VELVET GLOVES AND IRON FISTS
In recent years, the Canadian state has lent its support to a repressive post-coup regime in Honduras; it has provided military and ideological backing for a repressive regime in Colombia, one which boasts the hemisphere’s worst record on human rights; it has aggressively interfered in the domestic affairs of left-of-centre Latin American governments, such as that of Hugo Chávez in Venezuela and Rafael Correa in Ecuador; it has supported ecological destruction and the dislocation of vulnerable populations in the region through its support for Canadian natural resource companies; it has provided cover for exploitative working conditions in the factories of Canadian companies operating in the export processing zones of Central America; it has sought to delegitimize, coopt, or coerce popular movements that have directly challenged the economic interests of Canadian capital—this is the reality with which any honest study of Canada’s growing political and economic engagement with Latin America must start. These are not extreme or isolated examples, unrepresentative of the broader character of Canada’s foreign policies in the Americas. As we argue in this book, the trends mentioned above are at the core of Canadian foreign policy in Latin America, animating the dialectic of Canadian capitalist expansion and popular resistance in the region.
Canadian multinational corporations (MNCs) have expanded rapidly into Latin America as a whole since the 1990s with devastatingly destructive force. Their deleterious impact on human rights has been matched only by their enormous ecological offences—indeed, the two often go hand in hand. Expansion of Canadian capital has in turn engendered waves of creative and militant community resistance, which has proved the most successful way thus far of containing predatory Canadian MNCs and the state policies that abet their operations. This dialectic of capitalist expansion and popular resistance is well understood by Canadian policymakers. For example, Stockwell Day, the former Minister of International Trade, frequently noted the increasingly large amount of Canadian foreign investment flowing into Latin America. Summing up the drive of Canadian foreign policy towards the region quite effectively, he said, “These are substantial figures, and they indicate where our interests lie.”1
But as a considerable portion of that investment is in the land-hungry and environment-imperilling resource sector—sometimes linked simultaneously to the Canadian financial sector—the realization of those Canadian interests, we argue, is never fully guaranteed. As surely as Canadian investment spells future mega profits for the investor, it faces opposition from local communities. Even when some governments do not openly oppose Canadian resource investment, their plans are not strictly reducible to the interests of the investor: an Ernst and Young report cited “resource nationalism” as the biggest risk to mining companies in 2013, up from tenth largest in 2008. “Resource nationalism” encompasses moves by governments of the Global South to capture a greater share of windfall profits earned during the most recent commodity boom.2 A central argument of this book is that Canadian “interests” are, by their very nature, fraught with contradiction and instability in Latin America, and require state protection if they are not to be undermined. Providing such protection is the overarching goal of Canadian foreign policy in the region—whether in its diplomatic, developmental, or security form—to ensure the successful expansion of Canadian capital in its relentless and insatiable drive for more profit.
Canada’s intensified engagement in Latin America has received increased attention from observers in both popular and academic literature in recent years. With some notable exceptions most of the analysis, though, has been limited in its insights.3 Conflicts between Canadian companies and local communities, for example, are covered inconsistently and typically in isolation from the broader pattern of conflagration that has marked the expansion of Canadian capital. The systematic failure of the Canadian state to hold MNCs legally accountable for their practices, or otherwise rein them in, is rarely discussed in the extant literature. When it is covered, the analysis is commonly bound up in a narrative that presents Canadian foreign policy as confused, rooted in a misunderstanding of the region, or as a simple expression of our subordinate relationship to the United States. To the extent criticism of the actions of the Canadian state is advanced, it is tepid, and the scale of violence and destruction meted out by Canadian companies and the security forces supporting them is downplayed.
Furthermore, while the expansion of Canadian capital into Latin America and contemporary expressions of Canadian foreign policy begs serious consideration of the imperialist dynamics of the world system in the twenty-first century and the role of the Canadian state therein, no observers have thus far conducted such research. Contemporary scholarship on Canada’s relations with the region routinely fails to situate Canada’s interventions within the broader context of the starkly asymmetric dynamics of global capitalist accumulation. What such an analysis reveals, is that Canada is one of the richest countries in the world, and it is operating within a global system of imperialism that continues to systematically benefit capital from the Global North at the expense of the people and ecologies of the Global South. A related lacuna is the missing analysis of the sheer scale of the Canadian drive to dominate the natural resources and human labour of Latin America. The novelty and scope of this domination has never been properly documented and analyzed.4 What is more, the issues at hand are not reducible to the question of capital penetration, as important as that is; the expansion of Canadian capital is inseparable from a more outwardly aggressive Canadian foreign policy stance and the effort of the Canadian state to imprint itself on the decision making of Latin American states and communities.
Now, one objection to our theoretical framework might be that it no longer makes sense to use the term “Canadian” capital. There is a widely held notion that in an age of transnational globalization it is no longer accurate to refer to national capitals and their particular interests; rather, it is said that we should speak of transnational capitals which root themselves in this or that nation state opportunistically and flexibly. While we recognize that there has indeed been a certain intensification of trends in transnational coordination of capitals (alongside ongoing competition) over the last forty years or so, we maintain that it continues to be crucial to retain the concept of national capitals, and in our case, to speak of Canadian capital—that is, capital that has a clear and indentifiable Canadian owner, whether as an owner of a private company or as a majority or minority (with controlling influence) shareholder of a publicly-traded company.
Our fundamental analytical and empirical concern in this book is the role assumed by the Canadian state within the worldwide system of capitalist imperialism in relation to Latin America. It makes sense, then, to be clear conceptually from the outset about the relationship between capitalism and imperialism. A key feature of capitalism is its self-expansionary character, its compulsion to envelop the world. “The need of a constantly expanding market for its product,” Karl Marx and Friedrich Engels wrote long ago in The Communist Manifesto, “chases the bourgeoisie over the whole surface of the globe. It must nestle everywhere, settle everywhere, establish connexions everywhere.”5
“From its beginnings in the sixteenth and seventeenth centuries,” notes political economist David McNally, “capitalism has sought to profit from the exploitation of the peoples and natural resources around the globe.” The international dimensions of the history of capitalist development in Europe involved massive “world movements of cotton, sugar, tobacco—and, most unconscionably, of enslaved Africans,” all of which “fuelled the accumulation of capitalist wealth.” According to McNally, “the colonization of huge areas of the globe—Ireland, India, the aboriginal lands of North and South America, China, much of Africa—were all central aspects of capitalist development…capitalism has always been global in orientation.”6 “Mature capitalism,” political theorist Colin Mooers argues, “is inevitably imperialist; the outward push of capital, its search for new geographical sources of accumulation, is an inbuilt feature of the system.”7
However, when we look around the world today we do not see the same proliferation of prolonged territorial conquests and rule by colonizers over the colonized as in centuries past. Colonialism, understood strictly as the “political control of peoples and territories by foreign states, whether accompanied by significant permanent settlement (‘settler colonies’) or not” is a marginal feature of contemporary world politics.8 Has speaking of imperialism in the twenty-first century therefore lost much of its meaning? Or did imperialism become, in the wake of World War II and the decolonization of former European empires, imperialism without colonies?
