Why do Post-Colonial Countries Fail?

July 29, 2011

By Shiv Sethi


In a recent paper, Raghuram Rajan, ex-Chief economist of IMF and an economic adviser to the PM of India, analyses continual political and economic failure of countries in many parts of the world. The paper entitled “Failed States, Vicious Cycles, and a Proposal” attributes this failure to a host of endogenous causes plaguing such states [1]. The paper proposes that the populace of such states might consider democratically electing foreigners with known credentials in governance.

Even though Rajan doesn’t try to define a failed state, he gives enough evidence what it might mean. It is typically an ex-colony that experienced a civil war following political independence, followed by dictatorial rule by a military junta or a small set of warlords. According to Rajan, there is a vicious circle in the political dynamics of such states. The main participants of civil wars are warlords with narrow support bases predicated on ethnic/regional/tribal loyalties. The very process of civil war destroys the country’s economy and exhausts its resource base. In such a setting, winners in the civil war set out to consolidate their own hold on political power based on the self-serving winner-take-all precepts, which further undermines progression to democratic political and economic norms in an already ravaged society. Needless to say, such an outcome sows seeds for the next stage of the civil war.

Rajan’s solution: international organizations like the UN should intervene in such countries and give them an option of democratically electing foreigners of impeccable political record as their head of states. According to Rajan, these foreigners will not have vested interest in the affairs of the failing state and therefore will provide a far stabler political ambiance, allowing important state institutions to be built and strengthened.

The charming simplicity of the argument is only matched by its astounding ahistoricism, its breath-taking refusal to engage with historical and present-day reality.

Political economy of civil wars

Civil wars are doubly costly. The more they undercut the economic foundations of a society, the more expensive they become in relative terms. Given the number of civil wars afflicting the present world, what causes these wars, how are they financed? Rajan provides a world bank observation: “if a country is in economic decline, is dependent on primary commodities, and has a low per capita income and that income is unequally distributed, it is at high risk of civil war”.

If one of the principle causes of civil war is deep income inequality, it is funded largely by exports of primary commodities. Most civil wars are fought in under-industrialized countries which don’t produce weapons and other industrial goods needed for fighting and sustaining a civil war. These industrial goods have to be bought from outside. This requires controlling production and distribution of commodities that can be exchanged for much needed weapons and other goods to arm, feed, train, and pay armies. In most cases, these commodities are sold on international markets in Western countries. Be it heroin and cocaine from Afghanistan and Columbia, coltan, tin, and gold from Democratic Republic of Congo (DRC, Zaire before 1997), diamonds from Sierra Leone and Liberia, or oil from Nigeria, the markets of these products are located predominantly in the Western countries and these products are mostly marketed by Western transnational corporations [2]. Not surprisingly, most of the weapons and other industrial products used in civil wars also originate in these countries. And therefore it is pointless to look at civil wars around the world without analyzing the role of Western countries and corporations in these wars.

This role is best illustrated by the ongoing civil war in the Democratic Republic of Congo (DRC) and its historic underpinning. According to various estimates, between 5 to 10 million people have died in this conflict in the past 15 years. Armies of many neighbouring countries have fought in the conflict. This war came to be known as Africa’s first world war. The UN’s largest contingent of soldiers has been deployed in the Eastern part of DRC to control the excesses of this civil war. Yet the conflict rages on with regular news of large scale killings of non-combatants and mass rape of women in the conflict zone [3].

The chaos of the civil war is accompanied by something far more systematic. DRC is one of the richest countries in the world in terms of natural resources:

The Congo [DRC] possesses over 80 per cent of the world’s reserve of coltan and has vast amounts of casserite (tin ore), gold, wolframite, pyrochlore, diamonds, clays, copper, cobalt, gas, nickel, oil, tungstone, zinc, iron, kaolin, niobium, ochre, bauxite, marble, phosphates, saline, granite, emerald, monazite, silver, uranium, platinum and lead. The DRC is “the only country on earth that houses all elements found on the periodic table”. The Congo is probably the richest country in the world in terms of natural resources [4].

