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Session Overview
3-HP140: The Extractive Imperative, a Global Phenomenon?
Tuesday, 06/July/2021:
2:00pm - 3:15pm

Session Chair: Dr. Lorenzo Pellegrini, ISS Erasmus University, Netherlands, The
Session Chair: Prof. Murat Arsel, International Institute of Social Studies, the Netherlands, Netherlands, The

Session Abstract

Natural resource extraction is seen simultaneously as a source of income, employment generation and financing for social policy expenditure and investment in infrastructure. More broadly, extractive industries are considered conducive to development, to the point that governments and other social actors embrace an ‘extractive imperative’. According to this imperative, extraction needs to continue and expand regardless of prevailing circumstances, ultimately undermining social justice. The concept has originated from Latin America, but has subsequently been applied to countries outside the region. This panel aims at the shape the extractive imperative has taken in Latin America after the conclusion of the ‘left turn’ as well as discussing it globally and comparatively. We invite the submission of (early) drafts and extended abstracts for the panel.

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The Extractive Imperative in Mongolia and the Impact of Canadian Foreign Aid

Stephen Brown

University of Ottawa, Canada

Mongolia is in the grips of the extractive imperative. Depending on the year, between 20% and 46% of its GDP depends on natural resource rents (World Bank 2019), mainly from the large-scale mining of gold, copper and coal. In theory, the revenues could fuel significant poverty reduction programmes as well as other expenditures that would benefit the population in the short, medium and long term. However, large and unpredictable fluctuations in commodity prices have made financial planning difficult and much of the revenue appears to be syphoned off by an alliance of domestic business elites and high-level officials from the main political parties. The extractive dimension of Mongolia’s political economy has profoundly shaped its political system, whereby politicians often seek access to power in order to capture a share of these revenues and channel them to their supporters, creating a fundamentally neopatrimonial system. As a result, the Mongolian government – no matter which party is in power – has very little interest in attempting to restructure the economy to lessen its natural resource dependency and develop alternatives to extractivism. Instead, the government periodically seeks to modify its laws and its agreements with large multinational mining companies in order to increase its share of the revenues. Mongolian civil society organizations have focused their attention on resisting individual mining projects and highlighting their negative side effects on local populations. As a result, there is very limited concerted pressure for the state to lessen its reliance on the extractivist model.

Within this context of weak state leadership and feeble civil society pressure, international development actors could play an important role in promoting economic diversification. In recent years, after a long period of stagnation, official development assistance to Mongolia has grown significantly as measured both in net contributions (from US$236 million in 2015 to $764 million in 2017) and in its share of gross national income (increasing from 2% to 8% of GNI over the same period) (OECD 2019; World Bank 2019). This paper examines the case of foreign aid to Mongolia from Canada, one of Mongolia’s main bilateral aid partners since 2014, when it added Mongolia to the list of priority countries for Canada’s foreign aid programme.

This paper analyses the motives behind and the impact of this new development partnership between the two countries. Drawing on interviews conducted in Mongolia in 2018, it argues, first, that Canada was motivated primarily by a desire to benefit Canadian mining companies, which has not actually materialized to date. Second, the aid has modestly helped promote foreign investment in the mining sector, which reflected the Mongolian government’s priorities. However, it did not adopt more inclusive conceptions of national “ownership” and partnership, failing to consider broader civil society perspectives, even if the latter were weakly articulated. Canadian aid has thus strengthened Mongolia’s natural resource dependence and, as a result, indirectly facilitated the ills associated with extractivism in Mongolia, notably high-level corruption. Third, Canadian aid’s supply-driven emphasis on the mining sector – at the expense of other sectors – did little to promote poverty reduction, which is its central purpose according to Canadian legislation. In other words, rather than help contest Mongolia’s extractivist imperative, Canadian foreign aid has reinforced it.

The Extractive Imperative and Regional Environmental Cooperation: A Comparison of ASEAN and Mercosur

Karen Siegel1, Helena Varkkey2

1University of Glasgow, United Kingdom; 2University of Malaya, Malaysia

This paper examines how the extractive imperative has shaped regional cooperation. We argue that in both, Southeast Asia and South America, the extractive imperative is an important reason why regional environmental governance remains marginalised and efforts of regional organisations remain ineffective despite important advances in science, technology and governance mechanisms in recent decades. A comparison of the two cases leads to a better understanding of the constraints that the extractive imperative poses for regional cooperation.