Following the political theorist Ellen Meiksins Wood, we want to suggest that we live in a world in which imperialist domination no longer relies on permanent colonies. According to the dynamics of the world system today, “capitalist imperialism has become almost entirely a matter of economic domination, in which market imperatives, manipulated by the dominant capitalist powers, are made to do the work no longer done by imperial states or colonial settlers.”9 In Empire of Capital, Wood takes us on a whirlwind tour, beginning with the rhythms of the Roman Empire and ending with driving dynamics—capitalist competition, accumulation, and increasing labour productivity—at the heart of the contemporary leadership of the United States over the global economy and the hierarchically ordered world system of states. Hashing out the distinctive characteristics of a particularly capitalist imperialism is the consistent focus of Wood’s text, which moves her to juxtapose our current epoch with empires past. Wood’s aim is to unmask and underline “what drives [capitalist imperialism] and has distinguished it from other imperial forms since its inception.”10
There is one facet of Wood’s contribution that deserves special attention. She points to the analogous relationship between specific forms of domestic social relations and specific forms of imperial rule, between the operation and expansion of the domestic social relations of capitalism particularly, and the externalization of capital through capitalist imperialism. The historical record shows that there has been a tight historical association between both non-capitalist and capitalist societies, on the one hand, and their imperialisms, on the other. Non-capitalist colonial empires of the past—such as the feudal Portuguese and Spanish Empires in Latin America between the late fifteenth and early nineteenth centuries—like feudal lords in their relations with peasants, dominated territory and subjects through military conquest, often direct political rule, and therefore extensive extra-economic coercion; in contrast, capitalist imperialism “can exercise its rule by economic means, by manipulating the forces of the market, including the weapon of debt.”11 It does not follow that capitalist imperialism dispenses with the need for coercive force, as any casual perusal of the daily newspapers in the twenty-first century will attest. Indeed, as Colin Mooers suggests, “force remains indispensable both to the achievement of market ‘openness’ where it does not yet exist and to securing ongoing compliance with the rights of capital.”12 For Wood, a world defined by the near-universalization of capitalism is a relatively recent historical development and thus requires a new theory of imperialism, one that is “designed for a world in which all international relations are internal to capitalism and governed by capitalist imperatives.”13
Therefore, colonialism, understood as direct political control of peoples and territories by foreign states, whether or not through permanent settlement strategies, is best understood as merely one of the forms that imperialism has assumed historically. As Bernstein points out:
Whereas colonialism means direct rule of a people by a foreign state, imperialism refers to a general system of domination by a state (or states) of other states, regions or the whole world. Thus political subjugation through colonialism is only one form this domination might take; imperialism also encompasses different kinds of indirect control.14
In a complimentary refinement of this definition, which focuses our attention on North-South relations specifically, and which allows us to see how forms of capitalist imperialism may change over different historical periods in the rise and consolidation of capitalism as a world system while retaining some of their basic presuppositions, David McNally suggests: “imperialism is a system of global inequalities and domination—embodied in regimes of property, military power and global institutions—through which wealth is drained from the labour and resources of people in the Global South to the systematic advantage of capital in the North.”15
In sum, capitalist imperialism is characterized by deep structural inequalities between regions and countries of the world. These inequalities are exacerbated by the uneven development of global capitalist relations, and are reproduced through the active policies adopted by imperialist states and powerful international financial institutions (IFIs), such as the International Monetary Fund (IMF) and the World Bank. Capitalist imperialism involves the draining of the wealth and resources of poorer countries to the benefit of capital of the Global North, at the cost of the majority of the peoples of the Global South. The majority of inhabitants of imperialized countries experience imperialism through the blunt end of economic, political, ideological, and military bludgeons. “Underdevelopment” or “dependency” in the Global South is not a necessary structural corollary of growth and development in the imperialist core—as per classical dependency theory.16 Rather, it is a product of the uneven way in which capitalist growth takes shape, itself a product of the logic internal to capitalism at the national, regional, and global levels that leads the most productive capital to concentrate in already wealthy regions and spread slowly, haltingly, and often under fairly specific conditions (for instance, to access raw materials, or in response to economic crisis at home) to other parts of the globe. What concerns us here, however, is not simply a question of uneven development, or simply market forces internal to capitalist accumulation. We are interested in the manners in which uneven development is amplified and reproduced through the actions of capitalist states of the Global North in order to create and recreate conditions to the benefit of Northern capital. In some cases, these actions benefit all capital, but because of uneven development the patterns of contemporary capitalist imperialism tend to concentrate benefits in the hands of capital from the Global North. State managers of core imperialist countries introduce policies such as structural adjustment, free trade, market liberalization, and political interference of various kinds in order to structure the domestic political economies of weaker nations to the benefit of imperialist capital.
Dependency of peripheral countries on the core, therefore, is not a necessary product of capitalist accumulation, but rather the frequent outcome of the combination of uneven development and conscious actions taken by imperialist states. This is not to say imperialist states are attempting consciously to reproduce the impoverishment of dependent countries necessarily (though it may be the case in some instances), as much as they are trying to shape the political and economic dynamics of dependent states such that they remain politically subordinate to the interests of capital from the core. Patterns of dependency are, therefore, a combination of intended political action and unintended by-products of capitalist accumulation. Political economist Andrew Higginbottom points out that one can find contemporary iterations of modernization theory in the outlook of many core imperialist states, as well as in the regular publications of the World Bank and the IMF.17 Such articulations of modernization theory today argue that Foreign Direct Investment (FDI) ipso facto represents a necessary source for Third World development and improvement in the standard of living of the peoples of the Third World. And, indeed, the position is reiterated, albeit in a different register, in some Marxist theories of imperialism. 18
Ray Kiely, for example, deploys a framework of uneven development that offers important insights into the persistent political and economic asymmetries between the Global North and Global South. However, he also suggests that a principal problem facing the Global South is the lack of inflowing FDI from richer nations. The continuing concentration of FDI within and between the countries of the Global North is a central problem for Kiely.19 This overstates the concentration of FDI in the North, which is real, but in the case of Canada, for instance, there is also clear growth over the last twenty-five years in the proportion of its outward flowing FDI that targets countries of the South.20 But it also fails to problematize an economic process that is clearly not, in and of itself, beneficial to populations of the South. An increase in FDI flows does not by definition equal progress. To cite but one important example, a recent report of the Economic Commission for Latin American and the Caribbean argues:
Profits made by transnational companies operating in Latin America and the Caribbean have increased by a factor of 5.5 in nine years [up to 2011].…This surge in profits…tends to cancel out the positive impact of FDI inflows on the balance of payments. The evidence for Latin America and the Caribbean shows, in fact, that in the past few years outflows registered as FDI income were almost as high (92%) as inflows in the Caribbean.21
The same study indicates that the rate of outflow per dollar of profit earned—that is, repatriated to the home country of the multinational corporation (MNC)—is highest in the natural resources sector with over 50 percent of FDI profit in mining-centric countries being repatriated, for example. At the same time, average returns on FDI accruing to MNCs in the natural resources sector has been considerably higher than in other sectors over the last two decades, and more than double that of the second highest sector for the largest five hundred companies investing in the region.22 Due to the intersection of the liberalized natural resource regimes found throughout much of the Americas and high global commodity prices, “extremely high returns [were] obtained by corporations in the extractive industries.”23 From 2001 to 2011, FDI flows increased by a factor of approximately 2.7, or less than the increase in profits.24 The fact that liberalized tax regimes in countries of the Global South are accompanied by corporate strategies to transfer profits to jurisdictions with more permissive tax environments if necessary, means that natural resource sector growth is not typically a reliable strategy for improving economic wellbeing of people in these countries. Adding to this problem, as the ECLAC report makes clear, despite Canadian government justifications to the contrary, the natural resources sector is a poor employment generator. Mining and oil investment, for example, is the lowest job creator out of twelve major industries featured in the ECLAC report, with only 0.5 jobs created per US$1 million invested.25
