The New Extractivism? A review
In April, 1997, several thousand fighters from the United Self-Defense Forces of Colombia, or AUC, entered the Caribbean department of Bolívar, along the Magdalena River, their stated goal being the “cleansing of the area and (the) handing it over to multinational corporations.”
The AUC, short for Autodefensas Unidas de Colombia, was a paramilitary army whose right-wing ideology had grown out of the network of rural businessmen and druglords who supported them. The official raison d’etre of the AUC had originally been to fight the communist guerrillas of the FARC and ELN, against whom the Colombian state had been waging a three-decade internal war. Yet making the departments of Bolívar and Magdalena safe for corporations meant far more than merely clearing out communists, and the broader agenda at play was more sinister than mere “self-defense.”
It wasn’t long before human rights abuses began rolling in. In the space of ten years, 36,000 people would be displaced in the region, seven villages destroyed, and 380 people, mostly unionists, assassinated. Two prominent activists critical of the presence of foreign corporations in the Bolívar department would be killed in 2006.
It was a new variation on an old story. The reason these people suffered is the same one that augured doom for countless millions of people in places like Iraq, Venezuela, the Niger Delta and the Congo: the ground beneath them was rich in raw materials.
In Colombia, it’s been said that 74 percent of human rights violations occurred in regions rich in prospects for mining and petroleum. Colombia has the second-highest population of internally displaced people in the world, riding just behind Sudan, and unsurprisingly, an estimated 87 percent of these people came from these resource rich rural areas: the same areas ravaged first by the paramilitaries, and then by the transnational corporations for whom those paramilitaries act as a vanguard.
Years later, in 2000, the strongman Carlos Castaño, whose cocaine-funded paramilitaries acted as the auxiliary of the Colombian military, would describe how the AUC, at its core, was a pro-business organization: “We have always proclaimed that we are the defenders of business freedom.”
This is the ugly face of extractivism: an economic program based solely on the extraction of raw materials for sale on the global market.
It is a radical economic program, based on the philosophical presupposition that poor countries should exist not on their own terms, as independent countries, but as marginal auxiliaries within the machinations of a vast system of globalized economics. It entails the regimentation of everything into the unwavering dictates of free-market capitalism—the environment, human beings, the relations that bind both to one another—and the quick expurgation of all that cannot be incorporated into that system. This purging was often carried out violently, with repression and state-violence—in the case of places like Colombia, with full blown paramilitary violence, assassinations, massacres. And in twenty years of practice, it has yielded disastrous consequences for both the environment and everyday people of Latin America.
Almost no Latin American nation has rejected the allure of extractivism’s proffered economic benefits—even the ostensibly progressive nations of the Pink Tide: Chavista Venezuela, Morales’ Bolivia, Ecuador, Argentina, Peru.
This embrace of extractivism by “progressive” regimes is the tragedy percolating through The New Extractivism, a collection of treatises authored by various sociological researchers, sandwiched at beginning and end by the proposition and theses of Henry Veltmeyer and James Petras. The subtitle, A Post-Neoliberal Development Model or Imperialism of the Twenty-First Century?seems to suggest an initial uncertainty over the supposedly liberating prospects for extractivism, which has been embraced with as much zeal by the left-wing nations of the Pink Tide as it has by those of the right-wing Washington consensus. A read through reveals that that uncertainty is in fact disappointment, bordering outright rejection.
In a sequence of case studies, the authors lay out a succession of savage arguments illuminating the consequences of extractivism—by both pro- and anti-Washington Consensus countries—dispelling the myth that a practice as ecologically precarious as extractivism can ever be socially conscious, liberating, or “progressive.”
The books probing examination of extractivism—its human and environmental cost—illuminates one of the greater tragedies of that collection of Latin American countries who, however flawed they were from the outset, however corrupt they became, sought nobly to erect more socially just regimes at the turn of the millennium. By succumbing to the allure of wealth and “development” offered by bleeding their stretch of the earth of its life and life-giving abilities—a transaction made in exchange for oil, gold, mineral profits—the progressive governments of Latin American unwittingly became the expanding agents of the very capitalist system they purported to oppose, expanding the system at a slower rate but expanding it nonetheless, legitimizing its necessity and consolidating its power.
In Latin America, a distinctly discernable pattern can be seen within the politics and economics of extractivism.
The historical backdrop of extractivism’s rise runs parallel with the rise of late-20th century globalization, for extractivism is as much a feature of globalization as is mass-migration, trade deals, deregulation and state-violence.
