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Post Development Perspectives on Latin America


Back the 1990s, a post-development literature emerged from a variety of different sources  Gandhi, Ivan Illich, Karl Polanyi, and others - as a critique of both development practice and Western modernity - on the view that both development and Western modernity are failed projects.  The future requires something else and maybe that something else can be found around the edges of the development project.  State making in Latin America, though, went in a very different direction:  toward embracing extractivism as a mode of development through which progressive states could capture some of the economic surpluses of primary goods production and redistribute them to the poor.  The resulted, quipped one observer, would be a hydrocarbon charged social democracy.  What I would like to review here today are several of the Latin American critiques of this model of development.  This is a renewal of post-development thought, now tied to the critique of progressive extractivism. 

10 Urgent Theses Over the New Extractivism in Latin America, Eduardo Gudynas


What was Gudynas saying about the new extractivism more than 10 years ago?   He points, in the first place to the limits of this project in terms of transforming the extractive sector.   


On the one hand, one cannot maintain that the governments of the Left haven’t done anything and that the systems of management of sectors like mining and petroleum are the same as they were in the 1980s or 1990s. But on the other hand, neither can one defend a hopeful position which would suggest that these new governments have substantially modified the extractive sector, and that they are ameliorating their social and environmental impacts through a transition to another kind of development which does not depend on the exportation of primary materials such as copper and petroleum.


In particular, the extractive sector still minimally processes agricultural goods and minerals and it still has a hugely destructive environmental impact, even if governments are more active in establishing some of the financial terms on which these industries operate or, in some cases, expanding the role of the state in these industries (the cases of Venezuela and Bolivia, for example).  But there is no break from the larger world market and this world market is still structured in such a way as to give processors more access to the value generated by primary  products while the developed countries maintain greater capacity to set  the demand and hence the price for these goods. 


Thus, the progressive governments accept this new global commercial institutionalism and move according to its rules. At the same time, this signifies an acceptance of a subordinate role in global markets, where South American nations are the recipients of a price which depends strongly on intermediaries and international commercial brokers and their domestic decisions. These decisions respond to commercial opportunities. In effect, changes in international prices or export opportunities play key roles in national decisions about production.


In terms of institutions, the Pink Tide countries have done little to disrupt the international structures of trade and investment in the global economy - particularly the WTO.  This is certainty different from the attempt of the developing countries to use UNCTAD to reorganize the global economy so that it would operate for favorably for them. 


This history makes clear that the progressive governments have various institutional global and commercial alternatives to draw from. For example, they could revitalize the role of UNCTAD in the face of the WTO, or inject new energy in the ICBs. The surprising thing is that it hasn’t happened.


But this is not happening, the only exception being, which Gudynas does not discuss, ALBA, which has sunk along commodity prices and the Bolivarian republic.  Another continuity of extractivism is its internal geography of integrated natural resource enclaves, connected to the world market, and neglected hinterlands.  Similarly, neo-extractivist states have no interest in structural reforms that impinge on the performance or the expansion of the export section.  A key point to consider in this regard in the PT’s attitude toward land reform in Brazil.


For example, the Lula government did not fulfill its goals to dedicate land for farmers and agricultural reform, the latifundios were not disposed of, and the area conceded is very small (hardly 30% of the official goals). Furthermore, the new government plan abandoned these objectives, and substituted them for the regulation of land property. The Comisión Pastoral de La Tierra indicated that this paltry “agrarian reform” is marked by two principal conditions: it won’t take place inside the lands dedicated to agroindustry, and it will only go forward in a way that “helps” agribusinesses. One concludes that agrarian reform on the part of the Workers Party and its allies is tied to the expansion of agribusinesses (de Oliveira, 2009). These and other examples indicate that there is in progress a territorial arrangement in fact where one of the determining factors is the interests of the extractive sectors.


Nor does it matter that significant parts of the extractive economy are state run.  The same imperatives of efficiency, profitability and externalization of costs apply.  Resistance to environmental destruction is regarded as the pursuit to short sighted sectoral interests at the expense of the larger interests of the nation.  Regions that laid waste by extractivism are sacrifice zones; they are performing their patriotic duty, but not everyone sees it this way.  Rural conflict escalates with neo-extractivism. 


