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Finance, extraction and logistics as axes of the third neoliberal moment in Latin America

 24/01/2020  Di: 

By Alessandro Peregalli

From Into the Black Box

This article is a draft version of a paper published for WOLG (Work Organisation Labour Globalisation), Vol. 13, No. 1,  Logistical Gazes. Spaces, labour and struggles in global capitalism

foto 1Con la nozione di ‘operations of capital’, centrata sull’interazione tra le dimensioni della finanza, dell’estrazione e della logistica, autori come Mezzadra e Neison hanno fatto luce sul alcune ‘trasformazioni sotterranee del capitalismo’ che vanno ben oltre un’idea generica di neoliberismo come ‘circolazione egemonica di dottrine economiche e processi di deregulation e finanza’.
L’obiettivo di questo articolo é analizzare la forte articolazione di finanza, estrazione e logistica in America Latina con un focus sulla creazione di nuovi corridoi infrastrutturali nel continente durante la ‘terza fase’ dell’egemonia neoliberista nella regione. Questo articolo mette insieme elementi teorici provenienti dalla letteratura dei cosiddetti ‘critical logistics studies’ con un insieme di altre prospettive teoriche come quelle provenienti da autori come David Harvey, Giovanni Arrighi, Michel Foucault e Saskia Sassen; e fa interagire questo background teorico con la realtá latinoamericana, utilizzando categorie proprie della letteratura latinoamericanista e fonti documentarie e adottando una prospettiva trans-disciplinare.

With the notion of ‘operations of capital’, focused on the interaction between the dimensions of finance, extraction and logistics, authors such as Mezzadra and Neilson have highlighted some ‘underlying transformations of capitalism’ that go well beyond a generic idea of neoliberalism as ‘the hegemonic circulation of economic doctrines or processes of deregulation and governance’.
The aim of this article is to investigate the strong articulation of finance, extraction and logistics in Latin America by focusing on the creation of new infrastructural corridors in the continent during the ‘third  phase’ of neoliberal hegemony in the region. This article brings together elements from the so-called ‘critical logistics studies’ literature with a range of other theoretical perspectives, including insights from the work of David Harvey, Giovanni Arrighi, Michel Foucault and Saskia Sassen. It applies this theoretical background to the Latin American reality, drawing on regional-specific literature and general data using a trans-disciplinary perspective.


Introduction

In recent years, the concept of logistics has developed as an important theoretical lens for the analysis of  contemporary capitalist transformations. In Latin America, however, this perspective has remained largely unexplored, despite growth in the planning and construction of important infrastructural projects and corridors, the multiplication of special economic zones and the rapid emergence of platform and ‘just in time’ economies throughout the entire region.
This is due, partially, to the overwhelming importance, in Latin America, of the  concept of neoextractivism 1 and the so-called ‘Commodities Consensus’ (Svampa, 2013) and its necropolitical logic. Originally taking the form of the extraction of natural resources from the territory, primarily minerals and hydrocarbons, and on their large-scale exportation abroad in the form of commodities, this idea has recently been productively extended to other sectors (e.g. agribusiness, cellulose, fishing, also tourism) and to other social realms (e.g. to cities, via the phenomenon of gentrification). As a result, even the construction of infrastructure is now largely considered in the Latin American literature to be, almost exclusively, an extractive operation which has a significant impact on the territory as well as on the dispossessed populations, without considering its fundamental role in the advent of so-called supply chain capitalism.
In a recent article, Sandro Mezzadra and Brett Neilson (2015:1) proposed to connect the logic of extractivism and extraction both to finance, whose growing tendency is ‘to penetrate and subsume economic activity and social life as a whole’, and to logistics, ‘the art and science of organizing the turnover of capital to maximize efficiencies of transport, communication, linking, and distribution’. These two authors suggest that it is important to understand the way in which extraction, finance, and logistics interact and coexist in contemporary capitalism by using the concept of  ‘operations of capital’, with an operation seen as ‘a moment of connection and capture that exhibits the materiality of even the most ethereal form of capital’.
We argue here that such an approach can be extremely powerful for capturing some interesting issues and analytical mediations that have, until now, remained hidden, despite the development of the concept of neoxtractivism, which draws attention to the extractive dimension at the expense of other dimensions of logistics and finance which articulate with extraction. At the same time, we also consider the emergence of a strong articulation of extraction, finance, and logistics as a specific pattern of what we call the ‘third neoliberal moment’ in Latin America, the first phase being that of dictatorships and monetary shifts during the late 1970s/early 1980s which served as a kind of ‘shock therapy’ that led to the brutal conclusion of the previous ISI (Import Substitution Industrialisation) model, and the second phase being the period of ‘transition’ to democracies that were managed by a series of new think tanks and international organisations in alliance with the USA.
Mezzadra and Neilson (2015:1) also observe that ‘many analyses that makereference to the concept of neoliberalism in a generic sense point to the hegemonic circulation of economic doctrines or processes of deregulation and governance without really taking stock of the underlying transformations of capitalism’. An analysis of the historical path of neoliberalism in the region and of its conflicts and discontinuities will enable a new way of understanding these transformations through both the endogenous and exogenous dynamics and tendencies that have been shaping capitalism in Latin America. If we understand that extraction, finance and logistics are, in fact, the emerging dimensions of today’s global scale capitalism, this approach in no way denies the unevenness of this development, or the historical, social and geographic specificities it incorporates.

