Development

A snapshot of growth-led development in Delhi-NCR, India. Photo by the author.

by Vandana

The term ‘development’ perhaps needs no introduction. To develop is to improve the conditions in which we live. But what should be the path of development? Can there be only one way to develop? What are the prevalent ways of thinking about development and what have they meant for the majority of people in the world? The dominant means of development have largely been counterproductive, wreaking ecological damage and social inequality in most parts of the world. To understand where to go from here, it is crucial to understand that development processes and the goals of prosperity are politically determined.

The dominant means of development have largely been counterproductive, wreaking ecological damage and social inequality in most parts of the world.

The modern model of development grew out of the end of the colonial period, when colonial empires assumed the duty of developing the former colonies. Since then, colonial-era power relations have continued to play out under the guise of economic development. Institutions like the World Bank and the International Monetary Fund (IMF) formed in the 1940s with the promise of stabilizing the economy and rebuilding war-torn Europe. Their strategies centered Gross Domestic Product (GDP) as a key indicator of development. At the same time, with their deep-seated colonial ambitions, the triumphant Allied Forces—France, Great Britain, the United States, and the Soviet Union—came to define development. US President Harry Truman used the word ‘underdeveloped’ for the first time in his inaugural address in January 1949, dividing the world according to regional poverty and prosperity. High levels of poverty coincided with low levels of industrialization, bolstering the belief that Western-style development would be inevitable for these ‘underdeveloped’ countries. 

Countries like Britain, Belgium, France, Germany, and later on the US, saw an improvement in living conditions as a result of the Industrial Revolution. At the same time, a hierarchical relationship developed between business owners and workers. Within this new relationship, peasants lost their relationship to the land and became workers who sold their labour in return for a wage. Increased production set the stage for mass consumption, which signaled improved access to material goods for the workers themselves. But the perceived success of the Industrial Revolution was mainly due to the extractive colonial expeditions that boosted Western economies through the supply of enslaved people and the import of goods.  As this model of industrial production proved its ability to generate an abundance of profits and products, it came to serve as a paradigm for development around the globe. By the mid 20th century, many countries in Asia, Africa, and South America were finally liberated from colonial rule, but pursued this Western model of development due to its perceived success. 

In the 50s and 60s, dominant economic theory emphasized the need for countries to modernize by moving their labour force away from agriculture and towards sectors like manufacturing and services. This was called ‘structural transformation,’ and was made popular by the works of economists W. Arthur Lewis and Walt W. Rostow. So-called ‘primitive’ sectors like agriculture underwent a complete overhaul to improve productivity, efficiency, and incomes. This theory of development—which proposed that GDP growth would lead to the improvement of living conditions—faced a challenge in the 70s and 80s. The ‘Limits to Growth’ report, published in 1972, brought ecological concerns to the forefront, while environmental movements gained momentum all around the world. The report argued that unlimited material and population growth would not be possible because the planet’s resource pool is limited. By the end of the 1980s, the United Nations released ‘Our Common Future,’ a report that gave rise to the idea of sustainable development. The Sustainable Development Goals (SDGs), launched in 2015, are based on this report’s definition of sustainability. 

Another framework, called the capabilities approach, proposed by Amartya Sen and Martha Nussbaum, suggested expanding the scope of existing goals of poverty alleviation programs. By expanding the focus beyond income improvement alone, the capabilities approach proposed that an expansion in the opportunities and freedoms available to those experiencing poverty is essential for overall development. This approach eventually led to the conception of the Human Development Index—a measure of whether a country is capable of ensuring good health, education, and income for its residents. However, while the goals of development expanded, the mechanism for achieving them—GDP growth—largely continued unscathed.

Proponents of growth-centric economic development—namely world leaders and policymakers—argue that access to healthcare, education, and basic freedoms will grow once incomes begin to grow. They also assume that economic growth based on the principles of the free market—which had triumphed by the 1980s—will provide solutions to ecological degradation. The claim made in ‘Our Common Future’ that ‘poverty places unprecedented pressures on the planet’s land, water, forests, and other natural resources,’ brought the alleviation of poverty to the center of sustainability and human development discourse. 

