doi:10.1016/j.cities.2006.06.001 Cities, Vol. 24, No. 2, p. 95–109, 2007 Ó 2006 Elsevier Ltd. All rights reserved. 0264-2751/$ - see front matter www.elsevier.com/locate/cities Regional industrial policies driving peri-urban dynamics in Hyderabad, India Loraine Kennedy *,1 CNRS, Centre d’Études de l’Inde et de l’Asie du Sud (CNRS-EHESS), Paris, France Received 1 July 2005; received in revised form 4 April 2006; accepted 5 June 2006 Available online 16 February 2007 Between 1995 and 2004, regional political elites in Andhra Pradesh sought to transform greater Hyderabad into a dynamic economic region oriented toward global growth sectors. Inspired by the infrastructure-led growth model, a dominant strategy consisted in fitting out, via public–private partnerships, specialised business/technology parks and attracting investment through carefully designed industrial policies. This study focuses on regional IT policies, with attention to the strategic use of peri-urban space and examines the construction of HITEC City and other large-scale projects. Using a multi-level perspective, the Hyderabad case is contextualised in relation to India’s recent adoption of economic reforms. Recent literature on global city-regions and the development of global capitalism provides a macro framework for analysing the role of a provincial government both in initiating and driving industrial and urban dynamics. State re-scaling or re-territorialisation in particular is a compelling concept for interpreting the strategies examined here, which aim to promote the competitive advantages of Hyderabad in global economic processes by adapting institutional and regulatory infrastructures. At the micro level, the analysis focuses on how policies are played out in peri-urban spaces, and the implications for urban governance are discussed. Although economic strategies have been fairly successful, top-down decision-making practices have effectively excluded many local actors from the policy process, and the creation of special purpose enclaves in suburban areas has weakened prospects for the development of governance institutions at the metropolitan scale. Ó 2006 Elsevier Ltd. All rights reserved. Keywords: Global city-regions, peri-urban dynamics, reterritorialisation, state re-scaling, urban governance, Hyderabad, India Introduction infrastructure-led growth, a dominant strategy consisted in fitting out specialised business/technology parks and attracting investment through carefully designed industrial policies.2 This study examines these recent state-led efforts to promote growth in Andhra Pradesh, a state of 76 million people, with special attention to the impli- Hyderabad is the capital of the southern Indian state of Andhra Pradesh and constitutes the core of its largest metropolitan area (population 5.7 million). Between 1995 and 2004, the state government sought to transform Hyderabad into a dynamic economic region oriented towards global growth sectors. Inspired by international models such as 2 A preliminary version of this text was presented in New Delhi at the international workshop on ‘‘Peri-urban Dynamics: Population, Habitat and Environment on the Peripheries of Large, Indian Metropolises’’, organised by the Centre de Sciences Humaines and the India International Centre, 25–27 August 2004. * Tel./fax: +33-556-24-7115; e-mail: kennedy@ehess.fr. 1 Administrative address: CEIAS, EHESS, 54 Boulevard Raspail, 75006 Paris, France. 95 Regional industrial policies driving peri-urban dynamics in Hyderabad, India: L Kennedy cations for peri-urban spaces around Hyderabad. The transformations currently underway include the emergence of new industrial and service activities, the realisation of large investment projects involving ‘‘world-class’’ infrastructure, and the construction of new housing colonies and commercial ventures catering primarily to upper income groups. Using a multi-level perspective, the aim of this paper is to analyse how regional industrial policies are playing themselves out in Hyderabad’s peripheries and their consequences for urban governance. This case is situated both within its wider political and economic context and with regard to recent literature on the renewed role of cities in post-fordist capitalism. It is argued that recent developments in Hyderabad, quite remarkable in the Indian context, are the outcome of a process of political assertion on the part of the regional government in the sphere of economic policy-making. The policies can be interpreted as a strategy of re-scaling on the part of the provincial state, in an attempt to adjust its actions to the imperatives of the global economy. Through such processes of reterritorialisation, similar to that described by Brenner (1998, 2004), the aim has been to make metropolitan Hyderabad a growth engine for the entire region. These policies have been successful in many respects, attracting private firms both domestic and international and creating wealth and employment. At the same time, they have raised important questions with regard to urban governance. Private sector actors have emerged on the scene, for instance as builders and managers of infrastructure complexes, mainly through public–private partnerships. In contrast, locally elected representatives have been largely excluded from the policy process, as have civil society groups, learning about major decisions only after the fact. Large tracts of peri-urban space are being transformed into special purpose enclaves, governed by specific regulatory frameworks. By subdividing peri-urban spaces and increasing spatial differentiation, such policies appear to weaken prospects for governance institutions at the metropolitan scale. Method and context The research presented here is based on information collected during several study trips to Hyderabad between 2002 and 2006. Although essentially an empirical study, it engages with recent theoretical literature in order to interpret and situate local developments. The method involves several layers of analysis. Although the study focuses on regional industrial policies and their interaction with the metropolitan region of Hyderabad, it is crucial to place the analysis within the Indian context, where economic liberalisation has spurred important changes and where the federal set-up requires taking into account several superimposed spatial scales. It should be recalled that the state (regional) political 96 sphere is partly subsumed within the national polity, although separate elected bodies exist at each echelon (national, state, and local), and the Indian economy constitutes an integrated market for all practical purposes. India’s economic reforms, adopted by the federal government in 1991, constitute an important backdrop to this analysis because they have deeply affected economic and political processes in the country at all levels. Of particular interest is the fact that as the federal government loosened