Neocolonial Practices and Economic Growth in Former colonies

Question One: Neocolonial Practices and Economic Growth in Former colonies
Neocolonialism refers to any attempt by a powerful nation to use economic, cultural, and political pressures to influence their former colonies to act a certain way. Nations could act directly or through influential global institutions such as the International Monetary Fund and World Bank. Proponents of neocolonial practices argue that they provide means to stimulate economic growth in less-developed nations. Critics, however, argue that such practices have little benefit on former colonies and they, in fact, stifle real economic growth. Using relevant examples, this text argues that in line with critics’ argument, neocolonial practices impose limits on real economic growth in the target countries since the imposing countries are often driven by personal interests.
Jamaica offers a perfect example of an economy stifled by neocolonial practices as laid out in Stephanie Black’s documentary titled ‘Life and Death’. In the 1970s, at the height of the country’s energy crisis, Jamaica was forced to take out loans to cover the rising costs of fuel-related importations. The then president, Michael Manley, sought financial aid from the IMF and World Bank to implement a long-term development plan that prioritized natural resources for the fragile economy that had just emerged from colonialism. The IMF, however, declined a long-term plan, and instead; i) insisted on a short-term repayment plan and ii) imposed regulations limiting Jamaican authorities from instituting policies that favored local industries at the expense of foreign imports. As a result of these actions, thousands of local Jamaican farmers were driven out of business by cheaper imports. Cheap imports dominated the local market, and the local dairy industry was destroyed by powdered milk imports that dominated the market. Unemployment levels rose to unprecedented levels, making insecurity a serious concern. In one scene, a Jamaican hotel guide warns visiting tourists to beware of thieves who had migrated to the city in search of employment. The country’s economy was at the brink of collapse as a result of the IMF’s policies - although IMF representative Stanley Fisher, who is interviewed in the documentary, insists that the practices were beneficial for Jamaica. Three decades later, Jamaica was still struggling to rise above the IMP austerity regime and the foreign domination of the agricultural economy.
The negative impact of neocolonial practices is also captured in the Washington Consensus, which was developed and presented in the 1940s and 50s. The Washington Consensus was presented as a developmental strategy for the third world, only to be used as a strategy for re-establishing US Power (Schefner & Fernandez-Kelly, 2011). Through the Consensus, the US government, working directly with the IMF and World Bank, withdrew its support for inward-looking strategies such as imports substitution and replaced the same with capital-friendly shock therapies (Schefner & Fernandez-Kelly, 2011). The therapies were geared at liberalizing capital movements and foreign trade, and transferring assets from the public to private sectors (Schefner & Fernandez-Kelly, 2011). Two decades later, sources report little success in the colonies.
For instance, by the 1980s, the US had successfully reversed its decline of the 1960s and 70s (Schefner & Fernandez-Kelly, 2011). However, the same had resulted in a deterioration of the relative positions of Japan, western and southern Europe, the former Soviet Union in the 90s, as well as Latin America, and Sub-Saharan Africa (Schefner & Fernandez-Kelly, 2011). Some sources argue that Sub-Saharan Africa and Latin American experienced a significant decline from which they have never recovered (Schefner & Fernandez-Kelly, 2011). This reinforces the idea that neocolonial practices, though presented as being beneficial to the target countries, are fundamentally used to benefit the powerful nations that develop them at the expense of the poorer colonies.
Unlike most countries in Sub-Saharan Africa and Latin America, China and India did not fully relax their long-term plans for the Consensus’ capital shock. By the 1990s, there were significant differences in inequality levels between the two groups, with countries such as China reporting significantly higher levels of economic success as their counterparts struggled (Schefner & Fernandez-Kelly, 2011). This supports the ideology that neocolonial practices limit economic growth and that countries may be better off without the same.
In summary, the cases of Jamaica, Sub-Saharan Africa, Latin America, and the former Soviet Union, all of which had their economic growth stifled by neocolonial practices, show that such practices do more harm than good to former colonies. In this regard, there is a need for institutions such as the IMF and World Bank to focus on developing policies that align with countries’ long-term development plans rather than imposing shock therapies whose long-term effects could be devastating.
References
Schefner, J., & Fernandez-Kelly, P. (2011). Globalization and Beyond: New Examinations of Global Power and its Alternatives. University Park, PA: Pennsylvania state University Press.
Stephanie Black Documentary. Life and Debt.