In the past few decades, poverty alleviation programs have helped move millions of people out of extreme poverty, but they have not done much to increase the freedoms or opportunities afforded to them. This is due to several reasons. First, the threshold which determines extreme poverty is set very low, at an income of less than 2 dollars a day. Any movement above this level does not guarantee an improvement in people’s lives. Second, World Bank data confirms that the poverty reduction rate has slowed down recently, and that the absolute number of people living below the poverty line has barely declined since the 1990s despite the goals of these programs. The third, and most important problem lies in the relations of production that this path of development creates as it actualizes.

Growth-driven development triggers a process of dispossession. It plays out through the loss of access to land and resources and through the experience of the environment’s continuous degradation.

In the case of India, this path of development has led to a significant change in land use, from forestry and agriculture to industry and mining. It has also altered human-nature relations and power relations between the State, the market, and communities. This shift has triggered a process of dispossession that plays out in two ways: one, through the loss of access to land and resources (soil, water, forest, foliage, etc.), and second, through the experience of the environment’s continuous degradation. In response, people move out of rural agricultural areas and migrate to industrialized cities with the hope of earning higher incomes. However, the work they find does not necessarily ensure good health, access to education, or the ability to make savings. With neither the private sector nor the State investing in programs that provide decent living conditions, the majority of the population is left feeling betrayed and stranded. This dissatisfaction has given rise to numerous resistance movements. The Chipko movement (1973), Narmada Bachao Andolan (1985), Niyamgiri Suraksha Samiti (2003), and Chhattisgarh Bachao Andolan (2009) are a few examples of movements that have resisted the crucial features of the mainstream development model like the construction of big dams and mining projects. These struggles foreground the underlying violence of growth-driven development. 

It’s time to rethink the idea of development, and to create alternative relationships to production.

These conflicts among communities and different agents of development—namely, the State, NGOs, and private industries—have deepened in the recent past, indicating the growing desperation among all stakeholders. The sharp increase in the level of inequality in the past three decades confirms that this development model only supports the interests of business owners and landowners at the expense of workers and the environment. It’s time to rethink the idea of development, and to create alternative relations of production. The future of development thought must focus on the creation of more meaningful and ecologically sensitive work. It should give more space to the knowledge and ideas of the subaltern groups in India—the Dalits, bahujans and adivasis—in defining the idea of sustainability. For development to truly deliver on its promise—the betterment of life for all—it must engage a multidimensional understanding of poverty. As we’ve learned, poverty manifests not only through financial hardship, but also through the loss of access to life-sustaining resources, the degradation of one’s environment, lack of healthcare, diminishing leisure time, and a scarcity of meaningful work for the majority of people in the world. A new approach to development must address the increasing precarity in the lives of people confronted with industrialization and conservation policies.  

Further resources

Philip Alson, Philip Alston Condemns Failed Global Poverty Eradication Efforts, July 2020.
A recent report and commentary by the United Nations Special Rapporteur on extreme poverty and human rights (2014-2020), on the false promise of the existing approach toward poverty alleviation.

Demaria, F., & Kothari, A. (2017). The Post-Development Dictionary agenda: paths to the pluriverse. Third World Quarterly, 38(12), 2588-2599.
A crucial resource for understanding the conceptualization of future development paths. 

Shiva, V. (2013). How economic growth has become anti-life. The Guardian, 1.
A critical overview of the growth-driven economic model that elucidates how growth-driven development impoverishes farmers. 

Escobar, A. (2011). Encountering development: The making and unmaking of the Third World (Vol. 1). Princeton University Press.
This book offers a political understanding of the process of development. It describes the ways in which expert-led knowledge originating in the West came to define poverty and development in the so-called developing world.    

Gerber, J. F., & Raina, R. S. (Eds.). (2018). Post-growth thinking in India: Towards sustainable egalitarian alternatives. Orient Blackswan.
This book discusses post-growth theories, from the perspective of a developing nation. It argues that moving beyond growth-led thinking is not a privilege of the Global North/developed world but also a requirement for the Global South/developing world. 

Goldman, M. (2005). Imperial nature: The World Bank and struggles for social justice in the age of globalization. Yale University Press. 
This book explains how the projects funded by the World Bank really work at the ground level and why community activists struggle against its brand of development .  

On resistance and alternative ideas of wellbeing:

Transformations – Wellbeing by Kalpavriksh Environment Action Group, September 2020.
The story of Korchi taluka, in the Gadchiroli district of Maharashtra State in India, on creating transformative alternatives to challenge mainstream ideas of development.   

A folk song sung by the subaltern resisting industrialization in India. Released on Youtube in 2018.
This song is inspired by a song by Bhagwan Majhi, leader of adivasi struggle against bauxite mining in Kashipur, Odisha.

