Economic Reasons for decolonisation

Economic reasons from 1870-1980


1870 - start of our period

Britain - Greatest Industrial Power

75% of british investment in America's while 6% of british investment was in Africa

Britain mainly trading outside empire and backed a free trade policy

Economic Threat from Germany, France and USA developed due to industrialisation

West Africa - Threat to British trade (Contains Cocoa and Palm Oil)

Led to colonisation of West Africa including these places

South Africa - Gold & Diamonds

India - Profitable cotton & Jute, cheap raw materials, cheap food stuffs to come to britain which equals low wages.

Malaya - Rubber production, cheap raw materials

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1902 - Boer War

No significant change as a result of the Boer War.

Joseph Chamberlain wanted imperial protection but was rejected

Suez Canal - Vital economic link as it was the route to india.

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1918 - End of WW1

UK in debt to USA

Some colonies formed other trading relations during war - e.g. Canada with USA

With economic diffculties of 1929 - Great depression - britain introduced protectionism

India - Nationalist movement leads to a boycott of british goods which reduces profits from trade with India

Britain buying more from india then selling to India

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1945 - End of WW2

Main Turning Point

Britain in greater debt to USA

Britain forced into giving their biggest economic rival, the USA, access to it's imperial markets to pay the debt in Dollars.

Some colonies looked away from Britain for trade due to ww2 - e.g. Australia

Colonies too expensive - not making enough money + cost of troops : Results in decolonisation of India.

In africa - Colonial Development Corporation - Groundnut scheme - tried to make more money but actually lead to failure, increases resentment and leads to nationalism.

Making money from the Gold Coast - Cocoa sold to the USA - gaining dollars to repay the debt.

Malaya - Rubber Plantations - rubber sold to USA for tyres to make dollars to pay the debt.

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1956 - Suez Canal crisis

USA block IMF (International Monetary Fund) to Britain to stop them taking colonial action against Egypt (Nasser)

This shows economic weakness of Britain

Macmillians cost benefit analysis - not cost effective to keep colonies in Africa because of cost to run colonies and to look after troops.

Instead, give independance, keep good relations and get neo-colonial profits instead

Britain started to look to Europe for trade links

1973- Britain joined the ECC (European Economic Community)

Still have neo-colonial links such as cocoa from Ghana

Hong Kong- economically profitable as it was the trade hub for the far east

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