunctionality that has come to epitomise urban India.

It is worrisome that India’s approach to urban development seems to have no alternative to the smart city paradigm. India needs to develop its own framework of urban renewal that prioritises the democratic aspirations of its citizens. What our cities need is not smartness but functionality; not efficiency so much as equity. And neither of these is a value that technology alone can deliver.

Thinking Cities
By Thinking Cities July 28, 2016 16:31