Fintech is being sold throughout the world as the new panacea to poverty, promising financing to anyone with a mobile phone. However, driven by investors and venture capitalists seeking short-term returns, it often leaves people and communities with unmanageable debt burdens and facing increasing poverty and vulnerability. The city of Maricá, Brazil, is pioneering a community-based model of Fintech. Could it point to a different path for addressing vulnerability and building long-term sustainable development?

For many of the world’s precarious workers, the COVID-19 pandemic led to immense financial stress and anxiety, particularly in cash-strapped low-income countries that could not afford to provide furloughs or stimulus payments. In the coastal town of Maricá in Brazil, however, locals had a different experience. During the pandemic, the municipality doubled the guaranteed monthly income to 300 mumbucas – a digital currency unique to the town – equal to roughly a third of Brazil’s minimum wage at the time.

Luciana de Souza Nunes, who works as a freelance massage therapist in Maricá, benefited greatly from this programme. ‘Even though I can only buy within the city, it helps a lot,’ she told El Pais.¹ ‘I use the mumbuca mainly at the supermarket and at the pharmacy, to buy the basics. With the money from work I pay the extra bills.’ The injection of money into the local economy also had wider benefits, as it sustained local businesses and prevented job cuts.

The municipality of Maricá is located in the greater Rio de Janeiro metropolitan area and is home to around 160,000 people. It has the good fortune of being situated inland from profitable offshore oil reserves. Since 2010, the left-wing municipality has used the revenues from both oil and gas exploration to fund one of the largest basic income experiments in the world.²

Under Maricá’s basic income programme, the Renda Básica da Cidadania (Citizen’s Basic Income, RBC), around a quarter of the city’s residents receives a monthly stipend of mumbucas equivalent to 170 Brazilian reals (US$33). Mumbucas are accepted by local businesses and retailers and can be used to pay for a range of services, but it is worthless outside the town’s borders. This model ensures that the stipends paid out by the municipality are spent locally and that the money stays in the town and helps promote local economic and social development. 

Upon its introduction, the so-called Maricá Model was met with hesitancy from the local population. ‘Only about 40 people signed up when it was created. As the programme grew, people began to believe,’ recounts José Carlos de Azevedo, who commands the municipality’s Solidarity Economy portfolio in conversation with El Pais.³ But over the years the model has proven its worth – even more so since 2018 due to the failure of the central government under President Jair Bolsonaro to meaningfully invest in poverty reduction and social development, as well as its weak response to the COVID-19 health crisis.

The Maricá Model is an important example of how grassroots and locally developed ‘fintech’ (financial technology) can be used for social development programmes offering direct support to those in need.

Photo credit: Prefeitura de Maricá/Flickr

The Maricá Model began as an economic, social and political development intervention heavily influenced by the Solidarity Economy movement in Brazil.⁴ The Maricá Model has not just survived the COVID-19 crisis, but appears to have emerged even stronger out of it.

Over the past few years there has been a wild-growth of fintech initiatives and start-ups around the globe proclaiming that they possess the power to address poverty and to promote sustainable and equitable local economic and social development. Almost none live up to their claims. The basic fintech model must, first, be described as investor-driven⁵ because it has evolved to overwhelmingly serve the interests of private investors and venture capitalists. Such fintech financial platforms have boomed in low-income countries, promising short-term gains for the poor and marginalized, including reduced costs of, and greater access to, many important financial services, such as credit, remittances, and payments. But in the medium-to-longer-term, they have failed to live up to their claims and have instead led to individual indebtedness, unviable, speculative, and short-lived enterprises and increased poverty, vulnerability and suffering. 

The Maricá Model is different in many respects and can best be described as a ‘people-centred’ fintech model. It shows how it is possible for basic fintech applications to be directly used to promote the common good rather than to generate profit. Put simply, the explicit aim of the Maricá Model is not to lavishly reward private investors, but to substantively address local poverty and rising inequality, promote sustainable local enterprise development, extend social justice through the retention and reinvestment of community-based wealth, and to enhance democratic participation in economic life.

The Maricá Municipality is one of four regional and local governments in Brazil – along with Niterói in the State of Rio de Janeiro, the municipality of Ilhabela in the State of São Paulo, and the State of Espírito Santo itself – that have opted to creatively use the royalties that flow from the oil and gas industry to endow a sovereign wealth fund.⁶ In 2019, up to 70% of Maricá’s municipal budget was financed by oil revenues.

While the exploitation of these new oil and gas reserves is certainly problematic in light of the climate emergency, it remains the case that marginalised communities like Maricá often have no other means to develop their local economies than by carefully using such natural resources.⁷ This is the case for many of the poorest communities in the underdeveloped regions of Brazil.

Fortunately, among some of these communities, we are witnessing a genuine desire to manage fossil fuel reserves in such a way as to provide a permanent economic and social benefit to the local populations.

Photo credit: Prefeitura de Maricá/Flickr

The mumbuca is regulated through the Mumbuca Bank, Maricá’s municipal community bank founded in 2013. It is based on a model of community development banks famously pioneered in the Palmeira neighbourhood of Fortaleza, a city in northern Brazil, which sought to promote a bottom-up Solidarity Economy. Banco Palmas (Palmas Bank) in Fortaleza was the first community development bank to introduce a local social currency to stimulate the economic and social development of marginalized communities. These local currencies are only accepted as legal tender within their own communities, and have evolved from actual paper bills like the palma in the year 2000 to digital currencies like the mumbuca in Maricá today.

For the circulation of the mumbuca the Mumbuca Bank relies on a digital payments platform called E-dinheiro.¹⁰ Launched in Palmeira in 2015, this platform is a community technological innovation that links the Palmas Bank with more than 40 community banks around the country that also use local digital currencies. Crucially, the links with other local digital currency programmes reinforces the sense of solidarity between the community banks.

But in Maricá, the municipality has taken the experiment a step further. Not only has it developed its own local digital currency, it also pays the RBC in mumbacas, injecting millions of the local currency into the local economy every month. In the short term, this cash injection underpins the local economy and addresses local poverty. In the long run, it aims to stimulate sustainable new enterprises serving unmet local needs.

The use of mumbuca in the business community continues to grow. Of more than 8,000 businesses registered at the Mumbuca Bank, over 70% received a payment in mumbuca and 67% used mumbuca to pay for their own raw materials and other intermediate inputs, utility bills and so on.

Finally, the Mumbuca Bank has in the last year expanded its offer of low-cost microcredit to local businesses, especially targeting those with the most potential to serve the local community, such as cooperative businesses. It also offers a credit line that is designed for home renovations and repairs.¹¹

Through its development company Codemar, the Maricá municipality also seeks to invest in more medium and long-term economic development, including funding and developing new enterprises linked to the oil and gas sector. To that end, Codemar has sought out a range of local and international partners to assist it in developing a technology-intensive local SME sector with the capacity to expand sustainably.

Progress in regards to this effort to promote sustainable local economic development was inevitably delayed by the COVID-19 pandemic, but the Maricá municipality’s vision remains to fund a wave of sustainable SMEs through the Mumbuca Bank. The aim is to advance the level of local innovation and technology development, as well as create more well-paying, high-skill and environmentally-friendly employment opportunities for locals.

The mumbuca digital currency and E-dinheiro payment platform fit into a wider economic and social development programme by the Maricá municipality, which also includes ‘savings accounts for high school students, free public transportation, massive infrastructure investments, and a sovereign wealth fund to lower costs of capital and guarantee social programmes in perpetuity.’¹² Together they powerfully demonstrate the ability of a local government to use its financial resources to promote equity and social development for its citizens.

Photo credit: Prefeitura de Maricá/Flickr

There is, however, a real threat facing community-based initiatives such as the Mumbuca Bank. Brazil’s oligopolistic banking structure – almost 80% of credit goes through only five large banks – has allowed large banks to invest huge amounts of money in technology. In 2021 alone, around R$30 billion (US$5.6 billion), was invested in fintech incubators and spent on the acquisition of smaller fintechs.

At the same time, an increasing number of Brazilians are taking out individual loans using digital platforms: 2021 saw a 26% increase in the number of loans compared to 2020.¹³ In 2021, Brazil’s fintechs issued nearly R$13 billion (US$2.4 billion) in loans, which was nearly double the volume of loans registered in the previous year, and a quadrupling of loan volume compared to 2019.¹⁴

In addition, Brazil has witnessed quite spectacular growth by a new investor-driven fintech sector.¹⁵ By far the most important example here is Nubank. Founded in 2013, it is now Brazil’s largest investor-driven fintech platform with around 45 million clients. Its lower costs, thanks to the lack of physical branches, and backing by deep-pocketed – mainly foreign – investors willing to accept significant initial losses in the hope of eventually creating a hugely profitable monopoly (similar to Safaricom in Kenya, the owners of M-Pesa¹⁶), has enabled it to lure a large number of clients away from the largest legacy banks.¹⁷

Similar developments elsewhere¹⁸ have shown conclusively that a dominant market share will indeed enable a fintech enterprise to extract stratospheric monopoly profits from the poorest communities, which is clearly the strategic, albeit unstated, goal of many of its shareholders and senior managers.

For progressive forces in Brazil, one of the most serious risks associated with the emergence of fintech banks is that they stand to wipe out Brazil’s democratically-managed financial cooperatives and local community-owned financial experiments such as the Mumbuca Bank. The more control investor-driven fintechs gain over local financial systems, the more likely the chance that grassroots democratic financial institutions will be forced out of business.¹⁹

Crucially, this risk exists even if local fintech applications are adopted by community-based institutions in an attempt to streamline business and lower costs. This is because their more solidaristic operating methodology, democratic approach and concern for social justice inevitably leaves such financial institutions exposed to the competition coming from the far more aggressive and often unethical business tactics adopted by the new generation of investor-owned fintechs.

While institutions like the Mumbuca Bank are undergoing major changes, they still lag behind many investor-driven fintechs. The risk here is that the millions of reals that Maricá’s RBC basic income programme injects yearly into the local economy will be all too easily drained away by investor-driven digital platforms that offer attractive initial benefits to secure new clients, but in the fullness of time end up over-charging them for the digital services they provide. In the meantime, of course, the competition will have been thinned out and clients reverting to their former smaller financial institution or community-based fintech may no longer be possible if it has been forced out of business.

Another potentially problematic issue concerns the contract signed in 2019 between Codemar, the Maricá government’s development company, and Leonardo, the major Italian aerospace, defense and security company. The aim of the contract is for Leonardo to help develop various technology-intensive small- and medium enterprise (SME) projects in the locality that are linked to the oil and gas industry. The intention is to create many sustainable high skills jobs and raise productivity. However, with Leonardo known worldwide as a major arms dealer and border militarisation contractor²⁰, this connection might prove politically awkward to maintain into the longer-term. A less controversial enterprise development partner might thus be needed in due course.

Photo credit: Prefeitura de Maricá/Flickr

The ‘people-centred’ fintech model being implemented in Maricá, now being adapted by neighbouring cities in Brazil, stands as one of the most exciting ways that fintech can made to directly benefit the local community as opposed to enriching a small number of wealthy – and mainly foreign – investors. In Maricá, this model has helped to cut the costs of local government, has directly aided the poor, is boosting local demand and provides financial support to promote the sustainability of local businesses.

The main threat the Maricá Model faces, however, is from big fintech platforms, such as Nubank, that can attract clients away with promises of cheaper services before going on to exploit its clients thanks to the monopoly it aims to create in the longer run.

Ultimately, the fate of the Maricá Model will be determined by its ability to provide quality financial services to the community while at the same time advancing greater equality, building a sustainable local economy and promoting social development. Links to similar experiments elsewhere in Brazil and across the region will also help to create the necessary economies of scale that can offset the advantages sought by the monopoly-seeking investor-driven fintech platforms. In this way, local fintech initiatives like the Maricá Model can ensure that local communities retain control of their own financial systems in the long run.

Conservation finance has become the dominant ideology of most of the world’s biggest environmental NGOs. It is also heavily promoted by the World Bank, the United Nations and the European Union. The basic premise of conservation finance is that saving nature and averting the climate crisis requires enormous funds, but money derived from public and philanthropic grants is woefully insufficient. Proponents argue that the only way to bridge this funding gap is to tap into the trillions of dollars of private capital circulating through global financial markets. To do this, saving nature must be turned into a profit-making endeavour, appealing to what are known as ‘impact investors’.

The rise of conservation finance has transformed not only the way in which conservation is addressed, but by whom. People with backgrounds in finance, banking and business consulting are taking over the management of most of the big conservation organisations. Their governing boards are stacked with investment bankers, hedge fund managers and venture capitalists. Consequently, risky and opaque financial instruments, originating in financial markets, are being repurposed for environmental projects. As elaborated elsewhere by the author, this process represents another dimension of financialisaton; the process whereby financial markets, financial institutions, and financial elites are gaining greater influence over almost all aspects of society.¹

This long read aims to scrutinise one particular financial instrument promoted by this conservation finance industry: the debt swap. Over the past few years, the world’s largest conservation organisation, The Nature Conservancy (TNC), has concluded three of these: in the Seychelles, Belize and Barbados. These deals are intended to expand marine protected areas, parts of the ocean where (certain) commercial activities are restricted with the goal of allowing wildlife to recover and be preserved. According to TNC, many more deals are in the pipeline. It has US government support for concluding deals in at least 20 coastal and small island developing states. Most recently, it is being reported that TNC is on the brink of securing a debt swap in Gabon, where it will buy $700 million of the country’s debt in exchange for ocean conservation, including a marine protected area, but also other commitments, such as on carbon trading and fish farming. Other countries rumoured to be negotiating these kinds of deals include St Lucia, Kenya, the Gambia, Ecuador and Namibia. If this ambitious programme succeeds, TNC estimates it will have saved 4 million square kilometres of the ocean. It will also have leveraged several billion dollars in private capital, giving it unprecedented power for an NGO over a vast area of the planet and the economic health of many highly indebted countries. This is a development that demands attention.

World leaders at the UNFCC Climate COP (COP-27) have made positive statements about debt swaps. These instruments will also feature prominently at the UN Biodiversity Conference (COP-15 of the UN Environmental Program) in Montreal this December, where the task is to agree on a global framework for the conservation of biodiversity. One of the key issues on that agenda is a commitment to designate 30% of the world’s land and oceans as protected areas by 2030. Debt swaps are likely to be seen as a viable way of achieving this. What is alluring about these deals is they claim to accomplish two things: they increase the flow of private capital for developing countries to use for saving nature and mitigating the climate crisis, and they provide relief for developing countries from their crippling debt crisis. Indeed, many organisations are recognising that ‘climate justice’ cannot be divorced from ‘debt justice’. The question, however, is: Do debt swaps really deliver either?

Photo credit: Kristin Marie Enns-Kavanagh/Flickr/(CC BY-NC 2.0)

To fully understand debt swaps they must be put in historical context. They also need to be understood in a wider perspective of the troubled relationship between developing countries and loans from investment banks.  

Debt swaps for conservation were first proposed in the 1980s, when they were used predominantly by environmental NGOs to raise money for rainforest conservation. They were inspired by equity swaps that were once seen as a viable way to save Western banks and developing countries from an economic disaster caused by the gluttony of recycling petrodollars in the 1970s. It has been estimated that during the 1970s $450 billion was deposited in US and European banks from Arab oil producing states, and that the irresponsible lending bonanza that followed saw developing country’s debt rising at astonishing levels: from under $200 billion in the mid 1970s to well over a trillion in the mid 1980s. Most of this debt was via bank loans for government projects with high interest rates, pegged to the US government’s interest rates. It is well documented that many of these loans lacked both transparency and due diligence.² The money was often squandered while providing bankers and political elites fabulous wealth at the expense of citizens. For developing countries, the 1980s was famously dubbed ‘the lost decade’.

The bubble burst in 1979 when the US government aggressively raised interest rates to halt inflation back home, thereby increasing the value of developing countries’ debts by 25%.³ In 1982, Mexico became the first country to ever default on its debt repayments. In a panic, banks began to sell debts owed to them by developing countries to private investors at steeply discounted rates. For countries such as Peru, Western banks were willing to sell debts at a discount of as much as 95% (although they could recover part of their losses through tax accounting). Loan agreements between Western banks and foreign governments prohibited governments from buying their own debts, so to entice others to do so, they had to offer investors something in return. This was often done either by giving them the face value of the debt in local currency (enticing the investor to spend it in their countries) or a share of a nationally owned industry. These ‘equity swaps’ were controversial, blamed for a wave of costly privatisations and the capture of businesses by foreign investors for knock down prices.

In this context US conservation organisations identified an opportunity. Developing countries had other valuable assets they could trade for discounted debt—their wildlife and pristine rainforests. So, environmental NGOs such as WWF, Conservation International and The Nature Conservancy set up ‘equity swaps for nature’. There were several ways they did this. However, in essence they would use their own money to buy discounted debts from banks in the US and Europe. Then they would get developing country governments to provide the face value of the debt in local currency to be used on a conservation project of their choosing. Some of the deals involved a straight swap for cash, whereas others involved payments in kind. These deals usually involved a commitment by the host country to designate a new area of land as a protected park and allow the foreign NGOs a role in its management. Debt swaps were therefore considered a clever way of multiplying NGO’s limited funds and enlarging the size of rainforest parks.

These swaps were also described as deals to help lower the debts of developing countries. It was an important claim, first made by Thomas Lovejoy at WWF in an article in the New York Times in 1984. A prevailing view among conservationists was that the debt crisis was itself a primary driver of deforestation: highly indebted countries were selling off their natural resources to raise foreign cash to service debts to Western banks. Debt swaps were therefore seen as a ‘win win’ solution.

By the early 2000s, it was estimated that there had been 47 separate debt swaps paid by conservation organisations, with a total net spend of about $42 million.⁴ But for several reasons, including changes in US tax laws, new systems for debt restructuring led by the US, and then ultimately debt forgiveness, the market opportunities for equity swaps dried up, and so did those for nature swaps. The enthusiasm for debt swaps among conservation organisations also waned; they were expensive deals to finalise and the resulting agreements with governments were hard to enforce.

Like equity swaps in general, nature swaps were also controversial, being rejected by many social movements working with small-scale farmers and indigenous people because they threatened land rights and were seen as legitimising odious debts.⁵ They were also subject to critical assessments by multilateral organizations, including the World Bank.⁶ They had no effect on the debts of developing countries and rarely led to meaningful achievements in conservation. In 1993 the Italian academic Mauricio Minzi provided a withering summary of these criticisms;

‘Scholars and activists were mesmerised by the potential of debt-for-nature swaps; in buying distressed debt on the U.S. market, and, then selling it at face value to a LDC [Least Developed Country] one could leverage the financing of conservation programs. For instance, debt bought at twenty cents on the dollar could be used to finance the equivalent of one full dollar in conservation projects. In the roaring ‘80s, the mystique of financial engineering was very influential and people were prepared to believe that the mere shuffling around of paper could somehow create value. Unfortunately…the leverage of conservation dollars is at least in part a myth…Proponents of the swaps mistakenly believed that these transactions were generous forms of assistance provided by the North to the South. In reality, the economic substance of the swaps appears to benefit the North more than the South’.⁷

Photo credit: The TerraMar Project/CC BY 2.0/ via Wikimedia Commons

The first swap for oceans NatureVest tried to negotiate was in Belize in 2011. Belize was one of the most indebted countries in the world, largely due to reckless borrowing from the US bank Bear Sterns, one of the first banks that went bankrupt in the sub-prime mortgage scandal. But in 2012 the Belize government negotiated a debt restructuring deal, so the time wasn’t right for a swap. NatureVest turned attention to the Seychelles, also among the most debt distressed countries in the world at that time, partly due to unsustainable loans provided by other disgraced US banks, including the Lehmann Brothers.

An IMF debt restructuring package had taken the pressure off Seychelles debts as well, so again timing was not right for a debt involving bonds. Perhaps impatient for a deal, NatureVest instead offered to buy some of the Seychelles debt owed to Paris Club donors.¹³ This could then be swapped for commitments to declare 50% of the Seychelles oceans a marine park. NatureVest asked the Paris Club donors to sell $75 million dollars of Seychelle’s debt at a discount of 25%. The donors agreed to sell only $21.5 million at a discount of 6.5%. But the deal was sufficient as a proof of concept and gained impressive international media coverage.¹⁴ However, it was not a good example for the audacious plan: TNC did not raise private capital to finance the deal and instead had to provide the cash itself: about $15.5 million. They also required $5 million extra from philanthropic grants. But the deal was important for one major reason: for the first time a conservation NGO had lent money to a government to buy its own debt, and then charged them interest to pay it back. TNC charged 3% on their loan of $15 million, requiring it to be paid back in full over 10 years. This provides TNC an estimated return of $2.5 million on their investment.¹⁵

For 6 years after the Seychelles deal, NatureVest did not finalise any more debt swaps. That changed with the COVID pandemic and the acceleration of the debt crisis. NatureVest went back to Belize, this time with the help of Credit Suisse. Late in 2021—when the Belize government was on the brink of defaulting on its debt repayments—Credit Suisse arranged a loan for NatureVest to buy the entire commercial debt of the country, which had been consolidated into one ‘superbond’ with an outstanding value to bondholders of $533 million.

NatureVest announced that this was one of many deals in the pipeline. There was evidence supporting this: the US Development Finance Corporation (DFC) had offered NatureVest an investment guarantee to help raise money for the Belize transaction. These agreements were published on the website of the DFC’s website, with a reference to a master plan for 20 debt swaps in total that will create an additional 4 million square kilometres of marine protected areas.¹⁶

The next deal NatureVest secured was in Barbados, which involved them buying Eurobond debt worth $146.5 million. As indicated already, Gabon looks to be the next deal nearing completion, were NatureVest will purchase a Eurobond worth $700 million.¹⁷ From what can be gleaned from various sources, the next countries include Kenya, Cabo Verde, St Lucia, Namibia and Ecuador.¹⁸ During Cop-27, at a meeting at the Resilience Hub, sponsored by JP Morgan and others, the environment minister from the Gambia declared her government’s interest in working with TNC on a debt swap as well.

Photo credit: Olivier ROUX/Flickr/(CC BY-NC 2.0)

The structure of these deals requires NatureVest to obtain a loan from an investment bank. So far NatureVest has worked only with Credit Suisse, although it might choose to work with others. This money is referred to as a ‘blue bond’, which is then lent to the government of the indebted country to pay out bondholders. In the case of Belize, the loan to the government did not come from NatureVest directly, but from a company they set up in the tax haven of Delaware, called the Belize Blue Investment Corporation (BBIC). Credit Suisse then repackaged the loan to the BBIC to be sold in notes to investors. Credit Suisse did not issue the new bond notes themselves but passed this over to Special Purpose Vehicle registered in Amsterdam, called Platinum Securities. It is assumed this SPV is a subsidiary of Credit Suisse. However, there is no online information available on who owns this company or works for them, and the company does not have a website. The Swedish pension fund Alecta announced it bought $75 million worth of bond notes from Platinum securities in January 2022.¹⁹

The key to these deals is an agreement by the owners of the original Eurobond to sell their debt at a discount. The successful buyout in Belize saw bondholders agree to a ‘haircut’ of 45% of the face value of their original debt; the value of the bond notes when they were first issued including all outstanding interest rate payments. The loan to Belize to buy out the bondholders was therefore $301 million. However, another $64 million was added for other costs. The contract between the BBIC and the government of Belize commits the government to several things:

1. Repay BBIC with interest and compensate for legal and banking fees, as well as financial inducements (discounts for early buyers) of the new bond issued by Platinum Services. There was also an insurance contract attached to this deal that provided Belize temporary respite for repaying BBIC in case of a climate disaster, which they needed to pay for on an annual basis. In total these extra fees came to $40 million.

2. Implement a range of policies for marine conservation, including scaling up marine protected areas from the current size of 20% to 30% of their oceans, implementing a strategic plan for the use of ocean resources (usually known as a marine spatial plan²⁰), advancing fish farming in coastal areas, and engaging in blue carbon trading schemes.²¹

3. Use a proportion of the money lent (the remaining $24 million from the loan) to set up a marine trust fund. This fund will invest the money over a 20-year period, which is estimated by TNC to result in annual revenues of 7%, or a total amount of $71 million after 20 years. It is not specified how the money will be invested.

4. Establish a new national Conservation Fund to receive the money from the earnings on the trust fund savings in the debt swap. Precise details of how this financing arrangement will work remain elusive, however according to an IMF report the Conservation Fund will receive annual payments from the Belize government of $4.2 million for the next 40 years.²² The role of this new Conservation Fund is to oversee policy implementation of the marine spatial plan and administer grants for marine conservation projects. TNC is given a permanent position on the governing board of this new organisation.

It is likely that the same general model has been used in Barbados and will be used in Gabon, although the exact figures depend on several variables, including the discount rate achieved in these deals and the value of bond being bought out.

Photo credit: Olivier ROUX/Flickr/(CC BY-NC 2.0)

NatureVest’s debt swaps have been covered in an enormous number of reports and news articles, and they have received substantial attention in international events on ocean conservation, the climate crisis and debt restructuring. Almost all of this has been positive. These complex financial deals are celebrated as ingenious financing mechanisms that could be replicated and scaled up even further. During COP-27, Kristalina Kostial the deputy director of the IMF, described these debt swaps as a critical solution to the international community’s failure to provide adequate climate finance, adding that ‘carbon credits could feature as part of the swaps’.²⁴

Few organisations seem to scrutinise these deals, especially in light of all the criticisms raised against the past debt for nature swaps. Yet many of the same critical issues appear relevant. To simplify, there are three broad themes that more critical debates over these deals should explore.

Transparency and democratic participation

We should expect international finance that helps developing countries tackle their debt crisis and fund nature conservation to be transparent. So far, however, these deals remain astonishingly opaque.

News of these deals is deliberately kept secret, probably to avoid inflating the market value of bond notes before debt buybacks. However, even after they have been concluded, public access to information is limited. The investment and conservation contracts signed between NatureVest and governments in the Seychelles, Belize and Barbados are not in the public domain. This means it is impossible for citizens to understand what their governments have signed up for.

So far, information on conservation commitments have filtered through via statements by TNC. But these statements lack detail. It is currently unclear why the full conservation contract itself cannot be published. Several of the financial terms of this agreement are also kept from public scrutiny, again with summary information only found in statements and press releases, sometimes with inconsistencies. One aspect that is left unreported is the profits being made by NatureVest and Credit Suisse, including through the SPV in Amsterdam. There will be various commission and legal fees occurring as debt is transferred throughout this web of company structures. There is also a possibility that interest charged by the BBIC to the government of Belize is less than the interest provided to companies buying the bond notes supplied by Platinum Services, meaning the intermediaries in this deal would be making further profits. The fact that NatureVest establishes new companies, registered in a tax haven, to handle payments and revenues, is concerning. It is important for TNC to clarify the financial structures of these deals and be transparent about the income from these arrangements.

