As an aftermath of WWII, due to the immense cost of post-war reconstruction, the colonial empires belonging to the main European powers broke up through the success of the national liberation movements of the 1950s and 1960s (Alexander and Renton, p.46), enforcing an economic retreat of these imperialist powers (exhibiting a relative and temporary economic decline). This suited the ex-imperialist nations, as they replaced direct colonial control with indirect neocolonial relations to further their economic and political interests. European colonial powers had to come together and work as a regional block as politically they could not afford to individually maintain their direct control over their own overseas colonies, sharing the trading regimes related to their overseas territories consolidated within a new European Common Market, later enshrined within a new European federalist union. The six founder member-states of the European Union agreed on integrating the overseas territories of France, Italy, Belgium, and the Netherlands into the new “European” Common Market, so instituting the process of neocolonial expropriation (the Lome Conventions of 1975 & 1979 sought to ensure duty-free fair prices for primary producers in this “special relationship” with former colonies – later challenged by the WTO). The underlying fundamentals of the colonial trading system were re-established, whereby a system of bulk-buying of commodities produced in the colonies at discounted prices became the norm, whilst the colonies had to pay fully competitive prices for manufactured goods they had to import which were produced in the industrialised North. This situation of commodity prices being driven down on world markets – primary commodities for which countries in the south were reliant upon as their main source of export earnings – remains the basic blueprint of the international economy as it stands at the start of the 21st century.
(i). The post-war Anglo-American consensus:
The United States overtook the British Empire’s role as the leading economy on the world stage after the end of the Second World War. Up to this point, the British had still been the dominant world power in the highly-sought after oil-rich region of the Middle East. The British had used bombs & gas to control Arab dissent first in Iraq, then Palestine, Aden, Egypt, Sudan, and Somalia between the 20s and 30s. One of the first actions of the British in Palestine involved building the 1st Israeli oil refinery in Haifa in 1918 to process oil from Iraq.
The US entered World War I on the side of Britain and France in 1917 on the condition that her economic and political objectives be met, most notably access to oil reserves. In February 1919, Sir Arthur Hirtzel, a top British colonial official, warned his associates “It should be borne in mind that the Standard Oil company is very anxious to take over Iraq” (originally quoted in “Britain in Iraq, 1914-32” by Peter Sluglett, London, 1974, taken from Becker, 2002). With the overthrow of the Ottoman Empire during WWI, after Britain installed the puppet monarchy of King Faisal in the new state of Iraq, the Sykes-Picot agreement divided the country up between Britain, France, the Dutch and the United States. Iraq’s oil was split five ways: 23.75% to each of the colonial powers, with Iraq retaining just 5% of their own oil production (this was how it was to stay until the revolution of 1958). In 1927, the al-Saud family, with Washington’s backing, conquered much of the neighbouring Arabian peninsula. Saudi Arabia came into being in the 1930s as a neocolony of the United States.
By 1949, financially spent after World War II and realising that her Empire had waned, Britain opted for a special relationship with the United States, so as to ensure that she would still achieve her foreign policy goals – albeit in a subordinate role to the new American Empire – to sustain the common and convergent interest between British and American capital. That “special relationship” has continued to the present day, being most explicitly demonstrated in the Middle East – for instance in the joint MI6-CIA coup in 1953 against the Iranian government which had nationalised the British controlled oil industry, and in Iraq, when after the revolution of 1958 which saw the Abdul Karim Qasim regime pursuing a nationalist foreign policy, nationalising British oil interests, the CIA and MI6 masterminded the February 1963 coup, providing the coup leaders with a list of 5000 people (mainly members of the Iraqi Communist Party) who were hunted down and murdered. After the coup, before Baghdad began operations to quell the rebellion of the Kurdish population in the north of Iraq, Britain approved major arms exports to the new Ba’athist regime, such as artillery ammunition, 22 Hunter fighter aircraft and rockets for Iraq’s existing Hunters. The British embassy noted in July 1965 that “Kurdish casualties have been mainly among the civilian population who are again being subjected to considerable suffering through indiscriminate air attack” – from, that is, the Iraqi airforce’s 27 Hawker Hunters and thousands of rockets and other ammunition supplied by the Douglas-Home and Wilson governments. (Taken from “Unpeople: Britain’s Secret Human Rights Abuses”, by Mark Curtis).
