January 26, 2023
Ithaca, NY | 30°F


Foreign investments often prove harmful

Following up on journalist Naomi Klein’s visit to Ithaca College and her mention of the recent earthquake in Chile and problems with “shock” therapy-style reconstruction, it may be timely to discuss in greater depth what the presence of American and other foreign corporations in Chile have meant to the country and its people. People often assume that bringing economic development to developing nations is a good way to tackle poverty and other problems, without considering the ways in which it can be bad.

After a violent U.S.-backed coup d’etat by military forces against democratically-elected Salvador Allende on Sept. 11, 1973, neoliberal economics took strong root in Chile and then in much of the developed and developing world. During and after the authoritarian rule of General Augusto Pinochet (1973-1989), the obsession of Chilean political elites (even center-left parties) with maintaining a favorable investment climate for economic growth at all costs led to opening the country to foreign companies, free trade deals and a development model based on exports and heavy extraction of natural resources like timber and copper. Though poverty has diminished, this has been at the cost of environmental damage and citizenship rights. Ecological damage, such as the decimation of native forests and contamination of wild lands, has only been addressed via executive-dominated institutions that ensure the “fast-track” approval of corporations’ own environmental impact assessments.

Hundreds of indigenous families have been displaced or forced to sell their lands to multinational corporations, with explicit approval of the government. As a result, Chile’s most important resources are now controlled by multinational corporations or by the domestic elites, in a repeat of earlier eras. For instance, the seven largest timber — mostly eucalyptus and pine — companies in Chile (some of which are U.S.-owned, including Simpson Paper and Scott Paper) own 2 million hectares of land, while the indigenous have painstakingly managed to recover 32,000 hectares through direct activism since the early 1990s. The problem is likely to intensify. Newly elected president Sebastián Piñera, a businessman from a rightist political party, already proposed a bill to Congress that delineates substantial tax breaks for businesses that take part and certainly profit in the reconstruction efforts.

Besides increasing the levels of inequality in the country, the manipulation of institutions by political elites seeks to depoliticize the citizenry. Yet indigenous and other groups have mounted diverse protest strategies and alliances with other non-state actors, including human rights groups, environmental groups and academics, in order to uphold the rights they have obtained throughout their struggles. Though the alliances are difficult at times, this citizen activism thrives on the autonomous political agency of groups that challenge the profound inequalities that exist in Chile. This bottom-up activism is also seen in the struggle of 30,000 Amazonian indigenous from Ecuador against U.S. giant Chevron/Texaco for the huge water, air and land contamination from its crude oil extraction in the Ecuadorian jungle during a span of three decades (1964-1990s). This battle is currently being fought in national and international legal arenas and has involved a number of alliances between the indigenous and global environmental organizations, human rights lawyers and social justice advocates against a powerful conglomerate of corporate representatives of Chevron in the U.S.

Though the connections between our own lives in the developed world and the indigenous, environmental and social justice struggles in Latin America and elsewhere are not so easily grasped, they are there. By raising awareness and dialogue about these matters, we can hope to one day address them better.

Patricia Rodriguez is an assistant professor of politics. E-mail her at prodriguez@ithaca.edu.