Due to this secretive approach to debt swaps, they fail to achieve the free, prior and informed consent of people relying on marine resources for their livelihoods. This is critical. Debt swaps establish binding commitments for the management of marine resources, including expanding marine protected areas that might curtail economic activities, such as fisheries. They also introduce other contentious policies such as carbon trading and the development of commercial aquaculture. However, NatureVest and the host governments of these deals have failed to consult with citizens or parliament before signing the contracts. None of these deals have produced environmental and social impact assessments either. It is hard to imagine such undemocratic instruments being employed in Europe or the US, and difficult to reconcile this with international human rights instruments such as the Tenure Guidelines SSFGs which recognise the rights of small-scale fishers.

Resolving this lack of consultation is not straightforward. Debt swaps targeting commercial loans also rely on stealth. In negotiating the buyout of bondholders, it is unlikely that NatureVest could succeed if it had to subject its plans to lengthy public debate. Anyone familiar with the process of developing national plans for the oceans will know that this can take a long time, particularly if it involves genuine participation form marginalised people. As such, debt swaps, following the model used by NatureVest, would seem fundamentally inappropriate for financing ambitious programmes for reforming policies on nature conservation or climate mitigation and adaptation.

The illusion of generosity

One of the claims surrounding debt swaps negotiated by TNC is that they represent an act of generosity by creditors. Often creditors are described as forgoing debt repayments, equating these deals with debt forgiveness. The Guardian’s write up of the debt swap in the Seychelles described that creditors had agreed to forgo millions in debt. This makes these deals seem relevant for global debates on compensation for loss and damage. But this is clearly misleading now, as it was for debt for nature swaps in the 1980s.

In the debt swap for the Seychelles, for example, Paris Club donors agreed to a mere 6.5% discount for their debts. This is an attractive deal to them because they receive an early payment in cash for debts that were not due to be paid in full for several years. However, what has been overlooked in this deal is that the donors all reported this discount as a grant. This means the money ‘gifted’ to the Seychelles reduces the donor’s commitments for other aid spending. It was not a transfer that increased aid flows from donor countries to developing countries. Bi-lateral debt swaps can be designed to reduce this problem; combining a greater element of debt forgiveness with rules that prevent donors from using an accounting trick to avoid additionality. But that did not happen in the case of the Seychelles.

When it comes to commercial deals involving Eurobond swaps, investors are not acting charitably either. They are being offered lump sum cash payments based on the market value of their bond notes. It is possible that bondholders would reject this offer of a buyout, preferring to hold out for the full value of their assets. However, it was clear in 2021 that Belize’s economic situation was worsening, and bondholders were holding assets that were depreciating in value. The value of bond notes of Belize’s superbond have been volatile,  trading as low as 30% of their face value in 2020. That bond holders were offered 55% of the face value in 2021 suggests it  was in the interests of investors to sell then, irrespective of their concerns for the oceans and the climate disaster. Still, the bondholders, represented by a committee, issued the dubious statement that they agreed to sell out because savings in the deal were going to a good cause.²⁵

Debt justice

Positive assessments of nature swaps point to the fact they reduce the debt burdens of developing countries. In the past this claim was unconvincing because debt swaps were so small they achieved only tiny changes to the overall debt burdens of countries. That was also the case in the Seychelles, as the debt for ocean swap there reduced the country’s future debt obligations by less than $2 million. It was a drop in the ocean. But the situation is now changing in the mega deals targeting Eurobonds, and the credentials of nature swaps creating fiscal breathing space for countries seems to be strengthening.

In Belize, for example, it is described in news reports that the debt swap saved the country $189 million and NatureVest has swapped a high interest rate loan for a more favourable blue bond. While part of that is true, the IMF confirm the interest rate schedule for the new blue bond starts with a lower interest rate, of 3%, but after 4 years this rises to over 6%; the same rate that Belize was paying for its previous Eurobond.²⁶ But most importantly, while Belize has reduced the total amount it has to pay to foreign creditors by $189 million, almost all of this money is reserved for spending by the new Conservation Fund for marine projects. There is limited fiscal space created by this swap for other pressing areas of government spending, such as health or education.

As debt swaps become larger transactions dealing with a sizeable share of a country’s foreign debt, they also become more relevant to other efforts for debt restructuring. In this view, they appear more problematic rather than less. For example, a substantial barrier to co-ordinated and effective debt relief has been the difficulty of bringing different creditors to the table, including bilateral lenders, multilaterals, and foreign private creditors. This leads to heightened concerns that debt relief will not be shared fairly. Furthermore, the scale of the debt crisis in many countries now is such that the only chance for lasting solutions is a co-ordinated response based on a transparent and participatory dialogue. However, debt swaps undermine this ideal: without consultation, they capitalise on a period of debt distress to benefit commercial lenders.²⁷

A recent IMF publication analysed debt swaps alongside other forms of assistance for developing countries for both debt relief and financing for climate related spending.²⁸ This report made it clear that debt swaps are sub-optimal solutions. For highly indebted countries requiring urgent assistance to deal with climate change, the case for scaling them up should be rejected:

‘Debt-climate swaps subsidize the creditors that do not participate in the operation. In contrast, deep debt restructurings generally come with frameworks that seek to ensure wide participation… For this reason, it is generally efficient to de-link the restoration of debt sustainability from fiscal support of climate action, which should be additional to the debt relief required to restore sustainability, and ideally come in the form of conditional grants (or a combination of grants and loans) rather than debt-climate swaps.’

It is therefore surprising that senior officials at the IMF have been advocating so stridently for scaling up debt swaps at COP-27, including praising TNC’s deals. Tellingly, the IMF in their latest country assessment for Belize did not consider the debt swap sufficient to change its view that the country was still stuck with unsustainable debt: highly likely to struggle to maintain payments to its creditors, with a strong probability of needing more comprehensive debt restructuring in the future.

Finally, international recommendations on debt justice also stress the need for public audits of debt, and the urgent need for regulating the way in which sovereign commercial loans are raised for developing countries. Moving out of the debt trap is therefore not simply achieved through financial restructuring, but also regulatory and political reforms. None of this appears to be advanced by debt swaps so far. Instead, the public relations surrounding nature swaps legitimise the institutions that have created and benefited from the reckless Eurobond market. In the 1980s debt for nature swaps were rejected as unwelcome distractions from campaigns on odious debt. The same could be said of the reincarnation of nature swaps today.

Saving nature

Finally, although the stated purpose of these swaps is to save nature, it is doubtful they will succeed. Many of the statements made about these swaps assume that the debt buyout and the commitments of governments to set up endowment funds for new conservation organisations will protect the oceans. The mere act of designating an enlarged area of the ocean as protected is taken at face value, conflated with nature being actually saved.

TNC’s limited public reports on its debt swaps are devoted to explaining the financial benefits of these deals. Almost nothing is provided on the considerable political and practical barriers countries face in following through on the ambitious conservation pledges. Meanwhile their conservation contracts reveal potential policy incoherence: they promote eco-tourism and commercial aquaculture, for example. These sectors may help boost economic growth or food production, but they have high risks of costly environmental externalities and exacerbating inequality.

The plans for spending the money from debt swaps are also questionable. Channelling all the money through a new Conservation Fund creates another organisation running parallel to, and possibly in conflict with, existing government agencies. The resulting Conservation Funds will have annual budgets that surpass government departments and will dwarf those of existing civil society organisations working with groups such as small-scale fisheries. The intention is that the Funds will disperse money to others through grants, but this arrangement is fraught with risks relating to democratic accountability and conflicts of interest. TNC’s guaranteed seat on the governing board of these Funds is also questionable, given their lack of democratic legitimacy or direct links to local communities.

In short, the mere act of increasing financial flows to conservation efforts does not solve deep-rooted conflicts over the use of resources, while it may work to aggravate them. Herein lies the fundamental dilemma in the debt for nature swap concept. This is the simplistic assumption that ecological destruction is due to an absence of funding and that this problem can be solved by more money. Once the absurdity of that belief is exposed, the entire proposition for conservation finance falls apart. Ecological justice is first and foremost a political struggle, not a financial one.

Photo credit: U.S. Geological Survey/Public domain

The audacious plan by TNC deserves intense critical scrutiny. This is clearly difficult to do given the complexity surrounding its deals and their lack of transparency. However, if TNC delivers on this plan, then it will represent an astonishing development in the governance of the oceans. The arguments presented in this paper suggest the considerable international praise that debt swaps are receiving is unmerited. Unfortunately, few organisations involved in marine conservation seem to be ringing alarm bells. 

Debt swaps are just one of several innovative financial instruments being developed by the conservation finance industry. There are other forms of blue bonds, as well as CAT-Bonds and Rhino bonds, for example. The financialisaton of conservation is producing a bewildering set of instruments described through jargon that most of us find impossible to decipher. 

Addressing the heavy burden of unsustainable and illegitimate debt carried by Southern countries, who are increasingly confronting the worst effects of the climate crisis, is pivotal to addressing this global crisis. Comprehensive frameworks for debt forgiveness, economic justice, loss & damages and reparations will be needed if we are to move towards climate justice. However, debt for nature swaps instead represent a dangerous distraction, moving us further away from genuinely democratic solutions and just transitions, undermining the ability of working people to shape the policies that impact their lives, and further consolidating the power of international finance.  

Photo credit: © Javier Quiroga/Unsplash. Busy street in Shanghai, April 2019. 

Over the last 30 years, China has undergone dramatic economic growth and social transformation, bringing enormous changes in the daily lives of ordinary people. Often overlooked in the Chinese government’s grand narrative and its large-scale social engineering projects, however, are the lives of women, workers, and ethnic minorities in the country’s changing political and economic structure. 

Women in China

After the Communist Party took power in 1949, the Chinese state introduced a series of laws to narrow gender gaps. In 1950, the first Marriage Law was passed to prohibit arranged marriage and child betrothal, which had existed since the imperial era. The new constitution stated that women enjoy equal rights with men in all aspects of political, economic, cultural, social, and family life. 

In the state socialist era (1949–1976), ‘women can hold up half the sky’ was a symbolic and widely used slogan. As the state pushed industrial accumulation and agricultural production, women were mobilised to work in factories or agriculture. To support women’s full employment, the government promised to socialise much of women’s domestic work. As a result, women’s labour participation rate reached nearly 90%, among the highest worldwide. Despite this, the gendered division of labour in the household and public sphere remained intact. Women still had to bear most of the burden for unwaged reproduction work. New gendered divisions also emerged in the productive sector. In most workplaces, male workers were concentrated in the skilled positions in heavy industries, whereas female workers were concentrated in low-end positions in service and light industries. 

In the wake of the economic reform, which began in 1978, women in China have faced widening gender gaps in both their participation in the labour force and in wages. By 2000, most government-run childcare facilities were privatised or shut down, which moved the parenting burden to working women and jeopardised their position in the labour market. In contrast to the mobilisation of women’s labour in the socialist era, from the 1980s some male intellectuals began calling for women to ‘go back home’ to fulfil their domestic duties. Women have also faced increasing pressure to enter into marriage. Between 1990 and 2018, the female labour participation rate dropped drastically from 90% to around 60%, and  women’s earnings declined from about 84% of men’s wages in 2000 to 65% in 2013.

Since the early 2010s, the crisis of social reproduction has intensified. With a rapidly growing urban population and inadequate public services, the cost of social reproduction has been driven up further, which has in turn contributed to declining fertility rates. Chinese women continue to face systemic exploitation and appropriation of their reproductive labour and discrimination in the job market, although of course their experiences vary according to their social position. Women who work in the formal economy not only experience sexual harassment and earn lower wages than men, but also disproportionally shoulder the burden of childcare in the deepening class gap in the cities. Meanwhile, poor rural women have been pushed to enter informal, precarious, and poorly paid job markets to provide essential urban services. Owing to the lack of access to social welfare in the cities where they work, they are often separated from their children. These female migrant workers in China make up the world’s largest domestic service market, made up of approximately 35 million people.

In the face of this discrimination and oppression, women have not stayed silent. Chinese feminism dates from the turn of the twentieth century, when revolutionaries advocated for women’s rights as a part of national modernising project. As stated above, after the Communist Party took power, the state played a key role in launching campaigns to promote women’s legal and economic rights. More recently, between the 1990s and the early 2010s, non-government organisations (NGOs) emerged, focused on combatting domestic violence and promoting reproductive health rights. This included the ‘Anti-Domestic Violence Network’, which was shut down right before the government passed the ‘Anti-Domestic Violence Law’, for which the network had long advocated.

Over the past decade, explosive online discussions have contributed to unprecedented debate on gender issues, with wide scope and high visibility. Scholars Wu and Dong identify two major styles of expression women used during this period in a ‘Made-in-China’ feminism. The first and most pronounced is the ‘entrepreneurial’ voice, which resonates with women’s anxiety about economic security and encourages women to abandon traditional wifely duties and exercise their autonomy in deciding on marriage to maximise their personal returns. They also identify a more radical style, most represented in the ‘Young Feminist Activism’ (YFA). Since the early 2010s, this network of young students and activists has organised street demonstrations and online campaigns to against discrimination and gender-based violence and advocate for women’s rights. After the crackdown on the YFA, the #MeToo Movement, which emerged at a larger scale in 2018, has become one of the most energetic forms of activism in China today and the most pronounced critiques of the status quo. The #MeToo movement is reviewed in more detail in the later section ‘Social Movements in China’.

Workers and migration in China 

At the turn of the millennium, the working class in China could be divided into two main groups: permanent workers in the old state-owned enterprise (SOE) sector and internal migrant workers originally from rural areas and working as contract workers in cities. 

In the state socialist era, SOE workers held permanent jobs in public employment, and enjoyed socialist benefits from cradle to grave, such as housing and childcare benefits – all of which were distributed through membership in a work unit. However, as China accelerated its integration into the global capitalist system in the late 1990s, around 30 million SOE workers were laid off during corporate restructuring. This marked the demise of the old SOE working class, as China’s SOEs were pushed to operate as profit-driven corporations. More detail about the development of China’s economic system is reviewed in the section ‘China’s Economic System’.

China’s economic transition also increased its reliance on internal migrant workers. In the late 1970s, special economic zones (SEZs) were set up to attract foreign capital for export processing. By the 1990s, as China further opened up and became the world’s factory, tens of millions of migrant workers moved from poor rural areas to coastal cities to make a living in the hyper-exploitative manufacturing sectors producing goods for markets overseas. Transnational capital boosted its profitability through the massive relocation of global supply chains to China, where the overall enforcement of labour law was poor and basic labour rights of migrant workers were systematically abused. Migrants often worked in on-site dormitories, subjected to extremely long working hours for a meagre salary, where they suffer frequent work injuries. Moreover, workers’ right to strike was removed from the constitution in 1982, and workers’ bottom-up struggles were often repressed. The All-China Federation of Trade Unions (ACFTU), the only legal trade union, is also controlled by the Party and, despite occasional bids for greater autonomy since the 1949 revolution, primarily ‘maintains stability’ and ensures that production continues, rather than representing workers’ interests. At the enterprise level, union officials are often part of the management.

The collaboration between the Chinese government and transnational capital was essential to China’s emergence as the ‘world factory’. The government identified the large rural surplus population as its ‘comparative advantage’ in the global supply chain and crafted political and social policies to facilitate massive economic growth. The hukou system, which links the provision of social services to household registration in a particular location, has served as an overall development strategy to enable cities to enjoy a cheap workforce without having to pay any of its reproduction costs. Under the hukou system, rural migrant workers are denied access to all kinds of state-subsidised social services in the cities, including health care and their children’s education. As a result, despite some variations between successive waves of migration since the late 1970s, the pattern for many migrant workers is that they work in the cities when they are young, briefly moving back to the countryside to get married and have children, and then leaving them to return to work in the cities. By 2013, 61 million children were separated from one or both of their parents. Some of these children have been subjected to sexual and physical abuse. 

By 2021, there were 292 million migrant workers in China, comprising more than a third of the entire working population. In 2018, for the first time, the number of migrant workers employed in the service sector exceeded those in the manufacturing and building sectors and this share has continued to grow. Migrant workers in the cleaning, hospitality, food and logistic sectors have been crucial to sustaining the lives of the modern urban population, yet their jobs are both precarious and exploitative. In recent years, the central government has begun to address the situation of migrant workers in its rhetoric, and enacted some reforms of the hukou system. However, since the central government leaves implementation to local governments, but without providing additional resources, the welfare system remains effectively unreformed. Although restrictions on securing residence in smaller cities have been loosened, social services are still typically available only to a small number of better-educated non-locals. Registration in bigger cities, where better job opportunities are concentrated, remains extremely difficult. 

In response to the exploitation and exclusion of migrant workers, there have been persistent protests and wildcat strikes. These have articulated a range of demands – from wage increases and pensions to compensation for factory relocation – and led to both repression and policy reforms. We review labour movement in China in the section ‘Social Movements in China’.

Ethnic Minorities

China’s official position is that it is a unitary multi-ethnic state comprising 56 different groups. The Han constitute a 91% absolute majority of the total population, and other ethnicities are often referred as ‘ethnic minorities’. In 1950s, the Communist Party started its ‘Ethnic Classification Project’ to call for applications from ethnic groups for official recognition. The government sent hundreds of researchers to investigate groups for classification and identification, and eventually over 400 self-reported groups were classified into 55 officially recognised minorities that could claim minority rights enshrined in the law. It is worth noting that, within the process, the government categorised the ethnic groups in a way that fit its political concerns of territorial integrity and stability. For example, the Baima Ersu people, who are classified as Tibetans, have petitioned to be recognised as separate ethnicities, which the authorities have rejected.

As China instituted its economic reforms, the government has presented itself as an inclusive and multicultural state and invested in infrastructure in order to promote tourism. This commodified and exoticised ethnic cultural representation for domestic and international tourist markets. For instance, the provincial governor of Yunnan initiated tourism projects in Lijiang and used The Old Town, which features the Dongba culture of Naxi, to apply for the UNESCO-monitored legacy project. Meanwhile, as the central government encourages further urbanisation, some ethnic minorities in the border regions have been dispossessed from their lands and become part of the urban workforce. In the film project ‘Caches From The Landscape’, the Nomadic Department of the Interior (NDOI) features villagers in the southwestern province of Guizhou who were being displaced by the world’s largest radio telescope. It captures changes in the landscape, peoples’ collective identity, and the constant migration experienced by many ethnic minorities in China. 

According to scholars Gerald Roche and James Leibold, a ‘second-generation’ of Ethnic Policies was first proposed in 2011, and has been implemented across the country since 2013. This new approach, with its more forthright embrace of cultural assimilation, marks a break from the somewhat Soviet-inspired approach adopted in earlier periods, which featured language protections and occasional rebukes of ‘great Han chauvinism’ at the same time as even while it also repressed ethnic groups, such as Tibetan and Uyghur movements. In recent years, the government has placed increasing emphasis on ‘inter-ethnic mingling’ and proactive forging of a common identity, while also promoting universalisation of Mandarin-medium education, and scaling back a range of preferential policies. The response to these policies builds on long-standing grievances and campaigns for national self-determination by groups on China’s periphery, resulting in intensified grievances and social unrest in Xinjiang, Inner Mongolia and other autonomous regions. In 2020, a newly implemented language policy sparked petitions, street demonstrations, and school boycotts in Inner Mongolia autonomous region. The Chinese government has constructed a digital enclosure mass internment system in the Uyghur autonomous region, which has detained at least one million ethnic Uighurs ( more context and details is reviewed in the later section ‘Political System’).

Webinar participants

Yige Dong, Assistant Professor of Sociology and Gender Studies at the State University of New York, Buffalo and author of the forthcoming The Fabric of Care: Women’s Work and the Politics of Livelihood in A Chinese Mill Town. 

Eli Friedman, Associate Professor and Chair of International & Comparative Labor at Cornell University’s ILR School.

Yutong Lin, Nomadic Department of the Interior art research collective

Resources

• Byler, D. (2021) Terror Capitalism: Uyghur Dispossession and Masculinity in a Chinese City. Durham, NC: Duke University Press.
• Chan, J. Selden, M. and Ngai, P. (2020) Dying for an iPhone. Chicago: Haymarket.
• Friedman, E. (2022) The Urbanization of People: The Politics of Development, Labor Markets, and Schooling in the Chinese City. New York: Columbia University Press.
• Rozelle, S. and Hell, N. (2020) Invisible China. How the Urban-Rural Divide Threatens China’s Rise. Chicago: University of Chicago Press.
• Wang, Z. (2017) Finding Women in the State: A Socialist Feminist Revolution in the People’s Republic of China, 1949-1964. Berkeley, CA: University of California Press.

Photo credit: © Yuri Kozyrev / NOOR. Gulzira Auelhan, an ethnic Kazakh, returning to Xinjiang in 2017 to visit her ailing father, was detained for 437 days in China’s sprawling new system of incarceration and indoctrination. 

China’s political system is often difficult for outsiders to understand. While it is often portrayed as a monolithic, top-down bureaucracy, the Chinese government claims to practise ‘whole-process people’s democracy’, a model of socialist democracy which it characterises as ‘true democracy that works’. To explore the complexity of China’s political system in its own context, it is useful to look at the dynamics from several angles, such as the class character of the Chinese state, the ways the system shapes daily life, as well as recent political events such as the government’s ‘People’s War on Terrorism’ in Xinjiang, the crackdown on Hong Kong and the response to the pandemic.

Class character of Chinese state

At the founding of People’s Republic of China in 1949, Mao proclaimed that the new socialist state would constitute a people’s democratic dictatorship, serving the class interests of the revolutionary peasant–proletarian alliance which had ushered the new state into existence. Throughout the socialist era, the state insisted on making its class character apparent and ensured the supremacy of the peasant–proletariat alliance in state practice and ideology. In other words, the state made no pretence of class neutrality, announcing that the state served the peasant–proletarian alliance and acted on behalf of the revolutionary people of China. This provided the state with its ideological legitimacy. While the state was to be democratic for those people who supported the revolutionary party and its allies, it was to prove a dictatorship to those who were considered anti-revolutionary or whose class background was suspect.

By contrast, although the state still claims universal continuity between its interests and those of the supposedly classless nation, it usually serves the interests of the wealthy and subordinates the interests of workers and peasants. During and after China’s reform era, far from retreating from social life the state has embedded itself further, issuing policies that advance the commodification of land and labour. At the same time, capitalist activity is subject to state control and surveillance. Today, although China acts in the name of socialism, the state largely serves to safeguard the conditions for capitalist accumulation and its power lies in its demonstrated capacity to ensure economic growth and stability.

The structure of China’s political system

The territories of China, especially the peripheral regions where non-Han Chinese reside, are largely a legacy of the Qing empire’s military conquest, and were inherited by the Nationalist-led Republic of China and subsequently reshaped by the upheavals of the twentieth century. Since 1949, the entire territory has been ruled by the Communist Party, whose leadership is enshrined in China’s constitution. The party is structured as a pyramid. At the lowest level, there are around 92 million party members across the nation, and around 2,200 delegates are elected as representatives to the National Party Congress, convened once every five years. At the Congress, a Central Committee of about 380 members are elected and take up key roles in the central government. Finally, a new Politburo and its standing committee are elected from the Central Committee. These are the organs of government that hold real decision-making power. Currently, there are seven members in the Politburo Standing Committee, representing the apex of power in China. The committee makes decisions through a majority vote. It has been led by party chief Xi Jinping since 2012, who is also the chair of the central military commission. 

While on paper the Communist Party operates on the principles of ‘Democratic Centralism’, which allows the party to elect its leadership from the bottom up and discuss and vote on policies in a democratic way, in practice the composition of the Politburo and standing committee is determined through closed-door negotiations. It is unclear to what extent democratic internal debates take place or whether lower-level party members simply go along with top-down directives. 

Moreover, the Communist Party has control over all branches of government, including legislative and judiciary institutions. Though there are a number of other smaller political parties present in the National People’s Congress (NPC), the existence of those smaller parties is based on the condition that they accept the Communist Party’s leadership. In effect, they serve as a rubber stamp, offering a nominal diversity of opinions, rather than a real supervisory power or a political opposition. The state council, tasked with enacting national policy and supervising all government departments, is also led by the Chinese premier who is himself a member of the standing committee of the Politburo. Meanwhile, the judiciary is supervised by the party’s central political and legal affairs commission, chaired by a member of the Politburo. However, it is worth noting that although the Chinese state generally works in a way where the power is concentrated at the top, it also consists of many departments and actors with conflicting or competing interests. In addition, lower level bureaucracies are not always in line with the central government, which often creates imbalance and tension in the system.

Pandemic as a case study

The Chinese government’s response to the COVID-19 pandemic illuminates the structure of the state in motion and shows how the population interacts with the government. At the start of the pandemic, when its severity was still unknown, local governments’ interests in economic performance and social stability trumped public health concerns, resulting in an extended period of cover-up. The doctors who first detected the virus and alerted others on social media were reprimanded by local police and hospital administrators for sharing false information. Dr. Wen-liang, Li was one of the whistle-blowers who later died from the virus in February 2020, prompting a national outpouring of grief and anger at the government’s handling of the pandemic crisis. 

The Chinese government took some measures to enable a certain level of sharing information from the public to improve governance. One example is the health emergency system restructured by the Chinese Centre for Disease Control and Prevention (CDC) after the SARS pandemic in 2003. The system enables individuals to report health incidents to local commissions, but only the national commission and its designated provincial agencies are allowed to make public announcements. As a result, information could flow from the bottom up within the government bureaucracy while still being kept from the public. During the lockdown, there was also a brief period where the government loosened some controls on the media and public expression, which served as a way to collect information and respond to public resentment. However, after the brief loosening of public expression, there followed immersive social media censorship and arrests of ordinary people and citizen journalists. At least 897 people were penalized for online speech about COVID-19, and citizen journalist Zhang Zhan was handed down a four-year prison sentence for her reporting on the pandemic.

China’s security state and people’s daily life

The governance of the state is expressed through the intertwined relational networks that operate at the most molecular level of everyday life. For instance, schools, neighbourhoods, as well as private and public companies, are all required to set up a party branch, which ultimately links back to the formal bureaucracy and is responsible for overseeing and reporting to the upper-level party. In addition, a ‘patriotic education system’ is another important rhetorical device to buttress the ideological legitimacy of the state in people’s daily life.

In the past decade, rapid digitalisation has enabled the government to build security infrastructure to regulate the public sphere and increase surveillance. In the 2000s, the newly available internet enabled people to enjoy a certain level of freedom and autonomy by self-publishing on social media. This led the state to shift from attempting to direct the whole public sphere to managing and controlling discourse. Around 2010, the Chinese government initiated the all-round development of China’s security state; for the first time its domestic security budget surpassed military spending. Over subsequent years, the government implemented a real-name registration system for all mobile phone users and social media accounts, introduced an ID-based ticket booking system for public transport, and constructed an extensive network of CCTV cameras, which was soon connected to facial recognition technology. 

In 2013, an internal document entitled ‘Communiqué on the Current State of the Ideological Sphere’ was circulated by the state leadership. The document identified universal values, freedom of the press on the internet, and civil society as major political ‘perils’ that the Party should be on guard against. A year later, the government formed the ‘Central National Security Commission (CNSC)’ in response to the internal and external ‘double pressures’ identified in its documents alongside other factors as a threat to political stability. The CNSC was directly chaired by Xi and developed an ‘overall national security outlook’, which covers politics, territory, military, economy, culture, society, science and technology, information, ecology, nuclear and natural resources.

