Richard Ye
Economic Neocolonialism: The New Era of Colonization?
Many might think that colonialism is a thing of the past and that since there are no longer any colonial empires ruling over vast territories, we have moved beyond it. However, this is far from the truth. Use this learning module to examine how economic neocolonialism continues to shape the world today. From control of resources to unfair trade agreements, we unpack the subtle mechanisms of economic domination and exploitation that continue to exist between nation-states.
Through this module, you will gain a deeper understanding of current global issues such as the blood diamond trade in Africa, the phenomenon of Americanization worldwide, the nuances of the Belt and Road Initiative, the formation of Banana Republics, and how all of these are examples of economic neocolonialism. This module will provide you with the tools to critically analyze and navigate our interconnected world, enabling you to become a more informed global citizen and understand the lingering impacts of colonial practices on our current economic and geopolitical landscape.
Structure
This module is made up of four parts. In each part, learners will read primary and secondary documents (articles, papers, etc.) that provide examples and discussion materials. The materials are designed for students to read, think about, respond to, and discuss in a seminar-style setting. Anyone is welcome to use this module, but it is best suited to a traditional classroom environment.
We must recognize a problem before we can solve it. After completing this module, learners will be able to understand what economic neocolonialism is and, most importantly, how to recognize it in the world around them—when they see events in the news, for example. The goal is for students to be able to recognize economic neocolonialism and its inequities so that if they go on to work at these multinational corporations or end up influencing policy, they can keep this in mind and help fight against this masked continuation of colonial exploitation.
Richard Ye is a third-year undergraduate double-majoring in Computational and Applied Mathematics (CAM) and Economics at the University of Chicago.
Learning Resources
Control of Resources
Part 1 explores situations where the colonizer often uses ownership/control of extraction, Monopolistic/Oligopolistic control/vertical integration, and infrastructure development to exploit the natural resources of the weaker entities, often without regard for environmental and social consequences.
Case 1: De Beers and the Diamond Industry in Africa. De Beers, a multinational company headquartered in South Africa, had a near-monopoly on the diamond industry for most of the 20th century. It mined diamonds in various African countries, including Botswana, Namibia, and South Africa, and controlled the marketing and sale of these diamonds. Profits from diamond mining flowed predominantly to De Beers and its Western shareholders, while the African countries where the diamonds were mined received only a small fraction of the wealth generated.
“The Diamond Empire: Oppenheimer Family’s Cartel, Artificial Scarcity, and the Illusion of Value,” 1994, by Josh Saviano. This PBS documentary film sheds light on how De Beers controlled the diamond market.
“The Kimberley Process is a ‘Perfect Cover Story’ for Blood Diamonds,” 2016, by Jane Goodall. Published in The Guardian, this article discusses the Kimberley Process, designed to prevent conflict diamonds from entering the market, and critically examines the role of companies like De Beers in the diamond industry.
“Report to Society: Ethics” and “Sustainability and Ethics” (De Beers website). Here, De Beers outlines its approach to ethics, particularly its support for the Kimberley Process, an initiative designed to prevent conflict diamonds from entering the diamond market (read critically, as with all corporate material).
Financial Dependency
Part 2 explores situations where the colonizer uses loans, grants, or aid to create a cycle of debt and dependency between the colonized and the colonizer.
Case 2: China’s Belt and Road Initiative (BRI) and Sri Lanka. Launched by China in 2013, many countries involved in the BRI are taking on significant debt to finance the projects, in many cases creating a situation of debt dependency on China. For example, in Sri Lanka, the government was unable to repay the Chinese loans used to build the Hambantota Port. As a result, in 2017, Sri Lanka leased the port to China for 99 years.
“Examining the Debt Implications of the Belt and Road Initiative from a Policy Perspective,” 2018, by John Hurley, Scott Morris, and Gailyn Portelance. This report from the Center for Global Development discusses the debt implications of the Belt and Road Initiative for several countries, including Sri Lanka.
“How China Got Sri Lanka to Cough Up a Port,” 2018, by Maria Abi-Habib. This New York Times article provides an in-depth look at the Hambantota Port situation, detailing how Sri Lanka fell into a debt trap and ended up ceding control of the port to China.
“Public Opinions on the Belt and Road Initiative,” 2017, by Yu Cheng. This report surveys public opinion and media reporting on the BRI in relevant countries, including Sri Lanka. It offers insights into how the initiative is perceived by those most directly affected by it.
Cultural Imperialism
Part 3 explores situations where the colonizer imposes their values, norms, and beliefs on weaker countries through economic means, such as media, education, and consumer products.
Case 3: McDonald's and Americanization of the World. When McDonald's enters a new market, it brings with it not only its food but also a certain set of American values and ways of life. For example, McDonald's popularized the concept of fast, convenient, and standardized meals, which is a departure from traditional food cultures in many countries that value leisurely, shared meals made from fresh, local ingredients. In many places, the arrival of McDonald's and other American fast-food chains has led to significant changes in local eating habits, culinary preferences, and even agricultural practices, as local systems have to adapt to supply and sustain the chain.
“McDonald’s in India,” 2005, by Kishore Dash. This study in Thunderbird, the journal of The Garvin School of International Management, examines consumer behavior towards McDonald’s in India, a country with a vastly different culinary tradition.
“Workers’ View on Indigenization of Theme Park,” 2019, by Jenny Banh. This academic article discusses the cultural implications of the Americanization of and entertainment in Hong Kong through the introduction of HKDL: Hong Kong Disneyland.
Golden Arches East: McDonald’s in East Asia, 1997, by James L. Watson. This book is a collection of essays examining the role of McDonald's as a cultural importer in East Asian countries like China, Japan, and South Korea.
Unfair Trade Agreements and Exploitative Policies
Part 4 explores situations where the colonizer uses their power to leverage terms that are disproportionally favorable to the colonizer at the expense of the colonized.
Case 4: Banana Republics and America’s “backyard,” or, how companies like Chiquita dominated entire countries’ economies. American corporations often created and enforced trade conditions that were favorable to their interests and detrimental to the economies of the countries in which they operated. Furthermore, the influence of these corporations on local and regional politics often resulted in policies and agreements that served their interests. For example, they might secure exclusive access to transportation infrastructure or resist labor regulations that would increase their operating costs.
Banana Wars: Power, Production, and History in the Americas, 2003, edited by Steve Striffler and Mark Moberg. This collection of essays explores the social and economic impacts of the banana industry in the Americas.
The Fish That Ate the Whale: The Life and Times of America's Banana King, 2012, by Rich Cohen. This biography of Samuel Zemurray, the head of the United Fruit Company, reveals an inside perspective of the company's practices in Central America.
Bananas: How the United Fruit Company Shaped the World, 2007, by Peter Chapman. This book delves into the United Fruit Company's (now Chiquita) dominance over the banana industry and the consequences for the countries they colonized.