The Struggle Against Neo-Colonialism: Synthesizing Theory and Action
Introduction
Neo-colonialism is the modern development of colonial domination. This stage of imperialism continues the subjugation of formerly colonized nations that exist within the global capitalist system. Even as the historically known structure of colonialism became obsolete through the waves of national liberation movements that occurred throughout the global south, the mechanisms of oppression have persisted. Economic dependency and political manipulation have become the new mechanisms of subjugation that adapted to the ever-changing contradictions persistent through imperialism. These neocolonial systems serve the goals of extracting super-profits and furthering the concentration of wealth in the hands of finance capital.
Neo-colonial institutions embedded in the system of global capitalism erode the autonomy of the people they colonize. Post-colonial theorists such as Frantz Fanon and Kwame Nkrumah gave a multi-dimensional analysis of neo-colonialism on a material that gave insight into the extent of exploitation and consequences of existing within a superstructure of imperial domination and capitalist hegemony, where the interests of finance capital determine their autonomy and right to self-determination.
This paper addresses how international financial institutions and trade agreements perpetuate neocolonial dependency in developing nations and what strategies Marxist-Leninist Maoist and postcolonial theorists propose to dismantle these structures.
By synthesizing post-colonial theory with Marxist-Leninist-Maoist frameworks, this paper highlights the necessity of revolutionary action, economic self-determination, and cultural liberation to dismantle neo-colonial structures. The underlying framework of these two
aforementioned theorists focuses on the dialectical analysis of neo-colonialism as the “highest stage of imperialism”. Developing economies in the global south are seen as reservoirs of profit to be extracted through exploitation. Building on Lenin’s theories of monopoly capitalism, Mao's analysis of semi-colonial conditions, and Marxist critiques of economic dependency, this framework examines the material basis for the systemic and intentional reproduction of colonial structures. This paper argues that international finance institutions and trade agreements put forward exploitative policies that perpetuate the conditions that allow neo-colonial dependency to function, therefore making an anti-imperialist, communist revolution a necessity.
II. Defining Neo-Colonialism
In the aftermath of World War II, the great world powers divided the world into spheres of influence, with the inter-imperialist conflict resulting in the allocation of territories and resources to align with their geopolitical and economic interests1. However, as the global balance of power shifted, weakened by the devastation and contradictions of an all-out war, colonized peoples seized the opportunity to advance national liberation movements, breaking free from the chains of direct colonialism. As Kwame Nkrumah observes, this shift from traditional colonialism—defined by direct subjugation of territories and peoples—to neo-colonialism, which perpetuates economic domination without assuming direct responsibility. Nkrumah explains in Neo-Colonialism: The Last Stage of Imperialism, “The essence of neo-colonialism is that the State which is subject to it is, in theory, independent and has all the outward trappings of international sovereignty. In reality, its economic system and thus its political policy is directed from outside."2. This distinction is important for understanding the development of colonialism into neocolonialism, as it perpetuates the imperialist control over the new sovereign state by controlling the means of economic growth and political autonomy. This new form of economic imperialism replaces the highly volatile structures of colonialism with a more covert and insidious system of control.
The economic dominance over the new sovereign relies on the use of debt traps and Structural Adjustment Programs as a mechanism that entrapped the sovereign state into the grasp of colonial power. Nkrumah addresses the assistance Western powers offer, “Aid to a neo colonial state is merely a revolving credit, paid by the neo-colonial master, passing through the neo-colonial state and returning to the neo-colonial master in the form of increased profits.”3. To the neo-colonial powers, the new sovereign state is a means of producing a larger rate of profit that could not be achieved within its borders. The extraction of these super profits is administered by the international financial institutions that manage the economic direction of developing nations. Institutions like the World Bank and the International Monetary Fund established themselves as the hand that would aid developing nations, as they are funded by the largest economies such as the United States, the European Union, and other wealthier states.45. Immediately, the economic power imbalance is established as imperial powers hold voting power within these institutions, enabling them to dictate the terms of financial assistance. These institutions are positioned to impose any form of strict conditions, such as the liberalization of markets. Austerity measures and privatization, which are in the interests of the donor member states and finance capital over the development goals of the recipient states 6.
