DECOLONIZATION AND INTERNATIONAL TRADE
Dr. Albert J. Milhomme, Texas State University at San Marcos
ABSTRACT
Former colonies may have acquired their independence after violently struggling against the colonizer.
Others may have acquired their independence peacefully. The process has been described by the rupture
intensity factor. This study focuses on the short and long term impact, if any, of a low and a high rupture
intensity factor on the achievement of the economic independence of two former British colonies.
HYPOTHESIS
For some time now, many countries, former colonies of some colonial powers like Great Britain have
acceded to their political independence. Some did acquire their political independence through peaceful
negotiations, some others got their independence through brutal and bloody confrontations. The question is:
“What about their economic independence? Was there any short term impact on their economic
independence on the way the political independence was achieved? Is there any long term impact on their
economic independence on the way their political independence was acquired?
The answer to these questions could be “no”. British companies seem to have maintained an active
position in their former colonies. The reasons for this are the cultural ties and traditions established during
colonial rule. The colonial language used for business, the education system of the country, the legal
systems, the financial connections with outside world, the type of product or produce especially adapted to
the colonizer market, and expatriates staying in the country after independence are all factors which will
contribute to a paradoxical degree of dependence upon the former colonizer on the part of many newly
dependent countries, especially those with a low rupture intensity factor (peaceful and smooth transition).
The answer to these questions could be “yes”. Before independence, ostracism was high in many
former colonies and the events preceding independence made some people believe that former colonized
countries would reject companies from the colonial power. If dependence of former colonies to their
colonizers existed then it would be for a short time. Colonizers will very quickly loose their historically
acquired economic advantages, especially if the independence was the result of some brutal and bloody
confrontation, i.e. a high rupture intensity factor (violent and acrimonious transition) (Johansson).
To measure the evolution of the economic independence with respect to the former colonizer, one can
look at the evolution of the international trade pattern, exports and imports, before the independence, just
after the independence, and today, almost half a century after the political independence. Ghana and Kenya
appear to be the right countries to compare, Ghana having got its independence very peacefully and Kenya
having got its independence through a fierce military struggle.
In 1957, as a colony of Great Britain, Ghana exported 38 percent of its total exports to Great Britain
and imported 45 percent of its total imports from Great Britain. This was the result of more than a century
of effort to create and protect trade, to pump in finished products into Ghana and pump out raw materials.
Ghana was the 21st largest importer of goods from the U.K. and the 32nd largest exporter of goods to the
U.K. a rank without any relationship with Ghana’s Gross Domestic Product.
In 1963, Kenya as a colony of Great Britain exported 24 percent of its exports to Great Britain and
imported 41 percent of its imports from Great Britain. The United Kingdom had also at that time a
dominant position in Kenya. This position was also mainly the result of a century of effort to create and
protect trade, to pump in the finished product and pump out the desired raw material. At that time, Kenya
was the 29th largest customer of the U. K. in terms of imports and the 45th largest supplier in terms of
exports, a rank without any relationship with Kenya’s Gross Domestic Product.
What was the evolution of the economic independence, measured by an international trade concept
like the geographical concentration factor, of those two countries having acceded to political independence
through two opposite schemes, Ghana peacefully, and Kenya violently?
SHORT TERM IMPACT OF THE RUPTURE INTENSITY FACTOR: THE FIRST FIVE YEARS
AFTER THE POLITICAL INDEPENDENCE
To measure the impact on the “Country Mood” just after the political independence and its short term
impact on the trade with the former colonizer, one will study the evolution of the trade (Imports and Exports)
five years before the independence and five years after the independence, for both countries.
1 – GHANA Independence 1957
A - Short term evolution of the imports (1952-1962)
Chart 1 is a graphical representation of the evolution of the Ghana Imports from U.K. during the five
years (1953-1957) before the Independence.
Chart 1
Ghana: Imports from U.K. from 1953 to 1957
1000
900
800
Constant Dollars
y = -1.8688x + 835.41
Value in U.S. Dollars
700
600
500
400
300
200
current dollars
y = 2.2x + 105
100
0
1
2
3
4
5
Years
Chart 1 shows a slight decrease of the imports during the five years preceding the independence.
Chart 2 is a graphical representation of the evolution of the Ghana Imports during the five years
following Independence (1958-1962). Any sharp modification could be the result of the short term impact
of the political ties severance. A slight increase in the rate of growth of the imports from U.K. is observed.
