This article analyzes the essentialization of ethnic difference, or racialization, in processes of extractive governmentality and ethnic territoriality in the upper Amazon Region of Ecuador. I trace contemporary and historical colonial legacies shaping land and oil compensation disputes among Kichwa families in Pañacocha. I argue that extractive governmentality uses legal and institutional frameworks based on multicultural and clientelist principles that appear to benefit populations based on ethnic and cultural difference. However, I show that this approach exacerbates colonial understandings of ethnic difference, generating conflicts among Indigenous families.First, I show that oil legal frameworks, and ethnic territorial frameworks obscure the existence of ethnic diversity within Indigenous territories, forcing families to choose between essentialized Indigenous and non-indigenous backgrounds to secure territory, access to oil compensations, and state development programs. Legal and institutional frameworks continue to further racial colonial divides and hierarchies between Indigenous territories and the rest of society. Second, these legal and institutional frameworks have empowered a group of Indigenous leaders that act as power-brokers between territories and the state. Indigenous leaders distance themselves from the rest of families by strategically aligning with their Kichwa, colono, and mestizo ethnic and cultural backgrounds as convenient. This way leaders exclude families from participating in territorial governance either because they are too Indigenous to understand territorial projects paid for with oil profits, or because they are not Indigenous enough to be considered part of the territory.
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