The three phases of neoliberal penetration in Latin America

It has been widely accepted by historians that the neoliberal turn in Latin America began with the coup of 11 September 1973, when the Chilean Air Force, under the command of General Pinochet, attacked the Presidential Palace of La Moneda in Santiago de Chile, provoking the murder of President Salvador Allende and bringing about the bloody end of the socialist experiment of the Allende government. The moment represented just one of a number of political coups that crossed the region in the 1970s, but it was particularly significant for two reasons: the overthrow of an explicit attempt at democratic socialist transformation; and a high level of ideological consciousness that directed the neoliberal policies that Pinochet’s military government implemented. The demise of this ideological consciousness was also supported by the cooperative participation of many academics and intellectuals who, during the previous decade, had coalesced around Professor Milton Friedman and his famous ‘Chicago Boys’ at the University of Chicago. The political programme of the military cabinet was elaborated by them, under the leadership of Sergio de Castro, in the document called El Ladrillo (de Castro, 1992). This was originally formulated in 1969, as an economic programme for the candidate of the National Party, Jorge Alessandri, who would be
defeated by Allende in the election that took place the following year, but it remained hidden and unpublished until 1992, with the return of democracy in Chile. Within de Castro’s group there were also various members of the Christian Democratic Party (PDC), who provided the inclusion of important elements that came from the ordoliberal tradition that had been promoted and diffused into the Latin American Christian Democracies by the German Christian Democratic Union (CDU). Quite famous is the analysis made by Michel Foucault (2005) of ordoliberalism in which he emphasised the point that, in the view of its theorists, neoliberalism was by no means a project of ‘minimum state’ as the old liberal one had been. Instead, it was a strategy in which the state would function as the guarantor of the market, the creation of markets being not a natural fact but the very political aim of the state and the product of continuous active state policies. This idea is exactly what is suggested in El Ladrillo.
As Beatriz Stolowicz (2016) has analysed, El Ladrillo in no way reduced its own neoliberal idea to the politics of ‘laissez-faire monetarism’, with simple state withdrawal from the economy through privatisations. If elements such as control of inflation and price liberalisation were not in question, the participation of the State in the economy and even its social policies, expressed by the idea of a social market economy, were included and strongly considered in the document; and the promotion of infrastructure by the State was included as a central point.
Following Stolowicz’s reading of El Ladrillo, the reductionist idea of ‘laissez-faire monetarism’ only represents the first step of a two-stage strategy of neoliberal hegemony: first, the ‘shock therapy’ moment aimed at the violent and abrupt destruction of the existing developmentalist and inclusive model of industrialisation, and second, the return to a system that is more dependent on external markets. To implement such a violent transformation it was necessary to sacrifice democracy in many countries: a few months before the Chilean coup, there was another one in Uruguay, while in Argentina the military coup took place in 1976. Countries like Bolivia, Paraguay and Brazil were already in the hands of dictators. 2 In other cases, most significantly in Mexico, the authoritarian but formally democratic regime never changed, but the neoliberal turn would be imposed in 1982 by the new monetary policies of the US Federal Reserve, the default of its economy due to debt crisis, and the structural adjustment plan imposed by the International Monetary Fund (IMF).
foto 2If El Ladrillo could be considered as a necessary first step in structural destruction, the second step would have been the reconstruction and stabilisation of the model, in which the role of the State and its active economic and social policies would be crucial. Such a stabilisation of the model was realised in two different moments: the return to democracy, and a moment of social reform that, thanks to the ambiguities of the concept of neoliberalism, could present itself as postneoliberal.