The substance of the US and UK’s strategic understanding spread to the extent that most of America’s brutal interventions abroad were given unconditional support by various British governments – from Guatemala in 1954 to Nicaragua in the 1980s (where the military clampdown against the left-wing forces had been financed by the illegal selling of arms to Iran and Iraq). Of course, the UK was the United States’ key ally on the UN Security Council in Gulf Wars 2 and 3. Britain, herself, engaged in many interventions abroad, with the failed invasion of Suez in 1956 proving to be the turning point for British power globally (Curtis, P.21). However, the Anglo-American relationship has consistently steered the operational agenda of the UN Security Council, whilst hypocritically flouting international law (e.g. continuing diplomatic support for repressive governments, pursuing arms exports), and has been at the heart of the neoliberal mandate, which underpins the world trade system, the Bretton Woods institutions (World Bank and International Monetary Fund) and structural adjustment.
The overall goal of American foreign policy after the Second World War was nothing less than control of the international economy. The justification for the numerous interventions abroad were put down to containment of Soviet influence. US documents reveal the true motivations of US post-war policy. Noam Chomsky: “[The] world system was to take the form of state-guided liberal internationalism, secured by US power to bar interfering forces and managed through military expenditures, which proved to be a critical factor stimulating industrial recovery. The global system was designed to guarantee the needs of US investors, who were expected to flourish under the prevailing circumstances”(Curtis, p.10). US aid was explicitly identified as a key component of America’s foreign policy goals, which was largely seen as a means to support economic stability throughout the world by means of encouraging private investment, to prevent the growth of ‘national or international power which constituted a threat to US security’, and to orientate foreign nations toward the US. US policy statements on this subject were very explicit during this time. Former head of the CIA and Secretary of State John Foster Dulles was quoted as saying: “Our so-called foreign aid programme, which is not really foreign aid because it isn’t to foreigners but aid to us, is an indispensable factor in carrying out our foreign policy” (quoted by Curtis, p-85 and taken from a State Department Memorandum of discussion, 25th October 1956, Vol X, p.118). This latter quote eloquently summed up the position; US aid was essentially a taxpayer subsidy to exporters and investors abroad. This was a main trend within the post-war Marshall plan, and has been ever since. Andrew Young, former US representative to the UN, noted in February 1995 that: “we get a five to one return on investment in Africa, through our trade, investment, finance and aid …we’re not aiding Africa by sending them aid.. Africa’s aiding us!” (quoted by Curtis, p.88 and taken from African Agenda Vol. 1 No.2 “A five to one return”, by Patrick Bond, 1995). In recent times, US food aid has been used as a means to swamp developing country markets, destroying local agriculture. More recently, food aid has been used as a vehicle of foreign policy to establish global market acceptance for Genetically Modified (GM) food in the south. For example, the US response to the 2003 famine in the south of Ethiopia was an inflow of food aid in the form of GM US grain, not cash, even though farmers in the north of the country had a bumper harvest of cassava.
As long ago as 1949, a US government study for the NSC stated that the US should find ways of “exerting economic pressures on countries that do not accept their role as suppliers of strategic commodities and other basic materials” (Chomsky, p.122-123). British priorities in the post-WWII international economy were highlighted in a Treasury memorandum of 1945. Spelt out in this document was how “the UK must devise techniques for bringing influence to bear upon other countries’ internal decisions” (Curtis, p-67).
