Variegated transitions: Emerging forms of land and resource capitalism in Laos and Myanmar

Introduction

Since the late 1980s, the socialist and command-and-control political economies of mainland Southeast Asia – Cambodia, Laos, Myanmar (Burma), and Vietnam – began adopting market reforms that facilitated a transition towards capitalist economic development. This market transition has attracted novel forms of domestic and foreign investment, particularly for the extraction of natural resources and commodification of land. Across Cambodia, Laos, and Myanmar, 5.1 million hectares (ha) of land have been granted to agribusinesses for plantation development (Ingalls et al., 2018). Land and resource investments have produced widespread dispossession and displacement across the Mekong region, intensive land grabbing that has been met with a range of political reactions ‘from below’ (Hall et al., 2015; Schoenberger et al., 2017). Legacies of state control or uneven ownership over land combined with repressive political apparatuses have facilitated such abrupt and violent transfers of land access and use (Hirsch and Scurrah, 2015).

Yet despite broad similarities in the political-economic transitions that have taken place and the Polanyian counter-movements that disruptive land investments have produced across the region, there are important differences that have emerged across national and sub-national contexts—particularly concerning how capitalism has taken shape in what are relatively recent transitions from socialism. These differences can be seen clearly when comparing the experiences of Laos and Myanmar. Laos’s economic transition has been accompanied by relatively stable and hegemonic political control by the communist party and state (St John, 2006). Resource extractive investments are largely driven by foreign investors, centrally organized by the Lao state (Barney, 2009), dispossessing peasants of their land with little opportunity for restitution (Kenney-Lazar, 2018). In contrast, Myanmar’s economic transition has been accompanied by several rounds of political crisis and uneven democratization, leading to the emergence of comparatively fragmented, pluralistic, and contentious politics over land and resources. Land investment projects are driven by a range of actors, not necessarily in coordination with one another, including the Burmese military (Tatmadaw), domestic crony companies, and ethnic armed organizations (EAOs), many of which have links with foreign partners (Scurrah et al., 2015). Despite the massive displacements that such projects have caused, the political transition has led to a flourishing of politics contesting how such land should be used going forward and challenging the prevalence of large-scale land investments in the country (Mark, 2016a).

In order to understand how these different forms of capitalism have emerged in what might be considered similar types of transitioning, resource extractive economies, we turn to the conceptual framework of variegated capitalism (Brenner et al., 2010; Peck, 2010; Peck and Theodore, 2007). Building on and spatializing the varieties of capitalism (VOC) approach (Hall and Soskice, 2001), variegated capitalism (VC) is concerned with the diverse ways in which late capitalism manifests spatially through various forms of uneven development, in ways that transform and exacerbate geographically embedded institutional differences. The framework is useful for examining differentiated political-economic transitions in Laos and Myanmar due to its focus on the ways in which general logics and patterns of capitalist accumulation and expansion interface with local politics, institutions, and even cultural structures and relations, leading to variegated local manifestations of globalized capitalism.

However, the VC framework has largely been employed to analyze late capitalism in advanced economies rather than political economies at the margins of global capitalism, such as in Laos and Myanmar. While such countries make up a small share of the global economy and are not the places where most capitalist value is realized, they are major sites of appropriation and extraction of capitalist value, especially in the form of natural resources that fuel global commodity networks and mass consumption elsewhere (Hornborg, 2011; Jorgensen, 2006). Not only are they important sites in terms of material inputs into the global economy, but they are also where some of the gravest social and economic abuses related to extraction have taken place (Bebbington et al., 2008; White et al., 2012).