The second phase of the neoliberal penetration into Latin America coincided with the political openness of the mid-1980s. The transition to democracy was an open process not devoid of conflicts and uncertainties. The general orientation that prevailed, however, was one of a general consensus of the main political forces around a process of economic continuity. The international platform that managed the transition was the Inter-American Dialogue, which would produce the so-called Washington Consensus. However, as Stolowicz (2016) points out, the strong participation of international organisations such as the Inter-American Development Bank (IDB), Latin American historical organisations such as the Comisión Economica para América Latina y el Caribe (CEPAL), and a wide range of Latin American intellectuals, politicians and businessmen lends testimony to the idea that the consensus was less a unilateral imposition than a real adhesion. In the words of Paul Singer (1998:np), it was a shift from a ‘tolerated dependency’ to a ‘desired dependency’.
Even if the first reactions to this neoliberal shift would occur by the end of the 1980s, with the so-called Venezuelan caracazo, the first general social opposition to the Washington Consensus would not emerge until the Zapatista uprising of 1994 and would not become widespread at a continental level until the end of the century. As popular dissent grew, governors and international organisations began to change their discourse toward a critique of neoliberal excess and to draw attention to the social effects of privatisation and deregulation. Along with the rise of popular opposition, these actors had to face a period of continuous and dramatic speculative bubbles and financial crises, whose epicentres where both external and internal, such as the so-called Tequila Effect in Mexico, in 1994, the Samba Effect in Brazil, in 1999 (a direct consequence of the 1997 crisis of the Asian tigers) and the Tango Effect in Argentina in 2001. In this last case, financial crisis and social upheaval coincided, generating a major political crisis that was only partially solved with the electoral victory of progressive Néstor Kirchner in 2003.
In the meanwhile, leftist governments were beginning to emerge in Venezuela (with the victory of Hugo Chavez Frías in 1998), and in Brazil (with the victory of Luiz Inácio Lula da Silva in 2002). The subsequent leftist victories in Uruguay, Bolivia, Honduras, Ecuador, Nicaragua, Paraguay and El Salvador brought about the formation of a progressive block aimed at contesting neoliberal politics and US geopolitical hegemony in the region. In this context of escalation of popular uprisings and progressive electoral victories, the traditional think tanks and the Bretton Woods Institutions elaborated a strategy of co-option and political influence to these emerging political forces. Their plan consisted of adopting a post-neoliberal rhetoric around three main crucial directions: first, an anti-privatisation rhetoric aimed at promoting the return of state investments in several aspects of political economy, which led to the proliferation of so-called post-privatisation policies and the establishment of a legal framework for Public–Private Partnerships (PPPs); second, a broad discourse around the fight against poverty that was implemented mostly by the ‘new’ World Bank under its vice-president Joseph Stiglitz (1997–2000) leading to the creation of several social programmes and the multiplication of micro-credit policies across the region, and to broad-reaching policies of financial inclusion of the subaltern classes; and third, an anti-deregulation rhetoric aimed at the creation of a huge logistics and infrastructural leverage in order to ‘territorialise’ the financial surplus into ‘productive’ sectors. In the background, the discourse that encouraged countries to take advantage of their abundant natural resources, in order to enforce their role of direct exporters of minerals, energy and agro-industrial commodities within the global value chains, was maintained.
All these points reflected a strategy that was uncritically shared by all governmentsand political forces that governed in the region (with only a few rare exceptions, the most significant one being in Venezuela), in spite of their not unimportant differences, and by all geopolitical blocks at stake. They represented those aspects of continuities that can be better understood by the analytical perspective of the ‘operations of capital’ as anatomised by Mezzadra and Neilson and their articulation achieved by bringing together the dimensions of finance, logistics and extraction.

Infrastructure as an engine of the ‘new developmentalism’