And it is the sale of these minerals that is funding the civil war. There is enough video evidence to show that small quantities of many minerals and precious metals such as coltan, casserite, gold, and diamonds are mined using slave labour by various militias fighting the civil wars. These mineral are transported by the same labour to nearby make-shift airfields and flown to district headquarters like Goma in Kivu district in Eastern DRC. These district headquarters house marketing companies of both local and global origin which operate quite openly and arrange to transport these minerals to international destinations. This pattern of resources plunder has also been noted by the UN in many of its reports.

The UN and other aid organizations in the region have also listed a set of transnational companies involved in this trade. As an illustration one could source the final 2008 UN report on DRC [5] or an earlier report that came out in 2001 [6]; the 2001 report, for instance, noted quite clearly that “the conflict in the Democratic Republic of the Congo has become mainly about access, control and trade of five key mineral resources: coltan, diamonds, copper, cobalt and gold.”

This naturally brings up the question: was the real cause of the civil war this resource plunder in the first place? There is fair amount of evidence to suggest that this might have indeed been the case. The civil war in DRC was touched off when Eastern DRC was attacked by Rwanda, later joined by Uganda, in 1996, ostensibly to hunt Hutu militia presumably responsible for the genocide of Tutsis in Rwanda in 1994 [7]. How did Rwanda, a country of 8 million and already ravaged by a civil war culminating in the events of 1994, get the wherewithal to attack a country with nearly 8 times its population and ten times its size?

Rwanda and Uganda are the largest recipients of U.S. military and other kinds of aid in the region [8]. Madsen provides evidence that the U.S. military is not only present in the region, even though the U.S. government does not admit it, but provides active support to these regimes, e.g., they have routinely provided satellite reconnaissance to Rwandan armies in DRC}. This support expectedly translates into diplomatic and political backing and positive coverage in the western media. This also means that multilateral organizations such as the IMF look the other way when the money these countries borrow on international markets is used to wage wars; on the other hand, the IMF imposed sanctions on Zimbabwe when it chose to participate in the war in DRC. As the Rwandan-backed militia continue to operate in Eastern DRC with impunity, U.S. officials have openly called for Eastern DRC to be in the economic sphere of Rwanda [9]; such a wish can only prolong the civil war.

A closer look at historical facts reinforces the view that DRC has been a victim of resource plunder ever since it won independence from colonial rule in 1960. The first democratically elected president of independent DRC, Patrice Lamumba, sought to nationalize mining and planned self-sustaining development of the country. He was deposed and killed by a militia backed by the ex-colonial powers, Belgium and the U.S., in 1961. Belgium formally apologized for this act in 2002 [10]. The power was vested in the military strongman Mobutu who was so pliant to Western interests that the very basis of political independence was defeated. Before Mobutu was deposed in 1997, DRC had been reduced to one of the poorest countries even in sub-Saharan Africa. It was a highly indebted country in spite of its vast mineral resources, which were extracted and exported by mostly Western corporations.

One form of resource plunder from some of the poorest countries in the world is the unreported flow of capital from these countries owing to illegal transfers and mis-invoicing by transnational corporations, money embezzled by corrupt leaders and sent to Western banks, etc. Some estimates show this capital outflow to far exceed the the total external debt of the 25 poorest sub-Saharan countries [11].

The pattern seen in DRC is reminiscent of other ex-colonies in Africa and across the world. Western colonial powers created social divisions, or acted to widen existing fissures in society, to validate their rule [12]. However, when the nationalist movement gathered pace, the colonizers found it increasingly difficult to hold on to power. Their first solution to protect their political and economic interests was to pass on the power to the local elite. These elites had either been loyal partners during colonial rule or were inclined to overemphasize the “national” character of decolonization, which essentially overlooked the class structure of society imposed by colonial rule, e.g., Kenya, Senegal, and Ivory Coast in Africa. However, the colonial rulers did not always succeed in de-legitimizing the armed resistance movements; so their second line of approach was to de-fang the armed movements and get the military leader to join the `mainstream’. That colonial powers succeeded spectacularly is fairly clear from the evidence that none of the independent states refused to acknowledge the debts contracted by the colonial regimes, even though a lot of this money was borrowed to suppress the very movements the new rulers of the independent country represented [13].