A Ted Talk by Ashish Kothari held at FLAME University, Pune, Maharashtra. March 2019.
The founder of Kalpavriksh speaks on alternative theories of development.

Vandana is Lecturer at Jindal Global Business School, in Jindal Global University, Sonipat, India. She is about to finish her PhD at Indian Institute of Management Calcutta with specialization in Public Policy and Management. As a development professional working with an international NGO prior to her doctoral studies, she has extensive experience in working with government agencies, NGOs and indigenous communities. Her current research works lie in the intersection of multiple fields of study like Political Ecology, Sustainable Development and Ecological Economics with a focus on food systems and tribal communities in India. Twitter: @Vanni_vandana

Extractivism

by Diana Vela Almeida

La versión en español de este artículo está disponible aquí.

One could simply define extractivism as a productive process where natural resources are removed from the land or the underground and then put up for sale as commodities on the global market. But defining extractivism is not really this easy. Extractivism is related to existing geopolitical, economic and social relations produced throughout history. It is an economic model of development that transnational companies and states practice worldwide and that can be traced back more than 500 years all the way to the European colonial expansion. You can’t tell the history of the colonies without talking about the looting of minerals, metals, and other high-value resources in Latin America, Africa, and Asia—looting that first nourished demands for development from the European crowns and later from the United States, and more recently also from China.

Today this model of accumulation of wealth remains a key part of the structure of a globally dominant capitalistic system—a system where power is in the hands of those who control money and industry—that has extended the extractive frontier to the detriment of other forms of land and resource uses. Such exploitation has also appropriated human bodies in the form of slaves or, more recently, as labor-intensive precarious workers. Extractivism is entirely tied up with exploitation of people.

Today’s extractive industries such as gas, oil, and mining have an egregious reputation of violating human and environmental rights and supporting highly controversial political and economic reforms in poor countries.

Expanding the global frontiers of extraction

Since the mid-20th century, extractive frontiers have expanded around the planet as global demand for commodities has increased. Most non-industrialized countries (but also industrialized countries such as Norway, Canada, and the US) have activated their primary sectors of production to exploit landscapes that were previously inaccessible, such as in the case of fracking and tar sands extraction in the Artic or in the open sea.

Since the mid-20th century, extractive frontiers have expanded around the planet as global demand for commodities has increased.

The central idea behind such state-sanctioned extractivism is that extractive projects are strategic ventures for national development in resource-rich countries that can thereby strengthen their comparative economic advantages—that is, their economic power relative to the economic power of other nations. In other words, poor nations can exploit their natural resources as a means for economic growth, a source of employment, and ultimately a tool for poverty reduction.

This idea has been ingrained for many years in developing countries, and yet these countries have historically been unable to convert resource wealth into so-called development. Indeed, in some places that are rich in natural resources—typically in African countries with large oil or mineral deposits—there is an inverse relationship between poverty reduction and economic performance. This means that a lot of extractive activity is coupled with high levels of poverty, economic dependency on capital flows from developed countries, and political instability. This phenomenon is known as the “resource curse.”

In the last 20 years, several governments in Latin America, Africa, and Asia have challenged the “resource curse” by asserting national control over new forms of primary-production extractive industries. These are oriented around intensive and large-scale projects that cover previously inconceivable environments (again, like off-shore mining or fracking), as well as new forms of economic exploitation such as the agroindustry, fisheries, timber extraction, tourism, animal husbandry, and energy megaprojects.

These endeavours require national policy reforms. In Asia and Africa, extractivist national policies adhere to what is called “resource nationalism” and include the total or partial nationalization of extractive industries, renegotiation of contracts with foreign investment, increased public shareholding, new or higher taxation to expand resource rent, and value-added processing of resources.

In Latin America, the commodity boom at the beginning of the 2000s, marked by the increase in commodity prices together with transnational investments, led to great economic growth in what is called “neoextractivism”. Neoextractivism is a relative of resource nationalism and its emergence coincided with the rise to power of several progressive governments in the region that also seized more state control over natural resources within their national boundaries.

Advocates of neoextractivism claimed that new extractive practices would be “environmentally friendly” and “socially responsible”, thereby minimizing the disastrous impacts of extractivism as it was practiced throughout colonial and neoliberal history. Despite this, extractive industries have expanded and continue to expand in new frontiers with the negative effects of dispossessing people from their land, subjugating communal values to the values of extraction-driven development, and disrupting social structures, territories, and alternative forms of life.

