Kwame Nkrumah coined the term to describe the socio-economic and political control that can be exercised economically, linguistically, and culturally, whereby promotion of the culture of the neo-colonist country, facilitates the cultural assimilation of the colonised people, and thus opens the national economy to the multinational corporations of the neo-colonial country.
Between 2011 and 2012, the IMF was unhappy with Malawi. The late Bingu wa Mutharika, president of Malawi during this period, was unwilling to devalue the Kwacha and adopt some other conditionalities set by the IMF as prerequisites for financial aid to Malawi. Mutharika’s argument was that IMF aid packages should not be based on terms dictated unilaterally by IMF alone. Such an approach, argued Mutharika, compromised financial independence and national sovereignty as the conditionalities set unilaterally by the IMF benefitted not the people of Malawi, but only IMF partners and global businesses operating in Malawi. Mutharika believed that such an approach by the IMF was a reincarnation of the neo-colonialism that has shackled Africa ever since the days of Kwame Nkrumah, and which needed to be resisted vigilantly by all Africa. Mutharika considered that Malawian, and indeed African dignity would only be preserved if the IMF recognised the need to work with African countries, in this case Malawi, in coming up with programs and packages that would represent the interests of both Malawi and the IMF and benefit both these parties.
Nkrumah and Mutharika- both now dead, understood that although territorial colonialism was considered to be dead and buried, a new colonialism of a more insidious and pervasive kind–economic colonization through global market integration–was flourishing. Nkrumah believed in a total liberation of Africa that included not only territorial independence but more importantly, economic independence. He said, ‘Our independence is meaningless unless it is linked up with the total liberation of the African continent’.
Unfortunately, modern African leaders such as President Joyce Banda of Malawi, Mutharika’s successor have chosen to fight against the ghost of Kwame Nkruma, prioritising personal gain ahead of the Pan African ideal. As a result, the new colonizing powers continue to flourish. These are not nation states- not at face value anyway. They are gigantic corporations with no national allegiance but using their influence to dictate policy to the former colonisers and to the United States- the most powerful country on earth. The collapse of the economy of Eastern Europe, the opening up of the economies of China and India are significant moves toward the borderless world economy that is the dream of the economic colonists, propagators of the neo-colonisation that was so dreaded by Nkrumah.
Today’s development is driven by a money-centred economic model, which is always motivated to bring returns to money as capital. Human and natural resources are mobilized and exploited merely as factors of production. People are simply means, not the beneficiaries of development.
Corporations from developed countries like the United State or Europe invest in developing countries like Malawi not because they want to help develop the economy, but to profit from Malawi’s people and resources.
Neo-colonisation wants developing countries like Malawi to be politically stable when peace is good for profits. Where its profiteers can make money out of weapons, they create war and political strife. Neo-colonisation wants excellent infrastructure, communication and support services, because these things aid in making more profit with greater convenience, not because it raises the quality of life of the people. Just like slavery of old, and the territorial colonialism that followed it, Neo-colonisation wants cheap labour, electricity, water supply, weak environmental laws and excellent tax incentives. It encourages developing countries to accommodate it with these so called “competitive rates,” which developing countries should read as “cut your own throats.”
The main agents of the Neo-colonialism are the Bretton Woods institutions controlled by the G-7. The IMF-World Bank structural adjustment programs for foreign debts epitomize the economic colonialism process.
IMF programs are designed to reduce consumption of the poor and redirect the resources into export-led growth for the repayment of debts. This is like asking a starving man and his family to allocate all their resources to producing commodities for sale instead of producing food and necessities to sustain themselves first.
Over the years and in diverse locations, IMF-World Bank structural programs have caused overproduction of primary products and a precipitous fall in their prices. It has also led to the devastation of traditional agriculture, and to the emergence of hordes of landless farmers in virtually every country where the World Bank and IMF operate. IMF programs are responsible for the dramatic decline of food security in all Third World regions. Growing dependence on food imports, as in the sub-Sahara Africa experience, places these countries in an extremely vulnerable position. They do not have the foreign exchange to import enough food, given the fall in export prices and the need to repay debts.
IMF insists on drastic cuts in social expenditures, especially in health and education, as countries struggle to meet the basic conditionalities that they and the world bank set. According to the United Nations Economic Commission for Africa, expenditures on health in the programmed countries declined by 50 percent during the 1980s, and on education by 25 percent.