In mid-20th century South America, many nations sought to create independent, self-sustaining economies through Import-Substitution Industrialization, or ISI. In vogue throughout many Third-World nations at the time, the practice advocated a distancing from the global economy through the creation of national industries to produce goods for internal usage that would’ve otherwise been imported from abroad, thereby creating jobs and stimulating the national economy. It was and has faced criticism, but it was an effort to create industrial powerhouse economies similar to the first-world nations, particularly the United States, whose industrial dynamism they were so eager to imitate (often at the encouragement of those first-world nations themselves). Several decades of internal contradictions and external pressure soon put an end to such hopes.
By the 1980s and 90s, these Latin American nations became so crippled with debt that the IMF would force them to “liberalize”—read: relinquish control of—their economies in exchange for having debt bailed out. As a result, their countries’ labor and resources were thrown open to the predations of globalizing corporations.
In the first world, the policies of neoliberalism have come under increasing scrutiny in the 2010s, with Occupy, Brexit, the rise of Bernie Sanders and Donald Trump. But a similar rage emerged nearly two decades earlier in Latin America, when in the late 1990s a series of progressive regimes were elected to power in on the vast wave of discontent over IMF-imposed economics, perceived by many to be neo-imperialist financial extortion. The leaders of these countries publicly declared (to the chagrin of the United States) their opposition to the “Washington Consensus,” a geopolitical arrangement stipulating US hegemony and strictly enforced free-market capitalism. Venezuela’s Hugo Chavez was the most visible head of this movement, proclaiming the emergence of a “21stCentury Socialism.” Bolivia’s Morales, Ecuador’s Correa and Argentina’s Kirchner quickly followed suit.
These progressive regimes, as these authors contest, didn’t seek to create an authentic alternative vision to capitalism. Rather, they sought to work within the capitalist system itself, allowing the same structures of plunder to continue with the condition, which eventually engendered corruption, that higher renter taxes imposed by the state would be directed towards spending on social programs.
Herein lies the internal contradiction and seed of their doom: their decision to continue with extractive industries facilitated systemic state oppression while at the same time evoking the wrath of the United States for not allowing Western corporations to reap the entirety of the profit drawn from those industries.
At this point in the late 90s and early 2000s, with the left-wing regimes on one end of the spectrum, and those on the right on the other, the first forms of extractivism can be seen coalescing, and that within extractivism’s varied iterations a pattern of reconfiguration, replacement, and ultimately violence can be discerned.
The “structural adjustments” which helped clear the clutter of ISI allowed for what the authors of The New Extractivismterm the “Reprimarization”of these nations’ economies.
Extractivism has been driven by the primary commodities boom that began at the turn of the millennium, when expectations for American-inspired, middle-class lifestyles began growing East Asia, particularly China, demanding astronomic quantities of wood, oil, and other raw materials—primary commodities—to accommodate it. Whereas the ISI economies of mid-20thcentury Latin American nations were focused primarily on producing goods for their own countries, and thus would have been and were inconducive to the system of vast raw material exports demanded by the Asian primary commodities boom, their Reprimarization in the era of IMF-imposed liberalization shifted the locus of their economies towards the exports of a few raw materials for sale on the global market: wood, gold, petroleum, palm oil.
The ballooning demand for primary commodities, or raw materials, demanded an expansion of the capital frontier, often pitting poor rural people of indigenous or African descent against state security forces, who were charged with clearing the path for corporations. It meant incorporating all that was non-capitalist—and here we refer to the natural wildlands of South America and the people who lived there—into the capitalist system, a process that geographer David Harvey calls “accumulation by dispossession.”
Accumulation by dispossession, in Harvey’s reckoning, is the latest stage in the two century expansion of capitalism, a process which began with the enclosure of the English countryside and is reaching its denouement with the mass-privatizations of tracts of land and water via World Bank and IMF inspired government programs—and this is the conclusion, for the Earth is limited and there is nowhere left to go.
The rural people who are in the way of the open-pit mines, the oil-wells, the palm-oil plantations need to be cleared, according to the logic of extractivism, to make way for the corporations that will carry out those operations, a process often carried out through intense violence and armed displacement. In Colombia, the worst example of accumulation by dispossession, researcher Jasmin Hristov has done much to illuminate this bloody system in her 2014 work Paramilitarism and Neoliberalism, a pattern to which Kyla Sankey amply alludes in her 29-page chapter in the book.
Accumulation, or profit, is generated by the dispossession, or theft, of the poor.
