1. There is also a connection between this kind of structuralist argument and several versions of the much-touted “resource curse” thesis, whereby resources are said to hinder attempts at development and growth. Most mainstream examinations of the resource curse rely on “internalist” accounts (Auty 1993; Sachs and Warner 1995; Pomfret 2012), which tend to argue for the uniquely distorting effects of resource-derived revenues on national institutions and political stability. Few of these accounts, however, consider the fact that natural resources appear to have been associated with relatively successful development in periods of more favorable terms of trade for raw material exports (Bonini 2012). The discussion of contemporary cases of resource-exporting states (chapters 5 through 9) suggests that a wide spectrum of institutional outcomes, ranging from developmental to predatory, are possible under commodity boom conditions. In any case, while the resource curse is one of the major lines of investigation on the connection between commodities and development, I do not devote a large amount of time to its consideration. My focus here is not on whether states can defy the supposed curse by adopting one or another of the various developmental programs that I identify as emerging since 2003 but on illustrating that it is the commodity boom (and, ultimately, the rise of China) that has made the pursuit of this range of options possible, whether successful or not.
2. I do not consider soft commodities—that is, food and agricultural inputs—as part of the analysis, for two reasons. First, while prices for these classes of goods rose over the period, these increases were proportionately smaller than those seen in energy and minerals. Second, the nature of the energy and minerals sectors as point source, nonrenewable, and capital intensive facilitates the ability of states to control access and extraction (and thus revenue collection), unlike more diffuse and less capital-intensive sectors such as agriculture. One exception here is soybeans. The capital- and technology-intensive nature of production and high level of concentration in most producer countries’ soy industries means that, in some respects, they approximate the features of an extractive rather than an agricultural sector. Price increases have also been substantial and have been driven by China. As I will discuss in chapter 5, these factors mean that soy industries were subject to changes similar to those seen in extractive sectors and thus potentially conferred similar advantages of policy autonomy (as occurred, especially, in Argentina).
3. I use the hyphenated term “Fordism–developmentalism” to denote the unified but variegated nature of global capitalism over the period from roughly the end of World War II to the onset of crisis, in the 1970s. As seen from the global North, this era is associated with the spread of Fordist mass production from North America to Europe and then to Japan, buttressed by high mass consumption and demand management grounded in welfare states and a broadly Keynesian approach to economic policy. Mass production was not extended to most of the global South and Northern consumption standards were achieved only by Southern elites. Nevertheless the principles of developmentalism (whether of the modernization or the structuralist variety) were largely of a piece with those informing policy in the North. Many institutional arrangements, meanwhile, were global in character (or at least in intent). These include the United Nations, the World Bank, and the International Monetary Fund but also the universalization of the nation-state.
4. My usage is borrowed from Harvey (2005, 11), who describes the separation of national spaces into relatively autonomous spheres during the developmentalist era as providing a force field, behind which domestic political struggle is isolated from the pressures of the world market.
1. The first of these booms occurred at the height of the materials-intensive postwar reconstruction period (1951–1953), compounded by the effects of the Korean War, and the second was during the era of the first oil shock, 1973 to 1975. The latter episode is particularly interesting in that its structural conditions appear to be somewhat similar to those of today, with the United States apparently beginning to lose its hegemonic grip and with new challenges emerging in the global South, represented in the earlier period by the New International Economic Order. Though these attempts to present alternatives to the emerging shift between Fordism–developmentalism and neoliberalism failed for nonfuel commodity exporters and had a disappointing impact on a global scale, oil states did in fact manage to keep prices high for some time and often achieved rather impressive (albeit usually noninclusive) development in the wake of the oil shock. Many oil exporters, particularly in the Middle East, are still among the least neoliberalized states in the contemporary world, marking an interesting parallel with the claimed possibilities for other commodity exporters today.
2. The 1947–1975 period is sometimes identified as such a cycle (containing within it the two short-term booms mentioned in note 1), associated with reconstruction and industrialization in a range of economies and coinciding with the theoretical model discussed later, which posits this period as an era of material expansion within the U.S.-led secular cycle of accumulation that currently may be entering its final phases. The apparent stalling of the contemporary commodity boom from around 2014 may signal a somewhat premature end to the China-driven cycle or, alternatively, may represent a lull, should Chinese growth continue over the longer term or be replaced by expansion of other large economies in the South, such as India. (These and other scenarios will be considered in more detail in chapter 10.)
3. Demand for gold and diamonds is subject to rather different demand pressures, and China is not expected to become such a central driver here as for other commodities. Gold prices reached historic highs since the financial crisis as investors hedged against a weak dollar and other under-pressure currencies. This, though, along with the demand for diamonds, is not directly or substantially linked to the rise of China. For this reason, I do not include these commodities as part of the analysis.
4. In the wake of the financial crisis, many Western firms backed away from planned investments in extraction, discouraged by a short-term volatility associated with commodity speculation. Chinese firms (especially state-owned enterprises), however, tend to employ more patient capital and are less focused on short-term profit maximization (Lee 2014, 2017).
5. During the last period of sustained high copper prices in the 1970s, aluminum was used as a substitute for household wiring in the United States, a practice which stopped after a wave of fires resulted from the poorer quality connections.
6. Energy use per unit of gross domestic product tends to increase while an economy is industrializing, before declining at higher levels of GDP, when service sectors become progressively more important (though there is significant variation in the shape of this trajectory) (Humphreys 2018). South Korea is used as a comparator here because of its somewhat similar developmental path, which, like China’s, included a heavy emphasis on investment and manufacturing.
7. The term “world-system” is most prominently associated with Immanuel Wallerstein and has been criticized from many angles, sometimes justly (Brenner 1977; Skocpol 1977; Wood 2002). I apply the label loosely here in recognition of the many elements that Arrighi’s works share with the more Wallersteinian treatments of the world-system. A full survey of Arrighi’s departures from Wallerstein’s version lies beyond the scope of this book, though perhaps most important is the idea that the system is not a stable hierarchy but one that is subject to constant, open-ended, and qualitative transformation (Arrighi 1994; Arrighi and Silver 1999). Arrighi shares with Braudel (1982) the notion that each successive cycle of accumulation may, in many senses, be viewed as a separate world economy (or system) in its own right, making for a less deterministic structure than what has been termed Wallerstein’s “orrery” (Pieterse 1988). This makes it easier, for instance, to incorporate the rise of China into the model, since the Wallersteinian alternative—that individual nations may well ascend in the world-system hierarchy but that this does nothing to alter the enduring structure—seems rather far-fetched when considering a state that is home to around one-fifth of the global population and has averaged more than 9 percent annual GDP growth for more than three decades (Cheremukhin et al. 2015).
8. Perhaps one of the most significant interventions into the growing literature on China and development is Lee’s (2017) The Specter of Global China, since it moves beyond the usual empirical analyses and offers a theorization of the nature of Chinese state capital as it appears in the global South. Lee’s thesis is essentially that the Chinese state’s “variety of capital” is driven by a distinct logic of accumulation (which incorporates political as well as profit-maximizing priorities) as compared with global private capital. As such—and as Lee shows with respect to Zambia—Chinese state capital potentially may be more flexible and accommodative of political demands on the part of states and social forces in host countries. This line of research holds a great deal of promise, though it is less applicable to the arguments of this book, which focus mainly on China-driven shifts in market conditions rather than on the direct impact of Chinese capital flows.
9. It is wise to be cautious in making predictions of this sort. For instance, a late nineteenth-century observer convinced of the merits of Arrighi’s arguments might well have singled out Germany rather than the United States as the ascendant power more likely to replace Britain in the long run (see Arrighi 1994, 59–60).
10. Prices for many commodities began to rally in 2018, which has been variously ascribed to strong global GDP growth, the working through of a previous supply surplus, and production cuts in oil (OPEC) and in steel (China) (World Bank 2018; Economist 2018).
1. The use of natural resources, of course, long predates European arrival in most areas of the world, though colonialism, whether in the sixteenth-century Andes or in twentieth-century Southern Africa, tended to bring some combination of reorganization in production and exchange relations, extension of the extractive or agricultural frontier, and intensification of exploitation (see, for example, Bunker 1988). All of these changes fit the colonial notion of development detailed in this section.
2. Unless otherwise stated, in this chapter I use “European” to refer to European metropoles and their settler colony offshoots in what is now the global North.
3. Coercion and accumulation by dispossession often had a direct role to play in setting up this uneven playing field, most famously in the British destruction of the Indian textile industry.
4. For most of the book, I use the terms “core,” “periphery,” and “semiperiphery” in line with those understandings most commonly adopted in most world-systems literature (Wallerstein 1974; Hopkins and Wallerstein 1977; Arrighi and Drangel 1986; Goldfrank 2000), though at various points I discuss the problems that the rise of China may pose to this schema. When discussing structuralism, I employ “center” rather than “core,” in line with this school’s terminology.
5. There is a second strand of argument relating to declining commodities terms of trade, based on the concept of unequal bargaining power between center (scarce and organized) versus periphery (plentiful and atomized) labor. I do not explore this in greater detail here given my main focus on capital-intensive resource industries which require little labor to operate.
6. Notwithstanding Russian and then Soviet expansionism within Eurasia.
7. African socialist governments, for example, such as that of Julius Nyerere in Tanzania, often mixed European socialist concepts with a desire to restore what was often idealized as a classless precolonial society. Industrialization and developmentalism were still watchwords in these cases, however.
