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Wistful Hope Local Responses to Neo-Liberal Politics: Uruguay and the Pulp Industry Cecilia Guadalupe Salinas Department of Social Anthropology UNIVERSITETET I OSLO June 2010 2 Abstract Drawing on five months of fieldwork in a rural community in the west cost of Uruguay and the subsequent analysis of the data, this thesis argues for the importance of studying neo-liberal capitalism in relation to local social and economic dynamics. Neo-liberalism indeed has effects but these effects are not mechanically reproduced everywhere. This study addresses the socioeconomic effects of the installation of a Finnish pulp mill in a Uruguayan rural locality. Neo-liberalism became dominant in the eighties and nineties in Latin America leading to reforms in the industrial policies, which promoted foreign investment and exports as the driving force for growth and as a solution for the region‘s economic problems. Thus, the forestry and pulp industry acquired a central role for the economic growth in countries such as Uruguay. In the eighties Uruguayan governments started to stimulate the monoculture of tree plantations with exonerations, flexible credits, and direct subsidies from the State. In this way the Uruguayan governments have managed to attract the interest of multinational firms, such as the Finnish company Botnia to install a pulp mill mega-project in the country. Botnia became the largest foreign investment ever in Uruguay. Governments and financial institutions have referred to the investment as progreso for the host community. However, I argue—as many others have done before—that global agro- export enclaves, such as the Finnish pulp mill, only benefit a small segment of the local community. Empirical examples are presented to illustrate the fact that this rural community has not had major benefits of the exploitation of their natural resources. I attempt to offer a localised understanding of global processes arguing that it is wrong to attribute poverty to local autonomous production processes. However, there are also limitations in explaining local socioeconomic processes in terms of neo-liberal capitalism alone. I construct my argument around three different foci, but which all are closely linked together. First, the study examines the youth‘s living conditions and the local carnival. Second, the study analyses the role of the past in relation to the way the local people 3 conceptualised the Finnish pulp mill. Lastly, the study compares two different models of social development at different periods of time in Fray Bentos. 4 Acknowledgments Both in Uruguay and in Norway many people contributed in a myriad of ways to make my research possible and pleasurable. I wish to thank all of you in Uruguay who generously shared with me their stories. Specially, I would like to thank Hernán López Echagüe and his family, Rene Boretto Ovalle, Horacio and Beatriz. I will give ―Mil Gracias‖ to Chola whose magical hands helped me in difficult times, to Tere, Cimarrón and Oyo, for your friendship and guidance in the world of Fray Bentos. The writing process of this thesis was done at Centre for Development and the Environment (SUM), which has been a wonderfully stimulating place. I am deeply grateful to the academic director of the interfaculty research program LEVE (Livelihoods in developing countries), Sidsel Roalkvam who encouraged me and supported my project, granting me a master scholarship. I will thank my academic advisor, Professor Marit Melhuus, who has provided me with knowledge and wisdom throughout this thesis. My gratitude to her for her professional guidance, encouragement and effort, without her inputs and support this thesis would not have been able to develop. You have challenged me, helping me to build my skills and motivate me to continuously improve the quality of my work. This has been a very valuable learning process. I will also thank Rune Flikke who, throughout the path of my study has inspired me at every turn, enriching my perception of life. This project would not have been possible without the support of my family and friends – my gratitude is endless. Thank you to my family in Argentina and in Norway. Especially thanks to you Carl for your encouragement and support. I will thank you Ragnhild and Virginia for readings and suggestions at an early phase, and also Per Einar for moral support during the whole project. I also direct my most sincere thanks to Iselin and Claudia, for your generosity, care and support; to my mother Elena, for you unconditional love, patience and support and more than anything else for taking care of Simón during the fieldwork and when I was overwhelmed with writing. Thank you mamá for continually reminding me to never loose hope. Thank you to you Vero, for your boundless love 5 and joy. Last but not least, gracias a vos Simoncito, for your patience, love, magic and humour. You have creatively coped with your mother in stressful times. 6 This study is dedicated to my dear Simón and my brother Rodrigo: ―Og håpet dør aldri. Det brer seg videre... til nye hjerter ... til nye slekter. Som en vårvind som bærer bud om en varm sommer‖ (Kautakeino-opprøret) 7 Table of Contents Abstract ......................................................................................................................... 3 Acknowledgments ........................................................................................................ 5 Chapter I: Introduction ............................................................................................. 11 Hope ........................................................................................................................................ 13 Analytical Perspectives ........................................................................................................... 17 History ..................................................................................................................................... 17 Carnival ................................................................................................................................... 17 Socially Thick and Thin Models of Development................................................................... 19 Methodology ........................................................................................................................... 19 The Structure of the Thesis...................................................................................................... 26 Chapter II: Contexts: Botnia and Fray Bentos ....................................................... 27 Botnia and the Uruguay‘s Neo-Liberal Politics ...................................................................... 27 The Discourse about Progress ............................................................................................ 29 The International Conflict ....................................................................................................... 32 The National Political Context ................................................................................................ 36 Fray Bentos.............................................................................................................................. 38 The Past in Fray Bentos ...................................................................................................... 42 Generational Discrepancies ............................................................................................... 44 Conclusion ............................................................................................................................... 48 Chapter III: Carnival, Neo-liberalism and the Youth ............................................ 50 Looking Forward to the Carnival Season ................................................................................ 53 Behind Shangó’s Masks ...................................................................................................... 54 The Carnival: No pain, No Glory ............................................................................................ 62 Burying Carnival ..................................................................................................................... 65 Conclusion ............................................................................................................................... 76 Chapter IV: Fray Bentos and Botnia: A question of Hope? .................................. 78 The Past in the Construction of the Present ............................................................................. 79 Lambs of Hope in Times of Despair ....................................................................................... 81 Ephemeral Hope: Botnia‘s Construction Period ..................................................................... 86 Diverging Meanings about the Effects of Botnia .................................................................... 91 Dreaming about the Future while Looking Backwards ........................................................... 94 Conclusion ............................................................................................................................... 97 8 Chapter V: Botnia, a Socially Thin Model of Development................................... 99 Investment Patterns in the Neo-Liberal Era .......................................................................... 100 A Socially Thick model of Local Development: the Meat Industry in Fray Bentos ............. 102 The Socially