Grouping together the governments of Hugo Chavez (Venezuela, 1998–2013), Evo Morales (Bolivia, 2005–), and Rafael Correa (Ecuador, 2006–2017) is hardly an original proposition. The Latin American “pink tide” of the 2000s brought a debate in the literature over the nature of the regions’ new left-leaning administrations. The most influential characterization here was of Venezuela, Ecuador, and Bolivia as representatives of a “bad” populist left, as contrasted with a “good” left composed of more sensible moderates, as in Brazil, Chile, and Uruguay (Petkoff 2005; Casteñeda 2006; Weyland 2009). At this point, debate has certainly moved on from this reductionism, influenced no doubt by the rather divergent fortunes that the three more radical Andean cases have experienced since the end of the commodity boom.

My intention here is not to regress to a bad/good or radical/reformist dichotomy. Instead, I suggest a different justification for bracketing Ecuador, Venezuela, and Bolivia, in terms of their political-economic trajectories over the commodity boom years. This is based on commonalities in these countries’ circumstances of insertion into the global economy and, crucially, the domestic class configurations that shaped and were shaped by these external linkages. For the extractivist-redistributive (ER) type, uniquely in the typology, the key social force that lay behind a distinctive form of post-neoliberal turn was the popular classes. Indeed, I argue that the ER type existed in three variants over the boom years, and that these differences stem from divergent priorities among their leading popular sector actors. I label these variants “communitarian” (Venezuela), “social movement” (Bolivia), and “technocratic” (Ecuador). However, in all cases strong executives launched redistributive projects on the twin foundations of a growing resource surplus and nearly constant mass mobilization, with mass mobilization employed in conjunction with repeated plebiscites as a means of pushing through the government’s agenda in the face of elite resistance.

Here, I discuss the ER trajectory as an ideal type, drawing on notions of populism, which is useful for understanding the emergence of ER governments but does not tell the whole story. The centrality of redistribution to the ER agenda is noted as reflecting ER leaders’ reliance on support from marginalized groups—from the urban informal sector, for instance—where the main axis of struggle revolves around exclusion from, rather than exploitation by, the circuits of capitalism.

Following a brief summary of the ER developmental agenda and its possible contradictions with the priority given to redistribution, I move to examine how conditions changed for the main export sectors in each case over the 2002–2013 period. As fuel exporters, all three ER states experienced a marked turnaround from the very low price levels of the 1990s, with China constituting an increasingly hefty driver of global demand. My aim here is to point out the linkages among this China effect on fuel commodities markets, the ensuing enhanced capabilities of ER governments to maximize extractive revenues, and, in turn, the governments’ ability to fund new forms of social expenditure.

Finally, I address the domestic political-economic paths taken by each of the three cases during the boom, using Ecuador as the exemplar case for the type. Differences in how redistribution and development were conceived of by authorities in each ER state are key to understanding how the distinctive character of leading popular sectors in each country produced political-economic differentiation among them. In Venezuela (communitarian variant), the government faced the only nationally unified capitalist class of the three cases, which intensified struggle and made the initially poorly rooted governing party seek greater engagement with and organization of core supporters through participatory mechanisms.¹ This, combined with a reluctance to rely upon the traditional arms of the liberal democratic state, led to a growing resort to community organization both as the bedrock of chavismo and as a source of informal structures through which to deliver social policy (along with patronage distribution to key elites, including the military).

In Bolivia (social movement variant), the origins of the ruling Movimiento al Socialismo in locally focused social movements, combined with institutional features that favored decentralization, produced a similar focus on municipal administration of social funds. In Ecuador (technocratic variant), by contrast, the collapse of the indigenous social movement bloc Confederación de Nacionalidades Indígenas del Ecuador (Confederation of Indigenous Nationalities of Ecuador, or CONAIE) after it supported the disastrous presidency of Lucio Gutiérrez meant that it was not a major actor in the political movements that brought Rafael Correa to power in Ecuador. Here, urban middle and professional classes took a leading role in government, giving a far more centralized, bureaucratic, and technocratic flavor to policy goals and orientation. In some senses, these three divergent outcomes appear to represent varying trade-offs between mass participation and a coherent national development project.

The Extractive-Redistributive Type: Ideotypical Characteristics

Central to the understanding of the ER type regime is the issue of populism. Roberts (2007, 5) provides a fairly standard, broad definition of Latin American populism as “the top-down political mobilization of mass constituencies by personalistic leaders who challenge elite groups on behalf of an ill-defined pueblo, or ‘the people.’ ”² Typically, ER regimes are associated with populism in a pejorative sense (Hawkins 2003; Levitsky and Loxton 2013). The term is meant to indicate the “seduction” (de la Torre 2010) of the populace by a charismatic demagogue with little in the way of coherent policy propositions, who instead generates support by portraying themselves as the embodiment of the will of the people in an ethical-symbolic sense, contrasted with the corruption and immorality of the old oligarchy. This Manichean worldview then leads to a majoritarianism that lends itself to the dismantling of liberal democratic checks and balances and their replacement by creeping authoritarianism.

Although this critique is undoubtedly rooted in reality, the extent of its validity depends upon one’s particular conception of democracy. Chavez, Correa, and Morales certainly relied upon majoritarianism—both in the polls and on the streets—as a primary means of driving through their agendas and as a lever against the power of domestic capital. Since the state—previously the almost exclusive territory of elites of various kinds—was not conceived of as neutral territory by any of the three leaders, it is hardly surprising that efforts were made in all cases to dismantle or bypass liberal democratic institutions.³ Given the increasing concentration of authority in the executive branch under all three presidents, combined with their personalistic and charismatic styles, there clearly were dangers associated with these processes, which might plausibly lead to a wide range of political outcomes (Laclau 1977, 170–75; Parker 2001).

Nevertheless, as Lander (2005) points out, populism of this sort has served as a vehicle for the inclusion of large proportions of populations previously marginalized under heterogeneous, hierarchical, and exclusionary societies. If the classical Latin American populist era of Juan Perón and Getúlio Vargas saw the integration of new urban populations, particularly formal workers, then pink tide populist processes were primarily about the political participation of those marginalized under neoliberalism—principally urban, informal populations hugely swelled in numbers by the impact of liberalization. The form that this participation took—expression through populist mechanisms—reflected the fact that the dominant political base in each state lay largely outside the formal sector and was not easily organized along bottom-up lines (Ellner 2012).⁴

Populism is also an appropriate fit for ER regimes, since their most salient social dynamic—of mass marginalization—chimes with the appeal to a pueblo (people) in binary opposition to, first, a domestic oligarchy, and secondarily, global neoliberalism. As Kaup (2013b, chap. 1) points out in reference to Bolivia, this in turn requires attention to the differences between processes of exploitation and marginalization within capitalism. In all three ER states, economic stagnation and then liberalization had the effect of excluding large numbers of people from participation in circuits of accumulation, whether through increasing urban unemployment, through accumulation by dispossession in the countryside, or through peasant marginalization in the face of cheaper, liberalized food imports. As a result, the primary axis of popular struggle revolved around exclusion from processes of accumulation (particularly pronounced in these states with enclavic resource industries) rather than around levels of exploitation within these processes.