8. The greater endurance of higher oil prices can be ascribed to a combination of the Iranian Revolution in 1979 (bringing the second oil shock) and the comparative effectiveness of OPEC as a cartel, relative to similar bodies in, for example, copper. A scramble to develop new sources of oil created a dilemma for OPEC producers. One route was to ration production and thus keep prices afloat while seeing market share decline (and with it, eventually, OPEC’s leverage as a cartel). The second was to abandon efforts to control market prices and instead to maximize production volumes, which, in the case of West Asian members, afforded an advantage based on low production costs (Al-Chalabi 1988). This latter course, eventually adopted in 1986, signaled a final shift of the global commodities regime, in line with the neoliberal order, as well as a return to principles of comparative advantage in trade policy.
9. As Babb (2013) points out, structural adjustment programs were somewhat marginal until they were backed by the United States following the Brady debt plan of the mid-1980s.
10. Harvey (2005, 45) notes that the template for the newly reoriented international financial institutions had its roots in the New York City debt crisis of the early 1970s, in which repayment of creditors became the overriding priority of settlement negotiations.
11. There are notable exceptions here, of course, not least in East Asia.
12. In fact, in cases with high levels of government debt, pressures toward neoliberalization have been extremely difficult to escape from, even when engagement with the IFIs has been rejected, as the experience of Jamaica in the 1990s illustrates (see chapter 9).
1. This chapter contains a summary of the qualitative comparative analysis process and findings. The appendix provides a more detailed discussion of issues such as case selection and operationalization of conditions (equivalent to variables in QCA nomenclature).
2. As noted, there clearly is a range of variation here. A number of East Asian economies were able to chart relatively independent policy courses and avoid excessive indebtedness, at least until the late 1990s crisis. Southern oil producers (such as Venezuela, Algeria, or Iran) often were able to hang on to statist features of their economies and liberalized at a slower pace than many of their neighbors. And some of the largest Southern states (such as India and Brazil) also seemed to exercise more control over the pace and extent of reforms. But while processes of liberalization often were not fully implemented and experiences varied in terms of speed, scale, and scope, virtually no states in the global South have remained untouched by neoliberalization without suffering the severe consequences of dislocation from the global economy or earning political pariah status, as is the case with North Korea, for example.
3. Full details regarding methodological issues (for example, the decision to use crisp-set rather than fuzzy-set QCA), case selection, and operationalization of conditions can be found in the appendix.
4. The Organization for Economic Co-operation and Development’s Development Assistance Committee is the primary coordinating body for the major sovereign foreign aid donors.
1. In the following discussion, the notion of political-economic orientation is framed primarily in terms of state–society relations and their expression in the form of state policy sets.
2. World-systems approaches have long been criticized for a failure to satisfactorily account for internal (especially class) dynamics (Brenner 1977; Skocpol 1977). Even world-systems scholars themselves are often pessimistic when it comes to bridging the analytical gap between global and the local scales (Bergesen 2015). My purposes here do not lie in resolving the many contradictions between globally and nationally framed accounts—much less controversies around the definitional nature of capitalism. Nevertheless, it seems perfectly possible, as in earlier literature (Cardoso and Faletto 1979; Paige 1978; O’Hearn 2001) to examine the inner relations of particular national societies and their states without giving up the notions of a larger (uneven) global parameterization of these workings or of an unequal world division of labor.
3. The results of these struggles also, in reciprocal fashion, feed back into redefining the global terrain, though, with a few important exceptions (not least China), most Southern states are far more shaped by than shaping of world economic conditions.
4. Perhaps the most prominent theoretical current on how to categorize states according to political-economic model or orientation is the varieties of capital school (Hall and Soskice 2001). Theoretically and empirically, I see the cornerstone of the typology I present here as the relationship between a given state’s social dynamics and its policy orientation under the shifting conditions of insertion into the global political economy brought by the commodity boom. I therefore do not engage with varieties of capital models here, which tend to understand different types of capitalism primarily in terms of relatively enduring institutional complexes framed by national boundaries (Lee 2017, 163). There also is the problem that the majority of varieties of capital scholarship focuses on advanced economies—and that which looks at cases in the global South tends to involve collapsing important variation among cases into expansive overarching categories (Nölke and Claar 2013). For example, most varieties of capital literature contends that all Latin American capitalisms belong to a single type of hierarchical market economy (Schneider and Soskice 2009).
5. I assign cases to one type or another based on shared characteristics, with the ideal type constructed according to the principle of family resemblance. This notion, first developed by Ludwig Wittgenstein, describes a means of placing cases into categories on the basis of shared overlapping features, without any one particular characteristic being required for category membership. Goertz (2006, 59–60) uses an example from Hicks, whose study of 1930s welfare states defined the latter as a system possessing at least three of five features (health insurance or pensions, for instance), without any one of the five being necessary. Such a conception is also widely used in medicine and psychology, with, say, the presence of any four of seven symptoms resulting in the diagnosis of a particular condition.
6. As Chibber (2003, 2005) has pointed out, the empirical record in many Southern states since World War II suggests that the existence of a separate, identifiable national bourgeoisie may be in doubt. In the main, Chibber’s argument concerns the failure of any supposed domestically oriented capitalist fraction to fulfill the mission of national development, which has often been inferred from its apparent objective interests. Nevertheless, if an identifiable national bourgeoisie exists in a particular case, it may still be expected to press for policies generally associated with the developmentalist era—subsidies and protection of domestic markets, for instance—even if the intent here is more parasitic than developmental. This is what occurred in Chibber’s main case of India.
7. Briefly and in ideotypical fashion, these two types of policy orientation are meant to signal a mixed economy, capital controls, selective trade barriers, import substitution industrialization, and industrial policy more generally (developmentalism) versus privatization, financialization, deregulation, and open trade.
8. To the extent that rival groups may be dependent upon sales in the domestic market, structural adjustment program–mandated trade liberalization also would have a part to play in this process.
9. Global, regional, and bilateral agreements may still rule out the application of certain protective tariffs and industrial policies.
10. I adopt the term “popular classes,” rather than “proletariat” or similar, primarily in recognition that, in most of the Southern societies discussed in the following chapters, the proportion of wage laborers is low in comparison to those in the informal sector or in the (perhaps not adequately labeled) semiproletariat (Schneider and Enste 2000). In discussion of several of the cases, I detail the circumstances under which it may be possible for different configurations of these groups to work together to advance common interests. I therefore use “popular class” in a broad manner, similar to Goran Therborn’s (2012) preferred terminology of “plebeian.”
11. As occurred during the first term of Alan García in Peru and the administration of Raúl Alfonsín in Argentina.
12. Of course, clientelistic governance is not singular, and much recent literature explores its various forms and their potential implications for development, often, though not exclusively, in the African context (see, for example, Khan 2010; Kelsall 2012; Abdulai and Hickey 2016; Behuria, Buur, and Gray 2017). Something along the lines of a “political settlement” approach may be a productive avenue through which to extend the analysis of my typology cases, although, with the book’s already rather involved theoretical framework, such an effort lies beyond my scope here.
1. In this respect, neodevelopmentalism is similar to the neostructuralist work that began to emerge from the Economic Commission for Latin America and the Caribbean (commonly known by its Spanish acronym, CEPAL) in the 1990s (Sunkel and Zuleta 1990; Sunkel 1993; Leiva 2008). Certainly most neodevelopmentalist work owes a debt to this school. Where they differ crucially is in the neodevelopmentalist core belief in maintenance of a high exchange rate, implying a more interventionist macroeconomic approach than would be countenanced by the neostructuralists, who regard devaluation-derived competitiveness as “spurious.”
2. Indeed, one of the major differences between neodevelopmentalism and older Latin American developmentalist efforts is a partial retreat from concern with the structural underpinnings of global trade.
3. In 2002, general government debt as a percentage of gross domestic product stood at 79 percent in Brazil and 138 percent in Argentina (International Monetary Fund n.d.).
4. It is not at all clear that the commodity boom made corruption worse in either case. In Brazil, for example, the lava jato (car wash) scandal has implicated a wide range of politicians from all major parties as well as prominent businesspeople and executives at the state-owned oil company Petrobras. But such bribery is not by any means a novel feature of the boom or the Partido dos Trabalhadores eras. Instead, it has been a pervasive element of Brazilian politics since the return of democracy in the 1980s, rooted in the country’s electoral system (Anderson 2016).
5. These being former president Carlos Menem, who had been the chief architect of neoliberal reform during the 1990s, and Ricardo Lopez Murphy, a Chicago-trained economist with strong ties to the international financial institutions (and briefly economy minister, in 2001). In a crowded field, Menem scored a narrow first-round victory, with Nestor Kirchner in second place, though Menem then forfeited the election when it became obvious that Kirchner was set for a second-round landslide.
6. There is a high degree of correspondence and exchange between Brazilian scholars and their Argentinian counterparts, with the neo/post-Keynesian Phoenix Group, formed at the University of Buenos Aires in 2001, being a key source of policy advice in the initial stages of the Nestor Kirchner government (Ferrer, Clemente, and Rofman 2004). However, for the sake of clarity, I rely largely upon Brazilian authors for the theoretical exposition of Latin American neodevelopmentalist thought, since this tradition is arguably more fully developed and has certainly attracted more commentary and debate.