Finally, following the process of accumulation by dispossession, we see what the authors term the “proletarianization” of the poor campesinos into a “semi-proletariat,” who were previously non-capitalist, into the capitalist system following their forced displacement. Theoretically, proletarianization occurs when “direct producers are separated from their means of production… converted into a class for hire, compelled to exchange their labor for a wage, subjugating them to a wage relation.” Campesinos who previously lived in rural areas are forced to move, work in urban factories, become hands on large-scale farms or partake in the limited available jobs within the mines whose existence forced them to leave their rural homes; yet they don’t constitute a formal “proletariat” in the sense that they lack a uniform line of work and any sense of class-consciousness or shared sense of community. After all, following displacement, former campesinos are generally dispersed across the landscape.
Almost no country can fit perfectly within the above framework for the dynamics of extractivism, but despite this, the authors have identified two main currents of extractive policy within the book.
The narrative that money siphoned off from extractivism, when in the hands of the state rather than a transnational corporation, can be equitably funneled towards social justice is one that former Ecuadorian President Rafael Correa worked hard to promote in his 2007 election campaign.
But the plausibility of such a narrative, in the eyes of Ecuador’s largely urban population, hinged on the ability of the Ecuadorian state both to hide the dismal economic results actually yielded by extractivism, and to render invisible the indigenous peoples which both the state, and the corporations the state still nonetheless worked with, despite its progressive pretensions, invariably worked to criminalize, displace, and poison.
Correa compared his country to a beggar sitting atop a sack of gold. The leftist, PAIS Alliance government that Correa led, which aligned Ecuador with Chavez’s Venezuela and Morales’ Bolivia, had campaigned on a program of ameliorating the inequality and poverty that had long haunted the South American nation, poverty that had been worsened by two decades of strict IMF structural adjustments. Funds for this crusade, Correa said, would come from the government’s demanding of higher rents off the nation’s largely untapped oil wealth—the proverbial “sack of gold” lying inert beneath much of the Ecuadorian Amazon.
In fairness to Correa, the money drawn from extractive oil rents helped significantly expand social spending in comparison to the years of IMF-driven deregulation.
From 1990 to 1999, social spending constituted 6.4 percent of the national GDP, a number which rose to 15.9 percent in 2011 under the Correa government. The total government investment in education in 2001 was at US $493 million, a statistic which rose to US $3.3 billion in 2011. In that same time bracket, health spending rose from US $189 million to US $1.6 billion. For the poor country of Ecuador, it was a necessary and much needed government intervention in a previously deregulated, liberalized economy—none of which, however, could’ve happened without oil.
That oil couldn’t have been extracted without the criminalization of the people who get in the way of oil corporations—mostly indigenous peoples—nor without the vast despoiling of the Amazonian rainforest from which the oil is extracted.
From the beginning, in 2007, the PAIS Alliance government sought to project a message which connected extractivism with social justice, perpetuating a corporatist narrative that portrayed the indigenous people fighting to protect their lands as noisome hindrances to the more nationally important project of extractivism—justifying government suppression of indigenous peoples in the eyes of urban Ecuadorians, who live entirely separate from the realities of the Amazon’s destruction.
Indigenous rights under the Correa government were repeatedly violated despite the numerous constitutional rights they had been accorded as Ecuadorians; those who resisted were demonized by the government as opponents of “development” and “modernization.”
Beyond the rises in government social spending that are visible on paper, the image of a “progressive” extractivism begins to fall apart when one examines the real reasons for the statistic drop in poverty. In 1999, the national level of poverty in Ecuador was at 57 percent, a number which dropped to 28 percent in 2012. And yet it wasn’t the money drawn from extractive rents that had yielded such a dramatic decline in poverty, as many government officials would be eager to contest; poverty decreased in Ecuador because of remittances sent back by emigrants to the United States. Between 2000 and 2011, a whopping US $27 in remittances was sent from Ecuadorian emigrants in the United States to help financial sustain their families back home.
It wasn’t Correa’s oil-soaked Amazonian crusade that reduced on-paper poverty in Ecuador; it was immigration to the United States.
To put that in perspective, only US $8.5 billion in the form of Foreign Direct Investment (FDI) came to the beleaguered South American nation during the same period. It makes little sense, then, to peg Ecuador’s drop in poverty on the national economic policy when it was people leaving and sending money back that kept people financially afloat. To continue justifying such an economic policy when it entails the criminalization of Ecuador’s minorities and the toxic despoiling of Ecuador’s shared swath of the Amazon is immoral.
In a revealing passage, the authors identify the PAIS Alliance government’s ironic embrace of a globalizing “green capitalism” through a program called REDD, in which wildlands are conserved as carbon sinks—but in which the indigenous peoples who previously lived in sync with the ecosystems designated for conservation are forcibly displaced and charged with becoming Forest Rangers in the lands they were dispossessed from.
