Ankie Hoogvelt: “As a result of the penetration by colonial capital, a distorted structure of economy and society was created in the colonial countries, which would reproduce overall economic stagnation and extreme pauperisation of the masses for all time”1.
Over the course of time, profit-margin was siphoned out of the economies of ex-colonised nation states. Countries which have particularly borne the brunt of a heavy burden of exploitation have been Bolivia and many nation states in Africa. To emphasise the long-running exploitation of land-locked Bolivia, during the Second World War, Bolivia contributed to the allied cause by selling tin at a tenth of the world market price.
Three centuries of wealth expropriation including the slave trade and prolonged unequal trade with the imperial powers established Africa’s state of underdevelopment. Direct colonial control of African territory was the final straw that brought about the disruption of the internal autonomous development of African societies. African societies were now transformed into monoproduct/monocultural economies, with each society tasked to produce commodities either mineral or agricultural for European markets. Colonies were meant to be self-sustaining and yet produce a surplus that could be repatriated to the metropolitan country. The attempt to exploit colonies for wealth inadvertently brought into being an African working class formed out of tribal people that had been dispossessed of their means of production, or had been forced by the monetisation of African societies to seek employment in the colonial economic sector to pay various taxes that were levied on them by the colonial powers (source: Oke – see credit for this also on LegacyofColonialism homepage).
“The question as to who, and what, is responsible for African underdevelopment can be answered at two levels. Firstly, the answer is that the operation of the imperialist system bears major responsibility for African economic retardation by draining African wealth and by making it impossible to develop more rapidly the resources of the continent. Secondly, one has to deal with those who manipulated the system and those who are either agents or unwitting accomplices of the said system. The capitalists of Western Europe were the ones who actively extended their exploitation from inside Europe to cover the whole of Africa. In recent times, they were joined, and to some extent replaced, by the capitalists from the United States; and for many years now even the workers of those metropolitan countries have benefited from the exploitation and underdevelopment of Africa”
Walter Rodney, 1972, ‘How Europe Underdeveloped Africa’
As the imperial powers replaced direct colonial control with indirect neocolonial relations, this export-orientated primary production structure in the less-developed world was commandeered by an internal class structure dominated by a small landed and mercantile elite, whose economic interests intertwined with those of the advanced capitalist class in the western world (they would bank their money in western financial institutions, after-all, so eliminating the multiplier effect of economic growth in their own territories and the economic regeneration of the periphery). In the Middle East, oil companies – backed by imperial nations – made deals with local feudal rulers or sheiks in exchange for concessions for exploration.
For countries across the south generally, this legacy of underdevelopment has been sustained because these countries have continued their colonial role of concentrating much of their international trade in the export of primary goods for the wealthy north. The prevailing international division of labour through this export-orientated primary production structure in the less-developed world involves a transfer of value from poor to rich countries because of the unequal terms of exchange of the commodities traded (made worse by the long-term downward pressure on export prices on account of the cash-crop bonanza). Worsening terms of trade and poor economic growth performance had characterised the situation of many African countries from the early 1980s onwards, with this trend having generally been exacerbated with the spread of the neoliberal development model, which involved deregulation and liberalisation, mostly spread through the auspices of policies enforced by the World Bank and IMF.
Yet, between 1967 and 1980, more than a dozen African countries registered a growth rate of 6%. This included not only mineral-rich countries such as Gabon, Congo, Nigeria and Botswana but also countries such as Egypt, Kenya and Ivory Coast. The downside was the failure to transform agriculture, and thus to bring the vast majority of the population into the development process. This shortcoming in economic policy went alongside and was sustained by a political authoritarianism. Meanwhile, western banks, western nations and the IMF/World Bank, flush with cash from the Middle East with the explosion in oil prices in the early 1970s, generously lent out money to African governments, with a notable lack of proper checks on the recipients or conditionality as a mortgage company would carry out. Much of the money siphoned off by African elites ended up in western banks, whilst loan capital previously loaned to governments and dictators in Africa and the “developing world” charged with interest – led to an upward spiralling debt resulting in harsh economic misery for the civilian populations in these nations.