The coercive nature of the IFIs lies in “the practice of requiring policy reforms in exchange for access to resources”7. The threat of much-needed aid being cut places the sovereign state in a position where they must relinquish economic autonomy as they are forced to engage in neoliberal reforms, such as “privatizing state-owned industries and lifting trade barriers”8. These neoliberal reforms materially benefit the wealthy donor states, primarily composed of global north states, by opening markets and ensuring favorable conditions for their economic interests. It modifies the structure of economies as a means of establishing export economies that offer cheap labor and resources to foreign capital.
The resulting unequal trade agreements between developed and developing countries are perpetuated by the same international financial institutions funded and controlled by global north nations. As for the impact of the free trade agreements that followed the opening of markets, a study by the Overseas Development Institute examined the effects of FTAs that were adopted by countries such as Mexico, Colombia, Chile, and many other countries in the global south. The findings concluded that these agreements failed to deliver the promised economic benefits in developing countries, in some cases, the economic inequalities were further exacerbated because of these agreements9. The United Nations Conference on Trade and Development has reported that the trade agreements have contributed to an increase in global inequality with trade liberalization benefiting developed countries and their financiers10. Al Jazeera researched the level of profit extraction pointed towards a total of “$152tn” drained from the global south through the unequal exchange, intensified by the “neoliberal structural adjustment programs in the post-colonial era”11. These exploitative structures are rooted in the development of imperialism throughout the global south and developing nations.
Lenin argued that imperialism was a natural development of capitalism, as its contradictions, such as the tendency for the rate of profit to fall, led capitalists to seek profits beyond the borders of their domestic markets. Marxian economics adhered to this tendency.
These domestic markets become saturated, which leads to the export of capital to untapped markets that are forced to open within underdeveloped countries. As Lenin stated, “Imperialism is capitalism at that stage of development at which the domination of monopolies and finance capital is established; in which the export of capital has acquired pronounced importance; in which the division of the world among international trusts has begun.”12. The export of finance capital across the world allowed the influence of these trusts and banks to expand through the form of financial aid. Lenin establishes this exploitative character of imperialism, as it prevents the colonized nations from their right to self-determination and sovereign autonomy.
Ajith, a member of the Communist Party of India (Maoist), expands Lenin’s theory of imperialism in the era of globalization, which of course functions at the behest of finance capital and monopoly capitalism but also through financial institutes and trade agreements. Ajith writes, “The postcolonial paradigm is thus, in essence, the denial of the neocolonial, i.e., the continuing domination and exploitation of ex-colonies by imperialism through indirect means.” As Lenin focused on the conditions of his time, the development of imperialism was one of the quantitative changes in the expansion of financial capital across borders. This distinction is crucial, as it allows Ajith to expand Lenin’s theory into the realm of neo-colonialism, where the exploitation of labor and resources persists through systemic economic policies rather than overt colonial rule13. Ajith’s focus on IFIs such as the World Bank and IMF, which impose structural adjustment programs that prioritize neoliberal reforms over self-determination, underscores the modern-day mechanisms of imperialism.
Let us analyze India as an example of a state with a semi-feudal, semi-colonial structure and a neo-colonial character. Although India declared independence from British colonial rule in 1947, its continued reliance on global capital and the contradictions rooted in its semi-feudal economy and comprador ruling class have entrenched its neo-colonial nature.
When it comes to debt-trapping, the Reserve Bank of India reported that as of March 2024, India’s external debt stood at $663.8 billion USD, an increase of approximately $40 billion USD from the previous year. The external debt-to-GDP ratio slightly declined from 19.0% to 18.7% within a year. This means that the external debt has become slightly smaller in proportion to its Gross Domestic Product (GDP) over a year. The majority of this debt consists of long-term obligations, totaling $541.2 billion USD, indicating a reliance on extended financial agreements tied to development projects.
However, the debt service ratio (DSR), which measures a country's ability to repay its debt and overall debt sustainability, rose from 5.3% in 2023 to 6.7% in 2024. This upward trend suggests that an increasing amount of loan repayment is coming from exports, so this could be due to higher debt obligations, a decline in exports, rising interest rates, or a combination of these factors. This debt is then used as a mechanism of coercion toward policies favoring foreign investment or trade liberalization to boost export earnings. If the DSR continues to rise, austerity measures and further neoliberal reforms can be imposed, aligning with the neo-colonial interests of international financial institutions.