This logic could be said to have been relevant to any of the imperialist nations namely France, Holland and Belgium. For instance, the installation of Mobutu by the west in the Democratic Republic of the Congo [DRC] (subsequently renamed “Zaire” for a number of years) occurred after the post-colonial leader Patrice Lumumba was murdered after he was leading his country in an anti-imperialist direction. Mobutu was provided with funds to carry on with his corruption as a form of bribe by the IMF, World Bank and the west.
In short, then, the post-WWII supremacy of the United States in the world economy has involved a mixture of covert action, military intervention and a range of international economic instruments, through the Bretton Woods institutions. The USA’s manipulation of World Bank and IMF policies in its favour has been historically possible due to the fact that the US remains the major controlling shareholder on the steering committee of both these global financial institutions. Mohammed Daud Miraki: “As the new centre of global hegemony initially in competition with the geopolitical sphere of influence wielded by the USSR, the USA represented a different face of the old hegemonic imperialist powers hidden under the cloak of a new framework and justification – a more sophisticated institutionalised arrangement to confine the less developed countries under political and economic subjugation” (taken from “THE NEW PARADIGM OF FORCED SOCIOECONOMIC UNDERDEVELOPMENT”).
(ii). Neoliberalism – the Broad Policy Dictate behind the Neocolonial Process:
Mark Curtis: “Whilst the 1970s saw setbacks for the West through a series of anti-Western revolutions in the Third World, the 1980s was a decade of rollback with the debt crisis disciplining the Third World and aggressive Western foreign policies under Reagan and Thatcher; the 1990s sealed the success of this rollback with the unhindered promotion of economic liberalisation in the South, especially through the creation under Northern auspices of the World Trade Organisation” (Curtis 1998, p-4).
The North’s capitalist advancement – led by the USA – occurs at the expense of the Neo-Colonial state, a process which is sustained by the fierce worldwide market penetration of multinationals facilitated by the colonisation of neoliberalism (fiscal discipline, combined with an orientation towards privatisation and blind faith in the imposition of financial deregulation), and the one-way traffic of the global “free trade” architecture of GATT (General Agreement on Tariffs & Trade) which largely favours countries in the North due to the latter’s hijacking of rules written into these trade agreements. The colonisation of neoliberalism has been most easily implemented across the board through the imposition of structural adjustment policies – rigid macro-economic policy prescriptions designed to fast-track economies along the path of neoliberal restructuring to encourage the maximum conditions for the prospering of private capital, which mostly goes to facilitate the further growth prospects for multinational trade. With the domination by multinationals and financial speculators (such as those acting on behalf of pension funds for instance) over global commodity markets (80% of world trade takes place in ‘value chains’ linked to transnationals), it is safe to say that world market prices are largely set in the stock exchanges of the North (by 1999, 66% of developing country exports were destined for developed country markets in the USA, Europe and Japan). Meanwhile, financial deregulation and the removal of barriers-to-entry to financial speculation has taken place largely to serve these multinational financial capital investments abroad.
The broad picture which has become established is that freemarket orthodoxy or “neoliberalism” leads to national economies engaging in constantly cut-throat competition, with each economy trying to “out-compete with one another” for both multinational investment and in the shorter term, favourable market approval by investors on the stock-exchange. The result is a continual competitive race-to-the-bottom across the world, in terms of environmental and labour standards. John Bunzl: “The inherent uncertainty of international de-regulated capital markets tends to engineer a kind of paralysis of national economic policy ensuring governments’ adherence only to policies they can be sure will not displease world markets” (from “The Simultaneous Policy” – New European Publications).
The structural adjustment programs (SAPs) imposed by the IMF and World Bank on 36 African countries since 1980 have devastated the continent, decimating national economies and health and education systems. SAPs offer loans on condition that governments drastically reduce public spending (especially on health, education and food subsidies) in favour of repayment of debt owed to Western banks, increase exports of raw materials to the West, encourage foreign investment and privatise state enterprises; the last two steps mean selling whatever national assets a poor country may have to Western
Over 40% of Africans suffer from malnutrition, and more than half are without safe drinking water. Health care spending in the 42 poorest African countries fell by 50% during the 1980s. As a result, health care systems have collapsed across the continent,
creating near-catastrophic conditions.
