Roosevelt Institute | Cornell University

Resource Extraction, Sell-Outs, and Unsustainability: Chinese-Ecuadorian Relations in the Face of Development

By Christina YinPublished November 9, 2015

"Nature in all its life forms has the right to exist, persist, maintain and regenerate its vital cycles." With this clause in its 2008 constitution, Ecuador became the first country to establish fundamental rights of Nature under the law.

By Christina Yin, 11/9/15

"Nature in all its life forms has the right to exist, persist, maintain and regenerate its vital cycles." With this clause in its 2008 constitution, Ecuador became the first country to establish fundamental rights of Nature under the law. The global trend of development and urbanization, however, as well as the subsequent call for extensive supplies of natural resources, have begun to infringe on these rights.
China has become a dominant player in Ecuadorian environmental affairs. As the Asian nation looks to expand its economic sphere of influence worldwide, it has prioritized developing relations with Latin America. Specifically, China has solidified a near-monopoly on many of Ecuador's natural resources: it has claims on 90% of Ecuador's petroleum exports for the next 5 years, and has invested over $11 billion on in-country mineral extraction and infrastructure development projects. The history of this relationship is pragmatic; the foundation, economic. In 2008, Ecuadorian president Rafael Correa defaulted on $3.2 billion in foreign debt. The same year, Chinese oil and gas company PetroChina loaned the Correa administration $1 billion, stipulating that Ecuador's state oil company was to sell Amazonian crude oil exclusively to PetroChina in return. As a result, Ecuador exported 96,000 barrels each day to Chinese companies. Since 2008, the $11 billion from China has largely gone towards oil, mining and energy projects, and has further intensified Chinese-Ecuador relations. By 2013, China was paying 61% of the Ecuadorian government's finances, and Ecuador was accumulating increased debt to China. This debt has led to a loss of sovereignty as the nation has been forced to drill for oil in its untouched natural reserves; indigenous peoples' rights have been forcibly violated by Ecuador's government, and ecological impacts of extraction in the Amazon and cloud forest regions have been enormous. Furthermore, China has legally claimed rights to seize assets from Ecuador, should the country default on its loan repayments. Thus, by strategically investing billions of dollars in oil and development projects, China has exploited Ecuador for its extensive resources while simultaneously solidifying itself as an economic world superpower in what many criticize to be a modern-day form of imperialism.
"We can't be beggars sitting on a sack of gold." The words of Ecuadorian president Rafael Correa in 2012 illustrate his belief that the country needed to tap into its vast stock of natural resources. Critics of the Ecuadorian government's extraction policies point to Correa's underground support of natural resource exploitation: in 2013, the Correa administration negotiated a secret $1 billion agreement to drill for oil in Yasuni National Park in the Amazon; the Ecuadorian government effectively granted China drilling rights in exchange for loans for development projects. Correa has been publicly denouncing resource extraction, yet has simultaneously been granting China claims over Ecuadorian assets in exchange for monetary loans. Critics have also accused Correa of selling out Ecuador's resources in order to support industrialization, and of exploiting petroleum's value in order to receive external funding for unsustainable development projects. From the fundamental disconnect between Correa's denouncement of resource extraction to his evident support of it, perhaps the Correa administration intends to use China as a springboard to catapult Ecuador onto the world stage as a significant player in the petroleum and resource sphere.
The increasing economic ties between China and Ecuador are complex, with many factors contributing to the growing relationship. In terms of resource extraction and development, I urge the nations to think twenty, forty, one hundred years into the future, when the mines are gone and the oil reserves are empty. What will be left for the nation that industrialized so quickly, and depleted their resources completely? What of the indigenous populations that tried so hard to oppose this Euro-centric vision of development, to oppose a complete overhaul of their traditional way of life—one that tied them inherently to the land that was lost in urbanization. At its roots, development simply means an increase in well-being, be it money, security, a strong relationship with your environment, or something else completely. The conversation surrounding development is a complex one with many facets, but in Ecuador it most importantly calls for consideration of Nature and recognition that well-being is not always an economic matter.