In the debate over extractivism, there is no consensus about how to solve the problems caused by this mode of development. Some people think that extractivism should be viewed positively because of the economic growth and increased public spending that was accomplished during the early 2000s in Latin America. Others emphasise that most of the wealth produced is siphoned out of the producer countries to transnational investors, while negative impacts remain locally or regionally. And from the perspective of those who are directly affected by extractive industries, it is clear that economic revenues are not translated into socially just well-being and that these revenues are generated through the destruction of their lives and their land.

Not a neutral economic model

To further understand the complexity of the problem with extractivism, let us look at three interrelated dimensions of what makes up the extractivist economic model—and then consider how to go beyond the economic considerations of extractivism.

First, for extractivism to work, any biophysical “nature” becomes exclusively framed as a natural resource. That is, nature is conceived as an input (e.g. a resource like oil, soil, or trees) for the production of a commodity (e.g. gas, food, or timber). This simplifies the multiplicity of socionature relations with which such an economic model is entangled.  

When thinking about the environmental impacts of extraction, we surely need to consider what will happen to other elements in nature that are interconnected with the extracted resource, including water, air, soil, plants, and human and non-human animals. A cascading effect of environmental change indeed often occurs in ecosystems that are impacted by extraction, and thus interrelated elements of nature become irreversibly altered.

Second, extractive projects are normally located in or close to marginal, poor, and racialized (i.e. conceived as non-white) populations. Extractivism arrives with promises of improved life conditions, more jobs, and infrastructure development. But large-scale extractive industries are by no means necessarily interested in forwarding local employment and improving the livelihood of people. Instead, experience tells us that they often serve to diminish alternative economic activities and disrupt existing community networks and social structures. Extractive industries have frequently dispossessed people of land rights with the result of cultural disruption and violence.

Demands for social and environmental justice revolve around claims that the social and environmental costs of extractivism are higher than any economic benefit.

Marginal populations still bear the brunt of the social costs of extractivism and don’t necessarily reap any benefits. In response to this, demands for social and environmental justice revolve around claims that the social and environmental costs of extractivism are higher than any economic benefit but that these costs are not accounted for in the decisions.

New demands from feminist movements and women Indigenous defenders highlight the relation between extractivism and patriarchal and racial violence and how this disproportionately impacts women. Examples are the increase in prostitution and sexual violence in communities restructured by extractivism and the externalization the social costs—the transfer of responsibilities for caring that are pivotal for the functioning of any economy—to women. As women are primarily responsible for the reproduction of life, they are highly vulnerable to the rupture of community or loss of territory. Because of that, women organizations have become the frontline defenders of their territories in the resistance against extractivism.

Finally, extractivism is a highly political endeavour that maintains a model of capital accumulation and destruction. It has led to the increase of socio-environmental conflicts around the globe, involving measures by states and industry to control resistance and criminalize social protest.

So, in sum, one should define extractivism as far from neutral or apolitical; it is an economic model that reflects a specific political position that relies on a given, predefined understanding of growth-oriented development as the ultimate good. Extractivism thereby reinforces political-economic arrangements that are biased against marginalized people who are deprived of their power to influence political decisions.

From an extractivist political perspective, resistance against extractivism is naïve, obstinate NIMBYism (Not in My Backyard-ism), or ignorant of the economic needs of the countries that could be “developed” by extractive projects. In reality, actions of resistance are contestations that challenge the dominant extractivist worldview and the uneven power relations between actors who decide, actors who benefit, and actors who bear the negative consequences of extraction. Under these conditions, extractivism is in complete contradiction to social and environmental justice and care for nature and life itself.

All in all, extractivism as a single model of production remains one of the most expansionist global enterprises and it squashes any other ways of living with the land. The 500 years’ legacy of extractivism is part of ongoing imperialist interest from industrial powers in securing access and control over natural resources around the globe, even in today´s green energy transitions. As such, extractivism stands in sharp contrast to flourishing alternative forms of land use and livelihoods.

Opposition to extractivism does not mean that people can’t use a resource at all and by no means implies a binary choice between either extractivism or underdevelopment. Instead, anti-extractivism is about focusing on what type of life we want to achieve as a whole and how we build global systems of justice. We can nourish ourselves from several non-extractivist modes of production and reproduction that center on a dignified life for all.  

