Profitability of British Colonies in the Postwar World

[LoftonHenderson]

What British colonies were actually profitable in the postwar world? Obviously profits are not all direct — plenty of benefit to the metropole can be had via trade, resource extraction…etc. even if the state itself is making little revenue. But had the UK tried to decolonize “strategically” to benefit its ruined finances as much as possible after WW2, what colonies should it have tried to hold onto (whether it actually could have done so is another matter of course).

Hong Kong is an example of one they held on to as long as possible, I assume it was very profitable for them to hold that “gateway” into Chinese trade. Are there other examples of territories that would have been similarly beneficial to try to retain?

I’ve seen a lot of breakdowns of Imperial German colonial possessions and their profitability (or lack thereof) by 1914 – does anyone have similar numbers for British colonies in the 40s and beyond?

I’m not making any normative statements about colonialism here, just asking about profitability. I’ve heard that by the end “empire” was a financial drain on the metropole, but I've also heard that the UK's finances were thrown into turmoil by the loss of imperial trade revenues/end of the built-in commercial advantage British companies had in imperial territories – curious which of those hold up under scrutiny.

 

[Godot]

Thing is that most colonies were unprofitable even before the war - it's just that the destruction of the war, and the rebuilding/attention the homeland needed, made public patience for maintaining those money pits much more scarce.

It's tricky because if you pay some heed to Leninist conceptions of imperialism, the conquest of territories abroad was a matter of expanding markets and forestalling the trend of profits to reach zero in a single market, which of course would lead to economic hardship and eventually revolution. Thinking like that the colonies were valuable economic markets but the benefits were largely experienced by private companies rather than the actual royal coffers. Thus, neo-imperialism, and tight economic control over countries you no longer need to actually maintain and garrison.

 

[LoftonHenderson]

Thing is that most colonies were unprofitable even before the war - it's just that the destruction of the war, and the rebuilding/attention the homeland needed, made public patience for maintaining those money pits much more scarce.

But which colonies were still profitable in the 30s then in that case? (Not necessarily for the British state, but for the British economy as a whole)

 

[BlueTrousers]

IIRC, the only British colony that was really profitable in the 1950s was Malaya. Once Malaya went, the entire logic of what was left of the British Empire collapsed like a house of cards.

All the schemes (groundnuts, coffee) to develop industry in African colonies were desperate attempts to get them to pay for themselves. None of them worked out quickly enough, and decolonisation became preferable for diplomatic and economic reasons.

 

[Godot]

But which colonies were still profitable in the 30s then in that case? (Not necessarily for the British state, but for the British economy as a whole)

Yeah as said by @BlueTrousers I believe Malaya was the only colony actually in the green, a pattern pretty common across all the European empires. I recall reading, though I can't recall from where, that the only colony of the German Empire before WW1 was Togo.

However I do think colonies like Hong Kong and Singapore, small trade port style zones, tended to be pretty cheap with major trade benefits, even if they didn't make much sense to maintain once the whole mercantile empire schtick fell to the Yanks.

 

[LoftonHenderson]

Interesting! Thank you both Yes that about tracks with what I thought. Malayan rubber was lucrative. I assume some of the oil colonies were profitable too. And those small trade hubs like Singapore and Hong Kong as well, although I guess without the rest of the empire those trade hubs are probably less useful, like you said.

Africa was generally a money-sink from what I understand, although does anyone know anything about resource extraction revenues/trade? I wonder if Britain would have been better served trying to keep hold of Malta, Mombasa, Singapore, and Hong Kong as trade hubs to serve an indirect commercial empire in adjacent territories. That and maybe do more to keep Malaya/the Gulf States in the exclusive sphere of interest for those resource benefits.

 

[Godot]

Interesting! Thank you both Yes that about tracks with what I thought. Malayan rubber was lucrative. I assume some of the oil colonies were profitable too. And those small trade hubs like Singapore and Hong Kong as well, although I guess without the rest of the empire those trade hubs are probably less useful, like you said.

Africa was generally a money-sink from what I understand, although does anyone know anything about resource extraction revenues/trade? I wonder if Britain would have been better served trying to keep hold of Malta, Mombasa, Singapore, and Hong Kong as trade hubs to serve an indirect commercial empire in adjacent territories. That and maybe do more to keep Malaya/the Gulf States in the exclusive sphere of interest for those resource benefits.