The IMF demands removal of subsidies to the poor on basic foodstuff and services such as rice, water and electricity, as governments follow IMF-World Bank requirements. Such was a conditionality that Mutharika rejected for Malawi in 2004, and became a pariah to the IMF when his fertilizer subsidy program proved that the IMF was wrong.
Further, the IMF pressurizes governments to introduce regressive tax systems and falling real wage rates. In Mexico during the 1980s, the real wage rate declined by 75 percent.
Malawians now know only too well about devaluation, another favourite IMF tool, which in turn promotes inflation and increases the prices of all imported foodstuff. Removal of price controls on domestic food items leads to sudden increases in the prices of commodities used by the poor. Additionally, devaluation causes big increases in interest rates, which cause bankruptcies in domestically-owned small businesses, and further unemployment.
IMF conditionalities also frequently demand the dismantling of foreign exchange restrictions and import controls, which allows the elite classes to export funds overseas and increase their purchase of luxury imports, thus worsening the balance of payments.
Governments such as Malawi have incurred incalculable losses as profitable government-owned enterprises are privatized in order to comply with the demands of the IMF.
Nkrumah and Mutharika are turning in their graves as the IMF continues the trend of growing economic exploitation, tension and polarization caused by our desires to become rich and powerful, and the desires of the developed countries to dominate the economy of the developing countries. The developed countries continue to export the dream that people in countries like Malawi, China and India can grow to be affluent like America and the United Kingdom. Developing countries are buying this dream –but it is only a dream. It would take three more earths like ours to provide the resources required to achieve such living standards.
Not too long ago, the United Nations Conference on Environment Development (UNCED) declared that sustainable development was the only option for the future. The whole world agreed and made the commitment to promote this goal. Unfortunately, not only do the key actors in the global community continue on their unsustainable path, they also continue to sell the dream of an unsustainable economy to others to facilitate the process of economic colonization. It is the great irony of the international development agencies. They talk one thing and practice quite another.
Instead of being blinded by the promise of power and the personal benefits associated with it, it is imperative for Malawi to be vigilant enough and determined enough to chart her own course. Buying into the IMF programs in a wholesale manner as evidenced by the recent developments in Malawi betrays political gullibility of the decision makers and their naivety and lack of appreciation of world affairs. Ultimately allowing the IMF to dictate the Malawian course in the manner demonstrated by the Joyce Banda administration is a demonstration that real love for Malawi and an understanding of the African Dream is desperately missing.
40 years after the death of Kwame Nkruma; 40 years that have seen the demonstration of inhuman plunder of the most cynical kind by the IMF and the neo-colonialists, the head of the IMF, Mrs Christine Lagarde arrived in Malawi on January 4 to a reception like she was the Queen if Sheba. President Joyce Banda hailed the visit as a vote of confidence in the economic reforms that she had implemented to improve Malawi’s ailing economy. The parallels between this and the ancient practice of slave traders regularly visiting their slave foremen to ensure that the slave trade was being practiced to their satisfaction should not be lost to perceptive Malawians. Lagarde’s visit is in the end a supervisory tour by a representative of neo-colonialism, made to ensure that the measures taken to exploit Malawi and Africa are having their desired effect.
The fact that President Joyce Banda and other clueless Malawians are celebrating the visit is a dance on the graves of Pan Africanists of the order of Kwame Nkrumah who said: “a state in the grip of neo-colonialism is not a master of its own destiny. It is this factor which makes neo-colonialism such a serious threat to world peace. Political independence, though worth-while in itself, is still only a means to the fuller redemption and realization of a people. When independence has been gained, positive action requires a new orientation away from the sheer destruction of colonialism and towards national reconstruction. The seductions and the Trojan horses of neo-colonialism must be stoutly resisted, for neo-colonialism is a latter-day harpy, a monster which entices its victims with sweet music. In order to be able to carry out this resistance to neo-colonialism at every point, Positive action requires to be armed with an ideology, an ideology which, vitalizing it, and operating through a mass party with a regenerative concept of the world and life, forge for it a strong continuing link with our past and offer to it an assured bond with our future”.
Z Allan Ntata is a Barrister at Law is the Author of “Trappings of Power: Political Leadership in Africa” (Authorhouse), and has written numerous political analysis articles that have been published in Malawian newspapers for the past 7 years. His articles have also been posted on the maravipost.com. more articles can be found on his website zallanntata.com