This is especially important because the strategic orientation of imperialist powers such as the U.S. and Canada vis-à-vis Latin America over the last fifteen years has been driven principally by an effort to assert control over access to the region’s immense natural resource wealth. The importance of this dynamic has intensified as opportunities for accumulation have been opened up in the context of the neoliberal privatization of natural resources, and, until recently, increasing prices of basic commodities on the international market.26 At the same time, in geopolitical terms, both the U.S. and Canada have been interested in containing through persuasion, and/or eliminating through coercion, the rising tide of popular social movements and left-leaning governments in the region, an important part of whose mandates has been precisely to reclaim popular sovereign control over natural resources and reassert political and economic autonomy in the region vis-à-vis dominant external powers.27
It is worth remembering here that Latin America and the Caribbean contain 25 percent of the world’s forests and 40 percent of its biodiversity. The region contains 85 percent of all known reserves of lithium, and a third of copper, bauxite, and silver. Latin America and the Caribbean are similarly rich in coal, oil, gas, and uranium, with 27, 25, 8, and 5 percent respectively of all discovered deposits in the world currently being exploited. New underwater oil reserves, meanwhile, are regularly being discovered along the region’s vast coast lines. Finally, the region contains 35 percent of the globe’s potential hydroelectricity and the biggest reserves of fresh water under its soil.28
Access to the South’s natural resources, and the often disastrous ecological impact of the rapid development of economic sectors like mining, oil and gas development, and dam building, are therefore key to the dynamics of imperialism. Imperialism is an ecological phenomenon: it is shaped by ecological regimes, such as the ways in which certain natural resources have become central to capitalist accumulation and the geographical location of these natural resources, while it in turn transforms (usually destructively) local and regional ecologies in pursuit of profit, such as by blowing off the side of and clear-cutting a mountain in order to build an open-pit mine, the toxic waste from which leeches into the surrounding water system poisoning everything in the area. This connection remains undeveloped in much of the literature on imperialism, especially in accounts that stress a lack of FDI as a central issue facing poor countries without seriously considering the ecological factors motivating and resulting from the expansion of capital from the Global North into the South. Canadian FDI, as we discuss, is inserted into the wider system of global capitalism, which is based on an insatiable thirst for non-renewable resources, increasingly found in the Third World. Inevitably running alongside Canadian efforts to expand FDI is a series of initiatives that aim to weaken already poor environmental regulations.29
Predictably, imperialist powers downplay the environmentally and socially destructive nature of capitalist expansion and their aggressive free market policies. In so doing, their defense of market liberalization and FDI mobilizes, explicitly or implicitly, racist tropes about the backward peoples of the Third World, mired in poverty and debt and unable to help themselves. This is a recurring theme throughout our book. Imperialism and racism, as noted earlier, have been intimately connected through the history of capitalism, rooted as it is, in part, on colonialism. As is the case of ongoing capitalist expansion within Canadian borders, much of the land Canadian resource companies are pursuing in Latin America is inhabited by indigenous peoples. Canadian natural resource companies often ignore indigenous claims to the land, and act as if these territories were terra nullius: empty and going to waste. It is up to MNCs to transform that land into a source of commerce and profit, and any indigenous communities that challenge the authority of investors—that are not grateful for the help foreign investors are bestowing upon them—are seen as obstacles to progress—that is, they are to be removed, by force if necessary. The mere fact that they do not demonstrate reverence to the interests behind capitalist development, and see the land as more than a means for capitalist exploitation, is cause for them to be dismissed as backward and naïve. This worldview also regularly provides justification for the repression of indigenous communities in resource-rich areas by legal and illegal security forces. Given the history of capitalism within Canadian borders, Canadian business and political leaders are well practiced in these dynamics.
Ecological destruction of indigenous or poor peasant communities in the South transforms those communities in profound ways. Dislocated from the land and its resources, indigenous patterns of social reproduction are undercut, putting new pressures on women in particular who are often the primary caregivers for the young. The ability to sustain themselves on the land is threatened, and greater integration into market relations is encouraged by the IFIs and national aid programs, including Canada’s. But the sheer scale of displacement from the land over the last two decades has meant that market relations in poorer countries are not a realistic option for survival for most people. The natural resources sector, as we have noted, has very low employment levels as a ratio of investment. The growth of low-wage manufacturing zones in the Third World has drawn millions of dispossessed peasants, primarily women, in search of work, despite extremely poor working conditions. The new proletarians are desperate to eke out an existence on the rough margins of global capitalism. For many others, the only option for survival is migration to the Global North, leaving family behind in a desperate search for work at what is, inevitably, the very bottom end of the labour markets in North America, Europe, and the Middle East. In the Global North, racist exploitation of migrant labour is cloaked in the language of citizenship to exclude these foreign-born workers from the basic rights won by workers born in places such as Canada and the U.S. In the neoliberal age of global mass migration—the scale of which is unparalleled in history—the social reproduction of increasing numbers of poor people of colour is an international process.30
The goal of FDI has never been development per se, nor improved standards of living for peoples of the Global South. The goal, rather, is profit. Investors look for opportunities in scenarios that will allow for the repatriation of as much profit as possible with as little interference from local governments and communities as possible. If there is excessive “regulation” or “red tape,” or if demands from local communities threaten to make serious inroads on profitability, investors will move elsewhere when possible. Leaving aside for the moment the matter of what kind of development is most desirable for social justice and the future of the world’s ecological systems and human population, a simple uptick in FDI does not constitute a formula for improved living standards or endogenous industrial growth. As economist Anwar Shaikh has demonstrated, FDI flows facilitate and intensify uneven development and poverty, while simultaneously generating profits for corporations in the Global North, as well as a thin layer of the population in the imperialized country (mainly capitalists and politicians).31 Any theory which suggests that FDI is the central driver for meaningful development, or which uncritically situates FDI as a solution to problems of poverty and inequality in the Global South, is dangerously simplistic and needs to be challenged.
The phase of world capitalism that most interests us in this book is that of neoliberal globalization, which spans across roughly the last four decades. There is a significant amount of confusion and obscurity as to what precisely characterizes this latest phase of global capitalism, and it is therefore necessary to be quite specific in our use of the relevant terminology. Neoliberalism on a world-scale, in our view, ought to be understood as a political project of the ruling classes in the advanced capitalist countries—especially in the U.S.—to create or restore capitalist class power in all corners of the globe in response to the crisis of Keynesian and developmentalist economics in the late 1960s; the decline in profitability and the growth of stagflation by the 1970s; and the rise of leftist political threats to capital in the shape of radical popular struggles, labour movements, and peasant insurgencies across large parts of the world during that period.32
The purist theory of free market economic fundamentals which provides the bedrock for neoliberal ideology should be understood as a flexible toolkit for justifying the project for restoring capitalist class power, rather than as a guide to the actual policy practice of states during this period. The extent to which state policy has conformed to the precepts of the purist theory of neoliberalism has varied tremendously across different cases. Globally, neoliberalism has failed miserably in terms of its declared objectives of increasing economic efficiency and improving human well-being. However, seen as a political project for the formation or restoration of capitalist class power, neoliberalism has been hugely successful. Nonetheless, its implementation has created massive social contradictions, not least since the Great Recession began in 2007–2008, initiating in its wake a wave of ever more extreme experimentations in economic austerity throughout most of the world.33 In the twenty-first century, organized popular rejection of the neoliberal model has been most advanced in Latin America, although since 2011 the Arab uprisings and waves of movement across parts of southern Europe have added to the international fomentation of resistance.34
Financial Capital
The expansion of neoliberal capitalism in the last quarter of the twentieth century and the opening years of the twenty-first had a number of defining characteristics. To start, given the fact that its economic dominance in the realm of production was threatened by the late 1960s, the U.S. state placed its bets in finance. Financial capital in the U.S. increasingly played a central role in the renewed project of capitalist imperialism initiated through the neoliberalization of the globe.35 In order for this to be successful, the U.S. required the liberalization of markets, and in particular capital markets. Taking advantage of the leverage over countries of the Global South offered up by the debt crisis of the 1980s, both the U.S. state, and, to a lesser but important degree, other core imperialist powers, utilized their control of the most important international financial institutions—commercial banks, the multilateral lending institutions such as the International Monetary Fund (IMF) and the World Bank, and various regional banks—to push through structural adjustment programmes (SAPs) in a vast number of countries.36 SAPs, which were often imposed by IMF and World Bank conditionality, typically included demands for countries of the Global South to commit to fiscal austerity with minimal to zero deficits, cutbacks in spending for social services and subsidies for food and other basic necessities, reform of the tax system, liberalization of financial markets, unification of exchange rates, liberalization of trade, elimination of barriers to foreign direct investment (FDI), deregulation of industry, and strengthening of guarantees of private property rights.37