More than 200 million Africans have no access to health services, as hundreds of clinics, hospitals, and medical facilities have been closed. This has left diseases to rage unchecked, leading most alarmingly to an AIDS pandemic. More than 17 million Africans have died of HIV/AIDS, which has created 12 million orphans.
Between 1986 and 1996, per capita education spending in Africa fell by 0.7% a year, on average. At least 40% of African children are out of school, and the adult literacy rate in sub-Saharan Africa is 60%, well below the developing country average of 73%. More than 140 million young Africans are illiterate.
SAPs have transferred $229 billion in debt payments from sub-Saharan Africa to the West since 1980. This is four times the region’s 1980 debt. Like the wars, SAPs also help keep raw material prices low by enforcing the expansion of such exports to the West. The value of primary African exports has dropped by about half since 1980.
The ongoing peonage of Third world debt:
In 1997, the United Nations Development Program (UNDP) stated that, in the absence of debt payments, severely indebted African countries could have saved the lives of 21 million people and given 90 million girls and women access to basic education by the
The All-African Conference of Churches has called the debt “a new form of slavery, as vicious as the slave trade.” After 20 years of SAPs, 313 million Africans lived in absolute poverty in 2001 (out of a total population of 682 million), a 63% increase over the 200 million figure for 1994. Life expectancy has dropped by 15% since 1980 and today is 470 years, the lowest in the world.
After years of prevarication, the 2005 G8 summit in Scotland gave commitment to long overdue respite of 100% debt relief for Burkina Faso, Ethiopia, Ghana, Mali, Mauritania, Mozambique, Nicaragua, Niger, Rwanda, Senegal, Tanzania, Uganda and Zambia). However, progress on this has not been complete so far. It must not be forgotten that after the 2nd World War, Nazi Germany agreed to spend only 3.5% of its export income on debt payments. Germany argued that anything higher would be “unsustainable”. Up until the summer of 2005, the world’s creditor nations, including Germany, were still demanding (as they had been for years) that the world’s most under-developed nations spend up to 25% of their export incomes on debt payments. For instance, up until 1996, Mozambique has spent US$1O7 million every year servicing its so-called debt. In contrast, Mozambique was spending US$2 per person per year on health and US$4 on education.
(iii). Neocolonialism within Africa for the benefit of Multinational exploitation:
Since World War II, Africa has witnessed a legacy of civil wars, military-coups, and crises of disorder and chaos. Blame for this “disorder” can be largely put at the door of continued imperialist interference in the domestic politics of countries. For example, the cold war situation saw political destabilisation in country after country throughout the African continent, such as in Angola, where the US financed the Unita rebels against the Soviet funded MPLA government (supported by Cuban troops in 1976 and 1988). Post-cold-war imperialist interference has been just as telling, for instance the original US backing of Uganda and Tutsi-Rwandan rebel insurgency in the Democratic Republic of the Congo (DRC) in the mid-1990s owed much to the battle between US and French multinationals for control over the region’s vast mineral wealth. Laurent Désiré Kabila was the spearhead of a rebel insurgency involving Tutsi militias from Rwanda and troops from Uganda and Burundi – all backed by the United States. Kabila’s revision of multinational contracts he originally signed up to, one can speculate, displeased certain financial interests who originally backed his coup. By August 1998, the Rwandese wing of the ADFL rebelled against Kabila, and in the resulting conflict, rebels militia from Rwanda, Uganda and Burundi joined the fray, pitted against the countries of Angola, Zimbabwe and Namibia who supported Laurent Kabila’s DRC government in the west of DRC, resulting in Africa’s First World War and the deaths of 3.8 million people. The worst atrocities took place eastern region of the Congo between Sept 1998 and August 1999 by the rebel militias, most notably from Rwanda such as the RCD-Goma militia (and subsequently since then by a cartel of criminal networks) who engaged in genocide of Hutu refugees (as the ADFL had done in 1997) and mass looting, sweeping up that area’s stockpiles of diamonds, gold and timber, and exploited additional supplies of these materials as well as quantities of the precious mineral used in mobile-phones – Coltan (80% of the world’s known reserves of coltan are found in eastern DRC). Corporations implicated in the illegal trade of coltan from out of Rwanda include US mining corporations. There has also been massive destruction of Congo’s socio-economic infrastructure. (Antoine Roger Lokongo).