In both regions, regional organisations, notably the Association of Southeast Asian Nations (ASEAN) and Mercosur, have engaged with environmental concerns since the 1990s and in some respects appeared to offer quite promising frameworks to deal with transboundary or shared environmental concerns. Mercosur’s creation in 1991 was driven primarily by economic objectives, but nevertheless environmental concerns have been considered from the start and have come to be institutionalised through regular meetings of government officials and environment ministers as well as some externally funded projects. Similarly, ASEAN was also driven largely by economic objectives. However institutionalisation of environmental concerns eventually led to a comprehensive framework to address the regional transboundary haze problem.

Yet, in both regions these steps towards regional environmental governance have turned out quite ineffective. Regional environmental governance in Mercosur has suffered from a constantly changing agenda addressing many different environmental concerns, but with little continuity. This has been largely decided by higher levels of government while lower level government officials working on environmental concerns have not been given sufficient autonomy to make substantive progress. In Southeast Asia, too, citing the “ASEAN way” governments have strongly resisted any move towards supranational environmental governance that would give regional forums more autonomy. In both regions regional environmental governance is characterised by vague and/or non-binding commitments and an avoidance of issues that are sensitive for economic and elite interests.

We posit that the “extractive imperative” is one of the key reasons for the ineffectiveness of regional environmental governance. In Southeast Asia transboundary haze is directly linked to land clearing for the expansion of palm oil plantations. Economic regionalisation which facilitated the expansion of Malaysian and Singaporean palm oil companies into Indonesia has caused severe transboundary environmental problems of haze. In South America there is no such obvious regional environmental crisis, but the extractive imperative, well-documented at the national level, also has regional repercussions. For example, water pollution associated with intensive agriculture also has transboundary dimensions as it affects the water quality in the La Plata river basin shared by five countries.

In both regions the position in the global economy as exporters of agricultural commodities, notably palm oil and soybean, creates strong tensions between economic growth and environmental concerns. This includes environmental justice dimensions as the benefits of resource exports and their negative consequences are usually unequally distributed within countries, but also within a region. Moreover, in both regions intensive agriculture is supported through discourses maintaining that it is a key driver of economic growth and national development, and the widespread idea that natural resource wealth is abundant. Research on ASEAN shows how patronage networks linked to elite interests have limited effective regional governance on haze. This adds an additional dimension to the research agenda on the extractive imperative that has received little systematic attention in South America. In South America, in turn, the reliance on external funding and NGOs to drive regional environmental governance is very clear, which is an area that warrants more research in ASEAN. In both regions the emerging initiatives of regional environmental governance have remained marginalised and the extractive imperative is an important element to account for this.

Solastalgia in a Petroleumscape: A Critical Analysis of the Social Licence to Operate in the Val d’Agri Oil Block (Basilicata, Southern Italy)

Alberto Diantini, Salvatore Eugenio Pappalardo, Daniele Codato, Massimo De Marchi

University of Padova, Italy

The Social Licence to Operate (SLO) is usually defined as the level of acceptance an enterprise has from the local communities. It is also described as being an implicit social contract between the company and the host society. This implicit contract ensures that the social risk of a company is reduced if its behavior is in accordance with the community values: the higher the SLO, the lower the risk. While the SLO concept has been spreading, especially in the extractive sector, there has been much debate on its value. One of the criticism is that it has emerged only as an industry response against community opposition to projects, in order to silence the voice of local stakeholders. Anyway, it is widely considered that the SLO concept can be easily adopted in the Global North, where it has developed, as a potential vehicle to influence corporate-community relations. On the contrary, its use in the Global South seems to be quite critical, due to more common conditions of power imbalances and conflicting worldviews. The aim of this paper is to critically analize the adoption of the SLO concept even in the Global North. The study area is the Val d’Agri oil block, in Basilicata, Southern Italy, situated over the biggest onshore oil field in Europe. It overlaps one national park and other protected areas, in a territory with an important food farming tradition. Despite its importance in terms of cultural and biological conservation, it is also home to the most important oil extraction activities of Italy, supplying around 70% of the national oil production. The contexts are clearly different, but even this region shows to be asphyxiated by a form of extractive imperative, with dynamics very similar to those present in Latin America. For Example, since the ’90s, when ENI (an Italian partially state-owned company) started the actual production phase in the block, these oil activities has been described as the main driver for the local economy. In one of the poorest regions of Italy, the oil extraction seemed to be the unique and indispensable economical alternative to ensure a fast and certain development, public expenditures in social programs and investments in human and physical capital. Moreover, in the public speeches of politicians, the Val d'Agri operations have been considered as activities of national interest, needed to reduce Italy's dependence on the external fossil fuels market and to boost the national economy. Any form of dissent has been often publicly criminalized as a threat to the development of the country and the region, while the block’s production covers around 6% of the national hydrocarbons demand. As many semistructured interviews conducted in the study area by the first author showed, the local people don’t perceive the oil extraction has improved their socioeconomic condition. After almost 30 years of oil activities, the promises of progress and wellbeing have been translated in swimming pools and synthetic grass football pitches, but not in more employment opportunities or long-term development projects. A clear condition of “solastalgia” can be observed when the people talk about the environment where they live, perceived as chronically and irreversibly degraded by the oil activities. The territory has been reshaped, from an agricultural and touristic landscape to a deeply rooted petroleumscape. The attempts of the regional government (fuel bonuses for citizens) and the company (recruitment campaigns) to increase community acceptance, are simply strategies to downplay local grievances and keep maintaining operations. No alternative seems possible, except for oil extraction, and, on this basis, no SLO is plausible.