The construction of a huge infrastructural leverage can be seen as a means to connect the financial surplus value, which was continuously at risk of devaluation as a result of the frequent crises, to the accumulation cycle. David Harvey (2014:155) describes this situation as the capacity of capital, in periods of crisis, to create ‘spatio-temporal fixes’, where ‘fix’ means both capital’s ‘fixing’ itself into that territory for a relatively long period and its ‘adjustment’, that is to say the spatial solution to the problem of over-accumulation. Harvey has pointed out in various works how the construction of infrastructure, in order to absorb capital and/or labour surpluses, has always been a classic capitalist device for achieving this, at both regional and metropolitan level. As he showed in a widely read book on urban development and conflict (Harvey, 2013:64), in the USA, the dramatic boom of the real estate market and subprime mortgages followed the end of the high-tech bubble and the fall of the stock market in 2001. It was during the same decade that China reached the highest growth in its frenetic urbanisation accompanied by massive public investments in roads, railways and other multi-million infrastructural projects. This tendency to see investments in infrastructure as anti-cyclical policies in the context of financial devaluation continued to be repeated, eventually, even after the financial crisis of 2007–08. The reason for this is that infrastructure has a slower, but safer and more durable rotational time while also providing the basis for an acceleration of the transportation of commodities, energy and people in a following moment. It is particularly safe because, as Stolowicz (2016:743) affirms, the aim in the Latin American case was that ‘state activism’ could provide capital, juridical and political security, adequate levels of profit, and access to credit. What was significant, in this case, was that the ‘productivist’ rhetoric that surrounded this operation was by no means a ‘productivism’ that led to the return to the old ISI industrialisation model but rather one that signified the openness and the availability of the territory and its resources for international markets. Also favoured by the dramatic increase in the prices of primary commodities, these new logistical infrastructures therefore provided leverage for the export of such commodities abroad and the import of industrial goods.
Two important plans were elaborated to connect and reorganise the entire Latin American territory: IIRSA (Initiative for the Integration of the Regional Infrastructure of South America, 2018) and the Mesoamerica Project.
foto 3In April 1998, the Second Summit of the Americas of the Organisation of American States (OAS) held at Santiago de Chile discussed the creation of the American Free Trade Area (FTAA), an extension of NAFTA (North American Free Trade Agreement) to the entire American continent, and mandated the Inter-American Development Bank (IDB) to develop a general plan for the facilitation of the participation of the private sector in local and transnational infrastructural projects (Stolowicz, 2016:748). This led to the IDB presenting the IIRSA project at the First South American Summit of Presidents in August–September 2000 in Brasilia. Although the FTAA was considered a too explicitly US-led geopolitical project and was abandoned in 2005 thanks to the opposition of the emerging progressive alliance, IIRSA, with its hidden and imperceptible logistical power, remained largely unquestioned and was even expanded. The plan now crosses all South American countries, includes ten logistical inter-modal corridors and 562 projects (some finalised, but the majority either under construction or only planned) for a total investment of US$199 billion. Among these, 90% are transportation projects and 50% are highways; one-third of the total investment is in energy, the majority of which is in hydroelectric projects.
While the huge infrastructural projects were being organised around the IIRSA plan in South America, from the late 1990s Mexico and Central America were also organising their own project of logistical interconnection. Under the presidency of Ernesto Zedillo, Mexico planned a National Plan of Urban Development (1995–2000) which was aimed at creating seven bio-oceanic corridors along which it was planned to build maquiladora facilities, greenhouses for export, toxic trash incinerators and canals for the extraction of strategic resources such as minerals, oil and water, and to encourage bio-diversity (Barreda Marín 2002:4). These corridors were then integrated with others in the Puebla Panama Plan (2002) that was inaugurated by President Fox in 2002, and included, in addition to the Mexican states of Veracruz, Puebla, Guerrero, Oaxaca, Chiapas, Tabasco, Campeche, Yucatán and Quintana Roo, the Central American countries of Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica and Panamá. Colombia was added to the plan in 2006 and it was eventually transformed, in 2008, into the Mesoamerica Project, with the setting up of a joint Committee of Promotion of Inversion (CPC) whose main financiers were the IDB, the Andean Development Corporation (CAF), and the Central American Bank for Economic Integration (CABEI; Stolowicz, 2016:757). rojects.
With the development of IIRSA and the Mesoamerica Project a new geography began to take shape in Latin America, a geography where the strongly modernised ports and the great enclaves of surface mines and soybean plantations represent the crucial nodes between which logistical corridors run in a way that is, at the same time, both embedded with the regional history and tremendously new.