This provided an opening for a dogmatic assault by the International Monetary Fund and the World Bank calling for so-called structural adjustment at the height of the cold war. For the poorer countries of the south, particularly many nations in Africa, for the so-called “third world debt” (the accumulated compound interest on non-existent capital which was paid to corrupt leaders), the carrot of debt-cancellation was proffered – used as a fait-accomplie bargaining tool by the IMF and World Bank to enforce neoliberal structural adjustment policies in return for short-term loans, containing conditionality which enforced drastic reduction in government funding for schools, health care and social programmes amongst recipient countries. It resulted in poorer nations’ further dependence on the export of a narrow range of a few primary commodities, products which suffer from terms of trade which are continually being pushed downwards, ensuring a steady supply of cheap raw materials into the western marketplace. Further to this, the structural adjustment assault on social expenditure – including university funding – combined with an emphasis on importing expatriate intellectuals through technical assistance programmes. Together, the two devastated the national intelligentsias, the most competitive of whom fled to the “west” (referred to as the ‘north’ in social science discourse).
In terms of debt peonage, by 2007 there has been some limited progress towards the long overdue cancellation of “Third World debt”. Up until the summer of 2005, the world’s creditor nations 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.
Debt peonage continues to be pervasive and substantial across the developing world, being perhaps the foremost drain of economic value outwards, with the total accumulated external debt belonging to all the low-income countries across the world $523 billion by July 2005. Based on figures from the IMF and World Bank, research by the Jubilee Debt Campaign in October 2014 showed that between 25% and 60% of impoverished countries will have significant increases in debt payments as a proportion of government revenue over coming years, suggesting that loans are not creating enough revenue to enable their repayment. This is because of falling export revenues; since the start of 2014 the IMF’s commodity price index has fallen by more than 40%, and the US dollar has risen in value by 20%. This has caused rapidly worsening financial conditions for many countries. 3 (Source: Jubilee Debt Campaign ).
The ongoing debate – what is the legacy of colonialism in Post-Colonial Africa?
In Africa, defenders of colonialism in denial about the extent of the long-term effect of underdevelopment on that continent argue that colonialists brought a system of education, roads, railways, trade and medicine technology. Positive and negative merits of each of these aspects can be evaluated. As already mentioned, imperial nation’s economic growth through colonial expansion, specifically their colonial expropriation, which in tandem over time caused Africa’s long-term underdevelopment, came about due to one main trend – namely unequal exchange, which continues to a smaller extent to this day.
Walter Rodney: “Throughout the colonial period, this inequality in exchange got worse. In 1939, with the same quality of primary goods, colonies could buy only 60% of manufactured goods which they bought in the decade 1870-80 before colonial rule. By 1960, the amount of European manufactured goods purchasable by the same quantity of African raw materials had fallen still further. There was no objective economic law which determined that primary produce should be worth so little. Indeed, the developed countries sold certain raw materials like timber and wheat at much higher prices than a colony could command. The explanation is that the unequal exchange was forced upon Africa by the political and military supremacy of the colonisers, just as in the sphere of international relations unequal treaties were forced upon small states in the dependencies, like those in Latin America”4
Within the colonial period, transport routes were designed not to improve links between different African states, but to ease administration in the colonies and allow for the swift export of raw materials. As for medicine, this is one area of positive change where strides were made in healing certain diseases such as small pox and TB into the 20th century, but with very limited access to availability of treatment for other basic diseases amongst the native populace of many African nation states continuing well into the latter end of the 20th century. Finally, education was largely geared to establishing a middle-class bilingual elite, destined for colonial employment as glorified clerks for the Empire. The Oxbridge education system became a model for private education systems across the world for this very purpose.
Post-colonialist Africa, characterised by land areas previously divided by colonial rulers into territories on a map, is made up of nation states whose institutions and bureaucracy was inherited from the state apparatus of the colonial state originally imposed on the African people. The new rulers and bureaucracy were products of the education system of the imperialist empire, a middle-class bilingual strata of society. Infact, the British empire in particular, before, during and after colonialism, succeeded in dividing loyalities between different tribal groups and peoples – a policy commonly understood as ‘divide and rule’ and most expertly fashioned in India under the Raj.