Due to a focus on advanced economies, the conceptual approaches of VC and VOC have less to say about countries that are transitioning towards capitalism, including those with a socialist past where various forms of hybrid capitalism have emerged. The major exception is VC scholarship on China (Lim, 2010; Lim, 2014; Mulvad, 2015; Peck and Zhang, 2013; Zhang and Peck, 2016). Yet even this work has focused more on China’s current variegations of capitalism, rather than its transition towards capitalism. This is a missed opportunity, as the period of transition is when some of the most interesting and insightful interactions between logics of capital accumulation and the political, institutional, and socio-cultural legacies of pre-capitalist ¹ political structures, processes, and relations. Additionally, VC and VOC approaches have predominantly focused on the interrelation between capitalist logic and regulatory institutions, which are much stronger in the advanced economies of the Global North than in the marginal, transitioning economies of the Global South. In the latter, due to a lack of regulatory protection from the abuses of capitalist resource extraction, affected groups of people and the public tend to resort to immediate and direct political reactions, such as protest and appeals to state power, in an effort to curb socio-environmental abuses. Thus, land and resource politics play an important role in shaping the development of resource capitalism in such places in ways that are not captured by VC’s focus on regulatory institutions.

In this paper, we show how the VC framework can be extended and applied to marginalized transitioning economies by analyzing the emergence of resource extractive capitalisms, especially related to issues of land, in Laos and Myanmar. These two countries are compelling sites for a comparative analysis of variegated capitalism in transitioning countries. As part of their post-colonial liberation and transformation, both countries have experimented with socialism and have built their economies on the extraction of natural resources (Barney, 2009; Bissinger, 2012; Steinberg, 1982; Stuart-Fox, 1997). However, while their political economies have transitioned away from hybrid forms of socialism towards hybrid forms of capitalism ² in ways that appear similar, their political structures are quite different, linked to economic transition in unique ways, as noted above. We contend that how these political differences have unfolded historically is critically important for the variegated development of resource capitalisms in both places. Likewise, the variegated expressions of capitalism have shaped different opportunities for land and resource politics to emerge, demonstrating the dialectical relationship between land politics and new relations of extractive capitalist accumulation.

We develop these arguments as follows. In the next section, we review the VOC and VC literatures and identify their limits for analyzing marginalized resource extractive economies that have transitioned from colonialism to socialism and now towards hybrid forms of capitalism. This is followed by an exploration of different types of resource capitalism that have emerged in Laos and Myanmar, with a focus on the socialist period until recent events. Then, we comparatively analyze these different expressions of resource capitalism, with particular attention to the dialectical relations among national, regional and global capital, pre-capitalist political-economic and social configurations, political reactions to resource extractive investments, and emerging forms of variegated capitalism. Finally, we conclude the paper with additional reflections on its contributions to extending the VC framework to marginalized and transitioning economies of the Global South.

This paper is based on research that both authors have been conducting in Laos and Myanmar over the past decade on conflicts over land, with a particular focus on the contestation of state land concessions granted to domestic and foreign investors for the development of agro-industrial plantations. Considering the broad analytical focus of the paper, we do not provide detailed descriptions of our primary research, but rather cite and use it to shape our understanding and analysis of transitions towards capitalism. We employ a comparative analysis of our research on the political-economy of land-based capital accumulation and reform in both countries. Contrasts and comparisons across the two contexts provide fruitful and novel understandings of each, while expanding the application of the VC framework.

Variegated transitions

The varieties of capitalism (VOC) conceptual approach critically analyzes the ways in which different forms of capitalism have developed across the world due to institutional variation that alter the relationships between capital, labor, and the state. Political economists, particularly Peter Hall and David Soskice (2001), have argued that there are different forms of capitalism rather than just one undifferentiated global system. They distinguish between two major types of advanced capitalist economies: liberal market economies (LMEs) (the United States, the United Kingdom, Canada, and Australia) and coordinated market economies (CMEs) (Germany, Japan, and Sweden). In LMEs, firms primarily coordinate via hierarchies and market mechanisms, following neoliberal norms of regulatory practice. CMEs are more reliant on non-market forms of interaction for coordination among firms and between firms and other actors, like trade unions. A key difference between the two models is the role that institutions play in shaping how markets operate. Not only are these types of capitalism different, but they are also often in competition with each other, economically and for social-political legitimacy. The theory offers a powerful critique of neoliberal globalization rhetoric that assumes global economic convergence.

