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 occurs in some sacrifice zones in the Global North, in European extractivism.Wilson, E.; Stammler, F. (2016). "Beyond extractivism and alternative cosmologies: Arctic communities and extractive industries in uncertain times". The Extractive Industries and Society, 3 (1), 1-8.Sörlin, S., Dale, B., Keeling, A., & Larsen, J. N. (2022). "Patterns of Arctic Extractivism: Past and Present" in Resource Extraction and Arctic Communities: The New Extractivist Paradigm. 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 (TNCs) as the main players, but also include the government and some (chiefly economic) 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, becoming a potential avenue for development. 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 to work collaboratively with already existing programs, therefore inflicting environmental, social and political consequences.
Environmental concerns of extractivism include: climate change, soil depletion, deforestation, a severe loss of food sovereignty, declining biodiversity, and contamination of freshwater. Social and political implications include violation of human rights, unsafe labor conditions, unequal wealth distribution, and conflict. As a result, 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 (as extractivismo) 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 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 toward 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 (1971).
Criticism The term, with its negative connotations has drawn comments from some economists and high-ranking officials in South America. Álvaro García Linera, Vice President of Bolivia from 2005 to 2019, wrote:Álvaro García Linera Geopolítica de la Amazonia (in Spanish)
All societies and modes of production have these different levels of processing of "raw materials" in their own way. If we conceptualize "extractivism" as the activity that only extracts raw materials (renewable or non-renewable), without introducing further transformation in labor activity, then all societies in the world, capitalist and non-capitalist, are also extractivist to a greater or lesser extent. The agrarian non-capitalist societies that processed iron, copper, gold or bronze on a greater or lesser scale, had some type of specialized extractive activity, complemented in some cases with the simple or complex processing of that raw material. Even the societies that lived or live from the extraction of wood and chestnut along with hunting and fishing, maintain a type of extractive activity of renewable natural resources.
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. In the case of Chile, Eyzaguirre argues that rentierism, rather than 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 centers.
According to Rafael Domínguez, the Chilean government coalition Concertación, which ruled Chile from 1990 to 2010, pioneered "neo-extractivism".
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 runs counter to their philosophy of living in balance with the earth and other life forms 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 (TNCs) are primary actors in neo-extractivism. Originally, as TNCs began exploring raw material extraction in developing countries, they were applauded for taking the risk of extracting 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 attributed to the often weak governance structures of 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 is manufactured into jewelry.
Neo-Extractivism
Definition Neo-extractivism, which was adopted primarily by countries in Latin America during the commodity boom of the early 2000s, refers to a development model where state governments increase their control over the extraction and revenue of natural resources to fund social programs. Unlike other neoliberal extractivist models, neo-extractivism regulates the allotment of resources and their revenue, pushes state-ownership of companies and exports, revises contracts, and raises export duties and taxes while still remaining an export driven economy reliant on global markets. Neo-extractivist models are most commonly connected with the 'Pink Tide' governments of the 21st century. Pink Tide governments claimed that intense extractivism was necessary to fund social programs such as poverty reduction, expansion of infrastructure, and social inclusion. Neo-extractivism has similarities to older forms of extractivism and exists in the realm of neo-colonialism.
Redistribution Efforts Governments employing neo-extractivism would often justify the continued use of extractivism by arguing that revenues from exported resources would finance social programs such as poverty reduction and infrastructure investment. During the early 2000s commodity boom and the rise of neo-extractivist governments in Latin America, the large increase in exports and therefore revenues saw an increased investment in social programs. This increase in social funding led to measurable improvement in poverty and other indicators of poverty across Latin America.
Critique Although measurable statistics are showing social improvement under neo-extractivist governments, many critics argue that the continued reliance on commodity exports encourages a singular economy, putting the country at greater risk. Critics argue that rooting social programs in international commodity markets makes them increasingly vulnerable to global market changes and sudden drops in exports. The sudden drops in social funding can destabilize not just the economy, but the social programs rooted in it as well. On top of that, critics argue that neo-extractivist governments also increase the power of governmental executives, leading to less consultation and options for participation from the public.
Scholars also note the socio-ecological issues arising from the expansion of extraction under neo-extractivist governments. Some of the main issues critics mention are community displacement, ecological degradation, state militarization of extractive zones, and increasingly violent land disputes in rural and indigenous communities. During the same commodity boom that improved social conditions, factors such as biodiversity loss, forest clearing, pollution in water supplies, and health risks surrounding toxic waste deposits all worsened. Scholars and indigenous communities also critique the use of progressive language and the framing of neo-extractivist policies as positive, while reinforcing the reliance on commodity exports and intensifying ecological damage.
Neo-extractivism in Ecuador