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The New Extractivism

The New Extractivism

James Petras | Henry Veltmeyer


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In a primary commodities boom spurred on by the rise of China, countries the world over are turning to the extraction of natural resources and the export of primary commodities as an antidote to the global recession. The New Extractivism addresses a fundamental dilemma faced by these governments: to pursue, or not, a development strategy based on resource extraction in the face of immense social and environmental costs, not to mention mass resistance from the people negatively affected by it. With fresh insight and analysis from Argentina, Bolivia, Colombia, Ecuador, Mexico and Peru, this book looks at the political dynamics of capitalist development in a region where the neoliberal model is collapsing under the weight of a resistance movement lead by peasant farmers and indigenous communities. It calls for us to understand the new extractivism not as a viable development model for the post-neoliberal world, but as the dangerous emergence of a new form of imperialism.
Henry Veltmeyer is Professor of Development Studies at Saint Mary's University (Canada) and at the Universidad Autónoma de Zacatecas (Mexico). He is author, co-author and editor of over forty books on issues regarding Latin American and world development, including Critical Development Studies: Tools for Change (2011), The Cuban Revolution as Socialist Human Development (2011), and Development in an Era of Neoliberal Globalization (2013). Books co-authored with James Petras include Globalization Unmasked (Zed 2001), System in Crisis (2003), and What's Left in Latin America (2009). James Petras is Professor Emeritus of Sociology at Binghampton University and Adjunct Professor in International Development Studies at Saint Mary's University (Canada). He is the author and co-author of over sixty books and numerous other writings on the dynamics of world affairs and Latin American development, including Globalization Unmasked (Zed 2001), Social Movements and the State (2005), Multinationals on Trial (2007), What's Left in Latin America (2009), and Social Movements in Latin America (2011). Many of his periodical and political writings are accessible via
'The New Extractivism cuts to the core of one of the most important components of the new imperialism in Latin America - the accelerating extraction of mining minerals and resources under the impetus of multinational capital. This is a crucial book for scholars and activists hoping both to understand and dismantle the latest, devastating dynamics of the region's long history of capitalist development.' Jeffery R. Webber, author of Red October: Left-Indigenous Struggles in Modern Bolivia 'This brilliantly argued and convincingly documented critique of ''the new developmentalism'' in Latin America definitively shows that relying on wealth generated by minerals and commodities cannot build equitable and sustainable economies. Veltmeyer and Petras have rightly identified that only a labor-oriented reinvention of socialism, in response to a vigorous social movement, can hope to achieve humane, responsible, and sustainable development patterns in the 21st century.' Richard Falk, Princeton University 'The authors of this book skilfully expose the contradictions and limitations of both neoliberal and progressive extractivism. They masterfully expose the pillage of the continent's natural resources and highlight the struggles of resistance and contestation by indigenous communities against today's imperialist plundering. This book is a worthy and brilliant introduction to contemporary Latin America.' Cristóbal Kay, International Institute of Social Studies 'The New Extractivism is a ground breaking study of the latest stage in the plundering of natural resources from Latin America and the Global South by imperialist Western companies. The authors detail the ways in which Latin America is once again being used as a supplier of primary products to the industrialized centre, and shows how even Pink Tide countries like Ecuador, Argentina and Bolivia are developing a post-neoliberal economic model that frequently sides against indigenous communities. This is a very important volume that all students of Latin America must read.' Harry E. Vanden