Mahmood Mandani, taken from his article “Misrule Britainnia”, published in the Guardian newspaper, February 2002: “The core political legacy of British ‘indirect rule’ in Africa was the absence of a modern state. Britain ruled its middle African colonies through a range of ‘native authorities’, each of which dispensed with the rule of law in the name of “tradition”. The colonial fiction was that African tradition, particularly political tradition, was ethnic. The result was to disenfranchise those considered ethnically not indigenous to an area, even if they were born there.”5
“The social legacy of indirect rule, meanwhile, was the absence of a national intelligentsia. When Frederick Lugard, the British colonial administrator, moved from India to Nigeria, he was determined that Britain’s new African colonies would be immunised against ‘the Indian disease’, by which he meant the creation of a westernised native intelligentsia. The sober fact is that it was not the colonial interlude, but nationalist independence, that laid the basis of a university-educated intelligentsia in middle Africa”.6
In the wave of mobilisation towards independence that spread across the African continent, nationalist movements emerged especially in areas with relatively large urban areas and organised workforces. Nationalist movements varied between those dominated by African elites and mass movements led by radical factions originating from African elites, but who took their support from trade unionists, ex-servicemen. students, women and other subordinate groups, employing militant strategies such as strikes and agrarian conflicts which furthered political resistance; for instance, Nkrumah’s Convention People’s Party in Ghana.7 Unions and working class movements generally remained separate from the leading nationalist political parties. In Morocco and Egypt, the indigenous bourgeoisie and feudal elements led the nationalist movement. In Zimbabwe, an-altogether different situation occurred, after trade-unions became co-opted by international capital, which, combining with the severe repression of Ian Smith’s regime, led to the emergence of a tribalist peasant-based guerrilla movement (ZANU) dominated by an ideology of radical nationalism mixed with Maoism (which transformed into Robert Mugabe’s own brand of Stalinism), who succeeded in achieving Zimbabwe’s independence in 1980.8
During the 1950s and 1960s, the Soviet Union invested much aid to help nationalist movements across the continent. Historically, the achievement of independence throughout the continent from colony after colony from the 1950s onwards showed that as the territorial areas which formed the identity of these new African nation states became the basis of the anti-colonial struggle, this process legitimised the authenticity of the nation state identity and it’s administrative structure. However, these were “artificial states” which corresponded to no conceivable ‘nation’ and which were based on no strong local bourgeois and no large middle class (the layer of workers ideologically aligned with the bourgeois) meaning that these states could never have been stable bourgeois democracies. Over time, with the entrenchment of power relations between the bourgeoisie and the working class/rural proletariat across the African continent, the proliferation of conflict and tension has occurred not only in relation to state power, but also ethnic division, which African elites have exploited and used as a means of mobilising support for the contestation of power and resources.9
Mumia Abu-Jamal: “National elites use the social distinction of ethnicity to keep people concentrated on their neighbours, rather than their leaders. Thus, the ‘enemy’ is the nearest tribe, never the State; and never the exploiting class which appropriates the powers and privileges of government”.10 A perfect example is post-independent Kenya, where ethnic clashes stoked up by politicians characterised the Moi years. The insidious self-interest of multinational capital has always been in the background of this divide and rule dynamic, where the worst of Africa’s elite dictators held onto the reins of power in the past by acting as toadies to foreign capital. From 1965 to 1991, Zaire received more than $1.5 billion in US economic and military aid. According to the World Bank (a long-time supporter of Mobutu), 64.7% of Zaire’s budget was reserved for Mobutu’s discretionary spending. Infact, despite the publication of a report detailing these findings in 1982 (carried out by a German banker – Erwin Blumenthal, who was sent in by the World Bank to manage the Bank of Zaire), between 1982 and 1989, the IMF trebled the volume of loans to Mobutu. At the same time, western mining interests were served very well in Zaire (the Congo) during Mobutu’s dictatorship.
