An excellent research paper by Colin De Laval - Spring 2008.
The International Monetary Fund (IMF), World Trade Organization (WTO), Group of Eight (G8), and other economic institutions of predatory capitalism are intrinsic to the continuation of exploitation of third-world countries, without them, neo-colonialism could not exist. When we study countries who have been afflicted by colonialism, we see an immense pattern of underdevelopment created by resource and industry hungry capitalists, and this economic underdevelopment trend carries over into the neo-colonialist tradition. Economic dominance, an inherent trait within neo-colonialism, follows the fundamental economic imperialism within capitalism at the expense of underdeveloped nations. Forced dependency on US and first-world goods is the only logical way to continue the first-world status, by destroying the infrastructure of these countries. MNC's (Multi-National Corporations) play an enormously important role in neo-colonialism, by being the major financier and profiteer.
What is colonialism? The dictionary defines colonialism as, "The control or governing influence of a nation over a dependent country, territory, or people." This definition of colonialism is much undefined and ignores many forces within colonialism. If one was to define colonialism in any meaningful way, one would have to explain the role of venture capitalists, apartheid and the restructuring of race politics, forced dependency and many other facts. However this definition explains more than it means to, and that would be a justification of the takeover of 'southern' nations by saying they are dependent. When colonizers would come to a prospective country, they would destroy any localized means of production that had been localized, and set up production in a way foreign to the colonized, creating dependency within oppressed communities. This dependency was pivotal to the 'logic' of colonialism, without this dependency the ushering of neo-colonialism could not have happened. Within the framework of capitalism, which was the model for the colonizers, having local competition with Multi-nationals is the most undesirable outcome. When the colonizers moved in a complete restructuring of the economic and social life of the chosen country occurred with the intent to knock out the competition and have full control over market forces. This necessity to control the economic and social life of a given colonized country led to the underdevelopment we see today within these countries. All facets of life within colonial nations was controlled or regulated by the colonizers through governing bodies set up by the imperialistic state, and this also is true within neocolonial states.
Resource rich countries in Africa are more dependent on first-world nations than on their own industrial and productionary capabilities, thus leading to economic dominance of the first world. Countries attempting to force their way out of the destitution of colonialism are economically forced to use SAP's (Structural Adjustment Policies) given out by the World Bank and IMF, but these lead to further economic dominance by first world countries. "Structural Adjustment Policies are economic policies which countries must follow in order to qualify for new World Bank and International Monetary Fund (IMF) loans and help them make debt repayments on the older debts owed to commercial banks, governments and the World Bank" These SAP's lead to forced privatization of national industries (which we saw in South Africa once independence was gained ), the wholesale cutting of social programs, shifting the economy to an export-based economy, the devaluation of currency, removing subsidies and price controlling, and a whole host of other programs . These programs lead to many problems, such as the loss of national sovereignty. This loss of national sovereignty is because of the de-localization of resource acquisition and the economic market, instead leaving market forces up to outside investors and leaving economic policy to outside bodies. The explosion of public debt within once colonized nations leads most to believe that these SAP's are meant to be used as a framework for the governance of most of humanity, due to the fact that almost all once colonized nations are in a huge amount of debt, and this also leads to a loss of national sovereignty. Privatization in neo-colonized nations follows a long lineage, dating back to the original processes of colonization, and has the same devastating effects. In South Africa, for instance, water, one of the most important resources in the world, has become privatized, following IMF regulations. During South African colonization, the Afrikaners cared little if people had water, or if the people they were oppressing would die without it it was less of a priority than raping the land for its precious resources, and the whites used most of the water and so they paid little mind to the water infrastructure within the Black Community. "When Nelson Mandela and the African National Congress (ANC) came to power, former political prisoners and guerrilla fighters took over cabinet posts and top bureaucratic offices. They wrote a new constitution, one that's unique in recognizing access to drinking water as a right of citizenship." Many folks expected amazing changes to happen, but this right to water has been the source of protests, riots, and deaths. The shift in politics of the ANC from Socialist to Capitalist led them to take on loans from the IMF and World Bank, with which they have gone down the road of privatization. The economic imperialism inherent within capitalist nations has led, in part, to this destitution of local markets. First-world economic imperialism has, through the IMF and World Bank, made its presence known in all facets of life under neo-colonialism. This economic dominance over decolonized nations is pivotal to the survival of neo-colonialism and first-world capitalist nations.
