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ABSTRACT
This article elaborates upon the concept of speculative urbanism and the theory of accumulation by dispossession by delving into the recent history of the transformation of Bengaluru (formerly Bangalore) India into a global city. It explains how the conversion of rural land into urban real estate for ‘global-city’ projects triggered distinct forms of dispossession and financialization. The shifting practices of global finance capital along with its national and local partners have created the conditions for widespread dispossession of rural producers and the financialization of the regional economy, a phenomenon identified here as ‘dispossession by financialization’.
Acknowledgements
I would like to offer my gratitude to Vinay Baindur and Manjunath for their remarkable research support over the years, and thank Ph.D student collaborator Devika Narayan, research consultants Sanjiv Aundhe and Amay Narayan, and Profs. Carol Upadhya, Vinay Gidwani, Helga Leitner, Eric Sheppard, and Hemangini Gupta for their generous support and comraderie. Special thanks go to Prof. Rachel Schurman for her intellectual and editing support and to my colleagues participating in the ACLS Land Dispossession Workshop in Singapore. Research was funded by an American Institute of Indian Studies Senior Fellowship, Dr. V. K. R. V. Rao Chair Professorship from the Institute for Social and Economic Change-Bengaluru, University of Minnesota GPS research grant, and a collaborative research project on Speculative Urbanism funded by National Science Foundation (grant number BCS-1626437) and based at the National Institute of Advanced Studies-Bengaluru.
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No potential conflict of interest was reported by the author(s).
Notes
1 This calculation comes from brokers and consultants in the business.
2 ‘World-class’ urban infrastructure has been the rising focus of advice coming from PriceWaterhousecoopers and McKinsey Global Institute and loans and conditionalities from the World Bank and Asian Development Bank since the mid-1990s. These latter two international finance institutions have had the sectors of finance, infrastructure, and the urban as three dominant sources for loans and the highest percentage goes directly to the confluence of all three sectors, i.e. financing urban infrastructure (See Peterson Citation2009). These organizations are key nodes in the transnational policy network through which the discourse of global urbanism has emerged and been refined.
3 For details on dispossession and unfair compensation, see Doshi and Ranganathan Citation2019; Goldman Citation2010; Sundaresan Citation2013. On the changing dynamics of the complex agrarian structure in the region, to which this article cannot offer nuance or depth, see Chandrashekhar Citation2009; De Neve Citation2015; Inbanathan and Gopalappa Citation2002; Manor Citation2007; Pattenden Citation2016.
4 As noted elsewhere, the vitality of this water catchment system in rural Bengaluru made possible the settlement and expansion of the city from the 1700s onward (Goldman and Narayan Citation2019; Mathur and da Cunha Citation2006; Nagendra Citation2016).
5 As Viswanath’s (Citation2014) and others’ studies of caste demonstrate, access and ownership to land and caste designations have been co-constitutive throughout history. The ‘pariah problem’ in southern India reflects the obstacles for lower and out caste communities to gain full rights to land; while their location in social hierarchy is discursively defined as religious and cultural, their inability to access rights to land is defined by powerful and enduring institutional and social barriers (Viswanath Citation2014). Hence, the situation in this region reveals that while communities were often barred from land ownership, many have enjoyed access to land, especially government and village land, on which they cultivated, grazed animals, raised silk worms, maintained water infrastructure and sacred groves, fished, grew flowers, and much more, contributing to the vibrant regional economy (Nagendra Citation2016; Upadhya, Gidwani, and Goldman Citation2017).
6 ‘Concession Agreement 2004’ (Government of Karnataka) and ‘Landlease Agreement 2005’ (Government of Karnataka).
7 Karnataka Industrial Area Development Board or KIADB is the largest parastatal in the region responsible for acquiring and assembling land to sell to firms, supplying basic infrastructure such as roads and electricity, for industrial development. The land records described were the farmers’ and should not need a middleman to retrieve them. KIADB has been well documented in the press and in court proceedings as the most corrupt parastatal in Karnataka. It is financed by external loans from the Asian Development Bank et al., yet it oversees large public projects and infrastructure and mandates, and is only accountable to the chief minister of the state and its creditors, and not to democratic institutions such as the city council or state legislature.