its centralised control over the economy, some state-level governments began taking initiatives to promote growth and attract investment, giving rise to regional economic policies for the first time in post-independence history.3 Although macro-economic policies remain the prerogative of the central ministries, it has been convincingly shown that state governments have a decisive role to play in the reform process, with regard to both the scope and the pace (Jenkins, 1999).4 Regional political elites are discovering that they can craft their own strategies, prioritise their public investments, and negotiate directly with foreign investors. Between 1995 and 2004, Andhra Pradesh stood out as one of the more pro-active states, and has arguably taken economic reforms further than any other state.5 In addition to economic reforms, political developments, notably the formation of coalition governments at the national level, have given regional political parties greater influence in national affairs. Although it will not be elaborated upon here, this evolution is important in explaining how Andhra Pradesh’s state government managed to assert itself so effectively in both national and international fora. Two facts are of particular importance: during the period under study, the government was led by a regional political party, the Telugu Desam Party (TDP), which had been demanding greater decentralisation from New Delhi since its creation in the 1980s. Secondly, the TDP was a major partner in the national coalition government between 1999 and 2004, giving it a distinct advantage in its negotiations with the federal government. From these brief remarks, it is apparent that economic reforms and political change are contributing to the emergence of new forms of governance in India and this study is an attempt to examine this process. There can be no doubt that economic reforms have deregulated many aspects of production and trade, facilitated private investment, including for- 3 India gained independence from Britain in 1947. As Sinha points out (2004), many state governments are reregulating as the federal government delegates more and more decisions to them, thereby leading to a new layer of bureaucracy and differentiated rules and regulations across national space. 5 Although less far than the state’s political rhetoric would suggest. See Kennedy (2004), Kirk (2005), and Mooij (2005). 4 Regional industrial policies driving peri-urban dynamics in Hyderabad, India: L Kennedy eign direct investment, all of which have increased competition. However, it will be evident in the course of this narrative that state forces continue to play a crucial role in the economy at both the national and regional levels where they are increasingly compelled to adapt to a more competitive environment and to more stringent fiscal constraints. It is in this context that Indian cities, after years of neglect, are receiving renewed attention from policy-makers at the central and regional levels.6 One reason is that since the start of reforms, investments have concentrated in urban areas. The growing contribution of cities to national income, and their potential to act as growth engines have spurred efforts in recent years to improve basic urban infrastructures and strengthen municipal finance. It is striking to observe how policy-makers have been inspired by international examples, and how they are adjusting their strategies to global market conditions. As indicated above, one of the objectives of this analysis is to explore the ways that specific, localised strategies interact with global economic processes. Recent theoretical work provides some compelling insights and suggests a number of hypotheses. It will be seen that whereas the Hyderabad case validates certain trends discussed in the literature it also diverges in some respects from other contemporary patterns. Interpretive frameworks Much current literature on large cities and their articulation with the global economy emphasizes the influence of exogenous forces shaping outcomes, especially footloose capital, multinational firms and international aid agencies. This is a compelling perspective for several reasons: it appears to corroborate the widely held view that globalisation has led to a retreat of the nation-state; it corresponds to perceptions about the rapid changes taking place in large metro areas in the developing world, such as the mushrooming of commercial and entertainment centres; lastly it explains the conspicuous presence of multi-national firms in places where they were previously absent. However, this ‘‘global forces’’ perspective tends to conceal the fact that public actors too are actively shaping urban outcomes, taking the decision to leverage their large cities to better attract global investment flows. States are ‘rescaling’ their internal institutional hierarchies to adjust to economic realities; state territorial power is being rearticulated and reterritorialised (Brenner, 2004). Following Brenner, whose work has focused on the 6 It may be recalled that one of the goals of centralised economic management was balanced regional development and planned urbanisation. Indeed, to avoid massive migration from the countryside, and ‘‘uncontrolled’’ urban growth, policy-makers consciously strove to make large cities unattractive by blocking productive investments and neglecting infrastructure (Dupont, 2002, p. 73). European context, cities are at once ‘‘coordinates’’ of state territorial power, embedded within larger state institutions, and sites of reterritorialization for post-Fordist forms of global industrialisation where they function as ‘‘nodes of accumulation’’ in global flows (1998: 3, 17). Concretely, this means promoting the productive capacities of specific localised spaces in urban regions, for instance through the creation of immobile assets like conference centres or enterprise parks. This re-scaling hypothesis will be examined here, in relation to emerging trends in India’s metro cities, which mirror those observed in other urban regions that aspire to ‘‘global city’’ status. The ‘‘global city-region’’ perspective also offers an attractive framework for analysing the Hyderabad case (Scott, ed, 2001), although a closer examination reveals an important discrepancy, which will be discussed later in the paper. In this literature, city-regions function as the basic motors of the global economy and their development is intimately linked with globalisation: ‘‘They function as territorial platforms for much of the post-Fordist economy (. . .) and as important staging posts for the operations of multinational operations. Above all, they are important centers for flexible-manufacturing sectors, as exemplified by high-technology or neoartisanal industry, and for service sectors, . . .’’ (Scott, 2001, p. 4). Like in the case of rescaling strategies, global city-regions are emerging as a result of efforts to strengthen regional competitiveness and face the challenges of globalisation. In most cases, this strategy involves consolidating the metropolitan territory by bringing together fragmented territorial units in order to build regional political competence (Scott, 2001). It underscores the importance of political leadership, of the state and other organised actors, both local and supra-local. The term ‘governance’ is used in this paper with the following meaning in mind: ‘‘Governance, as distinct from government, refers to the relationship between civil society and the state, between rulers and ruled, the government and the governed’’.7 Given the particular focus of this study, Jefferey Sellers’ definition of ‘urban governance’ provides a useful complement by underscoring the economic dimension of cities: ‘‘actions and institutions within an urban region that regulate or impose conditions for its political economy’’ (Sellers, 2002, p. 9). Regional growth policies and Hyderabad’s peri-urban areas As indicated above, economic reforms and political change are redefining relations between the federal government and the states, and have effectively contributed to a form of political decentralisation. From the point of view of the states, one of the trade-offs of 7 McCarney et al. (1995, p. 95), cited by Stren (2001, p. 205). 97 Regional industrial policies driving peri-urban dynamics in Hyderabad, India: L Kennedy decentralisation is that they are required to take on greater responsibilities in resource generation and sound fiscal management. States have reacted differently to these opportunities and constraints and have adopted various approaches with regard to empowering local governments including their largest cities. Most states, including Andhra Pradesh, have been reluctant to cede significant powers to elected municipal councillors, or indeed to include them in decisions that directly affect their constituencies. Economic policies in particular are considered to fall outside the purview of local governments, although the 74th constitutional amendment ratified in 1993 advocates extending their functions to include planning for economic and social development. Soon after Chandrababu Naidu took over as Chief Minister8 in 1995, the government of Andhra Pradesh announced a series of policies to stimulate growth and economic development. It openly endorsed economic reforms, which marked a rupture with earlier practices and rhetoric of the TDP, and indeed of previous Congress governments in the state, both of which followed regimes that can be broadly classified as populist.9 A detailed policy document released in 1999, Andhra Pradesh: Vision 2020, put forth a ‘‘new and comprehensive growth agenda’’ based on a threefold approach consisting of building capacity, focusing on high-potential sectors to be mobilised as engines of growth, and transforming governance, namely ensuring transparency and accountability of government and a strong voice for the population (Government of Andhra Pradesh, 1999, p. 10). The aim was to profoundly modify the state’s economy in order to favour it integration into the national and global economies. Clearly the idea was to ‘‘leapfrog’’ conventional development stages, i.e. labour-intensive manufacturing, and take advantage of opportunities created by new technologies to break into knowledge intensive, high value added sectors with strong growth potential.10 The tremendous capital investment required for this massive restructuring project was to be provided by the private sector, while the role of the state was to facilitate by providing a conducive atmosphere for business, including administrative transparency and strong legal institutions. Governance reforms were thus emphasised as part of the overall strategy for the making the state an attractive place for business, 8 This position is the regional equivalent of a Prime Minister. The TDP was founded in the early 1980s as an oppositional force to the Congress party, which had dominated state politics without interruption for about thirty years. The TDP was largely constructed on the basis of Telugu regional identity, which crystallized during the colonial period and combines linguistic and territorial dimensions. 10 It was proposed, for instance, that agriculture’s contribution to state domestic product be reduced over twenty years from 33% to 12% and that the service sector’s contribution be increased from nearly 50% to 67%. especially in the global growth sectors, where international standards are considered de rigueur. What is particularly relevant for the perspective examined here is that the government’s efforts to promote growth largely focused on cities, and on Hyderabad in particular. It is not an exaggeration to say that in the decade from 1995 to 2004, Hyderabad’s peri-urban areas provided a laboratory for the implementation of several key strategies like infrastructure-led growth and a focus on global growth sectors such as IT and biotechnologies. Although the spectacular development of the IT industry in Hyderabad can be explained in part by the presence of an existing industrial base11, the main reason is no doubt the policy thrust given by Naidu’s government. Indian and international entrepreneurs have responded positively to a series of generous investment incentives including an attractive location and state-of-the-art telecommunications infrastructure. Industry-friendly policies for the IT sector Naidu’s government designed specific policies for developing IT and related services. In 2002, the Andhra Pradesh government released a new ICT policy, replacing the 1999 policy, which outlined incentives and investment subsidies available to IT hardware and software industries, as well as to the IT service sector, called ‘‘IT Enabled Services’’ (ITES) (Government of Andhra Pradesh, 2002). The latter are also known as business process outsourcing (BPO), and include such services as medical transcriptions, accounting and billing services, call centres, and also engineering design. The policy extended some of the incentives to IT infrastructure companies, such as those building IT parks, and to telecommunications companies. Numerous incentives were designed to attract investment to the IT sector, many granted automatically, such as: exemption from purview of statutory power cuts, exemption from inspections under most labour laws12 in exchange for self-certification, and permission for three-shift operation. Incentives that are not automatic but for which a company may apply include: a 25% rebate in power tariff, a 50% reimbursement of registration fee, stamp duty and transfer of property duty, exemption from zoning regulations, and a rebate on the cost of land. (Government of Andhra Pradesh, 2002). The last two items are particularly relevant for this study, as they have a direct impact on peri-urban spaces. 