Therborn (2012, 15) notes that taking account of popular marginalization as well as exploitation requires a revised notion of class in order to be comprehensible, and thus he settles on “the popular classes in all their diversity, the plebeians” (emphasis in original). Clearly, this broad whole contains contradictory elements, and different sectors within the popular classes of each state varied in prominence (though with a general urban preponderance in all three). Nevertheless, the fundamental notion of ER regimes as an attempted corrective to exclusion rather than exploitation serves as an effective lens through which their political styles, strategies, and policies may be understood.

One ideotypical characteristic of ER states, reflective of an inclusionary orientation, was the use of mobilization and repeated elections and referenda to force through changes to political structure. Correa and Morales undoubtedly took their cues from the experiences of Chavez in Venezuela here. All three leaders prioritized a “refounding” of their nations through use of constituent assemblies to draw up new constitutions, followed by various referenda on further constitutional or institutional change. These electoral contests, which generally delivered strong mandates to the three governments, were meant to demonstrate the “will of the people” as a legitimization, which overrode liberal democratic checks and balances and facilitated a majoritarian rather than consensus-building governance style. Regular electoral events were used as rallying points, which kept supporters almost continually mobilized and sustained momentum for incumbents.

Economic policy aspired toward developmentalist goals, at least in principle. However, these were often sidelined in practice, partly owing to the prioritization of redistribution and partly because of tensions with those sectors of capital that would have been the main beneficiaries—even if, in Bolivia and Ecuador, relations with domestic capital became gradually more accommodative toward the end of the period (Wolff 2016). Overvalued exchange rates, designed to minimize inflation and increase mass consumption, undercut local producers and had an especially detrimental impact on agriculture. Some efforts were undertaken to diversify away from economic dependence on hydrocarbon production, which was perhaps most promising in Ecuador, but the results were generally disappointing.

Instead, and in keeping with the theme of demarginalization, emphasis was on maximizing and redistributing resource rents in a broadly programmatic rather than clientelistic manner (even if clientelistic practices were undoubtedly at play in all three cases, too). As a result, the state took a greater role in extraction, through very much in continued partnership with transnational capital, which was required in order to provide investment and technology. In an era of high commodity prices, transnational extractive firms generally accepted the new terms proposed by governments, if not without protest, and continued to operate profitably in ER states, in spite of the regular and sometimes strident anti-imperialist rhetoric of their governments. Nevertheless, while productive structures have hardly been diversified, economic (as well as political) relations shifted away from dependence on the global North. Chinese capital, both in terms of direct investment and oil-for-loans deals, is now of vital importance in Venezuela, Ecuador, and, to a lesser extent, Bolivia. Russian, Brazilian, Iranian, South Korean, Indian, and even Belarusian capital have all had a presence in one or more of the three states.

External Market Conditions

All of the ER states are primarily fuel exporters, with oil accounting for 55 percent of Ecuadorian exports and 91 percent of Venezuelan exports in 2012 (Chatham House n.d.). In Bolivia, natural gas made up half the total value of exports that same year, with zinc, tin, and lead together adding another 10 percent to the country’s export concentration in natural resources. Focusing on hydrocarbons, figure 6.1 shows price indexes for oil, natural gas, and fuels as a whole (a measure that also includes coal). As can be seen, oil prices began to rise around 1999, earlier than increases in other commodities, though from a historically low level. After a drop associated with the September 11, 2001, attacks, a stronger upward price trend began, around the start of the commodity boom proper, from 2003. The chart also reveals the tendency toward price co-movement among fuel commodities, particularly in the 2003–2009 period. Although China is certainly not the only determinant of fuel prices, it clearly is now the central demand driver in this commodity class, as was discussed in detail in chapter 1.

While oil is traded freely on world markets and thus shows relatively little variation in geographic pricing, the situation for natural gas is somewhat more complicated, with implications for Bolivian exports. Though there has been a recent growth in the trade of liquid natural gas, which can be shipped around the world freely, most gas is still transported via pipeline, and prices are thus dependent upon localized supply contracts rather than market trading. That said, movements in prices for possible energy substitutes, primarily oil, do have a major influence upon the prices of piped natural gas (Cameron and Stanley 2017). In the context of high and rising energy prices, Evo Morales was able to renegotiate Bolivia’s gas supply contracts with Brazil and Argentina—by far Bolivia’s two largest export markets. In the Brazilian case, the new variable rate was initially set at four times the previous level, which had been agreed upon in the 1990s (Kaup 2008). As a result of higher prices and a Morales move to appropriate a larger share of the surplus for the state, the fiscal contribution of hydrocarbon revenue rocketed from 9.8 percent of Bolivia’s gross domestic product in 2005 to 35 percent in 2013, even in the context of a fast-growing economy (Johnston and Lefebvre 2014).

This device does not support SVG — *Figure 6.1* Fuel commodity price indexes, 1995–2014. Calculated from International Monetary Fund, World Economic Outlook Database.

As in Bolivia, rapidly growing fuel export sectors fed substantial increases in both revenue and expenditure in Venezuela and Ecuador (figures 6.2 and 6.3). From 2004 to 2009, for example, oil accounted for fully 62 percent of Venezuelan central government revenues, a period during which $60 billion was plowed into social services provided by the community misiones, which we will discuss (Kaplan 2014). Although the relative increase in Venezuelan expenditures (shown in figure 6.3) appears moderate compared with its ER counterparts, it should be noted that these figures do not reflect the substantial spending on the part of the state-owned oil enterprise Petróleos de Venezuela, S.A. (Venezuelan Petroleum, or PDVSA), which, since the early 2000s, has been directed toward a developmental role.

In Ecuador, the share of oil in government accounts was somewhat lower, but still hugely significant, at 34 percent of total revenues in 2009 (Weisbrot, Johnston, and Lefebvre 2013). In 2007, Ecuador raised its windfall profits tax to 99 percent as a means of forcing transnational firms to the negotiating table. By 2010, all the transnationals had either signed new contracts, which paid a flat fee of between $16 and $41 per barrel, or had withdrawn from the country. Companies such as Petrobras (Brazil), Noble (United States), and the China National Petroleum Company all pulled out, with their operations taken over by the SOE Petroamazonas. Many transnational corporations accepted the new terms, however, including Repsol (Spain), ENAP (a state-owned Chilean enterprise), and—interestingly, given China National Petroleum’s withdrawal—private Chinese firms Andes Petroleum and PetroOriental (Escribano 2013). In addition to the Human Development Bond, which we will discuss, Ecuadorian social spending rose from 5 percent of GDP in 2006, the year of Correa’s election, to more than 9 percent for the years 2010 to 2012, which included a doubling of education spending (Weisbrot, Johnston, and Lefebvre 2013).

Venezuela

Although Venezuela under Hugo Chavez (and now his successor, Nicolas Maduro) has clearly been home to the most radical experiment of all the ER regimes, it is easy to forget that such a course represents a major break from the first years of Chavez’s presidency, when the agenda, at least in economic terms, was still indistinct. Railing first against a moribund domestic political class, through an overhaul of institutional structures and the harnessing of popular mobilization, Chavez began to build a framework around which a more radical project eventually emerged. It also provided an example that Correa and Morales would later follow.