Economic geographers (Brenner et al., 2010; Peck and Theodore, 2007) have critiqued VOC for several reasons. First, it ignores the commonalities of capitalism as a system, albeit one that is unevenly developed and polymorphic. Second, VOC fails to take seriously the ways in which CMEs have been increasingly neoliberalized since the 1990s and the CME model is under threat. Third, the VOC approach is methodologically nationalistic, thus ignoring variation within nation-states, especially larger countries like China, or regional-based differentiation. Furthermore, capitalist variegation is reduced to two ideal types and it is overly focused on advanced, North Atlantic economies. Questions remain as to where other major, emerging national economies such as Brazil, Russia, India, China, and South Africa (BRICS countries) might be located within the model. Thus, VOC has only begun to scratch the surface of geographical differentiation pertaining to varied modes of capitalist development, given its lack of nuanced treatment of temporality and spatiality in capitalist development. There is a need for the recalibration of connections, as well as the documentation of differences in capitalist development paths.

In response, Peck and Theodore (2007) and Brenner et al. (2010) have developed a conceptual approach termed ‘variegated capitalism’ (VC), or ‘variegated neoliberalism’ ³ in certain cases, to address these deficiencies. Compared with VOC, VC is more concerned with explicating processes and forms of uneven development within, and beyond, late capitalism. Variegation is invoked to ‘emphasize the constitutively incomplete, experimental and ultimately polymorphic character of neoliberalization processes, as well as their endemically path-dependent character during each successive wave of regulatory restructuring’ (Brenner et al., 2010: 217, original emphasis). VC is interested in how geo-institutional variegation is produced through processes of capitalist expansion and transformation, or ‘the demonstrated capacity of neoliberalization projects to exploit, transform and reproduce inherited geoinstitutional differences’ (Brenner et al., 2010: 207). It seeks to explain structural transformations at multiple temporal and spatial scales, particularly decisive moments of economic transformation, institutional restructuring, and regulatory change. The normative aim of the project is to reveal the internal (including spatial) contradictions of capitalist globalization, to seek out differentiation across contexts, and to identify alternative and progressive forms of local development.

The VC theoretical framework was developed with regard to North Atlantic processes of neoliberal capitalist transformation. More recently, however, it has been applied to transformations of capitalism in China (Lim, 2010; Lim, 2014; Mulvad, 2015; Peck and Zhang, 2013; Zhang and Peck, 2016). The case of China confounds the VOC approach because it fails to fit into the CME and LME models and it exhibits significant variation at the sub-national scale (Peck and Zhang, 2013; Zhang and Peck, 2016). Using a VC framing, economic geographers have argued that Chinese capitalism is highly differentiated into varied expressions of capitalism across different regions of the country (Lim, 2014; Mulvad, 2015; Zhang and Peck, 2016). Lim (2014) has shown how variegated capitalism operates in China as a result of uneven state spatiality across the country’s three belts (eastern, central and western) resulting in regional differences in the adoption of neoliberal reforms. He also considers how the Chinese Communist Party, in an effort to perpetuate its one-party rule, justifies the adoption of neoliberalism within a contradictory vision of Marxian socialism by emphasizing the role of neoliberalism in the party’s quest to achieve ‘common affluence’ for a ‘harmonious society’ (Lim, 2014: 222).