7. There are indications that China may begin to rely upon grain and other agricultural imports in the next decade (Economist 2015; Hansen and Gale 2014), at which point it is possible that a comparable China effect on markets for these products may emerge, with similar potential consequences for exporting countries.
8. As will be discussed in more detail with regard to the Argentinian case, the fact that the vast majority of soy production in both countries is exported enhances this effect, because changes in export taxes on soy therefore have very little direct bearing on domestic markets.
9. The International Monetary Fund also signaled concern—the negotiation of a new $30 billion loan package with the outgoing Cardoso government, in 2002, was explicitly designed to lock any successor administration into fiscal austerity and primary surpluses. The agreement also mandated central bank independence as a key means of maintaining policy continuity (Morais and Saad-Filho 2003).
10. Many of these firms would be those later implicated in the lava jato (car wash) scandal, leading to many of their executives being convicted on corruption charges.
11. It is worth clarifying here that two rather distinct groupings benefited from the changes during the Menem era: domestic manufacturing sectors and manufacturers integrated into international supply chains (especially the auto industry); and agribusiness, especially with the introduction of “no tillage” systems and other technologies that greatly increased yield and extended cultivation to the dry Northwestern provinces.
12. Beef and wheat exports were also taxed, and at times even banned, across the two Kirchner administrations, with the intent of depressing prices, as a means of containing both inflation and wages. Soy exports have more than compensated for any impact such measures have had on external trade, however.
13. These sorts of taxes were especially attractive because they could be imposed by presidential decree and were one of the few forms of taxation that did not have to be shared with provincial governments under the terms of the 1990s decentralization.
14. Somewhat ironically, the rents from agricultural export taxes were in part responsible for the ability of the government to maintain the weak peso, which benefited the rural bourgeoisie greatly, though this was a measure mainly meant to help industrial sectors.
15. In 2008, under Cristina Fernandez de Kirchner, agriculturalists did manage to organize themselves into a coherent protest movement in the face of a further tax increase—to an initial, but variable, 44 percent. This move increased cohesion among producer groups. Those representing smaller farmers, who had previously been more accepting of tax increases, began to argue that they might be unable to absorb the new rate (unlike larger farms). Concurrently, the new measure pushed large producer associations away from what had proved fruitless dialogue with the government and more toward the smaller producers’ preferred strategy of protest (Fairfield 2010; 2011; 2015, chapter 7). The participation of small producers, many of whom were not affiliated with any group, gave the protests a movement-like character that prevented the government from portraying the protests as elite agitation against progressive taxation. After five months of strikes and roadblocks, much urban middle-class opinion had turned against the government, and Fernandez de Kirchner was forced to back down after a senate vote against the taxes was decided in favor of the protesters—by the single vote of her own vice president. The events around this period certainly seem to have weakened the bases of the governing coalition, though the previous 35 percent export tax remained in place and both soy production and government revenue continued to increase for several years.
16. The Plan Jefes y Jefas de Hogares Desempleados was initially funded by the first round of export taxes, together with the World Bank. As Nestor Kirchner distanced himself from the IFIs, subsequent programs came to be funded entirely by the central state.
17. The scheme was also meant to help the Peronist political machine reassert some of the control of the villas (informal settlements), which, during the 1990s, it had increasingly ceded to piquetero groups (Svampa 2007). In part, this was achieved by diverting some of the funds to local Peronist punteros (neighborhood fixers) as a “toll” for access to the program.
18. However, the degree to which wages increased, or whether real wages ever returned to pre-neoliberalization levels, is difficult to discern, given disputes over official inflation figures from 2007 onward.
19. Nestor Kirchner’s decision to delay settling the outstanding debt until late 2005 actually allowed for a buildup of international reserves, which helped domestic business confidence, boosting the recovery (Grugel and Riggirozzi 2007).
20. At least, interest rates were kept low until 2007, when increasing inflation prompted a return to higher rates.
21. The combination of a maintained devaluation of the peso with agro-export taxes may itself be thought of as industrial policy, since, as Salama (2012) points out, this is effectively the same as a system of multiple exchange rates, in terms of its differential impact upon industry and agriculture.
22. As well as providing a direct energy subsidy to business, of course.
23. This was made a formal part of the bank’s charter in 2012.
24. Cristina Fernandez de Kirchner’s presidency is often seen as somewhat more radical than that of her husband. For example, she renationalized the national pension scheme and expropriated the former national oil company, Yacimientos Petrolíferos Fiscales, from its Spanish owners. In the case of the pension scheme, this was mainly to ease fiscal pressure on the government. In first place, the central government had, after privatization, kept all pension liabilities up to that point and thus was continuing to pay out while receiving no new pension payments. Second, the newly nationalized pension scheme was mandated to buy up government bonds during times of fiscal stress, providing a work-around in the absence of foreign creditors. The nationalization of YPF (or, more accurately, the expropriation of the 51 percent of its shares controlled by the Spanish company Repsol) was partly meant to inspire nationalistic fervor at a point of declining popularity for the government, and it was timed around similarly inspired saber rattling over the long-dormant Malvinas/Falklands dispute. Even so, there was an economic rationale to the move, born of the belief that electricity price controls and subsidies had led to chronic underinvestment in Argentina’s energy infrastructure and that government thus was required to assume this responsibility. Furthermore, acquisition of YPF made the government the major negotiating partner in the prospective deal with Chinese state-owned enterprises regarding Argentina’s vast shale gas reserves (the third largest in the world).
25. Vulture funds operate by purchasing, at a low price, debt that is in default and then aggressively pursuing any available legal avenues to recover the full face value of the debt.
26. Delivering budget, or at least primary, surpluses was a policy priority in the first years of Nestor Kirchner’s presidency, lining up with neodevelopmentalist recommendations, though in the Argentinian case this was for the specific purpose of strengthening the government’s hand in negotiations with creditors.
27. Manufactures as a share of Brazilian exports dropped by 10 percent from 2005 to 2010, even when adjusting for commodity price increases over the period (Jenkins 2014).
1. The governing party, initially, was the Movimiento Quinta Republica (Fifth Republic Movement), until the consolidation of various parties of the pro-Chavez coalition into the Partido Socialista Unido de Venezuela (United Socialist Party of Venezuela), in 2007.
2. Classical populism, associated most prominently with Juan Perón in Argentina (though also with a host of other figures), was often identified with industrialization in previously commodity export–driven economies, involving the mass mobilization of new urban masses and associated with nationalist-developmentalist projects. The emergence of neoliberal populist leaders such as Alberto Fujimori and Carlos Menem (Weyland 1996), followed by the likes of Hugo Chavez and Rafael Correa, has led to a broadening of the definition of the term to encompass divergent economic models, largely concentrating, instead, on political style.
3. This might be thought of as including specifically neoliberal institutions, such as a membership in the International Court of Investment Dispute Settlement.
4. The exception here is Bolivia, where the Movimiento al Socialismo heads a coalition of allied social movement groups, both rural and urban, which coalesced around Evo Morales, a representative of coca growers’ associations. The Morales government is not typically defined as populist, since it is a social movement–driven government that originated in bottom-up mobilization. However, the political style and tactics of Morales have been extremely similar to those of the other two extractivist-redistributive governments, and the MAS has become increasingly alienated from its social movement base over time.
5. As one example, Ellner (2001) mentions that the previous pledge that there would be no sell-off of any part of the state-owned Petróleos de Venezuela, S.A. was honored, though clauses were added permitting “strategic association” and the sale of subsidiaries to foreign interests.
6. The governments of the time were very much on board with Kennedy’s Alliance for Progress.
7. A concurrent process was continuing concentration of capital. Only large businesses, favored by clientelistic networks around the two parties, tended to survive the tough economic conditions. This paradoxically left the position of capital more unified and stronger relative to the state when facing down neoliberalization, which would lead to cuts in their various privileges. This accounts for the moderate and stop-start character of neoliberalism in Venezuela.
8. Poverty rates stood at an astonishing 77.1 percent in 1996—a rate that, sadly, would eventually be exceeded after the postboom collapse, under Nicolas Maduro.
9. However, the lack of a rival, neoliberally oriented capitalist fraction is also related to the relative unity of Venezuelan capital, compared to the sectoral–geographic divide found in Bolivia and (in a somewhat different manner) in Ecuador.
10. Tony Blair and the “third way” were cited as inspirations for Chavez (Raby 2011).
11. Constitutional changes in 1999 had undermined the power of the two traditional parties (and thus of groups that had received corporatist or clientelistic benefits under the old two-party system) by removing state funding for the parties, weakening the legislature in favor of the executive, and stripping the legislature of the power to appoint the judiciary. Compounding this, the business community was denied its usual representation in government, and the practice of forming regular tripartite (government–business–labor) commissions was discontinued. These changes had already fomented the first widespread opposition to Chavez, though PDVSA’s wide-ranging societal influence (Parker 2005) meant that its executives were crucial in solidifying these currents into an intractable opposition that was prepared to confront the government head-on.
12. This sort of rhetoric had resonance along classist and racist lines, as it would in many Latin American states.
13. This included a general strike, an April 2002 coup attempt that briefly saw FEDECAMARAS head Pedro Carmona installed as president, and then a management lockout at PDVSA.