Mining in Sweden and the Extractive Imperative? Unpacking the State and its Inherent Contradictions.

Sara Moritz

Stockholm University, Sweden

This paper maps and analyses narratives and tensions within the Swedish state’s engagement with mining in peripheral municipalities in the north, viewed from the local perspective.

In Sweden, the northern region's relationship with the central state authorities and the state mining company is complex. Historically, the extraction of natural resources in the northern mountain areas is connected to the establishment of national borders and deeply intertwined with the colonization of Sámi land. In the mining municipalities of Kiruna and Gällivare, the dependence on the state-owned mining company LKAB is substantial and the traditional role of the north as a resource industry region continues. However, during the recent global mining boom, several conflicts concerning planned mines emerged.

The concept of the extractive imperative, defined by Arsel et al. (2016) as “a model of development in which intensified extraction of natural resources takes on a teleological primacy”, is interesting to explore in the Swedish context. The emerging conflicts challenge the discourse of the north of Sweden as a “natural” space for extraction. Nevertheless, the dominant narrative – advocated by politicians both from the left and right – still stresses that resource extraction is the key development path for the region. Through juxtaposing the Swedish case to the discussions of the extractive imperative in the global south and especially Latin America, interesting similarities and differences become visible.

Previous research on extractive industries in various parts of the world has primarily focused on resource conflicts and particularly highlighted community resistance against mining expansion. Moreover, debates on the resource curse have demonstrated the role of the central state and political elites in pushing for extraction due to the profits it generates. A few studies have addressed the state’s role, paradoxically describing the state as being both absent and “hollowed out” yet present and authoritative. This paper contributes to these debates by exploring the dynamics between different levels and sectors of the state.

Theoretically, this paper draws on an understanding of the state as non-monolithic and continuously constructed through its interactions with other social forces (E.g. Migdal 2001; Sharma and Gupta 2006; Mitchell 1991). Empirically, the study is based on a collection of local media material from 1950 to 2020 and additional semi-structured interviews with local representatives. The paper analyses the contradictory narratives on what the state is and should be that are articulated concerning mining issues from the local perspective. Based on the findings I will theorize the relationship between the state’s constructed inside (state institutions and its representatives) and outside (civil society and other social forces) and how such relationships have changed over time.

By providing for novel empirical findings about the strategies and practices of state engagement in extraction over time and how it is reflected locally, the paper contributes to debates on extractive governance. Through unpacking the state and its inherent contradictions, the paper advance debates on how to conceptualize the extractivist state and shed light on the multiple and conflicting claims within government institutions and beyond them, and also how the boundaries between the inside and outside of the state are upheld and reinvented. Through this analysis of the state, the study also contributes to debates on the extractive imperative in the global north.

The Extractive Imperative Meets Rising China: A Multi-Scalar Analysis of Development and Distribution in Namibia’s Uranium Sector

Meredith DeBoom

University of South Carolina, United States of America

State-led mining is enjoying a resurgence across the world. This trend includes Africa, where at least eight countries have created new state-owned mining entities over the past ten years. African politicians’ stated goals in pursuing an increased state role in mining include combating the resource curse, ensuring that citizens — rather than foreigners — benefit from mining, and ending the dominance of neoliberal policies perceived to be antithetical to broad-based development. This resource nationalist shift has coincided with a second global trend in mining: rapidly increasing Chinese investment. Although researchers have examined rising Chinese investment and resurgent resource nationalism separately, there has been surprisingly little attention to how these two trends intersect and with what implications for development outcomes and the extractive imperative across multiple scales.