Trade and Foreign Direct Investment
In Global Shift, the geographer Peter Dickens offers an accounting of aggregate world economic trends over the decades in which such policies were the main framework governing state policy in most regions. In particular, he offers a measure of the various indicators of growing interconnectedness within the global economy, and particularly trends in the flows of trade and FDI.38 In terms of general trade flows, while they have been incredibly uneven across countries and regions in terms of integration, the evidence suggests an uptick in processes of interconnectedness in the world economy since the 1980s. An ever-increasing amount of what is produced, in other words, is moving across borders. However, if trade has grown intensively over the neoliberal period, FDI has still outpaced trade by some distance. We observe an incredible upturn in FDI since the mid-1980s, which quite radically exceeds the also-expanding export trends. FDI is important to our analysis of Canada, as it constitutes investment above the threshold (10 percent) considered to give the investor managerial control over the asset being purchased, whether it is a bank, a mine, or a sweatshop factory. While it is still true today that FDI continues to be concentrated in the triad of North America, Europe, and Japan, it is also evident that there are increasing FDI flows toward other select areas of the Global South, most importantly China, which has become a major new zone of capital accumulation. It is important to note that aggregate data on flows, trends, and volatility in the global economy are a necessary backdrop to understanding the neoliberal epoch, but also that they tell us little about the profound unevenness of these trends across different geographical zones—for example concentrations of production, trade, and FDI in some zones, and their relative absence in others. Nonetheless, what this all means, Dickens points out, is that the primary mechanism of interconnectedness within the global economy has shifted in the neoliberal era from trade to FDI.39
Multinational Corporations
And what are the new agents of FDI and trade in the global economy? The principal actor that has emerged as the vehicle to facilitate the soaring flows of FDI and trade is the multinational corporation (MNC). These enormous entities, although operating across borders, maintain headquarters in specific countries and continue to rely on their home states to defend their interests domestically and abroad. In this sense, the capitalist state remains a core feature of capitalist imperialism in the neoliberal epoch. The capitalist state—with its laws defending such things as the sanctity of private property and individual over collective rights, its administrative mechanisms (policing, labour laws, welfare systems) to manage class struggle, and its privileged role in printing money and influencing the financial system—emerged as a means of containing the social contradictions thrown up by capitalism, and thus of producing stable market relations. This has been done historically by ensuring that social struggles and any other threats to market relations are safely defused or, when necessary, repressed.40 Imperialist states today do their best to secure markets at home and pry open and consolidate new markets for their MNCs abroad. These characteristics of the neoliberal period together—FDI and trade increases, the emergence of MNCs, and the facilitation of all of these other factors by imperialist states—are part of the reason we pay so much attention in this book to the dynamics of Canadian FDI in Latin America, and the role of the Canadian state in supporting the advance of Canadian MNCs in the region.
Accumulation by Dispossession
Key to the analysis of global capitalism developed by Marxist geographer David Harvey over roughly the last decade is his concept of accumulation by dispossession. Accumulation by dispossession is an elaboration of Marx’s notion of “primitive accumulation.” Wood explains how primitive accumulation in Marx’s writings refers to “the expropriation of direct producers, in particular peasants” that “gave rise to specifically capitalist social property relations and the dynamic associated with them.”41 Marx writes of those epoch making “moments when great masses of men are suddenly and forcibly torn from their means of subsistence, and hurled onto the labour market as free, unprotected, and rightless proletarians. The expropriation of the agricultural producer, of the peasant, from the soil is the basis of the whole process. The history of this expropriation assumes different aspects in different countries, and runs through its various phases in different orders of succession, and at different historical epochs.”42
For Harvey, Marx rightly highlighted these processes of capital accumulation “based upon predation, fraud, and violence,” but incorrectly imagined them to be exclusively features of a “primitive” or “original” stage of capitalism. With the concept of accumulation by dispossession Harvey wants to point rather to the continuity of predatory practices that have risen dramatically to the surface once again in the era of neoliberalism.43 Since the mid-1970s, assets around the world previously held under collective ownership—either by the state or in common—have been forced on an unprecedented scale into the realm of the market, often through fraud, coercion, and innumerable forms of predation both by the state and powerful private actors. In other words, many forms of public property have been commodified, have entered into the market as commodities for buying and selling. The intensification of commodification has included the commodification of labour, or the proletarianization of peasantries and indigenous peoples, on a grand scale. Harvey, in a vivid if perhaps rather too all-encompassing fashion, includes all of these variegated processes into the singular—albeit uneven and complex—unfolding of accumulation by dispossession across the globe.44 “Considered on a historical level,” write Adolfo Gilly and Rhina Roux:
The expansion of the capital relation sustains itself in two concomitant and interconnected processes: exploitation (appropriation of surplus product under the form of surplus-value) and dispossession (violent appropriation, or concealed under legal forms, of natural goods and goods of communal or public property).…In our view this refers to a permanent process, which forms a part of, and always accompanies, the process of capital.45
Each of these traits of the neoliberal phase of capitalism on a world-scale has its specific Latin American variation. We will return to the regional specificities in a moment, but first let us examine the recent patterns of Canadian capital’s international expansion in light of our discussions of capitalism, imperialism, and neoliberalism above.
THE EXPANSION OF CANADIAN CAPITAL
As we have suggested, Canada is deeply implicated in contemporary dynamics of imperialism as they are playing out in Latin America. To start, the scale of the expansion of Canadian capital in Latin America in the form of FDI over the last quarter century has been phenomenal, following the liberalization of capital flows, the rewriting of natural resource and financial sector rules, the privatization of public assets, and so on. In 1990 it stood at only C$2.58 billion in stock (that is, cumulative FDI flows). It rose to C$25.3 billion in 2000, an increase of 880 percent, and to C$59.4 billion—amidst the deepest global economic recession since the 1930s—in 2013, an increase of 134 percent from the year 2000, and 2,198 percent from the year 1990. The figures for 2000 and 2013, moreover, are certainly an underrepresentation of the extent of Canadian capital’s penetration of the region, as Statistics Canada’s data, from which these figures are primarily drawn, do not include Canadian investment that is routed through the Caribbean Offshore Financial Centres (OFCs), which, if it did, would likely double-to-triple the figures for some countries given how strong Canadian financial capital’s presence is in the Caribbean OFC sector, as we note below.46
To put the growth of Canadian investment into Latin America into perspective, American FDI into the region over this same period, while not surprisingly much higher than that of Canada in absolute terms (at US$283.9 billion in 2012), increased at a slower pace: by 79 percent from 2000–2012 and by 555 percent from 1990–2012; and, notably, as a share of total FDI into Latin America and the Caribbean combined, U.S. FDI decreased from 46.8 percent in 1990 to 38.7 percent in 2012. From 2007 to 2012, Canada was the second largest external source of FDI to Latin America and the Caribbean combined behind the U.S.—it was the third largest source if Latin America as a whole is included as a source region—a jump from fifth during the period from 1995 to 2005. And while American investment is much greater than Canadian, the rate of the latter is much greater than that of the former. The Canadian economy is roughly one-tenth the size of its American counterpart, but Canadian foreign investment in Latin America and the Caribbean combined is one-fourth that of the U.S.47
Finance and Mining
Canadian investment is occurring across a range of sectors. As we discuss in the chapter on Honduras, one of the largest sock and t-shirt manufacturers in the world, and the largest private sector employer in the Central America country, is Montreal-based Gildan Activewear. Canadian oil and gas, pipeline, and construction companies also play prominent and controversial roles in the hemisphere. But it is clearly in the financial and mining sectors where Canadian companies are most prominent. Canadian financial companies have long-established historical roots in the region, going back to the nineteenth century, often connected to U.S.-backed dictatorships.48 But the neoliberal period has seen a sharp expansion of Canadian financial capital in the western hemisphere, growing from 15 percent of Canadian FDI in the early 1980s to close to half in the 2000s.49 Scotiabank, for instance, the Canadian bank most well-established outside of North America, generates more than one-fifth of its profits from its extensive international investments, the majority of which are in the Americas. It spent approximately C$6 billion on more than twenty acquisitions in the Americas from 2007 to 2012—part of a wave of Canadian takeovers of foreign financial assets following the 2008 global crisis.50 Canadian banks dominate the financial sector in the English Caribbean, controlling its three largest banks. Three Canadian banks—RBC, Scotiabank and CIBC—own over C$42 billion in assets there (61 percent of total Caribbean banking assets), forty times greater than what approximately forty-odd local banks own.51 The significance of this influence extends beyond the English Caribbean, of course. As the Economic Commission on Latin America and the Caribbean notes:
