Imagine a world where the wealthiest 1% own nearly half of all assets, and billions subsist on less than $2 a day.

This is not a dystopian novel; it’s our 2025 reality. The roots of such staggering inequality are far in the past, in the colonial era when empires plundered Africa, Asia,  and the Americas for resources and labor to build their riches.

Oxfam defines colonialism as “the period of formal occupation and domination by rich countries that largely came to an end with the national liberation struggles waged in the decades after World War II.” Those historic burglaries still echo today, dictating everything from access to healthcare to opportunities for education, and ensnaring entire countries in poverty cycles.

Many castles, railroads, farms, and plantations that the imperial nations benefited from were built on the labor of generations of slaves, who endured disease, death, and torture. It might be said that the foundation of the northern hemisphere’s welfare and prosperity is on the plundering of the global south.

The Unearned Nature of the Wealth

Oxfam’s report, Takers, Not Makers, argues that the “unearned nature” of the wealth of the ultra-rich can be traced back to colonialism. “Between 1765 and 1900, UK drained $64.82 trillion from India, with $33.8 trillion going to the top 10%…, enough to carpet London in £50 notes almost four times over, and over USD 17 trillion to just 1% of the UK population” Oxfam calls this wealth as “taken,” not ‘earned’ as it is either from “inheritance, cronyism or monopoly power”.

The colonial era is not over and has continued in the form of “neocolonialism,” with the Global North extracting wealth from the Global South, funneling $30 million each hour to the Northern richest 1% (Hickel, 2020). During the years 1995-2015, $242 trillion (in 2010 US$) was extracted by this system, driven by multinational corporations (MNCs) dominating global supply chains, exploiting cheap labor and raw materials in global value chains (Hickel, 2017).

What Is Neo-Colonialism Exactly?

This system widens hemispheric and even Northern disparities, with the wealthiest 1% prospering and the rest lagging. As Hickel observes, in 2020, the Global South remitted $1.2 trillion in debt servicing to Northern creditors, bleeding their economies even more (Hickel, 2020).

Neocolonialism relies on unfair trade structures, with MNCs repatriating profits to rich Northerners and impoverishing Southern nations. For example, Chang highlights how mining companies in Africa earn billions annually, yet the local communities get minimal returns (Chang, 2010).

Neocolonialism, as opposed to colonialism, does not use slave labor on farms but exploits cheap labor from the Global South to extract natural resources and maintain economic disparity (Chang, 2010). In doing so, the system ensures the perpetual flow of wealth from the Global South to the Global North, exacerbating global disparities (Hickel, 2017).

Does Colonialism Affect Health Services?

Apart from enriching the North and impoverishing the South, colonialism had other significant impacts. Traces of colonial inequality and injustice can be found in health, education, the economy, and the environment.
The poor in developing countries (the Global South) don’t receive cheaper healthcare services. The rich Northern multinational companies, called development finance institutions (DFIs), funded by wealthy countries like the UK, France, and Germany, use public money to invest in the private healthcare systems, hoping to extract even more money from the already impoverished global South. Not to forget the scars of the Pandemic and the devastating effect it had as the “unpayable debts, lower wages and far higher food prices, making day-to-day life a struggle for billions of people”.

The World Health Organization (WHO) reports that colonial powers’ decades-long underinvestment continues to cripple healthcare systems today. To quote one example, life expectancy in sub-Saharan Africa is just 61 years, compared to 78 years in wealthy nations, largely because of public health infrastructure abandonment.

Lethargic healthcare systems are unable to deal with pandemics, crises, or shortages. As noted by researcher Paul Farmer, during the 2014 Ebola outbreak, Sierra Leone and Liberia had a mere 0.2 physicians per 10,000 individuals.

What About the Education System?

The education system, too, “bears the marks of and sustains the colonial legacy of inequality”. The Southern education system is dominated by Western knowledge and language. The education system of the colonized lands, as UNESCO reports, served the local elites and left the “mass education underdeveloped”. Furthermore, as if to ensure the continuity of this dominance, the ruling class in these countries is mostly educated in the universities of the developed countries.

According to Oxfam, in 2017, about “39% of heads of state globally were educated in universities in the UK, USA or France”. UNESCO reports that  “today, 60% of children in low-income countries fail to achieve basic reading and math proficiency by the end of primary school”. And as Altbach & Gail note, in sub-Saharan Africa, only 42% of children were enrolled in secondary school in 2022, the lowest rate globally. They attribute this to the “colonial underinvestment in education infrastructure and teacher training.”

Living in an Unequal Geography

The persistent economic disparity between the global North and the global South is another consequence of the colonial era. The extraction of resources and the exploitation of labor from the already impoverished Global South have had a detrimental effect on the world that continues to this day. As Hickel explains, “The richest 1% of the global population owns nearly half of the world’s wealth, while billions in the Global South live on less than $2 per day.”

