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Industrial Development and Economic Growth:The MEDUPI POWER STATION - A sustainable approach to development and progression?
(Medupi Power Station, Lephalale - Limpopo Province)
This magnificent development project is situated in Lephalale, Limpopo Province. The Medupi Power Station (Medupi, seSotho - rain that soaks parched lands, bringing relief) is a coal-fired power plant with a capacity to supply 4800 MW of power after completion. It was awarded in 2005 and is since one of South Africa's largest and most well known industrial development projects of the last year costing an estimated total of R 100 billion. Eskom, South Africa's only power supplier is both owner and operator of the plant, thereby involving the South African government, which is its only shareholder.
The project caused great controversy at national level as the ruling party ANC has a financial interest in its establishment. Moreover the decision of the World Bank to grant a massive loan came only after great struggles between its members. Most major countries were concerned about an investment in a highly pollutive technology, which draws from non-renewable resources. After its scheduled completion in 2012/15 Medupi will be the fourth-largest coal plant and the biggest dry-cooled power station in the world. Thus increasing South Africa's total supply of electricity by an estimated ten percent. Throughout its scheduled 50 years of operation coal will be supplied from Exxaro's Grootegeluk coal mine, a local coal field at the north end of the site. The effects on the environment are an annual emission of 25 million tons of carbon. On the other side however, approximately 10 000 jobs will be created during the process of construction and the GDP of Lephalale is expected to increase by 95 percent.
Why is this a development program?
Large scale investment in industrial plants, especially power plants, has been a darling in government and donor programs all around the world since the Second World War. Its high prestige as a step towards "modernisation" and supposed impact on the economy lead international organisations such as the World Bank and International Monetary Fund, as well as national governments and public enterprises to recommend and support such developments. It is argued that a development like the coal plant in Lephalale benefits the local economy directly through employment opportunities and indirectly through business opportunities e.g. for the component suppliers. As a result one could argue that the investment in this project will eventually ‘trickle down’ to the majority of the people, which in return allows them to better their living conditions. A family in Lephalale may see the father working at the plant, the son playing for the local soccer team sponsored by the plant’s owners and the mother selling snacks to the people coming from and going to work. However development on this scale could be described as mainly material or financial as it does little to improve education or access to basic services.
The Medupi power station will also cause further development as the need for infrastructure and housing will increase. Furthermore this project has lead to the development in other areas too, as Eskom has teamed up with various stakeholders and formed projects aiming at the improvement of the quality of life for the people residing in the area. For instance the Foundation Classroom Computers project in association with Intel is fostering education by sponsoring schools expenses such as salaries or technical equipment like computers, printers, etc. over a period of five years. This is hoped to eventually result in a rise of literacy and employment rates and in the long run support the fight against poverty and crime. Another aspect to consider is the growing attraction of Lephalale as a centre for industrial development, which may cause an influx of capital and labour in the area.
On a bigger scale the Lephalale power station can be regarded as contributing to development by benefiting the national economy. Through the increased supply of electricity, businesses and consumers will be able to improve their production as they do not suffer the paralysing effects of power failures. Research suggests a growth of South Africa’s Gross Domestic Product (GDP) by 0.35% a year as a direct effect of the station. Moreover a technological advanced project such as this coal power station will improve the skill base of South African engineers as they have to maintain and improve the station constantly. Thus this development project represents a step forward on the development ladder closer to a perceived level of ‘modernity'.
However more recent scholars would argue that a plant like this will cause a lot of negative externalities mainly as the use of coal (a non-renewable resource) is highly pollutive. To these group of scholars a more sustainable approach to development e.g. through the construction of a solar power station, which does not burden the environment as much, is presumed to be more beneficial.
In the recent and South-African context one could also argue the short comings of Eskom’s power policies and question why such a development only takes place now as the population has been plagued by power cuts through the last couple of years. This investigation would then touch the political side of development, examining the role of institutions and transparency as a pre-condition for development.
What development theory does the project underpin?
Economic growth and modernisation theories
As indicated above the Medupi Power Station falls clearly under the economic growth theories of development. These theories regard development as a process of overcoming a state of ‘underdevelopment’ and reaching a defined end point of development. This progression to ‘modernity’ can only be achieved through economic growth, which is highly connected to industrial development. It was first established and witnessed in the ‘Industrialisation’ of Europe in the 19th and 20th century. Especially the steel and textile industry in England and Germany were on the forefront of fostering development for the entire economies of their respective countries.