The share of [Canadian] FDI going through international financial centers has increased significantly and represents a very important distortion, because these flows of Canadian capital do not remain in OFCs, but go on to final destinations in third markets, mainly in Latin America and the Caribbean, Asia, the United States and Europe.52
Canada’s mining industry, meanwhile, is the largest in the world. Approximately two-thirds of the world’s mining companies are based in Canada, with its permissive tax and legal regime, long mining history that has nurtured an aggressive exploration and producing sector, and unflinching foreign policy support for companies with international ambitions.53 Those international ambitions, coupled with the Canadian state’s legal and diplomatic fealty, has led Canadian companies, big and small, to the four corners of the globe in pursuit of profit. But the Americas (Latin America plus the Caribbean) account for over half of Canadian mining assets held abroad—C$72.4 billion.54 Whereas there were only two Canadian mines in operation (i.e., not simply exploration properties or mines under construction) in 1990, that jumped to eighty in 2012, with another forty-eight in the development or feasibility stage, according to the Canadian International Development Platform (whose numbers are drawn from industry database www.infomine.com). These operating mines generated combined revenue of C$19.3 billion in 2012 for Canadian companies.55 According to the Northern Miner (an industry web publication) database, in 2014, 62 percent of all producing mines in the region were owned by a company headquartered in Canada.56 The size and international leading role of the Canadian mining industry is no doubt the reason Toronto is the most important financial nodal point of the global mining industry. In 2013, for example, C$6.9 billion was raised in equity financing on the city’s two exchanges (the Toronto Stock Exchange and the Toronto Venture), representing 84 percent of the global total.57
Super-Profits
The dominance of Latin America’s natural resource markets has showered the owners of Canadian companies with super-profits. Looking only at the earnings from mines that were still operational in 2013 (fifteen gold mines in total), the three largest gold mining companies by revenue—Barrick, Yamana, and Goldcorp—earned a combined net profit of US$14.9 billion between 1998 and 2013.58 The rate of profit for these operating mines was an astounding 45 percent; with taxes and royalties factored in for Barrick, it was still an incredible 42.4 percent. The average rate of profit for the Canadian economy as a whole from 1998 to 2013 was 11.8 percent.59 Here, presented quite plainly, are the Canadian “interests” at stake in Latin America. As we discuss further below, the argument from Canadian governments of various stripes and the companies themselves, repeated ad nauseam, is that Canadian resource companies are not simply getting filthy rich off of the resources of impoverished and dispossessed communities. Canadian companies are, instead, improving the living standards of the communities where they are digging gold, silver, copper, and other toxic riches from the ground.
In truth, very little of the company profits are invested in local communities. Barrick and Yamana’s combined “community investment” spending—part of companies’ Corporate Social Responsibility (CSR) agendas to create the fiction that they give back to communities whose land they exploit and whose political problems they accentuate—was a miserly 1.4 percent of net earnings in 2012 and 0.9 percent in 2011 (comparable figures for Goldcorp were not available). But beyond the supposed “community investments,” after construction is completed there is very little new inflow of money from these companies into the countries in which they are operating mines; and the construction costs of new mines are usually made back within the first few years of the mines’ operations. New capital expenditures on operating mines by Barrick and Goldcorp averaged 39.9 percent of previous years’ net profits during the period studied. These are thus reinvested earnings, not new inflows. Most of their profits, in other words, leave the country, and after the construction period, mining represents a significant net outflow of value. It is important to keep in mind, as well, how poor a job creator large-scale industrial mining is, on top of the human displacement and irreparable ecological damage these mines, by necessity, cause. In short, these companies and their owners are getting incredibly rich from Latin America’s mineral wealth, at the expense of the often impoverished communities that are left to deal with legacies of dislocation, poisoned water sources and, not uncommonly, the violence that makes all this possible.60
CANADA’S STRATEGIC ENGAGEMENT WITH LATIN AMERICA
Predatory Instincts
While a proper accounting of the wreckage caused by Canadian MNCs when they invade Latin America is studiously avoided in the mainstream Canadian media and academic literature, the reputation of these MNCs now precedes them in the region. People living in places where Canadian investment is significant and influential know full well the practices of which Canadian companies are capable. Residents of communities in mining regions flying Canadian flags with skulls and crossbones over the maple leaves have no illusions about what Canadian capital represents. The real stories of Canadian investment in Latin America that lie behind the fairytale representations found in the pages of Corporate Social Responsibility (CSR) on company websites thus feature prominently in our book. The lies of the big mining companies, sweatshop manufacturers, and other investors need to be demolished so that the economic elites behind them, as well as their political backers, can be held to account. With super-profits awaiting them, the owners of Canadian resource companies, for example, have proven unwilling to brook meaningful political challenges from impacted communities. Any dissent quickly becomes a security matter—sometimes at a very high price for those resisting. Between 2009 and May 2014, at least twenty-three people were murdered in Latin America in conflicts involving Canadian mining companies.61
That is the bloody tip of the iceberg, however. A 2009 report by the Canadian Centre for the Study of Resource Conflict, commissioned by the industry organization Prospectors and Developers Association of Canada (PDAC), found that Canadian companies have the worst record in the world for human rights, environmental, and occupational incidents, accounting for one-third of all those incidents studied—a much higher rate than other countries. The PDAC did not publicly release its findings; they had to be leaked instead.62 Of course, conflict, human rights abuses, and environmental damage do not end at the mining sector, even if that sector offers some of the most egregious examples. Canada’s Gildan Activewear has become one of the largest manufacturers of t-shirts and socks in the world through its terrible working conditions in the export processing zones of Honduras, Nicaragua, the Dominican Republic, and Haiti. Meanwhile, Scotiabank was the focus of violent protests during Argentina’s economic meltdown in 2002, after the bank stopped middle class and poorer Argentinians from withdrawing their savings during a banking collapse, and refused to recapitalize its Argentinian operations, instead closing shop, exiting the country, and leaving many Argentinians destitute.63
Capital and the State
Canadian capital’s penetration of Latin America has not been accomplished on its own; it has received the steadfast support of the Canadian state—from the Prime Minister’s Office (PMO) to Foreign Affairs, the Canadian International Development Agency (CIDA) (as of 2015 Foreign Affairs, CIDA, and International Trade are now part of Global Affairs Canada), National Defence, Natural Resources Canada, and Health Canada—as we discuss in detail throughout this book. Canadian foreign policy in Latin America has been intimately bound up with the outward expansion of Canadian capital, both responding to the imperatives and shaping the actions of Canadian MNCs as their investment in the region has steadily grown and encountered various political and social obstacles. Canadian state managers have prioritized new and aggressive engagement with states in the region, hoping to create the best possible conditions for the accumulation of profit. Further expansion of Canadian investment into the region has become a strategic goal of policymakers. Latin America was clearly on the radar of the Jean Chretién and Paul Martin Liberal governments of the 1990s and early 2000s, who signed the initial free trade agreements (FTAs) in the region, as well as a series of bilateral investment treaties (or Foreign Investment Protection Agreements as they are called in Canada), including the North American, Chilean, and Costa Rican FTAs. But foreign policy engagement in Latin America was given an extra boost, and received clearer articulation, under the Harper Conservatives, who signed another four FTAs while attempting to sketch out—publicly and privately—an agenda for Canadian intervention.64
This observation should not be taken as suggestion that Canadian foreign policy is reducible to the whims of a particular government, whether Conservative, Liberal, or even New Democratic. Justin Trudeau, leader of the Liberal Party, replaced Harper as Prime Minister in October 2015. While it is too early in his administration to make any decisive claims about its foreign policy orientation in Latin America, there is little reason to expect any significant rupture with the Harper legacy. Clearly the Harper Conservatives left their cynical imprint on Canada’s relation with the Americas (and the rest of the world for that matter), and, having been in power from 2006 until 2015, their actions bear a lot of scrutiny in this book. But, to stress a point raised earlier in our discussion of contemporary forms of imperialism, Canada’s external policies, like those of other countries, are framed by the rhythms of capitalist accumulation, with all its economic and political demands, contradictions, and ecological limits, and by the country’s place within the privileged hiearchy of the world system. These policies will persist—with changes in inflection, priorities, and aggression to be sure—in the absence of a fundamental reordering of the deep structural roots of global capitalist imperialism, even in the absence of Harper. Sober reflection of Canadian engagement in Latin America over the last two decades reveals that the Conservatives did not represent a radical departure from their Liberal predecessors, and with Trudeau now in the helm we should, once again, expect more continuity than change.