Venezuela had been a late and erratic neoliberal reformer, and even during the 1990s, governments had attempted to partially reverse neoliberal policy when oil prices had allowed it (Coronil 1997, 375–82; Hellinger 2004b, 32–40). Chavez seems to have long been influenced by leftist thought, and the initial program of his Movimiento Quinta Republica (Fifth Republic Movement), in 1997, did advocate some greater degree of state intervention in the economy, with, for example, a proportion of oil revenues to be directed in support of a failing agricultural sector (Lander and Navarrete 2007). Nevertheless, by the time of the 1998 presidential campaign, the message had become less clear as the Fifth Republic Movement admitted various new centrist factions, resulting in compromise and deliberate ambiguity in policy wording (Ellner 2001).⁵

Once Chavez was in office, the brakes were applied on new privatizations, but fiscal conservatism and orthodoxy were embraced. It is perhaps illustrative of the now oft-forgotten evolution of Chavez’s policies that, eighteen months into his first term, the question of whether the new government would evolve in a neoliberal, populist, or radical direction was still being posed by Ellner (2001), who later was a (qualified) supporter of chavismo.

It is difficult to discern whether Chavez had radical plans in mind from the start, though historically low oil prices in 1998 meant that the economic basis for any such program was initially lacking (Buxton 2008). The government’s early diplomatic focus on the revival of OPEC as a means of constricting oil supplies suggests an appreciation that low oil prices constituted a major barrier to government action (Parker 2003). Only the increasing resistance of economic elites, as Chavez strove to gain greater control of the state, prompted a turn away from economic orthodoxy and liberal democratic norms. This was first played out in the struggle over the national oil company PDVSA, after which the Chavez government became more radical in both goals and means.

The first two years of Chavez’s “Bolivarian Revolution,” then, reflected a desire to address the concerns of his popular base while (necessarily) working within the constraints of a neoliberal global conjuncture. However, the wave of popular sentiment upon which Chavez was elected was primarily anti-oligarchic rather than anti-neoliberal, and for this reason the anti-oligarchic message was overwhelmingly emphasized as the new government’s primary purpose, leaving political-economic change somewhat sidelined (Buxton 2008). The main target was the Puntofijo system of governance, in place since 1958, which allowed for elections within the two-party social democrat/Christian democrat system but allocated positions in the bureaucracy and other arms of the state equitably between the two parties, ensuring their joint domination over Venezuelan political life. The flip side to this arrangement was a class compromise referred to as “sowing the oil,” meaning that oil revenue would be allocated in a manner that guaranteed rising incomes for all classes, as a response to the threat of a communist urban guerrilla movement in the 1960s.⁶

As in many resource-based economies, commodity price increases in the 1970s saw a move toward greater state involvement in the economy and a more expansive fiscal posture. Volatile oil prices over the decade were treated as temporary blips, and debt was expanded to cover the shortfalls, a situation which worsened during the 1980s, when prices continued to decline. Previous boom conditions had encouraged an overreliance on the petroleum sector, which meant that, by the 1980s, the rest of the economy—which had been systematically neglected—offered little prospect of recovery. Agricultural collapse, in particular, meant a mass migration to the cities and the creation of a new informal urban class, which found no voice in either hegemonic party.⁷ With real per capita incomes 8 percent lower in 1997 than in 1971, the broad majority of the population saw a deterioration in their circumstances over time.

Widespread marginalization and impoverishment,⁸ contrasted with a long-standing popular belief that oil could and should drive national and social development, led to widespread disillusionment with puntofijismo, manifested in rioting in 1989 and two attempted coups in 1992 (one led by then Lieutenant Colonel Hugo Chavez). The exhaustion of the Puntofijo Pact eventually fatally weakened the domestic capitalists who ultimately lay behind the two major parties, without a sustained period of neoliberalization having promoted an alternative capitalist fraction, as occurred in Bolivia.⁹ The situation thus was ripe for the emergence of an outsider candidate capable of mobilizing disenfranchised but unorganized popular sectors. That this was only tangentially related to the matter of neoliberalism was evidenced by the candidacy, in the elections of 1998, of the pro-neoliberal Irene Sáez, who was the initial front-runner until she accepted the endorsement of one of the traditional parties.

Given the stranglehold these parties had long maintained on the state, it is no surprise that some of Chavez’s first moves in power were aimed at short-circuiting their interests by overhauling or bypassing various parts of the state apparatus, most prominently with the election of a constituent assembly and the new constitution that resulted, though there also were struggles over the composition of the Supreme Court. For the first two years, however, economic policy remained largely orthodox, with commitments made to private property and timely debt repayments and with macroeconomic policy based on International Monetary Fund advice (Vera 2001).¹⁰ Projects to give property titles to landless groups looked somewhat more radical but in fact were largely based on Hernando de Soto’s ideas about incorporating the poor into private property regimes (Parker 2005).

Lack of change in the economic sphere during the first years of chavismo seems to have simply been a function of the prioritization of institutional change. This does not mean that there was any radical anticapitalist plan waiting to be unveiled, but neither does it necessarily suggest an absence of desire to move away from neoliberalization. Chavez, in fact, seems to have initially envisaged a development project that involved a key role for the domestic bourgeoisie (Lander 2007; Ellner 2004) and that would have furnished them with subsidies and protection in much the same manner as they enjoyed under puntofijismo. Polarization in Venezuela—meaning Chavez was unable to carry domestic capital along with him—seems to have reached a critical point with his moves to gain control of PDVSA. It was the successful, though fraught, battle for government control of oil that both prompted Chavez to radicalize (in the face of opposition from the bourgeoisie) and allowed the chavista project to survive, with the chavista project hinging on the upswing in oil prices that occurred over the period of struggle (Buxton 2008).

Though it was state-owned, PDVSA had, by 1998, become almost entirely autonomous from the government, was involved in various joint ventures with transnational oil companies, and was itself a transnational conglomerate, with investments in U.S.-based Citgo Petroleum and several refineries (Parker 2005). Given this, it is hardly surprising that PDVSA operated essentially as a private firm would, attempting to limit its fiscal contribution to the state through transfer pricing and lobbying for tax cuts. It had also, contrary to official OPEC policy, adopted a strategy of maximizing production volumes, which of course contributed to the low price of oil as well as integrating Venezuela more tightly with the U.S. market and alienating OPEC partners.

Chavez’s moves to bring PDVSA under greater state control and to reorient the company toward a less commercial ethos brought conflict with its executives and drove a wedge between the government and the domestic capitalist class.¹¹ PDVSA promoted a policy of continuing the opening of the sector to foreign private capital and presented itself as a bastion of technocratic efficiency, contrasted with the shortsighted populism of chavismo.¹² The management and professional staff of PDVSA became key actors in the various attempts to unseat Chavez in 2001 to 2003, associated with the peak business association Federación de Cámaras y Asociaciones de Comercio y Producción de Venezuela (Venezuelan Federation of Chambers and Associations of Commerce and Production).¹³

Though Chavez survived these conflicts, the polarization that they wrought drove much of the middle class into the arms of the opposition and definitively ruled out compromise with domestic capital, spurring radicalization along a number of axes. Capital strikes and lockouts over this period brought greater state participation in the economy—out of the necessity to maintain support for the government by minimizing shortages of goods rather than out of any great ideological commitment. One of the most prominent of these measures was the establishment of a government chain of informal supermarkets to provide subsidized goods in poor areas, as food distribution almost ground to a halt toward the end of 2002 (Clark 2010). This was a hugely popular move, which was made permanent as the Mision Mercal, pointing to another dynamic of radicalization—the need for Chavez to rely more heavily upon his base, in the absence of middle-class support.