9 98 11 Interview by author, J.A. Chowdary, former director of the Bangalore and Hyderabad branches of the Software Technology Parks of India, in Hyderabad, 23 November 2002. 12 These include: The Factories Act 1948, The Maternity Benefit Act 1961, The Contract Labour Act 1970, The Payment of Minimum Wages Act 1936, The Employment Exchanges (Compulsory Notification of Vacancies) Act 1959. Regional industrial policies driving peri-urban dynamics in Hyderabad, India: L Kennedy IT software units have been exempted from most zoning regulations including those designated as conservation/agricultural use, residential use, commercial use and institutional use, and from payment of conversion charges (Government of Andhra Pradesh, 2002, Annex IV). IT parks, including those developed by private builders, are also exempted from these same zoning regulations, with the exception of land designated for agricultural use, and here also land-use conversion charges are waived. It is interesting to note that these parks must meet certain conditions laid out in the policy i.e., minimum area of 4000 square meters, provision of telecommunication infrastructure such as optic fibre connectivity, and access to the satellite earth station (Government of Andhra Pradesh, 2002, pp. 9–10). 100% on-site power back-up to support office equipment and lighting must be provided, and in terms of amenities, all buildings must meet minimum floor space and floor to ceiling norms, and provide airconditioning and parking, as well as 24-h security. With these strict mandatory requirements the state government clearly wants to ensure a minimum level of quality in infrastructure, to meet its claim that Hyderabad’s IT environment meets international standards.13 Rebate on government land A rebate in the cost of land is a key provision of the IT policy linking financial incentives in the form of land rebate to employment creation. IT companies can receive a rebate of 20,000 Rupees14 per job created, to be put toward the cost of undeveloped land. In order to avail of the rebate, a minimum number of 100 employees must be hired.15 Interestingly, the policy also includes an incentive for paying higher salaries: for employment to be considered, the minimum gross salary must be 5000 Rupees per month. The land rebate provision clearly illustrates the government’s direct participation in identifying specific zones in which IT companies can establish themselves, and its willingness to use public resources, here government-owned land, to buttress its growth policies. The rebate only applies to lands allotted by the government and its agencies, primarily the Andhra Pradesh Industrial Infrastructure Corporation (APIIC), the main body in charge of 13 The ICT Act includes a second list, which outlines optional but ‘‘desirable amenities’’ for IT parks that include a food court and a health club (‘‘equipped with an aerobics studio, games area, karaoke lounge . . .’’). It is stated that large parks (over 1,000,000 square feet or 93,000 square metres) are expected to plan for residential, retail and entertainment infrastructure (Government of Andhra Pradesh, 2002, p. 11). 14 One Rupee is worth approximately 0.019 Euros, or expressed differently, one Euro is worth about 54 Rupees (January 2006). 15 Companies availing of this rebate are not eligible for other incentives such as investment subsidy, exemption of stamp duty, etc. developing industrial estates and facilitating large investment projects. In the case of Hyderabad, the plots offered by the government are located mainly in the peri-urban areas on the city’s periphery. In particular large tracts have been reserved in the western periphery for specialised parks, like HITEC City (cf. below), where numerous large firms have set up office space on extensive campuses. Policy-makers in Naidu’s government gave particular emphasis to ITES, which has a greater capacity to create employment and where Hyderabad is considered to have strong potential. This is a fast-growing sector in the global economy, around 60% per year for off-shore, and India is well placed to benefit from this market.16 According to data provided by a government agency, Hyderabad had the fastest growth rate in India for ITES between 2000 and 2002, measured in terms of export value of services. It should be noted, however, that in absolute value terms, its exports were far behind the National Capital Region (including Delhi, Gurgaon, and Noida). Hyderabad’s advantages include a large number of graduates (B.Sc/B.E./B.Com), and relatively lower wage rates than other metro cities in the country. In order to promote this fast-growing sector, ITES was declared as an ‘‘essential services’’ industry and companies are authorized to operate 24 hours a day, 7 days a week, 365 days a year. Among financial incentives for this sub-sector, an investment subsidy of 20%, up to a limit of 2 million Rupees (approx. 354,400 Euros), is available. To meet the labour requirements, the government set up a subsidized training facility specifically geared for call centre operations.17 This pragmatic stance offers further evidence of the state’s determination to actively steer the growth process, and not wait for market forces to lead. Building HITEC City on the periphery of Hyderabad In addition to creating a conducive policy environment, Naidu’s government was the main driving force behind the realisation of HITEC City i.e., Hyderabad Information Technology Engineering Consultancy City, a large-scale industrial park dedicated to IT and related activities. HITEC city is situated about 20 km from the centre of Hyderabad, towards the west, and approximately the same distance from the airport (see Figure 1). It is the result of a public– 16 It is estimated that India captured 55% of the total market of outsourced services in 2002. The sectors most concerned are banks and financial services, followed by telecommunications and industry. 17 According to an official interviewed in early 2003, the government saw its role here as temporary and planned to withdraw as soon as private sector companies came up to take over. Interview by author, Sulaksh Dikshit, AP First manager (marketing), 3 April 2003. 