Chart 2
Ghana: Imports from U.K. from 1958 to 1962
1000
900
800
y = 9.4887x + 791.68 Constant Dollars
Value in U.S. Dollars
700
600
500
400
300
200
y = 3.8x + 112.8
Current Dollars
100
0
1
2
3
4
5
years after Independence
B – Short Term Evolution of the Exports (1952-1962)
A better measure of the economic independence of a country is the geographical concentration index
(GCI). This index is defined as the ratio of the exports of a country A (here Ghana) to another country B
(here U.K.), over the total amount of exports of the country A (here Ghana) to the World. A portfolio of
customers, with smaller geographical concentration indexes will make the economy of this country less
vulnerable to the ups and downs of the economy of its customers. Let us observe the evolution of this index
for five years before the independence, and 5 years after the independence.
Chart 3
Ghana: Exports to U.K. from 1953 to 1957
1200
1000
Constant Dollars
y = -63.427x + 972.38
Value in U.S. Dollars
800
600
400
200
Current Dollars
y = -6.3x + 123.7
0
1
2
3
4
5
Years
Chart 3 indicates already a decrease in the amount of Ghana exports to U.K. during the five years
preceding the independence. Chart 4 represents the evolution of the geographical concentration index
(GCI) – exports from Ghana to U.K./Exports from Ghana to the World – during the same period. The CGI is
already shrinking at a rate of 1.46% a year.
Chart 4
Geographical Concentration Index from 1953 to 1957 (with U.K.)
0.45
y = -0.0146x + 0.4334
0.40
Geographical Concentration Index
0.35
0.30
0.25
0.20
0.15
0.10
0.05
0.00
1
2
3
4
5
Years
Chart 5 indicates a continuous decrease of the exports from Ghana to the U.K., but at a rate three times
smaller than before Independence.
Chart 5
Ghana: Exports to U.K. from 1958 to 1962
800
700
600
y = -23.949x + 740
Value in U.S. Dollars
Constant Dollars
500
400
300
200
Current Dollars
y = -1.5x + 105.5
100
0
1
2
3
4
5
Years
Chart 6, a representation of the GCI evolution during the 5 years following Independence indicates a
continuous decrease of the GCI but at a slower path. The independence has not fundamentally modified the
trajectory of the GCI.
Chart 6
Ghana: Geographical Concentration Index from 1958 to 1962 (with U.K.)
0.40
0.35
Geographical Concentration Index
0.30
y = -0.0118x + 0.3559
0.25
0.20
0.15
0.10
0.05
0.00
1
2
3
4
5
Years
2 - KENYA Independence 1963
A – Short Term Evolution of the Imports (1958-1968)
Chart 7 shows a moderate shrinkage of the U.K. product imports well before the independence. This
could be the consequences of the insurrection which started in 1952.
Chart 7
Kenya: Imports from U.K. from 1959 to 1963
600
Constant Dollars
y = -10.352x + 578.54
500
Value in U.S. Dollars
400
300
200
Current
Dollars
100
y = 0.29x + 83.79
0
1
2
3
4
5
Years
Chart 8 shows a large increase of the imports from U.K (almost 10% per year in constant dollars), just
after the political independence. The fact that the rupture was the result of a fierce struggle had no
negative short term influences on the imports from U.K.
Chart 8
Kenya: Imports from U.K. from 1964 to 1968
700
600
y = 36.822x + 381.62
Constant Dollars
Value in U.S. Dollars
500
400
300
200
Current Dollars
y = 9.8x + 58.82
100
0
1
2
3
4
5
Years
B – Short Term Evolution of the Exports (1958-1968)
Chart 9 shows an increase in the amount of the exports from Kenya toward the U.K. before
Independence. Kenya’s goods were moving to U.K. at a faster rate.
Chart 9
Kenya: Exports to U.K. from 1959 to 1963
250
y = 7.6074x + 166.13
200
Value in U.S. Dollars
Constant Dollars
150
100
50
Current
Dollars
y = 1.86x + 23.72
0
1
2
3
4
5
Years
Chart 10 is a representation of the GCI evolution during the same period. A slight decrease of the GCI,
which indicates a larger increase of exports to the World than to the U.K.
Chart 10
Kenya: Geographical Concentration Index from 1959 to 1963
0.27
Geographical Concentration Index
0.26
0.25
0.24
y = -0.0015x + 0.2475
0.23
0.22
0.21
0.20
1
2
3
4
5
Years
Chart 11 shows the evolution of exports to U.K. during the five years (1964-1968) following
Independence.
