Imperialist Investment: A Trojan Horse Of Surplus Extraction

By Martin Nguyen

The effects of Imperialism, poverty, famine and the export of capital back to the imperialist countries can be felt far and wide. The impact of imperialism can be seen in Asia where most Asian countries have suffered under the direct colonial rule of Europe and Japan. Imperialism had a devastating effect on the population and economy of India, China, The Middle East and Indochina.

“The goal of colonialism and imperialism in Asia during the 18th and 19th centuries was to export capital from already saturated markets back in the imperial centres and to then use that exported capital in the subjugated nations to extract value that would enrich the bourgeoisie of imperial powers at the expense of local proletarians and peasants. “

This process directly caused untold suffering for the working people of Asia and left scars they still bear today.

A common argument made in defence of imperialism is that the imperialists invested in infrastructure in the subjugated nations. This was the case in Indonesia (Dutch East Indies) where the Dutch built, 7,500 kilometres of railways, bridges, irrigation systems covering 1.4 million hectares of rice fields, several harbours, and 140 public drinking water systems. The purpose of this infrastructure development wasn’t the elimination of poverty or the benefit of local people. It was built to facilitate the exploitation of local workers and resources and the growth of capital back in the metropoles. Ignoring for the moment the harsh, often deadly working conditions faced by the local workers, the consequences of the exportation of capital and exploitation of labour can still be seen today. In 2015, 47.2% of Indonesia’s population of 255.46 million lived below the poverty line with a 2014 report showing 23.8% rural poverty and 16.2% urban poverty. The “Cultivation System” (cultuurstelsel), imposed on Indonesia between 1830 and 1870 which forced locals to grow cash crops for export rather than food to meet local needs, robbed the country of an estimated 1 billion guilders and directly led to famines, epidemics and impoverishment among the Indonesian peasantry and proletariat.

India and subsequently the British Raj, faced some of the worst effects of imperialism on both economic and human terms. 1700’s India accounted for about a quarter of global GDP, yet under British rule India’s share of global GDP fell to 4.3% by 1950. At the same time, the United Kingdom’s share of the world economy rose from 2.9% in 1700 up to 9% in 1870. Both capital and industry were being extracted from India with Britain replacing India as the world’s producer of textiles and gunpowder by the 19th century. Factories that produced these good were moved to Britain and deindustrialisation was implemented in favour of peasant farming for opium in the North and coffee and tea in the South. A result of this type of economic exploitation was uneven development in the South leaving its majority Dravidian population as the peasant class with the main industries being fishing and farming. The economic impact of this led to deaths in India with such events as the Great Bengal famine of 1770 (৭৬-এর মন্বন্তর) which caused the death of a third of the Bengali population, Britain’s response was to implement high taxes via violence in India to make up for lost income.

The effects of imperialism in Vietnam whilst under French colonial rule saw the import of resources and goods with large taxes and tariffs on opium, salt and rice alcohol, the trade of which formed about 44% of the colonial government’s budget in 1920 but declined to 20% by 1930. Indochina was the second most invested-in French colony by 1940 after Algeria, with investments adding up to 6.7 million francs. The main purpose of these investments was the exploitation of the natural resources of Vietnam namely rice, coal, rare minerals, and later also rubber with the onset of WW2. The effects of imperialism on the people of Vietnam led to suffering. While French investment led to construction of irrigation works that quadrupled the land dedicated to rice farming between 1880 and 1930 there was at the same a decrease in the consumption of rice with peasants needing to find alternative sources of food. The peasants share of rice crops sold in Saigon was as little as 25. After heavy taxation and tariffs that were passed on the crops after sale, this left them without enough for the onerous rent that was imposed by the new landlords that arrived with French colonialism. Overall poor working conditions on farms and rubber plantations, lack of food, medicine and a lack of representation of the Vietnamese people within the French administration is what led to the emergence of socialist and national liberation movements within Vietnam.

“The experiences of these three countries show that imperialism comes under the guise of foreign investment while the reality is these investments are used to extract the natural resources of subjugated countries and the surplus value of local workers.”

The result is an accumulation of capital for the bourgeoisie of imperialist countries while the local workers are forced to face poverty, famine and disease. Knowing this, workers living in the imperial cores must join the workers in subjugated countries in the struggle against imperialism. This isn’t simply a moral duty since a weakening of imperialism is a weakening of the same class that exploits and oppresses workers in imperialist countries.