An infrastructural platform for the export of commodities

As already noted, in Latin American analysis, the issue of logistical and infrastructural interconnection has mostly been subsumed by the paradigm of neoextractivism. The concept of ‘neoextractivism’, which moves away from the idea of a reprimarisation of the economy in the region (and therefore from the deepening of its historical dependent role in the world system) has emerged in the last decade as a successful theoretical approach because it takes into account the growth of extractive operations in the region. The concept has the value of providing a clear theoretical tool that can be used by many of the territorial, social-environmental and indigenous struggles that, in the last years, have been challenging the attacks on the territory by both conservative and progressive governments.
The acceleration in the extraction of natural resources and agricultural goods with the aim of export abroad has been an important feature of the last two decades, and has been growing in parallel with the infrastructural boom. This has been driven by the rapid increase in the international prices of commodities during the first decade of the century. This can be illustrated by some examples, drawn from the most abundant commodities in the region. The price of crude oil rose from US$27.59 per barrel in November 2001 to US$147.85 in May 2008. That of copper surged from US$0.67 per pound in December 2001 to US$4.54 in February 2011. Natural gas went up in price from US$2.54 in September 2001 to US$15.17 in June 2008. The price of gold increased from US$370.4 per ounce in April 2001 to US$2,027.58 in August 2011, while that of silver increased from US$6.06 in October 2001 to US$45.44 in August 2011. Iron ore saw an even more spectacular rise (from US$1.37 per ton in March 2002 to US$28.7 in May 2008) while the value of soybeans went up from US$4.18 per bushel in July 1999 to US$17.36 in September 2012.
These dramatic prices rises gave economic operators and regional governments the illusion of indefinite growth and a reproduction of the idea of abundance which important intellectuals such as Eduardo Galeano (2004) and Alberto Acosta (2009) have brilliantly argued to be the historical curse of Latin America. They also allowed the new wave of progressive political forces in power in many states to avoid any kind of structural change in the productive model and to build a new social compromise whereby the popular classes they represented could improve their conditions and get included into consumption (through minimum distributive mechanisms) while transnational companies could maintain and even increase their profit rates. Not surprisingly, however, the sudden and dramatic fall in commodity prices since 2013 has revealed the fragility of this new equilibrium and all these governments entered into crisis with many of them ending up losing political power.
This increasing dependence on commodities is an important part of the current context, in which the creation of such an important infrastructural platform must deal with the need to provide better access to these natural resources, and their faster export abroad, following Marx’s (1978:539) famous statement that capital needs to ‘annihilate space by time’. This is exactly the concern of logistics. But just as logistics and extraction are more entangled with each other than ever, their articulation with finance is equally important.
As already noted, infrastructural construction plays a strong role in the absorption of financial surpluses. Nevertheless, it is important not to underestimate the constant possibility for such an operation to multiply speculative risks in the longer term. For instance, in the case of current worldwide speculation in shipping it
is clear that the phenomenon of container ship gigantism far exceeds any real necessity of transportation economy (Bologna, 2013). But the articulation of logistics, finance and extraction goes even further. We have already seen that the point of encounter between the leftist political forces that emerged from the crises at the turn of the century and the strategy of the more intelligent elements of the international organisations was a rhetorical commitment against deregulation, to which a presumed return to productive capital would represent the solution. Such an idea was used to promote both the development of logistics and of extraction as forms of a real economy that was in some way opposed to financialisation. This is an idea that was mobilised by the vice-president of Bolivia, Alvaro Garcia Linera, as Verónica Gago and Sandro Mezzadra (2015) have pointed out. Gago and Mezzadra extend the concept of extractivism to some important dimensions of Latin American societies, such as the financial subsumption of popular life in the slums of the big cities and even in the rural areas, but even if we set this insight aside, it is still clear that the classic extractive activities are by no means separate from financial operations. One example, that was brought vividly to life in the global financial crisis of 2007–08, was the role played by financial derivatives, including futures (one of the most important financial derivatives) which supply the fundamental mechanism that establishes the price of commodities at a world level and hence the ups and downs in these commodity prices.
The financial dimension of today’s commodity markets reinforces the structural dependence and lack of economic sovereignty of Latin American countries, regardless of the emphasis that the progressive left places on celebrating the productive alternative and the stronger role of the state. Rather, it is precisely the renovated and more active post-neoliberal state that has been used as an important articulator of logistics, finance and extraction in this third phase of neoliberal penetration in Latin America.

