Indigenous struggles and the global economy



Standing Rock Sioux water protectors brace for a difficult winter, continuing to oppose the completion of the Dakota Access Pipeline in North Dakota, USA. Photo: The San Diego Union-Tribune.

by Tim Shenk
Committee on U.S.-Latin American Relations (CUSLAR)

Indigenous struggles have gained visibility in 2016 throughout the Americas.

On December 4, indigenous-led resistance halted construction of the Dakota Access Pipeline in and around Standing Rock Sioux territory in North Dakota, USA. Tensions had been mounting since April, as thousands of indigenous and non-indigenous water protectors risked injury, arrest and frigid temperatures to oppose the pipeline’s crossing of tribal lands and especially the Missouri River.    

In March, the assassination of globally renowned indigenous environmental leader Berta Cáceres brought the world’s attention to Honduras, where the Lenca people are fighting land grabs and a destructive hydroelectric dam megaproject in their territory.

Less international coverage has been given to indigenous communities opposing large-scale mining operations in Oaxaca and Chiapas, in southern Mexico, and from Guatemala to Chile.  

CUSLAR, the organization I now lead, has a decades-long history of relationships with and support of self-determination for indigenous peoples, especially in Latin America. Our reading of recent and past coverage of these conflicts is that indigenous protests have tended to be framed either as struggles to assert rights around autonomous governance, participation in development planning, territory, water or cultural rights, or a combination of these. Yet is there more at stake here than a clash of cultures?

In this piece, I would like to consider how recent conflicts involving indigenous populations may be connected to the current global economic context, especially as the world continues to feel the effects of the global economic crisis of 2008.


The 2008 global economic crisis

The crisis that shook the global economy, triggered in 2007-08 with the United States housing market crash, was a crisis of overproduction nearly half a century in the making.

Since the 1970s, productivity has climbed steadily in the U.S., the world’s largest economy, while real wages have stagnated. Wage stagnation is not a fluke, but rather an intentional obligation to discipline labor brought on by global crises of the 1960s and 70s. Today, this means that while more and more products can be made more efficiently, not enough people can afford to buy what is available for sale. When this happens, production slows, workers are laid off and profits in productive sectors suffer until owners can figure out how to move the backlog of goods.

There have been consistent attempts to circumvent or postpone the problem of growing discrepancy between the economy’s productive capacity and the ability of the population to consume.

In the 1980s, the massive extension of credit to U.S. workers, in the form of credit cards and home equity loans, was one attempt to artificially inflate consumption to stabilize the economy. As profits in productive sectors stayed low, investors required policy shifts that allowed them to keep assets in “liquid” form, or cash. Profits in finance, such as interest and ever-more-complicated mechanisms to buy and sell debt, rose above profits in manufacturing. This is known as the financialization of the economy. Finance drove investment in the U.S. construction sector, where millions were encouraged to buy houses with one or more mortgages. The American Dream was pitched as a safe investment.

Financial speculation, or betting, on whether people would be able to consistently pay their mortgage, was a risky proposition. Yet it was good money for some, for a time, until it became clear that not enough people had well-paying enough and stable enough jobs to make good on their promises to the banks. This caused a banking crisis that threatened the stability of the global political and economic system. The solution was massive redistribution of public funds, to the tune of $7 trillion, to bail out financial speculators who had gambled and lost, while 5.5 million homeowners lost their houses.


Shifts to investment in resource extraction and land

After 2008, capital, increasingly agile on a global scale, made another massive shift. Its targets: natural resources, energy and land.

After the 2008 crisis, Big Oil found the financing to invest in new infrastructure. Productive and financial sectors bet big on rising global demand. As other sectors declined, oil became a risk many were willing to take. The industry set its sights on oil reserves previously considered too dangerous, expensive or volatile to drill.

New technology in natural gas extraction made horizontal hydraulic fracturing, or fracking, possible. High gas prices made the environmental and human health risks palatable to permit-granting governments in the U.S. from Pennsylvania to Montana, as well as in Argentina, Mexico and elsewhere.  

Regarding mining, Otaviano Canuto of the World Bank wrote this in 2012: “Global demand for scarce natural resources is mounting rapidly. Industry experts argue that we are in the midst of a ‘super cycle’ of commodity prices, driven by demand from fast-growing emerging economies. Natural resource extraction is capital intensive, with annual global investments approaching $1 trillion, hence offering the potential for rapid infrastructure development and structural transformation in developing economies. Riches from the sector promise to be massive, with resource rents, that is, the difference between revenues and extraction cost, estimated at about $4 trillion annually, or 7 percent of global GDP.”

Accompanying the drive for minerals, oil and gas has been a “global land grab,” in which big capital has broken down national laws, most egregiously in Latin America and Africa, scrambling to acquire vast tracts of land. Sociologist Philip McMichael puts the land grab into context: “[T]his rush to acquire land … is symptomatic of a crisis of accumulation in the neoliberal globalization project.” That is, while production is unprofitable, investment in land becomes a haven for capital.

Relatedly, McMichael notes that the global trend toward financialization has created a shift from investing in food-related production as such to speculating on the future of prices. He draws from the analysis of international peasant coalition La Via Campesina regarding land, food and finance: that the real power in agriculture today lies with those who control lending, technology and distribution, not with the producers.  

Of, course, resources have been exploited and land has been grabbed throughout history. Colonialism is nothing if not a concerted pillaging of natural resources and enclosing of land. However, new large-scale technology, trade agreements and national policies, and an aggressive investment climate in many countries recently opened the door to new extraction in places that were before unattainable or too risky.  


Commodity crash

The “super cycle” of commodity prices that the World Bank’s Canuto referred to seems to have ended in 2014.   