The Harper government formulated its Strategy for Engagement in the Americas in 2007, with the economy, democracy, and security the stated interests. The Strategy was cited approvingly by many observers as Canada’s strategic foreign policy turn to the hemisphere after decades without a broader, more coherent plan. The Harper government was subsequently criticized by some media commentators and academic observers, however, for not following through on the plan or adequately resourcing it. For instance, it was argued that Canada under Harper was unable to assist in the security of the region because it was overextended in Afghanistan or that its efforts to promote democracy in a region where it is facing serious hurdles (and such critics of the Harper government usually had places like Venezuela and Ecuador in mind) was inconsistent and lacked a sufficiently clear strategy. These criticisms miss the larger point. For one thing, as this book demonstrates, the goal of the Harper government’s Americas Strategy was never the promotion of genuinely robust democracy, and certainly not anything that would challenge the exceedingly narrow parameters of neoliberal democracy. The overriding goal articulated in the document is the protection of the rights of global capital in general, and Canadian capital in particular: the creation and reinforcement of those conditions conducive for the accumulation (and repatriation) of profit by Canadian investors, including mechanisms to promote market liberalization, strong private property rights, and the weakening of any institutions that could challenge this paradigm.
Security/Democracy
It is important to point out that while the majority of Canadian security spending and thinking was devoted to Afghanistan between 2001 and 2014, Latin America, as we argue, has not fallen off the radar. With much less fanfare than in its intervention in Afghanistan, Canada has been cultivating security ties with governments in Central America and the Andes that share its flexible attitude towards the protection of human rights. In short, such a utilitarian view of democracy and security—ignored by most commentators—has led Canada to support regimes of the extreme-Right (Guatemala) and authoritarian rule (post-coup Honduras).
Optimal Conditions
Reproducing the optimum conditions for foreign investors in Latin America involves, to use Canadian foreign policy speak, a “whole of government” approach. It is not just Foreign Affairs and CIDA being mobilized (both of which, undoubtedly, play central roles), but various departments of the Canadian state apparatus: Natural Resources Canada, Health Canada and, of course, various Canadian security agencies. Natural Resources Canada and Health Canada, while ostensibly not part of the foreign affairs portfolio, nevertheless frequently bring their respective forms of expertise to bear, particularly in contexts where governments are wavering on the question of Canadian resource development projects, usually due to challenges from below. The expertise of these departments rests in demonstrating the putatively safe, environmentally responsible, and economically beneficial nature of Canadian mining. Canadian security agencies, such as National Defence and the RCMP, as noted above, have increased their presence in training, combat exercises, and arms and technology trafficking, following the Harper government’s call for Canada’s deeper engagement in the region. The Harper government eschewed any over-reliance on soft diplomacy in Canadian foreign policy more broadly. In a speech to Conservative Party members, Harper intoned that in a world of increasing threats, “Strength is not an option; it is a vital necessity.”65
This is a sentiment that clearly bleeds into Canada’s foreign policy towards Latin America. Obviously, Canada cannot throw its military weight around on the scale of the U.S. or other major imperial powers, but nor is it a marginal military minion: Canada was the fourteenth largest global military spender in 2012 (behind a number of former colonial powers, as well as countries whose militaries are essentially financed by the U.S.) with budgets above US$20 billion for the last several years, considerably higher than its spending during the Cold War (accounting for inflation). The Harper government’s Canada First Defence Strategy, announced in 2008, forecast continued budget increases up to 2027–2028. Even though the government scaled back spending estimates and made cuts to military spending following the 2008 global financial crisis and the winding down of its participation in the occupation of Afghanistan, total spending projections from the Strategy still reach approximately C$400 billion over its lifespan. And that spending is evidently not earmarked for peacekeeping: the investment in fighter jets, armoured personnel carriers, naval destroyers, unmanned aerial drones etc., is designed to improve the ability of Canada to project its hard power.66 Further, the Canadian military has played a central role in major interventions in the last decade, such as Afghanistan, Libya, Mali, Iraq, and Syria, demonstrating a capacity and willingness to project its hard power abroad.
In fact, the second major Canadian military engagement of the new millennium (after the original invasion of Afghanistan, but before taking over in Kandahar in 2006) was in the western hemisphere: the 2004 coup against the democratically-elected president of Haiti, Jean-Bertrand Aristide, and the subsequent military occupation.67 That coup—under a Liberal government in Ottawa—sent a signal that Canada is willing to project its military power in the hemisphere against governments and movements that fail to sufficiently demonstrate their subservience to the imperial project. Although that is the only direct example of military intervention against a government and its supporters by Canada in the hemisphere, the Canadian security agenda also comes in other, perhaps more subtle, forms, such as financing and training corrupt police forces that routinely violate the human rights of political dissidents, as in Honduras and Guatemala.
In Jamaica, with whose military Canada has long-established relations, Canada has established a military base for future rapid reaction needs in the region. The Canadian government, of course, cites ongoing counterterrorism and counternarcotics efforts when discussing its increased security engagement in the region, but as this book shows, these are only a small part of what is actually at play here. The security forces with which the Harper government cultivated relations are systematically located in countries that share the Canadian government’s political and economic outlook, and/or countries in which Canadian capital has significant interests and faces meaningful opposition, such as Honduras, Guatemala, and Colombia.