If African politicians are correct in claiming that the dominance of private, foreign investments has hindered African governments’ abilities to use mining to facilitate broad-based development, Chinese investments may open up new developmental possibilities. Unlike most Western investments (with some exceptions, such as France’s Areva), Chinese investments typically occur through state-owned entities, many of which are amenable to state-led mining. Namibia’s Husab uranium mine is just one example of a joint venture between an African state and the Chinese state. Husab is owned by China’s state-owned China General Nuclear Power Corp. (CGN) (90 percent) and Namibia’s state-owned Epangelo mining company (10 percent), which was established in 2008. It is expected to become the world’s second-largest uranium mine at full production and contribute up to $170-200 million in annual revenues for the Namibian government — revenues that Namibia’s ruling party, SWAPO, promises will facilitate broad-based development and the diversification of Namibia’s economy away from mining.

The rising prominence of state-based, joint ventures like Husab raises pressing questions about how the extractive imperative — and the distribution of the benefits and costs of state-led, mining-based development — may be changing in association with China’s rising geopolitical and geo-economic influence. Can Chinese investments in mining facilitate a more just distribution of the costs and benefits of mining at global as well as national and subnational scales and the eventual diversification of African economies? Or are such investments likely to merely facilitate the entrenchment of the extractive imperative and the state’s authority at the cost of the quality of life of ordinary Africans?

This paper uses Namibia’s Husab uranium mine as a case study to assess the possible implications of state-based, joint mining ventures between China and African governments for development across multiple scales. My findings draw on interviews and focus groups with a range of Namibians as well as participant observation and textual analysis. I use these data to identify patterns in Namibians’ perceptions of state-led, mining-based development and Chinese investments, as manifested in the Husab mine, and assess how those perceptions differ from the rhetoric promoted by the SWAPO ruling party. While Namibians’ perceptions vary in association with geographical and socioeconomic characteristics, my findings suggest that there are reasons to be skeptical that the ‘Husab model’ will facilitate broad-based development. Instead, I find that Husab appears to be facilitating both the entrenchment of the extractive imperative within SWAPO and the entrenchment of multi-scalar exploitative patterns that have contributed to Namibia’s status as one of the world’s most unequal countries. These findings demonstrate the importance of multi-scalar analysis in assessing the implications of China’s rising influence for development and distribution in resource-rich countries both in and beyond Africa.

Rentier State: Resource Extraction, Micro-politics and the Developmental State in the making of everyday Exclusion

Nikas Kindo

Tata Institute of Social Sciences, India

An abundance of natural resources is significant for the development of any country or region. However, it is striking to learn that many times resource abundance has played havoc for a country and community. The aspect of the rentier state shows that the main political-economic impacts of resource dependence rest on how the state handles windfall resource rent. Moreover the nexus between powerful politicians, ruling elites, bureaucrats and the dominant section of community control resources for rent-seeking. This study is located in the North Karanpura region- a resource-rich tribal-dominated region in Jharkhand, India and the mining region of Raigarh in Chattisgarh, India which produces a very significant amount of coal to feed the burgeoning needs of the energy sector. The finding shows that various forms of exclusion practised by different state institutions and local politics are the historical challenges for a developmental state. Tribal communities resisted the different forms of violence and exclusion by dominant communities and state against their expanding control of land, forest and natural resources. Today state often uses insurgent groups for negotiations and securing resources for energy generation. State rentier role and social injustice are in everyday practice where insurgent and dominant section can classify as agencies of ‘rentier capitalism'. This research follows the theoretical line of the ‘micro-politics', ‘developmental state' and ‘Rent-seeking'. Through ethnographic fieldwork carried out between 2015 and 2019 at Karanpura in Jharkhand and Korba- Raigarh in Chattisgarh, India this research will investigate the State-Society relationship, everyday exclusion of tribal communities and the state rentier role in its development practices. This research will also explore the fragmentation of society among tribal and other groups that lead to extremist movements to gain control and extract rents from resources. This research will be a contribution in ‘Resource politics’ and political economy theorization, and will critically examine the role of rentier agencies, its collaboration with the state that violates social justice to tribal communities in everyday life.

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