In other words, colonial rule was replaced by what Ghana’s first president Nkrumah called neo-colonialism. While political power changed hands, the economic balance of power drew the newly independent countries into the economic sphere of ex-colonial power as pliant partners. The interests of Western countries and corporations were not only protected but were actually deepened in many cases. Needless to say, a vast section of the population of the ex- colonies, who had hoped that political independence would bring a respite from extreme deprivation and income inequality caused by rapacious colonizers and their local partners, were bitterly disappointed. It is this turn of events which culminated in political instability and the next stage of civil wars.

One fact of our world is that civil wars are being fought in some of the least industrialized, mostly post-colonial, countries in the world. Civil wars are very expensive for any society, and should show a tendency to dissipate, especially in poorer countries. Yet we don’t see it. The reason is that these wars might be sparked by domestic issues, e.g., control of resources, but they are sustained by the presence of external powers that try to protect their interests in the country being ravaged by a debilitating civil war.

Africa is replete with such examples. At present, in the most populated country in Africa, oil-rich Nigeria, a civil war is raging in the Niger delta, the region which produces most of the oil in the country. The oil is extracted by Western corporations such as Shell and exported to Western countries; the local population doesn’t see any benefits of oil riches of the region and in addition has to cope with continual environmental disasters caused by the ongoing unregulated oil extraction. As always, the military rulers of Nigeria receive aid, or purchase their weapons, from Western powers. The civil war in Sudan, the largest country in Africa, claimed a million lives and was fought between the ruling elite of the North against the oil-rich Southern region. The Southern region got direct support from Western countries and finally voted to secede from the rest of Sudan in early 2011. The growing complexity of civil wars in the world is also seen in the Darfur region in Western Sudan. Somalia, another oil-rich country and strategically placed at the horn of Africa, is in the throes of a civil war since 1990. The U.S. has directly tried to intervene in this conflict in the 1990s. So far any semblance of stability has eluded Somalia: while the ruling elite installed by US-backed Ethiopia has failed to create a nationalist consensus, the militia fighting against these elite doesn’t have the military might to win the war.

What is Raghuram Rajan trying to say?

These facts are too obvious to be not known to someone like Rajan. Being an ex-Chief Economist of IMF, and that too at a time when IMF policies were leaving behind a trail of destroyed economies around the world, he is surely aware that rule by a foreigner could not even begin to address the problems that beset these countries. So it is highly unlikely that he is simply making a mistake by advocating such a model to solve political instability in the so-called failed states.

His article gives a clue to his way of thinking. Throughout the text he refers only to Western rule over other parts of the world to push his case. For instance, he discusses in some detail the role U.S. rule played in economic recovery in Japan after the second World War. He notes, almost approvingly, how complete defeat of Japan in the war enabled these changes. He also refers to the much-discredited view that Western rule in the settler colonies proceeded along democratic lines wherever the climate was temperate as if all the atrocities committed by Western powers across the world could be attributed to extraneous factors like climatic conditions!

In short, the only political form he finds acceptable is the one found in Western societies or variants of it imposed by these powers. Within such an outlook, democracy is not a rich system with its expected myriad forms, depending on local social ambiance and economic exigencies. It is a very narrowly defined system of governance as wished by Western powers in alliance with a tiny local elite. No wonder, he believes that changing a few faces at the top of the political ladder can alter the economic landscape of a failed state.

This outlook seeks to separate the Western political system (or more appropriately its perception in the minds of its supporters) from Western vested interests in other parts of the world. This often means that the purported superiority of Western political systems acts as a proxy to serve Western interests across the world.

One, rarely stated, assumption that informs such a perspective is this: Western power will protect their economic and political interests under all circumstances in any part of the globe. And this implicit assumption naturally leads to an explicit threat: the only outcome of any attempt to confront these powers would be a long and tortuous civil war or other forms of political instability. Even this descent into political chaos might not hurt western interests so much as it will destroy the locals. So why try? Why not accept the status quo and build around it. Or, the only choice for countries around the world is to accommodate these interests. Indeed, this was one of the principal arguments used by the local elite to justify colonialism and it continues to be used in different forms by not only those strongly allied to those interests but also by `pragmatists’ who adjudge this to be the only possible path.

The argument is not without its merits. Even a cursory look at the role of Western powers in the post-colonial era shows that these powers protect their interests under all circumstances. The U.S. alone is responsible for bringing down more than 50 governments in this period; and even this barely begins to capture the extent of U.S. influence across the globe [14]. The US currently runs more than 700 military bases across the world [15]. There are hardly any repressive regimes in the developing world in this era that have not been strong allies of one Western power or another.