Further resources:

Bond, P. (2017). Uneven development and resource extractivism in Africa. In Routledge Handbook of Ecological Economics (pp. 404-413). Routledge.

  • This article explains the expansion of neoliberal environmentalism in the extraction of non-renewable natural resources in Africa. The author argues that if accounting the social and environmental costs, African countries end up poorer than before extraction.

Burchardt, H. J., & Dietz, K. (2014). (Neo-) extractivism–a new challenge for development theory from Latin America. Third World Quarterly35(3), 468-486.

  • An overview of key debates of ‘Neo-extractivism’ and the role of the state in Latin America.

Engels, B., & Dietz, K. (Eds.). (2017). Contested extractivism, society and the state: Struggles over mining and land. Palgrave Macmillan.

  • A presentation of several case studies around the globe on the conflicts between extractivism and other land uses.

Galeano, E. (1997). Open veins of Latin America: Five centuries of the pillage of a continent. NYU Press.

  • A classic essay on the history of the looting of natural resources, colonialism and uneven development in Latin America from the 15th century to the 20th century.

Svampa, M. (2015). Commodities consensus: Neoextractivism and enclosure of the commons in Latin America. South Atlantic Quarterly114(1), 65-82.

  • A critical analysis of neo-extractivism, capital accumulation, environmental conflicts and development. It ends up discussing proposals around ideas of post-extractivism and transitions.

Diana Vela Almeida is a postdoctoral fellow at the Department of Geography at the Norwegian University of Science and Technology. Diana combines political ecology, ecological economics and feminist critical geography to study extractivism, neoliberal environmentalism and socio-environmental resistance. Contact: diana.velaalmeida[at]ntnu.no

Why we need alternatives to development

by Ashish Kothari, Ariel Salleh, Arturo Escobar, Federico Demaria, and Alberto Acosta

The seductive nature of development rhetoric, sometimes called developmentality or developmentalism, has been internalized across virtually all countries. Decades after the notion of development spread around the world, only a handful of countries that were called ‘underdeveloped’ or ‘developing’, now really qualify as ‘developed’. Others struggle to emulate the North’s economic template, and all at enormous ecological and social cost. The problem lies not in lack of implementation, but in the conception of development as linear, unidirectional, material and financial growth, driven by commodification and capitalist markets.

Despite numerous attempts to re-signify development, it continues to be something that ‘experts’ manage in pursuit of economic growth, and measure by Gross Domestic Product (GDP), a poor and misleading indicator of progress in the sense of well-being. In truth, the world at large experiences ‘maldevelopment’, not least in the very industrialized countries whose lifestyle was meant to serve as a beacon for the ‘backward’ ones.

A critical part of these multiple crises lies in the conception of ‘modernity’ itself – not to suggest that everything modern is destructive or iniquitous, nor that all tradition is positive. Indeed, modern elements such as human rights and feminist principles are proving liberatory for many people. We refer to modernity as the dominant worldview emerging in Europe since the Renaissance transition from the Middle Ages to the early modern period. The cultural practices and institutions making up this worldview hold the individual as being independent of the collective, and give predominance to private property, free markets, political liberalism, secularism and representative democracy. Another key feature of modernity is ‘universality’– the idea that we all live in a single, now globalized world, and critically, the idea of modern science as being the only reliable truth and harbinger of ‘progress’.

Among the early causes of these crises is the ancient monotheistic premise that a father ‘God’ made the Earth for the benefit of ‘his’ human children. This attitude is known as anthropocentrism. At least in the West, it evolved into a philosophic habit of pitting humanity against nature; it gave rise to related dualisms such as the divide between humanity and nature, subject and object, civilized and barbarian, mind and body, man and woman. These classic ideological categories both legitimize devastation of the natural world, as well as the exploitation of sex-gender, racial and civilizational differences.

There is no guarantee that development will resolve traditional discrimination and violence against women, youth, children and intersex minorities, landless and unemployed classes, races, castes and ethnicities. As globalizing capital destabilizes regional economies, turning communities into refugee populations, some people cope by identifying with the macho power of the political Right, along with its promise to ‘take the jobs back’from migrants.. A dangerous drift towards authoritarianism is taking place all over the world, from India to USA and Europe.