Around the same time, the crackdown on media and civil society began to intensify. Since 2013, the government has tightened its censorship of mainstream media, arrested investigative reporters and constrained public discussion. In early 2015, a group of five Chinese feminists were detained in Beijing for planning a protest against sexual harassment. In July 2015, the Chinese government launched a nationwide campaign in which it jailed over 100 human rights lawyers and activists and in December, five labour activists were arrested for allegedly ‘disturbing public order’. There have since been numerous waves of repression against every part of civil society. In 2019, when the Anti-Extradition Bill Movement in Hong Kong began, the government conducted a particularly harsh crackdown, arresting more than 10,000 people, and implementing the National Security Law to further break up the movement. For more detail about movements in Hong Kong, see the section ‘Social movements in China’.

Terror capitalism and dispossession of Uyghurs

The Chinese government has constructed a digital enclosure mass internment system in Xinjiang, the Uyghur autonomous region in northwest China, to control the dissent that has resulted in large part from expanding the capitalist frontier and land dispossession. The technology-enabled entrapment of at least one million ethnic Uighurs illustrates how China’s security state and mass surveillance systems operate.

In the 1990s, the Chinese government expanded its capitalist frontier by encouraging companies and migrants to move to Xinjiang to extract natural resources and extend infrastructure. This led to land dispossession and antagonism between the local population and the new settlers. In the 2010s, with the arrival of 3G networks and digital media, migrant workers in the city used smartphones to find jobs and discuss topics including religion. This not only enabled a revival of Islamic piety and but also allowed for increased connection with the larger Muslim world. Due to the lack of language-recognition technology, voice memos sent in Uygur through social media apps were outside the state-managed public sphere. The combination of these trends made the Chinese state nervous.

Chinese counterterrorism was also inspired by post-9/11 Countering Violent Extremism (CVE) programmes in the United States and Europe and an emerging global discourse around Islamophobia and counter terrorism. As early as 2001 China had started to describe Uyghurs as a population prone to terrorism, but restrictions on the public sphere took off after 2010. In 2013, the Chinese media started to publish numerous stories about cases of terrorism involving Uyghurs attacking Han civilians in Beijing and Kunming, increasing public support for some kind of action to control the Uyghurs.

In 2014, the state declared the ‘Peoples War on Terror’, marking a shift towards preventative policing through surveillance and education systems. The government began to build a new security apparatus to enforce a new wave of racialisation and dispossession of Uyghurs. Apart from the massive deployment of police and lower-level police contractors, the government largely relied on a digital enclosure system to restrict privacy and assert state control of the internet and the Uyghur population. Up to 1,400 private technology firms worked with the Chinese government to develop tools to automate the transcription, translation and detection of Uyghur speech. A ‘counter-terrorism sword’ – software used by police to download all the contents of Xinjiang residents’ phones – was one of the tools the Chinese authorities used extensively  to scan people’s digital activities. Through these scans, at least 100,000 people were determined to have committed newly defined criminal activities, such as using a VPN or WhatsApp. Many of them ended up being locked up in internment camps and/or were forced to work in associated factories. In December 2019, the governor of the region announced that all ‘trainees’ had graduated. However, investigations revealed that the government continued to build new detention facilities or renamed ‘training centres’ as ‘detention facilities’, now intended to detain people prior to their trials. As mapped by the Xinjiang Data Project, there are currently around 380 suspected detention facilities in the region. Darren Byler described the process as a shift from mass internment to coerced labour and mass imprisonment. 

The mass internment in Xinjiang not only reveals the operation of a security state in China, but also illuminates how terror capitalism in the country is part of global surveillance capitalism. The security apparatus in China is interconnected with American institutions, military programs, and private companies. For example, the US Army has funded joint research with Chinese AI companies which are involved in building the security apparatus in Xinjiang. So, while the Chinese government outsources its policing duties to private and state-owned technology companies to enhance the state’s surveillance capacities, the ‘Public–Private Partnership’ (PPP) creates a space for private industries to expand their market share rapidly and improve their AI capacities through data harvesting and the construction of new analytic tools. Moreover, there is also a racialised component, where difference is accentuated in order to exploit people. In Xinjiang, ethnic Uyghurs have been labelled as terrorists and criminals based on their ethnic status, and their social existence has been systematically undermined through surveillance and indoctrination camps. A similar logic has worked in many places around the world, manipulating the abstract fears of the protected and creating entire groups of ‘suspect communities’ considered to pose a risk. 

Webinar participants

Rebecca Karl, Professor of History at New York University 

Darren Byler, Assistant Professor of International Studies at Simon Fraser University

Yangyang Cheng, Research Scholar in Law and Fellow at Yale Law School’s Paul Tsai China Center, where her research focuses on the ethics and governance of science and US–China relations.

Au Loong-Yu, labour activist 

Resources

• Byler, D. (2022) Terror Capitalism: Uyghur Dispossession and Masculinity in a Chinese City. Durham, NC: Duke University Press.
• China Media Project: chinamediaproject.org
• Chun, L. (2021) Revolution and Counterrevolution in China: The Paradoxes of Chinese Struggle. London: Verso.
• Gallagher, M.E. (2017) Authoritarian Legality in China: Law, Workers, and the State Cambridge: Cambridge University Press.
• Karl, R.E. (2020) China’s Revolutions in the Modern World: A Brief Interpretive History. New York: Verso.
• Karl, R. (2010) Mao Zedong and China in the 20th-century World: A Concise History Durham, NC: Duke University Press.
• Loong-Yu, A. (2020) China’s rise: strength and fragility Hong Kong in revolt: the protest movement and the future of China. London: Pluto Press.
• Manfred E. (2021) Workers and Change in China: Resistance, Repression, Responsiveness. Cambridge: Cambridge University Press.
• McGregor, R. (2012) The Party: The Secret World of China’s Communist Rulers. New York: HarperCollins.
• Pan, J. (2020) Welfare for Autocrats: How social assistance cares for its rulers. Oxford: Oxford University Press.
• Saich, T. (2010) Governance and Politics of China (3rd edn). Basingstoke:Palgrave Macmillan.

Photo credit: © Joshua Fernandez/Unsplash. Scene inside a Sam’s club during the 2020 Covid-19 pandemic in Shenzhen, China. 

There has been heated debate over the nature of China’s economic system – specifically whether it is capitalist or socialist. This section summarises different views on the development of China’s economic system over three periods of recent history: the socialist period between the 1950s and 1970s, the transition period between the late 1970s and 1990s, and the capitalist period as from the 1990s. This is followed by a summary of several characteristics and trends in China’s current economic system, the crisis it has been facing and its responses.

Socialist period (1950s–mid-1970s) 

After the Chinese Communist Party gained power in 1949, it first eliminated private property from the means of production to establish new socialist economic structures. In urban areas, the party nationalised and collectivised industries and established work units based on public ownership. In rural areas, land was redistributed and placed in the hands of villagers’ collectives. But there are diverging views on the character of society in this period and the trends it manifested. 

Joel Andreas argues in ‘Disenfranchised: The Rise and Fall of Industrial Citizenship in China’ that, during this period, Chinese workers gained ‘industrial citizenship’, which secured their recognition as legitimate stakeholders in factories through job tenure and extensive membership rights. Although the constraints on autonomous collective action severely limited the potential for workplace democracy, the work structure at the factories was designed to learn from workers’ grievances and the social hierarchy was compressed. 

In ‘The Communist Road to Capitalism’, however, Ralf Ruckus contends that, after the abolition of the old class divisions, new ones soon arose between peasants and workers and between different strata of workers. He argues that many overviews of the period are too optimistic and simplistic, and that it is important to examine some of its contradictions. In the 1950s, the system of taxation and unified purchase used to generate resources for the socialist industrialisation programme came at the cost of squeezing peasants’ livelihoods. The workforce was divided into permanent and temporary workers, who were accorded substantially different rights under the hierarchical dual labour system. Moreover, women faced a sexist division of labour as they occupied less skilled positions with lower pay. 

Transition to Capitalism (late 1970s–1990)

In ‘Rise of the Red Engineers’, Joel Andreas argues that the Chinese Communist Party’s class-levelling project ended in the late 1970s, after which the party started to restore the cultural and political class hierarchies that had been condemned during the Maoist era. This was done by establishing a more hierarchical education system, as well as through elitist academic and party systems that rewarded cultural and political credentials. In this period, the party retained the socialist economic infrastructure, but merged the cultural and political elites into a new class of ‘technocratic bureaucrats’. These bureaucrats would eventually become the new capitalist class, stimulating the transition to capitalism from the late 1970s.

Others contend that the economic basis for capitalism had already been established in the socialist period. Ralf Ruckus sees the socialist industrial infrastructure, including a disciplined industrial workforce and the patriarchal family structure, as laying important foundations for the new capitalist social relations. In this regard, the market reforms in the late 1970s facilitated the transition to capitalism in the 1990s. For instance, soon after the party officially announced the Economic Reform and Opening policies in 1978, it set up Special Economic Zones (SEZs) to facilitate foreign investment, and restructured the hukou system to enable rural populations to migrate as a cheap labour force in the SEZs. This then triggered new kinds of social struggles arising from rapid urbanisation and proletarianisation. 

Capitalist Era (1990s to the present)

From the 1990s, however, commentators and analysts tend to converge. Deng Xiaoping’s 1992 ‘Southern Tour’ marked a clear declaration by the party’s leadership to further transform China’s economy and integrate it into the global capitalist system. 

From the mid-1990s, the party accelerated the elimination of full employment and membership rights in the old socialist welfare system, which in cities had been based on the work unit structure. Between 1998 and 2003, around 16 million workers, or 40% of the state sector workforce, were laid off when most of the country’s SOEs were privatised or closed down. The remaining SOEs were amalgamated into modern, profit-driven conglomerates, making the workforce vulnerable to being hired and fired at will to minimise labour costs. In the rural areas, local governments dispossessed many villagers of their land, to be used to develop  infrastructure or industrial and commercial projects, totalling over one million illegal land grabs between 1998 and 2005.

After China joined the World Trade Organization (WTO) in 2001, more transnational corporations (TNCs) relocated their global supply chains to the country in pursuit of cheap labour and profits. In 2008, there were 225 million internal migrant workers, most of whom worked in coastal cities in export production. Built on the exploitation of migrant workers, China became the ‘engine of global capitalism’ and the largest destination for FDI. Throughout the 2000s, China enjoyed an unprecedented economic boom with an average of more than 10% annual GDP growth. Production for global markets was central to this boom, with the country becoming the world’s biggest exporter in 2009. 

After 2010, however, China’s economic growth has slowed. Although China was able to avoid the worst impact of the 2008 Global Financial Crisis due to its insulation from the global financial system, its export sectors were seriously affected. Throughout 2009 and 2010, the Chinese government introduced massive stimulus programmes, which totalled 4 trillion RMB (USD 586.68 billion), amounting to 12.5% of the country’s 2008 gross domestic product (GDP). Immersive infrastructure projects, such as high-speed railways, roads, and airports, were built with government funding and bank credit. Ho-fung Hung argues that China became burdened with diminishing returns from its continuous credit-funded stimulus projects, as it began to suffer a crisis of over-accumulation and over-leveraging, which worsened throughout the decade. Despite the government’s rhetoric about boosting domestic consumption to respond to over-production, the reality of growing inequality has made this less feasible. In the last 30 years, the growth rate of China’s per capita household consumption expenditure and disposable income has lagged behind its GDP per capita, leading to an increasing gap.

Chart 1: GDP per capita, household income and household consumption between 1990 and 2018

Characteristics of China’s economic system today

China’s current economy is fundamentally capitalist, in the sense that all businesses have to be oriented towards maximising profit. These enterprises co-exist with a strong state that regulates the economy to serve its national goals and ensure social stability. 

Yet, while capitalist, China’s economy is also distinct from many others. As Ho-Fung Hung points out, the domination of state enterprises is one distinctive characteristic. The Chinese constitution guarantees the state sector a dominant position in the economy and the party has used SOEs as important levers to direct the economy, playing a major role in domestic and global markets. In the 2021 Global Fortune 500 List, 124 out of 500 are corporations from China and 82 of these 143 are state-owned. The proportion of SOEs’ total revenue compared to private enterprises varies between sectors. In 2018, in strategic industries such as armaments, electricity, and minerals, SOEs compose 85% of all enterprises; in pillar industries, such as construction and electronics, they make up 45%, while in other industries they represent only 15%. Telecommunications and finance are exclusively state-owned, giving the state a continued monopoly of big data and finance. 

Ho-Fung Hung also argues that China’s economic slowdown, related to the debt and over-production crisis that has worsened since 2010, has created the context in which the state has launched regulatory crackdowns and is seeking to export capital overseas. Domestically, the government has pushed ahead with the expansion of state sectors at the expense of the private sectors in a situation of ‘economic cannibalism’ that has depressed the overall growth rate. For instance, while the state retains its monopoly in many sectors, its anti-monopoly laws have been disproportionately used against private and foreign enterprises. Internationally, Xi Jinping launched the ‘Belt and Road Initiative’ (BRI) in 2013 to provide credit to 70 low- and middle-income countries for infrastructure projects to absorb China’s over-accumulation. By 2015, the supply of local currency and loans was still growing while China’s foreign-exchange reserves were stagnant, which led to capital flight, a meltdown of the stock market, and devaluation pressure on the RMB. The state then introduced heavy-handed regulations on the financial market to tighten capital controls. More detail about China’s BRI project is provided in the section ‘China and the World’.

In all of this, it’s important to emphasise the enormous class polarisation and the struggles of ordinary people lying behind economic growth. In the past three decades, China’s explosive capitalist development has largely been built on the massive surplus rural population that supplies cheap labour to the export-oriented economy. In order to keep down the cost of labour, the state has facilitated the exploitation of its workers through overall development strategies in favour of capital. As a result, workers’ basic labour rights are often systematically abused, and their access to social welfare is also structurally limited. More detail about workers’ lives and their struggles is reviewed in other sections, ‘Life in China’ and ‘Social Movement in China’. 

Webinar participants

Ralf Ruckus, editor of gongchao.org 

Joel Andreas, Johns Hopkins University 

Ho-Fung Hung, Johns Hopkins University 

Resources

• Andreas, J. (2019) Disenfranchised: The Rise and Fall of Industrial Citizenship in China. Oxford: Oxford University Press.
• Chuang, J. (2020) Beneath the China Boom: Labor, Citizenship, and the Making of a Rural Land Market. Berkeley, CA: University of California Press.~
• Chuang collective (2021) Social Contagion. Chicago: Charles H. Kerr.
• Hung, Ho-fung (2015) The China Boom: Why China will not rule the world. New York: Columbia University Press.
• Naughton, B. (2018) The Chinese Economy. Adaptation and Growth. (Second Edn). Cambridge, MA: MIT Press.
• Roberts, D. (2020) The myth of Chinese Capitalism. London: St. Martin’s Press.
• Ruckus, R. (2021) The Communist Road to Capitalism. How Social Unrest and Containment Have Pushed China’s (R)evolution since 1949. Oakland, CA: PM Press.
• Shih, V.C. (2007) Factions and Finance in China: Elite Conflict and Inflation Cambridge: Cambridge University Press.
• Weber, I. (2021) How China Escaped Shock Therapy: The Market Reform Debate. Abingdon: Routledge.

Photo credit: © 8268513/Pixabay. Hong Kong Pride Parade. 

While the Chinese state’s political and economic structural power is characterised by capitalist relations and repressive authoritarianism, the country is still shaped in different ways by power from below. Despite the government’s increasing investment in new forms of technological surveillance and intensifying political arrests, people in China persistently struggle against exploitation, discrimination, and political repression and to secure their rights to a healthy and dignified life. The section explores workers’ struggles and feminist movements in mainland China, as well as the Hong Kong Anti-Extradition Bill movement in 2019.

Labour movement in China 

China has a long tradition of labour militancy, stretching back to mobilisation in foreign-controlled ‘treaty ports’ like Shanghai and Guangzhou in the early twentieth century and, from there, to waves of workers’ protests during the Hundred Flowers Movement, as a part of the Cultural Revolution, and during the Tiananmen Square Movement of 1989. Since the beginning of China’s Economic Reform Era, and especially in the early 2000s, there have been numerous strikes and workers have staged protests, petitioned, and rioted in order to push for their demands. Chinese workers have been extraordinarily active. There was a dramatic rise in labour actions during the Hu-Wen administration (2003–2012). There have been fewer since then, which could be interpreted either as a fall in the number of strikes or on reporting on them.

Chart 2: Worker actions between 2003 and 2012
 – Source: China Strikes, China Labour Bulletin, Chinese Academy of Social Sciences

As noted earlier, at the dawn of the twenty-first century, the working class in China was still divided into two main groups: permanent workers in the old SOE sector and internal rural migrant workers with temporary urban employment. Their  different experiences have led to articulating distinct claims. SOE workers experienced privatisation and corporate restructuring, which led to many job losses during China’s Market Reform in the late 1990s and early 2000s. As we have already seen, migrant workers never enjoyed socialist benefits, such as membership rights of their work units, and housing and childcare benefits. On the contrary, they experienced a discriminatory system in the cities, where they were hyper-exploited by factories operated entirely according to a capitalist logic.

C.K. Lee argued in ‘Against the Law: Labour Protests in China’s Rustbelt and Sunbelt’ that the claims of the SOE workers in the 1990s and early 2000s were rooted in their tattered socialist social contract, whereas the migrant workers focused on narrower legal rights. Conversely, Manfred Elfstrom points out that an increasing number of workers also made more assertive demands for higher wages and better social benefits in the later 2000s. For instance, in 2010, thousands of workers stopped Honda automobile plants in Guangzhou which led to the shutdown of the entire supply chain in demand of better wages. 

Various actors have given support to these struggles. Workers gain support from social media, from the loose networks of workers from the same home town, and, more recently, from Marxist students. Several years ago, grassroots non-governmental organisations were notable supporters. These were usually based in the industrial zones, where they opened community centres. They later became the target of government crackdowns. Elfstrom argues that NGOs played a complicated role in workers’ struggles. Certainly, some of the criticisms that they focused too much on advocacy and individual legal work as opposed to organising collective actions may be justified, but NGOs also had a more militant side, for instance when they provided advice in strike-making and facilitated informal collective bargaining in the aftermath of work stoppages. 

We have noted that China has a single, party-controlled union, ACFTU. Despite its revolutionary history, the union’s main goals today are to maintain peaceful industrial relations and restore normal production if it is disrupted. These goals are inscribed in the country’s Trade Union Law. Very occasionally, the union serves as a fairly neutral mediator between workers and capital, and is a mild internal advocate for new labour legislation on behalf of workers. In most cases, however, the union is merely an arm of management and the local government. 

Elfstrom argues that the results of workers’ activism in China have been double-edged: increased responsiveness and increased repression. The struggles of SOE workers have spurred the state to expand the social safety net, and workers’ protests have been credited with encouraging the enactment of a new Labour Contract Law in 2008 and a Social Insurance Law in 2011, providing a more comprehensive legal framework for labour protection. There have also been sporadic pilot experiments to allow elections in enterprise-level unions, and/or sectoral bargaining. It is important to note that these reforms took place in specific localities where independent collective actions were already more frequent. As the union reformers themselves have acknowledged, it was the workers pushing the unions to act, not the other way around. Elfstrom points out that although the repression has been more pronounced under Xi’s administration, with a crackdown on NGO leaders and Marxist students, strikes nevertheless continue and have even expanded to more sectors, like service industries, and the platform economy.

#MeToo Movement in China

China’s feminist movement has a long history (see section ‘Life in China’) but in 2018 it connected with the global #MeToo movement, when Xi-xi, Luo shared her allegations of sexual harassment against her former university professors on her social media platform. Her story went viral and encouraged a wave of women to publish their accounts of sexual harassment. To counter the censorship, netizens also invented the hashtag ‘Rice Bunny’ (the Mandarin pronunciation sounds like ‘Me Too’) and used it widely in the online discussion. The #MeToo movement has since expanded to universities, cultural, business and non-profit sectors in China.

The #MeToo Movement responds to the context of the long-term structural suppression of Chinese women and their grievances – as well as a history of women’s mobilisation against this. Women in China continue to face a discriminatory labour market and a society which urges them to have children but fails to provide public childcare support. 

In 2011, members of ‘Young Feminist Activism’ started to campaign against discrimination and sexual violence. They organised the ‘Occupy the Men’s Toilets’ campaign to protest over unequal provision of public toilets. They wore wedding dresses covered in red to draw people’s attention to domestic violence. They shaved their hair to address the unequal requirements women face to enrol in university. These eye-catching campaigns caught the attention of Chinese mainstream media, and provoked heated discussions on social media. A few policy changes were also made, including China’s first Anti-domestic Violence Law in 2015. However, in the same year, repression of civil society also intensified: five feminist activists were detained after planning a multi-city protest against sexual harassment on public transport.

In 2018, despite the political climate, the #MeToo Movement expanded and became more decentralised. Countless women continued to post their accounts of sexual harassment online and a handful brought their cases to the courts. In 2018, Zhou Xiaoxuan accused Zhu Jun, a prominent host on state broadcasting, of sexual harassment and drew enormous public attention. After being sued by Zhu for defamation, Zhou counter-sued him for ‘violation of personality rights’, as sexual harassment is not clearly defined in the civil code. In 2020 and 2021, when Zhou’s trials were held, crowds gathered outside the court to show support for her despite police harassment. Although the court eventually ruled that Zhou had tendered insufficient evidence in her sexual harassment case, her action was empowering to many participants in the #MeToo movement. Besides the lawsuit, there have also been various efforts to document and discuss the #MeToo movement in China despite government’s attempt to silence it, including a 2600-page ‘#MeToo in China Archive’ compiled by volunteers, and exhibitions in Guangzhou and Beijing. 

Since the #MeToo movement in 2018, a couple of policy initiatives have been introduced. For instance, in 2018, The People’s Procuratorate and the Education Bureau of Hangzhou Xihu District jointly announced the first guidelines to handle sexual harassment cases in schools. In 2021, nine Shenzhen government departments co-published a guidebook to provide a unified standard for sexual harassment policies at schools and workplaces to prevent and punish sexual harassment. In the same year, China’s first-ever Civil Code obliges companies to adopt measures to prevent and respond to sexual harassment in the workplace. However, while the state introduced the new policy initiative, it has also censored the online discussion, arresting and harassing the activists who were part of the grassroots movement that pushed for the changes. A prominent feminist activist, Huang Xueqin, who supported women to come forward with stories of sexual harassment, has been detained since 2021 on the charge of ‘inciting subversion of state power’, and her lawyer’s request to meet with her has been denied. 

Hong Kong Movement in 2019

In the summer of 2019, a million people marched in the streets to protest against the Extradition Bill, introduced by the Hong Kong government to enable the extradition of suspects from Hong Kong to mainland China. In so doing, they kicked off the biggest mass movement in Hong Kong’s history.

The government’s refusal to withdraw the bill and increasing police suppression led to a shift in the protesters’ focus, coalescing into Five Demands: complete withdrawal of the Extradition Bill, police accountability, retracting classification of the protests as riots, amnesty for arrested protesters, and universal suffrage for the legislative and chief executive bodies. The protests also expanded to various locations throughout Hong Kong, moving from the financial and political centres to outlying communities. Moreover, due to the intense police crackdown and the government’s refusal to make concessions, protesters began to complement mass demonstrations with more radical tactics, including road blocks, raids of government buildings, and petrol bombs. 

The street clashes escalated and reached their peak in mid-November 2019, with street actions taking place every couple of days. In response, the police crackdown and mass arrests also escalated: over a thousand people arrested in a single day as battles took place in two universities. The repression caused immense, social and psychological trauma and led to a decline in this radical street action as protestors perceived little possibility that it could achieve a change.

At the same time, there was a growth on other fronts in the movement, such as unionisation drives, ‘Yellow Economic Circles’ (a network of businesses which openly supported the protests), elections, and community-based organising. These fronts were explored through trial and error. When the pandemic struck at the start of 2020 the networks and solidarity formed by the movement enabled a prompt civil society response. For instance, the network of cross-sector unions became important for workers to express a joint and critical voice to the government’s pandemic policies and facilitated an unprecedent industrial action launched by health workers.

From the start of the Anti-Extradition Movement to early 2021, the Hong Kong police made over 10,200 arrests linked to the movement. In June 2020, the Chinese government escalated the crackdown by bypassing the local legislature to impose a National Security Law (NSL) on Hong Kong. The new law vaguely defined and criminalized activities related to ‘Subversion’, ‘Secession’, ‘Terrorist’ and ‘Collusion with a Foreign Country,’ which could potentially lead to a life sentence. Since the enactment of the law, the National Security Department (NSD) carried out a widespread crackdown on various parts of civil society, including universities, the media, and trade unions, arresting a total of 183 people. In early 2021, 53 activists and legislators were arrested on the grounds of ‘conspiracy to commit subversion’ for taking part in an opposition-organised primary election – speech crimes constitute nearly a third of arrests carried out by the NSD. The same year, dozens of activists from a speech therapists’ trade union former news outlets were arrested for publishing books and articles under the charges of ‘conspiring to publish seditious publications’, a notorious offence introduced during the colonial period. The arbitrary arrests functioned as an intimidation campaign and led to the mass disbanding of civil society organisations (CSOs) and self-censorship in public discussion. 

The crackdown on Hong Kong’s civil society has also had deep repercussions on mainland China. Au Loong-Yu pointed out that Hong Kong’s organisations have a long history of supporting social movements and grassroots initiatives in mainland China, covering a wide spectrum including environmental, labour, and human rights issues. For instance, in the last 30 years, the ‘Hong Kong Alliance in Support of Patriotic Democratic Movements of China’ has continuously organized mass vigils to remember the June 4^th Tiananmen Square massacre, until it was banned in 2020, with several activists jailed for participating in the illegal gathering. A handful of labour organisations based in Hong Kong have also played a crucial role in supporting groups in mainland China in awareness raising and empowerment of migrant workers. Au Loong-Yu thinks that if the cross-border solidarity and support had continued, we could see a different China, but the government has turned the clock back and cracked down on civil society in Hong Kong and mainland China.

Webinar participants

Au (a pseudonym), an activist from Hong Kong 

Manfred Elfstrom, University of British Columbia

Crystal L. (a pseudonym), a Chinese feminist activist  

Au Loong Yu, a labour activist

Resources

• China Labour Bulletin. https://clb.org.hk/
• Elfstrom, M. (2021) Workers and Change in China; Resistance, Repression and Responsiveness. Cambridge: Cambridge University Press.

