Extractivism refers to the extraction of immense volumes of natural resources that are exported with no or little value-added processing, to then be transformed into consumer goods for mass consumption. When this model is prioritized, elements central for more inclusive forms of development are frequently abandoned or sidelined.
Extractivism is not limited to mining, oil drilling, logging, industrial fishing, or industrial agriculture. It is also used to understand other activities such as bottling water and bioprospecting, as well as other means of energy production, including fracking, hydroelectric dams, and even large-scale wind power farms.
Some characteristics of the Extractive Model:
- It is promoted and enabled through a favourable political/legal framework.
- It has access to capital, including transnational, private or even national capital.
- A single or similar method of extraction is used in order to:
- Maximize yields – by price and cost,
- Minimize the time frame – by managing speed/duration/volume,
- With high technical efficiency, and
- With heightened competition in all respects.
- The chain of production is massive and directly or indirectly integrated with the primary product that is extracted. In other words, there tends to be a strong relationship between those who export the goods and those who import them to then convert them into consumer goods.
By virtue of the above:
- The environmental and social costs are high and extractive models are employed far too often at the expense of peoples’ lives and through the use of violence.
- Extractive projects tend toward monopolies over land ownership or other forms of territorial control.
- They compete with other activities, for example: competition between mining and agriculture.
- The costs are not just local. Resources are depleted, economic dependency on the rents from natural resource extraction, such as mineral extraction, tends to lead to disinvestment from other economic sectors, inflation in the value of a country’s currency tends to have negative repercussions on manufacturing sectors, and the authoritarian tendencies of governments tend to be aggravated.
More on the Mining Model
Source: Miguel Angel Mijangos Leal, “El modelo Extractivo”, Presentation made in Mexico City on November 22, 2013.