Development and sustainability: matching the unmatchable

The early twentieth-century debate on sustainability was strongly influenced by the Club of Rome’s Limits to Growth argument. Regular conferences at a global level would reiterate the mismatch between ‘development and environment’, with the report Our Common Future(1987) bringing it sharply into focus. However, the UN and most state analyses have never included a critique of social structural forces underlying ecological breakdown. The framing has always been on making economic growth and development ‘sustainable and inclusive’ through appropriate technologies, market mechanisms and institutional policy reform. The problem is that this mantra of sustainability was swallowed up by capitalism early on, and then emptied of ecological content.

In the period from 1980s on, neoliberal globalization advanced aggressively across the globe. The UN now shifted focus to a programme of ‘poverty alleviation’ in developing countries, without questioning the sources of poverty in the accumulation-driven economy of the affluent Global North. In fact, it was argued that countries needed to achieve a high standard of living before they could employ resources into protecting the environment. This watering down of earlier debates on limits opened the way for the ecological modernist ‘green economy’ concept.

At the UN Conference for Sustainable Development in 2012, this hollow sustainability ideology was the guiding framework for multilateral discussions. In preparation for Rio+20, UNEP published a report on the ‘green economy’, defining it ‘as one that results in improved human well-being and social equity, while significantly reducing environmental risks and ecological scarcities’. In line with the pro-growth policy of sustainable development advocates, the report conceptualized all living natural forms across the planet as ‘natural capital’ and ‘critical economic assets’, so intensifying the marketable commodification of life-on-Earth.

The international model of green capitalism carried forward in the declaration Transforming Our World: The 2030 Agenda for Sustainable Development reveals the following flaws:

  • No analysis of how the structural roots of poverty, unsustainability and multidimensional violence are historically grounded in state power, corporate monopolies, neo-colonialism, and patriarchal institutions;
  • Inadequate focus on direct democratic governance with accountable decision-making by citizens and self-aware communities in face-to-face settings;
  • Continued emphasis on economic growth as the driver of development, contradicting biophysical limits, with arbitrary adoption of GDP as the indicator of progress;
  • Continued reliance on economic globalization as the key economic strategy, undermining people’s attempts at self-reliance and autonomy;
  • Continued subservience to private capital, and unwillingness to democratize the market through worker–producer and community control;
  • Modern science and technology held up as social panaceas, ignoring their limits and impacts, and marginalising ‘other’ knowledges;
  • Culture, ethics and spirituality sidelined and made subservient to economic forces;
  • Unregulated consumerism without strategies to reverse the Global North’s disproportionate contamination of the globe through waste, toxicity and climate emissions;
  • Neoliberal architectures of global governance becoming increasingly reliant on technocratic managerial values by state and multi-lateral bureaucracies.

The framework of Sustainable Development Goals (SDGs), now global in its reach, is thus a false consensus

We do not mean to belittle the work of people who are finding new technological solutions to reduce problems, for instance, in renewable energy, nor do we mean to diminish the many positive elements contained in the SDG framework. Rather, our aim is to stress that in the absence of fundamental socio-cultural transformation, technological and managerial innovation will not lead us out of the crises. As nation-states and civil society gear up for the SDGs, it is imperative to lay out criteria to help people identify what truly is transformative. These include a shift to well-being approaches based on radical, direct democracy, the localization and democratization of the economy, social justice and equity (gender, caste, class etc), recommoning of private property, respect for cultural and knowledge diversity including their decolonisation, regeneration of the earth’s ecological resilience and rebuilding our respectful relationship with the rest of nature.

This article is an excerpt of the introduction to the forthcoming book Pluriverse: A Post-Development Dictionary by Ashish Kothari, Ariel Salleh, Arturo Escobar, Federico Demaria, and Alberto Acosta (editors).

Ashish Kothari is with Kalpavriksh and Vikalp Sangam in India, and co-editor of Alternative Futures: India Unshackled.

Ariel Salleh is an Australian scholar-activist, author of Ecofeminism as Politics and editor of Eco-Sufficiency and Global Justice.

Arturo Escobar teaches at University of North Carolina, and is author of Encountering Development.

Federico Demaria is with Autonomous University of Barcelona, and co-editor of Degrowth: A Vocubalary for a New Era.

Alberto Acosta is an Ecuadorian economist and activist, former President of the Constituent Assembly of Ecuador.

Is tourism a poverty trap?

