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Doug Saunders

Look east and south: Witness the end of post-colonialism Add to ...

While the western and northern quarters of the world were enjoying their debt-fuelled winter holidays, a set of transactions took place to the east and south that simply could not have been imagined a few years ago.

Brazil saw the swearing-in of a new president, Dilma Rousseff, who is best known for being a former guerrilla rebel against Brazil's military dictatorship. That was all in the past - a time when the politics and economics of Brazil, and most non-wealthy countries, were entirely defined by relations with the great former colonial powers to the north and west.

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In those days, countries like Brazil had a choice: They either sold raw materials and cheap goods at low cost to the Yankees and Europeans and played by their rules, or resisted them with closed borders, Kalashnikovs and command economies.

This was 2011, though, not 1981, so Ms. Rousseff had no need for such a choice. After her inauguration, she immediately set to work boosting export investments in value-added industries and cutting government spending to keep the Brazilian currency from inflating.

She also, tellingly, authorized a deal in which the huge Chinese company State Grid purchased seven of Brazil's electrical-transmission utilities for $1-billion, essentially putting the country's electrical-distribution grid under Chinese ownership, even though her government had weeks earlier placed import tariffs on Chinese toys during the Christmas season in order to avoid hurting her country's trade surplus. In the poor half of the world, trade relations are not a matter of simple tit-for-tat retaliations.

While that was taking place, Chinese Vice-Premier Li Keqiang made a huge deal during one of his extremely frequent trips to Europe, in which China Petrochemical Corp. and Spanish oil giant Repsol spent $7.1-billion in Chinese trade-surplus funds launching an oil-exploration venture off the Brazilian coast. That worked so well that the Chinese-led group will spend tens of billions more exploring in Central Asia and Africa.

What these deals have in common is that they involve "developing" countries striking deals, and entering political arrangements, that have nothing to do with either supplying the Western world with cheap goods and raw materials, asking wealthy neighbours for investment and support, or resisting economic and political overtures from the West. Until very, very recently, those sorts of transactions dominated the world.

I believe we are witnessing the end of the post-colonial era in politics and economics. In China, Brazil and a dozen other countries, the type of thinking known as "post-colonial" - defined as a stark choice between angry resistance or humiliating subservience - has simply ceased to matter in political and business relations.

The post-colonial era began in earnest in the years after the Second World War, when Britain, France and the United States ceased to be formal colonizers, allowing southern and eastern countries to have their own governments (in places like Brazil, it had begun decades earlier). The end of the Cold War and the Soviet empire kicked it into high gear.

Post-colonial governments had responded to the external, commercial and globalized nature of their erstwhile colonial rulers very often by becoming nationalist, closed to trade and investment. Sometimes they were opposed to capitalism itself - witness the waves of Marxist and Maoist regimes that swept across Africa and South America, without Soviet prodding, during the postwar decades. Or they were dictatorial and violent and co-operative with the industries of their former empires.

While post-colonialism clings on in Cuba, Venezuela, North Korea, Zimbabwe and a handful of other places, it has vanished from most of the world with amazing speed.

Consider two other developments in China these past couple of weeks.

First: On New Year's Day, Beijing raised its minimum wage, to be followed by provinces across China, by a startling 20 per cent, to $173 per month, making it higher than Bulgaria's. This move wasn't aimed at the workers in the Pearl and Yangtze deltas, who make goods for export to the West - they already earn more than that - but to those in inland cities and villages, who make things for internal markets. In essence, it is the cornerstone of a move to turn Chinese workers into consumers and buyers of Chinese goods, ending the country's yin-yang relationship with the West.

Second: Over Christmas, the United States was amazed to discover that China had fielded a fleet of short-range ballistic missiles that allow it to strike aircraft carriers throughout the region. This is not a Cold War development aimed at the U.S., but one designed to thwart any regional challengers.

Still, American generals reacted with alarm - not because they felt threatened with attack, but because they had suddenly discovered that they, like their country's banks and corporations and consumers, have become irrelevant.

Follow on Twitter: @dougsaunders

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