Canada’s security relations with Colombia offer a good litmus test of its thinking (and the role of human rights therein). Colombia has the worst human rights record in the hemisphere; those violations are carried out with regularity by the military and paramilitary deaths squads—the paramilitaries enjoy barely concealed (informal) ties to the military. This well-known scenario did not prevent Canada from signing a security cooperation agreement with Colombia in April 2012, which also includes cooperation on technical assistance to security apparatuses in Guatemala and Honduras.68
Most of the heavy lifting of the Canadian imperial project, however, is undertaken by Foreign Affairs, International Trade, and CIDA. Foreign Affairs, with some direction from the Prime Minister’s Office, constructs and directs the broader architecture of Canadian foreign policy, both in Latin America generally and in strategic countries specifically. It is, for instance, usually cabinet ministers with international relations and international trade portfolios that carry the Canadian message of free markets and limited democracy to the region, and of course it is officials with International Trade that craft the Free Trade Agreements. One component of Canadian foreign policy that receives surprisingly little attention from Canadian observers, especially given its importance, is the network of Canadian embassies throughout Latin America. As is made clear in this book, embassy staff (ambassadors, trade commissioners, CIDA agents) are the frontline missionaries of the Canadian imperial project. From applying various kinds of diplomatic pressure on governments, to being the eyes, ears, and mouthpieces for companies and Ottawa abroad, embassy officials play a crucial role in intelligence gathering and policy implementation. They often assume a behind the scenes role as facilitators for Canadian investors. It is embassy staff who navigate the local political terrain, advocate for investors, push for economic liberalization, and report to Ottawa when greater pressure is needed to advance Canadian interests. Embassy staff throughout the region also discuss among themselves opposition to Canadian mining in different countries to develop more effective and consistent responses.69
This role is captured inadvertently by one academic researcher of the natural resources industry in the Americas, Anthony Bebbington, who during testimony to the Standing Committee on Foreign Affairs and International Development in Ottawa paraphrased a Latin American government official who reportedly said to him, “As far as I can tell, the Canadian ambassador here is a representative for Canadian mining companies.”70 With coordination by embassies, Canada regularly pays for both journalists and officials in natural resource-related ministries from select countries to travel to the Prospectors and Developers Association of Canada annual conference where they meet directly with industry and Canadian government officials. Jennifer Moore from Mining Watch aptly describes this yearly ritual as an effort “to manage the message…of mine conflicts.”71 The countries from which journalists and other representatives are selected invariably feature strong Canadian mining interests which are frequently under threat by social conflict, or by specific policies assumed by the government in question. As our book makes clear, the defense of Canadian capital is not a new development for embassy staff. Thus the Harper government’s announcement in November 2013 that “All diplomatic assets…will be marshalled on behalf of the private sector,” with a particular focus on the Global South, was not a policy change, as some have suggested, but rather a long-belated official confirmation of what Canadian diplomats have long done under the cover of darkness.72
Development aid must also be situated centrally in any critical study of Canadian intervention in Latin America. The Canadian government’s claim that its aid programming is both robust and directed at the well-being of Latin Americans themselves simply does not stand up to scrutiny. Canadian development aid is in fact in the bottom half of international donor countries when controlled for by Gross National Income.73 It was a paltry C$187.7 million to Latin American countries in 2011–2012. To put that in context, in 2012 Canadian mining companies alone, as we have seen, earned C$19.3 billion, and three gold mining companies—Barrick, Yamana and Goldcorp—earned a combined net profit of C$2.8 billion from their operating mines. Remittances—money sent from migrants resident abroad to their home countries—from Canada to Latin American countries in 2012 totalled C$768 million, roughly four times official aid expenditures. Any discussion of aid also needs to acknowledge that aid budgets include money spent on bureaucracy and, in the case of Canada, supporting resource development in various ways, which we discuss below. In other words, the budget figures CIDA provides are not an accurate representation of what Canada is spending on aid, or how effectively its spending is doled out.74 A World Bank study of the major donor countries and International Financial Institutions (IFIs) ranked Canada twenty-ninth out of thirty-eight countries for the quality of its aid program.75
It is not just a matter of Canada being miserly with its aid budget. For Canadian policymakers, aid, like the rest of the foreign policy toolkit, is about creating the conditions for capital accumulation throughout the Global South.76 Julian Fantino, former Minister for International Cooperation, argued bluntly enough that CIDA’s role is “to make countries and people, trade and investment ready.”77 Fantino’s position, which is really echoing the sentiment of the Conservatives, Liberals, and leaders at CIDA, is rooted in the notion that the only proper developmental path a country can take is one rooted in strong free markets and private property rights—where profit reigns supreme, parts of which trickle-down to the impoverished communities where the investment is targeted. As Fantino added in an opinion piece for Embassy: “It is simply not plausible to expect sustainable economic growth without a stable government or vibrant private sector.” Anyone who suggests otherwise is merely “reverting to antiquated dogmas.”78 This was the same argument used by the Harper government to defend its FTAs with Colombia and Honduras in spite of the severe political repression in these countries: everyone is better in the end, as free markets will raise living standards and, somehow, improve human rights.
This is the trickle-down theory of economics, spun off into a trickle-down theory of human rights. It is theoretically spurious and empirically unsubstantiated by the reality on the ground in these countries. In fact, Fantino et al.’s argument is nothing more than political expediency, dressed up to justify Canadian plunder of the wealth and resources of poorer and weaker countries. In the last several years, for instance, Canadian aid has become increasingly tied to the Canadian mining industry. CIDA committed to spend C$100.7 million on mining-related training, infrastructure, and reform projects in the region between 2002 and 2019, though the bulk of that will be in the latter half of that time frame. Elizabeth Blackwood and Veronika Stewart have highlighted the number of different ways CIDA supports Canada’s mining sector, all of which are of course cloaked in the rhetoric of poverty reduction.79
At the same time, Latin America has become a target of Canadian aid policy in recent years, factoring heavily in the former Conservative government’s Country of Focus development program. CIDA recently reduced the number of recipient countries as part of this program, many of which are African, and among the poorest in the world. The aid was redirected and concentrated on a much smaller number of countries. The Latin American countries included in the program are Bolivia, Honduras, Colombia, and Peru. Neither Colombia nor Peru is among the poorest tier of Latin American nations. But what all the targeted Latin American nations have in common is considerable untapped resource riches and the rapt attention of Canadian investors. This aid orientation was summed up effectively by a spokesperson for Stephen Harper: “Our government is strengthening its development assistance in the Americas because this is our neighbourhood, where we have significant interests.”80 Towards this end, CIDA initiated a wave of funding cuts to long-time recipients of its financial support that did not fit into its more public and aggressive desire to push Canadian resource projects, though we should be careful not to overstate CIDA’s historic support for progressive or independent-minded developmental aid organizations. The fate of the ecumenical group Kairos is a telling example of CIDA’s political purges in the late 2000s. Cuts to Kairos have been linked to its work with organizations critical of Canadian mining in Mexico (rather than its possible connections to the Boycott, Divestment, and Sanctions movement against Israel, as initially reported in the media).81 CIDA also cut funding to Development and Peace and the Mennonite Central Committee, both organizations that have worked with groups opposed to Canadian mining projects.82
CORPORATE SOCIAL RESPONSIBILITY
While CIDA was cutting funding to organizations that did not share its stance on Canadian resource investment, Corporate Social Responsibility (CSR) began receiving a growing part of Canada’s development budget. With the intensification of protests against resource development projects in the late 1990s and 2000s, and subsequently more international attention focused on the activities of companies, the industry and the Canadian government have taken up CSR as the new face of large-scale industrial resource extraction. No discussion of mining or oil and gas development can be had by industry or the government without rote reference to CSR. But CSR is little more than an attempt to offer a social gloss to the predatory activities of resource companies. The money offered communities, as we have noted, is a pittance of what companies earn off their ecologically-destructive investments, and it is always politicized, and frequently used to buy-off sections of the affected communities. Furthermore, the premise for the small medical clinics, poorly-funded schools, and soccer fields built by the companies is that the community accepts the resource development—no mine, no financial assistance.
The companies see this as a necessary financial burden, the costs of which they try to minimize. But the Harper government increasingly directed Canadian development aid towards CSR, helping companies with their already meagre CSR programs. The Canadian government was, in effect, offering state subsidies to some of the largest mining companies in the world in their pursuit of super-profits, taking on what is, in reality, the public relations expenses for advancing environmentally-destructive, large-scale Canadian mining projects, which typically face strong opposition from impacted communities. As Pierre Gratton of the Mining Association of Canada notes, “These [CSR] projects help improve the image of the industry.”83 Harper, meanwhile, declared that CSR programs “will contribute to a more stable regional business and investment climate.”84
The Canadian aid-CSR nexus projects are growing in number. They include a C$200,000 two-year project being planned for Central America.85 In 2012, CIDA announced a grant of C$25.6 million to establish the Canadian International Institute for Extractive Industries as a partnership between the University of British Columbia, Simon Fraser University, and the École Polytechnique de Montreal. According to Julian Fantino, it “will deliver knowledge on proven regulation and oversight” to resource-rich countries.86 But the most publicly controversial project to be announced thus far was CIDA’s decision in 2011 to partner directly with Canadian mining companies and large NGOs, and explicitly link Canadian aid, via CSR, to specific mining projects. C$26.7 million will be spent over five-and-a-half years in this initial corporate partnering project in Africa (Ghana, Burkina Faso) and Latin America (Barrick in Peru, and the Andean Regional Initiative for Promoting Effective Corporate Social Responsibility in the Andes). In the case of Barrick’s planned Peruvian open-pit mine, which is included in CIDA’s partnership program, the company has faced stiff opposition from local farmers worried about the dangers to local freshwater sources. The municipality in which the mine is located also passed an ordinance for the creation of a conservation zone in the mine area, just months before the CIDA announcement.87
cSR is a tool of foreign intervention; it is being used to replace community decision-making about foreign investment and the requirement under international law that governments seek informed consent from indigenous peoples for development projects that will impact them and their land. Instead, companies, now with the active support of CIDA, are trying to buy communities off on the cheap. Rather than respecting the sovereignty of indigenous communities, CIDA offers up C$5.2 million for the Indigenous Peoples’ Partnership Program to “build the capacity of Latin American indigenous organizations” in “natural resource management.”88 It finds willing proxies in large NGOs to dangle rotting carrots in front of impoverished communities. And if CSR efforts to front for the mining sector are successful, Blackwood and Stewart remind us that CIDA does not even have mandatory regulations enforcing the “socially responsible” character of the projects it funds.89 But the true depth of Canada’s commitment to social responsibility is betrayed when CSR efforts fail: violence, intimidation, and the heavy hand of security forces are usually not far behind, and the Canadian government’s public pronouncements on CSR transform into silence. Support for Canadian corporations can also be gleaned from what the Canadian government does not do—most notably, both Liberal and Conservative governments have refused to implement legislation to hold Canadian companies accountable for human rights abuses and ecological damage caused abroad.90
EXTRACTIVE COMMODITIES AND MILITARIZED NEOLIBERALISM
A set of unique regional dynamics in Latin America over the last decade, related to patterns of accumulation elsewhere in the world market (notably high rates of growth in China), kicked off a concerted shift towards the acceleration of mining, oil and gas extraction, and agro-industrial mono-crop cultivation throughout the continent.91 Three basic processes are at work in the region.