Lim’s (2014) work also emphasizes the unique political history of China in explaining how capitalism takes shape there, leading to an integration of neoliberalism with China’s development ideology of ‘socialism with Chinese characteristics’. He has further developed this argument to contend that ‘geographically variegated neoliberalization, driven and repurposed by the Chinese state through a range of intrinsically discriminatory policies, have become at once a precondition and an outcome of/for the CPC’s [Communist Party of China] long-standing attempt to secure perpetual rule’ (Lim, 2017: 256, original emphasis). Lim’s application of variegated capitalism to China is useful for extending the concept to transitioning economies outside of the North Atlantic, especially those with a socialist past. It shows how, in a political system where there is a wariness or even resistance to a full-scale transformation towards Western models of capitalism and liberal democracy and its perceived social ills, attempts are made to selectively incorporate market forces into the economy, even if these may ultimately be ineffective. Relatedly, the state may seek to generate economic wealth from the infusion of global capital and the emergence of a market economy for the purposes of bolstering the current political system and preventing its reform. This, in turn, leads to the expression of unique, localized forms of capitalism, such as ‘socialism with Chinese characteristics’, ‘market socialism’, ‘state capitalism’, and ‘crony capitalism’ that have been used to describe the various forms of capitalism emerging across the non-Western world.

Further conceptual work is needed, however, to extend these insights concerning Chinese capitalisms across a wider spectrum of global capitalisms that extend beyond the core of the Global North and major emerging political-economic powers. In particular, we are interested in economically marginalized contexts of the Global South that are in the early phases of transition towards capitalism, opening up their economies that were previously closed, whether due to socialist, nationalist, or postcolonial compulsions. Such contexts are important for studies of VC for two reasons. First, while they are much more marginal to the global economy in formal terms, they are often the most significant sites of contributions of raw material as well as where the negative social-environmental externalities of global capitalism are most prevalent (cf. Bebbington et al., 2008; Hornborg, 2011; Jorgensen, 2006; White et al., 2012). The economic transformations of emerging capitalism in such sites are disrupting livelihoods and environments in ways unseen in the global economic core. Second, they provide a window into how unique forms of VC emerge as they are at historical junctures in which capitalist and pre-capitalist political economic forces are interacting with one another and producing distinct hybrid and uneven outcomes. These are the sites of some of the most significant manifestations of VC because of the ways in which capitalist reforms map onto prior political-economic and social arrangements.

Thus, we approach the study of variegated capitalist transitions by paying attention to the dialectical ways in which capitalist transformations interact with pre-capitalist political-economic and social relations, which are variegated in and of themselves, thus shaping the forms of capitalism that emerge. There are two analytical moves comprising such an approach. The first concerns how the forces and relations of capitalism that are being imported or are emerging organically interact with and emerge from diverse forms of pre-capitalist political, economic, and social relations. Many socialist and post-colonial countries, for example, place legal limitations on foreign capital, particularly concerning land and property ownership. In response to these restrictions, new forms of property investment and ownership can emerge, such as long-term leasing arrangements.

The second element concerns the role of politics, particularly immediate and direct political reactions to exploitative and highly predatory forms of capitalism that emerge in places with little regulation in place. Lim (2017) has shown the importance of the Chinese state and its goals of achieving some sort of hybrid ‘market socialism’ for shaping the variegated manifestations of capitalism in China. As important as the regulatory role of the state for shaping variegations of capitalism, however, are political reactions to capitalist transformations: from those who are dispossessed, marginalized, excluded, exploited, and the general public. Capitalist development in places that have recently opened up can be highly disruptive and predatory, leading to rapid and unjust changes that create conflicts and civil unrest. Without regulation of new capitalist investment, the only option for citizens and disaffected peoples is to engage in direct forms of politics, whether protest or appeal to the government to institute moratoriums and provide compensation, among other measures of protection. Governments, in turn, may react with blunt policy instruments, such as moratoria on certain types of investment or the cancellation of projects, rather than finely tuned regulatory mechanisms more common to advanced economies. These political reactions in turn affect and modify emerging forms of capitalism.