• Lee, C.K. (2007). Against the Law: Labor Protests in China’s Rustbelt and Sunbelt. Berkeley, CA: University of California Press.
• Franceschini, I. and Sorace, C. (eds.) (2022) Proletarian China: A Century of Chinese Labour. London: Verso Books.
• Loong-Yu, A. (2020) Hong Kong in Revolt: The Protest Movement and the Future of China. London: Pluto Press. 
• Lu, Z. (2015) Inside China’s Automobile Factories: The Politics of Labor and Worker Resistance. New York: Cambridge University Press. 
• Lee, C.K. (2022) Hong Kong: Global China’s Restive Frontier. Cambridge: Cambridge University Press.
• Wu, G. Feng, Y. and Lansdowne, H. (2019) Gender Dynamics, Feminist Activism and Social Transformation in China. Abingdon: Routledge.

Photo credit: © European Council President/Flickr. President of the EU Commission Jean-Claude Juncker,  Chinese Premier Li Keqiang, and European Council President Donald Tusk at the EU-China Summit 2017. 

This section provides a contextualised overview of China’s economic and military rise, including the Belt and Road Initiative, China’s overall military capacity, and cross-strait and South China Sea tensions. It also explores reflections from an activist in the Chinese diaspora participating in a transnational social justice movement in a period of heightened US–China geopolitical tensions. 

China’s Economic Rise – Belt and Road Initiative (BRI)

China’s contemporary economy has been largely integrated with the global economy, but one project above all is seen as representative of China’s global aspirations. Since Xi Jinping unveiled the ‘One Belt One Road Initiative’ in 2013 – later renamed ‘Belt and Road Initiative’ (BRI) – to connect the economies of Asia, Europe and Africa with transport and energy infrastructure projects, it has been depicted as a coherent and geopolitical-driven ‘grand strategy’ orchestrated by top Chinese political leaders to dominate the world. Research by Lee Jones and Hong Zhang suggests, however, that BRI was largely determined by ‘multilevel, multi-actor struggles for power and resources’. 

Lee Jones argues that profit-seeking SOEs and banks are the dominant actors driving the further internationalisation of the Chinese state. Because SOEs have been facing massive over-capacity, saturated markets, and declining domestic profits, their motives to seek overseas markets became the most significant drive behind the BRI. Political leaders then overlaid diplomatic language on this overseas economic expansion and framed it as a diplomatic ‘win-win’: recipient countries receive investment in projects that other risk-averse competitors are hesitant to back, while China expands its economic globalisation and boosts its international legitimacy. Moreover, the BRI is not an entirely new initiative, but an aggregation and scaling-up of China’s existing overseas economic activities, consolidated to allow foreign governments and consumers to soak up SOEs’ excess capacity and banks’ surplus capital. More discussion about China’s crisis of over-accumulation and overleveraging is reviewed in the section ‘China’s Economic System’. 

Hong Zhang categorises five major BRI actors: the central political leadership, government ministries, sub-national governments, enterprises, and social organisations. While the BRI actively mobilises agents across all levels, the central government’s ability to coordinate and oversee these has been weak and ineffectual. Characterised by Jones as a ‘Chinese style regulatory state’, the Chinese government often fails to devise detailed strategies and micro-manage outcomes; conversely, diverse actors may influence, interpret or ignore the broad policy guidelines formulated by the upper echelons. Usually, enterprises are the primary actors, scouting for overseas business opportunities then retrofitting their projects into the country’s overall development strategy and competing for the government’s diplomatic and financial support. This means that ‘the tail wags the dog’, with many uncoordinated and poorly thought-through projects being approved. Moreover, as Hong Zhang’s research shows, SOEs are often powerful economic actors in their own right, and are to some extent independent of the government’s ‘financial power’.

China is now a major international investor and creditor, and its involvement in development financing is also noteworthy. Over the 2000–2014 period, China’s overall provision of development finance totalled US $354 billion, only US $40 billion behind the US. However, while China’s share of foreign governments’ debt has risen substantially, its debt ownership is still relatively small compared to private lenders overall and lags well behind the established multilateral lenders. As of 2022, China is the dominant lender in only 17 debt-distressed states worldwide.

Chinese market dominance in overseas infrastructure projects, particularly in Africa and Asia, is unassailable, with nearly 1,000 projects totalling $170 billion dollars over the 2013–2021 period. Further information on some of these projects can be found on ‘The People’s Map of Global China’, a bottom-up, collaborative initiative documenting infrastructure and other projects financed and/or built by Chinese entities worldwide. Some of these projects are facing great challenges or already failing, which Jones interpreted as a reflection of the shortcomings of Chinese-style regulatory governance and recipient states’ economic unsustainability, rather than the success of Beijing’s ‘debt trap diplomacy’. 

Low transparency in governance and in engagements with the local community are common problems, which have led to significant ‘blowback’ for China from recipient countries. For instance, the land-grabs and displacements associated with several BRI projects in Cambodia Sri Lanka have caused serious local unrest. In recent years, due to rising concern about the potential risks and backlash, an increasing number of recipient countries are suspending (Sierra Leone) or scaling back (Myanmar, Malaysia) major planned BRI projects. The BRI therefore does not only strengthen China’s ties with recipients, but may also generate local and inter-state discord, undermining Beijing’s broader foreign policy goals.

China’s Military Rise – Cross-strait and South China Sea Tensions

There is no doubt that China is modernising and expanding its military capacities, although Walden Bello argues that this is largely limited to its own region rather than being a global phenomenon. Key indicators show that China’s military capacity remains largely inferior to other global powers, specifically the US. In terms of nuclear weapons, it is estimated that China has 350 nuclear warheads while the US has 5,600; the US has 800 military bases in 177 countries (out of a total of 195) while China only has one military base in Africa, and an overseas military presence in a few sites in Tajikistan and artificial islands in Asia. China only has two aircraft carriers based on an antiquated design while the U.S. has 11 of the total 43 that exist in the world today. 

However, the South China Sea (SCS) dispute and cross-strait tension with Taiwan are two major flash points for intensifying geopolitical tensions. The South China Sea (SCS) is a strategic link between the Pacific and Indian Ocean, which is not only an important trade route but also rich in oil, natural gas, and fish. It has been a point of contention in the disputed territorial claims among Brunei, China, Malaysia, the Philippines, Taiwan and Vietnam. In the past decade, China has carried out increasingly aggressive military activities in the region by building artificial islands for military bases, exploring for natural resources, and violating the rights of neighbouring countries. Walden Bello points out that an important factor in the SCS is US forward-deployed military presence in the region. Furthermore, China is surrounded by around 50 US military bases from Northern Japan to the island of Diego Garcia in the Indian Ocean, the South China Sea has also been controlled by the US 7th Fleet with its carrier taskforces, surface ships, nuclear-armed attack capacity, strategic submarines, and provocative air reconnaissance. Bello argues that, while the US and China are jostling for power in the region, this has created an explosive situation for the entire region, and although China’s moves might be understandable in its geopolitical tension with the US, this is no justification for them. 

Taiwan is only 160 km off China’s coast, and its political status has been contested. While Beijing claims Taiwan is part of China, Taiwan enjoys de facto autonomy with its own elected president and independent political system. Although China’s military aggression is not new to Taiwan, in the past few years, Chinese warplanes have crossed the median line of the Taiwan Strait at a historically high level. However, although the western media plays up the military threats, survey results show that the Taiwanese are aware of these but are not necessarily worried about the prospects of an immediate military conflict. 

Brian Hioe lays out some political and economic context to take into account when assessing the possibility of a cross-strait conflict. Despite the significant difference in military capacity between China and Taiwan, occupation of Taiwan would not be as easy as some observers might assume. Militarily, Hioe argues that China would face a severe death toll from a beachhead invasion, and currently China still lacks the ‘lift capacity’ to send troops for a long-term occupation of Taiwan. Economically, the world’s dependence on China and significantly on Taiwan would also be a decisive factor. As Taiwan produces more than half of the world’s semiconductors, used in all kinds of electronic devices from missiles to mobile phones, China would want to ensure minimal disruption and preserve know-how and infrastructure in Taiwan. This has led China to follow a multi-pronged strategy: not just intimidation campaigns and psychological warfare, but also economic and political co-optation as a strategy towards unification. So, China facilitates a class of cross-strait elites to encourage economic integration and supports KMT, the Chinese National Party, as its domestic proxy to attempt to take over Taiwan through electoral means. Similar to the regional tension in the South China Sea, Hioe points out that Taiwan is caught between the US and China. US diplomatic visits and gestures regarding Taiwan often lead to a response of China’s military aggression in a tit-for-tat escalation. 

Diaspora activists’ experiences in the heightened US–China tension

May Wu is a social justice organiser who works with Chinese students and activists in the US and internationally. She shared her personal experiences of participating in transnational social justice movement in the US, which also sheds light on the struggles of the Chinese diaspora in the heightened US–China tension and her insights on reimagining international solidarity. 

With the population of Chinese students in the US totalling more than 300,000, May underlines the importance of mobilising them while the liberal environment gives them opportunities to engage in social movements. However, as Mengyang Zhao argues in his article ‘Chinese Diaspora Activism and the Future of International Solidarity’, diaspora activists often suffer the ‘triple penalty’ of simultaneously being activists, immigrants in their countries of residence, and activists in their home countries. In the context in the US, the Chinese state is aggressively tightening its grip on diaspora activists, and puts them under extensive surveillance and scrutiny. At the same time, the worsening US–China relationship, Trump’s rise, and anti-Asian hate crimes following the pandemic outbreak has caught diaspora activists between two state actors and growing hostility in the US. For instance, May noted that when Chinese students and activists participated in the Black Lives Matter (BLM) movement in the US, their actions were viewed as evidence of having been brainwashed by ‘western liberal values’ among the mainstream Chinese public, and perceived by some US audiences as an intervention by Chinese communist spies sent to sabotage US domestic politics. 

It is important to move beyond the common stereotype that Chinese diaspora activists are only ‘dissidents against Chinese government in liberal democratic countries’. Diaspora activists  have huge amounts to contribute to social movement in their countries of residence practically and intellectually. During the BLM movement, in solidarity, some Chinese students joined rallies, created content and workshops about the topics, and participated in initiatives led by people of colour. Some also organised fellow students to contact Chinatown vendors to explain the cause of the movement. May argues that overseas Chinese students have a long history of transnational social movement organising in the US, and their participation in activism today is a living example of this transnational identity, building bridges between Chinese students, resident and home communities, and with other diaspora activists and local movements. 

Webinar participants

Brian Hioe, activist in Taiwan, editor of New Bloom Magazine 

Lee Jones, Queen Mary University London

Hong Zhang, John Hopkins University and co-editor of the People’s Map of Global China (https://thepeoplesmap.net)

Walden Bello, Focus on the Global South 

Resources

• Bello, W. (2019) China: An Imperial Power in the Image of the West? Bangkok: Focus on the Global South.
• Dreher, A., Fuchs, A., Parks, B., Strange, A. and Tierney, M.J. (2022) Banking on Beijing: The Aims and Impacts of China’s Overseas Development Program. New York: Cambridge University Press.
• Global China Pulse: https://thepeoplesmap.net/globalchinapulse/global-china-pulse-1-2022/
• Jones, L. and Hameiri, S. (2021) Fractured China: How State Transformation is Shaping China’s Rise. Cambridge: Cambridge University Press.
• Jones, L. and Hameiri, S. (2020) Debunking the Myth of ‘Debt Trap Diplomacy’: How Recipient Countries Shape China’s Belt and Road Initiative. London: Chatham House. https://www.chathamhouse.org/2020/08/debunking-myth-debt-trap-diplomacy
• Lee, C.K. (2017) The Specter of Global China: Politics, Labor, And Foreign Investment in Africa. Chicago: University of Chicago Press.
• New Bloom: https://newbloommag.net/
• Pettis, M.K. (2020) Trade Wars are Class Wars. New Haven, CT: Yale University Press.
• Reilly, J. (2021) Orchestration: China’s Economic Statecraft Across Asia and Europe. Oxford: Oxford University Press.
• Ye, M. (2020) The Belt Road and Beyond: State-Mobilized Globalization in China: 1998–2018. New York: Cambridge University Press.

Photo credit: © Photoholgic/Unsplash. Shanghai’s high rise buildings covered in smoke.  

The climate crisis affects the entire globe. Addressing it depends on international collaboration and collective action coordinated across the planet. This section examines China’s contribution to the global climate crisis, and the progress and shortcomings of its current policies. China has long been at the centre of the debate over this crisis, but much analysis often fails to understand its position in the global economy, the role of social movements in the country, and the possibilities for international climate cooperation.

Economic development and the energy model

China’s economic model and its position in global supply chains have significant implications for its energy model. China’s contribution to global emissions is a relatively recent phenomenon, coinciding with its spectacular economic growth and its emergence as ‘the factory of the world’. China’s export-led and infrastructure-building economic model, as well as its coal-rich energy resources, established an energy system that is highly dependent on coal, which has led to high carbon intensity given its economic outputs and also created enormous greenhouse gas (GHG) emissions. China’s carbon emissions started to take off in the early 2000s and escalated until 2012. In 2006, China overtook the US as the largest annual contributor to global carbon emissions in absolute terms, although US remains responsible for the largest share of historical emissions, with some 20% of the global total as of 2021.

As Ying Chen points out, however, different data sets can affect how people understand the climate crisis, influencing the questions to be posed and the possible solutions. While the mainstream media highlights aggregate data showing that China is responsible for 27% of global carbon emissions and more than 50% of the world’s total coal consumption, in per capita terms, China’s emissions are 10.1 tons per person, compared to 17 tons in the US. In addition, most emissions data is based on the production that occurs within a given territory. It does not reflect externalities, such as the fact that much of this production represents carbon-intensive activities that have been outsourced from the former industrialised countries to poorer ones. Per capita consumption-based data is a more accurate indicator, since it shows how those who are on the end of the consumption chain bear responsibility for the emissions. Using these measures, the G7 group of high-income countries have a much higher level of per capita emissions than lower-income countries, including China, which is the highest among emitter among the non-G7 economies. 

Per capita consumption-based CO2 emissions – Source: Our World in Data based on Global Carbon Project

Environmental consequences and environmental movements 

By the early 2000s, China’s massive coal consumption had led to severe smog and poor air quality across the country. An internal government from 2003 estimated that 300,000 people died each year from air pollution, mostly due to related heart disease and lung cancer. The contamination of water and soil with chemical waste and heavy metals are also huge concerns. A nationwide soil survey conducted by land officials from 2005 to 2013 revealed that about 16% of China’s soil and about 19% of agricultural land were contaminated. Recent estimates suggest that water pollution in China causes more than 100,000 deaths each year. 

Environmental public health issues have become a major concern and generated domestic discontent. This pressure from society and emerging environmental movements became one of the most important forces that eventually propelled China’s environmental policies. In the 2000s, an emerging middle class with a growing environmental awareness – including journalists, NGOs and self-organised groups – formed an nascent environmental movement advocating for cleaner air and clean water. In the mid-2000s, around 80,000 mass protests were taking place every year, many concerned with the environment. Some officials working in environmental protection agencies made alliances across society and attempted to regulate the polluting industrial sectors. However, as economic growth remained the state’s top priority and local governments were dependent on industrial revenues to meet economic targets, environmental protection agencies often lacked real power to take action. 

From the 2010s, demands from Chinese civil society to control air pollution made some progress. The government increased transparency in environmental data and accountability in the governance of public health, and has gradually embedded some of the calls for environmental changes into its own policies and launched ‘Ecological civilisation’ as a major campaign. In 2018, the Chinese government set up the Ministry of Ecology and Environment to coordinate, supervise, and regulate the country’s environment and formulate a new industrial strategy. However, as Hongqiao Liu and Isabel Hilton observed, unlike the vibrant social movements and self-organised groups of the 2000s, today’s civil society is compelled to address environmental issues through official channels, as popular movements face political repression and increased regulation. 

China’s environmental policies

After becoming the largest global emitter by volume in the mid 2000s, the Chinese government not only faced domestic discontent but also increasing international pressure. In addition, it began to be accepted that the country’s future prosperity could also be negatively affected by the climate crisis. For instance, much of the country’s urban infrastructure is located in the coastal regions, which are vulnerable to sea-level rise. 

In 2010 – and coinciding with the Chinese government’s attempt to encourage industrial restructuring in response to the economic downturn – the central state orchestrated a strategic shift in energy and climate policies that, it argues, will lay the groundwork to build a carbon-constrained world. China’s energy structure has been extremely dependent on hydrocarbons. In 2020, 84% of its primary energy consumption came from fossil fuels, of which about 57% is derived from coal. At a 2020 United Nations meeting, Xi Jinping pledged to peak C0₂ emissions before 2030, a promise first made at COP 21 in Paris in 2015, and to reach a target of carbon neutrality by 2060 – the first time China had put a carbon neutrality deadline on the table. Prior to COP26 in late 2021, China officially submitted its carbon neutrality ‘before 2060’ target, which could significantly prevent an extra 0.2–0.3ºC of global warming. The strategic vision to achieve carbon neutrality also specifies that China will increase the share of non-fossil fuels in the energy mix to 25% by 2030 and to 80% by 2060.

To build a carbon-constrained world, the Chinese government has launched national policies and devoted enormous resources to renewable energies, including wind, solar, nuclear, and hydropower. Starting in 2010, China began building the supply chain of the green economy, spanning from mineral inputs to manufacturing, as well as developing new technologies. Today, China is a significant player in the global green economy, and accounts for 75% of world’s supply chains for solar power, while its refineries supply an estimated 85% of the world’s battery-ready cobalt for lithium-ion batteries. China’s technologies and ability to manufacture renewable alternatives cost-effectively have also brought down the cost of solar and other renewables for the rest of the world, making it more possible for Low and Middle-Income Countries (L&MICs) to bypass a high-carbon emitting route to fuel their development. At the same time China’s GDP is also growing from being a major manufacturer and exporter of renewable energies. There are, however, various injustices within the green supply chain. One investigation reported by the New York Times found that the growing solar industry in Xinjiang is based on forced labour of the Uyghur minority, and that workers in the Democratic Republic of Congo are exposed to severe exploitation when working in the cobalt supply chain to fuel the switch to electric vehicles. 

It will be a major challenge for China to meet its environmental targets. It is that, to achieve the target of carbon neutrality, China will have to cut the same level of CO₂ emissions between 2020 and 2060 as it produced over the last 50 years. China will need to implement huge structural transformation of its economy. Although it appears to be on target to meet the peak C0₂ emissions by 2030, it remains unclear if it can meet its 2060 goals. Regardless, the priorities of the Chinese government have clearly undergone a significant shift away from a sole focus on economic growth towards a different development path that emphasises environmental sustainability. 

International Climate Collaboration 

The climate crisis requires global collaboration, argues Tobita Chow, the director of the Justice Is Global project, and the co-author of an outline on US–China cooperation. As Jonas Nahm has argued in ‘Collaborative Advantage: Forging Green Industries in the New Global Economy’, collaborative approaches between China, Germany and the US have historically brought positive outcomes and helped develop the wind and solar industries. 

Chow points out that the US and China are currently stuck in a nationalist competition over the dominance of cutting-edge clean energy technologies, which encourages both countries to hoard these technologies. However, since China has the largest industrial capacity in renewable energies, and the US is leading in the development and financing of green technologies, their collaboration on tech sharing, financing, and debt relief could potentially accelerate climate action in other countries. 

In addition, Chow argues for the importance of weakening the global intellectual property rights (IPR) regime for clean technologies. Currently, poorer countries struggle to build their own clean energy industries due to the monopolies granted by the IPR regime, which mainly benefits capitalists in industrialised countries, including China. Although cooperation on carbon pricing and carbon tariffs has been at the centre of the debate in industrialised countries, Chow argues that any such mechanisms need to be paired with other measures that support climate-friendly economic development in L&MICs. Otherwise, these could end up as punitive measures that further alienate and undermine poorer countries and would not help achieve a just climate transition. Last but not least, Chow advocates that people around the world should build political power not only to push for better policies domestically, but also to promote cooperation at the sub-national level. 

Webinar participants

Tobita Chow, activist and founder of Justice is Global 

Isabel Hilton, founder and senior advisor of China Dialogue

Ying Chen, Assistant Professor of Economics at The New School

Hongqiao Liu, independent journalist covering climate change and China

Resources

• Chen, Y. and Li, A. (2021) ‘Global green new deal: a global South perspective’. The Economic and Labour Relations Review, 32(2): 170-189. https://doi.org/10.1177%2F10353046211015765
• China Dialogue: www.chinadialogue.net

AUTHOR: Sophie Chen

EDITORS: Nick Buxton, Deborah Eade

DESIGN: Evan Clayburg, Jess Graham

Acknowledgements

Warm thanks to Stephanie Olinga Shannon, Pietje Vervest, Fiona Dove, Ralf Ruckus, Kevin Lin, Darren Byler, Yangyang Cheng, Rebecca Karl, Yige Dong, Tobita Chow and Sandy Shan for advice, guidance and support for the webinar series and this booklet.

In the days following Russia’s invasion of Ukraine in February 2022, the war frenzy reached fever pitch. A call to arms went out to join the war effort and arms consignments were shipped from the US and Europe to the country’s battlefields and trenches to counter the advance of Russian tanks and troops. Calls for de-escalation and dialogue were side-lined, ignored, ridiculed, or misconstrued as pro-Russian or pro-Putin.

It became taboo to reject militarism in favour of peace.

There are no easy solutions to stopping war once it has started, but by now it is clear that providing high-calibre weaponry worth tens of billions has not stopped the fighting. Peace will not be achieved through military victory and in attempting to do so Ukraine has become a bloodbath and its people cannon fodder.  By now the country is almost entirely irrelevant in a geopolitical quagmire between the world’s most powerful nations, the ramifications of which are reverberating around the globe.

There is no justification for Russia’s illegal invasion of Ukraine. President Putin is ultimately responsible for initiating this war and for the brutal conduct of the Russian armed forces on the battlefield. But this war did not occur in a vacuum. It occurred within a context where states have, for decades, rigorously pursued policies that drive militarism and war, where a nation’s worth is measured not by meeting the human-centred security needs of its own population, but by its military might. 

Although militarism enables and prolongs war, since the invasion of Ukraine, Western governments have ratcheted up defence spending, strengthened military alliances, and intensified divisive rhetoric. Perhaps stopping the war isn’t the end goal but rather defeating Russia, regardless of how long that may take or what the immediate and long term cost of that strategy may be. How did we get here and where will this unbridled militarism lead us?

In the years following World War II, French foreign minister Robert Schuman declared that ‘world peace cannot be safeguarded without the making of creative efforts proportionate to the dangers which threaten it’. In 1951, these creative efforts were realised in a treaty between previously historic rivals who agreed to make war ‘not merely unthinkable, but materially impossible’.¹ The European Coal and Steel Community, which eventually evolved into today’s European Union (EU), was born.

Almost 60 years later, EU member states pledged to ‘preserve peace, prevent conflicts and strengthen international security’ in the Lisbon Treaty, which came into force in 2009.² However, preserving peace was no longer about finding creative solutions to pre-empt brewing conflicts between rivals, but rather a business opportunity within a capitalist system, where profit and growth is the ultimate goal, regardless of the deadly consequences. Guaranteeing peace was seized upon by lobbyists for the arms trade, who positioned themselves as security experts and enjoyed unfettered access to the corridors of power. This corporate model of keeping the peace, and the politics that underpin it, only serves to secure capital, protect the elite, and line the pockets of the lucrative private security sector, while consigning the vast majority of the world’s population to a continuous cycle of insecurity and instability.

To exemplify just how embedded the arms industry is in influencing policy it is worth examining the Group of Personalities on Defence Research, an advisory body tasked with advising the EU on funding research and development within the context of the EU’s Common Security and Defence Policy.³ The Group of Personalities was composed of 16 representatives, nine of whom were directly affiliated with the arms industry. Based on their final report, the European Commission (EC) allocated unprecedented amounts of public money to private security companies for weapons research and development (R&D).

European Network Against the Arms Trade and Transnational Institute ‘Fanning the Flames’ March 2022

The initial precursor programmes got almost €600 million⁴ while the European Defence Fund (EDF) received an €8 billion budget. To date, the arms companies that directly influenced the creation of these funds have received €122 million or 28.1% of the current allocation, although this will undoubtedly rise once the entire budget is granted.⁵

In 2021, the EC approved the € 5.7 billion European Peace Facility (EPF),⁶ which, contrary to what its name suggests, finances EU military operations, such as those in West Africa or the Horn of Africa, as well as the provision of military equipment and training, with Ukraine being the first to receive such assistance. The fund is off-budget and therefore circumvents transparency, oversight and accountability procedures.

Research by Statewatch and the Transnational Institute found defence spending more than doubled from one budgetary cycle to the next, with €43.9 billion allocated for the 2021–2027 budget.⁷ By comparison, the amount allocated to the Citizens, Equality, Rights and Values Programme is just €1.4 billion. Arguably though, funding civilian peace initiatives would be much more conducive to building an enduring peace and align more closely with the EU’s founding principle of safeguarding it.

Statewatch and Transnational Institute ‘At What Cost?’ April 2022

Increased military spending is part of a worldwide trend, however. The Stockholm International Peace Research Institute (SIPRI) reported that the 2021 global military budget surpassed US$2.1 trillion for the first time.⁸ The US invested US$801 billion, while Europe’s top military spenders combined spent the equivalent of US$329.2 billion. China’s budget came in at US$293 billion, and Russia’s at US$65.8 billion.  Although the EU’s €43.9 billion over a seven-year period may pale in comparison, the intended direction is clear and indicative of how the EU’s identity is shifting to include a growing military dimension to the union. This began long before the Ukraine war.

The share of world military expenditure of the 15 countries with the highest spending in 2021
Source: SIPRI Military Expenditure Database, Apr. 2022.

Since the invasion of Ukraine in February 2022, the EC has indicated that it intends to increase the EDF and EPF budget lines, as well as create a €500 million fund to incentivise joint arms procurement among member states to replenish military materiel sent to Ukraine.⁹ In the run-up to the June 2022 NATO Summit, European Council President, Charles Michel, announced an increase in military spending to an unprecedented €200 billion in the coming years.¹⁰

Although in absolute terms Russia spends significantly less than the US (S$801 billion) and the combined sum spent by European nations (US$329.2 billion), its military expenditure (US$65.8 billion) has grown significantly over the past two decades, increasing by 175% between 2000 and 2019.¹⁹ Moreover, Russian military expenditure is estimated to be 4.3% of its GDP, which is higher than the 3.7% of GDP spent by the US.²⁰ As early as April 2021 Russia began building up its military presence in the annexed territory of Crimea, and subsequently in Belarus and along its border with Ukraine, deploying large scale artillery, missiles and eventually fighter jets, as well as establishing military training camps and bases.²¹

In July 2021 President Putin published an article titled On the Historical Unity of Russians and Ukrainians in which he lays out his belief that ‘Russians and Ukrainians were one people – a single whole’ stating that ‘modern Ukraine is entirely a product of the Soviet era … shaped on the lands of historical Russia’.²²

In November 2021, President Putin warned that ‘Russia will act if NATO crosses its red lines in Ukraine.²³ But instead of taking steps to mitigate the risk of a Russian military attack, in January 2022 the US State Department did the opposite by clearing Baltic states Estonia, Latvia, and Lithuania, as well as the UK, to send high calibre US made missiles and other armament to Ukraine.²⁴

Ukraine had become a tinderbox.