 

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Selling wares in Sapa, northern Vietnam. Source: Flickr

by Geert Vansintjan

I am walking through town in the remote and charming mountain region in Vietnam, looking for the market. A young woman helps us out. She walks part of the way to the market, and we have a conversation on what brings us there, and what she does for a living. She works in the kitchen in one of the hotels. Her mother is in charge of the kitchen. She is off to buy groceries. What will be her future? In any major city of Vietnam, a bright woman like her with this level of English fluency would be expected to study. Here, I expect her to work at the hotel for most of her life and move up the hierarchy until she fills the place of her mother.

Tourism is a global phenomenon, an important economic sector, and it shapes how people promote their own national identity. Most articles on the economic effects of tourism look into the income it generates or the investment it brings to a region, the destruction and environmental damage that it causes, whether income from tourism is sufficiently returned to communities where tourism is landing, and the effects of tourism on public life and identity politics.

This article focuses on the income that will not be generated when there is a priority for economic development in the tourism sector because tourism crowds out other options.  A region’s dependency on tourism inhibits development in other sectors—sectors with more productivity and development potential.  

The Belgian coast. Source: Flickr
The Belgian coast. Source: Flickr

Single-use infrastructure

The first highway in Belgium was finished in 1956 and ran from Brussels, the capital, to Ostend, the place of the Royal Holiday Home on the coast. The highway was constructed to facilitate the summer holiday migration from the cities to the coast, as well as the flows of international tourism embarking to London from the port of Ostend. Developers constructed a wall of high rise apartment blocks along the coast destroying the dunes and wildlife. These investments did not lead to a more diversified economy and the coastline stayed a backwater, even with all this building and tourism. Still in 1980, the region needed special European funding for its development, notwithstanding its prime location between important ports in Belgium and France.

Due to the seasonal nature of tourism the highway was, and is, never wide enough in peak season, while below capacity during the low season. The same goes with all infrastructure: hotels, houses, high-rises, shops, restaurants, roads. As full capacity is needed during important stretches of time, alternative uses are difficult.

Often public infrastructure for tourism promotion is only singly-use: a highway to an economically unimportant city, a cable lift, a hotel. The private and public infrastructure for tourism is often exploitative: building a hotel in a prime landscape makes the landscape less prime for others, and inflation on investment leads to it becoming a typical tourist trap, as in Niagara falls, where the landscape is only a backdrop for tourist fleecing.

 A region’s dependency on tourism inhibits development in other sectors—sectors with more productivity and development potential.

As a lot of private infrastructure for mass tourism is foreign or large, the focus is on fast returns on investment, without much attention to the needs and potential of the local communities and the local economy. The returns flow back to the investors, and the unschooled local population stagnates.

 

Low return on investment in education

In an economy dominated by tourism, the return on education is low, keeping people in a low income trajectory. Jobs are in hospitality or sales sectors, with limited educational needs, and wages are never high. Young people find a job, especially during high season, with a lot of unemployment between peaks. Why study? You can find a job without much schooling and have a lot of pocket money or even start a family. There is an advantage to speak some languages and know some basic skills, but higher education is not really needed. Even if higher education is available (which is often not the case) – there is no incentive to study for years instead of earning an income immediately.

The individual is stuck in a flat income trajectory, the family is stuck in a rut and the community is not developing.

Over a lifetime there is nearly no increase in productivity and salary. Service jobs require real skill—acquired by training or practice—but the limits on productivity are also real: you can only make a bed so fast (and honestly I cannot do it at all). The individual is stuck in a flat income trajectory, the family is stuck in a rut and the community is not developing.

As the employment options for higher education in the region are limited—and these jobs are often filled by people and employers coming from other regions—there are few role models for education. The role models for success would be rather the entrepreneur who, with luck and hard work, creates a successful business from scratch. It is fashionable to praise the entrepreneurial model, but for widespread growth, this maverick approach is definitely less reliable as a “one size fits all” solution than investment in human resources: education.

In industrial or postindustrial economies the return on investment in education is high. Unschooled labour is needed for the initial stages of industrialisation, but, very soon, schooled labour gets better opportunities. The menial jobs are done by immigrants from the periphery (yes the migrants from the poor, touristic regions). The difference in pay and status between a schooled and unschooled job is important enough to postpone income, marriage, and life until after university. Most industries suffer from Baumol’s cost disease: as wages rise in other industries, employees start to expect rising income, in line with the other sectors. This way a sector with low productivity becomes uncompetitive for labour and sheds jobs. The invisible hand at work. When tourism is a dominant sector in a region is isolated from other industries and does not suffer this effect. Normally the tourism industry, with its low wages, should shrink compared to the rest of the economy. But in a tourist trap, the salaries stay where they are.