But is the political “stability’ brought about by supporting dictators or finding ways to plunder even during a civil war the principle aims of Western powers and their corporations? According to a wide section of intelligentsia with “pragmatic’ outlook, the answer is no. A fraction of this section holds that Western powers have been forced to support dictators in violation of their own value system. A smaller subset sidesteps the entire issue of Western role and simply accuses the victims for this state of affairs for their lack of responsibility. Rajan belongs to this latter section.

A blueprint for reviving failed states

If the principal cause of failed state is the inability of different sections of its society to accommodate Western interests, and because the leviathan of these omnipresent and overarching interests is too powerful to fight, then what better starting point to solve this problem than to willingly become subservient to these wishes.

Those who advocate this solution give illustrations from across the world to support their case. Rajan mentions Japan, but even better examples could be the economic performance of ex-Japanese colonies Taiwan and South Korea. These countries enmeshed their economic fate with the markets of Western capitalist economies and grew fairly rapidly. It should also be noted that these countries were dominated by powerful Western-backed dictators for decades after their independence and their economic “miracle” was ushered in by policies adopted during this phase. These countries are deemed to have made a transition to a representative democracy in the more recent past. So one recipe suggests itself: first focus on economic growth under a strong leadership (read dictatorship); economic growth will automatically spawn a transition to democracy.

Less illustrious examples are Botswana and Costa Rica. Surrounded by politically unstable countries undergoing periodic episodes of civil wars, these countries have remained stable for decades. The most important sectors of the economy of these countries is completely dominated by Western corporations. Botswana is the largest exporter of gem diamonds in the world. A tiny section of the elite has been hand-picked by these corporations protect these interests; political stability and export earning allows them to buy the loyalty of parts of the middle and upper middle classes. A strong security and intelligence apparatus ensures that political unrest is kept under check, in spite of large income inequalities and political repression.

Such recipes are not only fundamentally undemocratic but politically fragile. They might `succeed’ sometimes due to favourable circumstances, e.g., the role of South Korea and Taiwan during the cold war era gave them greater bargaining power vis-a-vis Western powers. In most cases, this process is inherently destabilizing—a vast majority cannot be expected to remain submissive to a process that deprives them of their resources, brutally exploits their labour, and expects them to periodically pay the price of political excesses and economic follies of a tiny elite allied to, and subservient to, international capital.

Cognizant of the primacy of Western interests, Western liberal opinion seeks to find a suitable compromise with sovereign aspirations of failed states. Rajan’s proposal hopes to formalize this process. He recognizes that civil wars are inimical to both sides. However, he represents only one side. His basic message to the other side is to accommodate these interests. But, as noted above, these are almost impossible demands on countries facing political instability. Rajan’s recipe is meant to institutionalize the very cause of failed states, and sustain their failure over long term.


1. Rajan’s paper is available at http://www.cgdev.org/content/publications/detail/1424879/

2. According to UN department of Drug and Crime (UNDC), a large fraction of drug related money flows through legal banking sectors mostly located in the West or controlled by the Western banking system; this money played an important role in bailing out banks in the aftermath of global financial crisis in 2008, http://www.guardian.co.uk/global/2009/dec/13/drug-money-banks-saved-un-cfief-claims

3. http://news.bbc.co.uk/2/hi/8650112.stm

4. see e.g. http://www.thirdworldtraveler.com/Congo\_watch/Scramble\_Congo\_Loot\_UK.html and references therein

5. http://www.scribd.com/doc/8921493/UN-Final-Report-of-the-Group-of-Experts-on-the-DRC

6. http://www.un.org/News/dh/latest/drcongo.htm

7. Detailed investigations have questioned the normally-accepted version of this conflict, e.g see The Politics of Genocide, E. Herman and D. Peterson, Monthly Review Press, 2010 for further details and references

8. The U.S. military intervention in the region was detailed by investigative journalist Wayne Madsen to a U.S. congressional committee; this is available at http://www.globalresearch.ca/articles/MAD111A.html

9. e.g http://www.nytimes.com/2008/12/16/opinion/16cohen.html

10. e.g. http://news.bbc.co.uk/2/hi/africa/1805546.stm

11. http://www.umass.edu/economics/publications/econ2000\_01.pdf

12. One example is the Hutu-Tutsi divide in Rwanda and Burundi. While Hutus, the majority in terms of population, were drawn from nomadic groups, Tutsis (a small minority in terms of population) were largely settled farmers. The colonial power Belgium sought to create a racial divide between the two with Tutsis adjudged to be racially superior and therefore worthy partners in ruling the colony. This divide has led to extremely tragic consequences for post-colonial Rwanda and Burundi, and continues to dominate the politics of the two countries.