Trade liberalization becomes part of trade exploitation, as the neocolonial character is defined by persistent trade imbalances and reliance on low-value exports, which continue economic dependency. In 1992 the Export-Import Policy Which would implement as a means of trade liberalization by structuring the economy around exporting goods. This has had its consequences, as of August 2024, India's merchandise trade deficit widened to a ten-month high of $29.65 billion, with exports declining by 9.3% year-on-year to $34.71 billion, while imports increased by 3.3% to a total of $64.36 billion.14. These numbers reflect the inherent exploitative imbalance within India’s role as a source of low-value goods and raw materials while relying on imports for high-value products such as technology. The lack of diversification, which is embedded within the trading policies, forces Indian markets to depend on foreign markets which are ruled by financial capital and thus work in tangent with imperialism. This practice locks India in a subordinate position within extractive economic relationships, which stifles industrial development and self-reliance within India as a neo-colonial state.
The socio-economic outcome of this uneven development is devastating for the Indian population. Even data from the World Bank shows a decline in poverty rates, decreasing from 61% in 2015 to 44% in 2021, which relies on a poverty line of $3.65 USD per day15. This decline in poverty fails to account for the further concentration of wealth that has been developing within India, as the top 1% held 22.6% of the income share and the top 10% held 57.7%16. This small percentage of the population is comprised of the comprador class, comprised of financiers and local elites, working at the behest of foreign capital. This class helps establish the cycle of dependency between the neocolonial state and the neocolonial power. The result of this exploitative class dynamic is deepened within the economic disparities of the Indian population.
These international financial institutions have streamlined their ability to exploit these wealthy nations for all the labor and resources required to enrich their donor states.
When examining post-colonial theories, it is important to frame their development within conditions at the end of the era of colonialism and the beginning of a higher stage of imperialism, neo-colonialism. Post-colonial theorists like Frantz Fanon and Kwame Nkrumah offered various analyses on decolonization and dismantling the structures that perpetuated the neocolonial character of their state.
Frantz Fanon, in his work Wretched of the Earth, addressed the need for violence and revolutionary struggle as a means towards liberation. Fanon discusses not the option, but the necessity of violence in the process of decolonization. He states: "Violence is a cleansing force. It frees the native from his inferiority complex and his despair and inaction; it makes him fearless and restores his self-respect"17. Fanon believes that the violent structures of colonialism, which subjugate people through repression and dehumanization, require violence as a restorative force for emancipation. He argues that the colonial issue is inherently violent, leaving the colonized with no option but to initiate an armed struggle for national liberation. Only the absolute act of resistance, rooted in violence, can the colonized break the mental and physical chains that bound them to a colonized superstructure and mode of production. Engaging in this act of decolonization, which is violent, allows the colonized to reclaim their identity, self-respect, and control over their collective destiny. Only then can the colonized people reclaim what was robbed from them by the colonial interests of imperialism. By framing violence as a necessary emancipatory response to the inherently violent nature of colonialism, Fanon argues that true liberation through struggle empowers the colonized to stand up against their colonizer. This is in direct contradiction to the goal of bourgeois pacifism, which is the preservation of the colonial structure to benefit directly through the concentration of wealth.
The National Bourgeoisie, on the other hand, advocates nonviolence as a way to address contradictions, whose interests lie in maintaining the colonial structures. Fanon critically examines the futility of such negotiations, stating, “Non-violence is an attempt to settle the colonial problem around a green baize table before any regrettable act has been performed or irreparable gesture made before any blood has been shed.”18Fanon’s critique of nonviolence as a means of addressing the oppression and subjugation of the colonized system is nothing short of useless because it inherently avoids addressing the root cause of the oppression, which is the colonized system itself. Liberation is not attainable through a compromise or middle-of-the-road approach because it will allow the national bourgeois to perpetuate exploitative dynamics with direct coordination with colonial powers. Thus, a different mode of production is necessary to replace and transform the colonized state into one that works for liberated people.