Chart 11
Kenya: Exports to U.K. from 1964 to 1968
250
y = 12.133x + 171.6
Constant Dollars
Value in U.S. Dollars
200
150
100
Current Dollars
y = 3.62x + 26.4
50
0
1
2
3
4
5
Years
Chart 12 shows the evolution of the GCI during the same time interval. The GCI did in fact increase
after the independence. The economic independence as measured by the GCI was less than before the
political independence. The harshness of the rupture had, if any, a short term impact inverted.
Chart 12
Kenya: Geographical Concentration Index from 1964 to 1968 (with U.K.)
0.30
y = 0.012x + 0.1928
Geographical Concentration Index
0.25
0.20
0.15
0.10
0.05
0.00
1
2
3
4
5
Years
LONG TERM IMPACT OF THE RUPTURE INTENSITY FACTOR
1 – GHANA (1958-1997)
A – Low Rupture Intensity Factor’s Long Term Impact on Imports from U.K.
Chart 13 is a graphical representation of the evolution of the Ghana Imports from U.K. during the
40-year period which has followed the independence. A comparison of Chart 13 and Chart 2 could bring
some lights on the trend observed just after the independence.
Chart 13
Ghana: Imports from U.K. from 1958 to 1997
1000
900
800
Value in U.S. Dollars
700
y = -9.3968x + 674.69
600
Constant Dollars
500
400
300
y = 8.5684x + 22.023
Current Dollars
200
100
0
1
3
5
7
9
11
13
15
17
19
21
23
25
27
29
31
33
35
37
39
Years after Independence
Ghana is reducing its imports from U.K. at a rate of $ 9.4 million in constant dollars (base 1996). The
softness of the rupture has not lead to the maintaining of U.K. as a large supplier. New relations have been
created with other suppliers, old U.K. foes or neighbors. The percentage of British imports by Ghana has
decreased from 37 percent of the world imports in 1958 to 15 percent in 1997, a decrease of about 0.55
percent per year. Ghana is today the 67the largest importer of British goods, from being Britain’s 21 st
largest importer in 1957.
B – Low Rupture Intensity Factor’s Long Term Impact on Exports to U.K.
Chart 14 represents exports from Ghana to the U. K. from independence in 1958 to 1997 (forty
year-period)
Chart 14
Ghana: Exports to U.K. from 1958 to 1997
800
700
Value in U.S. Dollars
600
500
400
Constant Dollars
y = -12.768x + 622.53
300
200
Current Dollars
100
y = 2.7393x + 69.719
0
1
3
5
7
9
11
13
15
17
19
21
23
25
27
29
31
33
35
37
39
Years
The ratio of Ghana’s exports to the U.K. to Ghana’s total export activity has been computed in order to
measure the today vulnerability of Ghana’s economy to the U.K.’s economy. (Chart 15)
Chart 15
Ghana: Geographical Concentration Index from 1958 to 1997 (with U.K.)
0.40
0.35
Geographical Concentration Index
0.30
0.25
0.20
0.15
0.10
y = -0.0053x + 0.3016
0.05
0.00
1
2
3
4
5
6
7
8
9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40
Years
Ghana’s export share (GCI) to the U.K. have decreased from 30 percent in 1958 to 9 percent in 1997, a
rate decrease of the GCI of about 0.53 percent per year. Ghana today ranks as the 63rd largest supplier
for the British, down from its position as the U.K.’s 32 nd largest supplier in 1958. Ghana, 40 years after, has
really improved its economic independence vis-à-vis the United Kingdom.
2 – KENYA (1963-2002)
A – High Rupture Intensity Factor’s Long Term Impact on Imports from U.K.
The chart below (Chart 16) shows the evolution of imports by Kenya from Independence to 2002 in
current dollars and constant dollars. There was a shrinkage of the amount of imports from U.K. during
this 40-year period at a yearly rate of $ 8.4 million constant U.S. dollars (base 1996) comparable to the
attrition rate of imports by Ghana from U.K. (9.4 million), for a level of imports of about the same at their
independence (700 million constant U.S. dollars base 1996).
Chart 16
Kenya: Imports from U.K. from 1963 to 2002
1200
1000
Value in U.S. Dollars
800
600
Constant Dollars
y = -9.3913x + 678.12
400
200
y = 7.1292x + 107.95
Current
Dollars
0
1
3
5
7
9
11
13
15
17
19
21
23
25
27
29
31
33
35
37
Years
B – High Rupture Intensity Factor’s Long Term Impact on Exports to U.K.