On 21 February 2022, President Putin took what he described as a ‘long overdue decision’ to recognise the independence and sovereignty of the People’s Republics of Donetsk and Luhansk.²⁵ For Ukraine, this was a direct affront to its sovereignty and significantly heightened its fear of Russian imperialist aspirations being realised. The stage for war was set.

Before dawn on 24 February 2022 Russian tanks rolled in to Ukraine. The long looming war had begun. The EU’s shift from a being a political and economic alliance to also becoming a military one was cemented when EC President Ursula von der Leyen stood alongside NATO Secretary General Jens Stoltenberg and declared ‘we are one union, one alliance, united in purpose’.²⁶

On 18 May, Finland and Sweden applied to join NATO,²⁷ whose accession Secretary General Jens Stoltenberg claimed ‘… would make the Alliance stronger and the whole Euro-Atlantic area more secure’.²⁸ In response President Putin stated that if military contingents and infrastructure is deployed to Finland or Sweden, Russia ‘would be obliged to respond symmetrically’.²⁹

Both countries have a long history of military neutrality and remaining outside military alliances has served them well. Yet in a time of war they have abandoned a strategy that has brought them stability to join an alliance, the very expansion of which is a key factor that Russia has cited for its invasion of Ukraine.³⁰ NATO member Turkey quickly announced that it would only accept their membership in exchange for the relaxation of arms embargoes and the extradition of persons alleged to be connected with the Kurdish struggle. Considering that Turkey exports arms to conflict zones, and has used similar trade-offs to justify waging war against the Kurds in the past, the knock-on effects of these Nordic nations joining NATO will be felt far beyond the geopolitical inner circles of the NATO alliance.³¹

In Denmark a referendum was passed in June with over a two-thirds majority to remove an exemption to it participating in the military dimension of the EU’s Common Security and Defence Policy.³²

In all three countries this unprecedented embrace of militarism was ushered in by left-leaning Social Democratic Parties. Instead of upholding leftist principles of internationalism, social justice and equality, they have thrown their weight behind militarism, hierarchy, authority, and patriotism, concepts that are more broadly associated with right-wing politics and not conducive to building peace.

Colombia signs historic peace deal with Farc. Credit: Gobierno de Chile, CC BY 2.0 <https://creativecommons.org/licenses/by/2.0>, via Wikimedia Commons (Cropped)

Far too often, and increasingly with the war in Ukraine, military neutrality is misunderstood as a weak, passive, inactive stance, that permits and facilitates war while bringing nothing to conflict resolution. In fact, unaligned, militarily neutral nations have historically played a fundamental role in creating the conditions that give rise to a ceasefire, providing a neutral setting for peace negotiations to take place, accompanying these negotiations as a neutral mediator, and serving as a starting point from which the seeds of an enduring peace can be sown and political grievances can be resolved through diplomacy. Cuba, for example, played a crucial role in hosting and accompanying the peace talks between the Colombian government and the FARC-EP guerrilla group that culminated in the signing of a historic peace agreement in 2016.³³ It is incumbent on states, particularly neutral nations, to use their position to actively engage and insist unapologetically that dialogue and diplomacy is the only way forward, rising above binary ‘with us or against us’ politics. Ireland, which has also experienced the fruits of a negotiated peace and currently sits on the UN Security Council, should lead by example in this regard.

Four days after the war began, EC President Ursula von der Leyen announced that ‘for the first time ever’, the EU would ‘finance the purchase and delivery of weapons… to a country that is under attack’.³⁴

On the same day in Berlin, German Chancellor Olaf Scholz announced that the country’s defence budget would be increased to more than 2% of GDP and that €100bn would be invested in a one-time special fund for its armed forces. Although this was framed as a direct response to the invasion of Ukraine, it had, in fact, been on the cards since at least October 2021, when it was proposed by Germany’s Defence Minister. This represents Germany’s largest jump in military expenditure since World War II. ³⁵

For its part, long before the invasion, the Biden administration had begun increasing its military assistance to Ukraine, providing US$650 million during his first year in office. A further US$350 million weapons package was pledged in the days following the outbreak of war in February. Subsequently a bipartisan support package of US$13.5 billion was approved to ship materiel and humanitarian assistance to Ukraine, before a whopping US$ 40 billion was pledged, of which at least half is military assistance.³⁶ In July an additional US$270 million security assistance package was announced.³⁷ Thus far the US has pledged US$55 billion to Ukraine’s war effort. By comparison, it contributes just US$1.5 billion to the UN’s Global Peacekeeping Fund 2022 – 2023.³⁸ Moreover, there are currently 100,000 US troops stationed in Europe, up from 85,000 already in place before the outbreak of war. This is highest number since the end of the Cold War and has steadily increased since 2014.³⁹

As the war goes on, the US has called, not for de-escalation and a ceasefire, but for the protection of the sovereign nation of Ukraine and for Russia to be weakened.⁴⁰ Having received such a vast array of military equipment and training from the West since well before the outbreak of the current war, it is questionable to what extent Ukraine, or any other nation for that matter, that serves the agenda of US hegemony and benefits materially from it, remains truly sovereign.

While NATO member states have not deployed troops to Ukraine, they have provided artillery, anti-aircraft and anti-tank weapons, armoured vehicles, reconnaissance and attack drones, helicopters, smalls arms including rifles, pistols and machine guns, ammunition, body armour and helmets.⁴¹ The US has also provided intelligence assistance with aircraft designed for this purpose positioned over Poland, Romania and the Black Sea.⁴²

Since the invasion arms companies’ profits have soared. Between 23 February and 8 June, the share prices of Lockheed Martin rose by 14%, Northrop Grumman by 22.3%, BAE Systems by 31.9%, Thales by 39.4%, Leonardo by 67.8% and Rheinmetall by a colossal 123.9%.⁴³ Within this context, states have published extensive shopping lists of sophisticated armaments that they plan to purchase in the coming years to replenish their armed forces.

Coupled with that, the EU intends to relax the criteria for arms exports⁴⁴ and the European Defence Agency has begun promoting the notion that the arms industry is sustainable, boasting that ‘defence is going green’.⁴⁵ There is a complete disconnect between the death, devastation, and destruction caused by the use of armaments, and the narratives peddled to justify their development, export, and use. This is even more perverse given that so many of the policies that permit the expanse of the arms industry are made precisely by those who will benefit directly from them.

At least 20 US federal legislators or their partners hold stocks in Raytheon Technologies and Lockheed Martin,⁴⁶ while in the UK, Tory peers Lord Glendonbrook, Viscount Eccles and Lord Sassoon, and unaffiliated peers Lord Lupton and Lord Gadhia, each own shares of at least £50,000 in BAE Systems.⁴⁷ While legislators are not prohibited from sitting on committees, writing legislation, or voting on bills that might affect them financially, the optics might suggest otherwise. The fact that those in positions of power benefit hugely from militarism is a point that is often missed when analysing the structural drivers of war. 

Ukraine has been devastated by this war. In its most recent update from 25 July, the United Nations Office for the High Commissioner for Human Rights reported that 5,237 civilians had been killed and a further 7,035 injured.⁴⁸ The United Nations High Commissioner for Refugees (UNHCR) reported that one in three Ukrainian citizens has been displaced, seven million within the country,⁴⁹ and a further 5.5 million have sought refuge elsewhere in Europe.⁵⁰ In the city of Mariupol, which saw some of the worst fighting, the UN estimated that up to 90% of residential buildings and 60% of homes have been destroyed.⁵¹ Across the country infrastructure – such as bridges, roads, railways, hospitals and schools – have been targeted and destroyed. According to Ukrainian Prime Minister Denys Shmyhal, the cost of reconstruction is already set to reach $750bn.⁵²

The effects of the war have been felt way beyond Ukraine. According to António Guterres, the UN Secretary General, the world will face severe food shortages with many countries expected to experience food insecurity and even famine as a result of the war being added to existing pressures.⁵³ Similarly, with very few exceptions, governments are forcing consumers to cough up for rising energy bills related to fuel insecurity caused by the war, as opposed to addressing massive corporate profits. This will severely affect those who are already economically vulnerable and push many into poverty.

Annette Jones/Pixabay License

There is no long-term strategy or ultimate goal beyond militarise by any and all possible means. At a national level, money that could be spent on strengthening access to health, education, social care and other essential services, is instead invested in military expenditure. Globally, resources that could be invested to offset the excessive warming of our planet and the destruction of ecosystems, to guarantee universal access to water and food security, or to prevent conflict and build peace, is used to guarantee the security of the few to the detriment of the many. This is madness. Recalling the global sum of US$2.1 trillion on military spending, what would our world look like if there was a committed collective effort to invest in peace, not war?

However dire things are now, they will undoubtedly get significantly worse if the threat of nuclear warfare is realised. Currently the US and Russia hold the highest number of nuclear warheads, with the US arsenal also dispersed around Europe.⁵⁴ Moreover, other nuclear powers such as India, Israel, or Pakistan, may be emboldened to flex their nuclear muscles in their own ongoing conflicts were Russia to make good its threat of doing so first. The consequences of nuclear warfare are terrifying and yet if this war continues, it may eventually culminate in exactly that. If for no other reason, global leaders must urgently shift course in favour of dialogue, diplomacy and peace. The stakes of doing otherwise are too high.

When Gijsbert Huijink, a Dutch national living in Banyoles, in the Catalan province of Girona, set out to install solar panels in his home he stumbled upon a legal labyrinth that criminalized energy self-consumption. “If I wanted to connect to the grid to recharge my batteries and supply my excess, I had to pay a fortune,” Gijsbert Huijink said in an interview.¹ Huijink then hatched a plan to exact sweet collective revenge: he founded Som Energia,² Spain’s first power cooperative. With the help of his wife, his university students, and some friends, Gijsbert laid the foundations to effect a change in the Spanish energy market. Som Energia has since grown from an initial 150 contracts in 2010 to 125,589 in March 2021,³ and it is currently the fastest growing energy cooperative in Europe. Hundreds of city governments have hired its services and dozens of new energy cooperatives are replicating the model.

Som Energia has a characteristic that sets it apart from most environmentalist efforts. It is not a project that merely reacts: it proposes. It does not focus on protesting, but on action. It does not stop at defending certain ideals, but puts those ideals into practice. It goes beyond criticizing an economic model based on fossil fuels: it sets a new model in motion. It does not just denounce the injustice of certain regulations, but goes on to experiment with new forms of democracy. It does not focus on the individual: it aims for sustainability with community and networked solutions.

Som Energia was one of the thirty-two initiatives that participated in the first edition of the Transformative Cities People’s Choice Award and the Atlas of Utopias, the unique coopetition⁴ launched by the Transnational Institute (TNI) in 2018. Having completed a total of three editions,⁵ it perfectly embodies the spirit that infuses all those initiatives. The award-winning projects⁶ are a refreshing mosaic of “real utopias”. Pragmatic, adaptable utopias in progress. Simple utopias that satisfy simple desires, as Rutger Bregman notes in his book Utopias for Realists.⁷ “Real utopias.”⁸

What features do the Atlas of Utopias initiatives share?⁹ What horizons do they open up?

Community-led response to water pollution crisis / Cochabamba, Bolivia

Ever since 1516, when Thomas More described an island with a perfect political, social, and legal system in his book Utopia, that word has inspired pages and pages of writing. As of that moment, humanity began to project its desires onto the future. The mythology that explained the past—foundational myths, legends—was channeled toward the future, creating utopia. The most exalted version came with Ernst Bloch’s The Principle of Hope, published in the 1950s, which combined the modern myths of utopia with revolution and the arts.¹⁰ Utopia was on the horizon. And it served to keep us walking.¹¹

However, when Francis Fukuyama proclaimed the end of history in 1992,¹² a claustrophobic present governed by the global economy emerged. According to that author, the collapse of communist governments confirmed liberal democracy as the only possible alternative. The future began to fall short of the expectations of so many utopian centuries. The future lost its inspiring glow. Possible horizons became blurred. The grandiose dreams of modernity unraveled, perhaps precisely because they were overly ambitious. Utopia fizzled out. As Franco “Bifo” Berardi notes in After the Future,¹³ technology has emerged as a despotic deity that cancels the future, turning time into an unlimited generation of identical fragments.

The Atlas of Utopias is an invigorating breath of fresh air in a world that has lost its great utopia. And it is tangible proof that “real utopias” are underway. We no longer have a Utopia with a capital U, but dozens, hundreds, and even thousands of networked micro utopias.¹⁴ Micro utopias where humans come together to weave territories. Concrete micro utopias that activate what Argentine sociologist Maristella Svampa calls “affinity communities.”¹⁵ Communities that recreate and reproduce themselves as they go about doing. When the people of San Pedro Magisterio, a neighborhood in the Bolivian city of Cochabamba, organized to build and operate a wastewater treatment plant, they strengthened the community management of the water cycle and the neighborhood itself. The installation of a wastewater treatment plant in the neighborhood was made possible by Fundación Abril, with the support of several organizations.¹⁶ The process became a tool for teaching (with sessions in schools), political action, and social unity. Territory-based community water management exceeds the paradigm of what is considered public. The finalists of every edition of the Transformative Cities Award, which feeds the Atlas of Utopias, are utopias situated at the territory level and in communities, and they are anchored in what is the most conducive sphere for putting these micro utopias into practice: the local sphere.

In her book No Is Not Enough, the Canadian journalist Naomi Klein unpacks the importance of creating and affirming a new world. Reacting against a system is not enough. “No is not enough. It must be a yes and there must be confidence in that yes. It is necessary to propose an alternative that generates trust. We have to begin by designing real alternatives that are not only credible, but inspiring and exciting.”²⁵ The propositional demand raised by Klein echoes one of the most mythical sayings by Buckminster Fuller: “You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.”²⁶ A world is combated with a world. A vision, with another vision. Unlike utopia, networked micro utopias make a new system visible, a new world woven with mutual recognition mechanisms and habits.

The Irish ecovillage Cloughjordan, a finalist in the 2020 edition of the Transformative Cities Award, moves in the direction of Naomi Klein’s holistic yes. And it enunciates a complete world. It does not merely denounce the unchecked and unsustainable growth of cities, but implements a transition model based on communities and local consumption. Thanks to the low-carbon design of its fifty-five houses, a carbon-neutral district heating system, a community farm, a green enterprise center, and a planned reed-bed treatment plant, Cloughjordan has the lowest ecological footprint in Ireland. The world of the ecovillage is interconnected and multiplied through numerous educational activities.

The Cloughjordan Ecovillage models the transition to a low-carbon society / Cloughjordan, Ireland

While the viability of the new system lies in the yes and the assertion of a world, there are cases in which an action is no yes at the same time. Some of the initiatives of the Atlas of Utopias share the uncommon characteristic of creative resistance. When an action manages to be both yes (creation) and no (resistance), the micro utopia maximizes the visibility of the transformative power of the new model. The experience of the beedi (cigar) industry women workers in the Indian city of Solapur reveals how resistance against speculation and substandard housing can result in shaping a world. After years of struggling and forming cooperatives, the cigar industry women eventually founded the RAY Nagar Cooperative Housing Federation,²⁷ the largest housing cooperative in Asia. In 2015, local governments agreed to build 30,000 affordable houses for beedi and textile workers in the marginal neighborhood of Kumbhari. The project includes outdoor spaces, as well as land to establish community services, schools, and hospitals. The state and federal governments contributed with the laying of power lines, the construction of an electrical substation, and the installation of water tanks. Kumbhari has experienced a rebirth with the new public services and the opening of new shops. The Kranti Chowk produce market is one of the most thriving markets in Solapur.

Women Workers Association builds tens of thousands of homes / Solapur, India

In his unique way, philosopher Bertrand Russell rejected a categorical definition of utopia when he said, “It is not a finished utopia that we ought to desire, but a world where imagination and hope are alive and active.”²⁸ After the collapse of the grand narrative of modern utopia, the great potential of the utopian goal lies not so much in realizing and describing a closed reality that is to come, but in making it possible for the world to be necessarily populated by multiple worlds, as the neo-Zapatista movement has been insisting for decades. A world that can be inhabited by hope. Perhaps that explains why Ernst Bloch focused so much on studying the hope that persists even in horrific situations, thanks to what he calls “wishful images”. Images that serve as prototypes to cross borders. Images charged with emotions. Positive emotions that,2 while they may not lead to actions as urgent as those prompted by negative emotions, eventually open up and broaden the repertoire of thoughts and actions.

“Wishful images” are what emanates from the Atlas of Utopias initiatives, images that, in a way, make a new world desirable. Whether it is children participating in a river cleanup in Cochabamba or a group of cigar workers taking a public bus to work in their Solapur factory, these “wishful images” push the horizon of the possible. They excite. And they expand, connecting the networked micro utopias set in motion by the most diverse communities. Naomi Klein’s yes is not viable if it is merely a theoretical model. The no is not enough. But neither is a yes that springs from theory. The yes has to be inhabited by political and civic practices, by narratives, by imaginaries, by new symbols, by shared values, by emotions, by new shared meanings, by world visions, by alternative economic systems. The welcoming spaces for a coming together, an open we (the jiwasa of the Aymaras), the unifying slogans (the “We are the 99%” of Occupy Wall Street), and the shared positive emotions, these all exceed Bloch’s principle of hope. Collective action multiplies hope toward a future that can be inhabited in common. And because it is controlled by communities, there is less uncertainty about that future.

Which is why—Andrea de la Serna writes in her article Un común por venir²⁹—we should no longer pin our hopes for the revolution on a future horizon; we should instead concentrate on generating the conditions that can give us the horizon we want. In order to climb over the wall of the end of history and catch a glimmer of hope, humanity must restore its confidence in the strengths of the present. When a detour, however small, appears, we need to seize and boost it, feed it, make it breath. We need to organize gatherings, take care of ourselves as a community, create “wishful images” everywhere.

Birgitta Jónsdóttir, a poet and founder of the Icelandic Pirate Party, highlights the importance of enunciating a future populated by images and visions of hope: “When people are forced to choose between fear and hope, they usually choose hope. The future is not going to be a single vision, but a collage of visions. We need to think inclusively about the future.”³¹

For decades, the war on drugs has been waged in much of the world through a prohibitionist approach that seeks to eliminate the production, sale and consumption of a range of plant-based psychoactive substances, restricting them to medicinal and scientific uses. Since then, states and international institutions have invested huge sums of money and mobilised resources and human capital to achieve this ideal of a ‘drug-free world’.

The Single Convention on Narcotic Drugs is an international treaty signed in New York in 1961 that establishes a legal framework for global drug control; it was later complemented by the 1971 and 1988 Conventions. These three international treaties guide drug policy-making and contain measures to define all aspects of production, trade and possession of certain substances.

Among the strategies set out in the treaties are the identification and eradication of illicit crops that provide the raw material for cannabis, cocaine and heroin. To this end, the United Nations Office on Drugs and Crime (UNODC) set up the Global Illicit Crop Monitoring Programme (ICMP) in 1999. ICMP’s task is to monitor and analyse the surface areas, dynamics and impact of illicit crops, as well as productivity, yields and prices. ICMP has been implemented in Bolivia, Colombia and Peru regarding coca cultivation (as well as Ecuador for only two years); in Laos, Afghanistan, Mexico and Myanmar regarding opium poppy cultivation; and in Morocco and Nigeria regarding cannabis.¹

Since the instrument was launched two decades ago, fundamental criticisms and reservations have been voiced about the surveys and their use as a political input. These monitoring reports became the most important source of information for the design of supply control policies, particularly forced eradication, reasoning that identifying and eradicating the source of production will lead to an increase in drug prices in the illegal market and – therefore – discourage consumption. To this end, UNODC works together with governmental entities in the monitored countries to prepare annual reports about illicit crops in their jurisdictions.

However, little progress has been made in the reduction of supply, nor in drug use. On the contrary, drugs have become more available and drugs consumption is on the rise. Moreover, the various kinds of crop destruction operations have led to the displacement of communities, clashes between growers and law enforcement, mass incarceration and human rights violations. Clearly, questioning the effectiveness of the monitoring system is legitimate: Are the data and interpretations provided in the reports sufficient to explain the complex and specific phenomena and contexts that lead certain countries or regions to grow or produce these substances? Is it possible to deal with these phenomena from a purely quantitative and one-dimensional approach? Are there better uses for this kind of survey system?

This longread presents a critical analysis of the UN Illicit Crop Monitoring Programme, regarding their approach and purpose, in order to examine this survey mechanism and take stock of the effectiveness of its direction and the factors it takes into account. The paper explores ICMP’s impacts and results – both in relation to its own goals and objectives, and in relation to its relevance and influence in public drug policy design and decision-making. For this analysis, the paper focuses on the cases of Peru, Colombia and Bolivia, based on three separate studies, the main coca-producing countries in the world, which (in addition to their proximity) allows us to compare how ICMP functions in the region.

The paper begins with a brief review of ICMP’s origins and the reasons behind the development of the instrument. Then, an analysis of each country is presented, summerizing the work of Hugo Cabieses (Perú); Diego Giacoman,  (Bolivia); and Ricardo Vargas,  (Colombia).² In conclusion, a set of recommendations are made for the monitoring reports to include the particular contexts of each region and the structural factors in each country that have led peasant farmers to cultivate these plants. The inclusion of these elements would contribute to offering real development alternatives that meet the needs of the growers and/or communities that depend on these crops for their livelihoods.

Coca crop monitoring carried out by UNODC in coordination with the Bolivian government began in October 2001. The project at that time was called ‘Land Use Management and Monitoring System in the Yungas of La Paz’, focusing only on the department of La Paz. This first phase included various aspects of production, in addition to the number hectares of coca under cultivation. Two years later, the monitoring system expanded its geographic scope to include the department of Cochabamba and thereby develop national estimates.³⁰ Up until that time, the only source of data on coca growing in Bolivia was the United States government; an urgency was felt for the monitoring system to have access to a source of information in which the Bolivian State had an active participation.

NIño recogiendo plantas de coca arrancadas en zona de Caranavi. Fotografía Diego Giacoman

From the beginning, the Bolivian government has participated in and endorsed each annual report, with some differences in the funding structure and approaches across the years.³¹ The following chart shows the evolution of the monitoring reports through time.

In the early years (between 2001 and 2003), the US Embassy in Bolivia provided satellite imagery to develop a land use map in order to analyse existing activities and development potentials in the Yungas of La Paz. This map was then used by the Vice-Ministry of Alternative Development (VDA for its acronym in Spanish) as the main source of information for sectoral policy planning.  Similarly, the first published report included a map of Unsatisfied Basic Needs (UBN), which suggested the relevance of analysing the presence of these crops in the Yungas of La Paz region from a comprehensive socio-economic perspective.

Milestones in the approach and funding of Coca Crop Monitoring Reports in Bolivia

Source: UNODC Coca Monitoring Reports 2004 – 2020.

In the early years (between 2001 and 2003), the US Embassy in Bolivia provided satellite imagery to develop a land use map in order to analyse existing activities and development potentials in the Yungas of La Paz. This map was then used by the Vice-Ministry of Alternative Development (VDA for its acronym in Spanish) as the main source of information for sectoral policy planning.  Similarly, the first published report included a map of Unsatisfied Basic Needs (UBN), which suggested the relevance of analysing the presence of these crops in the Yungas of La Paz region from a comprehensive socio-economic perspective.

The first national report on coca cultivation was released in 2004, providing information on the estimated area under coca cultivation for 2003 in the departments of Cochabamba and La Paz. The monitoring programme received funding from the UK, Spain, France and Italy, while the US Embassy’s Narcotics Affairs Section (NAS) in Bolivia provided satellite imagery and logistical assistance.  It is worth noting that the early crop monitoring reports in Bolivia make no reference to the Vice-Ministry of Social Defence and Controlled Substances (VDS SC for its acronym in Spanish), which has played an important role since 2006.

The VDA and the VDS SC belong to two different ministries and sectors, although they have ended up sharing responsibilities for the control and reduction of coca cultivation. Broadly speaking, there are 17 reports whose contents, with some adjustments, are structured around five variables:

– Cultivated surface. Estimated at 25,000 hectares in 2019. This is the most expected and widely disseminated information from the reports. Based on photographic interpretation of satellite images, it serves to assess the effectiveness of the coca control policy and is the highlight of the report.

– Potential production. Estimated between 37,000 and 46,100 metric tonnes of sun-dried coca leaf, according to yield studies carried out by the Drug Enforcement Administration (DEA) in 1993, by UNODC in 2005 and by the Plurinational State of Bolivia’s National Council against Illicit Drug Trafficking (CONALTID for its acronym in Spanish) in 2010.

– Estimated value of trading and seizures. Data from the latest report estimate the approximate annual value of coca leaf in Bolivia to be between $375 million and $461 million. The amount of coca leaf in legal markets is also estimated at 24,178 metric tonnes. Alongside this, the seizure of coca leaf is reported to have reached 331 metric tonnes.

– Several reports between 2004 and 2014 mention the flow of coca leaf to Argentina and the trade that exists in the north of that country. However, the reports add no specific information, nor do they include any analyses geared towards formalising and regulating this market.

– Rationalisation/eradication. Estimated at 9,205 hectares in 2019. It is worth noting that the report does not define the methodology for rationalisation; there is only a mention that the Government of Bolivia reported 5,070 hectares of coca cultivation as voluntarily eradicated in 2006.

As for the information-gathering methodology, the reports are based on the visual interpretation of satellite images, with both aerial and ground validation. The quantification the area under coca cultivation mainly relies on satellite images with a spatial resolution that has ranged – throughout the history of the reports – between 10 and 0.50 metres. Photogrammetry is undertaken at different times of the year, seeking the least cloudy dates, as observed in each report. The analysis to quantify coca cultivation is based on the images obtained using visual interpretation techniques with specialised software and photo-interpretation specialists.

Overall, the data collection and validation techniques were not substantially changed. The reports have consistently prioritised providing quantitative information to demonstrate compliance with crop reduction policy; modifications to the work methodology have been due to factors that are more circumstantial. This has remained as such, even though during President Evo Morales’ first term (2006-2011), there was a suggestion for a more comprehensive approach towards coca control policies.

At the time, UNODC Executive Director Antonio Maria Costa stated, ‘Bolivia is one of the poorest countries of the world. In my meeting with President Morales a few weeks ago, I was impressed by the emphasis that he put on his commitment to reducing poverty and the need for alternative development. Sustainable reduction of Bolivia’s supply of coca must go hand in hand with reducing poverty and improving infrastructure, health and education. Farmers need a viable and long-term alternative to coca cultivation. Crop replacement without an effective alternative development strategy will not work. It is therefore incumbent on the international community – particularly cocaine consuming countries – to more generously assist Bolivia to help its farmers achieve sustainable licit livelihoods and to provide greater market access to make agricultural and forest products attractive to farmers.’³² Despite these statements, none of the above-mentioned elements were included in the monitoring of coca cultivation, nor did they open up new methodological or conceptual avenues for reporting.