Fanon further established the need for structural redevelopment that aims to address the contradictions of a colonial state. This colonial economy is one of violence and inhumanity that must be developed into an economy that serves the interests of liberated people. Fanon describes the necessity for a socialist reconstruction, as he asserts, "On the other hand the choice of a socialist regime, a regime which is completely orientated toward the people as a whole and based on the principle that man is the most precious of all possessions, will allow us to go forward more quickly and more harmoniously, and thus make impossible that caricature of society where all economic and political power is held in the hands of a few who regard the nation as a whole with scorn and contempt. “'19. Fanon establishes that without a socialist framework, it becomes vulnerable to further subjugation under the colonizer, which will be dominated by a native bourgeoisie that will work at the behest of foreign capital. Socialism, being a mode of production, would allow the workers and peasantry of the liberated nation to control their means of production and ensure their freed economy serves the interests of all workers and peasants.
Nkrumah further expands on the application of Fanon’s analysis of the necessity of a self sufficient economy free from neocolonialism to ensure their right to self-determination and autonomy as a sovereign state. Nkrumah reasserts a nation's right to self-determination, “…In the second, the socialized modes of production and tremendous human and capital investments involved call for cohesive and integrated planning. Africa will need to bring to its aid all its latent ingenuity and talent to meet the challenge that independence and the demands of its people for better living have raised. The challenge cannot be met on any piecemeal scale, but only by the total mobilization of the continent's resources within the framework of comprehensive socialist planning and deployment."20. To Nkrumah, economic emancipation from capitalism must be established with socialism as a political economy. Once the armed struggle proposed by Fanon. leads to decolonization, the fight against imperialism does not end but continues as it attempts to adapt. This adaptation leads to the qualitative development of colonialism to neo-colonialism that continues the struggle against subjugation and exploitation. He emphasizes the importance of socialist development and the mobilization of resources to ensure true independence and self determination. According to Nkrumah, without a socialist framework, newly liberated states remain vulnerable to neocolonial exploitation through IFIs, which sustain the neocolonial structure.
In synthesizing the post-colonial theories of Frantz Fanon, the anti-neo-colonial insights of Kwame Nkrumah, and the Marxist-Leninist-Maoist frameworks, this paper proposes a revolutionary strategy toward dismantling the oppressive mechanism of neo-colonialism. The necessity of a system in place of colonialism and capitalism is present in the views of these theorists, a system founded on a socialist dictatorship of the proletariat and peasantry, developed in the conditions of these semi-feudal, semi-colonies states.
Fanon addresses the need for a violent armed struggle to depose the colonial structures and dismantle the colonial mentalities that are the same due to their material basis. Nkrumah builds on this further by emphasizing that the struggle is not over after decolonization, as neo colonialism continues its colonial exploitation, through manufactured economic subjugation and political manipulation. Economic independence and the rejection of foreign capital must be established for the liberated people and their state to maintain their self-determination. These objectives of the liberated state allow for the Marxist-Leninist-Maoist frameworks to provide a comprehensive strategy towards achieving victory in their struggle against neo-colonialism.
Marxism-Leninism-Maoism as a framework for revolution relies on the importance of class alliance between the developing proletariat and established peasantry of these neo-colonies.
A socialist state, with a dictatorship of the proletariat and peasantry, ensures economic and political interests are in the favor of the liberated people21. This pivotal approach towards addressing the contradictions in neo-colony under the yoke of imperialism addresses the challenges Nkrumah addresses in the face of decolonization. Marxism-Leninism-Maoism as a framework aims toward protecting the liberated state, by continuing to address the contradictions presented by imperialism through cultural, educational, and economic restructuring of the state.
The Marxist-Leninist-Maoist strategy of a New Democracy is relevant to the conditions in semi-feudal, semi-colonial states, as the neo-colonial interests propagate undeveloped feudal structures that continue the legacy of colonialism22. All oppressed classes that oppose the feudal, colonial, and imperial structures would form a broad revolutionary coalition. This coalition would include the largest class, which would be the peasantry and a tactical alliance with the national bourgeoisie, whose interests align with national independence but are contrary to foreign domination. The central aspect of this alliance is under the leadership of the proletariat to mobilize the interests of anti-neo-colonialism and the feudal mode of production. This aligns with Fanon’s analysis of the revolutionary potential of the rural peasantry and Nkrumah’s emphasis on breaking free from neo-colonial economic control. By uniting these classes under the leadership of the proletariat, the strategy of New Democracy aims to mobilize a broad segment of society against both foreign domination and internal feudal remnants.