Where does logic follow when a resource rich nation has to depend on a first-world nation to survive? This roadmap follows directly to neo-colonialism. The dependency theory says, "Predicated on the notion that resources flow from a "periphery" of poor and underdeveloped states to a "core" of wealthy states, enriching the latter at the expense of the former. It is a central contention of dependency theory that poor states are impoverished and rich ones enriched by the way poor states are integrated into the "world system." This is based on the Marxist analysis of inequalities within the world system, but contrasts with the view of free market economists who argue that free trade advances poor states along an enriching path to full economic integration. As such, dependency theory figures prominently in the debate over how poor countries can best be enriched or developed." This speaks volumes to anyone who has consistently followed the tide of economic coercion within decolonized states. Forced dependency brought on by colonialism has affected neocolonial states in a way that is impossible to redeem, unless measures are taken to undermine global economic organizations. Production in pre-colonial times was regulated through local markets, and production was done in a way that wasn't foreign to the populace of a given country, but once colonial powers got involved, they destroyed production capabilities in favor of setting up their own industrial capabilities, with which the local populace had less knowledge of its operation. Leon Trotsky had this to say on production within colonial states, "In the industrially backward countries foreign capital plays a decisive role. Hence the relative weakness of the national bourgeoisie in relation to the national proletariat. This creates special conditions of state power." Within this framework of colonialism, the groundwork was laid to create forced dependency (not inter-dependency) within neo-colonized states.
Multinational Corporations (MNC's) play an enormous role in propagating neocolonialism. MNC's put major pressure upon the IMF and the World Bank to force countries to agree to privatization, lesser trade barriers and 'free-trade zones' so the agenda of global capitalism can be attained. Corporate dump-offs, the process of giving developing countries outdated or broken items for PR campaigns, is a side-effect of economic dependency brought on by neocolonialism. With these corporate dump-offs, countries receive outdated machinery which no one knows how to use, so they just sit there to rot, or they are in such a state of disrepair that they cannot be used. This process of neo-colonialism is a concerted effort by MNC's to keep local agriculture and production underdeveloped, leading to forced dependency, which was talked about earlier. MNC's hold sway with international market organizations and many first-world nations, and have the power to shift SAP's in their favor. Free-trade zones (FTZ's) are, "one or more special areas of a country where some normal trade barriers such as tariffs and quotas are eliminated and bureaucratic requirements are lowered in hopes of attracting new business and foreign investments. Free trade zones can be defined as labor intensive manufacturing centers that involve the import of raw materials or components and the export of factory products. " and, "In 1999, there were 43 million people working in about 3000 FTZs spanning 116 countries producing clothes, shoes, sneakers, electronics, and toys. The basic objectives of EPZs are to enhance foreign exchange earnings, develop export-oriented industries and to generate employment opportunities " The reality of these unassuming FTZ's is sweatshop labor and working conditions to rival Chicago in the 1800's. The reason for these FTZ's is to produce at as low of a cost as possible, with the least environmental standards, and the smallest amount of taxes, to reduce overheads and gain more profit, and more often than not, these FTZ's are placed in neocolonial states, thus perpetuating delocalization and destitution.
Culture homogenization plays into neo-colonialism, and a striking example of this would be the people of Ladakh. There are many pressures that a small society faces in the way of modernizing. Some of these pressures are tourism, the globalizing of world economy, and the Americanizing of the world. How does tourism play a role in the pressures facing a society with traditional values? Well, when tourists come through lesser advanced cultures, western cultures come with them. Imagine this: you are living in a society that has never had any contact with outside forces, and your society wears handmade clothes, has no toys (or no mass produced toys) and you have to work all day to produce for the community. Then imagine that you are this person seeing tourists trickle in with their blue jeans, nice shirts, toys, backpacks, etc. and they stare at you as if there is something wrong with you. They want to consume what you have made (clothing etc.) but you have no system in place to put monetary value on what you produce (never having seen money before) and engineers are building roads through your village, and cars are rolling through. You see how simplistic it is to get from point a to point b using modern technology, and that these people don't have to do work to produce what they wear and use. This puts pressure on the community to try and create an infrastructure to cater to these tourists, therefore adopting money, and western ways of doing things to appease the tourists. The pressures put on the culture to modernize are set in motion because the people see that outside of the community there is more to be had, more opportunity and greater objects to be had. How does the globalizing of a world economy affect small cultures and put pressure on them to modernize? As we saw in the Ladakh essay characterized by this quoted, "Until 1962, Ladakh remained almost totally isolated from the forces of modernization. In that year, however, in response to the conflict in Tibet, a road was built by the Indian Army to link the region with the rest of the country. With it came not only new consumer items and a government bureaucracy, but a first misleading impression of the world outside. Then, in 1975, the region was opened up to foreign tourists, and the process of 'development' began in earnest." A society that had been self sufficient and isolated for years had been affected rather quickly when the military built a road, and with that road came consumer items from other cultures, and that road brought tourism, and that road brought neo-colonial oppression. Neo-colonialism relies on homogeny to continue its economic and social hierarchy.
Neo-colonialism has become a facet of existence within many once colonized states, and it continues to be an issue that is pressing on the international level. Colonial history follows a dialectical materialist line, and history always repeats itself, and colonialism has followed into neo-colonialism. Economic dominance is a reality for resource rich countries afflicted by neo-colonialism, leading to many problems. One of these problems is resource reliance, because of a lack of localized sustainability, brought on by the history of colonialism. Many of these problems could be solved with an out and out revolution, or insurrection against the legacy of colonialism and neocolonialism.