As it can be traced back to Europe and European as well as American companies still enjoy a major share of the global economic power, which allows them to dictate economic development and international trade, these theories can be described as ‘Eurocentric’. Apart from identifying economic growth as the main agent for development and reaching modernity, this also implicates the formulation of European or Northern views on how this state of ‘modernity is defined. Northern values and ways of organising public life and government are seen as superior and even necessary for enabling development. Traditional values of ‘developing’ societies are often seen as obstacles to development which must be replaced. Main advocates and actors of this development theory are states (governments), markets and more recently International Organisations (IOs) such as the World Trade Organisation or the World Bank Group.
Even though they may agree on the emphasis on economic growth to initiate development, there are differences on how economic growth may be achieved.
Scholars following the school of JM Keynes (The General Theory of Employment, Interest and Money: 1936 ) regard the state as the main actor in the field of development. According to this theory the state has to regulate the market and promote economic growth through own actions such as investment in infrastructure or monetary policies.
On the other hand scholars of the neo-liberalist school which still draws on the theories of classical liberalist such as A. Smith (An inquiry into the nature and causes of the wealth of nations: 1776) would disagree. To them the market plays the major role of promoting economic growth through its “invisible hand” which regulates prices, demand and supply. The role of the government is reduced to just insure the stability and legality of markets. This “laissez-faire” approach was revived and implemented from the 1980s onwards and is still valid as it underlines the policies of major IOs.
To identify whether the Medupi power station falls under a Keynesian or neo-liberalist approach one would have to have insight in its funding. If major investors and stakeholders were foreign companies or businessmen it would be underlined by a neo-liberalism approach. The granting of a $ 3,05 Billion World bank loan and additional loans by the African Development Bank supports this view. Nevertheless final conclusions cannot be drawn without access to the loan conditions. On the other side Eskom as a public enterprise reflects the interest and involvement of the South African government. In addition to that South Africa is a mixed economy and major investments and economic planning are usually influenced or associated with government departments. This leads to the conclusion that the Medupi power station can rather be classified as a development project in the light of Keynesian beliefs about economic growth and modernisation. \
In addition to that the construction of a coal power station may raise concerns with a different group of development scholars. Although clearly not being considered in the conception of the plant, the theory of sustainable development also applies with regard to the Medupi Power Station. This is caused as a coal power station represents exactly the opposite on what could be termed sustainable development. Sustainable development can be defined as “development that meets the needs of the present without compromising the ability of future generation to meet their own needs” (WCED 1987: 43). In this context the use of coal, which is a non-renewable natural resource, to generate electricity clearly does not fall under sustainable development. What is even more are coal's negative effects on the environment when it is burned. It is assumed that within this century the amount of discovered non-renewable resources such as oil and coal will be exhausted. As a result development must be reconsidered concerning the use of resources and technologies and their impact on the environment. Clearly industrialization as Europe experienced it in the 19th century cannot be implemented on global scale as there are simply not enough resources on this planet. “Green” approaches to development might be named as alternatives and in the case of the Medupi Power Station the adoption of a “light green” approach such as the construction of a solar power plant could have been recommended.
As stated above the Medupi Power Station adds a huge burden on the environment and therefore it does not come to a surprise that its establishment was subject to great concern. The international community only agreed to World Bank loans after certain clauses were included. These involve the usage of cleaner but more expensive technologies and the construction of an additional wind power station. Most importantly it was stated that this was the last World Bank loan granted which funds the usage of non-renewable resources to generate electricity. In future only environmental sustainable projects should be considered for funding. On national level concerns arose mainly around the negative effect of the plant on local wild life and flora and fauna.
Not only will this have a negative impact on wild life, but it will also promote the process of extinction whereby most of the living organisms fail to survive in intoxicated areas. In this case the reproduction process will be disturbed. It will promote overpopulation of a certain group that will adapt easily to these conditions, a process C. Darwin named 'survival of the fittest'.This might also cause respiratory problems to the people who inhale this contaminated air.