Meanwhile, the technical coordination between the Bolivian government and the UNODC programme that currently prepares the report (BOL/Z68) is conducted by the Vice Ministry of Social Defence and Controlled Substances (VDS SC for its acronym in Spanish) and its General Directorate for Social Defence (DIGEDES for its acronym in Spanish). The Vice Ministry of Coca and Comprehensive Development (VCDI for its acronym in Spanish), through its General Directorate for the Comprehensive Development of Coca Leaf Producing Regions (DIGPROCOCA for its acronym in Spanish), also plays a coordinating role for the eradication/rationalisation report. The report on data regarding trade and market values is coordinated with DIGEDES as well as with VCDI’s General Directorate for Coca Leaf and Industrialisation (DIGCOIN for its acronym in Spanish). Earlier observations found that the institutional framework poses difficulties for smooth exchanges of technical information, a factor that hinders the use of monitoring information for a comprehensive social and productive analysis of the territories.

The considerations above show how the report has been used as part of the Fight against Drug Trafficking/ War on Drugs, which prioritises compliance with international agreements regarding the reduction of coca cultivation, and not to further the comprehensive sustainable development of the producing areas. This bias is evident in the fact that the information contained in the report does not guide investments and efforts to promote social and productive development, nor does it support the consolidation and formalisation of a legal coca economy in accordance with the provisions set out in Law No. 906.

On this point, Sabino Mendoza, former coordinator of the Coordination Secretariat of the National Council for the Fight against Drug Trafficking, stated, ‘crop monitoring reports could be used in a better way if they informed comprehensive development actions and not only crop reduction.’ The indicators’ emphasis on the ‘fight against drug trafficking’ has not been useful in guiding development policies, since the information gathered in the monitoring reports is not shared with FONADIN and does not contribute to comprehensive sustainable development planning in the coca producing areas.

It can also be inferred that the lack of information exchanges and the missing perspective on development in the report make it difficult to develop a regulatory model for legal coca markets that could be based on social control or community self-control. Such an approach for market regulation could include protocols, high standards, market promotion and other actions aimed at strengthening legal trade channels for coca leaf, thereby promoting economic development and reducing the flow of coca leaf towards illegal markets.

It is also worth noting that the 2007 report presented by the 2008 administration includes a definition of rationalisation. The Bolivian government uses this concept to explain a policy change from forced eradication towards concerted reduction of coca leaf cultivation through agreements and joint programming between government institutions and farmers’ organisations. None of the reports, however, use rationalisation as an actual variable.

In relation to the conventions and instruments to control coca leaf, is striking that none of the monitoring reports refer to the reservation that the Bolivian State made in 2013 regarding the mandate in the 1961 Convention to abolish coca leaf chewing. This important aspect of coca leaf has not been acknowledged or analysed in any of the reports.

As in the Colombian case, the reports are presented to the public as a reflection of policy successes or failures based solely on the number of crops eradicated, thereby validating the effectiveness of supply control policies. Thus, opposition sectors have at times used the reports as a political tool to disqualify the efforts of the Movement for Socialism (MAS) government, which they have labelled a ‘narco-government’.

Views on the monitoring reports generally remain broad, due to a lack of strategic and technical debate on market regulation for legal coca leaf and strengthening participatory mechanisms for the stabilisation of coca cultivation areas. Thus, government authorities and opposition members regularly celebrate or bemoan each year’s trends without further explanation of the causes.

The reports do not address the problem of reseeding and/or replanting, nor do they include alternative or complementary crops as part of an economic analysis that would enable the reality of families to be taken into account in decision-making and in the expansion of coca cultivation areas. This simplistic approach considers only one variable and seems to further stigmatise peasant communities, with a superficial view of their identity based only on these crops.

Another important element is the viability and potential of an analysis that would include the results of the comprehensive study on coca leaf consumption financed by the European Union, which is not mentioned in the monitoring reports. Instead, reviews of the report tend to focus on results and compliance with international commitments. As such, reviewers end up recommending equipment and resources to carry out the eradication or rationalisation of coca crops, exemplified by the former Vice-Minister of Social Defence, Felipe Cáceres, who asked the international community to contribute equipment, especially for the transport of anti-drug personnel.³³

This brief has summarised the three case studies that analyse the monitoring reports (Peru, Colombia and Bolivia) and reflected on ICMP’s involvement in the design of drug policies in these countries. The information presented points to a series of recommendations that go beyond the one-dimensional view of the monitoring reports, and the mere collection of data that lacks an in-depth analysis of the causes and structural factors of each territory.

The monitoring reports must incorporate a human rights approach, not only discussing the human rights violations that occur during eradication campaigns, but also recognising the health and ecosystem damage caused by spraying herbicides such as glyphosate. It is striking – to say the least – that UNODC remains completely silent on these issues, as if they were not part of the problem in the territories, nor a matter of concern for the international body.

The reports must reflect each country’s policies on illicit crops, and avoid uniform models. Regarding Colombia, compliance with the 2016 Peace Accord – endorsed by the UN Secretary General and integrated into the National Constitution – should be enforced, particularly in relation to the points associated with the issue, such as Item 4 [regarding illicit crops] and the subsequent crop substitution programme.³⁴

The reports must address the policies that have resulted from them, and not just verify manual eradications. With regard to Bolivia, it is important to note that under the slogan ‘Coca yes, Cocaine no’, the government made a commitment to promoting an industry of coca leaf-based products³⁵ as a strategy to reduce the cultivation of illicit crops, although it has had limited success.

At present, reports are limited to counting the number of hectares cultivated with illicit crops, with a cold and exclusively statistical approach when it comes to monitoring and reporting on what is happening in these territories. Instead, ICMP should take into account the specific policies for special areas (protected areas, indigenous reserves and afro-descendent territories), and include a differentiated gender perspective.

A chapter on ethnicity is needed to reflect the realities of indigenous and afro-descendent territories, including the obstacles and disparities that these communities face. Recognition of traditional use, and the right to this use, must also be reflected in the reports. To this end, the reports should capture the voices of the communities, so as to not infringe on their autonomy nor reduce them to mere providers of data to calculate outputs. This requires an approach that enables communities to participate both in crop substitution and in alternative development projects.

Since the reports are UNODC’s only tool to control illicit crops, these cannot be used as input for development projects. Using alternative development or crop substitution as a tool to reduce illicit crop cultivation is an approach that limits the understanding of environmental problems and ignores structural factors that have lead certain communities to depend on illicit crops as their only source of livelihood. Therefore, acknowledgement of the underlying socioeconomic problems related to the agrarian model is important. UNODC monitoring should focus on key social indicators such as territorial and environmental planning; resolution of land use conflicts; access to education, healthcare, road conditions, markets, credit; public policies for the agricultural sector in areas dependent on illicit crops; technical research; and improvements in the quality of life. Continuing to obsess over the numbers, as has been the case up to now, on the rise and fall of illicit crop cultivation areas, is an absurdity that shows the serious limitations of the supply reduction strategy.

Finally, it is crucial to recall the commitments to alternative development and a comprehensive approach adopted in the political declaration of the 1998 UN General Assembly Special Session (UNGASS) for the elimination of illicit crops³⁶ – from which the monitoring system emerged. Returning to the initial UNGASS goal and implementing the commitments outlined therein is essential not only for reducing supply but also for safeguarding ecosystems and vulnerable communities that have suffered under the burden of prohibitionism and the war on drugs.

By 2018, 100 transnational corporations (TNCs) accounted for 60% of the capital accumulated in the ocean economy. Offshore oil and gas and shipping alone accounted for a staggering 86% of these 100 corporations.ⁱ Poised to regain pre-pandemic levels, offshore oil and gas investments are predicted to reach USD 155 billion this year, more than double the anticipated investments in offshore wind energy by 2025.ⁱⁱ Other sectors are also rapidly expanding. Cruise tourism is on a strong rebound, letting clients choose between yoga classes at the North Pole and camping in the Qatari dunes.ⁱⁱⁱ Aquaculture, now the world’s fastest growing food industry, has become a lucrative investment target for funds and speculators trading green bonds or betting on ‘sustainable debt financing’ schemes.^iv In terms of aggregate investment dynamics, however, the steering room of the global ocean economy remains firmly controlled by the fossil energy and shipping sectors.

Recent economic statistics and reports on the ocean economy have cast a sobering light on the rise of a small number of TNCs over a space on which roughly 3 billion people depend for their livelihoods. But even this not enough. Among the top global TNCs, corporate power is gradually consolidating, marking a sharp rise of several quasi-oligopolies. Just before the pandemic, the container shipping sector consolidated into three mega alliances, together commanding about 80% of global container trade.^v And even as global supply chains came under sustained pressure since 2020 – leading some to herald the end of globalisation as we knew it – the Danish logistics frontrunner Maersk announced its highest-ever earnings for the first quarter of 2022.^vi Not least for Maersk, this follows a record year of global mergers and acquisitions,^vii propelled by central bank injections and debt-funded government buyouts. Needless to say, the proportion of the ocean economy controlled by a dwindling number of mega TNCs is even further on the rise.

But perhaps of greater concern is the question of equity ownership and interlocking connections. A close look reveals that the top 100 TNCs are deeply interlaced with each other, masking ownership structures behind a complex web of parents and subsidiaries registered in industry-specialised offshore financial centres.^viii Moreover, BlackRock, Vanguard and State Street – just three of the world’s five largest asset managers, all US-headquartered – accounted for 24% of the shares in these corporations. ^ix BlackRock, the undisputed number 1, recently broke the 10 trillion USD mark in assets under its management.^x For comparison, the combined gross domestic product (GDP) of the Eurozone in 2020 was gauged at USD 13 trillion. Such stark amassing of shareholder rights and insider knowledge permits these firms to define the terms and conditions under which much of the ocean economy operates and the future course it charts. The current direction of this course can be gleaned from BlackRock’s 2022 climate-related shareholder proposal, which specifies that BlackRock will use its authorised shareholder voting power to prioritise long-term financial interests, and in doing so ‘support proportionately fewer [climate proposals] this proxy season than in 2021, as we do not consider them to be consistent with our clients’ long-term financial interest’. ^xi

Image by eridelrivero from Pixabay

The political implications of this extraordinary concentration of capital ownership and control cannot be overlooked in a year that the Norwegian minister of International Cooperation ^xii has called the ‘Ocean Super Year’, a term dubbed by the World Economic Forum in 2021; a reference to several large international and corporate summits on variations on the theme of a sustainable ocean economy and the 40^th anniversary of the UN Convention on the Law of the Sea (UNCLOS). During the past six months, a slew of meetings has already been convened, most prominently The Economist’s World Ocean Summit (virtual event), the One Ocean Summit in Brest and the Our Ocean Conference in Palau. Unsurprisingly, a cross-cutting topic has been the financialisation of the ocean economy and the expansion of finance as an ostensible cure for the ocean’s many ecological and social ailments. The recent Clube de Lisboa Conference, for example, was concluded with instructive remarks by the UN Secretary-General’s Special Envoy for the Ocean:

‘…we are confident finance will start flowing at the scale necessary to enable global transition to a truly Sustainable Blue Economy… money talks, and if the CEO of BlackRock speaks in favour of taking the current while it serves, the voyage to our destination of a net zero economy is looking ever more auspicious’.^xiii (Peter Thomson, UN Special Envoy for the Ocean.)

Next in line is the UN Ocean Conference to be held in Lisbon from 27 June to 1 July. The final draft of the leaders’ declaration negotiated ahead of the conference buttresses a further dive into ocean financialisation, as encouraged by the various corporate run-up events. Among a range of promises, leaders commit to:

‘[e]xplore, develop and promote innovative financing solutions to drive the transformation to sustainable ocean-based economies, and the scaling up of nature-based solutions[…], including through public-private sector partnerships and capital market instruments,[…], as well as mainstream the values of marine natural capital into decision-making and address barriers to accessing financing’.^xiv

Yet, while governments will use the meeting’s many side events to forge stronger ties with the business and banking sectors in a bid to ‘cure the sea’, social movements are alarmed about an unparalleled round of ‘ocean grabs’.^xv The scale of these grabs, many fear, is compounded by a corporate capture of decision-making processes within the UN system. ^xvi Looming large is thus the question of how the overwhelming presence of business and financial interests at the Conference will affect democratic decision-making in global ocean governance. In other words, how can we interpret the prominent participation of actors that are simultaneously at the forefront of the current ‘blue investor’ frenzy around the ‘untapped’ ocean frontier? Will their leadership help to resolve urgent ecological, nutritional and social crises? Or, might it rather facilitate an intensification of resource enclosures, shareholder-value driven exploitation, and a marginalisation of populations who depend on the oceans for a living? And, last but not least: can we expect the UN Oceans Conference to tackle these questions and concerns in a meaningful and equitable way that amounts to more than a new round of ‘blue washing’ pledges?

The conference has been years in the making. The process was initiated by a UN General Assembly resolution in May 2019.^xvii The resolution sets out the rules for the preparatory process and the convening of the conference, including the opportunities for civil society to potentially shape the conference agendas. A list of non-state actors to be involved in key planning sessions was drawn up by the President of the General Assembly. Whereas this list excludes established social movement and labour unions, TNCs, banks, conservationist and philanthropic organisations feature prominently.^xviii The resolution also encourages ‘… the private sector, financial institutions, foundations and other donors… to support the preparations for the Conference through voluntary contributions’ as a means to plug the funding gap for the conference.^xix

In general terms, the exclusionary politics written into this process testify to the democratic limitations of ‘multi-stakeholderism’^xx – a development in global governance that social movements have long criticised as gradually dismantling the democratic foundations of the UN system. In the lead-up to the 2021 UN Food Systems Summit, for instance, over 1,000 movements and NGOs from across the world signed a letter denouncing the corporate takeover of the summit:

‘The UN Food Systems Summit is not building on the legacy of past [UN] World Food Summits, which resulted in the creation of innovative, inclusive and participatory global food governance mechanisms anchored in human rights… The upcoming Food Systems Summit is an illustrative example of how corporate-driven platforms in close cooperation with like-minded governments and high-level UN Officials intend to use the United Nations for supporting and legitimizing a corporate-friendly transformation of food systems while promoting at the same time new forms of multistakeholder governance to further consolidate corporate influence in public institutions at national and UN level.’^xxi

Following in the footsteps of its 2017 precursor, the UN Ocean Conference in Lisbon is expected to produce a torrent of voluntary commitments. More than 1,400 such commitments were made at the last conference, making it nearly impossible to track them coherently, let alone independently. These commitments were supposed to contribute to the ‘triple win’ bottom line of the UN Sustainability Agenda: simultaneously beneficial to the economy, the environment and the people. A study by the UN Division for Sustainable Development suggests that the financial pledges amount to an aggregate of USD 25 billion for multi-year programmes. ^xxii While this might initially appear to be a huge sum of money, it pales in comparison with the magnitude of investments that preserve the status quo in traditional ‘brown ocean economy’ projects. For example, ExxonMobile just announced its aim to channel USD 10 billion in a single off-shore oil exploration venture off the coast of Guyana.^xxiii

That said, there are also strong reasons to doubt those making pledges this time will succeed in living up to these noble aspirations. The UN analysis acknowledges ‘the diverse nature of the commitments presents certain challenges for follow-up and monitoring’ and that there are no mechanisms for ensuring commitments ‘…[will not] have negative impacts on other initiatives and stakeholders, for example those most vulnerable’ or for ensuring the participation of under-represented groups.^xxiv The idea of voluntary commitments to achieve sustainability goals is nothing new. ‘Multi-stakeholder commitments’ for sustainable development was introduced at the 2002 World Summit on Sustainable Development (WSSD) in Johannesburg as a mechanism to complement the commitments made by the UN member states.^xxv Yet, after 20 years of these voluntary commitments, there is essentially still no instrument to ensure these will contribute to the sustainability agenda; monitoring remains a major challenge; and while the total amounts committed might appear impressive, they remain insignificant compared to the investment agendas of the largest TNCs.

Governments, business leaders, philanthropic organisations, environmental NGOs and others will meet in Lisbon under the banner of ‘Scaling up ocean action based on science and innovation for the implementation of Goal 14’.^xxvi The issues they will discuss span from fisheries, aquaculture, carbon off-setting, and marine protected areas to renewable energy. However, the biggest elephant in the room – oil and gas – and other highly contested developments, such as coastal and deep-sea mining, were relegated to the side-event agenda. Furthermore, the participation of social movements will be marginal, with civil society organisations (CSOs) from many parts of the world struggling to participate. While some fisher movements have been invited, the profound asymmetries of power and information between these marginalised majorities at ‘one end of the table’, and the corporate and state actors at the other, suggests that their presence will merely serve to tick the ‘participatory’ box.

Global Justice Association tweet @GlobJustAssoc

Social movements are caught between the devil and, literally, the deep blue sea, with the option to either participate – and in so doing add legitimacy to the conference and its multi-stakeholder character, or to boycott, resist, or advocate from the ‘outside’. Given existing corporate media allegiances, the latter clearly entails the risk of being ignored or dismissed as ‘non-cooperative’. Telling in this is respect was, for instance, the piecemeal coverage of the International Peoples’ Tribunal on the Impact of the Blue Economy held across six Indian Ocean countries in 2020.^xxvii This series of tribunals provided in-depth documentation, including witness testimony, of the devastating effects borne by coastal populations and fishers through the recent blue economy expansionism; issues which are almost entirely absent from the 2022 leaders’ draft declaration.

At the 2017 Ocean Conference, the two leading global fisher movements – the World Forum of Fisher Peoples (WFFP) and the World Forum of Fish Harvesters and Fish Workers (WFF) – which represent over 100 fisher organisations and 20 million people who depend on the sector from all over the world, maintained that the current course was a clear call for ‘ocean grabbing’: the capturing of control by powerful actors over crucial decision-making, including the power to decide how and for what purposes resources are used, conserved and managed’.^xxviii Notwithstanding, they opted to not participate in the last conference, summing up the dilemma in a joint statement:

‘Over the past two and a half decades, there has been a gradual shift away from a human-rights based governance model with the states as duty-bearers who have obligations vis-à-vis human rights holders (i.e. the people), towards a much more vague system based on ‘partnerships’ facilitated through ‘multistakeholder’ dialogues.’^xxix

The preceding observations raise an age-old yet now particularly acute question: how and by whom should the oceans be governed? Is it the role of the UN to continue the pursuit of ‘stakeholder’ partnerships through voluntary commitments? Or should the UN member states retreat from multi-stakeholderism and re-prioritise negotiated agreements between state parties that reclaim the principles of the UN Charter and the Universal Declaration of Human Rights (UHDR)? In addressing these questions, it is important to take into consideration the crucial distinction between ‘stakeholders’ and rights-holders. The former signifies an approach in which whoever can assert a ‘stake’ in the process will be able to speak in the name of a multi-stakeholder group. Conversely, rights-holders encompass those, for whom the realisation of their human rights is inextricably linked to their customary and socially defined claims to coastal and marine space and resources.^xxx Taking the pyramidical and oligopolistic state of the global ocean economy seriously necessarily means that the multi-stakeholder approach adopted by the 2022 conference will help politically entrench economic inequalities at the expense of marginalised right holders.

Rather than heads of state congregating to endorse the propositions fed them by private-sector run-up gigs, the UN Ocean Conference should facilitate open and transparent dialogues that adequately acknowledge those who stand to lose from the concentration of power in the ocean economy. For starters, this could be a return to the spirit of the negotiations leading up to the UNCLOS in the 1970 and 1980s, where compromises on a large number of political, economic and ecological fronts were brokered between states and state alliances, and where the presence of liberation movements and civil society observers was more than a box-ticking exercise. The ongoing negotiation of a binding instrument for the conservation and sustainable use of marine biological diversity of areas beyond national jurisdiction – the BBNJ Treaty – could have revived this spirit. But apart from revealing transparency issues at its latest meeting in March 2022 – from which observers were excluded – it also exemplifies another issue, that of ocean governance fragmentation. ^xxxi New processes often overwrite existing arrangements, dividing up the ocean into myriad ecological and political domains that require immense resources to document and monitor.

The result is an obscure governance architecture that both lends technically well-informed TNCs and multi-stakeholder groups extra manoeuvring space, while overstraining the ability of CSOs and social movements to keep pace. For certain sectors, the most prudent choice would be to reinforce existing arrangements. In the context of fisheries, for instance, decision-making should be brought back to the Food and Agriculture Organization (FAO), the UN body where the UN Voluntary Guidelines on Securing Sustainable Small-Scale Fisheries (VGSSF) were originally negotiated and endorsed. Indeed, fisher movements have articulated these ‘guidelines themselves build on the core UN principles of justice, respect, human rights, tolerance and solidarity and international human rights standards and principles’. The movements have reiterated the importance of taking seriously the VGSSF and other UN human rights instruments:

‘Their [VGSSF] development resembles a legitimate, democratic country-led process, and the guidelines themselves build on the core UN principles of justice, respect, human rights, tolerance and solidarity and international human rights standards and principles. We express our recognition and appreciation of the stewardship of the FAO in the process of developing the SSF Guidelines.’^xxxii

WORLD ECONOMIC FORUM/swiss-image.ch/Photo Michael Buholzer (CC BY-NC-SA 2.0)

Each year, control of the global ocean economy is being further consolidated in the hands of fewer and ever-larger TNCs and financial institutions. Naturally, the concentration of economic clout results in a centralisation of control over maritime space, technology and proprietary knowledge that intensifies economic contradictions.^xxxiii Through decades of mergers and acquisitions, 60% of the economic activities are now in the hands of just 100 companies, while in terms of revenues the oil and gas sector is followed by shipping – including port activities – tourism, industrial fisheries and offshore wind energy. New large-scale investments by the highest valued TNCs in the ocean economy such as Saudi Aramco, Petrobas or ExxonMobile, and backed by the leading asset managers, add to the already intense pressure on resources and heighten competition over maritime space. It is within this process of capital re-investment and shareholder-focused accumulation that small-scale fishers, wage labour and coastal populations are being squeezed out from economic participation and decision-making, with many losing access to the spaces upon which their livelihoods depend.

In an apparent neglect of this economic reality, the UN Ocean Conference creates the illusion that both sides are at the same level when appointed ‘stakeholders’ are invited to the table in Lisbon. By endorsing a multi-stakeholder approach, the conference seeks to advance the UN sustainability goals, encouraging participants to proclaim voluntary commitments. Yet, while the conference may well be record-breaking in terms of financial pledges, it remains to be seen whether these will achieve the SDG agenda to ‘leave no-one behind’. Keeping in mind that there is still no functional mechanism for ensuring the adherence to commitments and that monitoring remains a major challenge, odds are low that the coming round of voluntary commitments will contribute to respecting, protecting and fulfilling the human rights and economic needs of the majority.

When the UN Special Envoy for the Ocean earlier this year raised high expectations for the Lisbon conference, with his reference to ‘the CEO of BlackRock speak[ing] in favour of taking the current while it serves’,^xxxiv he also reaffirmed the conference’s faith in multi-stakeholderism and voluntary commitments. But this course is precisely what over 1,000 movements and NGOs warned against in their letter condemning a similar UN conference in 2021, referring to the UN’s push for ‘… multistakeholder governance to further consolidate corporate influence in public institutions at national and UN level’.^xxxv For ocean governance to become a fair and transparent development, recognising the economic imbalances within the global ocean economy and the resultant distribution of political power will be the essential first step. Making sure that the UN Ocean Conference does not become just another major blue-washing occasion will therefore depend on state leaders and other decision-makers urgently addressing the deep-seated flaws in the current political process.

This essay is part of TNI’s Digital Futures series on Technology, Power and Emancipation’ organised in collaboration with ROAR magazine

We can no longer ignore the role of Big Tech in entrenching global inequality. To curtail the forces of digital capitalism, we need an ecosocialist Digital Tech Deal.

In the space of a few years, the debate on how to rein in Big Tech has become mainstream, discussed across the political spectrum. Yet, so far the proposals to regulate largely fail to address the capitalist, imperialist and environmental dimensions of digital power, which together are deepening global inequality and pushing the planet closer to collapse. We urgently need to build a ecosocialist digital ecosystem, but what would that look like and how can we get there?

This essay aims to highlight some of the core elements of a digital socialist agenda — a Digital Tech Deal (DTD) — centered on principles of anti-imperialism, class abolition, reparations and degrowth that can transition us to a 21st century socialist economy. It draws on proposals for transformation as well as existing models that can be scaled up, and seeks to integrate those with other movements pushing for alternatives to capitalism, in particular the degrowth movement. The scale of needed transformation is massive, but we hope this attempt at outlining a socialist Digital Tech Deal provokes further brainstorming and debate over how an egalitarian digital ecosystem would look and the steps we might take to get there.

This essay is the second part of two essays by Michael Kwet. 

The first on digital colonialism can be found .

Progressive criticisms of the tech sector are often drawn from a mainstream capitalist framework centered around antitrust, human rights and worker well-being. Formulated by elite scholars, journalists, think tanks and policymakers in the Global North, they advance a US-Eurocentric reformist agenda that assumes the continuation of capitalism, Western imperialism and economic growth.

Antitrust reformism is particularly problematic because it assumes the problem of the digital economy is merely the size and “unfair practices” of big companies rather than digital capitalism itself. Antitrust laws were created in the United States to promote competition and restrain the abusive practices of monopolies (then called “trusts”) in the late 19th century. Thanks to the sheer scale and power of contemporary Big Tech, these laws are back on the agenda, with their advocates pointing to how big companies not only undermine consumers, workers and small businesses, but even challenge the foundations of democracy itself.

Antitrust advocates argue that monopolies distort an otherwise ideal capitalist system and that what is needed is a level playing field for everyone to compete. Yet, competition is only good for those with resources to compete with. More than half the global population lives on less than $7.40 per day, and nobody stops to ask how they will “compete” in the “competitive marketplace” envisioned by Western antitrust advocates. This is all the more daunting for low and middle-income countries considering the largely borderless nature of the internet.

At a broader level, as I argued in a previous article, published at ROAR, antitrust advocates ignore the globally unequal division of labor and exchange of goods and services that has been deepened by the digitalization of the global economy. The likes of Google, Amazon, Meta, Apple, Microsoft, Netflix, Nvidia, Intel, AMD and many other firms are so big because they own the intellectual property and means of computation that is used across the world. Antitrust thinkers, especially those in the US, end up systematically erasing American empire and the Global South from the picture.

European antitrust initiatives are no better. There, policymakers who huff and puff about the ills of Big Tech are quietly trying to build their own tech giants. The UK aims to produce its own trillion-dollar behemoth. President Emanuel Macron will be pumping €5 billion into tech startups in the hope that France will have at least 25 so-called “unicorns” — companies valued at $1 billion or more — by 2025. Germany is spending €3 billion to become a global AI powerhouse and a world leader (i.e. market colonizer) in digital industrialization. For its part, the Netherlands aims to become a “unicorn nation.” And in 2021, the widely-lauded European Union’s competition commissioner, Margrethe Vestager said that Europe needs to build its own European tech giants. As part of the EU’s digital targets for 2030, Vestager said the EU aims to “double the number of European unicorns from 122 today.”