This united front, as detailed by the New Democracy, would be central in waging a Protracted People’s War, which is foundational in the Marxist-Leninist-Maoist framework, as it acknowledges the prolonged nature of class struggle in addressing the contradictions put forward by neo-colonialism23. The Protracted People’s War acknowledges Fanon’s analysis of the use of violence as a means toward the complete liberation of the colonized. The neo-colonial state will by all means attempt to maintain control which will involve imposing state-sanctioned violence and the prosecution of resistance groups, which would further deepen the contradictions of its existence. Protracted People’s War addresses this repression as it involves a gradual accumulation of forces and the establishment of strategic base areas around the rural territory surrounding the urban centers as a means of encircling the centers of bourgeoise dominance. These bases serve as the center of political and social reform, where the revolutionary coalition can implement goals of the transitionary New Democracy, such as land redistribution to the oppressed peasantry and local governance structures that reflect the people's interests and needs. Over time, these areas become exemplary of the movement's material goals, demonstrating the benefits of liberation from neo-colonial and feudal control, which would grow the popular movement of national liberation not guided by the national bourgeoisie but rather the national proletariat.
During this campaign, the Marxist-Leninist-Maoist principle of Mass Line acknowledges that the correct ideas and methods of addressing the contradictions must be derived from the masses and the implementation of them with their interests at the center of the national liberation movement24. This ensures that the revolutionary struggle is grounded in the needs and goals of the oppressed masses as they develop the revolutionary consciousness against the neo-colonial structures. This principle is necessary in ensuring Nkrumah’s objective of a self-sufficient economy is achieved, as this methodology is applied it aims at developing said economy to address complex class structures embedded in a neo-colonial state.
The synthesis of Fanon’s emphasis on the role of armed struggle to deconstruct colonial structures, Nkrumah’s emphasis on the necessity of economic self-determination to continue decolonization, and the Marxist-Leninist-Maoist strategy for a national liberation movement create a framework for dismantling neo-colonialism. This revolutionary struggle acknowledges the multi-dimensional structures that make up the neo-colonial character and addresses them with a multi-pronged approach that encompasses the systemic root of the neo-colonial structure and its material development. The true autonomy of a state can be achieved by applying these integrated strategies to the conditions present in underdeveloped neo-colonial states, as we have seen in the Philippines through the Communist Party of the Philippines- New People’s Army and in India through the Communist Party of India (Maoist)- People’s Liberation Guerrilla Army. Where the goals of New Democracy through a Protracted People’s War with an emphasis on the mass line aim to dismantle the neo-colonial state and its oppressive class composition.
Conclusion
The Neo-Colonial question is addressed, as to how international financial institutions and trade agreements perpetuate neo-colonial dependency in developing nations and how revolutionary methodology can deconstruct these oppressive mechanisms. As the material reality of neo-colonialism continues the legacy of colonialism, as it continues the extraction of resources and exploitation of labor in underdevelopment under a more sinister guise of international financial institutions. Lenin developed the theory of Imperialism which laid the materialist foundation for the examination of neo-colonialism by Nkrumah, as the institutionalization of this
exploitation in the world system. This neo-colonial character was composed of unfair trade agreements that aimed at the extraction of resources, by purposely forcing market liberalization that introduced the newly freed nation into a system of perpetual exploitation through debt trapping that is used as a coercive mechanism.
This method of extraction of wealth only became necessary as a development of imperialism after a period of decolonization movement. Finance capital relies on access to markets and resources, both natural and human, to generate super profits. Fanon addressed it as it involved the material liberation from direct colonial domination that was founded on contradictory class structures of the colonized people and the colonizer. Yet, as decolonization addressed political independence, neo-colonialism reasserted control through economic and financial domination, maintaining the unequal dynamics of the colonial era.
To dismantle these structures, the revolutionary methodology rooted in the framework presented by Marxism-Leninism-Maoism, encompassed the goal of national liberation and self determination proposed by both Nkrumah and Fanon. The direct challenge of imperialism with a socialist state that would safeguard imperial interests in the newly freed state. Laying the foundation for a prolonged struggle both material and ideological, as it works to deconstruct the colonial structures present in the state and the colonized people. By addressing both the material and ideological dimensions of neo-colonialism, these methodologies lay the foundation for a world free from the exploitative grip of imperialism.
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