Neoliberalism, by definition, is a policy model of social studies and economics that transfers control of economic factors to the private sector from the public sector (investopedia.com). India opened its arms to neoliberal economic policies advocated by the IMF and World Bank in 1991. With the launch of India’s New Economic Policy, the government relaxed its economic regulation of market functioning in order to facilitate the flow of foreign direct investment in order to strengthen India’s economy. Multinational companies were able to operate with greater ease in this new neoliberal India. This major policy shift led to redistribution of wealth in favor of the rich, which manifested in the innumerable towering skyscrapers and luxury condominiums and malls across major cities.
I wish to focus on Mumbai to study the impact of this neoliberal policy in India to show how then lopsided urban development due to neoliberal policies, in favor of the elite, led to social and economic inequality. Furthermore, I would like to describe how the poor in Mumbai, residing in slums, flourish within this inequality of neoliberalism to emerge as heroic entrepreneurs in informal economies. In order to analyze this, I wish to draw on concepts and theories of neoliberalism discussed in the works of Mike Davis, Katherine Boo, Aihwa Ong, Saskia Sassen and Richard Lloyd.
The liberalization of the market in India led to the intensification of capital accumulation.Following the wave of economic globalization through liberalization, cities like Mumbai, have become interested in wooing the real estate and builders to redevelop slums and dilapidated open spaces on a commercial basis to transform the face of the ‘urban’ altogether. This led to urbanization which in turn led to the expansion of the capitalist system. Hence, neoliberalism and capitalism have a dependent relationship, where one fails to exist without the other. Aihwa Ong discusses this interdependence in ‘Worldling Cities’ by stating that a city should not be viewed as an exclusive site of capital but as a constantly forming milieu that possesses a global significance. She also states ‘Spectacular architecture is often viewed as the handiwork of corporate capital in the colonization of urban markets’, in ‘Hyperbuildings’ ; she suggests the importance of ‘spectacle’ to accumulate capital in the neoliberal urban setting. She also mentions the importance of radical architecture in bringing Asian cities to the global stage.
This process is evident in the innumerable skyscrapers and architectural marvels that appeared in Mumbai in the early 2000s. The architecture in Mumbai reflects the motive of India’s neoliberal policies to bring in more foreign investment. In order to attract international multinational corporations, Mumbai used spectacular architecture.
Furthermore, she mentions the cruciality of neoliberalism in the art of becoming global. She defines ‘neoliberal’ as a logic of optimization (Rose, 1999) that maximizes the benefits derived from the particular structures of governing. Specifically in Mumbai, neoliberal policies are the reason behind the rapid growth and urbanization of the city which have made it globally prominent.
In addition to this, she mentions how ‘neoliberal techniques in urban governance are, however, rather unevenly and differently deployed in South Asian situations” (21). Despite the urbanization and spatial redevelopment in Mumabi, the aspect of urban population explosions hinders equal development. India is the second most populated country in the world (infoplease.com). For this reason, the rapid and unprecedented growth of city populations is inevitable. Mike Davis, in the ‘Planet of Slums’, discusses how Indian cities have burgeoned due to unprecedented population influxes. Whereas, China adopted neoliberal policies to create ‘a more balanced urban hierarchy of industrial investment and population’ (7). Ong attributed this to ‘the influx of dispossessed peasants and/or the rise of the middle classes – as, for example, in Mumbai’. She furthers the conversation by mentioning the inevitability of variations in class compositions as ‘one cannot attribute urban expansion to a single collectivity or homogenized demographic, such as slum-dwellers’. Hence, inequality in cities is merely a function of neoliberal urbanism.
Indian cities drastically reshaping themselves to become the core centers of investment of big capital. By using neoliberal economic policies to their benefit, Indian corporations have repositioned themselves on a global scale to extend India’s economy to a global stage. This economic globalization restructured India’s economy. Neoliberal urbanism by definition includes privatization, restructuring, and elimination of public goods and municipal services. As the government developed policies to reduce state intervention in Mumbai, growth became increasingly lopsided. For example, Mike Davis mentioned how ‘the neoliberal Janata government financed itself with the massive privatization of state industry; Enron sells electricity near Mumbai at thrice the rate of public utility.
Saskia Sassen discusses inequality in a different manner in ‘Globalization and its Discontents’: as a result of globalization. She raises the question of whether or not a city recovers the cost of inequality and disparities that emerge when neoliberal policies of deregulation and privatization creates a globalized market. Inequality and disparity between corporate actors (overvalorized) and disadvantaged workers in global economy (under-valorized) raises questions regarding ‘rights to the city’.