13. Zimbabwe and South Africa are two prime examples. Their post-independent leaders Mugabe and Mandela were both ex-militants who sought deep, far-reaching changes in post-independence society. However, not only did both these countries agree to pay colonial debts, they also conceded that no effective land reforms would take place and that private corporations would not be nationalized

14. There is an extensive literature on this subject. A good starting point could be: William Blum, Killing Hope: US Military and CIA Interventions Since World War II available at http://killinghope.org/ or the many writings of Noam Chomsky, e.g., Deterring Democracy, Hill and Wang, 1992, and Harry Magdoff, e.g., The Age of Imperialism, Monthly review Press, 1969.

15. Chalmers Johnson, in his book Nemesis: The last days of the American republic, Metropolitan Books, computed the number of overseas bases to be 737 in 2005.


3 Responses to “Why do Post-Colonial Countries Fail?”

  1. Som Says:
    August 14th, 2011 at 12:05

    Well, I would like to say that the writer is more inclined to accuse the West than to look into the internal issues of various African nations. I would like few points to be noted :

    1) While discussing on DRC, the writer totally overlooked leaders like Laurent Kabila, who had been fighting against Mobutu Sese Seko for a long time. In short, Uganda-Rwanda coalition didn’t have to fight against a unified DRC….they got stong help from internal elements who were against dying Mobutu.
    2) It doesn’t explain the failure of Libya under Gaddafi, Zimbabwe under Mugabe & Uganda under Idi Amin…….who were anti-West & was affected little by Western conspiracies.
    3) It also doesn’t explain the presence of dictatorial/semi-dictatorial rules in large number of African countries , which are not naturally rich.
    4) The write totally neglected the religious, racial & economical aspects of Sudanese Civil War & Darfur conflict. I don’t think the West would’ve give a damn if the get the oil from Bashir govt rather than South Sudanese govt. Similarly, the violence & Islamic militants in oil-rich regions of Nigeria will only hurt Western interests.
    5) A correction on ‘Note#12’ – Rwanda-Burundu region was already under the rule of Tutsi monarchs when the Belgians arrive. The colonials just continued with the existing socio-political structure. The racial rift was in fact created by Hutus & Tutsis themselves, & it only turned worse afterwords.

  2. Suvarup Says:
    August 19th, 2011 at 17:12

    As a novice on this subject I am eagerly waiting for a response from Shiv and learn more about it.

  3. Shiv Says:
    August 24th, 2011 at 05:59

    Thanks for your comments Som. You are certainly correct in asserting that Western powers cannot be solely held responsible for what happens in Africa or anywhere else. In fact without internal conflicts in African countries, Western powers could not/cannot easily get a foot-hold in those countries. The aim of my article was not to undermine these internal conflicts (I mention it only briefly in the article) but to point to the role of Western powers in exploiting them. In every single case I looked at the Western powers cynically exploited the existing conflict and made it far more prolonged and bloody.

    Now for many specific cases you pointed out:

    1. It is certainly true that Laurent Kabila was also against Mobutu, a long term ally of the Western powers. But why did Western powers arm Rwanda and Uganda to attack DRC? The only reason that has emerged after all these years is the control of resources of Eastern DRC (I urge you to read reference 9 of the article). The plunder of these resources continue at present. Is one to believe that Laurent Kabila deliberately wrote off those regions to corporations of imperial power in return of their support in deposing Mobutu? No, as the later events will amply prove. Laurent Kabila himself was assassinated a few years later. Now his son is playing a balancing act to remain in power.