“To expel the indigenous communities from their territories,” write the authors, “breaks their ancestral dynamic of harmonious coexistence with the earth and convert them into users of the land for a cash income, which in the long term impoverishes them.”
Little economic benefit can be directly traced to the extractivist project in Ecuador, and yet it came at the cost of criminalizing the weak and poisoning its portion—however small in comparison to the far larger portions presided over by its neighbors—of the forest which provides the planet with breathing air.
Ecuador has since elected a new President, Lenín Moreno (2017-present). But with primary commodity prices still booming, and the allure of the poisonous black gold laying inert beneath the amazon, the “sack of gold” offered by extractivism means practice is unlikely to disappear anytime soon.
As a sharp counterpoint to the Ecuadorian example, at the extreme right, unprogressive end of the bandwidth of nations embracing extractivism, there is Colombia.
Long a bastion of right-wing ideology and US hegemony in Latin America, Colombia suffers from some of the highest levels of inequality on the continent, as well as from a half-century-long internal conflict. The genesis of the war can be traced to the landlessness of poor rural peasants who began organizing in the mid-20thcentury, and its salient result has been the production of the worlds second-largest internally displaced population, a statistic on which Colombia falls just short of Sudan.
Despite the unprecedented and much lauded 2016 peace agreement with the FARC, the largest leftist rebel group, the conflict still sputters on in 2019, with smaller dissident leftist groups still active and right-wing paramilitaries still working under the visage of being criminal organizations.
Cocaine is often depicted as the embryo from which violence, in all its iterations, emerges in Colombia. Though this narrative is true insofar as it recognizes cocaine as a factor in exacerbating violence, it precludes the broader economic and political groundwork that allowed such violence to emerge in the first place. It’s true that the 90s cocaine boom which supercharged the Colombian economy simultaneously exacerbated the war, accelerating the armed conflict by funneling profits to nearly all sides. But it wasn’t the white powder itself that was fueling the violence. The assassinations, the massacres, the mass displacements and militarization of the countryside can be attributed to not to the sugar which makes its way to the noses of the Global North, but to petroleum and gold.
Twice the size of Texas, Colombia’s largely rural national territory is home to immense deposits of gold, coal, and oil which globalizing corporations in the US, Canada, and Western Europe have long been agitating to penetrate—a transaction that three successive Colombian governments have been more than happy to facilitate.
But the carbon-based economy rooted in mining, as has been pointed out elsewhere, is a self-destructive, zombie-like system consumes all other sectors of the economy which through a process called “Dutch Disease.” And the costs of mining, which Sankey illustrates with a devastating authority, are not merely financial.
In her study on Colombia, Kyla Sankey focuses on what former President Juan Manuel Santos (2010-2017), a liberal urbanite, referred to as the “locomotive” of the mining boom.
The past three Colombian presidents—including militaristic former druglord Álvaro Uribe (2001-2009) and his handpicked conservative protégé, the incumbent Ivan Duque (2018-present)—have whole-heartedly embraced the economic prospects of mining, promising Colombians that opening up their oil, coal and gold reserves to foreign corporations will deliver them unprecedented prosperity.
During the primary commodities boom at the cusp of the new millennia, Colombia under President Uribe, already subjected to the “structural adjustments” of the 90s, saw the explosion of its mining industry with a sweeping deregulatory rewrite of government mining code:
“…mining in Colombia experienced a ‘boom’ in the 2000s. This came in the wake of a new mining code in 2001 and the subsequent two terms in office of former President Álvaro Uribe… Uribe aimed to transform Colombia’s mining and energy sector into one of the most important industries in Latin America, based on a strategy of attracting multinational mining corporations to extract the country’s resources through the comparative advantage principle.”
The boom played to the benefit of two elite classes in Colombia—the conservative rural warlords, represented by Uribe and Duque, and the cosmopolitan urban liberals represented by Santos. Despite their differences, both classes share in common their desire to liberalize Colombia’s economy so it can be further ingratiated into the global capitalist system.
In a bizarre irony, Sankey points out that while Uribe used mining as a pretext to ramp up the internal war, as well mechanism to finance the conflict itself, Santos saw mining as a chief reason to strike a peace deal, as the constant threat of being bombed or kidnapped tended to deflect investments by foreign corporations in the country.
The two political approaches to mining have since culminated in the Presidency of Duque, who presides over country where immense militarization, especially under Plan Colombia, has seen large-scale leftist resistance nearly wiped out while continuing to facilitate, through the widespread deployment of the military, the suppression of those organizing to protest the displacement and socioenvironmental ruin caused by industries such as mining.