Picketty’s argument posits that the historical legacy of colonialism, marked by an imbalanced trade system, has contributed to the ongoing challenges faced by the Global South, characterized by persistent debt and underinvestment. The extraction of raw materials from colonies was a critical component of the trade system, serving to fuel the industrial growth of Europe, while locking the low- and middle-income countries into low-value markets, since about 70% of Global South exports are raw materials (UNCTAD, 2023).

Consequently, while the South’s rich lands have brought prosperity to the North, it has done little to its people; since as Oxfam says, “despite contributing 90% of the labor that derives from the global economy, workers in the low- and middle-income countries receive only 21% of global income.” The price of economic prosperity in Europe was the growing poverty in the colonized countries and their subsequent relegation to a state of subjugation.

The Great Divergence

Pomeranz claims that “between 1500 and 1800, roughly 85 percent of global GDP growth occurred in Europe, largely due to colonial exploitation. The extraction of silver, spices, and labor from the Americas and Asia created a ‘great divergence’ in wealth between the West and the rest.” For instance, in India, where the British ruled for centuries, as Rodney says, “colonial policies deindustrialized the textile sector, reducing India’s share of world GDP from 23% in 1700 to 4% by 1947. This economic drain funded Britain’s industrialization while impoverishing the subcontinent.”

The colonizers also played a role in creating ethnic tensions in the colonized territories. Acemoglu et al. say that “colonial powers drew arbitrary borders, often ignoring ethnic and cultural realities, which sowed seeds for conflict and instability in Africa and Asia, further entrenching economic inequality.”  For instance, the Rwandan genocide of 1994 is an example of how colonial history can lead to conflict between ethnic groups.

Under Belgian colonialism, Rwanda was divided by Belgium into Hutus and Tutsis, who were pitted against each other. This past polarization helped lead to the horrific violence that led to the massacre of about 800,000 Tutsis and moderate Hutus(Laws Learned, n.d.). In India, the British “divide and rule” policy produced the communal tension between Hindus and Muslims to “maintain colonial control”( Tharoor, 2017)

But besides its effects on the social and economic situation, colonialism has also had a lasting impact on the environment. Exploiting resources and plundering land have had everlasting effects on the environment.

Oxfam report argues that “most of the environmental and climate-related problems the world is facing today, stem from policies practiced during colonial times”. And Hickel believes that deforestation of the Amazon and Congo Basin is the legacy of the colonial era. The ominous event that has led to the climate change that mostly affects the Global South, “where countries emit only 10% of global CO2, yet face the worst climate impacts.”

Conclusion

Amending centuries of exploitation is not possible, but the least the developed nations can do is to cancel the debts of Global South countries, that is consuming most of the budget that should be channeled to health, education, and public services (Stiglitz, 2002). Rodney believes that to make up for the damage, the Global North must consider steps as “financial transfers and technology sharing… to redress historical injustices and reduce inequality”.

But all these steps would be insufficient if we ignore the significance of taxing the rich. As Picketty says, “progressive taxation, including wealth taxes on the richest 1%, could generate $1.7 trillion annually, enough to fund universal healthcare and education in low-income countries”.

References

1. Acemoglu, Daron, and James A. Robinson. Why Nations Fail: The Origins of Power, Prosperity, and Poverty. Crown Business, 2012.
2. Altbach, Philip G., and Gail P. Kelly. Education and Colonialism. Longman, 1978.
3. Chang, Ha-Joon. Kicking Away the Ladder: Development Strategy in Historical Perspective. Anthem Press, 2002.
4. Farmer, Paul. Pathologies of Power: Health, Human Rights, and the New War on the Poor. U of California P, 2004.
5. Hickel, Jason. The Divide: A Brief Guide to Global Inequality and Its Solutions. Windmill Books, 2018.
6. International Labour Organization. Global Wage Report 2022–23: The Impact of Inflation and COVID-19 on Wages and Purchasing Power. ILO, 2022.
7. Laws Learned. The Impact of Colonialism on Genocide. Laws Learned, n.d., 2024.
8. Oxfam International. Takers Not Makers: The Unjust Poverty and Unearned Wealth of Colonialism. Oxfam, 2025.
9. Piketty, Thomas. Capital in the 21st Century. Harvard UP, 2014.
10. Pomeranz, Kenneth. The Great Divergence: China, Europe, and the Making of the Modern World Economy. Princeton UP, 2000.
11. Rodney, Walter. How Europe Underdeveloped Africa. Verso Books, 2018.
12. Stiglitz, Joseph E. Globalization and Its Discontents. W.W. Norton, 2002.
13. Tharoor, Shashi. Inglorious Empire: What the British Did to India. Hurst Publishers, 2017.
14. United Nations Conference on Trade and Development. Trade and Development Report 2023: Growth, Debt and Climate. UNCTAD, 2023.
15. UNESCO. Global Education Monitoring Report 2023: Technology in Education. UNESCO, 2023.
16. World Health Organization. World Health Statistics 2023: Monitoring Health for the SDGs. WHO, 2023.