Extractivism
Extractivism is the removal of natural resources particularly for export with minimal processing. This economic model is common throughout the Global South and the Arctic region, but also happens in some sacrifice zones in the Global North in European extractivism. The concept was coined in Portuguese as "extractivismo" in 1996 to describe the for-profit exploitation of forest resources in Brazil.
Many actors are involved in the process of extractivism. These mainly include transnational corporations as the main players, but are not limited to them, because they also include the government and some community members. Trends have demonstrated that countries do not often extract their own resources; extraction is often led from abroad. Extractivism is controversial because it exists at the intersection where economic growth and environmental protection meet. This intersection is known as the green economy. Extractivism has evolved in the wake of neo-liberal economic transitions to become a potential avenue for development to occur. This development occurs through stabilizing growth rates and increasing direct foreign investment.
However, while these short-term economic benefits can be substantial, extractivism as a development model is often critiqued for failing to deliver the improved living conditions it promises and failing to work collaboratively with already existing programs, therefore inflicting environmental, social and political consequences.
Environmental concerns of extractivism include; climate change, soil depletion, deforestation, loss of food sovereignty, declining biodiversity and contamination of freshwater. Social and political implications include violation of human rights, unsafe labour conditions, unequal wealth distribution and conflict. As a result of this, extractivism remains a prominent debate in policy related discourse because while it sometimes delivers high economic gains in the short term, it also poses social and environmental dangers. Case studies in Latin America demonstrate these policy gaps.
Background
Definition
Extractivism is the removal of large quantities of raw or natural materials, particularly for export with minimal processing. The concept emerged in the 1990s to describe resource appropriation for export in Latin America. Scholarly work on extractivism has since applied the concept to other geographical areas and also to more abstract forms of extraction such as the digital and intellectual realms or to finance. Regardless of its range of application, the concept of extractivism may be essentially conceived as "a particular way of thinking and the properties and practices organized towards the goal of maximizing benefit through extraction, which brings in its wake violence and destruction". Guido Pascual Galafassi and Lorena Natalia Riffo see the concept as a continuation of Galeano's Open Veins of Latin America.Neo-extractivism
Extractivism has been promoted as a potential development path in which raw materials are exported and revenues are used to improve people's living conditions. This approach is called "neo-extractivism". This transition to neo-liberal economies is rooted in a nation's subordination to an emphasis on free trade. In contrast to older forms of extractivism, neo-extractivism regulates the allotment of resources and their revenue, pushes state-ownership of companies and raw materials, revises contracts, and raises export duties and taxes. The success of neo-extractivism is debatable as the communities at the sites of extraction rarely experience improved living conditions. More commonly, the people at these sites experience worsened living conditions, such as in the cases of extraction from Indigenous communities in Canada's boreal forest. Neo-extractivism has similarities to older forms of extractivism and exists in the realm of neo-colonialism.Criticism
The term and its negative connotations have drawn comments from some economists and high-ranking officials in South America. Álvaro García Linera, Vice President of Bolivia from 2005 to 2019 wrote:The concept of extractivism has been criticized by Nicolás Eyzaguirre, Chilean Minister of Finance between 2000 and 2006, who cites the mining sector of Australia as a successful example of a "deep and sophisticated value chain", with high human capital, self-produced machinery and associated top-tier scientific research. For the case of Chile Eyzaguirre argue that rentierism and not extractivism should be the concept of concern.
History
Extractivism has been occurring for over 500 years. During colonization, large quantities of natural resources were exported from colonies in Africa, Asia and the Americas to meet the demands of metropolitan centres.According to Rafael Domínguez the Chilean government coalition Concertación, which rule Chile from 1990 to 2010, pioneered "neo-extrativism".
Philosophy
Extractivism is a result of colonial thought which places humans above other life forms. It is rooted in the belief that taking from the earth will create abundance. Many Indigenous scholars argue that extractivism opposes their philosophy of living in balance with the earth and other life forms in order to create abundance. Leanne Betasamosake Simpson, a Michi Saagiig Nishnaabeg scholar and writer, compares these ideas of destruction versus regeneration in her book A Short History of the Blockade. She references the Trent–Severn Waterway, a dam in Canada that caused major loss of fish, a major source of food for her people. She quotes Freda Huson in saying, "Our people's belief is that we are part of the land. The land is not separate from us. The land sustains us. And if we don't take care of her, she won't be able to sustain us, and we as a generation of people will die." She also defines extractivism in another work, stating it is "stealing. It's taking something, whether it's a process, an object, a gift, or a person, out of the relationships that give it meaning, and placing it in a nonrelational context for the purposes of accumulation." The colonial action of theft goes beyond only extracting from the earth. This philosophy of entitlement is the cause behind colonization itself, and we are watching the continuation of theft in real-time through practices such as extractivism. Naomi Klein also touches on this in her book This Changes Everything: Capitalism vs. The Climate. She writes, "Extractivism ran rampant under colonialism because relating to the world as a frontier of conquest- rather than a home- fosters this particular brand of irresponsibility. The colonial mind nurtures the belief that there is always somewhere else to go to and exploit once the current site of extraction has been exhausted."Actors
Transnational corporations are a primary actor in neo-extractivism. Originally, as TNCs began to explore raw material extraction in developing countries they were applauded for taking a risk to extract high-demand resources. TNCs were able to navigate their way into a position where they maintained large amounts of control over various extraction-based industries. This success is credited to the oftentimes weak governance structure of the resource dependent economies where extraction is taking place. Through complex arrangements and agreements, resources have slowly become denationalized. As a result of this, the government has taken a "hands-off" approach, awarding most of the control over resource enclaves and the social responsibility that accompanies them to TNCs. However, the government still plays an important role in leading development by determining which TNCs they allow to extract their resources and how thorough they are when it comes to enforcing certain standards of social responsibility.Resources and techniques
Some resources that are obtained through extraction include but are not limited to gold, diamonds, oil, lumber, water and food. This occurs through techniques such as mining, drilling and deforestation. Resources are typically extracted from developing countries as a raw material. This means that it has not been processed or has been processed only slightly. These materials then travel elsewhere to be turned into goods that are for sale on the world market. An example of this would be gold that is mined as a raw mineral and later in the supply chain manufactured into jewellery.Impacts
Economic benefits
Neo-extractivism is seen as an opportunity for successful development in many areas of the developing world. Demand for extracted resources on the global market has allowed this industry to expand. Since the year 2000, there has been a substantial rise in global demand and value for raw materials – this has contributed to steadily high prices. Neo-extractivism has therefore been seen as a tool for economically advancing developing countries that are rich in natural resources by participating in this market.It is argued that the emergence of this industry in the neo-liberal context has allowed extractivism to contribute to stabilizing growth rates, increasing direct foreign investment, diversifying local economies, expanding the middle class and reducing poverty. This is done by using surplus revenue to invest in development projects such as expanding social programs and infrastructure. Overall, extraction based economies are seen as long-term development projects that guarantee a robust economic foundation. It has created a new hegemonic order that closely intertwines with the dominant capitalist system of the world. The green economy has emerged as an economic model in response to the arising tensions between the economy and the environment. Extractivism is one of the many issues that exist at this intersection between the economy and the environment.
Increasingly, policy tools such as corporate social responsibility mechanisms and increased government involvement are being used to mitigate the negative implications of neo-extractivism and make it a more effective development model.