Sankey delineates the devastating “slow-violence” exacted by the mining industry upon the fragile Colombian ecosystems (among the most diverse in the world) and the people, mostly poor and of indigenous or African descent, who live in sync with it. She discusses the more explosive, visible violence of armed displacement that mining necessitates to clear the way for extractivist industries to do their work, and how it’s fallen into the context of armed conflict. She lays bare the bitter irony that, even when perceived through the cold and crippling lens of economics, the mining industry has in fact worked to the detriment of many other industries in Colombia, who are consumed by “Dutch Disease.”
In one disturbing passage, she illustrates how, thanks to the El Cerrejón mine (one of the largest open pit mines in the world), the river upon which the Wayúu indigenous tribe depends for survival has been poisoned, running “an opaque reddish-brown.” And as if the despoiling of the river which had sustained their tribe for centuries wasn’t bad enough, the corporations which manage the mine hired overwhelming foreign workers (locals constitute only 1 percent of the mine’s workforce), leaving the 1,200 people displaced by its creation bereft of any means of employment.
It’s a microcosmic example of a broader pattern played out in Colombia: rural people are forcibly displaced from their lands, often violently, to clear the ground for extractive corporations (accumulation by dispossession) as the locus of the economy, in rhythm with global fluctuations, was shifted back to raw materials, or primary commodities (reprimarization).
A prism of hope nonetheless falls through Sankey’s bleak study: according to her, the mining boom has catalyzed the coalescence of various previously disparate groups—environmentalists, displaced rural campesinos, unionists—into a unified front of resistance, galvanized collectively by their antipathy towards the mines.
She notes that, while there were only ten protests nationally against the extractive industry in 2001—and that those struggles were composed only of waged workers—there were over sixty such events across Colombia ten years later, and that the socio-economic composition of those protesting had widened, now including people from rural communities, urban communities, and small-scale miners.
The immense cost being exacted on the people of Colombia, both environmental and social, have pushed poor people into a misery from which they either revolt or wallow, and has pushed the ecosystems of Colombia, including the Amazon, to the breaking point. Whether the forces of resistance or the transnational extractive corporations against whom they’ve organized is a question that only time will answer.
As illusory as its promises of social change may have been, Latin America’s “Pink Tide,” at its flood fifteen years ago, has receded back into the sea of history. For now, at least, the progressive governments that defined early 21stcentury Latin American politics, save a few examples (Mexico comes to mind), are on the defensive, if not a full-blown retreat.
Across South America, hard right-wing governments have once more consolidated power in the past three years. In Colombia, the liberal urbanite Juan Manuel Santos has been succeeded by hard right-winger Ivan Duque, the hand-picked protégé of former druglord-cum-President Uribe. In Chile, where the Cold War right of Latin America had its notorious genesis, right-wing billionaire Sebastián Piñera has risen to power with a program of further deregulating the economy. In Brazil, South America’s superpower, a neo-fascist leftover from the Cold War-right, Jair Bolsonaro, has risen to power in what many call a slow-motion coup, one that’s seen the criminalization of the left, the militarization of the favelas and the sacrifice of the worlds largest ecosystem on the guillotine of Chicago school economics. And we now sit on the cusp of what may turn out to be a US-sponsored invasion of Venezuela.
It would be misleading to say that the new shift rightward in the wake of Pink-Tide governments somehow constitutes an “improvement” in the lives of everyday Latin Americans, especially the poor. But as this book lays out in unrelenting detail, there are lessons to be learned from that fifteen-year continental drift to the Left.
Walter Benjamin says in his Theses on the Philosophy of History that the past is a growing wreckage of mistakes, bodies and lost hopes that we desperately try to make sense of, even as we’re blown into a dangerous and uncertain future. Where did the Pink Tide go wrong? Though lingering on the question may seem irrelevant in an era of rising neo-fascist populism, constructing a more just future means recognizing, and preventing the repetition of, past mistakes. In the end, the Pink Tide countries only made a hybridized version of the same systems of extraction, plunder, and dispossession they sought to escape from, invoking the ire of the capitalist world—not to mention the sanctions and threats of invasion—even as it imitated its injustices. The New Extractivism tears back the glittering veil of progressivism that garlanded those oil-soaked projects. The business of extractivism—which, at the end of the day, is the technical term for poisoning our home, for bleeding the earth—is a disastrous enterprise for nearly all those who aren’t immediately reaping the profit. But unfortunately for the people and environments of Latin America, the profits from bleeding the earth are booming.