Entering into the 21st century, Africa finds itself at the centre of a new planetary tussle for mineral resources between long established economic powers such as the United States and European powers, and the emerging economic ascendency of China. The stakes are high, as global multinational corporations compete to exploit inroads into establishing operations in areas with substantial reserves. With almost one third of the world’s raw materials, abandoned by the former metropolitan powers, which have been disengaging gradually, both from the point of view of cooperation and of military assistance, African countries have become easy prey of multinational corporations. Facilitation of multinational interests is provided for through the diplomatic service of nation states – such as the United States, whilst China embarks on it’s own investment programme in countries such as the DRC, which guarantees market access to vital resources such as copper.
The Congo has long being considered the most bountiful paradise of riches on the African continent, even the days when it was colonised by Belgium. Accordingly, the great financiers of this world, in tandem with multinational hunters of mineral resources, have their eyes targeted on Congo, where discovered mineral deposits are still virgin or ill exploited and likely to open markets to big capital gain investments. Congo has coltan (80% of the world’s reserves), which is sought after for the manufacture of mobile phones, laptops, CD-players, camcorders, satellite, in fact everything high-tech. It also has copper and cobalt reserves, which would be the most important in the world for several years. The size of the Democratic Republic of Congo (which is as big as the whole of western Europe), its geographically central position in the heart of the African continent, the sharing of its borders with nine other countries, along with its mineral resources, has destined it as first target and the site of choice for the pursuit of mineral exploitation and extraction by global multinationals, in the newest incarnation of the need to serve the never-ending world demand for mineral resources.
For more on the recent history of the Congo, read here: Congo’s Holocaust & the end-of 20th Century Plunder of DRC
1). Alexander & Renton in: “CLASS STRUGGLE & RESISTANCE IN AFRICA”, by Leo Zeilig, Anne Alexander, Peter Dwyer, Munyaradzi Gwisai, Miles Larmer, David Renton, David Seddon & Jussi Viinikka, 2002 (New Clarion Press, UK).
2). “Britain in Iraq, 1914-32” by Peter Sluglett,taken from “THE BATTLE FOR IRAQI OIL: US CORPORATE SKULDUGGERY SINCE WW1”, by Richard Becker (Workers World, October 31st, 2002).
3). Noam Chomsky: “WORLD ORDERS, OLD AND NEW”, Pluto Press 1994
4. Mark Curtis: “UNPEOPLE: BRITAIN’S SECRET HUMAN RIGHTS ABUSES”, 2004 (Vitage).
5). Mark Curtis: “THE GREAT DECEPTION: ANGLO-AMERICAN POWER AND THE WORLD ORDER”, Pluto Press 1998.
6). Mohammed Daud Miraki “THE NEW PARADIGM OF FORCED SOCIOECONOMIC UNDERDEVELOPMENT”
7). Aufheben 12: “OIL WARS AND WORLD ORDERS – NEW AND OLD”, .
8). Taken from African Agenda Vol. 1 No.2 “A five to one return”, by Patrick Bond, 1995.
9). John Bunzl: “THE SIMULTANEOUS POLICY”, 2000 – New European Publications
10). Antoine Roger Lokongo: published on old website” www.congopanorama.info