Chart 17 shows the evolution of exports from Kenya from 1963 to 2002, while chart 18 shows the
evolution of the Geographical Concentration Index during the same period.
Chart 17
Kenya: Exports to the U.K. from 1963 to 2002
500
450
400
Value in Million U.S. Dollars
350
Constant Dollars
300
y = 0.4946x + 243.91
250
200
150
Current Dollars
100
y = 6.8517x + 6.7441
50
0
1
2
3
4
5
6
7
8
9
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39
Years from Independence
The GCI index (chart 18) shrunk from 24% in 1963 to less than 15% in 2002 (mean attrition of the
geographical concentration index of 0.14% per year) Kenya is now the 63rd largest customer of the U.K.
and the 55th largest supplier of the U.K. Compare to Ghana’s GCI, the Kenya’s GCI has shrunk at a rate
three times slower than the one of Ghana. In spite of the rupture intensity factor, high for Kenya, this
country has today an economy more tied up to its former colonizer’s economy than Ghana (with a lower
initial GCI, but higher today GCI).
Chart 18
Kenya: Geographical Concentration Index from 1963 to 2002 (with U.K.)
0.30
Geographical Concentration Index
0.25
0.20
0.15
y = -0.0014x + 0.1847
0.10
0.05
0.00
1
2
3
4
5
6
7
8
9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39
Years
CONCLUSIONS
The violent or non–violent achievement of the political independence of former colonies from their
former masters does not appear to have any impact on the achievement of their economic independence.
The observed figures for Ghana and Kenya might even lead to the opposite conclusion! Kenya’s insurgency
against U.K. during ten years before the recognition of some political independence has not lead to a bigger
or faster rejection of the British buyers and sellers. The attrition rate of the international trade with U.K.
over a forty year period is a fact for all former British colonies, but appears not to be a dependent variable
of the rupture intensity factor.
LIST OF CHARTS
Chart 1: Ghana: Imports from U.K. from 1953 to 1957
Chart 2: Ghana: Imports from U.K. from 1958 to 1962
Chart 3: Ghana: Exports to U.K. from 1953 to 1957
Chart 4: Ghana/U.K. Geographical Concentration Index from 1953 to 1957
Chart 5: Ghana Exports to U.K. from 1958 to 1962
Chart 6: Ghana/U/K. Geographical Concentration Index from 1958 to 1962
Chart 7: Kenya: Imports from U.K. from 1959 to 1963
Chart 8: Kenya: Imports from U.K. from 1964 to 1968
Chart 9: Kenya: Exports to U.K. from 1959 to 1963
Chart 10: Kenya/U.K. Geographical Concentration Index from 1959 to 1963
Chart 11: Kenya: Exports to U.K. from1964 to 1968
Chart 12: Kenya/U.K. Geographical Concentration Index from 1964 to 1968
Chart 13: Ghana: Imports from U.K. from 1958 to 1997
Chart 14: Ghana Exports to U.K. from 1958 to 1997
Chart 15: Ghana/U.K. geographical Concentration Index from 1958 to 1997
Chart 16: Kenya: Imports from U.K. from 1963 to 2002
Chart 17: Kenya: Exports to U.K. from 1963 to 2002
Chart 18: Kenya/U.K. Geographical Concentration Index from 1963 to 2002
BIBLIOGRAPHY
Bureau of Economic Analysis. International Account Data 2002
Direction of Trade Statistics Yearbooks from 1952 to 2002 published by the International Monetary Fund.
Johny K. Johansson.
Global Marketing. Irwin editor 1997
Milhomme, Albert J. (2005). “Decolonization and International Trade: the Kenya Case.”
The Journal of
American Academy of Business, Cambridge, Vol. 6, Number 1, March 2005, p 164- 174.
Milhomme, Albert J. (2004). “Decolonization and International Trade: the Ghana Case.” The Journal of
American Academy of Business, Cambridge, Vol..5, Number 1, September 2004, p. 153-163.
National Science Foundation. Division of Science Resources Studies. Survey of Industrial research and
Development 1997
http://www/.ghana.gov
http://tradeport.org/ts/countries/ghana/tradex.html
http://www.kenyaembasy.com
http://www.cia.gov/cia/publications/factbook/geos/ke.html
http://reference.allrefer.com/encyclopedia/K/Kenya-history.html