Legacy of colonialism and the economic development
One of the impacts of colonialism is in the development of trade and commerce between regions and countries that continue to be major factors in today’s economics.South Asia’s economy remains intimately connected to that of its colonizers, primarily with that of the United Kingdom’s.One of the key studies in the development of colonial to modern economics in the region is that of India (United Nations, 2003).
The British East India Company was instrumental in expanding and developing India’s economy at the beginning of the 17th century (Reddaway, 1962).
At the beginning, the Company had little leverage on the trade since India had little demand for the goods that it brought to the country but traders made lucrative profits in bringing Indian products to Europe. The commercial reforms reflected British policies and administration but also paved the way for the Indian traders and businesses who became significant in international commerce in the 18th century.
The development of the agrarian economy, which similarly is a focus of current development objective of India, became the main industry. The policies integrated to the Indian customs and thus it did not significantly change the economic structure of the country but it provided more ground for UK companies to be established in the country (Rothermund, 1993).
The shift in power developed through the India was effectively colonized by the crown, but the country’s economy remained closely linked with that of the UK (United Nations, 2003). The impact of such a relationship defied the prevalence of the US and Japan in Asian economics. One of the main reasons for the scenario is the degree by which social and cultural influences have been adopted by both countries. Support to UK companies and enterprises have been attributed to the number of Indian immigrants in the UK as well as of British citizens in India (Rothermund, 1991).
According to the assessment of the management firm, McKinsey & Company (2004), the history shared by India and the UK, both good and bad, has created long-term and successful partnerships that remain to be the critical factors with either country. The importance of economic systems and businesses established since the colonization of India is evident in the degree of confidence given to them in the country’s stock markets which have traditionally been conservative outside of the information technology industry (Levine & Zervos, 1996). Warren (1980) believes that countries that have a colonial history have adopted the capitalism that prevails in most of these countries today because imperialism has crated the economic and industrial foundations suited to capitalist economies.
Rothermund (1993) furthermore points out that beyond the business and economic structures, the influence of colonialism can also be seen in the standards, practices and market preferences of Indian businesses: majority of Indian business follow UK standards and prefer exporting to Europe than to the US, though McKinsey & Company (2004) qualifies such conditions maybe because of the China’s domination in US partnerships. Another indication of the influence of India’s colonial history is that most of its business leaders have been educated in the United Kingdom and the adoption of UK bases English to business communications.
In conclusion, the impact of India’s colonial experience is apparent in the economic and business structures that still serve as the main architectecture of its industries. The influence can also be seen in the preferences and treatment of UK and Indian businesses of each other in both countries. Another indication of this influence is the characteristics of its markets, investments and policies that are in place both as a response to the needs of existing industries but also because of the close social and political ties between the two countries.
Levine, R. and Zervos, S. (1996). Stock Market Development and Long-Run Growth. The World Economic Review, 10, p.323-339.
McKinsey & Company (2004). China and India: The Race to Growth. McKinsey Quarterly . Retrieved on June 7, 2007 from http://www.mckinseyquarterly.com/article_page.aspx?L2=19&L3=67&ar=1487&pagenum=1.
Reddaway, W.B. (1962). The Development of the Indian Economy. Homewood, IL: R.D. Irwin.
Rothermund, D. (1993) An Economic History of India: From Pre-Colonial Times to 1991. New York: Routledge.
United Nations (2003). Country fact sheet: India. World Investment Report 2003 FDI Policies for Development: National and International PerpectivesPerspectives. New York: United Nations Publications, E.03.II.D.8.
Warren, B. (1980). Imperialism: Pioneer of Capitalism. London: Verso Press.