Neo-colonialism is the ‘new’ form
of colonialism in present day, where instead of political and social control by
a dominant group over a weaker nation, there is economic control, by means of
unequal conditions of economic exchange. An examples of neo-colonialism is IMF
and the World Bank, which forces poorer nations to adhere to strict economic
policies in exchange for a loan. The World Bank was created after the World
Wars, where the governments of countries could borrow a loan from the World
Bank in order to rebuild their economy and infrastructure. This lending
expanded out to African countries as well. However, in exchange for a loan,
African countries had to adhere to strict adjustment policies, and allow trade
from other foreign nations to ensure the debt would be paid out.
The IMF was the organisation
established to ensure the ‘smooth running’ of such transactions. Unlike a
democratic system in which each member country has an equal vote, rich
countries dominate decision-making in the IMF; voting power is determined by
the proportionate wealth each country pays into the IMF's quota system. Therefore,
the US, Germany, Japan, France and UK have more decision-making power and
control over the poorer nations.
In exchange for money, the IMF
imposed strict economic policies the country borrowing the money would have to
follow, involving cuts on education and health, food and transportation
subsidies, policies that effectively weakened the nation’s economy. In this way, it has ensured the inequality of
‘First World’ trade giants like the US and the UK, and poorer nations. The US
and the UK benefit from IMF loans because poorer nations have to allow trade
from corporate, international companies that the ‘elite’ countries own, perpetuating
the cycle of profit and wealth they accumulate, while poorer nations become
poorer still. By prioritising debt repayment and economic policies, the IMF
demands that poor nations lower the standards of living of their people, while
accommodating for the wants of the ‘elite’ nations. Many nations are poor because of the legacies of colonialism,
in which resources and money were taken by the coloniser. And yet, these
nations are forced to ‘repay’ the debt payment back to the coloniser that has
put them in that situation in the first place.
I am so happy someone brought this up, I'm learning about this in my international finance class and I'd reccomend you look into the Washington Consensus agreement, and the impact it had on the South American nations. It is literally neoliberal ideologies being forced onto the throats of other nations in exchange for the promise of granting them universal loans with easier interest rates of repayment. In argentina it led to the complete collapse of their economy because the countries biggest economic generators got into the hands of the foreigners so that myth of "oh the money will trickle down" never even happened. the IMF the UN the World Bank anger me so so much and its so sad to see people still believe these institutions are agenda free.
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