Economic Alternatives in Latin America

Political scientist Thea Riofrancos writes at Dissent about how the Latin American left has relied on extractive industries, which is both damaging to local communities and increases dependent economic relationships (including to China). I totally agree and of course this argument isn't new. What she does, however, is offer concrete solutions.

The first is political. Forge relationships between affected and non-affected communities to stop the spread of extraction.

In direct response to the national anti-mining movement’s demands, deputies of the left-wing Farabundo Martí National Liberation Front (FMLN) introduced a bill to ban large-scale mining in 2006. Eleven years later, the law was adopted unanimously by El Salvador’s legislature. A number of factors account for this success: dense organizational structure linking affected communities together; the movement’s ability to frame the national conversation around impacts on the country’s vulnerable water system; the innovative use of municipal consultas on mining (all of which registered community opposition); and the strong support of progressive Catholic bishops as well as FMLN deputies in congress. This movement-party dynamic, built on longstanding ties between rural community movements and the FMLN, was essential to channeling popular power into policy change.

It's much trickier to pinpoint what economic policies governments should enact in its place. There's less on that.

Those of us pushing for a post-extractive transition must grapple with two challenges: divestment from existing oil and mining projects and implementing moratoria on new projects, and replacing extractive revenues with taxes on the rich and reinvesting existing rents into non-extractive sectors.

100% of a new policy will be taxing the rich? That's a major challenge. This would be unprecedented and really tough politically given the history of tax policy in Latin America, where non-payment is rampant and governments have few to no means of enforcing it.

Setting that aside for the moment, the non-extractive sectors deserve more attention. Finding them has been the Holy Grail of Latin American political economy. The import-substitution model was a major 20th century effort.

Her article is worth your time. Someday Latin American policy makers need to find new solutions.