99 Regional industrial policies driving peri-urban dynamics in Hyderabad, India: L Kennedy Figure 1 HITEC City in Hyderabad’s western suburbs. private partnership (PPP) between the government, through the APIIC, which provided the land in the form of equity, and a private promoter, which manages the park. Located on a large campus, nearly 65 ha, the concept and site are explicitly modelled on successful international examples (Hsinchu Science-based Industrial Park in Taiwan, and Research Triangle Park in North Carolina). The main architectural features of the first phase of HITEC City are three large office buildings: Cyber Towers, a tenstory futuristic high-rise inaugurated in November 1998, Cyber Gateway, a larger complex completed in 2001 and Cyber Pearl in late 2004 (see Figure 2). In this same locality, the government is involved in a second large-scale PPP called ‘‘Mind Space’ covering 45 ha, currently under construction (see Figure 3). Besides the main office buildings, which offer fully equipped ready-to-purchase or lease space, 50% of the HITEC City campus is reserved for private firms wishing to erect their own facilities. Moreover, in the vicinity numerous Indian and international firms, including famous names like Infosys, Wipro and Microsoft have established their own offices on plots designated by the APIIC.18 The infrastructure facilities that are extended to these customised premises include: roads, water supply, drainage, street lighting and provision for data and voice connectivity. Interestingly, the APIIC, the public agency that built 18 Some of these plots, which are provided by the government at nominal cost as part of the overall IT policy, are as large as 24 ha. 100 much of the basic infrastructure here is the ‘‘deemed local body’’ i.e., the local administration, for this entire zone and constitutes the interface between the firms and various utilities, regulatory bodies, and branches of government. It should be noted here that the architectural style of HITEC City and of the large office buildings built by IT firms, the vast landscaped campuses, and the remarkable quality of the roads mark a striking contrast with the surrounding environment, which is generally dry and rocky and poorly equipped in basic infrastructure. In this way, HITEC City is actively contributing to the formation of highly differentiated ‘‘mixed spaces’’ midway between urban centres and rural spaces that characterise periurbanisation (cf. Dupont’s introduction to this issue) (see Figure 4). Apart from the spatial and environmental impacts of such large-scale projects, the increasing importance of private actors in providing and managing infrastructure has important implications for urban governance. PPPs have played a critical role in HITEC City, and also for setting up the reputed International Institute of Information Technology, an engineering school that offers specialised training courses through ‘‘corporate schools’’ sponsored by prominent IT firms. On its own, the private sector has set up numerous educational institutions in the immediate area, including exclusive residential schools. The Indian Business School was established in partnership with several internationally recognised management institutions including the Kellogg Regional industrial policies driving peri-urban dynamics in Hyderabad, India: L Kennedy Figure 2 Cyber Pearl, HITEC City. Photo credit: L. Kennedy. School of Management, the Wharton School and the London Business School. These specialised institutions reflect the global orientation of the economic policies and the preference for private sector service providers, ostensibly as a gage of quality and transparency. Performance of the IT sector Various indicators show that the IT sector has developed quite significantly in recent years, and it appears to be one of the more dynamic sectors in the city.19 Based on data concerning large investment projects, IT investments in HITEC City and surrounding area were estimated to account for over 70% of the total investments under implementation in Hyderabad in the late 1990s (Shaw, 1999, p. 976). Public sector spending, mainly on infrastructure, was estimated at less than 10% of total, but this figure may not take account of public equity in the form 19 There are no official city-level economic statistics produced in India, so estimates have to be used. of land. According to the Hyderabad branch of Software Technology Parks of India (STPI)20 software exports from Andhra Pradesh increased from roughly 13 million dollars US in 1995–1996 to more than one billion dollars in 2003–2004 (1109 million USD). In the same period, the number of companies registered with STPI and in operation rose from 31 to 860, providing employment to nearly 86,000 persons, of which nearly 77,000 are technical staff. All but 80 of these units are located in Hyderabad and surrounding suburbs. The break-down of exports by sub-sector, presented below (see Table 1), gives an indication of the structure of the industry. ITES have been on the rise in the last few years and now generate roughly half of total exports. 20 Software Technology Parks of India is an autonomous agency set up in 1990 by the Ministry of Communications and Information Technology, Government of India. I thank Bart Rijken for the compiled figures. 101 Regional industrial policies driving peri-urban dynamics in Hyderabad, India: L Kennedy Figure 3 Construction at HITEC City. Makeshift camps for construction workers and their families in the foreground, Cyber Towers in the background. Photo credit: L. Kennedy. Notwithstanding the remarkable performance of IT industry in Hyderabad, it is no doubt still too early to evaluate the capacity of HITEC City to sustain its growth and develop into an innovative industrial district. Be that as it may, it is undeniable that government-led efforts have resulted in new investments and put Hyderabad on the map as a high-tech hub in India, alongside Bangalore and Chennai. The making of place: Cyberabad ex nihilo In January 2001 the government of Andhra Pradesh created the ‘‘Cyberabad Development Area’’ (CDA) with the purpose of developing a large area around HITEC City into a model enclave (see Figure 5).21 The stated goal: to create an enclave that ‘‘will become a model for other urban areas in the country by providing clean air and water, high quality of services such as sanitation and waste management, and the best standards of power, housing and 21 See Government Order Ms No. 21 MA, dated 20 January 2001. 102 transport’’ (Government of Andhra Pradesh, 2001, p. 1). A Master Plan for CDA was drawn up with the help of special consultants defining specific land use zoning regulations and building regulations in order to ‘‘provide a framework for the creation of high quality infrastructure’’. To finance the creation of capital infrastructure such as road and urban amenities, the plan provides for raising resources internally by way of user charges, but also external betterment charges, and changes in the structure of property tax and recovery rates. The area, which covers 52 square kilometres, was carved out of Seriligampally Muncipality and consists of 17 revenue villages (cf. Figure 6). Currently the cluster around HITEC City, with its impressive buildings and state-of-the art infrastructure, occupies only a small portion of CDA. Although numerous commercial and residential buildings are under construction, primarily along the main roads, there are still plenty of open spaces. Major efforts have been undertaken to connect the area to the city, via wide well-maintained concrete roads, and Regional industrial policies driving peri-urban dynamics in Hyderabad, India: L Kennedy Figure 4 Peri-urban mixed spaces: herding (foreground) and HITEC City (background) in Cyberabad. Photo credit: L. Kennedy. Table 1 Sector-wise exports by STPI-Hyderabad units in 2003– 04 (%) ITES Application software System software Application re-engineering E-commerce/web applications Consultancy services Communication software ERP/client server VLSI and embedded software 46.70 10.50 7.30 4.03 7.50 4.25 7.85 9.37 2.50 Source. Compiled by B. Rijken, with data from STPI, Hyderabad. through a recently inaugurated mass transit commuter train. A new ring road is being built and will facilitate links to the planned international airport at Shamshabad, south of the city. When approaching HITEC City from the centre of Hyderabad the road travels through Banjara Hills and Jubilee Hills, both of which are affluent residential areas. In addition to providing attractive housing opportunities for peo- ple employed at HITEC City, these suburbs offer many amenities such as luxury hotels, restaurants, shops and entertainment. The promoters of HITEC City, and urban planners at CDA have planned housing colonies, commercial buildings, as well as recreation facilities, the idea being to create a selfreliant ‘techno’ township. As Véronique Dupont demonstrated in the case of Delhi, these various efforts contribute to the creation ex nihilo of new areas capable of providing upper income groups with the kind of working and living conditions to which they aspire (2001). These are becoming increasingly self-sufficient areas, capable of meeting all the needs of the residents, and do not appear to be particularly integrated in Hyderabad’s urban fabric. A knowledge corridor bridging Hyderabad and Bangalore In addition to planning numerous specialised enterprise parks in Hyderabad’s western periphery, and 103 Regional industrial policies driving peri-urban dynamics in Hyderabad, India: L Kennedy Figure 5 Cyberabad development area – CDA. promoting private educational and training institutions, Vision 2020 includes plans for a ‘‘knowledge corridor’’ consisting of three high-tech zones, each dedicated to a particular sector of activity: biotechnology/medical research, industrial technologies and IT enabled remote services (Government of Andhra Pradesh, 1999). A schematic map indicates the three zones will skirt around Hyderabad on the western, south-western and southern borders, with extensions from HITEC city toward the south along a planned Hyderabad–Bangalore expressway.22 What is clearly stated is that the government intends to develop a ‘‘large area’’23 to the south of Hyderabad in order to ensure a scale proportionate to the state’s ambitions and to international examples it is trying to emulate: 22 Bangalore, India’s IT capital, is located about 560 km from Hyderabad. 23 A recent press report indicated 20,000 acres (8094 ha). cf. ‘‘More land identified for IT firms’’, The Hindu, 4 August 2005, Hyderabad edition. 104 The State will need to develop a much larger area than HITEC City as the State’s IT hub and equip it with world class facilities. HITEC City is only one square kilometre whereas the US’ Silicon Valley is an 80 km strip and Malaysia’s Multimedia Super Corridor (MSC) is a 750 km strip. By planning a large location early, Andhra Pradesh will be able to avoid the unnecessary congestion that occurred in some states and keep real estate prices at reasonable levels for a longer period of time (Government of Andhra Pradesh, 1999, p. 282). An international airport, to be built and managed by the private sector, is under construction at Shamshabad and is considered a very important element of the overall strategy. About 20 km southwest of the city, it will be accessible by a national highway connecting Hyderabad with Bangalore. Like for Cyberabad, a special statutory authority has been created called HADA, Hyderabad Airport Development Authority. With a jurisdiction of 458 km2, HADA’s mission is to promote planned development in and around the Regional industrial policies driving peri-urban dynamics in Hyderabad, India: L Kennedy to Nizamabad to Nagpur NH 7 N Kukatpally Kukatpally to Mumbai NH 9 Alwal Qutubullapur to Kazipet Serilingampally to Mumbai Kukatpally SC Malkajigiri Kapra CDA Uppal MCH Musi River L.B.Nagar NH 9 Rajendranagar NH 7 Gaddiannaram Gaddi annaram to Vijayawada Proposed International Airport INDIA to Bangalore 10 km Hyderabad ANDHRA PRADESH MCH - Municipal Corporation of Hyderabad SC - Secunderabad Cantonment CDA - Cyberabad Development Area Boundary of Hyderabad Urban Development Authority (HUDA) Municipalities Major Roads Water Bodies Railways Source: HUDA Draft Master Plan (2003) Graphic design : Aimée Lafitte (CNRS, ADES) Figure 6 Hyderabad urban agglomeration (within HUDA area). airport, and act as the coordinator between government and the various agencies concerned. A Master Plan outlines the development strategy, including stipulations on land use and building requirements. Even more so than the area falling under CDA, HADA covers a largely rural area. Shamsabad is the largest settlement with less than 20 000 inhabitants, the remaining settlements are classified as villages and hamlets (HADA Draft Master Plan 2005, p. 12). The 105 Regional industrial policies driving peri-urban dynamics in Hyderabad, India: L Kennedy total population in 2001 was just above 154,000, and it is projected to reach 2 million by 2021.24 Glocal scalar ‘‘fixes’’ and global city-regions Both CDA and HADA resemble textbook examples of ‘‘glocal fixes’’, i.e. place-specific production complexes, which are the outcome of a strategic approach to infrastructure development that seeks to facilitate capital accumulation through intense global-local interaction.25 These fixes, often in the form of science parks or enterprise zones, involve providing excellent quality technical networks and services to attract firms, often custom designed for their needs. This strategy has been interpreted, notably by Brenner (1998, 2004), as a rescaling of the state territorial organisation as it involves the creation of a localised framework for intensifying productive forces, here ‘‘special development areas’’, governed by specific rules and regulations. Instead of applying a uniform regulatory regime throughout the national (or regional) territory, fitting out specialised spaces allows policy-makers to offer what investors are seeking, and what they themselves are unable to provide to the territory as a whole. Rescaling is a compelling concept, and one that appears quite powerful for explaining the current trend of city-focused growth strategies in India, deployed by both central and regional governments. Notwithstanding, rescaling strategies, premised on uneven spatial development, are strongly contested. It is argued in particular that they exacerbate urban fragmentation to the extent that they involve improving services for powerful users while bypassing economically or socially weaker groups.26 Within the HITEC City enclave, there is clearly a case of increasing differentiation in service levels at the local scale, and in this sense it effectively combines global connectivity and local disconnection (Graham and Marvin, 2001, p. 377). However, there has not been a deterioration in local services levels, and in some cases there appears to have been slight improvement. This observation joins other recent scholarship in underscoring the necessity for precaution when transposing across diverse political and cultural situations assumptions about the consequences of specific policies and of ‘‘uneven develop- 24 Some local environmental groups opposed the planned international airport at Shamshabad on grounds that it violated existing statutes protecting water bodies. The public interest litigation filed with the Supreme Court by the NGO, Forum for a Better Hyderabad, was unsuccessful in blocking the plan. 25 These concepts were elaborated in the 1990s by several scholars. See Neil Brenner (1998, 2004) for a discussion and preliminary synthesis of this literature. 