PPPs and the activism of the post-neoliberal state

As has been pointed out by Stolowicz (2016), a direct thread links the old ordoliberals to their post-neoliberal heirs. This thread is, however, obscured by the rhetoric and the discourse of the latter who, by explaining neoliberalism as simply ‘laissez-faire monetarism’ have created the illusion that they themselves represent a real and significant alternative. This thread, of course, has its nucleus in the role of the State and in its capacity to create and continuously mould and expand markets.
Two aspects of postneoliberal State activism have repeatedly been highlighted by its critics: first, the social plans, the most famous of these being the Brazilian Bolsa Família, have been highly praised for having raised 36 million people out of extreme poverty over a 12-year period; and second, the strategic state intervention in the economy through so-called PPPs. As far as the social plan is concerned, it is evident that a direct relation exists both to extractivism, in the form of a re-direction of part of the surplus generated by extraction toward social needs, and to finance, in the way it is connected to the mechanisms of micro-finance, financial inclusion and the expansion of credit to the subaltern classes, as has been explained in some depth by Verónica Gago (2014) and Beatriz Stolowicz (2016).
This active role of the state, however, is particularly crucial in the promotion and construction of infrastructure. In this regard, the PPPs establish the formation of a specific form of governance whereby the State and the ‘productive capital’ of the constructors directly articulate with financial investors. Where the PPPs differ from classic forms of privatisation, making them a clear example of what has been propagated by the World Bank as post-privatisation, is that with the PPPs the State does not lose the formal ownership of the activities carried on by private actors while, simultaneously using its permanence to serve as a guarantee in the face of eventual private losses. As Stolowicz (2016:1038) notes, ‘the active “regulator” post-neoliberal State regulates in order to renounce several of its powers and to oblige itself to subsidiarity’. 5 Despite variations in the legal forms adopted for PPPs in different national and international legislations, they have one key mechanism in common: that is, that the direct executors are private companies which enjoy concessions that may last as long as 50 or more years, but the ultimate ownership of the property remains public.
The state provides these private companies with such incentives as tax exemption, access to cheap credit and direct financial support. In addition, it may subsidise the tariffs to the private company if the profit rates of the project fall below a certain level. Furthermore, the state typically provides a wide range of other guarantees should any of its own negative actions (such as nationalisation or confiscation) prove threatening, in case of breach of contract by the financial investor, or in order to protect the concessionaire from competition and to offer it other services related to the infrastructure in question (Stolowicz, 2016:1048–49). Finally, the institutional investors are in many cases public banks, or private pensions funds that have been capitalised during previous reforms of privatisation of the social security system. This is particularly important in the case of Brazil, whose construction companies have, in
recent years, been the executors of the majority of the projects related to IIRSA.

Brasil Potencia and the politics of the ‘national champions’

In the last 20 years, following the guidelines of many international institutions, almost all Latin American countries have established some kind of legislation on PPPs regardless of whether they have been led by conservative or progressive forces. Among these, the example of Brazil is undoubtedly the most interesting since, during the governments of the PT (Workers Party) between 2003 and 2016 such partnerships served as a strategic lever for the renewed geopolitical ambitions of the country.
In Brazil, state intervention, through the use of PPPs, served as a fundamental tool for the politics of ‘National Champions’. By this means the state provided direct public support to several important private companies, in sectors such as construction, petrochemicals, food and mining as well as the public company Petrobras, the second largest oil company in the world (Zibechi, 2013:59) in order to transform them into transnational companies (TNCs), thus enabling them to invade and dominate markets abroad, primarily in Latin America and Africa. This strategy was facilitated by the important role of a financial system supported by the state, providing further evidence of the importance of the relationship between finance, extraction and logistical infrastructure. It is noteworthy that among the investments in infrastructure in Brazil and South America, those furnished by the Brazilian Development Bank (BNDES) exceeded those provided by international organisations. The BNDES is the most important investor in the IIRSA plan through its participation in and financial support both to the biggest construction companies in Brazil, such as Odebrecht, Camargo Correa, Andrade Gutierrez, OAS, and Queiroz Galvão, and its main extractive companies, Petrobras and Vale, the latter being the second most important mining company in the world (Zibechi, 2013:59). The construction companies have been financed by BNDES and other important institutional investors, such as the public pension funds, using PPP mechanisms, demonstrating the importance of public support to such public–private operations. This points to the way that the framework upon which the relationship between finance, logistics and extraction relies is taking place over the heads of the social body and particularly the working class. Other than the obvious case of the pension funds, the BNDES itself is almost totally financed by the Treasury Department and the workers’ consumption fund.