The first years of his administration, under conditions of low oil prices and relatively little government control over hydrocarbon revenues, had provided little funding for any prospective social programs for the poor.¹⁴ There was therefore a danger that the political and rhetorical changes that had proved so popular with these sectors—manifested in the huge mobilization that succeeded in bringing Chavez back to power after the attempted coup in April 2002—might have taken Chavez only so far, in the absence of more inclusionary social policies. A need to link directly to this base as a means of maintaining and enhancing its mobilization potential combined with a distrust of the institutions of the liberal state to produce programs designed to be implemented at a community level. These were collectively known as the misiones,¹⁵ which were administered by informal neighborhood organizations with relatively little oversight from above and mostly funded directly from the reformed PDVSA.¹⁶ Thirty thousand community councils also were eventually established, with the task of implementing public work schemes in their locality (Ellner 2013).¹⁷

Meanwhile, lockouts over the 2001–2003 period of unrest led several groups of workers to take over their companies and restart production, progressing from this to successfully demanding expropriation by the state. Increasingly intractable opposition from capitalists continued to drive further radicalization in subsequent years, as price and exchange controls increased in scope in order to combat the inflationary impact of shortages and limit what became a consistent flow of capital flight. In addition to expropriations driven from below, state ownership of a growing proportion of the economy mainly reflected a desire to establish a position of strength against domestic capital in fighting price speculation, smuggling, and induced shortages.¹⁸

These policies would have been simply unsustainable without the government’s successful battle for control of PDVSA, but, more fundamentally, even this would have counted for little without the upsurge in oil prices that immediately followed in subsequent years. This provided the economic base for the state to fill the gaps left by striking capital, to arrange for the emergency import of basic consumer goods, and to establish the misiones, which formed the foundation of continuing popular support for the government. In this context, it is no surprise that the wheels of the chavista project began to fall off as oil prices started to drop, around 2014.

Bolivia

Bolivia differs from Venezuela in the makeup of both its elite and its popular sectors, which have had a large impact on its post-neoliberal trajectory (Ellner 2012). Unlike in Venezuela, a Bolivian capitalist class divided roughly along sectoral lines, and more clearly by geography, meant that the leading opposition movement manifested itself in demands for regional autonomy (or even independence). Though, as with the other ER cases, popular mobilization (and subsequent governmental orientation) revolved around questions of marginalization, in Bolivia the process was rather different, with an alliance of heterogeneous (though ethnically linked) social movements gaining momentum, first locally and then nationally, before coming to power under the banner of Evo Morales’s MAS in 2005.

The local character of many of these movements tended to persist, reinforced by the dispersion of a large proportion of gas revenues at the municipal level, which made the formulation and implementation of a coherent national development program under Morales difficult. The situation was made more challenging by the low level of state capacity in Bolivia, which began the commodity boom as the poorest country in South America and in which several governance functions were carried out by donors and nongovernmental organizations until 2005. It is therefore unsurprising that post-neoliberal change in Bolivia was more modest than that seen in Ecuador and Venezuela, even though the Morales government has advanced a number of important policies that would have been unthinkable under previous neoliberal administrations and has proved more successful at preserving its project under the stress of falling commodity prices in the postboom years.

Kaup (2012, 2013c) posits that both post-neoliberalism and counter-neoliberalization in Bolivia can be traced to local class conflicts and that both have resulted in the consolidation of the power of the transnational capital within the country. In the first case, economic elites centered around mining interests in the highlands were able, in the 1980s and 1990s, to ally with global capital to push through a neoliberalizing agenda, at the expense of a lowland agro-industrial fraction. The agro-industrial fraction had enjoyed special privileges, particularly under General Hugo Banzer Suarez in the 1970s, which included, effectively, a redistribution of windfall commodity revenues from highland to lowland elites (Kaup 2012, 44–47). A neoliberal program that reversed this arrangement by dramatically lowering the government’s take from extractive revenues clearly suited mining interests, which also benefited enormously from the opening of the sector to foreign investment.

According to Kaup (2013a, 2013c), the even greater fractionalization of domestic capital which ensued created spaces for the emergence of the popular classes as a significant political actor, first in high-profile acts of anti-neoliberal protest, such as the Cochabamba “gas war,” and culminating in the historic election of Evo Morales as the first indigenous president of Bolivia (in South America’s only majority-indigenous state). Essentially, internal wrangling between a geographically segmented economic elite weakened local capital in general, to the point where popular class ascendancy was possible. For Kaup, though, the limits to this victory are heavily circumscribed by the dominance of transnational capital in the context of a globalized economy. The MAS and its supporters “have struggled to be included in—and to receive some of the benefits of—Bolivia’s extractive export-oriented economy … The Morales government has thus become the local actor participating in global circuits of accumulation. It has become the internal bourgeoisie, or perhaps better put, the internal proletariat and peasantry” (Kaup 2013c, 115).

This assessment appears accurate, at least in the sense that Bolivia’s development strategy since 2006 has concentrated on the redistribution of the proceeds of extraction rather than the development of domestic industry. Here, the notion of internal popular classes is certainly a useful way to conceptualize the MAS in government. Nevertheless, Kaup’s pessimism seems somewhat unwarranted. It is difficult to see how landlocked Bolivia, the poorest state in South America and with a population of fewer than 11 million (World Bank n.d.), would realistically manage to carve out a significantly more autonomous path of development at present than has been achieved under Morales, particularly given the levels of investment that will be required in the medium term to sustain the hydrocarbon sector (Cunha Filho, Gonçalves, and Déa 2010).

Some attempts were made to set up state-controlled basic industries such as food processing and paper production, though progress seems to have been limited. Probably of more significance was the inauguration, in 2013, of the first Bolivian natural gas separation plant, built by an Argentinian firm, which is slated to produce enough liquefied petroleum gas to supply the domestic market (Latin American Herald Tribune 2013). Further expansion of extractive frontiers, including a focus on beneficiation of raw materials, has been a priority, though results have generally been somewhat disappointing. The exploitation of the vast iron ore deposit (perhaps the world’s largest) at El Mutun, on the Brazilian border, by the Indian company Jindal Steel, was meant to amount to a $2.1 billion investment and to include on-site sponge iron and steel plants. The development was subject to repeated delays and mutual accusations of bad faith on the part of the government and the firm, and in 2012 Jindal finally withdrew (Dube 2014a). Much has been made of the considerable potential for lithium extraction from the Salar de Uyuni salt flats, since lithium is a vital component of advanced battery technology, which may well power most of the world’s auto fleet if a transition from fossil fuels occurs. With a quarter of the world’s known reserves, Bolivia shifted between trying to find foreign partners (while insisting that any deal should include all stages of production taking place domestically) and trying to develop the industry alone, with apparently little success (Valle and Holmes 2013; Alper 2017).¹⁹

