Big finance destabilises ecosystems, communities and climate

Deregulated global financial capital combined with new digital tools and asset classes have resulted in an accelerating rush to convert land and oceans — encompassing wild nature and people’s livelihoods and territories — into privately-owned financial assets, with deleterious consequences including violence and environmental destruction.

This is the conclusion of a new report, ‘Rogue Capitalism and the Financialization of Territories and Nature,’ published by FIAN International, the Transnational Institute and Focus on the Global South.

The report examines the architecture of global finance and the tactics used to extract wealth from natural resources. It finds that the rush for land is fuelling deforestation and greenhouse gas emissions, making big finance a key driver of climate change. At the same time, market-based mitigation schemes provide new investment opportunities — for example in Brazil and Indonesia.

Big data and digital technologies, says the report, play a key role in opening up new markets and investment opportunities for wealthy global financial elites and firms, such as BlackRock.

The report 20 examples of how the process works. These include: how half of Paraguay has been transformed in only ten years by the expansion of industrial agriculture, with funding from international actors such as Luxembourg-based company Payco, whose shareholders include EuroAmerican Finance (85%); and how deforestation and road building in the Amazon is incentivised by agribusiness firms wanting to transport soybeans and grain to the shipping terminal at Miritituba, itself run by a company owned in large part by Blackstone, one of the world’s biggest financial firms.

Also mentioned are the financialisation (in the name of development) of peasant farms in Zambia; the decimation of fishing communities in many coastal regions of the world under the ‘Blue Economy’ banner; the impact of ‘vulture funds’ in Catalonia and how China’s belt and road initiative will destroy livelihoods as far away as Sri Lanka.

In all cases, remote private asset owners accrue vast profits at the expense of local people and ecologies, says the report, explaining the mechanisms by which that happens.

“After discussions with small-scale food producers’ organisations and social movements, we have come to the conclusion that what is often referred to as ‘financialisation’ should rather be called ‘rogue capitalism’ because global finance’s grab of people’s territories is illegitimate and destructive, and because the involved actors actively seek to hide their operations,” said Philip Seufert, from FIAN International, as reported on the site farmlandgrab.

The report concludes with several discussion points and suggestions for countering these developments, urging people to, among other things, assert their rights to land and territory as a counter concept to the global right to property for financial capital; strengthen locally adapted models of management of the commons; and expose multi-stakeholder initiatives set up to legitimise such business and financial operations as “responsible”.

*Note that representatives from several campesino (peasant farmer) organisations in Honduras have announced that they will protest against the country’s new decree PCM 030-2020, which would hand over land ownership to national and international private capital, as reported by Telesur.

“This appeal goes against the life of small farmers, is a step backward from the agrarian reform, and would increase criminalisation in the countryside,” said Franklin Almendares, leader of the National Rural Workers Union.

Report: Rogue Capitalism and the Financialization of Territories and Nature

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