Extractivism in Bolivia: How raw materials extracted changed since neoliberal governments (1985-2004)?

By Susana del Granado* and Gabriela Olivarez**

Questions surrounding the extraction of natural resources have been the topic of multiple debates in Bolivia. Most recently, two talks, one in La Paz[1] and the other in Santa Cruz[2], questioned the need of this extraction and analyzed the costs. However, the need to compare the extraction between the current and previous governments remains. This short article attempts to contribute to fulfill this gap by comparing the quantities extracted and the public investment between a government claiming to be state-led (2004-2013) and neoliberal ones (1985-2003).

The data shows that the quantities extracted of the main raw materials for export in Bolivia’s economy have increased in the state-led government (see figure 1), but public investment in industry and manufacturing has remained fairly constant (figure 2). Yet, the current government wishes – as established in both development plans (2007, 2015) – to transform Bolivia’s extractivist economy into an economy in which the extraction of raw materials is used as a springboard to achieve industrialization. Nevertheless, little progress appears to be taking place in the discursive trajectory of the current government led by Evo Morales. Furthermore Raul Zibechi, an Uruguayan researcher and journalist, in a recent talk in La Paz argued that industrialization from extractivism is an unattainable goal[3].

Extractivism is defined by Gudynas (2013:2) as the “extraction of resources from Nature” or the activities of “appropriation of natural resources and their commercialization as raw materials” while excluding other economic activities (Gudynas, 2015: 9). Gudynas argues that far from turning from extractivism, current Latin American countries (including Bolivia) have intensified extractivist practices. The data on the quantities extracted in Bolivia shows that Gudynas affirmation is correct.

Figure 1: Quantities extracted over time: naturals gas and oil (left) – soy and minerals (right)

The production of soy has increased exponentially since 1988, with a slight decrease shortly before the international financial crisis of 2008. The production of oil and natural gas has also increased since the beginning of the 21^st century with the signing of contracts to export gas to Brazil and Argentina. In 2008, the quantities of hydrocarbons produced dropped but recovered after 2010. The production of minerals has increased modestly since 1983 in comparison to the increases observed in hydrocarbons and soy. After the financial crisis of 2008 the production of minerals has remained mostly constant.

Figure 2: Public investment (thousand US$) by sector corrected for inflation

using Consumer Price Index (left) and as percentage of total investment (right)

Public investment in industry and manufacturing has remained mostly the same (with a modest decrease since 2005 as a percentage of total public investment). However, public investment in general and investment in infrastructure in particular have increased since 1990. These two types of investment have increased at a higher rate since 2005. It is important to note here that even though it appears that public investment in extraction has increased, it has in fact reduced as a total percentage of public investment. Thus, it could be argued that the current government is harvesting the reserves discovered through the investment in extraction during free market policies and in the latest months Morale’s government is seeking alternatives to increase public investment in extraction. For example, on December 14^th of 2015, Evo Morales promulgated the Incentives Law 319 that subsidizes companies that have interest in extraction of hydrocarbon in the national territory. According to Gudynas (2015b) this subsidy entails an amount of 3,556 million US$. This amount represents the total government direct investment dictated by the law in a  20 year period (Del Granado-Cosio, 2015).

Why do Bolivian citizens remain silent, for the most part, compliant with this resource extraction? Because of economic growth, extraction under the current state-led model has been legitimized as necessary to fund welfare benefits (yet social investment seems to grow exponentially, but when assessed, as a percentage of total public investment there is no clear trend differentiating free market vs. state-led governments). How sustainable is this way of managing resources? Are the benefits worth the costs? In an open letter, on December 4th of 2001, to the Ministry of Economy of Chile, the Chilean economist Max Neef asked his government:

“If I do, for example, extract a natural resource, my economy will grow while I do the extraction, but at the expense of becoming poorer. In reality people do not realize the aberration of conventional macroeconomics which represents the loss of heritage as an increase in income. Behind every number there is a human and environmental history. If these histories are positive, let’s welcome growth, because it is preferable to grow little but grow well, than grow much but wrongly” (cited in Acosta, 2009 p. 163)

These questions are particularly important in the context of a government like Morales’ that claims that the goal of the economic model is to “live well” rather than live to grow and to enable that growth by increasing the extraction of natural resources.

REFERENCES:

Acosta, A. 2009. La maldicion de la abundancia. Comité Ecumenico de Proyectos CEP. Abya-Yala. Quito-Ecuador.

Gudynas, E. 2013. Extracciones, Extractivism y Extrahecciones: un marco conceptual sobre la apropiación de recursos naturales. Observatorio del Desarrollo 18: 1-18.

Gudynas, E. 2015. Extractivisms: ecología, económia y política de un modo de entender el desarrolla y la Naturaleza. Centro Latino Americano de Ecologia Social. Centro de documentacion de Informacion Bolivia. Cochabamba Bolivia.

Gudynas, E. 2015b. Propuestas para Transitar al postextractivism. Talk given on October 2015 at the Conference Propuestas para el post extractivism. http://www.bing.com/videos/search?q=gudynas&view=detail&&mid=ECB65C1BFC412867AB6FECB65C1BFC412867AB6F (visited on November, 2015)

Del Granado-Cosio, H. (November 15th of 2015).  El Proyecto de Ley de Incentivos. La Razón. http://www.la-razon.com/suplementos/animal_politico/proyecto-Ley-Incentivos_0_2380562078.html (visited on November 2015)

[1] International seminar on “the analysis and alternatives to the dependence and the extractivism in the context of world economic crisis” organized by CEDLA, CIDES-UMSA and the Marcelo Quiroga Santa Cruz Conferences (February 16^th, 2016).

[2] Titled Extractivism in the Bolivian Amazon: new pressures of the XXI century http://www.aecid-cf.bo/agenda/curso-taller-extractivismo-en-la-amazonia-boliviana/ (visited February 29^th, 2016)

[3] To listen to Zibechi’s talk https://chaskiclandestino.wordpress.com/2016/02/26/extractivismo-y-la-cuarta-guerra-mundial-contra-los-pueblos/ (visited February 26^th, 2016)

* The author is a researcher at INESAD and Ph.D. in Environmental and Natural Resources Policy at the State University of New York from the college of Environmental Science and Forestry (SUNY-ESF), sdelgranado@inesad.edu.bo – smdelgra@gmail.com. 

** The author is a Junior Researcher at INESAD, golivarez@inesad.edu.bo  

The views expressed in this article are those of the authors and do not necessarily reflect the views of Fundación INESAD.