In regions dominated by tourism, emigration remains the most efficient way to lift anyone and their family into prosperity. Getting out of the region with the family is an escape towards higher productivity and higher education.

The tourist trap

Tourist areas are not leading towards a diversified, sustainable economy. The tourist is a captive market, and the drive for better quality of products or services is low. The tourist will buy the only junk they can get once they are trapped at the tourist attraction. The “development” towards a more sophisticated economy does not happen, the products are, and stay, crap. Indeed, this is why we call it a tourist trap. With all respect for the painstaking manual craftwork of the Indigenous people, most will never earn more than around a dollar a day, even when cheating the tourist whenever they can (as they should).

Tourism makes people—most often women—exhibits in a human zoo. A museum piece to look at, to stare at, or to give a penny for a picture.

When tourism is the dominant sector, most jobs will be in “service” functions—as a servant to outsiders. When the lure of tourism is some exotic ethnicity, even the core identity makes people—most often women—exhibits in a human zoo. A museum piece to look at, to stare at, or to give a penny for a picture.

In touristic areas women will often be forced into sex work and face exploitation from their handlers or abusive behavior from customers—and even harassment from the police. Like in mining towns, shipping ports, and military bases—where the economy revolves around the constant influx of strangers with a lot of money to spend—authorities look the other way or even participate in and profit from exploitation in the sex industry.

How do you build a sense of community in a village if in every bar, restaurant, and square there are many more strangers than neighbours?

Overall, mass tourism involves low esteem jobs, low-quality trinkets, and overcrowded public places with little space for the local community life. How do you build a sense of community in a village if in every bar, restaurant, and square there are many more strangers than neighbours?

 

The charming resource curse

Tourism is a “charming resource” based economy. It shares elements of natural resource based economies described in the study “Urbanisation without industrialisation“. In this study the authors explain that cities in a natural resource economy are ‘consumption cities’, in contrast to ‘production cities’ with a mix of industry, agriculture and services. The composition of the workforce, poverty prospects, and long term growth are all different for each kind of city. A region with an economy dominated by tourism has characteristics of consumption cities, and the prospects for long term balanced development with rising productivity are low.

Unbridled one-sided industrial development can have the same effect: polluting industries crowd out all other activities. However, modern urban development thrives on diversity and synergy: the better a city is at creating a living environment for workers, managers and students, the better it becomes at attracting industries. As a bonus, a city becomes more interesting for tourists when it is more livable. A modern city becomes more and more diversified as it becomes more successful. It is the complexity of the social and economic network that leads to its success.

 

Tourism within limits

The growing resistance to touristification in cities like Barcelona and Amsterdam shows that the core of the problem is understood by the populations involved.  As the conventional wisdom is that any development is good development, their resentment is normally ignored and ridiculed. However, cities with a “real” economy keep tourism within bounds. Sometimes they even revolt against it. The latest measures of the municipality of Barcelona show a revolt against tourism. In New York too, there is an ongoing debate to keep tourism within limits. Standards are proposed to limit the damage tourism does to a society and the environment.


Cities with a “real” economy keep tourism within bounds.

It is possible to maintain a proud identity and grow a developed and prosperous country, but not when tourism dominates. Japan has proven that it is possible, Singapore, France, and most European cities too. Tourists are welcome, but the city is there for the citizens, and the investments in the city are to make the quality of life better for their own population. Tourists enjoy these quality of live investments too, but they are not the main beneficiaries. This is possible if tourism is a sideshow, something mostly using available resources and adding income to local restaurants instead of being an economic focus in its own right.

To conclude, tourism should be considered as one option to complement other economic priorities that fully optimize the existing capacities of the physical, human, and economic infrastructure of a city or a region. Moreover, it can be a way to strengthen local identity and pay for maintenance of culture and beauty. It should not be pursued on its own as a gateway to economic and social development, because too many aspects of tourism skew the economy, present the local identity as “exotic” and act as a poverty trap.

Just as the one-industry city has been proven to be a bad idea for manufacturing or heavy industry, the one-industry region is a bad idea too, at least if that industry is tourism.

Geert Vansintjan is a development and humanitarian professional with field experience in Central and South Africa, Central America and Asia.