26 Stephen Graham defines ‘‘premium networked spaces’’ as follows: ‘‘new or retrofitted transport, telecommunications, power or water infrastructures that are customized precisely to the needs of powerful users and spaces, whilst bypassing less powerful users and spaces’’ 2000, p. 185. 106 ment logics’’ generally.27 In this context, two remarks are in order. Firstly, patterns of social and spatial segregation are best understood within their specific social and historical contexts, and policy choices with regard to public utilities generally reflect broader social institutions (Lorrain, 2005, p. 24). Secondly, in a global context where spaces in developed and developing countries are increasingly in direct competition for capital investment, these strategies may be the most effective, from the point of view of the latter, for overcoming, albeit partially, infrastructural weakness and increasing capacity for promoting economic growth. An evaluation of the consequences would necessarily involve taking into consideration the overall policy approach, including efforts to redistribute wealth generated by these global growth sectors. Weak political mobilisation The growth strategies being deployed in Hyderabad are identical in many respects to those observed in large cities across the globe, in both developed and developing countries. Likewise, one observes similar patterns with regard to the types of economic and commercial activities that are most dynamic (business services, high-technology industries and services, shopping and entertainment complexes). In many ways then Hyderabad manifests key characteristics of global city-regions explored in Scott et al. (2001); not surprisingly it has more affinities with city-regions in developing countries which ‘‘. . . represent the best and the worst of the development process. They are places where highly productive and innovative economies are often in evidence, but they are also places where the multi-faceted market failures, historical imbalances, and brutal power relations of the development process are painfully in evidence.’’ (Scott et al., 2001, p. 26). However, Hyderabad diverges from the global city-region framework in one important aspect, namely the lack of political mobilisation at the metropolitan scale, observed in other city-regions, whose objective is to build regional political competence ‘‘. . . in pursuit of mutual aid and advantage in the face of the mounting challenges that globalization is now bringing to the fore at the local level’’ (Scott, 2001, p. 4).28 City-level political representatives in Hyderabad as well as in the surrounding municipalities have been conspicuously absent from the policy process at every stage, from the broad vision statement to the specifics of sectoral policies. Indeed, even within the administration the planning 27 On Mumbai, see Zérah, 2003. On cities in sub-Saharan Africa, see Jaglin, 2005. For a recent critical appraisal of the ‘‘splintering urbanism’’ thesis elaborated by Graham and Marvin (2001), see Coutard et al. (2005). 28 This point is explored in more detail in Kennedy and Ramachandraiah (2006). Regional industrial policies driving peri-urban dynamics in Hyderabad, India: L Kennedy authorities for the Hyderabad metropolitan area were not consulted about the decision to create CDA.29 In the period examined here, the state government indulged in a classic top-down decisionmaking process, which is emblematic of the political culture in Andhra Pradesh and in many Indian states. Attempts by the central government to strengthen political decentralisation in both urban and rural areas, most recently through constitutional amendments, have not always met with success, although situations vary enormously across regions. Civil society organisations, often with support from international NGOs, continue to demand more effective democratic decentralisation while denouncing political corruption at all levels.30 One key question that arises here, which will require further research, is the extent to which such top-down decision-making, in conjunction with regulatory tools that carve out selected areas for development within largely undeveloped peri-urban spaces, are effectively weakening prospects for participatory urban governance at the metropolitan scale. There is at present a distinct contradiction between the government’s rhetoric, which emphasises its commitment to improving popular participation, and its actions, which have excluded both elected representatives and civil society organisations from the policy process. Greater Hyderabad on the horizon? Interestingly, the state government recently issued a proposal that, if enacted, would lead to the formation of a political entity at the metropolitan level, the Greater Hyderabad Municipal Corporation. This would be formed by merging the municipalities and small towns surrounding Hyderabad.31 This proposal was not publicly discussed before the announcement of the Government Order, again symptomatic of top-down political practices, and met with hostility from the elected councillors of the Hyderabad Municipal Corporation, a majority of whom voted against it (75%).32 The fate of this initiative is unclear at present, but it seems likely that the state government will pursue it, citing the necessity of creating an appropriate management structure for coordinating overall city level systems, (e.g., road network, water supply and drainage network, public transport system, etc.) consolidating 29 Interview with a senior planning officer, Hyderabad Urban Development Authority, Hyderabad 25 November 2002. 