Trickle‐Down Debt: Infrastructure, Development and Financialization, Medellín 1960‐2013 – Transactions of the Institute of British Geographers – article

Trickle‐Down Debt: Infrastructure, Development and Financialization, Medellín 1960‐2013

Kathryn Furlong | Transactions of the Institute of British Geographers

2019-10-22

In many Latin American cities, infrastructure was largely financed through development lending over the second half of the 20th century. Exacerbated by debt crises and currency devaluations, public utilities became holders of significant levels of “negative value.” This encouraged public debt financialization in order to mitigate the effects of shifting interest rates and devaluation. For David Harvey negative value is the hallmark of contemporary capitalism whereby one must produce, not for profit, but to retire debt. This statement can be applied to indebted utilities, in the sense that the focus of utility governance – and its relationship towards those dependent on it for services – becomes reoriented towards debt management – or “governing by debt”. Full‐cost recovery emerges in this context as a mechanism to pay‐down the infrastructure debt held by utilities, which quickly led to increasing levels of user indebtedness. Service disconnection and pre‐paid metering emerge as processes to recover this user debt by enforcing a “culture of payment” through service exclusion. In these ways, the responsibility for infrastructure debt “trickles‐down” in small – but individually significant – amounts to persons and households enrolling them in the logic of debt (re)payment. This paper examines these issues through a case study of urban infrastructure financing, debt, and tariffs in Medellín, Colombia from 1960 to 2013.

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