14. An exception was the Plan Bolivar 2000, under which the army was used to repair roads and build schools, in the tradition of progressive militaries in Latin America. This created resentment among many in the top ranks of the armed forces, which were purged after participation in anti-Chavez agitation during the 2001–2003 period.
15. These included Mision Barrio Adentro (primary health), Mision Robinson (literacy), Mision Sucre (university education), Mision Ribas (adult secondary education), and Mision Habitat (housing). These schemes existed autonomously from and in parallel to traditional ministries of health, education, and others ordinarily responsible for social provision. The Mision Vuelvan Caras, meanwhile, was a training program—including political and ideological formation—designed to help the urban poor organize as a workers’ cooperative, a key means of organizing the informal sector.
16. At the conclusion of the strikes and lockout actions, seventeen thousand PDVSA employees were dismissed. The speed at which production was restarted following these moves suggests that the workforce had been somewhat bloated previously. A new board of executives was put in place by Chavez, and the company was made very much subordinate to the Ministry of Energy and Mines. PDVSA was essentially incorporated as an arm of the state, directly funding social programs and diplomatic initiatives, which saw cheap oil being sent to other parts of Latin America and the Caribbean (as well as to poor households in the United States and as subsidized fuel for London buses). Foreign participation was still permitted in the industry, though on much better terms for the state. As a result, ExxonMobil and Shell pulled out, though Chevron renegotiated its contracts and remained a major player. Venezuela increasingly sought investors from outside the global North, particularly from China, with capital from Sinopec and the China National Offshore Oil Company proving crucial to the opening up of the massive heavy crude deposits of the Orinoco Delta (Dreher et al. 2017).
17. This is yet another example of the use of community organizations to administer public funds, in preference to formal bureaucracies. As with many of Chavez’s spending initiatives, this form of infrastructure provision actually tends to be very inefficient. Crucially, though, it bypasses spending on megaprojects, considered a major source of patronage and corruption under puntofijismo.
18. There also has been a nationalization of basic industry, a long-standing goal of nationalist movements in Venezuela.
19. In 2018, a deal was signed for the German firm ACI Systems to invest $1.3 billion in the lithium sector, with the intention of partnering in extraction and battery manufacture (Clayton 2018).
20. The 1985 standby agreement with the International Monetary Fund stipulated that Yacimientos Petroliferos Fiscales Bolivianos would be barred from investing in capital goods, with the sector opened up to foreign investment in the early 1990s. Bolivia, as the ER state most impacted by neoliberal conditionality, was also the only one of these states that was pressured into privatizing its hydrocarbon industry. In 1996, much of YPFB was auctioned off in several packages. Rather than paying the state for their newly obtained assets, however, winning bidders were merely required to commit the amount they had bid toward new investment in the industry. With royalty rates also significantly lowered, gas subsequently became a focal issue for social movement mobilization.
21. The separate contributory pension scheme was also overhauled. Pension funds were nationalized, the age of eligibility was lowered from sixty-five to fifty-eight (in a country with a life expectancy of sixty-three), and previous terms that had made access to any retirement benefits unrealistic for the majority were made considerably more generous. Efforts also were made to extend the scheme to previously excluded informal workers.
22. There are complaints that such redistribution as has occurred has made inroads into previously protected national parks and indigenous lands and has favored highlanders by granting them land in the lowlands.
23. Though a staunch free marketeer, it was in fact Jamil Mahuad who presided over Ecuador’s temporary estrangement from the international financial institutions, after he suspended the payment of Brady bonds in the face of a banking crisis.
24. It was during this period that Ecuador abandoned the national currency, the sucre, and adopted full dollarization of the economy. The dollar has become increasingly popular, and even Correa has argued that to remove it would do more economic harm than good.
25. The lasting influence of the 1999–2000 economic crisis, and its impact on the banking elites in particular, is still easily observed. Common graffiti seen around Quito in 2013 satirized Bank of Guayaquil vice president Guillermo Lasso’s election slogan of “A different Ecuador is possible” by adding “But a different banker isn’t.” The Ecuadorian Banker’s Association regularly publishes documents that stress how different today’s domestic banks are from their counterparts during the 1999 crisis, when withdrawals were suspended before dollarization of accounts proceeded, at an unfavorable exchange rate. It is no surprise that Correa was particularly aggressive in his stance toward the banking sector, given its previous power. Financial institutions are now prohibited from ownership of any media outlets (a previously common structure).
26. A key event was the formation of the constituent assembly, which allowed for a rewriting of the constitution. Congress (for which Correa had nominated no candidates in the 2006 election, as part of his outsider strategy) had sought to block the creation of this body, which is where mass mobilization, enabling an overriding of liberal democratic norms, became highly significant.
27. Gutiérrez probably had no intention of following through on his campaign promises and was simply using this rhetoric to secure the votes of the left-inclined indigenous party Pachakutik (which had scored around 15 percent in the previous election). Certainly, many Partido Sociedad Patriotica (Patriotic Society Party) officials had roots in center-right organizations, and several important ministerial posts went to avowedly neoliberal figures. However, this still leaves unanswered the question of whether Gutiérrez’s stated original agenda was politically and economically possible under the conditions of the time.
28. Interview 7e. Details about Ecuador interviews may be found in the appendix, table A.4.
29. Interviews 2e, 7e.
30. Correa’s doctoral dissertation argued, from a broadly Keynesian stance, that structural reform in 1980s Latin America had failed to drive growth.
31. In seeking to interview representatives from other arms of the government on matters relating to economic policy or development issues, I was often referred to the Secretaria Nacional, known as SENPLADES. Organizational charts of the Ecuadorian governmental structure show the executive standing directly above SENPLADES, which in turn is placed above all other ministries (SENPLADES 2013).
32. Interview 11e.
33. Correa’s move to seize the assets of Roberto and William Isaias, for instance, was highly popular. The brothers are the former owners of Filanbanco, who embezzled bailout funds by making loans to businesses they controlled and then presenting these as losses to the government. They fled to Miami in the wake of the financial crisis and were sentenced to eight years in jail in absentia. After many years living in Florida, they were arrested in early 2019 (Robles 2019).
34. This policy was subsequently implemented, following Correa’s easy first-round victory in 2013.
35. This was the extension of a law that outlawed financial companies from media ownership, or vice versa. The prohibition of ownership of other financial companies is essentially a Glass–Steagall type of provision, but the cumulative impact of these two laws is to force a separation of the domestic financial sector from the rest of the capitalist sphere.
36. The government was subsequently able to secure limited loans from more sympathetic multilateral lenders, such as the Inter-American Development Bank.
37. Under this form of loan arrangement, a fixed quantity (rather than value) of oil is sold on the open market and the proceeds are deposited into an escrow account, which is then drawn from in order to pay off the loan (Brautigam and Gallagher 2014).
38. Some of these projects are aimed at making Ecuador self-sufficient in energy generation. With insufficient refinery capacity, it currently imports fuel, and the only real wobble in Correa’s popularity occurred after a series of rolling blackouts in 2009, caused by droughts that affected the generation of hydroelectricity.
39. Interview 3e.
40. Interview 11e.
41. Interview 4e.
42. Anti-extraction protests also occur frequently in Bolivia, but they are less frequent in Venezuela, where the historical role of oil in national development imaginaries seems to have prompted a wider acceptance of extractivism.
43. Though business leaders were likely to be unhappy with Correa’s continuing anti-oligarchy rhetoric, they were probably much more pleased with his dismissal of indigenous interests. Perhaps one-third of Ecuador’s population is indigenous, and the various communities have long been effectively organized as a political actor through the Confederación de Nacionalidades Indígenas del Ecuador (Confederation of Indigenous Nationalities of Ecuador) and the Pachakutik political party. Pachakutik’s credibility was seriously damaged by the fallout from its disastrous electoral alliance with Lucio Gutiérrez, in 2002, and indigenous groups were hardly involved in the coup of 2005. Correa drew most of his support from the urban working and middle classes, the majority of whom are mestizos. Though lip service was paid to the indigenous community in the 2008 constitution, which granted rights to Pachamama (Mother Nature) and declared Ecuador to be a plurinational state, many indigenous leaders condemned these provisions as “folklorization.” It was fortunate for Correa that his electoral majority did not depend upon rural indigenous populations, because there have been running conflicts with these groups over oil extraction in the Amazon and new copper and gold mining projects. A large-scale march in 2009 was repressed, and several indigenous activists were thrown in jail, convicted of terrorism.
44. Interview 4e.
45. Interview 8e, 9e.
1. This is not to define a simple binary between clientelist and capitalist political formations, since all societies display features of both, to some degree. In addition, nascent capitalists, in cases of late development, have almost always depended on their ties to the state to forge processes of accumulation (through the distribution of contracts, licenses, land, subsidies, and so forth). Even when large domestic capitalist classes have emerged (that is, in schematic terms, an elite with a basis of power in capital accumulation rather than in distribution of rents), a variety of different relationships with the state are observed. In the Gulf countries, for example, public and private political and economic realms are difficult to distinguish. The key aspect of the donor-dependent orthodoxy and the extractivist-oligarchic types, which distinguishes them from the others, is the absence of an economic elite with a base of power that lies (at least to some significant degree) outside direct dependence on the distribution of state largesse. These issues are explored in more detail over this chapter and the next.
2. Rentier states were originally associated with oil-rich Middle Eastern states, and hydrocarbon exporters remain the most obvious examples, though any state dependent upon centralized and externally derived revenue flows (including, for instance, aid receipts) may potentially fit the description (Moore 2001).