Table of Contents

Section Title Page Action Price
About the editors i
Title iii
Copyright iv
Contents v
Figures and tables vi
Abbreviations vii
Introduction 1
Imperialism in historical and theoretical perspective 7
The new extractivism in Latin America 10
1 A new model or extractive imperialism? 21
A system in crisis 22
The politics and economics of natural resource development 25
Foreign investment in Latin America: natural resource development or imperialist plunder? 30
Table 1.1 Long-term north–south financial flows, 1985–2001 31
Table 1.2 Average annual flows of inward FDI by sector and region, in developed and developing countries, 1990 and 2009 35
From neoliberalism to post-neoliberalism 36
The new political economy of natural resource development 38
The resistance to extractive capitalism and the dynamics of class struggle 41
Conclusion 46
2 Argentina: Extractivist dynamics of soy production and open-pit mining 47
The soy model 49
2.1a Grain production in Argentina, 1969–2012 54
2.1b Land dedicated to grain production in Argentina, 1969–2012 54
2.2 Land under cultivation in Argentina, 1990–2009 55
Open-pit mining in Argentina 61
2.3 Mining companies in Argentina by country of origin 65
2.4 Stage of activity of the mining companies in Argentina 65
Resistance to extractivism 69
Conclusion 78
3 Bolivia: Between voluntarist developmentalism and pragmatic extractivism 80
The political economy of natural resource extraction in Bolivia 83
Table 3.1 Exports of primary products 84
Public sector investment in natural resource development 85
MAS and the predominance of foreign capital in the extractive sector 86
Table 3.2 Mining projects and their relation to the state 90
Between pragmatic extractivism and developmental voluntarism 94
Table 3.3 Budgetary expenditures on public investments, 2012 102
Extractivism: a development strategy for living well (para vivir bien)? 104
Table 3.4 Annual growth rates of GDP 104
Bolivian nationalization: a model of progressive extractivism? 106
Labor, conflict and class struggle in the new Bolivia 108
Conclusion 111
4 Colombia: The mining boom: a catalyst of development or resistance? 114
The ‘new’ imperialism and class struggle in the center and periphery 116
Paving the way for extractive capital 122
Extractives at war: from 2002 to 2010 125
Extractives at peace? From 2010 to 2014 130
The driving force of resistance to extractive capital 134
4.1 Participation of various actors in social struggles relating to the extraction of oil, coal and gold, 2001–11 135
Conclusion 142
5 Ecuador: Extractivist dynamics, politics and discourse 144
Table 5.1 Public investment in the social sector, 2001–11 146
The fallacies of extractivism: extractive rents and social spending 147
5.1 Distribution of oil rents, 2007–12 149
Table 5.2 Total fiscal revenues, 2000–12 150
Table 5.3 Total educational expenditure by type, 2010 152
Extractivism and middle-class income 154
Table 5.4 Imports of total oil products, costs, revenues and subsidies, 2006–11 155
The middle class in Ecuador: beneficiary of and accomplice in extractivism 156
The fallacy of public investment and extractive rent: IIRSA and territorial privatization 157
The equity fallacy: conditional cash transfers and extractive rent 160
The expansion of the extractive frontier 162
5.2 Map of oil concessions in the Ecuadorian Amazon, 2012 163
Extractive rent from mining: so much for so little? 164
Green capitalism 166
The strategic discourse on extractivism 167
Table 5.5 Key actors in REDD in Ecuador 168
6 Mexico: The political ecology of mining 172
Contextualizing mining in Mexico 173
Neoliberal reforms in Mexico’s mining sector 177
Panorama of resistance 181
Theoretical implications and final reflections 188
7 Peru: Mining capital and social resistance 192
Overview: mining capital in Peru 193
The commodities boom and its significance for Peru: some data 194
Table 7.1 Peruvian export structure, 2000–12 196
Table 7.2 Basic social expenditure, 2002–11 197
The social and ecological impact of mining in Peru: the facts 197
The capitalist state and imperialism in Peru 199
Profits and corporate social responsibility 202
Peruvian governmental policies and mining capital 204
Ollanta Humala: neoliberalism with state intervention 208
Table 7.3 Contribution of the mining sector to total income tax revenue, 2005–12 214
Table 7.4 Peruvian poverty rates by department, 2004–10 215
The limits of the struggle for survival 216
Conclusion 220
8 Theses on extractive imperialism and the post-neoliberal state 222
Extractivism: a defining feature of the post-neoliberal state in the current context 224
From classical extractivism to the new extractivism 225
Contradictions of the new extractivism 226
Dependence on foreign investment in a policy of resource extraction is a development trap 232
The fallacious belief that extractive rents can finance and sustain a process of inclusive development (progressive extractivism) 234
The costs of extractive capitalism exceed any actual and potential benefits 236
Class analysis versus neoclassical cost–benefit analysis 239
The resistance is united in regard to extractivism but divided on capitalism 241
An alternative model: post-neoliberalism or post-capitalism? 246
Conclusion 247
Notes on contributors 250
Notes 252
Introduction 252
1 New model or extractive imperialism? 255
2 Argentina 258
3 Bolivia 259
4 Colombia 265
6 Mexico 267
7 Peru 268
8 Theses on extractive imperialism 272
References 274
Index 297
About Zed Books 310