In India 32 per cent of the population live in urban areas of whom 26 per cent live below official poverty line and 40 per cent do not have proper housing. 70 per cent of the urban employed are engaged in the informal sector. Slums occupy about 6 per cent of land in cities like Mumbai offering shelter to nearly 60 per cent of the city’s population. This means that the remaining 94 per cent of the land is used by 40 per cent of the residents. (Banerjee-Guha). In Davis’ ‘Planet of Slums’, he states ‘Bombay, according to some urban geographers, may be the extreme: “While the rich have 90 percent of the land and live in comfort with many open areas, the poor live crushed together on 10 percent of the land.” Ong mentions the harms of frenzied overbuilding in both ‘Hyperbuildings’ and ‘Worldling Cities’ to show how this practice can cause potential harm to the cities by developing cities in an economically lopsided manner. Davis, too, owes the development of slums to over-urbanization under the neoliberal regime. He blames the creation of slums to the lopsided urban development following neoliberal urbanism, characterized by the the socio-economic restructuring of the urban population; While the middle class became richer due to the a high-tech boom and stock-market bubble created by neoliberal policies of 1991, the defeated rural poor began killing themselves. As the despair increased in the countryside, rural populations thronged to cities in order to improve their living conditions. These individuals were faced with the problem of housing in their over-urbanized city. Hence, slums developed as a response to this issue.
While his work only briefly mentions ‘Dharavi’, Asia’s largest slum that is situated in Mumbai, I wish to focus on it in order to explore the social and economic inequalities in Mumbai and their effects on the residents of Dharavi. The history of Dharavi is closely intertwined with the migratory patterns of rural populations seen by Mumbai. Present-day Dharavi is a mosaic of villagers from all across India. Dharavi’s growth illustrates the problems associated with neoliberal urban development; I will primarily discuss problems relating to ‘rights to the city’ and increasing precarity of work for these slum dwellers.
In a city that has the highest number of skyscrapers yet houses Asia’s largest slum, the inequality functions of neoliberal urbanism become evident. The contrast of luxury and poverty present in Mumbai is discussed by Katherine Boo in ‘Behind the Beautiful Forevers: Life, Death and Hope in Mumbai Undercity.’; I will be discussing her work further in the essay. As previously mentioned, Sassen discusses how individuals burgeoned with socio-economic inequality struggle to claim their right to the city. The concept of ‘right to the city’ is also discussed by Richard Lloyd in ‘Neo-Bohemia: Art and Commerce in the Postindustrial City’, which will be elaborated in the following paragraphs.
The government continuously attempts to ignore the existence of slums while making efforts to demolish them. Despite these efforts, slums have continued to remain areas of settlement. However, their occupants are consistently reminded of their ‘illegal status’. This ‘illegality’ induces the vicious cycle of slum dwellers being pushed from one uninhabitable land to another, from one slum to another.
Despite this precarious existence, slum dwellers in Mumbai have created creative enterprises and industries in the ‘illegal’ areas. ‘Informal Economies’, defined by Sassen as ‘those income- generation activities occurring outside the state’s regulatory framework that have analogs within that framework’ emerged in the slums of Mumbai in order to cope with the structures of inequality created by neoliberal urbanism. Sassen owes the creation of inequality through economic polarization of the economy to the transformations to the economic structure of a city; the restructuring of India’s economy through privatization and deregulation caused growing inequality in urban cities.
As Boo discussed Annawadi, a slum in Mumbai, she discusses how Annawadi became increasingly commodified and misused as Mumbai’s precocious growth led to growing inequalities; The alternate economies were created in response to the marauding capitalist economy that refused decent employment to these poor; alternate economies of garbage collecting, fishing, and owning liquor stills and brothels emerged as a response to the rejected by the mainstream capitalist economy.
By using Lloyd’s concept of how ‘neo-bohemia’ makes sense in the context of flexible, global capitalism. He uses the example of Wicker Park to elaborate how ‘traditional do-it-yourself ethos of bohemia fits in well with the entrepreneurial imperatives of neoliberal capitalism’ (Lloyd, 245). In order to put this into context of Dharavi, Dharavi has provided gainful employment to millions in the various industries that categorize its lanes. From apparel to accessories, from baked goods to gold chains, from excellent leather goods to toothpaste, Dharavi’s informal sector produces an annual turnover of USD 600 million- USD 1 billion (dharavimarket.com). The entrepreneurial instinct of each resident of Dharavi is evident when one travel through its lanes on a guide tour provided by a Dharavi dweller; each inch of Dharavi is used for productive activity. Dharavi is, hence, ‘enterprise’ personified, it is free from state intervention and has used its ‘illegality’ to brand itself an ‘enterprise’.
The state is forced to recognize the status of Dharavi residents as ‘citizens of Mumbai’ since the informal industries within Dharavi provide employment to millions and the population is an irreplaceable vote-pool to politicians. For this reason, Dharavi has received public utilities of sanitation and water facilities with significant redevelopment.
A Neoliberal City one where the mode of governance, the social structures and urban development expresses the neoliberal view of a free market utopia. Mumbai serves as the poster child of the ‘Neoliberal city’ in India; reduced state interference led to privatization through deregulation of the market. This further impacted the social structure in Mumbai to create polarizing inequality. This resulted in urban development of Mumbai wherein soaring skyscrapers, reflecting wealth and luxury, were neighbors with slums, characterizes by squalor and poverty. However, on focussing on one such slum, called Dharavi, one can see how informal economies emerge within the neoliberal urban setting to improve lifestyles. The lives of Dharavi residents tells the story of survival and heroic entrepreneurship despite hostility from the state and society; they emerged as successful citizens of Mumbai despite being deemed ‘illegal’.
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