3. This is by no means an entirely new endeavor. Boone’s (1990) work on Senegal, for example, uses the terminology of a rentier class. Hanieh (2011), whose work will be discussed in more detail here, seeks to marry a rentier state model with Marxian state theory in his study of Gulf capitalism.
4. At times, the RS label has been applied more widely, particularly to oil-rich states with relatively significant domestic capitalist classes, such as Venezuela (Karl 1997). Clearly, this is the case with Venezuela during the years of the Puntofijo settlement, under which patronage resources, much of it ultimately stemming from oil revenues, were divided up between the two main parties and an associated domestic capitalist class, which was weak enough, relative to oil earnings, to become increasingly dependent upon state subsidies and procurement arrangements. Overall, however, the scenario of external-rent-derived relative autonomy for the state is most applicable in cases such as the EO type, in which domestic capital depends heavily on the state for its continuing activity. This is the context in which the RS concept is employed in this chapter, unless otherwise stated.
5. Here, I stress the reliance upon commodity prices as the primary external constraint on rentier state managers, though technological and organizational factors are also at play—foreign investment or management is often necessary, given the technical challenges associated with identifying, developing, and maintaining extractive ventures. Even in times of high commodity prices, such requirements can have a significant impact. For example, various “shallow” nationalizations of resource sectors in Africa during the 1970s left previous managers in charge of operations, given a paucity of local staff able to fill their roles (Shaw 1976).
6. Such downstream industries include Saudi Arabia Basic Industries Corporation (petrochemicals), Etisalat (telecommunications) in Abu Dhabi, and DP World (logistics) in Dubai.
7. Persian Gulf states do, of course, employ large numbers of wage laborers in construction, extraction, and services, but the vast majority of workers are migrants from South Asia and elsewhere who did not directly become workers through processes of dispossession and capitalist development in their destination states.
8. Another distinction should be made with the embedded autonomy framework of state-nurtured (but also disciplined) capitalists in East Asia (Evans 1995), given the persistence in the Gulf (as well as in EO states) of rent-funded waste, luxury consumption, and patrimonial networks, as well as the difficulty of distinguishing between state and bourgeoisie as separate entities.
9. The Kashagan Field, located in the shallows of the Caspian Sea, is the world’s largest offshore oil field. Its development has been beset with technical challenges and delays, though, by 2018, it had begun production (Cohen 2018).
10. However, it should be noted that, following the end of the Cold War and the loss of aid from state socialist countries, the Movimento Popular de Libertação de Angola officially abandoned Marxism in favor of some form of capitalism. During the period immediately following the civil war, the rather uncontrolled primitive accumulation that had occurred during the 1990s was reined in and an essentially orthodox macroeconomic framework was adopted as a means of encouraging foreign direct investment (Soares de Oliveira 2015, 132).
11. The fact that Samruk-Kazyna evolved from two holding companies, one of which was initially set up for the purpose of the managed privatization of utilities, brings Kazakhstan’s turn away from neoliberalization more sharply into focus, since the fund has retained all of these companies (including utility monopolies) and has added Air Astana and large real estate holdings, among others.
1. Vietnamese influence in Laos is also considerable, though the Laotian reform process actually began before that of its larger neighbor to the east.
2. Official development assistance includes both aid and concessional finance from the members of the Organization for Economic Co-operation and Development’s Development Assistance Committee.
3. For the rest of the chapter, I will refer to donors and international financial institutions as acting with largely shared goals and strategies in their interactions with recipient countries. Of course, this is not always the case, since bilateral donors may, for example, have particular economic or strategic reasons for more flexible or stringent treatment of particular recipients. However, after the adoption of the participatory agenda by the World Bank and then by the International Monetary Fund, in the late 1990s, major donors and IFIs converged toward a common overarching approach to official development assistance, in terms of both policy and process. This was further advanced by the process of aid harmonization on the part of OECD donors, which began with the Rome Declaration, in 2003 (Thede 2013). There has been considerable debate in recent years around the extent to which such commonalities continue to endure (Güven 2018).
4. Clearly, various forms of bureaucratic and political resistance were attempted and, for a variety of reasons, many structural adjustment program conditions were not fully implemented, but at no point during the SAP era could a government needing IFI funds chart a wholly different political course.
5. As Babb (2013) reports, there were divergent views on this point around the turn of the millennium, with the U.S. congressional Meltzer Report arguing that lack of full implementation lay behind the various adjustment failures. Stiglitz (2002), who was far more critical of the IMF than of the World Bank, where he had previously served, claimed that an inevitable lack of perfect information in developing economies had led to market failures. In terms of policy implications, this thesis departed little from what was to become the “establishment” position—that greater attention needed to be given to the institutional frameworks that would underpin (and to a limited extent correct for) the functioning of markets.
6. In recent years, some more flexibility has been introduced into IFI processes, with “economic development documents” (which can take the form of government-written national development plans) replacing the IMF’s PRSP template. There is some disagreement as to how substantive such changes have really been in terms of policy conditionality and overall agenda (Kentikelenis, Stubbs, and King 2016; Güven, 2018). For example, aid and loan disbursements are still often benchmarked against Country Policy and Institutional Assessment scores.
7. Always implicit in the depoliticized goal of poverty alleviation (that is, pushing the largest possible number of people over the current $1.25 per day threshold) is a decrease of aspirations toward short- and medium-term solutions to extreme deprivation and a movement away from a view of development as potentially encompassing society-wide transformation.
8. The concept of reform coalitions is associated with Robert Bates (1981), whose work on sub-Saharan Africa claimed that development had been stunted by the dominance of an urban coalition of the state, the public sector, and wage laborers, which had pursued distortionary, self-interested policies to the detriment of broader development. Bates’s proposed solution was to attempt to activate a countervailing reform coalition of peasants and agro-exporters, who might support initially painful adjustment measures if they could be persuaded of a longer-term developmental payoff. IFI qualms over extending their interference with national sovereignty into directly building political coalitions seems to have forestalled the application of Bates’s ideas in this area, until the emergence of the participation agenda in the late 1990s presented a more palatable means to similar ends.
9. Clearly, in many cases governments and other participants will share the basic policy assumptions of IFIs, to a greater or lesser degree, and thus, again, Poverty Reduction Strategy Papers rarely involve a simple imposition of external ideas upon unwilling governments.
10. Though the power of transnational capital in Bolivia has declined during the Movimiento al Socialismo years, its participation has still very much been required for the continuation of Evo Morales’s project, given Bolivia’s need to attract new investment in gas fields if current levels of social spending and redistribution are to be maintained.
11. Clearly, aid can rarely be considered capital, strictly speaking, but ODA flows do tend to broadly follow, at one or several removes, the preferences of Northern capital, through conditionality (except where aid may flow or not flow for geopolitical reasons).
12. Interview 2z. Details about Zambia interviews may be found in the appendix, table A.5.
13. Interview 2z.
14. Interview 2z.
15. Ollawa (1979) also includes senior officials of the Zambian Congress of Trade Unions in his list of ruling class subgroups, based on 1975–1977 survey data. This was probably a valid classification during most of the period of United National Independence Party rule, when trade union leaders were co-opted by a government-instituted closed shop that guaranteed them access to significant economic resources. It is also important to point out that industrial action in Zambia, particularly that of mineworkers, has often tended to come in defiance of the union leadership, including incidents in the past decade, meaning the rank and file should be considered separately from the leadership. I do not list leading trade unionists as part of the ruling elite, though, since their position vis-à-vis this elite has sometimes been oppositional.
16. This included a policy of “ethnic balancing,” whereby patronage was, in theory, dispensed equally to representatives of the major linguistic groups in Zambia. Though couched in terms of being antithetical to tribalist tendencies, this was spoils politics, which utilized vertical ethnic networks through traditional leaders and local “big men.”
17. Larmer gives Miners’ Union of Zambia membership figures of around sixty thousand at the peak, in the late 1980s, with a low of 15,600 during the first years of the twenty-first century. Since the arrival of the breakaway National Union of Miners and Allied Workers, in 2004, the picture has been complicated by the movement of workers between the two unions, but membership in 2008 is reported as twenty-seven thousand for the Miners’ Union and perhaps ten thousand for the National Union (Larmer 2010).
18. There also were occasions when the stances of IFIs and private domestic capital were categorically opposed to one another on the issues of specific reforms.
19. Manufacturers for instance, were provided with almost no protection against the sudden opening of the Zambian economy to international competition.
20. Among them was President Michael Sata (2011–2014), who, in common with several of his ministers, belonged successively to UNIP, the Movement for Multiparty Democracy, and the Patriotic Front.
21. This is contrary to the ideas developed by Robert Bates (1981), for whom Zambia served as an exemplar of a rural–urban divide (heavily favoring the urban), which constituted a fundamental obstacle to development. This was to provide the inspiration for many of the World Bank policy recommendations across Africa during the 1980s, which attempted to favor agricultural development, echoing the anti-urban sentiments of the colonial administration and UNIP’s notional commitment to the countryside.
22. Today, this would include, for instance, workers in the South Africa–dominated formal retail sector. I do not include public sector workers in this grouping, though their interests may at times be in line with other formal sector workers.