30 Lok Satta (People Power) is an example of a powerful NGO, based in Hyderabad, that focuses on political and governance reforms in its pursuit of development goals. See www.loksatta.org. 31 Cf. G.O.Ms. No. 704, Municipal Administration and Urban Development Department, Government of Andhra Pradesh, dated 20th July 2005. cf. http://www.aponline.gov.in/apportal/departments/GosbyDepts.asp. 32 Cf. ‘‘Majority corporators vote aginst Greater Hyderabad proposal’’, The Hindu, 5 August 2005, Hyderabad edition. technical capabilities and improving possibilities for resource mobilisation. Such justifications are no doubt founded, and indeed they are in line with emerging norms at the national level. Locally, the need for metropolitan planning appears ever more urgent as more and more suburban spaces are being developed, albeit selectively as we have seen, increasing spatial differentiation. However, the absence of political debate, indeed the total lack of prior consultation, has soured the proposal for many local political actors and may compromise its ultimate success. A more palatable proposal may be to conserve existing local bodies, while still creating an overarching metropolitan body, perhaps with indirectly elected representatives from the corporation and the surrounding municipalities and towns.33 Given the themes discussed in this paper, it is interesting to note that one of the six reasons listed in the notification for constituting the Greater Hyderabad Municipal Corporation refers explicitly to the state’s economic strategy: ‘‘to make the city internationally competitive with world class infrastructure and services’’. This example illustrates how global models are selectively chosen in Andhra Pradesh: whereas the state government has been very clear about its commitment to city-centric, infrastructure-led growth, it has granted scarce attention to governance issues. The international literature on strategic urban planning stresses the importance of engaging a political process with the major social and economic groups. Although, as Stren points out, the ability of civil society and specific stakeholders to participate in setting the agenda and devising policies depends on ‘‘how well (they) are engaged with municipal institutions, and how much power and effective authority these institutions command.’’ (2001, p. 206, emphasis added). This is a reminder that, even in the event that the Greater Hyderabad Municipal Corporation is created, it will not suffice to automatically transform the relationship between civil society and the state. In Hyderabad, for now, metropolitan governance is dominated by a strong state, which sets the priorities and pursues them in a top-down manner. Although new actors are present on the scene, they tend to represent private economic interests, and the consultation process with the state, to the extent it takes place, is mainly through informal channels. Conclusion The main objective of this paper was to examine how efforts to promote growth in the southern In- 33 This would be less threatening perhaps to the dominant political party in Hyderabad, the Majlis-e-Ittehadul Muslimeen, whose constituency is based in Hyderabad City, and whose political survival is directly threatened by the Greater Hyderabad proposal. 107 Regional industrial policies driving peri-urban dynamics in Hyderabad, India: L Kennedy dian state of Andhra Pradesh are impacting the Hyderabad metropolitan region and the consequences for urban governance. As we have seen, the state government’s growth strategies, based on high-tech industries and services and large-scale infrastructure projects, largely targeted Hyderabad and its peri-urban periphery. To promote the IT sector, a dual strategy was engaged: on one hand, an aggressive policy offers numerous incentives to investors, including concessions on land, on the other hand, specially designed enterprise parks are being built in peri-urban areas through public-private partnerships, and fitted out with ‘‘world-class’’ infrastructure. The analysis focused considerable attention on the case of HITEC City, the most prominent IT park. Of particular interest is the fact that the state government designed a special regulatory framework for the park and for a large area around it, the Cyberabad Development Authority, with the stated purpose of developing it into a ‘model enclave’. It was argued that this regulatory tool constitutes a key component of a reterritorialisation strategy, here the creation of a new territory equipped with excellent quality infrastructure and governed by specific rules, which aim to ensure a certain type of urban development. This example provides a striking illustration of state re-scaling as developed by Brenner (1998, 2004), whereby states seek to adapt to capitalist restructuring by promoting their major cities as key coordinates of rescaled state territorial power. What is remarkable here, with regard to the rescaling literature, is that fact that the strategy is being played out at the regional level. This was analysed as an expression of political affirmation on the part of the state government, whose policy-making capacities have been enhanced in recent years as a consequence of both economic reforms and profound changes in India’s polity. More opportunities for attracting capital, but also greater competition among states, are driving political elites in some of India’s states to devise policies that are responsive to the norms of the global economy. Their efforts concentrate on their largest cities and are characterised by large-scale infrastructure projects, often located in the urban peripheries, public-private partnerships, and also special regulatory instruments. Andhra Pradesh has been at the forefront of these trends. The relatively strong role played by public actors in this case study appears significant in light of the fact that much of the literature on global cities tends to emphasise the predominant role played by exogenous global actors, notably multinational firms. This does not suggest that the latter are not important, indeed their presence is growing; rather it underscores the fact that the regional state is mobilising its considerable powers to shape conditions for investors and for the urban region’s political economy as a whole. In that fundamental 108 sense, the state government constitutes the key actor of urban governance in Hyderabad; indeed other local actors are conspicuously absent from the policy process. Governance continues to be characterised by centralised political institutions. In the economic sphere, interface with investing firms is carefully controlled by government agencies. Such institutional arrangements in conjunction with special regulatory frameworks like CDA and HADA would appear to weaken prospects for governance institutions at the metropolitan scale. Acknowledgements I am grateful to Dr. Véronique Dupont for providing me with an opportunity to present a first draft of this paper at the workshop she organised in New Delhi in 2004. I would also like to thank Dr. Marie-Hélène Zérah for her suggestions, and two anonymous referees for their valuable comments. The usual disclaimers apply. 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