The emergence of a new form of governance and the disarticulation of space

Logistics cannot be reduced to infrastructure even if the latter represents an important component of it. As a principle of redefinition of the relations between production and distribution at a world scale, logistics and supply chain capitalism also imply powerful processes of spatial redefinition and assembly and the transformation of their governance. As Brett Neilson (2012) puts it, logistics is also political power. This can be discerned in several ways.
One issue that makes it visible is the multiplication of the zones. Due to its long history of extractivism and colonial pillage, Latin America has always been a region of enclaves, a region in which gold and silver enclaves, as well as plantation areas, have uninterruptedly alternated with traditional forms of subsistence economy. In this regard, the advent of the railway in the late nineteenth century and the recent rise of containertransportation represented two steps of a significant leap in this Latin American tradition. As Alfredo Falero (2015) points out, the ‘enclave economy’ of our times in the region is a mix between some classical extractive patterns, now redefined and modernised through the new technologies of fracking and surface mining, with other kinds of enclave activities such as the maquiladora industry and informational and high-tech enclaves. 7 As in the rest of the world, new institutional definitions of these zones have also emerged in the continent, resulting in the creation of specific forums and think tanks such as the Free Trade Zones Association of the Americas (AZFA). According to AZFA, in Latin America there are now more than 600 ‘free trade zones’ within 23 countries where more than 10,800 companies employ 1,700,000 workers. 8 In many cases, these zones are situated within the regional logistical corridors which result in the ‘production’ of a completely different connected space (Lefebvre, 2013), but one that excludes territories as much as it connects them. At a macro scale, the corridors produce important and rapid geographical re-articulations while the zones also have an impact at the micro scale. This impact, however, is by no means one of total separation, but results in continuities and discontinuities and patterns of inclusion and exclusion that are continuously managed and reproduced. Following Saskia Sassen (2010), these can be defined as strategic territories where the global tendencies are localised and where the national functions of the State are being ‘disassembled’. Rather than regarding this as a simple replacement of a national space for a global one, Sassen’s concept enables us to see the way that certain aspects and prerogatives of the national relate to and articulate with the global. From this perspective, the relationship between the special zones and the rest of national territory can be further problematised.
In the specific Latin American case, the state interacts with private actors in many ways, from the normative decision to create the special zones as such to the financial support it provides to the companies and the different ways it guarantees, along with its private partners, the availability of the territory and the repression of opposition. At the same time, these private actors interact in multiple ways with the territory itself and with the surrounding areas via the implementation of the so-called ‘bottom of the pyramid business’ (Stolowicz, 2016:903–946), which allows the transnational corporations to subsume the agricultural activities of communities to their global value chain and through other forms of ‘corporate social responsibility’. In this sense, the articulation between the state, companies and NGOs has been a powerful device for ensuring the submission of peoples and communities and in the co-option and fragmentation of social movements.
However, if the porous character of the zones in relation to the surrounding areas has been widely underestimated, it is nonetheless evident that the creation and multiplication of ‘free’ zones has had important consequences in the form of guarantees for business security and for social repression within these privileged spaces. To investigate this further, research aimed at an analysis of militarisation and the proliferation of violence on Latin American strategic territories, from the perspective of what has been described by Cowen (2014) as ‘supply chain security’ is urgently needed. In countries like Mexico, Colombia and Honduras, for example, it is becoming evident that the formation of a very necropolitical governance around corridors, zones, ports and infrastructural nodes suggests an unhealthy collaboration between the state, paramilitaries, drug cartels and the local caciques (traditional or native political bosses) as a fundamental feature.