However it must be highlighted that the Minister of Environmental Affairs and Tourism approved the project in May 2007. Eskom also moved plant life such as an old boabab tree, camel thorns, shepherds tree, leadwoods and established an animal reserve.
Impact on children and youth
The construction of the Medupi Power Station has been highly debated within the South African society. Critics often point out the political involvement of the ANC and the negative impact of the coal plant on the environment whilst supporters conceive it as a major investment in the country’s economy and electricity supply. However little attention has been paid to the plant’s impact on the life of the children and youth of South Africa. From the below it is evident that many contesting and often contradicting views prevail regarding the advantages and disadvantages of the Medupi power station for young people. Many students emphasise the direct advantages of the plant in the life of children and youth. These include: Improved academic prospects resulting from access to electronic equipment such as computers and extended study hours even after sun set, as well as the possible provision of bursaries; improved health due to the provision of hot water used for hygiene and food preparation; employment opportunities at the construction site itself and after the completion. However especially the first two points are highly arguable as the station itself just adds on to the total supply of electricity in South Africa hoping to prevent future blackouts. The construction of the plant needs to be refinanced and (with regard to Eskom’s wider upgrades) will increase the price for electricity in the next years. As a result currently disadvantaged families are unlikely to afford to and have increased access to electricity.
On the other side many students also mention indirect effects of the plant on young people. These refer mostly to improved household income as parents or care givers as well as youth might find employment at the plant. With close to a 10000 jobs created by the plant, families and thus children and youth will benefit in the short run. Yet again one has to be cautious to not overestimate this figure as a majority of these jobs are temporary and low-skilled. Investment within the wider area of Lephalale might also benefit young people. If the money circulates within the community, education and recreational facilities are likely to receive a boost. Nevertheless one would be too quick to link the construction of a coal plant to decreasing crime rates, since crime is a multi dimensional phenomenon, which has many underlying causes apart from poverty and unemployment.
Finally students supporting the construction of the station highlight its contribution to the national economy. Apart from promoting growth by increasing productivity through the prevention of power cut it moreover symbolises the commitment of the South African government to continue with the countries industrialisation and progression to a modern nation. This is seen beneficial as its multiplier effects will increase public spending, which in return improves children and youth's live through enhanced educational and health facilities.
Having discussed possible advantages of the plant, more critical students also pointed to a number of risks the plant poses to young people. In this regard pupil's opinions were more homogenous. A vast majority sees negative impacts on the environment caused by the use of coal to generate electricity. The burning of coal is believed to foster global warming and to lead to air pollution. In addition to that the mining for the resource may lower the quality of the drinking water. Children and youth could become victims of poor health as a consequence. Other health risks for young people were identified in the unsafe use of electricity, e.g. uncovered cables. However this again is not a direct effect of the Medupi power station as it just generates electricity and is not responsible for the proper connection of households and communities to the power supply.
All in all the Medupi Power Station can be seen as a positive development for the South African nation. Yet its direct impacts on children and youth might be limited as this population group is unlikely to receive the most rewards from industrial investment. In the long run the station might impact their lives increasingly. This is however closely linked to the general development of the South African economy and society.
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DEFINITION OF TERMS
1. ANC: African National Congress
2. GDP: Gross Domestic Product
3. World Bank (WB) :An international banking organization established to control the distribution of economic aid between member nations, and to make loans to them in times of financial crisis.
4. Eskom : is a South African electricity public utility, established in 1923 as the Electricity Supply Commission (ESCOM) by the government of South Africa in terms of the Electricity Act (1922).
5. Eurocentric: Focusing on European culture or history to the exclusion of a wider view of the world; implicitly regarding European culture as preeminent
6. Laissez-faire: A policy of leaving things to take their own course, without interfering
7. IOs: International Organisations
8. Exxaro: Exxaro Resources (formerly part of Kumba Resources) is a large coal and heavy minerals mining company in South Africa. It is also the largest South African based mining company in the country. The company operates facilities and offices in Africa, Asia, Europe and Australia
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Construction of 2010 soccer world cup stadium.jpg (JPEG Image - 117k)
posted by 201140502 Mar 3 2011, 2:53 AM EST
This was the preparation of the soccer world cup,The name of the stadium is SOCCER CITY.This is the biggest stadium and during WORLD CUP it has welcomed more than 679000 people.Before world cup began it hosted there welcoming ceremony