High levels of overall dependence on foreign capital have largely been a function of the weakness of the national gas company, Yacimientos Petroliferos Fiscales Bolivianos (Bolivian Treasury Oil Fields, or YPFB), which had been starved of investment during the 1980s and then privatized in the 1990s.²⁰ The subsequent renationalization of the Bolivian gas industry under Morales amounted to the state buying back majority control of the half of YPFB then owned by multinationals, substantially ramping up the state’s tax take from the rest of the extractive sector, and negotiating much higher gas prices with main customers Argentina and Brazil. Such efforts may not have met the expectations of large numbers of MAS supporters in Bolivia and beyond (Veltmeyer 2012; Kennemore and Weeks 2011). Nevertheless, they were a sharp turn away from neoliberal policies, which would have been almost impossible under the global structural conditions of the 1990s, no matter the balance of domestic forces. They also represented a substantially better deal for the state vis-à-vis transnational capital.

As a result, government revenue from the Bolivian gas industry had increased sevenfold by 2012 (Fuentes 2012), allowing for a doubling of state spending. Some of this revenue was channeled into the Bono Juancito Pinto, a scholarship program for primary school children, and the Renta Dignidad, a universal noncontributory pension scheme for those over age sixty (Silva 2013).²¹ Much of the new surplus, however, was diverted to municipal levels. This reflects the grounding of the MAS government in a mosaic of locally rooted social movements, to which it is fundamentally beholden. It also meshes with Bolivian institutional characteristics, especially the legacy of the Popular Participation Law of the 1990s, which had, in the spirit of decentralization, given municipalities more of a voice in the allocation of public spending. Many MAS supporters had first gained power at this level, and continued to hold it, but had been starved of funds, making a redirection of royalty and tax payments into their hands an obvious policy choice for MAS, though the decision may also have been related to low state capacity at the national level. With the nationalization of the electricity and water sectors, service delivery tended to be coordinated at the local level and was aimed at decommodifying provision. This had some promising results, such as the increase in rural electrification, from 20 percent of households to 50 percent (Fuentes 2015).

At the same time, handing gas and mining rents to local governments was a politically convenient way for Morales to undermine opposition from the lowland agro-exporter class, which at one stage posed a serious threat to the government. Despite losing the 2005 election to Morales, these interests operated from a position of relative strength after the election, owing to changes under which departmental prefects were now elected rather than appointed from the center (Bebbington and Bebbington 2010; Eaton 2011). The eastern Media Luna departments also contained the bulk of gas reserves and benefited from a complicated revenue sharing agreement, which made prefects in general—and those in the lowlands in particular—the major recipients of the increasing hydrocarbon revenue flows during the first years of the Morales government, until a large proportion of these funds were redirected to municipal levels.

Feeling threatened by an indigenous highland-based government, white and mestizo agricultural elites were able to mobilize support from a large proportion of savannah residents, who identified primarily along geographic rather than ethnic lines, in contrast to the self-consciously indigenous (and, to a lesser extent, Andean) character of the MAS government (Kohl 2010). A referendum on regional autonomy, in 2006, was an overall victory for Morales but also indicated strong support for regionalism in the Media Luna, leading to increasing tensions and resulting in racially inflected paramilitary violence, and even an abortive coup attempt, in 2008. Public opinion, even in the savannah, swung against the autonomy movement after a massacre of eighteen peasants in Pando department, in 2008. This, together with the momentum from his victory in a presidential recall referendum, allowed Morales to push through a bill on a plebiscite for the new constitution, in 2009 (Postero 2010).

Undoubtedly, the underlying issue for the lowland elites had been the prospect of land redistribution, in a state where, at the time of Morales’s election, land ownership was among the least equitable in the world and semifeudalism remained entrenched in some areas (Weisbrot and Sandoval 2008). In order to end the standoff, Morales was willing to compromise on this issue by agreeing to protect existing landowners and only redistribute “idle” plots.²² Perhaps, had Morales not offered this concession, or had landowners proved more intractable, conflict might have taken a direction similar to that seen in Venezuela, prompting a more radical approach from the government in order to keep goods and services moving in the face of opposition from capital. This seems unlikely, though, since the geographically fractured nature of the Bolivian capitalist class did not allow for a national anti-MAS movement, which might have drawn in more actors, such as the army (which, as an inherently nationalist organization, continued to support the government, despite natural sympathies with the lowland elites).

Ecuador

No Ecuadorian government made any substantive effort toward a sustained break with a neoliberal policy agenda between the beginnings of neoliberalization, in 1981, and the election of Rafael Correa, in 2006. During this period, a cultural and economic cleavage with deep historical roots—between the coastal area (centered around the commercial capital of Guayaquil) and the highlands (especially the political capital, Quito, and the surrounding Pichincha province)—combined with an electoral system that encouraged institutional instability and intra-elite conflict (Conaghan 1988, chap. 6) to produce a regular churn of presidents (table 6.1). The periodic rise of populist outsider candidates included a handful of avowedly anti-neoliberal figures. However, when they had successfully secured power, each would then reverse course and accede to the policy restrictions imposed by the conditionality of the international financial institutions, echoing the phenomenon of “neoliberalism by surprise,” which was notorious across Latin America during this period (Stokes 2001; Campello 2015). Whether any of these presidents were ever personally committed to their espoused policy goals is questionable, though room to maneuver was in any case very much constrained by dependence upon IFI support and approval.

An important example of this kind of process is the election of former colonel Lucio Gutierrez, in 2002. Gutierrez’s election is significant because his brief term in office coincided with the beginnings of the commodity boom, meaning that, at first glance, a shift away from neoliberalism under his watch should at least have been possible. Gutierrez’s record in office, while hardly supporting the notion that he would have instituted a new direction of travel for Ecuador had he been able, still provides good evidence for the centrality of the commodity boom in enabling such shifts.

Gutierrez had been the leader of a group of young army officers who, allied with CONAIE, the indigenous federation of social movements, had deposed technocratic president Jamil Mahuad²³ in 2000, during the worst economic crisis in Ecuadorian history (Fitch 2005; Zamosc 2007).²⁴ Gutierrez was definitively from outside the party structure—and, being from the Amazon, was not tied to either of the rival regions of littoral and Andes. Seemingly, the stage was set for a break with neoliberalism in Ecuador. At a moment when Chavez’s government in Venezuela was moving left, following the 2002 coup attempt, many commentators interpreted Gutierrez’s electoral victory as a sign of rising Andean (and, more broadly, Latin American) populist leftism (Hakim 2003). Though this is not entirely inaccurate, in the case of Gutierrez, the judgment was certainly premature.