Geopolitical uncertainties and the projection toward the Pacific

In his important book, The Long Twentieth Century, Giovanni Arrighi (1999) argued that there is a crucially important dialectical relation between two different logics in capitalism: first, a territorial logic, which sees power as the extension of a territory and its population and considers capital as a means for achieving this; and second, a capitalist logic, according to which power represents a control of resources and the acquisition of territory is a means to obtain it. Along the history of capitalism, these two logics have coexisted, and they still do. In a 2009 article, the geographers Deborah Cowen and Neil Smith postulate a progressive shift from a state-centred idea of power as a product of the political union between a homogeneous territory and its national society, economy, culture and citizenship to a system of domination directly responding to market imperatives. That is to say, they suggest that the capitalist geo-economic logic is becoming increasingly more important than the territorial geo-political one. However, if we substitute Foucault’s (2005) idea of ‘strategy logic’ for a ‘dialectical’ one, it becomes possible to analyse such a tendency not as the imposition of capitalism over territorialism, but rather as a shift that maintains a dynamic of articulation, coexistence and fission. In this way, rather than speaking of the end of geopolitics, it is possible to consider it as something that is being redefined in the context of today’s supply chain capitalism.
With the changes that have occurred since the turn of the century in Latin America, geopolitical assets have been dramatically redefined. The emergence of progressive governments and their adhesion, to a major or minor extent, to a geopolitical bloc of Russia and China began to challenge the USA’s traditional hegemony in the region in an unpredictable way. Amid this changing scene, Brazil (as we saw with the politics of ‘National Champions’), and, to some extent, Venezuela (with its ALBA project 9 ) were able to build their own hegemonic ties and relations in the continent. However, as we have also shown, certain patterns continued unaltered, such as the growing importance of logistics, finance and extraction as specific capitalist operations. This is reflected, for instance, in the permanence and in the deepening of the IIRSA plan despite the abandonment of the US-led FTAA trade agreement. As the geographer Carlos Walter Porto-Gonçalves (2017:63) pointed out, ‘The same physical infrastructure that served the Free Trade Area of the Americas serves now for the integration to the new geographic centre of industrial capital in Asia, in particular in China’. 10 Such a projection to China is increasingly evident with the planning of other huge
infrastructural and logistical projects such as the modernisation of the Mariel port in Cuba (built with Brazilian capital and where a new special economic zone was implemented), the plan for a trans-oceanic canal in Nicaragua, and the extension of the Panama Canal, the latter two being financed by Chinese investors. Not surprisingly, China is rapidly becoming the most important commercial partner of the region, and the IIRSA plan is increasingly being linked to its new Maritime Silk Road policy.
Today, progressive governments are in crisis as a result of the fall in the prices of commodities. In Argentina and Chile the right has been democratically returned to power, as is also the case in Brazil, though in a much less democratic way, while Maduro’s Venezuelan government is now facing a dramatic economic and political crisis. Nevertheless, if these changes lead to a return of the old pattern of a political alliance with the USA, they do not seem to question the general tendency toward the Pacific and the territorial reconfiguration at stake. Neither do they have any particular effect on the centrality of the financial, logistical and extractive operations that exist in the current phase of Latin American capitalism. In this context, the role of the state remains important. Because even if the move to the right of the political  spectrum has determined the end, or the decline, of certain policies of social aid directed at including the subaltern classes in consumption, the state does not seem to be losing its active role in providing direct support to finance, logistics and extraction.

Notes

1 The concept of ‘neoextractivism’ has been used in the critical literature in two different senses. On one hand, Eduardo Gudynas (2009) considers it as the continuation and enforcement of economic policies based on the extraction of primary and mineral goods under so-called progressive governments. In this sense, the prefix ‘neo’ refers to the major role of the State in capturing a part of the surplus value and redistributing it in the form of social plans. On the other hand, increasing numbers of authors have been using the term in a wider sense, in relation to the priority that such policies gained among all regional governments, and referring with the prefix ‘neo’ to the quantitative and qualitative increase in these practices, and the use of modern technologies such as surface mining, fracking and pre-salt oil extraction. Despite considering both meanings as fruitful, I will use the notion more in the latter sense, by focusing on extraction as an operation of capital common to both progressive and conservative governments.

2 However, not all these countries embraced the neoliberal principles. In the case of Brazil, for instance, the
military regime would remain anchored to the old developmentalism until its collapse in the mid-1980s and the transition to neoliberalism would only occur under democracy. In general, the transition to neoliberalism and the succession of the three phases mentioned above was not temporarily homogeneous and linear, presenting instead significant differences case by case.

3 www.iirsa.net.

4 Macrotrends (2018).

5 Translation mine.

6 Through the participation of the Fundo de Amparo ao Trabalhador, FAT, and the Programa de Integraçao
Social-Programa de Formaçao do Patrimonio do Servidor Publico, PIS-PASEP, which are the funds dedicated to the payment of workers’ benefits (Zibechi, 2013:58).

7 Falero (2015) reports the case of Zonamerica, a zone situated close to Montevideo where 9,000 workers
are employed in activities of logistics, distribution, financial services, consultancy, call centres and software
development. Another very famous case is that of the Zones for Economic Development (ZEDES) in Honduras. This is a project that has drawn much interest and support from Silicon Valley and other high-tech actors, offering a means to protect companies from certain forms of regulation over data practices (Lynch, 2018). Unlike the majority of the Special Economic Zones, the ZEDES, otherwise called ‘ciudades modelo’, show a total privatisation of police and security services. They also enjoy a completely different jurisdiction from that of the rest of the country, since in their territories only six of the 379 articles of the Honduran Constitution are applied. Nevertheless, at the time of writing the ZEDES seem to be an economic and social failure (The Economist, 2017).

8 Asociación de Zonas Francas de las Américas (2018).

9 ‘Bolivarian Alliance for the Peoples of Our America’.

10 Translation mine.


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Alessandro Peregalli is a PhD student in the Latin American Studies Programme at the National Autonomous University of Mexico (UNAM), Mexico.


Di:  In Categoria: America Latina, LOGISTICA, Ricerca

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