In the oil industry, a global glut has left the big four — ExxonMobil, Shell, BP and Chevron — with a combined debt of $184 billion. Now they must continue to extract oil, not to fill demand, as global oil storage is near capacity and crude oil prices are less than half of 2014 prices. Rather, production must continue because companies owe banks a record amount and must generate some revenue to service their debt. It is now clear that the industry overbuilt. For example, North Dakota Bakken crude is only being shipped out at 60 percent of capacity, according to a November report.  

In natural gas, fracking has added to energy market saturation and precipitous drops in prices. This has caused industry leaders to admit that “nobody is making money off U.S. natural gas exports anymore.”

A similar trend has affected large-scale mining:The net profit margin of this industry decreased from 25 percent in 2010 to four percent in 2013, before decreasing even further to negative 26 percent in 2015.”

The financial sector — that is, the big banks — lent billions to energy and extractive industries to build out infrastructure. It was a risk based on the projection that energy prices would continue to climb. Given razor-thin profit margins in increasingly mechanized, computerized global commodity production, investors rolled the dice on extractivism.


Indigenous communities in the crosshairs

And now they’re all up to their ears in debt. Because of the massive debt in the energy and extractive industries, there is continuing pressure to increase production. Companies are pressed to make use of new infrastructure even while prices are low, in order to meet their obligations with financiers.

Here is where indigenous communities come in. The World Bank notes that indigenous people inhabit or use around 25 percent of the world’s surface area, and this area holds about 80 percent of the world’s biodiversity. These are precisely the areas where extractive industries are trying to set up shop.

Indigenous peoples have lived on land for millennia that is now considered “resource rich.” Their cultures, traditions and livelihoods have been developed and shaped by an intimate co-existence with other species and the land. Yet indigenous culture is not what brings them into conflict with big capital. Rather, these are the peoples whose traditional territories are being targeted in the latest wave of profit seeking. And, as they have done since Christopher Columbus set foot on Taino territory in the Caribbean, they are fighting for their lives.

According to sociologist William Robinson, indigenous communities “constitute a frontal challenge to transnational corporate plunder in Latin America.” In light of the protests at Standing Rock, we could add North America as well. In his 2008 book, Latin America and Global Capitalism, Robinson argues that indigenous struggles in Latin America are “a leading edge of popular class mobilization.”

We’ll use an extended excerpt from Robinson here:

“The indigenous movement represents a threat to transnational capital because indigenous communities block access to land and natural resources under indigenous custodianship. Collective ownership of land and administration of collective resources, participatory democracy within indigenous communities, a cosmology and value system that is socialist…in essence, are anti-theses of global capitalism. The fundamental indigenous notion of mother earth as something that cannot be ‘owned’ much less privatized, and which must be respected and sustained, is diametrically opposed to global capitalism’s drive to commodify and plunder nature.”    

This is not, then, a clash of cultures. It is a clash of economic models — one sustainable and participatory, and the other predatory and exclusionary. And it’s becoming clearer that the latter cannot or will not allow the former to coexist.


Complicating indigenous rights

Following scholars like Robinson and growing ranks of activists and institutions, at CUSLAR we support indigenous communities’ claims to ancestral territories and right to continue their way of life.

Analyzing the global economic context in which indigenous communities find themselves fighting to defend life and livelihood, means recognizing the exploitative nature of the current economic system.

It means recognizing in analysis and practice that indigenous struggles arise alongside others in the world today, such as: the Michigan Welfare Rights Organization’s demand for the right to water in Detroit and Flint, Michigan, USA; Abahlali baseMjondolo’s fight for housing and dignity in South Africa; the North Carolina, USA Moral Mondays Movement for rights at the state level; the struggle of the Indian poor people’s movement, Ekta Parishad, to reclaim land, water and forests; and many others.

There are seemingly progressive forces who would use a discourse of “indigenous rights” to divide the poor and dispossessed of the world into more isolated and conquerable identities: for example, pitting indigenous against non-indigenous, and the rural poor against the urban poor. Non-indigenous campesinos and the rural poor are often blamed for dispossessing indigenous peoples from their lands. This narrative, however, does not take into account the economic shifts referred to above. Many who encroach on indigenous territories are poor farmers who were themselves displaced by transnational agribusiness, forestry and mining industries.

Charles Hale argues that the partial granting of indigenous rights and recognition of cultural pluralism can actually serve neoliberal reforms. He documents what he calls “multiculturalism as containment” at work in Central America. This is the practice of neutralizing potential opposition by granting “special rights,” often to indigenous groups, while instituting business-friendly reforms. Containment can mean granting indigenous groups the legal ownership or control of part of the group’s ancestral territory while opening the rest to large-scale mining and privatization of coastal property, for example. Many indigenous groups resist these legal arrangements, saying they do not seek the legitimacy of a state to continue to exist on their ancestral lands that have been reclassified or stolen outright.

Indigenous communities must make difficult decisions as they maneuver among a complex web of state, private and civil society actors, none of whom have a particularly rosy history of supporting native interests. The degree to which they resist or cooperate with the settler institutions must be their decision.

So I offer no easy solutions, conclusions or recipes to follow. If this piece is to make a contribution, may it be one of connecting the dots and posing big questions.

How do local conflicts and protests around specific issues connect to broader economic forces?

How can our strategies reflect an understanding of a global economic system that affects different groups differently but ultimately creates poverty, inequality and environmental degradation?

How can we build movements based on relationships that cross traditional lines of division, and insist that no segment of the global poor and dispossessed be cut off from the others?


Tim Shenk is the Coordinator of the Committee on U.S.-Latin American Relations (CUSLAR), based at Cornell University in Ithaca, New York, USA.


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