TABLE 6.1

Ecuadorian presidents since 1992

Years	President	Party	Orientation	Reason for Leaving Office
1992–1996	Sixto Duran Ballen	Republican Unity	Right (coast)	Democratic succession
1996–1997	Abdala Bucaram	Partido Roldosista Ecuatoriano	Populist (coast)	Removed by Congress after economic/anticorruption protests
1997–1998	Fabian Alcaron	Frente Radical Alfarista	Centrist (highlands)	Caretaker—democratic succession
1998–2000	Jamil Mahuad	Union Democrata Cristiana/Democracia Popular	Technocratic (highlands)	Military/indigenous coup amid economic crisis
2000–2003	Gustavo Noboa	Union Democrata Cristiana	Center right (coast)	Caretaker—democratic succession
2003–2005	Lucio Gutierrez	Partido Sociedad Patriotica	Populist (Amazon/highlands)	Urban working/middle class coup, corruption/political crisis
2005–2007	Alfredo Palacio	No party affiliation (former head of Supreme Court)	Technocratic (coast)	Caretaker—democratic succession
2007–2017	Rafael Correa	Alianza PAIS	Leftist/populist (national [urban])	Democratic succession
2017–Present	Lenin Moreno	Alianza PAIS	Left/center, increasingly moving to the right (national [urban])	In office

Although supported by a slightly different coalition of forces, Gutierrez’s appeals to the populace were similar to those that helped win popular support for Correa several years later, with initial policy proposals that certainly went further than those of Chavez prior to his election. These included promises to limit foreign debt payments, to renationalize parts of the economy, to remove the U.S. military base at Manta, and to increase social expenditures. As a reaction to the financial crisis and the unstable rule by shifting oligarchical fractions that led up to it, the election of Gutierrez certainly should be viewed as an ascendancy to state power by popular class groups. That he ended up reversing course and embracing a wholly neoliberal program even before assuming office demonstrates the enduring disciplinary power of international financial capital just prior to the impact of the commodity boom in Ecuador, which would give Correa far greater room to maneuver, four years later.

This is not immediately obvious when considering the internal and external situation in 2002. The traditional parties, and thus, elites (mostly, but not limited to, the capitalist classes), were the target of the 2005 protests that would eventually bring down Gutierrez (following his collusion with them over granting amnesty to ex-president Abdala Bucaram, exiled in Panama). But the main blow to the influence of the bourgeoisie had come during the 1999–2000 economic crisis, which also led to the ouster of a president, Jamil Mahuad, who had allowed several oligarchs to escape to Miami with their funds intact just before their banks collapsed (hence the emergence of Gutierrez as an “anti-elite” candidate).²⁵

Thus, had Gutierrez pressed on with his original redistributive agenda, he would have had the advantages of a weakened capitalist class, already aware of the potential power of mass mobilization against them, and status as an outsider with few ties to these traditional powers—not substantially different in these respects from the situation faced by Correa in 2006. It therefore seems unlikely that the bourgeoisie would have possessed any greater political capacity to stop these hypothetical efforts than they had later, when confronted with Correa’s plan to remodel the economy. The crucial difference lies in the fact that Gutierrez never possessed the economic means to meet his promises of social spending, and thus he never built the popular support that served as the solid wall from behind which Correa could launch his ambitious agenda.

Correa’s sustained popularity, which he was able to deploy as a weapon through almost constant mobilizations, cementing and extending his mandate and forcing structural reform by arranging various referenda and elections (once a year, on average, after taking office), hinged on his ability to deliver promised social spending.²⁶ Thus, with regard to Gutiérrez (or a hypothetical leftist president at the time), the question is whether he would have been able to do the same, had he not abandoned his election promises of redistribution.²⁷ Subsequently, Gutiérrez, and the current representative of his Partido Sociedad Patriotica (Patriotic Society Party),²⁸ maintained that the deal with the IMF, which Gutiérrez signed in August 2003, was absolutely unavoidable, given budget arrears of $700 million—mostly comprising salaries owed to the army (a key base of support) and other public sector workers. Ecuador had been shunned by the IMF since Mahuad’s suspension of debt repayments during the 1999–2000 crisis, and Gustavo Noboa’s caretaker government had already begun a reform process, which had been dismissed as insufficient by the fund (BBC 2003). Even though the terms insisted upon were typically harsh, it does seem that government officials genuinely believed that the $240 million standby loan, eventually granted during Gutiérrez’s first year in office, was necessary to head off an impending default.²⁹

Against this must be set the fact that Gutiérrez assumed the presidency in 2003, when oil prices were already high and, having survived a coup attempt, Chavez was beginning to advance a more radical agenda in Venezuela. Thus, the international environment seemed rather accommodating to deviations from neoliberalism. Indeed, in 2005, during Correa’s brief tenure as finance minister under caretaker president Alfredo Palacio, a break with IMF terms resulted in the suspension of a $100 million loan from the World Bank, but Ecuador turned to the bond market and was able to raise $650 million, albeit at a very high interest rate (Weisbrot, Sandoval, and Cadena 2006). The suspension of relations with the IFIs had come as a consequence of the reorganization of an oil stabilization fund, which had been set up just before Guiterrez’s election, in the hopes of pleasing IMF managers. By law, this mandated that 70 percent of oil revenues were to be spent on buying back debt, with a maximum of 10 percent set aside for social spending. The social spending limit was tripled under the new arrangement. If this could be reformed in 2005, then, at least in principle, why could this not be done by Gutiérrez two years earlier?

It should not be discounted that two years of extra economic growth and distance from the debacle of 1999 to 2000 would undoubtedly have facilitated Ecuador’s return to international capital markets, which may have been simply impossible in 2003. By 2003, however, oil was providing leftward-moving Venezuela with 69 percent of its export revenue; in Ecuador’s case, the figure was proportionately half that. A new pipeline, which came on line in late 2003, significantly boosted Ecuador’s export volumes, and this, combined with continuing price increases, meant that export receipts boomed, from $2.9 billion in 2003 to $6.5 billion two years later (figure 6.4). By the time Correa began his mandate, in 2006, the figure was $7.7 billion, accounting for 50 percent of exports. Taken together with the debt repayments and buybacks, which had continued (albeit at a reduced pace), Correa was in a far stronger position than Gutiérrez to reject IMF demands.

Correa’s ability to channel oil revenues into social spending gave him a cushion of mass popularity, allowing him to take on an economic elite which, while weak, would nevertheless probably have been capable of derailing his agenda under the old congressional system, given that he would have required the acquiescence of several of the old parties to rule. Correa instituted media laws, which changed ownership structures, and he calmed the previously vociferous criticism emanating from opposition newspapers by establishing dubious laws against so-called media lynching.

In addition to new financial taxes, Correa’s increasing political strength was manifested in much-improved tax collection across the board, addressing a traditional weakness in Latin American economies. For instance, during the first quarter of 2012, the Ecuadorian Internal Revenue Service, Servicio de Rentas Internas, reported a 34 percent increase in tax revenue over the same period for the previous year. Much of this burden fell on the grupos economicos who previously had avoided much of their tax obligations. As part of the fulfillment of a populist election promise, in May 2013, the Servicio de Rentas Internas published a list of debtor companies. Among those listed was Exportadora Bananera Noboa, owned by the country’s richest individual (and perennial presidential candidate), Álvaro Noboa.

