Neocolonialism is the continuation of the economic model of colonialism after a country which has been colonized has formally been granted independence. This concept is mostly applied to African countries which were granted independence by their colonial masters in the twentieth century.
The idea of neocolonialism suggests that after colonized countries were granted independence by their masters some decades after the end of the second world war, they continued to have a huge leverage over the economies of the newly independent nations making them sort of being heavily dependent on them and according to their whims and caprices.
The idea of neocolonialism has many theoretical influences. First and foremost, it is derived much from Marxist thought. Karl Max argued that the model of capitalism represented a level in the socio-economic advancement of mankind. He had the firm belief that, inevitably and ultimately would be overthrown by revolutions which will result in socialist utopias.
With colonies being granted independence, a theory of modernization emerged which suggested that newly independent countries would eventually begin to develop rapidly in a political and economic sense and would look like modern western nations.
It soon became very clear that this was not going to be as initially speculated. Post-colonial theorists sought to find out why independent African countries were chronically underdeveloped and found an answer in the ‘dependency theory’.
Dependency theory initially gained prominence as a method of explaining the underdeveloped economies of Latin American economies in the 1960s.It claims that, underdevelopment continued due to the domination of underdeveloped economies by the developed economies by paying glow sums for agricultural products and flooding or dumping their economies with cheaply manufactured goods.
This led to perpetually unbalanced payments which prevented the underdeveloped economies from competing on a level playing field with the developed economies. According to Rodney and Amin, the United States dominated the economies of the newly independent African countries through neocolonialism in several ways.
The main source of revenue for African countries after independence continued to be export of raw materials; this led to the underdevelopment of African economies while the western ones generally thrived. A good example is the production of cocoa in West Africa in the 1960s; during this period, production increased rapidly in numerous countries and due to overproduction, the selling price of cocoa reduced worldwide.
The cocoa was bought at low prices shipped to Europe refined and sold back to African at high prices.
A second way of neocolonialism according to theorists is the use of foreign aid. As a result of the newly independent African countries not able to develop soon, they enlisted the help of foreign countries through the use of foreign aid.
Accepting loans and grants from Europe or America showed the link between the newly independent countries and the exploitative forces of the former colonial masters.
Foreign aid which has been given to the African countries in the form of loans bear high interest rates and makes repayment very difficult and has immensely contributed to the underdevelopment of African economies.