First, as part of the region’s return to an extractivist, export-driven, commodity-fuelled growth regime, we are witnessing the intensification of forms of accumulation by dispossession. On a wide scale, violent appropriation of natural resources is precipitating the transfer of communal properties into the hands of multinational capital. Second, the process is changing Latin America’s position within the international division of labour. As extractive capitalism advances, so too do processes of deindustrialization and the return to the region’s historic role as provider of primary commodities to the core of the world system. With this change in the region’s insertion into the world market come attendant dynamics of renewed imperialism (this time in the form of multinational capital) and the resurgence of enclave economies (such as with mining or sweatshop manufacturing) with their characteristic traits of dependency.
Third, beginning in 2008, the rhythms of extractivism in Latin America have intensified still further with the onset of the deepest crisis of global capitalism since the Great Depression of the 1930s. This crisis ought to be understood in all of its multidimensional richness; in other words, this is an economic crisis, but it is also one of depleting natural resource energy supplies and the intensification of competition between large powers to control these supplies; a food crisis (expressed in dramatic price fluctuations) related to the acceleration of agro-industrial monocropping and the financialization of the global agricultural sector; and an ecological crisis, tightly linked to advancing climate change, among other factors.92
The extractive model of capitalism maturing in the Latin American context today does not only involve the imposition of a logic of accumulation by dispossession, pollution of the environment, reassertion of power over the region by multinational capital, and new forms of dependency. It also, necessarily and systematically involves what we call militarized neoliberalism: violence, fraud, corruption, and authoritarian practices on the part of militaries and security forces. In Latin America, this has involved murder, death threats, assaults, and arbitrary detention against opponents of resource extraction.
A fundamental part of militarized neoliberalism is the ideological attempt by states to demonize social movement opponents as criminals, narco-traffickers, or terrorists. Indigenous peasants resisting dispossession at the hands of a Canadian mining company become part of the “dangerous classes” according to the logic of such narratives. Under the guise of combating violent crime and the drug trade, or “neutralizing” subversive movements, a perverse rhetoric of “democratic security” has emerged, which justifies a range of changes meant to harden the coercive apparatuses of the state: legal reforms that provide the police with greater power; the legal system with tighter restrictions on individual and collective democratic rights and liberties; the armed forces with the power to intervene in domestic social conflicts; and paramilitary groups with ever greater impunity.93 In recent years the most violent and nefarious examples of militarized neoliberalism in Latin America have been the administrations of Felipe Calderón in Mexico (2006–2012), whose militarization of the “war on drugs” led to tens of thousands of deaths; and Álvaro Uribe in Colombia (2000–2010), whose turn toward “democratic security” meant the full-scale state and para-military terrorization and dispossession of large swathes of the country’s rural population. The entirety of the Central American corridor, linking Colombia to Mexico, has likewise been permeated by the violent dynamics of military neoliberalism, advanced, we argue, with the active support of Canada.94
In what follows, we trace the increasingly aggressive insertion of the Canadian state and capital into the complex political economy of Latin America, with a particular focus on two sub-regions: Central America and the Andes. Canadian capital, especially in banking and natural resources development, plays a leading role in capitalist accumulation throughout the Americas, while the Canadian state is assertively pursuing the conditions amenable to Canadian investors: liberalized markets, weak environmental regulatory regimes, and contained or repressed social movements. The first section of the book looks at the dynamics of capitalist expansion and resistance as they have played out in Central America. Canada has positioned itself as an important player in the isthmus, supporting reactionary forces, including the pro-coup actors in Honduras. The section is anchored by the chapter on Honduras, which pivots on the 2009 coup against democratically-elected President Manuel Zelaya, but also includes a detailed account of Canada’s political-economic intervention in Guatemala and the rest of the region. The second section of the book looks at the Andes. Canadian capital has major interests in Ecuador, Peru, and Colombia, while the Left resurgence in Latin America has been strongest in the central and northern Andes. Thus there is a great deal at stake for Canadian investors in a region where their interests are regularly challenged by strong social movements and, occassionally, governments. As our chapters covering Ecuador, Colombia, Peru, and Venezuela argue in detail, the Canadian state has worked assiduously to weaken Andean social movements and the Ecuadorian and Venezuelan governments, while simultaneously seeking to strengthen diplomatic and military ties with conservative governments in Colombia and Peru.
In situating Canada as an imperialist power whose capitalist class has its own objective interests to pursue in Latin America, our book stands outside the mainstream and, indeed, much of the left-wing analyses available of Canada’s place in the world. Mainstream observers have traditionally viewed Canada as a benign, so-called middle power that must navigate and seek out a place for itself within the complexities of a world order shaped by the (often competing) “great powers,” and offer no effort to contextualize Canada’s position in the international hierarchy of nations within the dynamics of global capitalist accumulation and the sharply asymmetrical relations between countries of the capitalist core and those of the Global South. Imperialism as a concept and the scale of the internationalization of Canadian capital are completely eschewed in this literature. The traditional “critical” literature on Canada’s place in the world sometimes employs the concept of imperialism, however this use is often accompanied by flawed empirical analysis of Canadian capital—as truncated in its development and subordinated to more powerful national capitals, such as British and, eventually, American—or presumptions based on dated and flawed empirical data. Drawing on dependency theory, which was originally derived to explain the unequal insertion of Third World nations into global capitalism, many left-wing analyses have argued that Canada is also a dependency, qualifying it however as a rich one (since no serious thinker can conflate Canada with the Third World). A recent example of this is Leo Panitch and Sam Gindin’s The Making of Global Capitalism, in which the authors reiterate the notion of Canadian dependence on the U.S. (with no empirical justification), and argue that the rest of the world has been “Canadianized” in its relation with the global hegemon.95 In other words, the argument of their work, in this respect, rests on a faulty assumption.
The traditional literatures, then, obscure more than they reveal about Canada’s role in the world. In the last several years, however, a growing body of work has emerged that has challenged the status quo consensus and argued that Canada must, in fact, be understood as imperialist. While this is not a homogeneous literature, authors who have offered an empirical and theoretical analysis of Canada as an imperialist power include Todd Gordon, Greg Albo, Dru Oja Jay and Nik Barry-Shaw, and Jerome Klassen.96 At the same time, and helping to inspire this emerging literature, independent journalists and solidarity organizations have done important work documenting individual cases of Canadian corporate malfeasance in the Global South.97 By analyzing Canada within the context of the broader patterns of global capitalist accumulation and North-South relations, and diving deeply into the murky waters of Canada’s investments and practices in Latin America, this book cuts against the grain of the traditional literature on Canada’s role in the world and endeavours to make a contribution, with a new regional specificity, to the emergent literature on Canadian imperialism.