Instead of opposing Big Tech corporations in principle, European policymakers are opportunists seeking to expand their own portion of the pie.

Other proposed reformist capitalist measures, such as progressive taxation, the development of new technology as a public option, and worker protections still fail to address root causes and core problems. Progressive digital capitalism is better than neoliberalism. But it is nationalist in orientation, cannot prevent digital colonialism, and it retains a commitment to private property, profit, accumulation and growth.

Other major blindspots for digital reformists are the twin crises of climate change and ecological destruction that imperil life on Earth.

A growing body of evidence shows that the environmental crises cannot be fixed within a capitalist framework predicated on growth, which is not only increasing energy use and resulting carbon emissions but also putting enormous stress on ecological systems.

UNEP estimates emissions must fall by 7.6 percent every year between 2020 and 2030 to meet the goal of keeping temperature increases under 1.5 degrees.Scholarly assessments estimate the sustainable worldwide material extraction limit at about 50 billion tons of resources a year, yet at present, we are extracting100 billion tons a year, largely benefiting the rich and Global North.

Degrowth must be implemented in the immediate future. Slight reforms to capitalism touted by progressives will still destroy the environment. Applying the precautioonary principle, we cannot afford to risk a permanent ecological catastrophe. The tech sector is not a bystander here, but now one of the leading drivers of these trends.

According to a recent , in 2019, digital technologies — defined as telecommunications networks, data centers, terminals (personal devices) and IoT (internet of things) sensors — contributed 4 percent of greenhouse gas emissions, and its energy use has increased by 9 percent per year.

And as high as that may seem, it likely understates the use of energy by the digital sector. A 2022 found that Big Tech giants are not committed to reducing their full value-chain emissions. Companies like Apple claim to be “carbon-neutral” by 2030, but this “currently includes only direct operations, which account for a microscopic 1.5 percent of its carbon footprint.”

In addition to overheating the planet, mining for minerals used in electronics — such as cobalt, nickel and lithium — in places like the Democratic Republic of Congo, Chile, Argentina and China is often ecologically destructive.

And then there is the pivotal role of digital companies in supporting other forms of unsustainable extraction. Tech giants help corporations explore and exploit new sources of fossil fuels and digitize industrial agriculture. Digital capitalism’s business model revolves around pushing ads to promote mass-consumption, a key driver of the environmental crisis. Meanwhile many of its billionaire executives have a carbon footprint thousands of times higher than average consumers in the Global North.

Digital reformists assume that Big Tech can be decoupled from carbon emissions and resource-overuse and as a result they focus their attention on each corporation’s particular activities and emissions. Yet the notion of “decoupling” growth from material resource use has been challenged by scholars, who note that resource use tracks tightly to GDP growth across history. Researchers recently found that shifting economic activity to services, including knowledge-intensive industries, has limited potential to reduce global environmental impacts due to the increase in levels of household consumption by service workers.

In sum, the limits to growth changes everything. If capitalism is ecologically unsustainable, then digital policies must accommodate this stark and challenging reality.

In a socialist system, property is held in common. The means of production are directly controlled by the workers themselves through worker coops, and production is for use and need rather than exchange, profit and accumulation. The role of the state is contested among socialists, with some arguing that governance and economic production should be as decentralized as possible, while others argue for a greater degree of state planning.

These same principles, strategies and tactics apply to the digital economy. A system of digital socialism would phase out intellectual property, socialize the means of computation, democratize data and digital intelligence and place the development and maintenance of the digital ecosystem into the hands of communities in the public domain.

Many of the building blocks for a socialist digital economy already exist. Free and Open Source Software (FOSS) and Creative Commons licenses, for example, provide the software and licensing for a socialist mode of production. As James Muldoon notes in Platform Socialism, city projects like DECODE(DEcentralised Citizen-owned Data Ecosystems) provide open source public interest tools for community activities where citizens can access and contribute data, from air pollution levels to online petitions and neighborhood social networks, while retaining control over data shared. Platform coops, such as the Wings food delivery platform in London, provide a prominent workplace model whereby workers organize their labor through open source platforms collectively owned and controlled by the workers themselves. There is also asocialist social media alternative in the Fediverse, a set of social networks that interoperate using shared protocols, that facilitate a decentralization of online social communications.

But these building blocks would need policy change to thrive. Projects like the Fediverse, for example, are not able to integrate with closed systems or compete with the massive concentrated resources of the likes of Facebook. A set of radical policy changes would therefore be needed to force big social media networks to interoperate, decentralize internally, open up their intellectual property (e.g. proprietary software), end forced advertising (advertising people are subjected to in exchange for “free” services), subsidize data hosting so that individuals and communities — not the state or private companies — can own and control the networks and perform content moderation. This would effectively strangle tech giants out of existence.

The socialization of infrastructure would also need to be balanced with robust privacy controls, restrictions on state surveillance and the roll-back of the carceral security state. Currently the state exploits digital technology for themeans of coercion, often in partnership with the private sector. Immigrant populations and people on the move are heavily targeted by a mix of cameras, aircraft, motion sensors, drones, video surveillance and biometrics. Records and sensor data are increasingly centralized by the state into fusion centers and real-time crime centers to surveil, predict and control communities. Marginalized and racialized communities and activists are disproportionately targeted by the high-tech surveillance state. These practices should be banned as activists work to take down and abolish these institutions of organized violence.

Big Tech corporations, intellectual property and private ownership of the means of computation are deeply embedded into the digital society, and cannot be turned off overnight. Thus, to replace digital capitalism with a socialist model, we need a planned transition to digital socialism.

Environmentalists have proposed new “deals” outlining the transition to a green economy. Reformist proposals like the US Green New Deal and European Green Deal operate within a capitalist framework that retains the harms of capitalism, such as terminal growth, imperialism and structural inequality. In contrast, ecosocialist models, such as the Red Nation’s Red Deal, theCochabamaba Agreement and South Africa’s Climate Justice Charter, offer better alternatives. These proposals acknowledge the limits of growth and incorporate the egalitarian principles need for a just transition to a truly sustainable economy.

However, neither these red nor green deals incorporate plans for the digital ecosystem, despite its central relevance to the modern economy and environmental sustainability. In turn, the digital justice movement has almost entirely ignored degrowth proposals and the need to integrate their assessment of the digital economy into an ecosocialist framework. Environmental justice and digital justice go hand-in-hand, and the two movements must link up to achieve their goals.

To this effect, I propose an ecosocialist Digital Tech Deal which embodies the intersecting values of anti-imperialism, environmental sustainability, social justice for marginalized communities, worker empowerment, democratic control and class abolition. Here are ten principles to guide such a program:

1. Ensure the digital economy falls within social and planetary boundaries

We face a reality that the richest countries in the North have already emitted more of their fair share of the carbon budget — and this is also true of the Big Tech-led digital economy that is disproportionately profiting the richest countries. It is therefore imperative to ensure the digital economy falls withinsocial and planetary boundaries. We would need to establish a scientifically-informed limit on the amount and types of materials that can be used and decisions could be made about which material resources (e.g. biomass, minerals, fossil energy carriers, metal ores) should be devoted to which use (e.g. new buildings, roads, electronics, etc.) in which amounts for which people. Ecological debts could be established which mandate redistributive policies from North to South, rich to poor.

2. Phase out intellectual property

Intellectual property, especially in the form of copyrights and patents, give corporations control over knowledge, culture and the code that determines how apps and services work, allowing them to maximize user engagement, privatize innovation and extract data and rents. Economist Dean Bakerestimates that intellectual property rents cost consumers an additional $1 trillion per year compared to what could be obtained on a “free market” without patents or copyright monopolies. Phasing out intellectual property in favor of a commons-based model of sharing knowledge would reduce prices, widen access to and enhance education for all and function as a form of wealth redistribution and reparations to the Global South.

3. Socialize physical infrastructure

Physical infrastructure such as cloud server farms, wireless cell towers, fiber optic networks and transoceanic submarine cables benefit those who own it. There are initiatives for community-run internet service providers and wireless mesh networks which can help place these services into the hands of communities. Some infrastructure, such as submarine cables, could be maintained by an international consortium that builds and maintains it at cost for the public good rather than profit.

4. Replace private investment of production with public subsidies and production.

Dan Hind’s British Digital Cooperative is perhaps the most detailed proposal for how a socialist model of production could work in the present context. Under the plan, “public sector institutions, including local, regional and national government, will provide venues where citizens and more or less cohesive groups can assemble and secure a claim on the political.” Enhanced by open data, transparent algorithms, open-source software and platforms and enacted through democratic participatory planning, such a transformation would facilitate investment, development and maintenance of the digital ecosystem and broader economy.

While Hind envisions rolling this out as a public option within a single country — competing with the private sector — it could instead provide a preliminary basis for the complete socialization of tech. In addition, it could be expanded to include a global justice framework that provides infrastructure as reparations to the Global South, similar to the way climate justice initiatives pressure rich countries to help the Global South replace fossil fuels with green energy.

5. Decentralize the internet

Socialists have long pushed for decentralizing wealth, power and governance into the hands of workers and communities. Projects like FreedomBox offer free and open source software to power inexpensive personal servers that can collectively host and route data for services like email, calendaring, chat apps, social networking and more. Other projects like Solid allow people to host their data in “pods” they control. App providers, social media networks and other services can then access the data on terms acceptable to users, who retain control over their data. These models could be scaled up to help decentralize the internet on a socialist basis.

6. Socialize the platforms

Internet platforms like Uber, Amazon and Facebook centralize ownership and control as private intermediaries that stand between users of their platforms. Projects like the Fediverse and LibreSocial provide a blueprint for interoperability that could potentially extend beyond social networking. Services that cannot simply interoperate could be socialized and operated at cost for the public good rather than for profit and growth.

7. Socialize digital intelligence and data

Data and the digital intelligence derived from it are a major source of economic wealth and power. Socialization of data would instead embed values and practices of privacy, security, transparency and democratic decision-making in how data is collected, stored and used. It could build on models such as Project DECODE in Barcelona and Amsterdam.

8. Ban forced advertising and platform consumerism

Digital advertising pushes a constant stream of corporate propaganda designed to manipulate the public and stimulate consumption. Many “free” services are powered by ads, further stimulating consumerism precisely at the time that it imperils the planet. Platforms like Google Search and Amazon are built to maximize consumption, ignoring ecological limits. Instead of forced advertising, information about products and services could be hosted in directories and accessed on a voluntary basis.

9. Replace military, police, prisons and national security apparatuses with community-driven safety and security services

Digital technology has increased the power of police, military, prisons and intelligence agencies. Some technologies, such as autonomous weapons, should be banned, as they have no practical use beyond violence. Other AI-driven technologies, that arguably have socially beneficial applications, would need to be tightly regulated, taking a conservative approach to limit their presence in society. Activists pushing to curtail mass state surveillance should join hands with those pushing for abolition of police, prison, national security and militarism, in addition to people targeted by those institutions.

10. End the digital divide

The digital divide typically refers to unequal individual access to digital resources like computer devices and data, but it should also encompass the way digital infrastructure, such as cloud server farms and high-tech research facilities, are owned and dominated by wealthy countries and their corporations. As a form of wealth redistribution, capital could be redistributed through taxation and a process of reparations to subsidize personal devices and internet connectivity to the global poor and to provide infrastructure, such as cloud infrastructure and high-tech research facilities to populations that cannot afford them.

Radical changes are needed, but there is wide gap between what must be done and where we are today. Nevertheless, there are some critical steps we can and must take.

First, it is essential to raise awareness, promote education and exchange ideas within and across communities so together we can co-create a new framework for the digital economy. In order to do this, a clear critique of digital capitalism and colonialism is needed.

Such a change will be difficult to bring about if concentrated knowledge production is left intact. Elite universities, media corporations, think tanks, NGOs and Big Tech researchers in the Global North dominate the conversation and set the agenda around fixing capitalism, limiting and constraining the parameters of that conversation. We need steps to strip their power, such as abolishing the university ranking system, democratizing the classroom and terminating funding from corporations, philanthropists and Big Foundations. Initiatives to decolonize education — such as the recent #FeesMustFall student protest movement in South Africa and Endowment Justice Coalition at Yale University — provide examples of the movements that will be needed.

Second, we need to connect digital justice movements with other social, racial and environmental justice movements. Digital rights activists should be working with environmentalists, abolitionists, food justice advocates, feminists and others. Some of this work is already being done — for example, the #NoTechForIce campaign spearheaded by Mijente, a grassroots migrant-led network, is challenging the supply of technology to police immigration in the United States — but more work is required still, especially in relation to the environment.

Third, we need to ramp up direct action and agitation against Big Tech and the US empire. Sometimes it is hard to mobilize support behind seemingly esoteric topics, such as the opening of a cloud center in the Global South (e.g. inMalaysia) or the imposition of Big Tech software into the schools (e.g. in South Africa). This is especially difficult in the South, where people must prioritize access to food, water, shelter, electricity, health care and jobs. However, successful resistance to developments like Facebook’s Free Basics in India and the construction of Amazon’s headquarters on sacred Indigenous land in Cape Town, South Africa show the possibility and potential of civic opposition.

These activist energies could go further and embrace the tactics of boycotts, divestment and sanctions (BDS), which anti-apartheid activists used to target computer corporations selling equipment to the apartheid government in South Africa. Activists could build a #BigTechBDS movement, this time targeting the existence of giant tech corporations. Boycotts could cancel public sector contracts with tech giants and replace them with socialist People’s Tech solutions. Divestment campaigns could force institutions like universities to divest from the worst tech companies. And activists could pressure states to apply targeted sanctions to US, Chinese and other countries’ tech corporations.

Fourth, we must work to build tech worker cooperatives that can be the building blocks for a new digital socialist economy. There is a movement to unionize Big Tech, which can help protect tech workers along the way. But unionizing Big Tech is like unionizing the East India companies, arms manufacturer Raytheon, Goldman Sachs or Shell — it is not social justice and is likely to deliver only mild reforms. Just as South African anti-apartheid activists rejected the Sullivan Principles — a set of rules and reforms for corporate social responsibility that allowed American companies to keep profits flowing from business in apartheid South Africa — and other mild reforms, in favor of strangling the apartheid system, we should aim to abolish Big Tech and the system of digital capitalism altogether. And this will require building alternatives, engaging with tech workers, not to reform the unreformable, but to help work out a just transition for the industry.

Finally, people from all walks of life should work collaboratively with tech professionals to develop the concrete plan that would make up a Digital Tech Deal. This needs to be taken as seriously as current green “deals” for the environment. With a Digital Tech Deal, some workers — such as those in the advertisement industry — would lose their jobs, so there would have to be a just transition for workers in these industries. Workers, scientists, engineers, sociologists, lawyers, educators, activists and the general public could collectively brainstorm how to make such a transition practical.

Today, progressive capitalism is widely seen as the most practical solution to the rise of Big Tech. Yet these same progressives have failed to acknowledge the structural harms of capitalism, US-led tech colonization and the imperative of degrowth. We cannot burn down the walls of our house to keep ourselves warm. The only practical solution is to do what is necessary to prevent us from destroying our one and only home — and this must integrate the digital economy. Digital socialism, made reality by a Digital Tech Deal, offers the best hope within the short time frame we have for drastic change, but will need to be discussed, debated and built. It is my hope that this article might invite readers and others to build collaboratively in this direction.

This article focuses on the role that the Colombian state’s land titling programme has played in helping their communities substitute their illegal drug crops with legal alternatives. The author interviewed over 80 farmers in former coca leaf farming communities, in Putumayo, Caquetá, Cauca and Nariño, and carried out 30 elite interviews.

The violence that accompanies forced eradication of coca leaf in Colombia is devastating and costly. Aerial spraying of glyphosate, and the fighting between the army and armed groups that try to protect the illegal drug trade, is disastrous for everyone living in the same community as coca leaf farmers. And there is no evidence that this financially and politically expensive option even works. Cocaine production continues to soar in Colombia, despite efforts to reduce the amounts of coca leaf crops and the land area used to grow them. In 2020 cocaine output rose by 8% in Colombia despite the land area with coca leaf crops shrinking by 7%.¹

Policymakers who insist the most obvious solution to illegal drug trade is to reduce the supply of coca leaf crops, should therefore consider intensifying a non-punitive approach.

Colombia spends about COP $1.3 billion (that is US $270 million) each year trying to incentivise farmers to voluntarily swap their illegal drug crops for legal alternatives. Calculating these costs is complex because there are different estimates for the price of glyphosate, its effectiveness, and some official figures include the security costs attached to eradication efforts.² Nevertheless, this seems like a very modest sum when we compare it to the COP $8 billion spent on efforts to eradicate these illegal crops by force.

The case for increasing investment in Alternative Development programmes would be more convincing if their success rate were more impressive and undisputed. Less than half of the efforts in Colombia to encourage farmers to give up their coca leaf crops peacefully, are effective. For example, between 2006 and 2015 about a third of the land used to produce coca leaf, received some form of investment to encourage farmers to switch to legal forms of agriculture. Of this, only about 40% remained clear of coca leaf three years later. Even so, some of this land was also subject to forced eradication programmes, therefore it is hard to discern if positive incentives are the reason why coca leaf was not replanted within this three-year window.  

Another reason why Alternative Development is not favoured over the war on drugs, is that working out how best to motivate farmers to willingly replace their illegal drug crops is not a straightforward endeavour. Short-term subsidies through specific projects may appeal locally, but without investment in infrastructure, market access and public services, they do not yield enduring results. Some argue that injecting money into poor communities without tackling broader development issues can be even more problematic. It can create perverse incentives for farmers who seek to qualify for subsidies. It can sour the state’s relationship with farmers who are deemed ineligible for subsidies, and potentially drive them to grow coca leaf instead. And few farmers are prepared to forego the immediate high returns that coca leaf crops provide, while they wait for any long-term land investments to provide a realistic way out of the illegal trade. 

Admittedly, policymakers have come a long way since the nascence of Alternative Development in the 1960s, when cash was paid out to opium poppy farmers in Thailand. At best, this approach was effective in gradually shifting opium production elsewhere, in this case to Myanmar. In Colombia, there have been various attempts to introduce more advanced designs of Alternative Development programmes than simple cash transfers. Perhaps the most famous are the Programa Familias Guardabosques (which ran until 2013) and Proyectos Productivos (which ran until 2016). These were well regarded, as they combined conditional cash transfer programmes with investment in infrastructure and capacity-building projects. But given the soaring levels of coca leaf production nationwide, the success of these programmes could be regarded as fleeting, and largely ineffective in the long term.

So, policymakers continue their quest to find the best way to support coca leaf farmers to build viable and lasting livelihoods in legal agriculture. One relatively novel approach to Alternative Development is giving land titles to illegal drug crop farmers. The mechanism by which land titles are supposed to prevent farmers from growing coca leaf in the future, is still undetermined. Nevertheless, it is a policy that has been used in Afghanistan, Peru, and Bolivia, and now in Colombia. Between 2015 and 2018, Colombia spent US $4.7 million sending teams of lawyers and topographers out to coca leaf growing communities in Antioquia, Cauca, Putumayo, and Nariño, to measure farmers’ land plots, and update or issue their land registration paperwork. This Formalizar para Sustitutir programme resulted in the formal transfer land ownership to 1,300 to 7000 families in that period. In some places it was land classified as baldio i.e., state-owned land in remote wastelands, which was privatised. In other places, it was already privately owned land that had been fragmented and changed ownership informally, and gradually fallen out of sync with the land registry.

The evidence for land titling dissuading farmers from growing coca leaf in Colombia, is inconclusive. One study by Muñoz-Mora, Tobón, and d’Anjou in 2018, found a negative relationship between land titles and area of coca leaf production in Colombia. But these results are based on a sample of 192 municipalities (second level administrative subdivisions of a Colombian department), which is about 17% of the total number of municipalities nationwide (1,123), and where the rule of law and state presence was stronger because they were subject to Plan Colombia policies during that period and were therefore more exposed to surveillance and law enforcement. A correlation between informal property rights and illegal drug production in these municipalities is not very informative when about 65% of rural land in Colombia is informally owned.³ And over 40% of small rural producers, who account for 70% of legal agricultural produce in Colombia, do not hold land titles.⁴ So, it is possible that the importance of land titling in the success of legal agriculture is overestimated by this study.

The focus of my research was to further understand, from the perspective of former coca leaf farmers, what role land titling plays, if any, in helping them switch to legal alternatives to coca leaf. Next, I shall describe how I first devised a hypothesis of the mechanism by which land titles could support Alternative Development, and then conducted extensive fieldwork research to test this hypothesis. After presenting my findings I will conclude with some implications for Alternative Development policy.

Formalizar Para Sustituir Office in Rosas, Cauca

From what we know so far about property rights and how they influence economic outcomes, I deduced four ways by which land titling could, in theory, support Alternative Development. I shall next provide a brief summary of each theoretical mechanism and explain which one holds up as the most likely one.

Transferability of land

Land titles might increase farmers’ ability to rent, sell and buy land.⁵ This has significant implications for attracting investment.⁶ And having more potential buyers willing to pay more for the land, boosts the land market.⁷ All this puts landowners in a better position to sell or rent out their land, and to seek greater profits elsewhere if they want to, and ultimately puts land assets in the hands of those who can best invest in it.⁸ The idea here, is that with increased investment in land, legal alternatives to coca leaf will be more profitable, meaning Alternative Development efforts will be more effective.

The problem with this theory, however, is that it overlooks other factors that can affect the transferability of land, such as the quality of land and the social norms that can prevent people from buying and selling land. Studies in India and China have found that, like in many developing countries, land is the biggest asset for farmers because they value it as a bundle asset, i.e., it provides them with a source of income but also a home, food security, a social network, social status and a pension for the whole family.⁹ For example, when poor farmers in a town called Singpur, in West Bengal, were offered a large sum of money for their land by the state (in this case so that they could build a car factory), farmers were reluctant to sell. They felt they were not skilled in anything other than agriculture, and they did not feel confident about spending the lump sum of cash wisely. Their land was the only thing that gave them the guarantee of subsistence.¹⁰ Thus, similar behaviour can be expected in other developing countries like Colombia, where most rural farmers are not skilled in anything besides agriculture. Therefore, any increased transferability of land, in communities transitioning from illegal to legal crops, does not mean that farmers will want to sell their land because without a rural land asset, they would be left deskilled.

Balboa, Cauca. Some former coca leaf farmers able to move to urban areas like these to find alternative work as construction workers, cooks, shopkeepers, motorbike-taxi drivers

Increased value of land

Land titles might increase the value of land assets, as it includes the value of the resources used in the acquisition of the legal paperwork. The legal ownership of land thus works as a savings tool and provides insurance for the family.¹¹ This can further result in a change of behaviour that adds additional value to the land asset. Firstly, farmers may allocate more resources to their land. The fewer resources you spend in protecting what is yours, the more you can spend on making a profit from it. A classic example of this is the way in which barbed wire in the 19th century American Plains increased farmers’ ability to protect their land from encroachment by land grabbers, resulting in higher levels of economic development.¹² And assuring investors that your property will not be easily stolen helps reassure them that if they invest in it, they won’t risk losing it all. Therefore, the introduction of land titles may conceivably help farmers operate in a more peaceful environment, allowing them to give their full attention to their land business.

In addition, farmers may invest in more long-term crops which thereby reduces their dependence on coca leaf crops. This argument is called “assurance” by some.¹³ Farmers with high uncertainty about their future access to land, and who feel at risk of being forcibly displaced, do not have incentives to invest in irrigation, reforestation and long-term perennial crops such as cocoa bean, for instance.¹⁴ A study on property rights and investment in Ghana found that, although land rights were not significant for investment decisions, they are slightly associated with investment in long-term crops.¹⁵ This was also found by a study carried out in Brazil. In places where land invasions were more frequent, there was also fewer long-term crop production.¹⁶ Therefore, land titling in the context of former illegal drug farming might encourage farmers to commit more long-term resources to the asset, such as by growing perennial crops instead of quick cash crops like coca leaf.¹⁷

However, even if former coca leaf farmers have the choice of growing long-term crops for a higher profit, this theoretical mechanism does not address the various other factors that cause farmers to seek immediate returns and a steady income from coca leaf crops, which can provide up to three or four harvests a year.¹⁸

Increased agricultural innovation

Land titles might increase farmers’ freedom to choose how to use their land.¹⁹ Conceivably, this means that farmers who are forced to grow coca leaf, can feel their land rights are backed by the law if they opt out of the illegal trade. If land titles enable landowners to use their land more freely, it may make their land more productive and thereby easier to transfer to legal farming from drug production. Farmers who might have been afraid of making legal use of their land because they felt obliged to grow coca leaf by extra-legal groups, could feel reassured by a land title as it means that they cannot have their land taken away when, or if, they choose to farm legal crops.

However, this theory assumes that innovation results in more profitable forms of land use. Sometimes, collective action is required for improved economic performance.²⁰ In other words, people may need to agree on how to use their land so that they can all reap the benefits of increased land productivity. So, if the freedom to innovate means that land is not used homogeneously, it may restrict greater land productivity. Farmers could be better off not working independently from each other, because of the potential economies of scale in land use. More to the point, many farmers are not forced to grow coca leaf, and choose coca leaf because it makes the best business sense. According to UNODC only about 2% of coca leaf farmers work under duress, so most coca leaf farmers are in the illegal business exclusively for the money.²¹

Remote hilly terrain where coca leaf has been grown in Nariño

Assumption of increased land tenure security

So far, the above three mechanisms presume that having a land title somehow provides greater land tenure security. There is abundant academic research that correlates secure rural land tenure with increased economic productivity.²² However, conflating land titling with increased land security is problematic in three ways. Firstly, land titling does not always increase land security in practice. There are endless examples of informal property rights systems that are enforced through social norms equally well, if not better than through the law.

Secondly, the evidence that links land security to increased land investment is patchy. Some studies suggest a possible reverse causation between land tenure security and investment because investment can strengthen the latter.²³ Measuring land tenure security is also difficult for methodological reasons. And much of the research on the causal relationship between land tenure security and investment has been focused on Africa, where the property rights system is often communal, with very specific circumstances. So, the evidence that links increased tenure security to increased land productivity is still disputed.

Thirdly, and perhaps most significantly for this study, land tenure security already exists in many of the communities where coca leaf is grown. This means that, besides the specific weaknesses already discussed, the above three mechanisms also fail to hold up as valid theoretical mechanisms for how land titles can support Alternative Development because they assume that land titles increase land tenure security.

Increased access to credit

There is one last mechanism that does not assume that land titles mean greater land tenure security. This theory is that land titles enable farmers to use their land as collateral and thereby access commercial loans, through the legal banking system, which in turn helps them to invest in their land and attain greater profits in legal alternatives to coca leaf. This is an extension of economist Hernando de Soto’s famous argument, that land titling increases landowners’ access to credit because it enables people to use their land as collateral to apply for bank loans. De Soto argues that if countries are poor, it is because they lack the institutions, namely formal property rights, to unlock capital and the economic potential of assets. In his words, “it is formal property that provides the process, the forms, and the rules that fix assets in a condition that allows us to realize [assets] as active capital”.²⁴ The logic follows that with a land title, farmers can use their land as collateral to access loans. And these provide farmers with the capital they need to invest in their land or set up a new legal business from which to profit. As with the prior three mechanisms, the underlying assumption is that if their investment is profitable, farmers will be less dependent on coca leaf production to make a living.