The leftist credentials of pink tide governments are tied to redistributing the surplus generated by extractive activities, often to the poorest segments of society.  These patterns of redistribution have the effect of pacifying actors that had previously engaged in disruptive social movements. This is the pattern that Gudynas discerns in Brazil where the struggle for land reform was superseded by the expansion of the state benefits, like Bolsa Familiar.  The long term effects of these policies was to demobilize key struggles and create possibilities for a return of the right once commodity prices dropped and fiscal austerity set in.  The alternative, exemplified by the landless workers movement, would have been for poor communities to have developed greater internal capacities for production and self-governance as opposed to becoming passive beneficiaries of state largesse. Gudynas presents evidence of pacification:

 

Where social compensation programs don’t exist, or function badly, the social protests against extractivism are much more intense. This differentiates progressive governments from those of conservatives (for example Peru under Alan García), where the conflicts against mining are much more intense (Bebbington 2007, and Scurrah, 2008) under progressive governments where these programs are much more effective and extensive, social protest diminishes, as happens in Brazil and Uruguay.


Another argument that can be made is that the legitimacy of pink tide states comes to depend critically on commodity prices.  When these drop, austerity is the order of the day, as the case of Lenin Moreno in Ecuador illustrates and, at this point, it becomes difficult to distinguish progressives from conservatives, one reason for the return of right wing governments in the region after 2015.  


Another aspect of extractivism is that the state becomes functional with respect to extractivism because extractivism represents the fulfillment of progress and development.  This is also how the extractive industries represent themselves. And of course, for the sake of development, some citizens - often indigenous peoples - have to sacrifice some of their rights and well being.  Anyone who resists making these sacrifices is deemed unpatriotic and an obstacle to the progress of the nation.  We see this very clearly, for example, AMLO’s statements on indigenous and rural resistance to megaprojects in Mexico.  Those who oppose are conservatives or neoliberalism ro both - either category signified opposition to the progress of the nation. 


These ideas about the progress of the nation remain enthralled to classical conceptions of modernity:  the view that development emerges through the transformation of nature into value and wealth and that the more this proceeds, the more developed the nation becomes.  What is notable here is how the left has assimilated this legacy of modernity.  And what arises from this is a systematic tension - or a contradiction - between the state and large cross sections of society.  One also has to consider that the Latin American societies are substantially urbanized and the urbanized sectors of society would receive some small slice of the revenue generated through extractive sectors through the intermediation of the state.  That payoff is what has ultimately become of development. 


Mariastella Svampa, Perspectives of Latin American Development and Debates


Svampa is another major target of Ellner and the other authors in Ellner’s volume.  I am having a hard time finding very much that is objectionable in their vision of the Pink Tide and extractivism.  In fact, much of what they say is quite illuminating.  Svampa points out, in this regard, that the longer extractivism has remained in place, the more conflictive it has become. At first, it appears as a contradiction that can be mediated by the state by the expansion of developmentalism combined with price volatility increased the conflict between the rural and indigenous communities, on the one hand, and extractive industries on the other.  Both trends wound up draining the pink tide government of popular political support and opened them to right wing electoral challenges.  As Svampa notes: 


This process of transformation of the state, which was accompanied by an important integrationist (inward) and Latin Americanist (for the region) narrative, gave rise to 5 high expectations regarding the extension of rights and forms of popular participation (constituent assemblies and new constitutions in Bolivia, Venezuela and Ecuador). Over the years, however, this widening of the bounds of rights (environmental, collective rights) found severe limitations in the expansion of capital’s frontiers. Far from the "creative tension" proposed by Vice-President Garcia Linera for the Bolivian case, it seems that Latin America has entered a period of intense socio-territorial conflicts and colliding narratives of emancipation. 


Another way of thinking about this would be the clash between democracy and capitalism (Streeck), played out within a Latin American context.  The fact that all of the pink tide governments after 2010 began to the expand and intensify extractivism is unmistakable: 


The second stage is a period of officialization of the Commodities Consensus and of open conflict in the territories. The progressive governments doubled their bet by greatly increasing extractive projects while, paradoxically, using an industrialist discourse. In the case of Brazil, the Growth Acceleration Plan is a project to build a great number of dams in the Amazonia. In Bolivia, there is the promise of a Big Industrial Leap, a formula launched by the Bolivian Vice-President in 2010, fostering the multiplication of extractive projects (gas, lithium, iron, agribusiness, among others). In the case of Ecuador, the situation involves not only the advance of mega-mining but also the end of the moratorium of Yasuni project (2013). Venezuela, in turn, formulated in 2012 the Strategic Plan for the Production of Petroleum, which implies pushing forward the boundary for exploitation in the Orinoco belt, where there are reservoirs of extra-heavy (non-conventional) crude oil. Argentina launched the 2010-2020 Agrifood Strategic Plan, that projects a 60% increase in grain production, and is also moving forward in the exploitation of unconventional hydrocarbons through fracking.


