Neo-colonialism and global agencies

In the context of the post-colonial world, numerous developing countries have operated under the assumption that the era of foreign domination has concluded.

However, the advent of globalisation and the increasing influence of multilateral institutions has given rise to a new form of control one that is not enforced through military presence or direct governance, but rather through economic dependency and institutional manipulation.

These global organisations have faced mounting criticism for operating in ways akin to modern-day colonial powers. These entities appear to subtly reshape the political and economic frameworks of developing nations, aligning them more closely with Western interests while often neglecting local requirements.

This manipulation, disguised as development and cooperation, carries significant implications for these countries, particularly for Pakistan. The challenges faced are not merely economic; they encompass broader issues of sovereignty and self-determination as nations strive to assert their identities and priorities in the face of external pressures. Global agencies frequently provide financial assistance or development programmes with specific conditions attached.

While these initiatives are presented as efforts for poverty alleviation, climate adaptation, or the enhancement of democratic governance, they often necessitate that recipient countries undertake significant economic restructuring, implement political institution reforms, or adopt foreign governance models. For example, aid packages from USAID have commonly included stipulations for the privatisation of public assets, the deregulation of markets and the adoption of Western-style governance. Although these conditions may serve the interests of Western investors and geopolitical strategies, they can exacerbate inequality, restrict local ownership and undermine national sovereignty.

According to a report from the Global Development Policy Center at Boston University, over 70 per cent of the aid extended by Western nations through agencies such as USAID is classified as "tied aid”, meaning that it must be utilised for the purchase of goods and services from donor countries, rather than permitting local procurement. This model tends to favour donor economies significantly more than recipient countries.

The IMF and the World Bank often collaborate with these agencies and similarly impose policy conditionalities in exchange for loans. Pakistan is a pertinent case study, having entered into over 20 agreements with the IMF since 1988, which consistently required stringent fiscal reforms, such as subsidy cuts, tax increases and austerity measures. These reforms have frequently resulted in spikes in inflation, reductions in social spending and public unrest.

As of 2024, Pakistan’s external debt was approximately $125 billion, with debt servicing accounting for over 60 per cent of its annual federal budget, according to the Ministry of Finance. The irony lies in the fact that while the ostensible aim of this assistance is to enhance governance and economic resilience, the actual outcomes frequently include increased dependency and weakened state institutions.

A critical area of influence exerted by international agencies is their control over global economic and governance rankings. Developing countries such as Pakistan frequently receive low rankings in indices such as the World Bank's now-defunct Ease of Doing Business Index and the European Union’s Generalized Scheme of Preferences (GSP+) human rights compliance reports. Although these rankings appear neutral on the surface, they play a significant role in influencing foreign investment decisions and access to international markets.

Pakistan's GSP+ status within the European Union, which provides preferential trade access to EU markets, is contingent upon compliance with 27 international conventions, which encompass labour laws, environmental policies and governance standards. While the objectives underlying these conventions are commendable, the implementation often undergoes selective scrutiny influenced by political motivations.

Despite advocating for free markets, Western agencies and governments frequently impose tariffs and non-tariff barriers that disproportionately disadvantage developing nations. Pakistan's textile industry, which accounts for nearly 60 per cent of the country's exports and employs millions, consistently faces pressure to adhere to labour and environmental standards imposed by the European Union and North America. Conversely, these same developed nations provide substantial subsidies to their agricultural and industrial sectors, thereby creating an imbalanced competitive environment.

According to the WTO, global subsidies from developed countries to their agricultural sectors surpass $500 billion annually, while developing nations are penalised for significantly smaller interventions. This double standard perpetuates the dependency and marginalisation of emerging economies.

Foreign aid frequently lacks political neutrality. USAID, for example, has a documented history of supporting political entities that align with US foreign policy objectives. Similarly, while the United Nations is primarily perceived as a neutral organization, it often aligns itself with the interests of powerful member states.

The cumulative impact of these influences contributes to a gradual erosion of policy sovereignty. Economic strategies, tax structures and social safety programs in Pakistan are frequently designed to meet the expectations of donors rather than reflect domestic priorities. Political reforms, including judicial restructuring and devolution policies, have often been shaped by foreign grants and technical assistance provided by Western institutions. This undermines the organic development of democratic and economic institutions, perpetuating a dependency cycle wherein subsequent governments may feel compelled to adopt foreign models to secure aid or avert sanctions.

In an evolving global order characterised by the rise of multipolarity, which includes the emergence of China, Russia and regional alliances such as BRICS, the dominance of Western-led institutions is increasingly challenged. However, this shift does not imply that manipulation will cease; rather, it may merely diversify.

Agencies such as USAID and the European Union are already adapting their narratives to focus on climate finance and digital infrastructure as new domains of influence. Although these objectives are critical, critics argue that, if not implemented equitably, they risk becoming a new form of "eco-colonialism”. Moreover, as digital governance becomes increasingly central to economic frameworks, countries like Pakistan may find themselves ensnared in a new technological dependency, one in which Western-backed cybersecurity frameworks, data regulations and artificial intelligence ethics dictate the evolution of their digital infrastructure.

To extricate themselves from this cycle, developing nations must enhance regional cooperation, invest in institutional resilience, and diversify their partnerships. For example, Pakistan could benefit from expanding trade relationships with neighbouring economies, negotiating more equitable terms with China through the China-Pakistan Economic Corridor (CPEC), and advocating for reforms within global institutions to increase representation and accountability.

Local civil society must also play an active role in scrutinising foreign aid, ensuring that development efforts prioritise the needs of the populace rather than being predominantly donor-driven. The path forward lies in fostering self-reliance not through the outright rejection of foreign assistance, but by recalibrating it to align with national priorities and cultural contexts.

The influence exerted by global agencies supported by Western powers in shaping national economic and political policies is undeniable. Often masked in the rhetoric of partnership and progress, this influence increasingly reflects the colonial strategies of the past utilising aid, rankings and access to markets as methods of control. For nations such as Pakistan, the challenge extends beyond merely resisting manipulation; it involves reclaiming the authority to define their own trajectories in an ever-evolving global landscape.

The writer is a trade facilitation expert working with the federal government

of Pakistan.