Every ruler knew that as soon as the profit margin of the transnational giants started to fall, an ambitious army officer or chief of some oppressed tribe would be found to replace them. Thus they were driven to ever-greater excesses of brutality to ensure the constant supply of profits. Western venture capitalists such as Tiny Rowland in the 1970s followed in the footsteps of the original mercantile capitalists and the authority of the imperial powers in the previous age of colonial direct rule, as the boardroom and the dictator became embroiled in a reciprocal relationship – their mutual self-interest defining them both as part of the capitalist ruling class.
Fifty-plus years on from the first wave of independence, the colonial project can largely be seen to have been renewed during this transitional period, leaving the post-colonial state subject to the new mandate of multilateral imperialism through nearly 2 decades of the imposition of structural adjustment policies, resulting in the dependence by many poorer nation economies on the export of a narrow range of a few primary products, products which suffer from depressed terms-of-trade due to this very reason, which ensures a steady supply of cheap raw materials into the western marketplace.
“The consequences of the World Bank’s policy prescriptions have left Africans as impoverished and disempowered as they were by the wave of colonial landgrabbing in the 1880s…without debt and the Structural Adjustment Programmes it entail[ed] Africa could [have] put its resources into building infrastructure, into feeding, educating and caring for its populations”11
The new World-Bank/IMF mandate of the ‘Highly Indebted Poor Countries Initiative’ (HIPC) enforces the nations adhering to it to western policies such as privatisation, financial deregulation and sweeping liberalisation, as does the NEPAD agreement (the New Partnership for Africa’s Development), which on the face of it is meant to improve the economic growth rate of African countries through more trade and investment liberalisation. It will in actuality also be accompanied by neoliberal austerity measures, and across-the-board imposition of privatisation, financial deregulation and sweeping liberalisation – meaning capitulation of national government’s economies to encroachment by foreign investors and their appropriation of profit margins. (Please Note: Cargill is a member of the Corporate Council on Africa and of the Africa Growth and Opportunity Act Coalition, two of the main organisations who lobbied for the African Growth and Opportunity Act [Forerunner of NEPAD – the New Partnership for Africa’s Development]).
All-in-all, then, there are now few barriers to the domination of Western economic and political influence in the South. This was best expressed by the South Commission at the beginning of the 1990s:
“The widening disparities between South and North are attributable not merely to differences in economic progress, but also to an enlargement of the North’s power vis-à-vis the rest of the world. The leading countries of the North now more readily use their power in pursuit of their objectives. The ‘gunboat’ diplomacy of the nineteenth century still has its economic and political counterpart in the closing years of the twentieth. The fate of the South is increasingly dictated by the perceptions and policies of governments in the North, of the multilateral institutions which a few of those governments control, and of the network of private institutions that are increasingly prominent”. (“The Challenge to the South: the Report of the South Commission”, Oxford University Press, Oxford, 1990, P.3) 12
[See also: sections on Neoliberalism, Structural Adjustment and Debt Peonage in Chapters-3 & 4 deal with this subject in more depth].
1). Ibid, Ankie Hoogvelt, (p-38)
2). Ibid, Eduardo Galeano
3). Jubilee Debt Campaign. (2014). “Don’t turn the clock back: Analysing the risks of the lending boom to impoverished countries”, Ref: http://jubileedebt.org.uk/wp-content/uploads/2014/10/Lending-boom-research_10.14.pdf
4). Ibid Walter Rodney, (p-160)
5). Mahmood Mandani: “MISRULE BRITAINNIA”, (The Guardian, UK, Feb 8th, 2002)
6). Ibid Mahmood Mandani
7). C.Allen, “Understanding African politics”, Review of African Political Economy, Sept 1995, p-303, quoted by Seddon, 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). (p.39-40).
8). Gwisai 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).
9). Kwesi Kwaa Prah: “WAR & CONFLICT IN AFRICA: A BIRD’S-EYE VIEW”, 2000.
10). Mumia Abu-Jamal: “AFRICAN HOLOCAUSTS”, [9/13/03]
11). Susan George in: “FAITH & CREDIT”, by Susan George & Fabrizio Sabelli (Penguin, 1994).
12). “THE CHALLENGE TO THE SOUTH: THE REPORT OF THE SOUTH COMMISSION”, Oxford University Press, Oxford, 1990
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