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What Is “Neocolonialism”?

What is “Neo-colonialism”? Is it different from colonialism, and if so in what ways? Discuss with reference to specific examples.

Neo-colonialism can only be understood in reference to the intercontinental European colonialism that started in the sixteenth century. Empires had existed before, but the Roman, Persian or Inca empires pale in comparison to the scale of European imperialism which resulted in Europe controlling 85% of the Earth by 1914 (Said, 1994). The key difference between Colonialism and Neo-colonialism is the means of exploitation. Colonialism traditionally relies on military and political power being wielded by the occupiers over the indigenous population (Osterhammel and Frisch, 2010). Under neo-colonialism, ex-colonies have political sovereignty and yet are still subject to exploitation and domination under neoliberal globalisation through more subtle economic means (Nkrumah, 1965). Post-apartheid South Africa’s and the ANC’s radical change in economic policy on gaining power illustrates the way western neo-colonialism exerts power over democratic developing countries forcing neoliberalism upon them. As illustrated by the wide ranging privatisation in Bolivia, Neoliberalism has facilitated the transfer of economic power from the public sector to the private sector, which has resulted in the sale of key public companies, infrastructure and public services to foreign multinationals (Spronk, 2007). It can be argued that neo-colonialism is the continuation of Western imperialism over the developing world in which the subjugated countries appear politically sovereign but are still exploited for wealth and as a source of cheap labour (Nkrumah, 1965).

Colonialism typically exerts power through superior military might and direct political control. Galeano details the way the Spanish and Portuguese colonialists, through superior military power, enslaved the indigenous populations of South and Central America and forced them to work mining gold and silver (Galeano and Belfrage, 2009). Their primary purpose was the extraction of natural resources such as gold and silver, which was becoming a rarity in Europe, “Silver shipped to Spain in little more than a century and a half exceeded three times the total European reserves” (Galeano and Belfrage, 2009).

In comparison, Neo-colonialism exerts power over the subjugated countries through economic pressure as opposed to military power and occupation. Post-apartheid, South Africa is now a sovereign nation-state with a ‘liberal democracy’ with the African National Congress (ANC) retaining power. Despite this, the radically left-wing policies outlined in the Freedom Charter (The ANC’s grassroots manifesto) that included nationalisation of key industries, redistribution of wealth and land and social housing (The Freedom Charter, 1955) never came to fruition. When the ANC came to power they were restricted by the globalised system of free trade agreements and the need to service their debt (Klein, 2007). An IMF loan for $850 million forbid the increasing of the minimum wage, signing onto the GATT and the WTO restricted the Government’s ability to subsidise factories and the Central Bank was made independent of the government with the apartheid-era head, Chris Stals, remaining on (Klein, 2007). Naomi Klein writes “The bottom line was that South Africa was free but simultaneously captured; each one of these arcane acronyms represented a different thread in the web that pinned down the limbs of the new government.” (Klein, 2007, pp.203). Shortly after that, the ANC announced a new economic program called GEAR (‘Growth Employment and Redistribution’), written with the help of economists from the World Bank, it outlined a radically neoliberal economic program (Kingsnorth, 2004). Despite being a sovereign nation-state, South Africa’s economic policy is being directed by a variety of external western institutions that subscribe to neoliberalism.

A key feature of neocolonialism is its dependence on neoliberal economics, which it pushes developing countries to adopt. One of the fundamental tenets of neoliberalism is the privatisation of publicly owned assets and public services. An example of this is Bolivia, which followed a neoliberal structural adjustment program in exchange for a loan from the IMF in 1985 (Kingsnorth, 2004). Keeping in line with the IMF’s structural adjustment program, in the 1990s, the Bolivian government started to privatise major parts of the public sector including energy, water, and other public services, despite opposition from both the left and right (Spronk, 2007). Over half of the shares were sold to foreign companies (Spronk, 2007) including Cochabamba’s water system which was put under the control of a subsidiary of the US company Bechtel Enterprises (Kingsnorth, 2004). Despite being a sovereign country, control of Bolivia’s industries, public services, and infrastructure was in the hands of western multinationals. Unlike colonialism in which the occupying power took complete political control of the occupied territory, neoliberalism allows neocolonial powers to control a countries economy. Colonial powers had to accept responsibility for their colonies, whereas neocolonialism shifts responsibility into the hands of the local elites in government (Nkrumah,1965). Meanwhile, foreign institutions retain control of the economy continuing the extraction of capital and resources that occurred under traditional colonialism.

Colonialism facilitated the exploitation of indigenous people as a source of cheap labour. European colonialists enslaved first the indigenous people’s of North and South America and then began to import slaves from Africa as part of the transatlantic slave trade (Williams, 1994). Britain’s use of Slavery in its colonies produced the capital and resources necessary for Britain to industrialise (Hall, 2014). Neo-colonialism, through different mechanisms, also provides developed countries with the ability to exploit cheap labour in developing countries. Multinational corporations now outsource production to suppliers in developing countries, allowing access to low wage labour and thus are able to generate more profit (Merk, 2009). In Africa, the widespread privatisation implemented by neoliberal structural adjustment programs has lead to lower wages and worse working conditions (Lebaron and Ayers, 2013). Lebaron and Ayers argue that these policies have “created a context where forced labour can thrive” (Lebaron and Ayers, 2013). Neoliberalism has continued the exploitation of people in developing countries for cheap labour to the benefit of foreign multinationals.

Neo-colonialism and colonialism differ greatly in regards to the means in which they achieve their goals. While colonialism uses more overt methods of political and military domination to subjugate geographical areas and the indigenous society, neo-colonialism uses economic pressure and neoliberalism to exert power. Using institutions like the IMF and the World Bank developed western countries can push neoliberal economics onto developing countries facilitating the extraction of capital and access to cheap labour (Klein, 2007). Bolivia and other countries find that through neoliberal privatisation many of the key economic interests of the country are put under the control of foreign corporations (Spronk, 2007). Neo-colonialism is a continuation of imperialism by other means, it’s a structure of domination and subjugation in which a country and population are exploited for the benefit of external institutions and countries in the developed world (Nkrumah, 1965).

Word Count: 1109 Bibliography

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