Colonies Turned Creditors | OZY

Financial crises have prompted Spain and Portugal to go begging at the doorsteps of their former colonies.


As some former colonies become emerging markets, former conquerors are hoping for a little generosity to prop up their own shrinking economies.

Does the Empire strike back? 

In recent years, investors from Angola, former colony of Portugal, have bought significant chunks of Portuguese companies. Spanish officials are urging their counterparts in South and Latin America to come invest — never mind the conquest. And an exodus of bright young Portuguese is seeking opportunity abroad — often in erstwhile Portuguese colonies like Brazil, Angola and even East Timor. 

It’s a significant reversal from decades past, when former colonies went begging their former masters for investment, aid and trade preferences, while stomaching the brain drain of their best-educated graduates. Now the roles have reversed, at least in some quarters. Some former colonies have become emerging markets, logging fast rates of growth, while the erstwhile imperialists are scrambling to stay afloat in the global recession. 

Ties between former colonies and colonizers can run deep

Nowhere has the reversal been as dramatic as in Portugal and Angola. The former colonizer expects its economy will shrink 1.8 percent this year, while Angola, fat on diamonds and oil and Chinese love, grew nearly 12 percent annually from 2002 to 2011.

To be sure, the phenomenon is neither widespread nor particularly thoroughgoing. The Democratic Republic of Congo remains mired in terrible conflict, while its former overlord, Belgium, enjoys relative peace and absolute wealth. And for all the Indians snapping up real estate in the United Kingdom, hundreds of millions of Indians still struggle well below the poverty line. Angola’s riches, meanwhile, are concentrated among a handful of oligarchs, including the daughter of President Jose Eduardo dos Santos, who is worth some $3 billion. (She’s got a half-billion-dollar chunk of a Portuguese media company.) Moreover, the country’s relationship with Portugal got testy just last month, with dos Santos complaining that Europeans were casting aspersions on the ethics of Angolan investors.  

Color photo of man holding up diamond to the camera upclose.

A miner shows off an estimated 5- to 7-carat diamond.

Still, ties between former colonies and colonizers can run deep. Language often binds them well after independence, and colonial governance and education structures can set the template for independent countries’ own. Perhaps that’s what Spanish prime minister Mariano Rajoy was hoping for at a summit of leaders, when he touted Europe as a golden opportunity for South and Latin American investors. He urged they consider his country, from which 16th-century conquistadors launched the brutal subjugation of the New World by the Old, as a gateway for their capital.

“Spain receives Latin American investment with open arms,” he said, in an effort to stave off shrinkage: Spain expects its economy to contract by 1.3 percent this year.  

But nowhere are northern countries’ woes on better display than in the reversal of migration patterns. Migrants tend to vote with their feet. Since widespread decolonization in the mid-1950s, they’ve tended to stream from global south to global north, often to the imperial motherland. After India’s independence from Britain, for instance, Indians tended to immigrate to “Commonwealth” countries, for instance, while Haitians often went to Francophone ones like France, French-speaking Canada or Belgium, and Angolans headed for Portugal. 

The flow appears to be reversing — at least in Portugal and perhaps in other places. Since the start of the financial crisis in 2008, young Portuguese have been streaming not only to wealthier European countries but also to former Portuguese colonies like East TimorBrazil and Angola.

But nowhere are northern countries’ woes on better display than in the reversal of migration patterns.

The outflow is massive — 100,000 last year, or 1 percent of the population — and it’s only increased since the austerity measures that accompanied a $104 billion bailout. 

Moreover, unlike previous waves of Portuguese emigration, this one is a brain drain of Portugal’s best and brightest, and no wonder: Unemployment among young university graduates is above 37 percent, while the percentage of university educated 30- to 34-year-olds has doubled, to nearly a quarter, over the past decade. Similar patterns prevail in Greece and Spain, where overall unemployment is around 26 to 28 percent. 

There was a time, of course, when the colonies were a suitable place for a young European to make his wealth and name. This time, we expect, they’ll be coming in with CVs and reference letters, instead of with guns and whips.