The drawback of this mechanism is that it assumes that with greater investment in legal alternatives to coca leaf, farmers’ land will undoubtedly yield greater profits than what coca leaf crops can offer. However, this was the most popular and recurring explanation used by the various policymakers I interviewed, who were enthusiastic about the use of land titling for Alternative Development.

Three key findings stand out from this research. Firstly, land titles had significant symbolic value among farmers but were not essential for their access to loans to invest in alternative legal uses of their land. Secondly, relatively few farmers wanted land titles to obtain loans and many of those who took out official loans using their land as collateral, did not use these to invest in their land. And thirdly, in several cases where farmers accessed loans with the use of their land titles, this did not reduce their dependence on the revenues of coca leaf crops, and counterintuitively, some of them paid off their loans with profits from farming coca leaf crops elsewhere. Let us look at each one of these findings in greater detail. 

Wanting vs needing a title

There was very little resistance to land titling in these areas. When asked if they wanted a land title, most interviewees said they did. The main reason referred to was “peace of mind” and that “now no one can take it away”. They associated land titles with the guarantee that their heirs would be able to own their land problem free. The desire for land titles also came from the satisfaction of being able to transform their relationship with the state. Farmers, who once perceived the state as their enemy, wanted to feel it would be on their side and backing them up. And land titles seemed increasingly sought after from a sense of the fear of missing out on something important. As more people were applying for land titles, more people without them felt they needed to secure one.

This was not surprising. It does not take an insider to appreciate that in a context of historical conflict over agrarian reforms, land titles have become a symbol for justice. They symbolise the state’s reparation of damages to the rural landless, who have for decades tried to make a living with no state support and many have turned to FARC, among other armed groups, to pressurise the state to redistribute land more equitably. Land titles beckon state presence and signal the end of the conflict. Land titles in areas formerly controlled by FARC, invite people to be loyal to the rule of law. 

But wanting, or even meriting, a land title is not the same as needing one to access a loan. Famers still did not perceive land titles as essential for borrowing money per se. There were multiple sources of credit available to farmers without land titles. Besides private loan companies (e.g., Contactar), there were charitable organizations (e.g. Fundación Mundo Mujer) and farming associations from which farmers could borrow money to invest in their land. Perhaps most surprisingly, even the Agrarian Bank issued small loans to farmers who owned land informally. Overall, there was a sense that land titling in itself was creating a new culture of banks asking for land titles as a prerequisite in loan applications. 

Undeniably, farmers in Cauca, Nariño, and Putumayo, felt land titles were now essential to access bigger bank loans than what they could get with as informal land owners, as this farmer explained: “with a COL$12 million [about $3,775 USD] loan I took out from the Agrarian Bank I began to produce pepper. That is the maximum they will lend you without a land title. With a land title, you can re-mortgage your land to access a higher credit, up to COL$50 million [about $15,730 USD]. I did not need a land title because it wasn’t a big loan I was after” (Pedro, 42).

Land Assets not deemed fit for collateral or large investment

But farmers did not want to take out the bigger loans, just because they could. About half of the farmers that I interviewed did not intend to take out loans once they obtained their land title. They felt that becoming eligible for bigger loans was an end in itself, and possessing a land title would somehow make it easier to sell their land if ever, they wished to do so. But they were mostly uninterested in applying for large bank loans, as this farmer described: “I was offered a land title for free, among many others from around here. I’d never had any land problems or had to defend my right to land from neighbours or others. But I was happy to get the land title even if I still owed money to the owner, who lives locally…yes the title helps me access credit, but I haven’t wanted to get a loan as I’d prefer to not get into debt” (Arturo, 55).

Dry soil in a vereda in Mercaderes, Cauca

Farmers were averse to long-term debts, for various reasons. Sometimes they lived in poorer land and lacked the confidence they could turn the loans to profit, such as this farmer: “I have never taken out a loan because I do not like being in debt. We live in such uncertainty with regards to employment and water that any income we have will go towards our children’s education. We cannot afford debts… we have serious water shortage problems” (Mirta M, 42). Sometimes farmers were older, and therefore less inclined to take the risk of having to repay loans with shorter life expectancy. In some cases, they had had bad experiences from loan sharks and informal financiers and preferred to avoid being in debt. And some feared that if they used their land, often their only asset, as collateral, they might have it repossessed, as was the experience of this farmer: “I became very indebted as I used much of my credit to pay for my healthcare and for my daughters’ university education. They now live in Pasto, one of them is an accountant and the other one a businesswoman but is unemployed. Last year I sold my land to pay my debts” (Sabalon, 60).

There was an interesting revelation about the other half that did want land titles to take out bigger loans. This was that they tended to be in a good position to invest in things other than for their immediate consumption. They had accrued better and bigger land assets, often with savings from the coca leaf days. Or they lived in places that were already well adapted to legal alternatives to coca leaf. These included places that were close to road infrastructure, or in areas that were well suited.

Home of a wealthy former coca leaf farmer in Putumayo

For example, in Esperanzas del Mayo, Mercaderes, farmers had access to dry soil and were close to the road, so they were positive that loans would help them grow profitable lemon trees. In Linares, Nariño, were there had previously been large-scale investment in milling machines, farmers who were close to the road wanted loans to grow sugar cane. In Santiago de la Selva, where there had been private investment in transport and storage infrastructure, all farmers were keen to buy milk cows with their loans and felt this would earn them a living.

In other places, like in Balboa, Cauca and Los Andes, Nariño, farmers were hopeful that loans would render their coffee crops sufficiently profitable to get by, but some still had some doubts as this farmer described: “Coffee production is costly, and I am new to coffee production. One sack of fertilizer costs COL$110,000 [about $34.50 USD] and one arroba of coffee costs COL$70,000 [about $22 USD]. You need two sacks of fertilizer to yield three arrobas of coffee. I’ve taken out a loan and had to sell some parts of my land as the price of coffee is too low to pay for production supplies. If the price of coffee does not rise, I would have to find another way to repay my loan…  I am losing my morale as a coffee producer. I think the solution is for the state to increase the price of coffee” (Fernando, 48).

However, many other farmers had altogether a different set of priorities on how to spend the money. About two thirds of those who had taken out official loans using their land as collateral, or were intending to, did not want the loan to invest in their land. Instead, they wished to spend the borrowed money on home improvement, on food, on healthcare or on their children’s education. In some tragic cases, farmers had chosen to invest their disposable income, as well as loans, in fraudulent financial pyramids.

Now this raises a critical assumption we are making about the use of land titling in facilitating Alternative Development. Agriculture is not always considered the most productive form of investment in some of these former coca leaf growing communities. Farmers identified many reasons for this. There were the most obvious macro-barriers to alternative forms of trade and agriculture, such as remote geographical location and infrastructure marginalization. The climate and quality of soil was deemed inadequate for alternatives. Farmers partly explained this by climatic changes, by the erosion that had resulted from intensive coca leaf production and glyphosate spraying. Indeed, the effect of additives and surfactants on soil is well documented.²⁶ Most of these farmers owned less than two hectares of land which had worked for growing coca leaf but not to compete with agroindustry.²⁷

A person walking in a dirt road in a former coca leaf growing vereda in Putumayo

Farmers further complained that the production costs for anything other than subsistence farming were too high. This was partly due to the increased cost of food and of day labourers, and an increased need for pesticide to make the soil fertile. Farmers described that many people had abandoned the countryside and moved to urban areas since the coca leaf bonanza days so there were fewer farmers around. It was also interesting to learn through the interviews, how much smaller families had become in just a generation, possibly adding to an increased demand for day labourers to help work the land. And finally, farmers referred to common investment risk factors such as the uncertainty of crop prices, the effect of smuggled agricultural goods and poor health as explanations for why it was bad business to invest loans in their land.

Hence for those farmers with nothing but subsistence farming as the most realistic alternative to coca leaf crops, a loan-based land investment is pointless. Rather than freeing up money for coca leaf growers to become successful farmers in legal alternatives, title-based loans may be used for consumption. And, alarmingly, instead of increasing farmers’ income, they can expose them to debt that some cannot afford to repay.

Ongoing dependence on drug crops

This point brings me to the last finding: land titles may not reduce farmers’ reliance on coca leaf income, and in the worst scenarios they may help to perpetuate it. For fast and easy money, coca leaf remained the preferable option for many. As mentioned above, there were multiple reasons why famers felt debt averse. And coca leaf was a quick way to supplement their incomes or pay for their children’s’ education or clear their debts. As such, there were farmers, even some with land titles, who openly expressed their decision, or intention, to return to illegal drug production, as this one described: “With no agricultural opportunities at home, what other kind of work can we realistically get? [I work as a raspachin] and go for two weeks at a time and come back for a one-week break. I go to various places depending on where there is work … My monthly outgoings are about COL$800,000 [about $255 USD] including my children’s education. …. I don’t work out of greed, buy out of need…. At home, I would be paid COL$15,000 to COL$20,000 [about $4.8 to $6.3 USD] as a day labourer whereas as a raspachin I earn from around COL$100,000 to COL$120,000 [about $31.8 to $38.2 USD] a day. That’s why I have gotten used to doing this work… I’m also producing coffee and sugar cane at home, but the fertilizers are very expensive. Sugar cane earns me about COL$300,000 [about $95.6 USD] per month, for half the year. The rest of the year it makes no profit. One arroba of panela costs COL$17,000 [about $5.4 USD] to produce and is sold for COL$35,000 [about $11 USD] and it takes a whole year to process that arroba, so it’s not worth the effort when coca leaf grows even on stones (Meregildo, 38).”

Without coca leaf crops, some farmers were not able to make a living from their land alone, so they complemented their new legal local occupation with earnings from coca leaf elsewhere. This farmer described her situation: “Coca leaf crops used to be my main source of income and I am a single mother and the sole breadwinner. I spend about COL$50,000 [about $16 USD] on shopping per week. I also used to have a job in a local restaurant but as the coca production shifted, the business went broke. So, I try to earn money selling yoghurt locally but mostly I have continued working as a raspachin” (Hortencia, 45).

Farmers who chose to resume their work with coca leaf would do so either by growing their own crops elsewhere, or by working as raspachines. Growing coca leaf far from home, protected their food crops from possible aerial spraying of glyphosate, and reduced the risk of bringing violence connected to armed groups close to home. Working as raspachines was a less financially risky occupation because it offered a daily wage and did not require an investment, but it also paid less money and was harder work and involved risky journeys.

Often younger people preferred the latter option, as this farmer described: “Those that remain in the vereda feel strongly tempted to start growing coca again, about five or six already do. About 20 young people continue to work as raspachines and domestic workers in temporary placements. One of my sons took out some loans and has a small internet café. The other one works in a supermarket. Every two to three months they go to pick coca to earn some extra money to pay back their loan. People [from coca leaf plantations] sometimes come here looking for workers, it is not always people who go out looking for jobs” (Carmen, 43).

Remote areas in Nariño where farmers grow coca leaf away from their homes

It has been estimated that 0.6% of farmers in receipt of Alternative Development subsidies resume their work with coca leaf.²⁸ I would suggest this figure underestimates the number of farmers in this position, as it is based on those “caught” working with illegal crops, and not on those who are considering returning to farming coca leaf again, or who are not “caught” doing so.

The point is that a fraction of the farmers I interviewed admitted they had repaid their land title-based loans with income from coca leaf, as this farmer explicitly described: “INCORA [former land agency] offered me a land title. They said that this would help me access loans from banks… So, I took out a loan for cattle, as this was the only thing, they would lend money for. I remember it was the World Bank that loaned me 14 beef cattle head and 1 bull. Then I started growing coca in three hectares of my land. With this I quickly paid the loan back” (Hipolito, 72).

As discussed above, the purpose of land titles for Alternative Development, is to offer farmers access to bigger loans so that they can profit from their land in legal substitutes to coca leaf. But sometimes loans do not perform as expected. So, it should not come as a surprise that if farmers who are offered land titles, use them to take out bigger loans but are still unsuccessful in their investments, they will simply accrue bigger debts. There are two outcomes for farmers in this situation. They either file for bankruptcy, or they seek a more lucrative occupation to pay off their loans. For many, the latter will be to resume their work with coca leaf crops elsewhere.

Why does this research matter? On a practical level, this study presents a flaw in the logic of land titling for Alternative Development. There is no short-cut to development. Land titles are no substitute for long-term investment in local infrastructure of the areas where coca leaf is the most profitable crop. This point has been raised in other studies that argue that eligibility for bank loans does not overcome the structural barriers to economic development.²⁹

Land in Putumayo where coca leaf used to be grown and where there still are significant barriers for farmers to access markets

On a more theoretical level, this study raises questions about de Soto’s argument that formal property rights, and consequently the formal economy, are the panacea for poverty. On the one hand, informal property rights are very effective in keeping a local economy growing.³⁰ On the other hand, formal debt does not wipe away poverty. This study highlights the problems of basing a policy on the idea. Commodifying land for the credit economy, and attempting to overcome poverty through private loans, means that farmers, rather than the state, assume the cost of unproductive land. Rural state subsidies or macro-investment programmes may be a more strategic way to spread that cost more equitably.

Arguably, in the context of deprived rural areas in Colombia, where it is usual for farmers to rely on loans to tide them over between harvests, making bigger bank loans available to them through land titles may even be serving the interests of mortgage lenders rather than borrowers, as has been suggested by Bromley (2008) in other contexts. The extent to which banks may profit from coca leaf farming is an area that needs further research. As this study has shown, some farmers choose to pay back their loans that way.

My findings shed light on the situation of individual coca leaf farmers who lived in veredas where farmers had not been forced to start or continue to grow coca leaf by extra-legal groups, and where land titling had been offered specifically as an Alternative Development incentive. Like all qualitative research, generalizing from the findings presented here is the task of the reader.³¹ This study did not set out to be statistically representative, because small-N research can never be so.³² My research does not speak for the municipalities as a whole and can certainly not be generalised to represent the experience of Afro-descendant and indigenous communities in Colombia where they have communal property rights systems.

But this study reveals that the value of land titles may be more symbolic than financial. Only about half of farmers interviewed wanted titles for bigger loans, and only a few of these turn them to profit. And counterintuitively, land titling is not mutually exclusive with farmers’ participation in the illegal drug trade. It shows that in some places in Colombia, having land titles and access to bigger loans is not a game-changer for coca leaf farmers.

What are the implications of this study for policymakers? In a country where rural farmers have, for decades, demanded a more egalitarian way of distributing agricultural land, the granting of formal land ownership by the state to the rural landless, is undeniably a triumph. It would be politically blind to dismiss land titling altogether because it is of immense symbolic value. However, land titling is not a remedy for illegal drug production, and what is more, it risks contributing to the “balloon effect” of illegal drug production. Spreading coca leaf farming know-how to new places and intensifying it in others can exacerbate the problem in the long-term. In vulnerable places, it can make it harder to wean farmers off coca leaf farming.

If the goal of land titling is to stimulate Alternative Development, then a more sophisticated approach is needed. A sensible step towards this, might be for policymakers to avoid overplaying the significance of loans in their efforts to elicit interest among coca leaf farmers in applying for land titles. Encouraging farmers to take out loans when it is unrealistic that they will improve their land productivity will only dash their hopes and lessen the credibility of Alternative Development programmes. This is a lesson we have learnt from micro-finance programmes in Africa.³³ Policymakers interested in continuing with land titling for Alternative Development, may also want to consider making it clear to farmers with land titles, that their land won’t be repossessed if they fail to make a profit. This might help to reduce pressure on farmers to join the illegal drug trade elsewhere to clear their debts.

In a recently published report, ‘High compliance, a lex lata legalization for the non-medical cannabis industry’, Kenzi Riboulet-Zemouli claims to have discovered a new legal justification for regulating recreational cannabis in accordance with the 1961 United Nations Single Convention on Narcotic Drugs. This option, according to Riboulet-Zemouli, went unnoticed by governments and by numerous experts ostensibly blinded by an orthodox prohibitionist treaty interpretation in the past decades. The report contends that it “easily finds a pathway where a ‘cannabis legalization’ in good faith is possible”, arguing that non-medical use of cannabis fits under the treaty exemption―in Article 2(9)―for “drugs which are commonly used in industry for other than medical or scientific purposes”.

Lengthy and amply resourced, the paper looks impressive. And the analysis does take into account several valid arguments that seemingly contribute to making the case for such a creative re-interpretation of the flexibility embedded in the Single Convention. At first glance, the argument that the Single Convention already allows for recreational cannabis legalization may hold appeal, as it purports to offer an enticingly easy way to overcome the treaty-related obstacles facing countries that are choosing the path of legal regulation of cannabis for not only medical purposes but for recreational uses as well.

A closer reading, however, quickly reveals the confused and legally indefensible nature of the paper’s proposed escape route. And while we consider the UN drug control treaties to be out of date and not fit for purpose, we strongly disagree with proposals that would seek to overcome the challenges on the basis of legally unsound and invalid arguments. The ‘High compliance’ paper constructs a legal house of cards that comes tumbling down when its core arguments are contested and taken out.

The paper tries to argue that the Single Convention nowhere obliges States to ‘prohibit’ cannabis. To be sure, in 2020 the Commission on Narcotic Drugs (CND) voted by a narrow margin to remove cannabis from Schedule IV of the Single Convention, based upon a recommendation by the World Health Organization (WHO) arising from its first-ever critical review of cannabis. As a result of the 2020 vote, the treaty no longer recommends against medical use of cannabis. Removal from Schedule IV marked an important, long overdue reform. Unfortunately, also following the advice of the WHO (which we have questioned elsewhere), cannabis remains firmly in Schedule I, alongside such substances as cocaine, fentanyl and heroin.

CND 2019/ Credit: Martin Jelsma

‘High compliance’ makes a big point about the disappearance of ‘prohibition of cannabis’ wording from early drafts of the Single Convention. However, in the context of those deliberations, ‘prohibition’ referred to banning cannabis for all purposes, including medical uses, and several countries rejected that notion. India objected, for example, because it opposed abolishing the widespread traditional use of bhang made from cannabis leaves with a low THC content. Other States pointed out the use of cannabis in some pharmaceutical preparations as well as in indigenous medicine and argued that it was feasible that future research would reveal additional medicinal benefits. Also, the hemp industry was relevant for the production of fibre and seeds and could not be hampered by overly restrictive controls.

Negotiations led to compromises, such as explicitly omitting the leaves and seeds from the definition of ‘cannabis’ in the Single Convention, which as a result only refers to the ‘flowering or fruiting tops of the cannabis plant’; in addition, cannabis resin (hashish) and ‘extracts and tinctures’ were added to the Schedule. India made clear that it would not be able to sign the treaty if it would oblige them to also disallow the uses of cannabis leaves in foods and drinks. With a few other countries, India actually preferred to provide a more general exemption for ‘other legitimate uses’, as had been used in previous treaties. That would have afforded much more flexibility for traditional, social and religious practices, not only for cannabis but also for coca and opium.

Some countries maintained that it would not be easy for them to ban the centuries-old social uses of cannabis, and that they would need time to gradually phase out those widespread traditions. That led to the option spelled out in Article 49 that a Party may “reserve the right to permit temporarily” the use and production of “cannabis, cannabis resin, extracts and tinctures of cannabis for non-medical purposes” but “only to the extent that they were traditional in the territories in respect of which the reservation is made, and were there permitted on 1 January 1961”. Besides India, the only countries making use of that transitional reservation were Bangladesh, Nepal and Pakistan. Article 49 specifies further, however, that such “use of cannabis for other than medical and scientific purposes must be discontinued as soon as possible but in any case within twenty-five years”, a transition period that ended in 1989. To make it possible for the countries concerned to ratify the Convention, according to Adolf Lande (author of the Commentaries, involved in drafting the 1961 and 1971 Conventions and regularly quoted in ‘High compliance’ as an authority), it was “advisable to allow a certain period of grace before the complete prohibition of the practice” (Official Records I, p. 185).

Unfortunately, the Conference decided against the inclusion of a broad exemption and ultimately narrowed the language that would have allowed ‘other legitimate uses’ to a few specified provisions deviating from the Single Convention’s general and decisive obligation in Article 4(c) “to limit exclusively to medical and scientific purposes the production, manufacture, export, import, distribution of, trade in, use and possession of drugs”.

The general obligation is “subject to the provisions of this Convention”, ‘seven words’ that Riboulet-Zemouli claims are repeatedly neglected in other studies. But the treaty Commentary does not leave any room for ambiguity with regard to the three provisions which are excepted from the limitation to medical and scientific purposes, namely Article 49 (transitional reservations), Article 2(9) “(whose practical importance seems highly hypothetical)”, and Article 27, “permitting the use of coca leaves for the preparation of a flavouring agent which must not contain any alkaloids” (primarily meant for the manufacture of Coca-Cola, as long as the cocaine was removed from the leaves beforehand).

Underscoring the narrow scope of exemptions to the treaty’s general obligation, the Commentary added that: “It is one of the most important achievements of the Single Convention that it ended the exceptions permitted in earlier treaties, subject only to transitional provisions of limited local application and duration pursuant to article 49, and apart from two cases presenting no problem of public health because they exclude the consumption of the dangerous substances involved” (p. 110).

In attempting to argue that the Single Convention does not disallow recreational uses of cannabis, ‘High compliance’ cites (on pp. 99 and 103) from the Official Records that the Conference decided to leave “governments free to prohibit the production of cannabis or not, as they saw fit” and that “the prohibition should take the form of a recommendation only. In the last analysis countries themselves must decide”.

Crucially, however, those quotes refer only to countries’ option to prohibit cannabis for the purposes the treaty specifically allows (medical, scientific and some industrial uses), not to escape from its basic obligations. Understood in its proper context, the Commentary is actually highlighting that the treaty explicitly allows for a stricter regime—not for a more lenient one—in recognition of the position of countries that considered some or all of the treaty exemptions as unjustified and harmful to drug control (Article 39 and Commentary p. 450). If they so choose, States can decide to prohibit medical or industrial use, or extend controls to the whole plant including the leaves and seeds, beyond the basic treaty requirements. Nowhere in the texts of the Convention, the Commentary or the Conference proceedings is there any indication that the deletion of ‘prohibition’ intended to afford Parties leniency with regard to recreational cannabis. “With regard to cannabis”, according to the closing statement of the President of the Conference, “it would seem that, under the Convention, production should be prohibited except in special cases” (Official Records I, p. 217).

Acknowledging the ‘innovative’ nature of his re-interpretation, to defend his case the author resorts to treaty interpretation concepts around ‘intertemporality’―questioning the temporality of a particular provision―and evolutionary interpretation taking into account the development of international law, practice, and custom. And of course a lot has happened over the past 60 years, and the UN drug treaties do afford certain latitude, which provides room for manoeuvre for policy makers to legally accommodate the progress made. Examples are the now widespread acceptance of medical cannabis, the emergence of a CBD market, the decriminalization of possession and cultivation of drugs for personal use, and harm reduction services such as drug consumption rooms, heroin prescription or drug testing. Those developments initially also created tensions with treaty provisions, running into an overly-prohibitive treaty interpretation by the INCB. But evolving state practices combined with sound legal argumentation have convincingly addressed those tensions, and the stance of the INCB is gradually adapting to these new realities.

But there are also clear limits to the latitude, and there is―unfortunately―simply no way around the fact that legal regulation of drugs markets for recreational use contravenes certain treaty obligations, and conflicts with the explicit purpose of the established international drug control regime to ban those practices. To be very clear, in our opinion the inevitable non-compliance with these obligations should neither prevent nor delay countries from proceeding ahead with legal regulation of cannabis markets. Indeed there are numerous compelling reasons for countries to choose to legalize cannabis, and we are actively supportive of countries moving in that direction. But undertaking reforms that will involve non-compliance with current treaty obligations must be addressed in ways that comport with the rules and procedures of international law, not through some fantasy re-interpretation.

In some countries the difficult reality about non-compliance has already been acknowledged. In recent answers to Parliament regarding the government’s planned experiment in cannabis regulation, the Dutch government referred to a legal advice from the State Council concluding that “[t]he planned experiment is presumably in breach of current international and European law”. At the same time, “the government intends to use the proposed experiment to investigate whether an alternative to the current, ineffective policy is possible” and on that basis, “the government considers the experiment legally defensible” while recognizing that “the experiment creates a certain amount of tension with those conventions”. As it elaborates its announced cannabis regulatory framework, Germany’s coalition government uses as a reference point the Green Party’s 2018 cannabis bill, which stated “there is little doubt that a system such as the Cannabis Control Act, which allows cannabis to be sold in licensed outlets for adult recreational consumption is not compatible with the international prohibition regime at this stage”. And Canada’s then-Foreign Minister Chrystia Freeland told the Senate in May 2018 that cannabis regulation does entail “contravening certain obligations relating to cannabis under the three UN drug conventions”, adding, “we need to be open about that”. Freeland affirmed that Canada is “definitely open to working with treaty partners to identify solutions that accommodate different approaches to cannabis within the international framework”.

It is time to plainly acknowledge that certain elements of these treaties are no longer fit for purpose, to confront the colonial legacy and injustice embedded in them, and to support a coordinated effort of a group of like-minded countries to distance themselves from the most problematic elements of this out-dated regime. Doing so, in our view, will also contribute to clear the path for other unduly restricted plants like the coca leaf or psychedelics, and to support ongoing struggles for the recognition of indigenous rights and ceremonial uses.

Cannabis policy developments have arrived at an important moment where the treaty issue needs to be confronted in an honest manner, and not by hypocritical denials or fantasy interpretations that undermine basic principles of international law and cannot stand the scrutiny of ‘good faith’ treaty interpretation. The pathway proposed in ‘High compliance,’ in our view, is no doubt well-intentioned but amounts to a legally indefensible distraction, and risks confusing the already complicated discussion over the most suitable strategies for moving forward with legal regulation with due respect for international law (as also argued by others). The principles behind the multilateral system and international law are precious, but also fragile and currently under threat on many fronts, and need to be treated with the utmost caution.

After careful consideration with a group of international lawyers, over the past years we have outlined in detail the few legally available and politically viable options, either by means of treaty withdrawal and re-accession with reservations or inter se modification (see sources below). In addition to Uruguay   Canada, multiple U.S. states have legalized cannabis and federal regulation proposals are now under debate in the U.S. Congress, a bill is pending in Mexico’s Congress, and across Europe developments are speeding up with initiatives in Luxembourg, Malta and Germany, and experiments in Switzerland and the Netherlands. Now is more urgent than ever for like-minded countries to coordinate discussions on realistic scenarios for resolving the unavoidable conflict between legalizing non-medical cannabis and the UN drug conventions and European Union law.