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Reflections on the Role of Logistics in the Sustainable Exploitation of Natural Resources in Latin America and the Caribbean

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Reflections on the Role of Logistics in the Sustainable Exploitation of Natural Resources in Latin America and the Caribbean Issue No. 357 - Number 5 / 2017 www.cepal.org/transporte English / Original: Spanish BULLETIN FACILITATION OF TRANSPORT AND TRADE IN LATIN AMERICA AND THE CARIBBEAN This issue explores the essential link between Refections on the role of logistics and the exploitation of natural resources. It briefy examines how the different theoretical and analytical conceptions of global trade logistics in the sustainable interconnections that exist have failed to take full account of the central role played by logistics, which has affected the ways in which the various exploitation of natural nodes and links in global value chains manifest themselves on the ground, together with the social resources in Latin America and environmental implications that this has for the region’s development. It was written by Cristina Muñoz Fernández, a and the Caribbean consultant, and Gabriel Pérez, an ECLAC Economic Affairs Offcer, as part of the ECLAC/UNDA project “Logistics integration for a more sustainable Background exploitation of natural resources in Latin America and the Caribbean”. This bulletin examines the interrelations that exist between logistics and The views expressed in this document are those natural resources and addresses different theoretical approaches for of the authors and do not necessarily refect the views analysing global natural resource production chains and networks. Many of of the Organization. the methodologies analysed focus either on the resources or on the stages For more information on this topic, contact Gabriel of international trade and omit the importance of logistics infrastructure, Pérez ([email protected]). which is the logical and physical thread that connects the different links Background in the network. Not only do properly coordinated logistics allow fows I. A holistic look at global natural resource chains of materials to be mobilized in an appropriate, timely, safe way and at a and networks competitive cost; they also have an enormous impact on the interconnection of territories, on the connectivity and accessibility of transport services and II. Logistics depend on prevailing governance on the mitigation of negative externalities that affect the environment and III. The enclave policy and its impact on the the population. development of a disconnected infrastructure IV. Linkages and production chains associated with In many Latin American and Caribbean countries, the exploitation and natural resources for structural change marketing of natural resources continues to be the main source of income and the principal engine of growth. For that reason, and given the urgent V. The need for multiscalar governance that need to promote productive diversifcation through progressive structural refects the complexities associated with the change in those countries (ECLAC, 2016), numerous institutions see global logistics of natural resources value chains as a tool for attaining that objective. However, one of the VI. Conclusions and fnal remarks prerequisites for the crystallization of such value chains is the physical VII Bibliography and technological support that logistics can provide for their effcient and competitive operation. This necessarily requires that the region’s logistical infrastructure be managed in a different way, given that the current approach was designed to export large volumes at the lowest cost and in the shortest time possible, with no consideration to encouraging productive linkages and no proper management of the negative externalities created. INFRASTRUCTURE SERVICES UNIT Natural Resources and Infrastructure Division, UNECLAC www.cepal.org/transporte Although the globalization of markets has been chiefy Nevertheless, the different theoretical conceptualizations characterized by increased interdependence among States of global value chains have failed to analyse the and their economies as a result of exchanges of persons, importance of logistics infrastructure and the impact of goods, services, information, values and habits, it has also the process on the territory and the population. This is the increased the scale of target markets, generating increased case, to a greater or lesser extent, from the frst approaches competitive pressures and a growing deterritorialization to the issue —under the successive denominations of and denationalization of development processes. “commodities chains” (1987), “consumption chains” Accordingly, the existing model for natural resource (Storper, 1992), “production chains” (Dicken, 1994) and governance requires a new multiscalar approach that “commodity circuits” (Johnson, 1996)— to the recent underscores the importance of interactions between the developments of provisioning systems, actor-network local and global scales, especially as regards the fow of theory, global production networks and other theoretical raw materials and the growing, decisive role played by frameworks for their analysis. logistics in that relationship. Thus, for example, in 1987 Hopkins and Wallerstein (2000) developed the concept of the “commodities I. A holistic look at global natural chain”, defned as a network of labour and production resource chains and networks processes whose end result is a fnished commodity. The authors developed the concept to explore how surplus For many of the region’s countries, effective integration value was distributed among owners and, consequently, into global value chains is essential for their future sustainable development. This is because of the advantages how “unequal exchange” occurred in practice. They those chains offer for promoting trade in manufactured analysed the main productive operations, the central goods with added value, increasing quality employment, properties of each operation and the geographic and balancing demand while preserving the basic sectors of political dispersion of those operations. However, because the economy, reducing exposure to currency volatility, of the infuence of the world-systems theory they had encouraging investment in strategic sectors, along with previously developed, their analysis focused on global many other advantages (World Bank, IDB, ECLAC, 2016).1 dynamics and was structured around such concepts as the centre and the periphery, with only secondary However, the structure of global value chains is determined importance given to the local level. In turn, Fine and by the characteristics of the resource as well as by the speed, Leopold (1993) sought to highlight the different ways in quality, fexibility and costs of the full chain. The ability of which production and consumption interact, focusing on a local company to join one of those networks does not how demand for resources determines their importance therefore depend solely on its individual performance but at different historical moments, with the importance of also on its historical and social background, its geographical one resource being transferred to another depending location and the quality of the available infrastructure. on the geopolitical and economic-political context. Thus, different resources are constructed ideologically and, as Although moving people and goods has been a key element a result, the task was to trace not only their chains, but in development throughout history, the deterritorialization also the discourse, knowledge and representations of the of production has made infrastructure and logistics historic moment. In this way, the analysis of production, services (including transport) basic requirements for global distribution, marketing and consumption could be interaction. Ongoing technological progress also leads to connected with the cultural elements that surround radical changes in the territory and nature, in forms of those processes. In turn, Gereff (1995) established that consumption and in the economic infrastructure required 2 a “commodity chain” has four main characteristics: an to meet demands that are increasingly exacting and niche- input-output structure, which includes a group of products based. In other words, to make progress with productive and services connected through a sequence of activities transformation and to harness the full potential of global intended to incorporate an added value; a distinctive value chains, logistics (both physical and service-based) territoriality, which includes the location of the raw must be integrated to provide the connectivity and fuidity necessary for the required amounts of primary products materials and of their production, export and marketing; and intermediate goods to move between nodes with the a particular structure of governance, which refers to the necessary levels of quality, safety and timeliness and at power relationships that determine the allocation of internationally competitive costs. fnancial, material and human resources within the chain; and the institutional context, comprising the role of the 1 Global value chains are a tool that allows the changing patterns of global production government, trade unions and other institutions that to be analysed, geographically disperse activities and actors within a particular regulate those issues. In turn, Kopytoff (1949) and Crang industry to be interlinked and the roles that developed and developing countries alike play within them to be determined (Gereff and others, 1994). (1996) expanded this with the concept of “commodity INFRASTRUCTURE SERVICES UNIT Natural Resources and Infrastructure Division, UNECLAC biographies”, to link consumption as a local contextual value chains as an analytical
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