8 The terms used here for out-caste villagers (Dalits) and upper-caste elites (Gowdas) are general designations used by my interviewees to connote the enduring dynamics of power in the village, and does not specify the myriad of castes, sub-castes, and non-castes with which many people identify. The term Gowda locally often refers to self-appointed, upper-caste village decision makers. See also MS Srinivas (Citation1994) on this process in south India and Vinay Gidwani (Citation2008) in west India. The region is infused with Dalit activism as caste divisiveness remains stark. Dr. B.R. Ambedkar defined Dalits in his fortnightly publication Bahishkrut Bharat: ‘Dalithood is a kind of life condition that characterizes the exploitation, suppression and marginalization of Dalit people by the social, economic, cultural and political domination of the upper castes.’
9 Interview, New Arasinakunte, June 2015. To clarify, the farmer is saying they were bonded by obligation and threat from upper-caste members, and thus obliged to give up their labor power for free; they were not necessarily bonded by financial debt, but that was also true for many. These were the conditions identified in interviews occurring on the northern periphery of the city, but not necessarily elsewhere.
10 Employees of the spatial mapping firm originally hired in the mid-2000s to create Bengaluru’s first comprehensive plot-by-plot mapping of land use for the city’s Master Plan, described to me the number of times their carefully studied and drawn maps were changed by the Chief Minister’s office to include certain plots of land for speculative investments (author interviews 2007, 2008, 2009).
11 Our NSF-funded project on Speculative Urbanism is completing an extensive research project on the eastern periphery and in the city core on the topics of land transactions, financialization, and livelihood effects.
12 This narrative and data come from interviews with senior executives with the firm as well as consultants working for them and sector analysts, as well as an analysis of the largest firms’ annual reports. This was typical of the IPOs in real estate globally on the cusp of the 2008 financial crisis.
13 These findings were derived from our NSF-funded study and the working paper, ‘Financialisation of Real Estate in Bangalore,’ Sanjiv Aundhe, October 2019.
14 Private equity firms like Blackstone make considerable sums from REITs (and other financial tools) in part from the high fees they charge for creating them, fees on every individual transaction (buy/sell), and specific built-in benefits such as incentive fees as high as 15% when shareholders make a profit. Often, the brand itself attracts so many investors: Blackstone REITs sell out quickly, globally, and so its shares go at a premium, which benefits Blackstone handsomely. On top of all this, since Blackstone invested in Embassy when its share price was at its nadir, as soon as Blackstone’s name gets plastered on the marquee, the share price shoots up, even higher when the REIT was first announced. Indian investors, small and large, have been waiting in great anticipation for this first REIT, and all that capital flowing in at premium prices will enable Blackstone to recover its investment plus much more. All of this economic activity can occur, including record profits, without any actual change in the building maintenance or its revenue generation. This is the beauty of financialization for those in control of the financial tool: PE can make its profits detached from the conditions of the physical, material, or activity (e.g. housing completion, office space occupancy, land development), but instead on the anticipation by subscribers of future revenue generation from the financial tool itself.
15 For English-language literature on financialization of land and urban processes in China, see Aveline-Dubach Citation2013; Theurillat et al. Citation2017; Wu, Li, and Lin Citation2016; Ye and Wu Citation2014; Zhang Citation2013; Zhen Citation2013.
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Michael Goldman
Professor Michael Goldman teaches Sociology and Global Studies at the University of Minnesota-Twin Cities. He is the editor of Privatizing Nature: Political Struggles for the Global Commons, author of Imperial Nature: The World Bank and Struggles for Social Justice in the Age of Globalization, co-editing a volume on the Social Life of Land with Wendy Wolford and Nancy Peluso, and finishing a book manuscript on Speculative Urbanism.