Emerging resource capitalism in Laos and Myanmar

Beginning from distinct forms of socialism, Laos and Myanmar have undergone a rapid transition towards capitalist economic development as they have liberalized internal markets, reduced trade barriers, and opened their borders to foreign investment. However, such transitions have occurred unevenly both across and within their national spaces and are accompanied and shaped by varied political reactions. In this section, we demonstrate how the interaction between forces of domestic, regional, and global capitalism have integrated with distinct local institutions and politics to generate variegated transitions towards capitalism that are uneven, partial, hybrid, and diverse across and within both contexts. The two country cases are used to demonstrate the value of applying an extension of the VC approach to understanding countries in transition, but rather than go into an exhaustive elaboration of how capitalism interacts with all pre-capitalist relations, it highlights the ones we highlight the relations that are most salient to shaping resource capitalism in its current form. Likewise, rather than describe the two countries’ transitions in depth, this section highlights major junctures in the movement from centrally planned and closed economies towards the development of resource capitalism in each over time.

Comparative transitions

The complex transitions towards land and resource capitalism described in the previous section can be interpreted through the conceptual approach of variegated transitions outlined above. In such an approach we examine the dialectical interaction between globalized logics of capital accumulation and localized political, economic, and social structures, relations, and forces. In particular, we first focus on pre-capitalist political-economic and social relations that logics of capital accumulation must contend, compete, or integrate with. Then, we examine the role of political reactions to emerging dynamics of land and resource capitalism, which further shape the forms that capitalism takes in response. Figure 1 below shows the effects of these two dynamics of variegated transitions upon emerging dynamics of resource capitalism in each country. In the following paragraphs, these relationships are explained and interpreted in greater detail.

OPEN IN VIEWER

Figure 1.

Comparison of key factors contributing to variegated capitalism in Laos and Myanmar.

There are a wide range of pre-capitalist political-economic and social relations with which domestic, regional, and global capital must interface in both countries, with important differences. First, the geopolitics of how each country has economically liberalized and opened up to international capital has had an important effect upon how national forms of capitalism have developed. In Laos, like China and Vietnam, the liberalization of the economy since 1986 has been celebrated by the West. Multilateral and bilateral donors encouraged the government to continue opening the economy to foreign investment to generate GDP growth. Without a domestic entrepreneurial class (having fled the country after the revolution in 1975), the government’s resource development strategy depended upon facilitating the lease of large areas of the country to foreign investors. In contrast, the West placed economic sanctions on Myanmar from 1990 until 2012, limiting the role of international capital just as the country was economically liberalizing. Thus, the military promoted the development of a domestic class of crony capitalists closely connected to the regime, particularly in the agri-business sector.

Second, there are important differences of political structure and centralization that affect how land and resource investments are approved, granted, and developed. In Laos, as the country was opened to foreign investment in the resource sector, investors had to work through a relatively centralized political structure in which the Party and state maintain a territorial monopoly. In Myanmar, the political structure has always been highly fragmented due to ongoing civil wars across the country. However, with the political transition towards a civilian government that began in 2011, it has become increasingly so, among the government, military, and EAOs, further exacerbated by the NLD coming to power in 2016.

Third, political relations among various factions of the state and investors have shaped how land is acquired and developed. In Laos, while large amounts of land have been granted to investors, they have not necessarily been allocated, secured on the ground, and developed. Although the central government approves large projects, investors must work through provincial and district governments, and even village authorities, to access and develop land, especially in the plantation sector (cf. Kenney-Lazar, 2018; Lu and Schönweger, 2019). Thus, they tend to use much of the land that is eventually allocated to them considering what they went through to acquire it. In Myanmar, crony capitalists were closely linked with the state before 2011 and their investment projects were poorly planned or regulated. As a result, large areas of land granted to companies were acquired through force by the military government, resulting in dispossession, regardless of whether or not the land was used. Large concession areas remained unused for decades, and some of these areas have recently been targeted by the NLD government for return to the original owners.