23. Or even to employ informal workers, as was revealed in the 2013 dispute between retail workers and the Shoprite chain, when employees agitated for higher wages partly on the basis of not being able to pay their own domestic workers (Lusaka Times 2013b).
24. I refer to these two provinces throughout, since these were the relevant administrative units for the majority of the period discussed. In 2011, however, four districts from Northern Province and one from Eastern Province were broken off to form the new province of Muchinga.
25. Though Cheeseman and Larmer (2015) argue for a dual “ethnopopulist” strategy on the part of the PF, stressing ethnicity in the countryside and populism in the towns, they cite evidence from Cheeseman et al. (2013) that voters in the two Bemba-dominated rural provinces were highly receptive to populist appeals and significantly more likely to respond to these than were their rural compatriots elsewhere. Ostensibly, the PF’s repeated message, during multiple elections, of “More jobs, less taxes, and more money in your pocket” has very little to offer to subsistence farmers, especially when compared to MMD fertilizer distribution, which is designed to appeal to precisely these groups. Though there was undoubtedly an element of Sata evoking shared ethnicity when he campaigned in Luapula and Northern Provinces, it is worth pointing out that his attempt to run as a “Bemba” candidate, in 2001, attracted just 3 percent of the national vote and very little success even in his “home” regions. In contrast, the United Party for National Development regularly won majorities in Southern Province, based on appeals to Tonga ethnicity (though rarely much beyond that until UPND’s postboom transformation into a broader-based party), again suggesting that a different political logic is at work in the urban/Bembaphone areas than in the rest of the country.
26. In recent years, Lusaka has seen an influx of migration from the Copperbelt, though the majority of its residents are originally from other areas and its lingua franca remains Nyanja rather than Bemba. Nevertheless, despite the absence of mines in Lusaka, urban areas exhibit a core of organized formal labor, combined with a wider, marginalized urban community, that has voted with the Copperbelt in recent elections. This perhaps indicates that more extensive urban class formation may hold the possibility for broader popular class coalitions in the future.
27. Interview 9z.
28. Interviews 8z and 5z.
29. The 2008 election was a presidential by-election, mandated by Zambian law following the death of the MMD incumbent, Levy Mwanawasa, and was won by his vice president, Rupiah Banda, who ran again, unsuccessfully, in 2011.
30. This anti-Chinese rhetoric gained traction in the wake of a 2005 tragedy in which fifty workers were killed in a blast at the BGRIMM explosives factory, part of the Chambishi mines, which was owned by China Nonferrous Metal Mining.
31. The number of people operating informally as city center vendors, selling snacks, mobile phone credit, or produce, especially in Lusaka, had increased so much that it was now becoming physically difficult to navigate many urban streets, sparking widespread complaints, particularly from the middle classes. A crackdown on informal vendors and markets, initiated by the MMD government, came at the same time as the growth in competition from Chinese traders, who often were able to source Chinese goods and sell at lower prices than local vendors.
32. Zambia’s Gini coefficient rose alarmingly with its twenty-first-century copper boom, from an already high 0.51 in 2004 to 0.65 in 2010, making it one of the most economically unequal countries in the world.
33. Larmer and Fraser (2007, 613) use the concept of populism, as defined by Laclau (2005), to link the Latin American parties with the Zambian PF, specifically in “the identification of particular unmet demands of distinct social groups, and their re-presentation to those groups not only as legitimate but also as aspects of a wider set of linked and unmet demands, sharing few characteristics beyond their frustration. The suggestion is then made that the frustration of these demands results from a disconnection between a newly imagined ‘people’ (those whose demands are being frustrated) and ‘power’ (those on whom demands are made).” Arguably, however, this underestimates the relative coherence of the Latin American examples, which, in different ways, connected the marginalization of the (mainly urban) poor to a relationship between a domestic elite and global capitalism, despite their employment of classically populist, personalist style of campaigning. It is also worth noting that Bolivia’s Movimiento al Socialismo began as a broad-based social movement rather than a top-down political party dominated by a charismatic leader. While Sata’s campaigning was certainly more ad hoc and less “ideological” than the Latin American cases, the PF had specific policy proposals at each election and this was thus not an entirely “empty” populism. I use the term “populism” more generally here, simply to indicate a style of politics that is designed to connect (whether cynically or not) with the concerns of the urban poor.
34. Interviews 2z, 3z, and 6z.
35. One of the significant features of the windfall tax, as proposed, was that it targeted the global price of copper on the London Metal Exchange rather than on any measure internal to the situation in Zambia.
36. After its closure by a previous Swiss–Israeli joint venture, however, the Luanshya mine was taken over by China Nonferrous Metals Africa.
37. Efforts to improve accounting standards to detect tax avoidance, chiefly funded by Norway, may have yielded some improved revenue, as with reforms banning foreign-denominated transactions within the country. Nevertheless, tax avoidance is a problem that states with access to far greater administrative capacity than Zambia’s have found difficult to grapple with. Accounting methods such as transfer pricing allow many companies to underreport profits (or to report a loss) and thus to avoid paying the majority of royalties, which are typically calculated against profits (as contrasted with the windfall tax, which would have targeted the international copper price).
38. This same document alleges that the Chinese government had approached the PF in 2006 to offer funding and indeed that Zimbabwean President Robert Mugabe had lent Sata money for campaign finances in 2008.
39. Local cash transfer programs have been trialed, with donor assistance, and are expanding significantly, but were still small scale as of 2013 (interview 3z).
40. Interview 3z.
41. For instance, in a dispute with the South African retailer Shoprite in 2013, workers went on strike after claiming they had not been awarded the minimum mandated increment. After the company moved to fire three thousand striking workers, the government threatened the removal of the chain’s operating license, resulting in the reinstatement of the workers and the negotiation of pay raises of 15 to 34 percent.
42. The 2014 Zambian budget statement (Government of Zambia 2013) estimated that fifty-eight thousand formal sector jobs were created in the first nine months of 2013, though this may not accurately reflect the total.
43. Sata, formerly a senior MMD figure, originally formed the PF after being passed over for the leadership. As noted, Sata’s vice president, Guy Scott (briefly interim president after Sata’s death), previously was MMD agriculture minister (and an enthusiastic neoliberal reformer). As with the MMD victory in 1991, many members of parliament and other officials defected to the new ruling party in the months following the 2011 election.
44. The PF did not have a parliamentary majority following the 2011 election. The switching of allegiance on the part of various MMD members of parliament (enticed in some cases by the prospect of deputy minister positions) triggered by-elections, as did the removal of (usually opposition) members on charges of corruption.
45. This occurred, for instance, in the Southern Province tourist hub of Livingstone, previously a United Party for National Development heartland (Mwenya 2013), and in Mkaika, in Eastern Province (Lusaka Times 2013a).
46. The fact that Chinese investors stayed—and, indeed, purchased new mining assets—during the financial crisis went some way to reversing their previously negative image among Zambians that was based on low rates of pay and perceived poor conditions.
47. Clearly, MAS’s politics also revolved centrally around the issue of ethnicity. Morales’s victory was historic because he was the first Bolivian president from the indigenous majority. However, given the particular course of colonialism in Bolivia, race and class overlap to a very large extent.
48. Though Cox and Negi (2010) are dismissive of “neo-Smithian” approaches, a version of this with the emphasis on exchange rather than on production would instead merely note the lack of penetration of the market into the social relations of rural Zambians, which places them mostly outside (albeit linked to) the world-system, even if “Zambia” as an entity can be considered part of this system, given the participation of Zambia’s governing class within it.
49. Even in Northern and Luapula Provinces, patterns of political mobilization seem to indicate expectations of indirect benefits—through, for instance, increased remittances—combined with traditional patronage.
50. Though they suggest markedly divergent underlying causalities, these conclusions are not necessarily antithetical to those of influential authors writing on the African state in markedly different theoretical traditions, such as Mamdani (1996) or Chabal and Daloz (1999). Mamdani stresses the colonial-era origins of what he calls the bifurcated state—a division between a rural populace ruled indirectly through traditional authority and the urban setting that was placed under the direct rule of the colonial power—which set the scene for differentiated social logics in the postcolonial period. For Chabal and Daloz, the persistence of widespread patronage politics relates to specifically African cultural features of patrimonialism.
51. Stuart-Fox (2006) identifies a lack of bureaucratic tradition, in comparison with China and Vietnam, as a major driver of the relatively greater salience of clientelism in contemporary Laos.
52. State socialism in Mongolia had begun in 1921 and effectively constituted a declaration of independence from nationalist China, explaining the country’s close relations with the Soviet Union until the 1990s. The experience of Chinese and then Soviet domination seems to be reflected in post-1990 Mongolian foreign and economic policy, which has tried to use the West (and Japan) in an effort to avoid dependence on its two much larger neighbors. Fear of Chinese economic penetration actually prompted one of the few examples of non-neoliberal policy in recent years, in which the prospective sale of a coal mining firm to Chinese investors prompted the identification of several strategic deposits where sales would need to be approved by Parliament (the huge copper and gold deposit at Oyu Tolgoi being the most important of these). The scale of Chinese investment in Mongolia remains surprisingly low, given its proximity and the obvious scope for profitable ventures.
53. Mongolia, during the early 1990s, seems to have been viewed by both external and internal market reformers as a sort of ideal test bed for shock therapy. Jeffrey Sachs visited to give his endorsement to the process in 1991, and, on several occasions, plans have been advanced to erect a statue of Milton Friedman in one of Ulaanbaatar’s central squares, in place of the previous occupant, Vladimir Lenin.