    2. You use the word ‘failure’ in a rather rhetoric sense. I would like to know how Libya failed under Gaddafi. However, I get the point you are trying to make and will illustrate it with one example you gave: Zimbabwe. First, Mugabe is in power since 1980 and was not always so anti-West as he is in the past 15 years of so.
    He signed the Lancaster agreement and a brief look at the terms of the agreement show that Zimbabwe was slated to join the ranks of neo-colonies. The terms included:

    (a) the debt of colonial state cannot be repudiated,
    (b) land cannot be expropriated but only bought at market rates with aid and loans from England (which England refused since mid-1990s),
    (c) none of the capitalist concerns, e.g. banking, export-oriented agriculture would be touched,
    (d) a small minority of whites would be disproportionately represented in government bodies, etc.

    Now this was a country where less than 10000 white farmers owned more than 75% of the best land, owned all industry and banking, strongly integrated with the Western world. In some ways, Mugabe recognized this balance of power while signing the agreement, but failed the revolutionary aspirations of a vast majority while doing so. In spite of this massive concession, Zimbabwe undertook land reforms (buying lands from whites to distribute to blacks) in 1980s and its agriculture productivity increased with state support, a middle class grew (with jobs in burgeoning state sector), etc. It all came unstuck by early 1990s debt crisis, whose roots lay in the formation of state in 1980 and its limited policy options. What followed was the IMF-backed slow withdrawal of the state and a brutal onslaught of the private sector (still while dominated but now joined by a tiny black elite). Mugabe turned anti-West partly in response to this crisis. He promulgated policies to expropriate land, a very progressive legislation but likely to face a coordinated backlash by Western governments. This also fragmented the social fabric of Zimbabwe because a fair section of the urban elite were opposed to such extreme measures, knowing fully well the possible outcome. Zimbabwe agriculture, tottering since 1990s, collapsed under the joint weight of IMF sanctions, bad weather, and open revolt of the erstwhile white elite. Zimbabwe failed not because Mugabe was anti-West but because he probably was too pro-West for too long.

    3. You are implicitly assuming Western powers only seek to dominate resource rich countries. That is simply not the case, e.g. Vietnam is resource poor. Western powers act on what was termed domino theory in 1960s. If progressive governments (not necessarily left but nationalist with a broad agenda of resource sharing) form somewhere, they are expected to influence their neighbours and therefore all such political formations should be undermined or crushed (this is openly stated in declassified documents of the US state department, as noted by many e.g. Chomsky). Or Vietnam might be resource poor
    but Indonesia and Malaysia are not. Let us look at Africa. There are indeed resource poor countries in Africa. Burkina Faso, Djibouti, Eritrea, and many others in the African hinterland e.g. CAR. All these countries have suffered from military coups or rise of
    dictators in not too distant future, owing to direct backing from one western country or another. This does not mean the repressive forms of governments cannot emerge without Western support. But to discuss such cases is somewhat hypothetical in the present world order.

    4. Sudan civil war is a very good example to understand the interplay between internal conflict driven by material conditions and the role of Western imperialism. Basher rose to power in the middle of a civil war in 1989. He turned anti-West not because of any ideological reasons but because the West supported the resource rich South Sudan (now a country) through Uganda, Kenya, etc. However, even the most charismatic leader of the South, John Garang did not want separation from Sudan. As Mamdani noted in a recent article, he was received by a very large crowd in Khartoum after the end of the civil war. But things changed after his death in a plane crash, and the outcome is in front of us: a resource rich country in lap of Western powers. For a long time, the conflict between North and South was dubbed a conflict between Arab Muslims in the North against Christians/Animists in the South. Similarly Darfur conflict, as you noted, is thought to between racist Arabs and black Africans. Those who have looked at these conflicts carefully have junked these notions, e.g Mamdani. These conflicts have their origins in century old conflicts between pastoral people and settled agrarian people (this extends to a fair part of North Africa, e.g. Sahel, Somalia, etc). For Nigeria, take a look at the agenda of MEND, the principle militant group fighting against the government.

    5. In my view, in Rwanda-Burundi also the main conflict was
    between settled agrarian population and pastoral
    people. The former occupations got to be dominated by Tutsis and the latter by Hutus. But the racial divide between these two groups was deliberately created by Belgian colonizers, even though they have always claimed to the contrary. In fact, to the best of my knowledge, there hardly exists any historic pre-colonial records to throw more light of this issue.

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