Western Hemisphere: The Economics Of Vestigial Colonialism 1971
The Netherlands’ Territories
Introduction
The Western Hemisphere retains the largest number of remnants of European colonial empires of any major geographic area. Their number poses the question of what economic and other factors are operating to bind them to their mother countries – the United Kingdom, the Netherlands, and France – and delay their independence. In contrast, many former European possessions in Africa and Asia have become sovereign states since World War II.
This memorandum examines the economic characteristics of Europe’s Western Hemisphere possessions and their relations with the mother country. It also assesses their recent economic trends and outlook, as well as other factors affecting their prospects for gaining independence during the next several years.
Discussion
Europe and Its Western Hemisphere Possessions
The present-day remnants of Europe’s once-great colonial empires in the Western Hemisphere embrace a total land area of some 111,000 square miles – about the size of Arizona — and a population of 2.3 million persons, mostly black or mulatto. They are characterized by narrow resource bases, tiny markets, and heavy dependence on imports. Moreover, there are strong population pressures in the case of the islands, which account for 75% of the population but only 10% of the land area.
The possessions contribute little economically to their mother countries, and many of them have become financial burdens. They are neither important sources of raw materials nor significant markets for manufactures. European direct investments in them – and thus profit remittances – are generally small. The more prosperous British and Dutch territories are more closely oriented economically to the United States than to Europe. At the same time, most of the territories are dependent on economic aid from their mother countries for infrastructure development and also need budget support to help provide educational and other services.
The Netherlands’ Territories
The Netherlands’ possessions – Surinam (formerly Dutch Guiana) on the South American mainland and the Netherlands Antilles – are, along with the Bahamas and Bermuda, the most important economically of Europe’s possessions in the Hemisphere.
Surinam is a major source of bauxite, and Curaçao and Aruba have sizable petroleum refineries established during 1915-28 by Royal Dutch Shell and Standard Oil of New Jersey to process Venezuelan crude oil. Like the British dependencies, the Netherlands’ territories have full autonomy in domestic affairs, but they retain greater economic and political ties to the mother country. Only about 5% of their population is of European origin.
Although Dutch private investments – primarily in petroleum refining – are sizable and rising, they are still smaller than US investments.
Much of Surinam’s bauxite is mined and processed by US firms, mainly for shipment to the United States and Canada. The United States supplies some 47% of Surinam’s imports, compared with a European share of 36% (and a Dutch share of 20%). Similarly, almost all Netherlands Antilles imports (excluding crude oil) come from the United States, and oil exports, largely frozen out of Europe by cheaper Middle Eastern supplies, go mostly to the United States.
Dutch aid to the Western Hemisphere territories averaged about $27 million annually during 1967-69, a fraction of The Hague’s total foreign aid outlays. About 60% goes to the Netherlands Antilles, about half as grants and half as long-term loans; this aid is used mostly for infrastructure development. The remainder, consisting primarily of grants, goes to Surinam – mainly for investments in infrastructure, although an increasing share has been allocated for supporting current outlays in the last 2-3 years.
Since 1965, Dutch aid to the two territories has been supplemented by small grants from the European Development Fund (EDF) by virtue of their status as associate members of the European Community.
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