The achievements in extending and rationalizing the tax system point to important features of Correa’s government, which mark it as somewhat different from those in Venezuela and Bolivia. In Venezuela, the firing of thousands of mostly white-collar PDVSA employees was a major step in a process of polarization that saw the middle classes generally line up against chavismo, while in Bolivia the grassroots and ethnic origins of the MAS have served to partially exclude middle sectors. In contrast, the middle classes have been one of the main cores of support for Correa, starting with the urban forajido (outlaw) movement in Quito, which ousted Gutiérrez. This was reflected in the greater participation of middle-class professionals in Correa’s government and civil service (solidified with increasing numbers employed by the state). This alleviated most of the suspicion around bureaucracy or technocracy encountered in the Bolivian and Venezuelan cases and resulted in a greater reliance upon the central state to achieve the government’s policy goals and drive economic development. To some of Correa’s critics, especially in Ecuadorian social movements, this meant a privileging of economic growth and efficiency over participation and empowerment (Becker 2013).

De la Torre (2013) is highly critical of this “technopopulism”—for him a novel combination of top-down, populist manipulation of the urban masses and an unaccountable rule by experts. Certainly, there was technocratic orientation to Correa’s government, which was filled with figures from academia and nongovernmental organizations who had been alienated by the experience of neoliberalism. As de la Torre points out, the majority of the top posts were filled by individuals with postgraduate education—in a country of 15.5 million, where only 358 university professors have PhDs. By contrast, in Venezuela, a more developed state, with a population of 30 million, only seven of the twenty-nine most senior government appointees had any postgraduate training (as of 2013). Correa himself holds a PhD in economics from the University of Illinois Urbana–Champaign.³⁰

Whereas the ER governments in Bolivia and Venezuela largely sought to bypass the state and to prioritize participation by diverting funds to local levels, the Ecuadorian state was extended and reoriented with the creation of the powerful new Secretaria Nacional de Planificacion y Desarrollo (National Secretariat of Planning and Development), which has responsibility for the design and implementation of the overarching National Development Plan as well as for reform of the state and the training of bureaucrats.³¹ A representative of the National Secretariat, very much versed in developmental state concepts, commented that the institution had been designed with the experiences of the East Asian newly industrialized countries in mind.³² Certainly, this institutional structure seems to have enabled the assembly of a more coherent national development vision and to have diverged from the neoliberal norm, in which finance ministers are able to dominate line ministries (Phillips et al. 2006).

Redistributive goals similar to those encountered in Venezuela and Bolivia found expression through a greater reliance upon nationally administered schemes than in the other two states. The Bono de Desarrollo Humano (Human Development Bond), which has been augmented several times since its introduction in 2006 (it stood at $80 in 2013 and increased again under new president Lenin Moreno), is a conditional cash transfer that provides a monthly stipend to the poorest 40 percent of the population. Social spending overall increased from 4.8 percent of GDP in 2006 to more than 9 percent of GDP from 2009 to 2011, including a doubling of education spending (Ray and Kozameh 2012).

Social and developmental spending, while clearly highly dependent upon oil revenues, also sprang from government’s increasing ability to control and regulate the financial sector. This industry, primarily identified with the coastal grupos, had been substantially weakened by the 1999–2000 financial crisis, and it remains highly unpopular, making it a relatively easy target for Correa’s government.³³ Indeed, after opposition candidate (and banker) Guillermo Lasso pledged to increase the Human Development Bond, as part of his 2013 presidential election campaign, Correa responded by suggesting a further increase, to be paid for through a tax on financial institutions.³⁴

Reregulation of the financial sector had begun much earlier, however. The central bank was placed back under executive control in 2007, and this institution was used to lower interest rates as a means of extending credit. Though Correa’s government may have been less focused on small-scale community initiatives than were the governments of Bolivia or Venezuela, the Popular Finance Program, established in 2008, led to a huge surge in loans to small businesses and cooperatives, as part of an attempt to both support and regulate the informal financial sector. Of perhaps greatest structural import was the barring of financial institutions from owning any other firms, whether inside or outside the financial sector.³⁵

Also highly significant were regulations designed to stem capital flight and to promote domestic investment—in an environment unlikely to stimulate large amounts of foreign direct investment (FDI), at least from traditional sources. Banks were required to hold 60 percent of their liquid assets within the country and were taxed at 5 percent on any capital leaving the country (with this latter accounting for a full 10 percent of government revenues). The government also mandated that the central bank repatriate $2 billion in international reserves held abroad. This helped fund $3.5 billion of public investment in construction, agriculture, industry, and mortgage lending from 2009 to 2012, part of a coordinated response to the global financial crisis (Weisbrot, Johnston, and Lefebvre 2013).

The financial sector was unable to count upon any help from IFIs or transnational financial capital in putting effective pressure on the government. In 2008, the decision was made to default upon and declare illegal $3.2 billion of external debt, and then to buy almost all of it back at 35 percent of face value, saving $300 million per year in interest payments alone (Kennemore and Weeks 2011; Weisbrot, Johnston, and Lefebvre 2013). Effectively cutting Ecuador off from international capital markets in this way may have appeared risky, but it did have the effect of insulating Ecuador from any policy leverage on the part of the markets or the IFIs.³⁶ Meanwhile, Northern FDI dropped considerably, compensated for by public investment and, increasingly, flows from China.

Though Correa periodically complained about China’s negotiating stances (El Comercio 2009), huge amounts of Chinese oil-backed loans and investments flooded into Ecuador after 2009.³⁷ The majority of these have gone to fund infrastructure megaprojects, including the $12 billion Pacifico oil refinery (Mfula 2013), the $2 billion Coca Codo Sinclair hydroelectric dam, and the similarly priced El Mirador copper mine, along with a host of oil exploration projects in the Amazon (Escribano 2013; Gallagher and Myers 2018).³⁸ China has been willing to fill in the gaps left by a lack of Northern investment in oil, and even more so in other sectors of the economy, leading to growing concerns around Ecuadorian dependence on China. One former high-ranking opposition party official took the view that this would be a point of political weakness for the government, as “part of Correa’s strategy when he won [in 2006] was to say that Ecuador had become a colony of the United States and that the people should not accept this. Fine, but now we are becoming a colony of China, something which is more frightening for the average person.”³⁹ The one government official I interviewed denied that Ecuador’s relationship with China posed any serious problems, echoing Correa’s public statements that if any country should worry about a growing dependence on the People’s Republic of China, it was the United States.⁴⁰

Toward the end of Correa’s time in office, though, the Ecuadorian government began to again pursue investors from more traditional sources. An indication of this may be seen in the relaxing of the terms of the county’s mining code, which previously had set aside 70 percent of profits to the state. This move was made in response to the disappointing level of interest in Ecuador’s substantial copper and gold deposits and to Canadian mining firm Kinross’s 2013 pullout from developing the large Fruta del Norte gold deposit (El Comercio 2014; El Telegrafo 2014). Exploiting Ecuador’s largely untapped mineral resources was seen as vital, amid increasing concern that oil production was beginning to peak.