Fourth, while Laos and Myanmar both pursued economic liberalization at the same time, their political systems and reforms could not be more different. An unchanged political regime in Laos has meant that there is a lack of pluralistic actors in Laos that could provide counterweights necessary for holding the government and foreign investors accountable. Citizens affected or concerned by land investments by foreign companies have few pathways through which they can openly and contentiously engage in land politics. There are no other political parties they can join or vote for, domestic civil society organizations are strictly controlled by the state, any form of open protest is shut down immediately if people dare to hold such events, and the court system is controlled by the Party. In Myanmar, however, political reform since the transition to a civilian government in 2011 has taken place, and Myanmar citizens, peasants, and ethnic groups have a greater political voice than ever before, able to form political parties, participate in civil society organizations, protest and demonstrate, and file lawsuits, among other avenues of expression. This has created pressures to tighten regulatory investment standards, especially for large international projects that are increasingly prominent.

Differences in political reform between Laos and Myanmar show the importance of paying attention to the varied political reactions across diverse political contexts to understand how variegated capitalist transitions take place. In Laos, projects do not risk facing nation-wide protests while localized forms of demonstration, such as cutting down trees in a plantation, are quickly repressed. A lack of pluralistic, contentious political actors in Laos has also made it much easier for the Party to exert political hegemonic control over many rural areas of the country through longstanding propaganda campaigns and the extension of the mass organizations (e.g. Lao Women’s Union, Lao Front for National Construction, and the Party’s Youth Union) to the grassroots at the village level of government. Similarly, ethnic minorities have always been incorporated into the political project of the Lao PDR, even if their equal status has not been formally achieved in practice. Thus, there are multiple political webs of influence that keep Lao peasants from openly questioning political economic changes that threaten their livelihoods, and certainly from taking direct action. However, Lao peasants are able to voice their concerns and shape project development in more indirect ways by ‘resisting with the state’. This has, in certain cases, delayed and diminished or re-shaped the land acquired by certain projects and is part of the process by which the amount of land that concessionaires have been able to acquire in recent years has been limited.

In Myanmar, the various democratic eruptions since 1988 have shown that the military regime has failed to paper over its economic failings with political ideology among the general population. In many instances, the military ruled with fear and external violence rather than hegemonic control or what Guha (1997) aptly termed ‘domination without hegemony’. Thus, once the political transition was underway as of 2010, and fear of military repression began to subside, disaffected populations were able to openly express their frustrations and anger after years of repression. Since 2011, this led to the cancellation or renegotiation of terms for several large projects in recent years, including the Myitsone Dam.

Conclusion

Comparing the economics and politics of transition in Laos and Myanmar reveals the critical differences of how domestic politics, particularly in bottom-up forms, and institutions interact with economic reform and external forces of capitalist globalization, leading to variegated transitions toward hybrid capitalism. Within these hybrid capitalist structures the unique interactions of these forces have resulted in different responses from the state expressed in the ways that land has been governed. In Myanmar, the state acknowledges the plurality of actors that counter its power by reclaiming unused land, re-allocating part of this to smallholders, and – although slow-going – engaging with ethnic minorities in national dialogues about sharing power in the control of land and natural resources. In Laos, the state has at times given in to the demands of land users who have resisted, especially when their claims have appealed to state narratives of productive agricultural land use or forest conservation (see Kenney-Lazar et al., 2018a).

An extension of the VC framework outside of the sites of advanced capitalism to economies that are still under transition towards capitalism affirms that this can be fruitful for understanding the nature and pace of capitalist development in these countries. Doing so in a comparative way, between countries that share significant commonalities (including a former socialist past, high dependence on China and extraction-based market economies) and distinctions (particularly the presence of political regime change in one but not the other), further nuances this analysis. Finally, the consideration of popular politics in a dialectical relationship with economic transformation enriches the application of the VC framework. Taken together, this approach can result in important new insights into other similar transitions around the world.