Neo-Colonialism: Concept, Forms and Causes

1A book from 1965

Eight years after leading Ghana to independence, Kwame Nkrumah published Neo-Colonialism: The Last Stage of Imperialism (1965). His argument was that a state can have its own flag, anthem, army and seat at the United Nations, and still have its economy, and therefore its policies, directed from outside. The new rulers, he wrote, need not govern directly: control through trade, loans, companies and advisers is cheaper and less visible. Keep his claim in mind as you look at the tea pickers below. Who decides the price of the tea they pick?

Figure 1. The basic pattern Nkrumah described: raw materials leave cheaply, finished goods and finance return at a higher price.

2Forms of neo-colonialism

3Causes

• Colonial economic structures: economies built to export one or two raw materials, with roads and railways running from mines and plantations to the ports.
• Lack of capital, technology and skilled workers at independence, which made new states rely on foreign investment and experts.
• Debt: borrowing for development, then the oil shocks and falling commodity prices of the 1970s and 1980s, led to debt crises and to lenders' conditions.
• The Cold War: both blocs offered aid and arms in return for loyalty.
• African disunity: small, separate markets that bargained alone with large partners.
• Local elites who gained from the arrangements and protected them.