It is notable that the similar conflicts emerged in both pink tide and the right wing governments around the expansion of the extractive economy.  In the pink tide states, all of these conflicts were dismissed with a similar set of political claims.  They were infantile, represented the point of view of NGOs or reflected some larger environmental colonialism.  One would also expect pink tide states to claim a right to development in the form of expanding the extractive sector of the economy (and the view of development that this represents is the transformation of nature into wealth and value).


An additional aspect of the new pattern of outward development is the role of China.  Svampa notes in this regard, though, that China is not an example of South-South cooperation, sometimes theorized as an alternative to exploitative relationships between the global north and the global south.  Chinese investment is about acquiring licensing rights to the natural resources; where infrastructure is required for these projects, the work is done by Chinese firms.  Thus Chinese investment in Laitn American is only very weakly articulated with national economic actors, does not entail very much use of the domestic labor or domestic content or technology transfer, but instead reproduced the dualistic logic of an export sector that “develops” and the rest of the national and regional economy, which is ignored. 


A View of the Green New Deal from Argentina, Svampas 


Another piece from Svampas published in the Jacobin draws the broad outlines for a green new deal in Argentina.  One of the interesting things about this piece is its engagement with the problem of urbanization, which much of the literature on the pink tide (at least in the Ellner volume) tends to ignore.  Svampas recognizes that Argentina is an overwhelming urbanized country.  Urban spaces are dominated by speculative real estate markets and the dominance of the car as the main mode of transformation - for the affluent. What Svampas proposes is a return to food self-sufficiency, driven by the development of regional agricultural economies linked to major urban centers in place of extractive economies tied to the world market. This pattern of regional economic development is consistent with the vision of the landless workers movement in Brazil.  It is also something that governments could support through land redistribution and by means of becoming a key purchaser of these agricultural commodities for schools, hospitals and other public institutions.  


Some additional components of her proposal:  a universal basic income financed by steeply progressive taxation of the rich, which essentially does not exist in Argentina or anywhere in Latin America.  This would be complemented by systems of job sharing to distribute employment.  These moves might be complemented by a new Marshall for the global south, recently proposed by UNCTAD. Here, from UNCTAD, are the four pillars of the plan: 


Four-pronged strategy

In the face of a looming financial tsunami this year, UNCTAD proposes a four-pronged strategy that could begin to translate expressions of international solidarity into concrete action:

  1. First, a $1 trillion liquidity injection; a kind of helicopter money drop for those being left behind through reallocating existing special drawing rights at the International Monetary Fund and adding a new allocation that will need to go considerably beyond the 2009 allocation made in response to the global financial crisis.

  2. Second, a debt jubilee for distressed economies. An immediate debt standstill on sovereign debt payments should be followed by significant debt relief. A benchmark could be the German debt relief administered after World War II, which cancelled half of its outstanding debt. On that measure, around $1 trillion should be cancelled this year overseen by an independently created body.

  3. Third, a Marshall Plan for a health recovery funded from some of the missing official development assistance (ODA) long promised but not delivered by development partners. UNCTAD estimates that an additional $500 billion – a quarter of the last decade’s missing ODA – largely in the form of grants should be earmarked for emergency health services and related social relief programmes.

  4. Finally, capital controls should be given their legitimate place in any policy regime to curtail the surge in capital outflows, to reduce illiquidity driven by sell-offs in developing country markets and to arrest declines in currency and asset prices.

The proposed package is similar in size to the amount that would have been delivered to developing countries over the last decade if countries in the Development Assistance Committee of the Organisation for Economic Co-operation and Development had met their 0.7% ODA target.


In relationship to the COVID-19 pandemic, the Svampas offers a useful reminder that the pandemic is tied to expanding geographical frontiers of capitalism, bringing about new and problematic human/nature interactions that can generate new pandemics.  


Extractivism, Sampas emphasizes, offers no pathway forward for Argentina or anywhere else in Latin America given the looming threat of climate change and the failure of progressive extractivism.  She outlines the false promise that extractivism has had in Argentina in an interesting manner:  


The spectacular crash in the value of oil is now putting an end to the drive to exploit non-conventional fossil fuels that took hold in Argentina ever since the discovery of the Vaca Muerta deposits, a little less than a decade ago. But it was already clear that the project was economically unviable, given the millions in subsidies that the oil companies received to keep production going, paid for by huge increases in consumer bills. The historic collapse in the oil price takes apart the “fracking consensus” shared by politicians and economists alike, and buries the El Dorado myth about these deposits that used to proclaim Vaca Muerta as our country’s “savior.” At the same time, it opens up an extraordinary opportunity for a total rethinking of the energy system.


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