Arrival of colonialism of the third kind

The Daily Star (Dhaka) | Tuesday, March 17, 2009

Mahfuzur Rahman

HAVE you heard the latest about colonialism? I would not blame you if you haven't. With the world economy appearing to be sinking under teetering financial institutions and failing business corporations, and all and sundry trying to understand what on earth collateralised debt obligations and toxic assets are, it is no wonder there is little room for anything else in the public mind.

Furthermore, people of the left, after decades of intellectual jihad against neo-colonialism, look like an exhausted lot, and seem not to notice any new threat to ward off. The suspicion must also be that at least some among them, while quite aware of the new phenomenon, are red-faced to see where it is coming from.

The old colonialism was instantly recognisable. European countries, with their growing commercial and industrial power, were seeking to subjugate less developed countries in Asia, Africa, and Latin America economically, often through political and military means. The aim was to extract as much advantage as possible from their economic relationship with the colony, including access to natural resources that the colonialists would otherwise lack. Plantation and mining very largely defined old colonialism.

As Western empires faded and the colonies emerged as independent states, industrialisation and rapid growth of world trade seemed to push this version of colonialism to the background.

But critics of colonialism would soon begin to recognise new forms of the old order in the dominance of the west in trade and finance, in unfavourable terms of trade for the former colonies, and especially in the activities of the transnational corporations. It is the latter two in particular that was soon seen as the new face of colonialism.

Neo-colonialism had arrived whereby the West continued to exploit the South in all but name. (The world had by this time had a strange West-South rather the older West-East split.) A number of concepts associated with the instruments of exploitation presented problems for the critics. Several shifts in terms of trade in favour of the South were one such difficulty. The transnational corporations, on the other hand, began to be seen as carrying some benefits for the South. A decades-long debate at the United Nations on the subject that began with a frontal assault on these corporations finally tapered off. This, in particular, and the huge transfers of income to the oil-rich South from the rest of the world, beginning in the early 1970s, is why so little has been heard of neo-colonialism of late.

Now turn to more recent times. Over the last few years, foreign investment has been pouring into exploration and extraction of minerals across Africa in the aftermath of global scarcity and sharply increasing prices of primary products in general and minerals in particular. Foreign construction and mining workers have been swarming into many of these countries to facilitate exploitation of minerals for export.

Elsewhere, rising food prices have led many food importing countries to scout for suitable land in developing countries. The idea is to strengthen food security at home by buying up land for production of food meant for export for home consumption.

Examples of the latter abound. Foreigners are looking for land to buy in fertile Punjab in Pakistan, there has already been sizeable investment in food production in the Sudan. Foreigners have farmed in Ethiopia, a country ravaged by repeated famines, for export. Perhaps most importantly, huge tracts of land, in millions of acres of it, are said to be ready for purchase in Madagascar.

All of this looks like Colonialism Type 1. The startling difference is that in this case it is not the Western countries that are buying up land and scouring for mineral resources in the above examples. It is, for instance, the Chinese who are after Africa's mineral resources; it is the oil-rich Middle East, especially the Saudis, which is scouring for farm land in Pakistan the Sudan and Ethiopia; and the bid to buy up land in Madagascar has come from South Korea. Authentic newspaper reports have it that the first shipment of rice from Saudi-owned farms in Ethiopia has already arrived in Saudi Arabia and was ceremonially presented to King Abdullah. It is safe to conjecture the king saw that it was good.

The truth is that if exploitation of a developing country's natural resources by the West is colonialism, so it is when rich countries of the South do the same. And if acquisition of land in a poor country by a rich developing country looks particularly sinister, this may be because it is. It would be hypocritical not to recognise this. Sadly, that recognition seems to have eluded those who not long ago were so ardently defending developing country interests against colonialism. Somewhat ironically, voices denouncing the new neocolonialism have begun to be heard in liberal western press. The Financial Times, for example, has called the Madagascar deal "positively neo-colonial," and termed it rapacity bordering on piracy. One hopes this might some day shame some in developing countries themselves into taking a critical look at the emerging phenomenon.

The overwhelming consideration in any inquiry must be: who benefits from such acquisition of natural resources and how? And that question must go beyond arguments bandied about, in the case of acquisition of land for farming, that new projects will create jobs. Setting up of an enclave can secure food security for Saudi Arabia but might do little else for the overall development of the host country. The fact that some poor countries acquiesce in the arrangement does not change the argument.

In an odd sort of way, recent colonial-like scramble for natural resources also brings to the fore broader issues of the role of such resources in a changing world. Not long ago the thinking on economic development was dominated by the role of physical capital. This was followed by increased emphasis on labour skill and technology. The thinking appears to have come full circle, or it should if it hasn't. It appears that the role of "land," in the broadest sense of natural resources and the environment, is now due for recognition in an increasingly resource-scarce and environmentally-conscious world. Much of future world economic development will depend on how we view that role. But unexamined acquiescence to scramble for resources in poor countries is not a policy option.

Mahfuzur Rahman is a former United Nations economist and an occasional contributor to The Daily Star.
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