It is likely that Correa would have been able to pursue many of his social policies and to increase the presence of the state in the economy without the need for large amounts of Chinese (or, say, Venezuelan) capital, as occurred in Bolivia. But his more ambitious goals were probably impossible without external financing. The Pacifico refinery project alone is valued at one-seventh of annual GDP, for instance. When interviewed in 2013, a representative of the Association of Private Bankers in Quito was of the opinion that global liquidity was at such high levels that the government, should it wish, could have returned to international bond issuance, as has occurred in the case of many developing countries.⁴¹ This was perhaps surprising, for a country that had selectively defaulted on its international obligations in 2008, but as commodity prices began to fall, the government did indeed return to the bond markets, to the tune of $2 billion in 2014 (Rodrigues and Schipani 2014).

An important facet of the technocratic bent of Correa’s government was a railing against what government supporters label “corporatism” (Becker 2013). In the Ecuadorian context, this is meant to evoke memories of the corporatist access to the state by business groups in the pre-Correa era. In reality, however, it was deployed against any “special interests,” such as social movements or indigenous groups, which were portrayed as advancing narrow, sectional causes in defiance of the national interest—national interest being primarily determined by the new peak bureaucracy, which was able to stand above such concerns and map out a developmental future on a national scale. In terms of developmental ambition and cohesion, this structure seemed to offer advantages over those in Venezuela and Bolivia. Nevertheless, it also led to an increasing authoritarianism, with anti-mining protesters criminalized as terrorists.⁴²

Perhaps in response to the more developmentalist bent of Correa, when compared with the other ER regimes, there were signs in 2013 that certain sectors of capital were content to reach a somewhat uneasy truce with Correa. An official from the Guayaquil Chamber of Industry was in no way hostile toward the government, despite lingering concerns.⁴³ New laws that prohibited private banks from owning companies in the real economy not only greatly reduced the power of domestic banks but also may well have partially severed the links between the financial elite and their counterparts in the industrial and agro-export sectors. The official from the Association of Private Banks, unsurprisingly, expressed a complete feeling of exclusion from the government: “In any democratic society, business leaders are able to influence the government—different sectors make proposals and it is for the politicians to make a judgment between them. We have tried to talk to the president, to the National Assembly, but no one wants to listen.”⁴⁴

Having witnessed events in Bolivia and Venezuela, however, there seemed to be a sense among the economic elites that any attempt to confront state power would be unrealistic. Interviewees from the commercial and industrial sectors talked of how relations with government had greatly improved, after early years of instability and uncertainty.⁴⁵ While most voiced significant concerns, usually relating to dependence on China and a lack of private foreign investment, there appeared to be a sense of pragmatic optimism among these groups, a feeling that the government was now willing to work with them. This rapprochement, which appears to have continued (Wolff 2016), is likely to now have been strengthened through a shift to the right under Correa’s successor, Lenin Moreno.

Conclusion

There is a tendency in some recent scholarship relating to Latin America (Webber 2010; Kennemore and Weeks 2011; Veltmeyer 2013) to claim that cases such as Ecuador and Bolivia (and sometimes even Venezuela) have not deviated from a neoliberal logic, because their “neoextractivist” strategies continue to advance accumulation by dispossession. This was seen in Ecuador’s decision to open up the Yasuní Ishpingo-Tambococha-Tiputini rainforest reserve to oil drilling, following an unsuccessful campaign asking for Northern compensation, amounting to half the value of estimated reserves, in exchange for leaving the oil in the ground (Vaughan 2014). The process will undoubtedly have a huge environmental impact in an area of exceptional biodiversity and will involve the displacement of Shuar and other indigenous groups. And clearly, in the context of climate change, any development strategy based on the exploitation of fossil fuels must surely have a limited shelf life.

There may be disappointment, on the part of some observers, with the dissonance between sometimes avowedly socialist rhetoric and a capitalist reality, particularly with regard to the governments of Ecuador and Bolivia, which have made a great show of enshrining constitutional rights not only for indigenous groups but also for Pachamama. But neoliberalism should not be confused with capitalism in general. Post-neoliberal turns in Ecuador and Bolivia certainly involved the deepening and widening of capitalism and capitalist social relations in ways that entailed exploitation and dispossession. Nevertheless, the character of this expansion—or development—in ER states was linked to export-oriented national popular projects of redistribution, expanded social services, infrastructure development, reregulation, increased taxation, and, in some cases, expropriation, all of which were most certainly off the menu during the neoliberal era and all of which signal that these three states have made a turn away from this particular form of capitalism, even while moving onto a path of renewed accumulation by somewhat different means.

Seen with the benefit of postboom hindsight, Morales in Bolivia has proved the most successful in consolidating his country’s break with neoliberalization, even through a period of declining commodity prices and a regional realignment rightward. Even so, at the time of this writing, Morales’s position is less certain than it has been for many years. In late 2018, Bolivia’s Supreme Electoral Tribunal cleared the way for the president to stand for a fourth term, despite this ruling running counter to the result of a 2016 referendum (Achtenberg 2018). With a loose coalition of unlikely allies (encompassing parts of the MAS’s former social movement base, along with lowland middle classes and elites) opposing Morales, the election result is by no means certain.

Ecuador has experienced more difficult economic conditions, not helped by a major earthquake, which hit the northern coastal region in 2016. Governing party candidate Lenin Moreno won only a narrow victory in the 2017 elections and lost the governing party’s majority in Congress. It appears that Moreno was chosen as the presidential candidate in a deliberate electoral strategy to present a more conciliatory figure for Ecuadorian elites, in comparison to the combative Correa (Vivanco 2018). But, seemingly hastened by a personal falling out with Correa, Moreno has since presided over a significant shift rightward, realigning foreign policy toward the United States, reengaging with the IMF, and instituting austerity measures. There also have been efforts to remove Correa loyalists from positions of influence. The extent to which these changes have been driven by Moreno’s own personal agenda and how much has been a response to economic and/or legislative pressures is at this point hard to untangle (Becker and Riofrancos 2018). Even so, while Correa’s term was far from perfect, his ten-year period of relative stability and progress on most development indicators marks a major advance on the previous decade of multiple crises, during which not a single elected president completed their term.

Of the three ER cases, however, Venezuela has clearly suffered the most since the end of the boom prices (Hetland 2017; Buxton 2016). The impact of declining oil prices was amplified greatly by a fixed exchange rate system (originally imposed to stem capital flight in the mid-2000s), which produced a huge gap between official and black market rates for dollars, driving up the cost of imports and sparking hyperinflation (while access to dollars at the official rate quickly became a source of profitable arbitrage for state-linked elites) (Velasco 2016). U.S. sanctions have exacerbated matters, with restrictions on the country’s ability to trade or raise finance in dollars making the prospect of economic recovery seem increasingly distant. This dire situation has led to mass outward migration, which, in turn, has prompted xenophobic reaction in some of Venezuela’s neighbors.

The Venezuelan opposition has claimed fraud in every election since the beginning of the Chavez period—mostly with little basis in fact. But it now seems clear that, since 2016, the Maduro government has increasingly resorted to unfair electoral practices—barring main opposition candidates from the 2018 presidential election, canceling a 2016 recall referendum, and effectively dissolving the opposition-controlled National Assembly (Hetland 2019). At the time of this writing, the United States, together with allied governments in Brazil and Colombia, has sought to put pressure on Maduro by recognizing National Assembly leader Juan Guaidó as interim president and talking up the possibility of military intervention (Toro 2019).