54. The phenomenon known as dzuds, or patterns of extreme weather over several months, which wipe out livestock herds via some combination of extreme cold, deep snow cover, and/or prolonged drought, have become more frequent in recent decades. In part, this increased incidence is likely driven by climate change. However, water shortages have been exacerbated by increased consumption following the postsocialist growth of herding and by water table pollution caused by the mining industry. Several severe dzuds have occurred in recent years, killing millions of animals and forcing large numbers of farmers back to the city, resulting in a growth of perhaps 1.2 million in the population of Ulaanbaatar’s peri-urban gert (traditional tent) dwellers (Mayer 2015).
55. Depending on the amounts distributed by this kind of unconditional cash transfer, such measures could be looked at as a basic income grant.
1. Beyond commodity markets, China does have a significant influence in Jamaica, with loans from People’s Republic of China policy banks totaling more than $1.3 billion since 2009 (Gallagher and Myers 2018).
2. Bauxite is extracted through strip mining, before being processed into alumina, or aluminum oxide. Variations in the chemical composition of ores found in different deposits mean that alumina plants tend to be adapted to the processing of ores from particular locations, giving the aluminum value chain a somewhat different character than that of other hard commodities. This has recently been particularly pertinent in Jamaica, with the dominance for a time of UC RUSAL over the domestic bauxite industry and the efforts of the latter to integrate Jamaican bauxite with processing in Russia (interview 5j; details about Jamaica interviews may be found in the appendix, table A.6.)
3. I use copper as the most appropriate comparator for aluminum because these are the two most widely used industrial metals and because, although substitutability between the two is generally low, a high proportion of applications for either (such as in appliances, construction, or military usages) employs the other in some way.
4. Large quantities of electricity are consumed in the process of transforming alumina into aluminum, meaning that refineries often are located close to cheap energy supplies (in Russia or West Asia, for example).
5. This strategy served to place Jamaica into a persistent trade deficit, which was only compensated for by surges in foreign investment, particularly in the bauxite and tourism industries.
6. Both the People’s National Party and the Jamaica Labour Party are rooted in the trade union struggles of the 1930s, from which the eventually successful demands for independence first emerged. Both were essentially multiclass populist–nationalist coalitions, though the JLP was more conservative and drew more support from rural areas.
7. An agreement had, in fact, been reached just prior to the 1976 election, but, with a renewed mandate, Manley instead decided to attempt a homegrown solution, the Emergency Production Plan, announced in 1977, which envisaged a much greater role for the state in the economy. This set the tone for fractious relations between the International Monetary Fund and the PNP, and many in the party blamed the IMF for the electoral defeat in 1980, explaining why later PNP governments attempted to avoid IMF agreements where possible.
8. Initially under Manley, until his failing health forced him to step down in favor of P. J. Patterson, in 1992.
9. An option which was itself possible because of the IMF-mandated liberalization of the financial sector from 1991, which led to a mushrooming of domestic credit.
10. This was seen, for example, under neoliberal populist governments in Peru and Argentina. These governments, as in Jamaica, tended to dole out relief on a clientelistic basis to supporters of the ruling party.
11. Interview 3j.
12. In the rather particular circumstances of postapartheid South Africa, the existence of such constraints is far more arguable, though the heterodox Growth, Employment, and Redistribution plan, which was developed prior to the democratic changeover, was eventually rejected in the face of business opposition (Freund 2013).
13. Patterson is sometimes referred to as Jamaica’s first elected black prime minister (though following Hugh Shearer, in 1967, who was appointed to the role following the death of Donald Sangster). This can be a contentious issue in Jamaica, depending on how ideas around race and ethnicity are understood. Nevertheless, it seems fair to say that Patterson was the first to place such stress upon an ethnic and cultural appeal to the disadvantaged black majority population (Robotham 2000).
14. The JLP, by this stage, with attitudes tempered by a traditional paternalism and a concern for agricultural unemployment in their rural base, were less enthusiastic liberalizers than the PNP.
15. Interview 5j.
16. Though the cases of Jamaica and Brazil clearly are extremely different in almost all respects, it is worth noting that, in Brazil, another state where domestic debt has been relatively important, the financial sector has played an important role in the continuation of elements of neoliberal policy, despite a neodevelopmentalist turn (Morais and Saad-Filho 2011).
17. Much of the information here is taken from anonymous interviews with a private consultant in the bauxite industry, who was formerly a senior manager at a parastatal (interview 4j).
18. Noranda was 49 percent owned by the U.S. firm Noranda Holdings until Noranda’s bankruptcy in 2016 and the acquisition of its stake by New Day Aluminum (also based in the United States). The Jamaican government sold its minority share in Windalco (which comprises two mines, two alumina refineries, and a port facility) to UC RUSAL in 2014 (Drakapoulos 2018).
19. Interview 4j.
20. Government divestment in the bauxite industry has been a condition of IMF agreements (which will be discussed in the next section), though the Jamaican government held on to its 45 percent stake in Jamalco while divesting from Winalco. U.S.-based, Alcoa World Alumina and Chemicals owned the other 55 percent of Jamalco, until selling to Hong Kong–based commodities trader Noble Group Holdings in 2014. At one point, it appeared that UC RUSAL was poised to take over the entire Jamaican bauxite/alumina industry, though attempts to acquire Jamalco came to nothing. Alpart’s refinery has since been reopened by new owners Jinquan Iron and Steel, which apparently plans a $3 billion special economic zone around the refinery for the manufacture of aluminum products (Drakapoulos 2019).
21. Interview 2j.
22. Interview 7z.
23. Interview 3j, 7j.
24. This target was achieved at the expense of non-execution of 5 percent of the already skeletal budget, allowing Jamaica to run a 0.1 percent surplus, the first positive fiscal balance in two decades (Government of Jamaica 2014, 36).
25. Peru also exports gold, which is not included as one of the commodities considered toward resource dependence for the purposes of the typology, given the metal’s distinctive demand determinants.
26. Unusually, though not uniquely, among the cases examined in this research, the presence of an important domestic mining bourgeoisie, which acts as junior partner to external extractive capital, seems to be of significance in accounting for a strengthening of domestic, though externally oriented capital during the course of the commodity boom. This contrasts sharply with the situation in Argentina, where the aftermath of the 2001–2002 crisis strengthened the voice of an internally oriented capitalist fraction.
27. Unlike Hugo Chavez’s coup attempt, which appears to have had some realistic hope of success, Ollanta Humala’s uprising involved fewer than one hundred soldiers in the southern city of Tacna. Humala was pardoned by Congress, following Alberto Fujimori’s fall a few months later, and seems to have gained a degree of public sympathy.
28. Alan García’s victory represented a remarkable political comeback following his first presidency (1985–1990), during which, elected on an anti-neoliberal platform, his attempts at economic heterodoxy had resulted in hyperinflation and a 20 percent fall in gross domestic product. Though he was at the head of the Alianza Popular Revolucionaria Americana, Latin America’s oldest populist party, by the time of his second presidency García had fundamentally reoriented his program toward neoliberal orthodoxy.
29. The 1994 Popular Participation Law.
30. Madrid (2011) notes the tendency of these regions to all vote for the same candidate in elections going back to 1990, explaining this mainly in terms of “ethnic proximity”—that is, indigenous voters choosing Fujimori, Alejandro Toledo, and then Humala based upon their nonwhite ethnicity.
31. The failure of land reform also set the scene for the emergence of the Maoist Sendero Luminoso (Shining Path) guerrilla movement.
32. Ecuador’s experience lies somewhere between that of Peru and Bolivia. Land reform under the military government of Rodriguez Lara (1972–1976) deprived the hacienda-owning highland classes of much of their holdings and eventually saw power shift toward coastal capitalists, but it left the Quito bourgeoisie in a position to diversify into commerce and finance, leading to substantially overlapping interests with their Guayaquil counterparts. Thus, while rivalry between littoral and Andes continued throughout the neoliberal era, complex coalitions of elements of the two factions often formed to temporarily gain political power, crosscut with alternating “classical” populist and antipopulist dynamics.
33. See, for example, Maxwell Cameron’s (1997) The Eighteenth Brumaire of Alberto Fujimori.
34. There also was an element of nationalism in this. For many protesters, a major objection to proposed arrangements for natural gas sales was a plan to export the gas via a pipeline that would end in a port and liquid natural gas facility in an area of the Chilean coast, which Bolivia had ceded to Chile following the War of the Pacific in 1904.
35. There certainly has been a far greater incidence of indigenous antigovernment protest in the lowlands in recent years. The 2011 clashes over the proposed Trans-Amazonian Highway saw highland and lowland groups on opposite sides of the dispute, with one grievance of the lowland groups being a fear of increasing migration from the Andes.
36. Clearly, in Bolivia, the Movimiento al Socialismo gained success through an alliance of all these sectors, plus rural elements, contrary to any assumptions that conflicting class interests would make such a coalition unworkable, as in the earlier Peruvian case. Appeals to indigenous ethnicity in Bolivia, combined with the catalytic effect of the gas export issue, may well have been important in transcending various segmented interests, though there is evidence that ethnic identification as nonwhite can be an important analogous factor in Peruvian politics as well (Madrid 2011). Perhaps more important, though, is that the MAS emerged over time, from a relatively weak and fragmented popular sector, without a formal worker base. It began with local issues but gradually moved toward a national alliance, the formation of which required experimentation with relatively novel organizational forms. In Peru, the Izquierda Unida looked much more like a traditional leftist party, which was unable to adapt once its worker base began to be undermined. Without the legacy of both the Shining Path and the Fujimori years to contend with, it is certainly possible that Peru might have acquired a political force equivalent to the MAS (or, for that matter, an urban middle class–radical alliance, as in Ecuador).
37. The association between leftism and the specter of the Shining Path is evident in the common use of the term “watermelon” to dismiss anti-mining protesters in rural areas, with the implication that the sheen of an environmental cause is being used to hide a (necessarily) sinister socialist agenda (Arellano-Yanguas 2011).
38. It is worth pointing out that Fujimori’s original platform was strongly against the shock therapy approach advocated by his main challenger, Mario Vargas Llosa. Once in office, however, Fujimori quickly implemented a thoroughgoing shock, making his government one of the most prominent examples of the apparently contradictory phenomenon of neoliberal populism.
39. A precipitous decline in support for incumbent presidents is an enduring feature of Peruvian politics and arguably reflects the contradictions of neoliberal populism: antisystem candidates, once in office, act to perpetuate the very system whose unpopularity had precipitated their support in the first place. In Toledo’s case, in addition to growing waves of protest, media attention tended to highlight increasing perceptions of corruption, not unconnected to his apparently lavish lifestyle and taste for luxury consumer goods (McClintock 2006).
40. While most of the fruits of the commodity boom undoubtedly flowed upward and outward, some of the urban poor of the coast were beginning to see a degree of greater prosperity, as shown by a huge gap in poverty rates—20 percent in Lima and 61 percent in rural areas (Eaton 2015).
41. Several accusations of human rights abuses committed by Humala during his military service began to emerge during the campaign, some of which (though perhaps not all) were almost certainly inaccurate. Increasingly, during the second round, Humala was portrayed by the media in Lima as a stooge of Chavez, a perception which García sought to highlight at every opportunity.
42. Levitsky (2011) notes that while the Lima elite voted overwhelmingly for Keiko Fujimori, Humala was able to split the city’s middle classes. This, together with a greater majority in the areas that had supported him in 2006, was enough for a second-round victory. The votes of wealthy areas and backing from the influential El Comerico daily (itself part of a large grupo) goes some way to indicating a favoring of Fujimori by Peruvian business. Nevertheless, Humala’s alliance with Toledo and his team does reveal that at least some of the externally oriented technocratic stratum, which had shaped economic policy for most of the Alberto Fujimori, Toledo, and García governments, preferred Humala. The elder Fujimori had, of course, been the first to imprint Peruvian government with its persistent neoliberal technocratic bent. Nevertheless, the latter years of his reign had seen rising concerns over both a briefly resurgent “populist” wing of advisers (favoring domestic industry) and the incompatibility of his centralized, authoritarian rule with the second-generation neoliberal institutional reform advanced by technocrats at home and abroad (Durand 2002). Toledo’s presidency (as well as García’s) saw the restoration of technocrats in key positions and the (at least partial) self-fulfilling of these reform demands. Speculatively, then, Toledo’s campaign team, together with other technocrats, may have feared a rollback of these policies under a new Fujimori government. Since Toledo had been Alberto Fujimori’s opponent in the fraudulent 2000 presidential election, however, Toledo also would have had his own reasons to side with Humala.
43. Humala’s father had been a member of the Communist Party and, in 2006, had spoken in support of pardoning imprisoned Shining Path leader Abimael Guzman.
44. Toledo appointed U.S.-educated former members of the Fernando Belaunde-Terry cabinet to senior posts, while García signaled his desire for neoliberal continuity by selecting Luis Carranza as his first finance minister, in 2006. Carranza, at the time, was working as an economist for Banco Bilbao Vizcaya Argentaria, having previously resigned as deputy finance minister in Toledo’s government over a reluctance to increase public spending (Weitzman 2006).
45. Reshuffles also tended to bring a change of political style. For example, the move from business leader Salomon Lerner to Humala’s former army instructor, Oscar Valdes, as prime minister, in late 2011, signaled a more hard-line approach to law-and-order matters (Kozak and Moffett 2011). At times, there was undoubtedly some change in terms of policy emphasis, also, though this was largely limited to tinkering at the margins.
46. Castilla’s resignation is usually blamed on pressure from the right in Congress, after a slowdown in economic growth, coinciding with a dip in global mineral prices. It is interesting to note that Castilla had earlier stayed in his post when Humala’s fourth prime minister, Cesar Villanueva, was forced to resign, after Castilla opposed Villanueva’s plans for a hike in the minimum wage (Dube 2014b).
47. “English” here, in the South African context, denotes white native English speakers, as juxtaposed with Afrikaans speakers.
48. The centrality of the energy sector in South Africa is especially notable. This includes the conversion of domestically mined coal into liquid fuel, the majority of which is used in electricity generation.
49. The World Bank showed remarkable flexibility in suggesting an initial postapartheid budget deficit of up to 10 percent. The IMF, however—with whom a joint National Party/African National Congress transition team negotiated an $850 million loan, in 1993—produced a more typical analysis, which stressed external liberalization and fiscal conservatism (Pons-Vignon and Segatti 2013).
50. Unlike the Shining Path in Peru, the Fuerzas Armadas Revolucionarias de Colombia, the major Colombian guerrilla group, at times showed an inclination toward electoral participation, as in the mid-1980s, when its leaders set up the Union Patriotica (Patriotic Union) party, which was then largely destroyed during the subsequent decade by a wave of assassinations by security and paramilitary forces (Aviles 2008). As part of the 2017 peace accords, the FARC rebranded as Fuerza Alternativa Revolucionaria del Común (Common Alternative Revolutionary Force) and contested the 2018 elections, without much success. However, trade unions and other movements have proved remarkably resilient in their ability to organize protests against neoliberalization. A $2.7 billion IMF loan, which stipulated wage freezes and public sector lay-offs, for example, brought a twenty-four-hour general strike at the height of anti–trade union violence. The potential for widespread protest has often been met with police crackdowns, as in 2013, when two hundred thousand joined rural protests against the impact of free trade deals with the European Union and the United States (BBC 2013). With political polarization following the peace accords, leftist Gustavo Petro was able to make the make the second round of the 2018 presidential election.
51. The frequency of trade unionist murders appears to have slowed somewhat in recent years, but figures are still high, with twenty-seven killed in 2013 and twenty in 2014 (Amnesty International 2015).
52. In Peru and Bolivia, widespread traditional usage of coca, the plant from which cocaine is extracted, makes it important to distinguish between cultivation of the source plant and the manufacture of its far more powerful and lucrative alkaloid. Some indigenous groups in Colombia have historically used coca for chewing and tea and are permitted to grow small amounts for these purposes. Nevertheless, the lack of a widespread tradition of coca use in Colombia makes it far less controversial to identify the vast majority of Colombia’s coca industry with cultivation for processing into cocaine.
53. Álvaro Uribe, however, bridges the divide between nationalist and transnationalized elites in Colombia, as the son of a cattle rancher (killed by the FARC) and a lawyer educated at Harvard and Oxford.
54. Richani (2010) cites Santiago Montenegro, ex-president of the National Association of Finance Institutions, in 2002, as making the case for increased military spending by arguing that the costs would be recouped through investment attracted by the better investment conditions that would result from improved security.
55. Some privatization and liberalization of elements of this system did occur during the 1990s (Robison 1993), though, for the most part, this left the patronage relationships that underpinned it largely unaffected.
56. However, the export ban would not be implemented until 2014. Rules on divestment were hardened significantly in 2012, to a mandatory 51 percent over ten years.
1. The figure for oil is lower than might be expected, owing to China’s continued reliance on coal as a fuel source. Concern over climate change and, particularly, urban pollution has brought efforts to shift the Chinese energy mix away from coal, though so far these attempts have met with only limited success (Hao and Baxter 2019).
2. As discussed in chapter 8, the later replacement of structural adjustment programs with Poverty Reduction Strategy Papers altered the process of conditionality, but it offered no fundamental changes to the policy orientation required in exchange for international financial institution loans and Development Assistance Committee aid.
3. It is worth repeating that here I am not solely referring to states that conduct significant direct trade with China or that house Chinese-owned extractive industry. More important is that China’s impact on global demand for energy, metals, and soybeans has upped world prices as a whole, meaning that similar effects are observed for exporters of these goods, no matter their trading partners.
4. As discussed in chapter 7, in the wake of the 2008 crisis, Angola did turn to the International Monetary Fund for help and, as a result, made some concessions on policy. However, the fund was far more flexible on terms than creditors had been in the early 2000s, signaling a turnaround whereby, in many respects, a deal with Angola, now a major oil producer, was more important for the IMF than for the recipient country. The 2009 agreement did little to substantively change Angola’s political-economic model.
5. Part of this equation is the increasing interconnectedness of commodity markets, given possible substitution across categories (such as converting sugarcane into ethanol to be used in place of fossil fuels) and the increasing energy inputs required to explore for, extract, and transport increasingly remote reserves.
6. Many such systems, of course, were heavily criticized for setting prices for peasant production artificially low, which often led producers to abandon cash crops in favor of other activities (Ellis 1983).