Well, Malta did seriously consider integration with the UK proper.

For the rest, you'd need pretty serious legwork done to disentangle those trade port types from the countries they're adjacent to. Can't hold Mombasa if there's any sort of Mau Mau uprising, can't hold Singapore as long as the Malaya Emergency looms, can't hold HK if China is ascendant, etc. As long as those anticolonial circumstances make some sort of negotiated cession necessary, maintaining those outposts becomes very difficult. Really, it's a bit of an exception that places such as Gibraltar and the Falklands weren't turned over to the countries they're adjacent to, very much a product of historical circumstance.

The easiest way to maintain that sphere is probably to butterfly the Suez crisis away, though that was more a symptom than a complete cause of the chance in outlook from London. Rather think that the Suez crisis was more of a final confirmation of the change in circumstances for Britain than the inciting incident, though it's debatable I guess.

Ultimately the issue you run into is that even with those resource benefits it's undeniably more economically efficient to fall in behind the US and Marshall Plan and ultimately look to Europe for trade.

 

[focus9912]

Yeah as said by @BlueTrousers I believe Malaya was the only colony actually in the green, a pattern pretty common across all the European empires.

Well...as a Malaysian myself...I kinda doubt myself (and think the losses incurred during the Emergency is actually putting it in the red)...but I read further...and lo and behold...there is another thing unique to Malaya...which was the fact that the government did not nationalized the British-owned industries...
and the return of investment to the British stockholders is arguably better during the post-colonial period (up until the inevitable "nationalization" during the 1980s anyway than during the colonial period.

Perhaps what would be better if rather than holding on to the territories....it would be better for them to release those colonies, but still holding on to the ownership of the resources inside the ex-colonies...

 

[BlueTrousers]

I assume some of the oil colonies were profitable too.

The Persian Gulf states presumably were profitable, but weren't considered by the UK to be colonies, but rather independent states under the protection of the UK by bilateral agreement. For the residents thereof, this may well have been an academic distinction.

An interesting possibility, IMO, is for the UK to agree to a 50/50 share of Iranian oil profits in 1950-1951. This was actually proposed by Iran, but rejected by the UK until it was too late to avoid nationalisation. The outcome was the UK-led coup in 1953, the newly-renamed BP getting only 20% of Iranian oil profits, a permanent weakening of the UK's stance in the Middle East, and a permanent weakening of the Shah's position in Iran.

For the rest, you'd need pretty serious legwork done to disentangle those trade port types from the countries they're adjacent to.

You can look at Aden as an example of this. Losing Aden seriously dislocated UK strategy in East Africa and the Middle East. If disentangling the port city from its hinterland was feasible, it would probably have been done. And in a lot of less-developed countries, the trade ports have been developed for resource extraction by foreign powers. So, by controlling the trade port you effectively control the country, whether it has nominal independence or not. This wouldn't be tolerable by (e.g.) Kenya, and would be transparent to the international community.

The route by which Singapore became independent is... complex, and tied up in Cold War geopolitics. Retaining it seems unlikely in any event.

Ultimately the issue you run into is that even with those resource benefits it's undeniably more economically efficient to fall in behind the US and Marshall Plan and ultimately look to Europe for trade.

The issue with that (necessary and inevitable) change is that the UK economy was built on cheap imported food from the Empire. Arguably, it has never recovered from abandoning that system, which was one of the factors contributing to dissatisfaction with UK membership of the EEC, and later EU.

 

[paperclipknight]

Realistically once India (& to a lesser extent Malaya) the entire enterprise of Empire was untenable. However with that being said I can see a world where Malta, Singapore, Suez (if we called the US bluff) are kept for strategic reasons & more of the Caribbean colonies are kept after the failiure of the West Indies federation

Of other places mentioned as “trade ports” I don’t particularly see the feasibility of Aden being retained as a sort of Anglo-Djibouti given the armed resistance that occurred during the 50s/60s. Mombasa however is an interesting idea that could be plausible if Britain intended to continue to use Africa as its breadbasket, becoming a Goa like enclave in east Africa where grain & animal produce are exported - but imo its only going to happen if somewhere along the line it’s separate from Kenya in the same way Singapore is from Malaya - perhaps the nominal treaty of coastal land leased from the Sultan of Zanzibar is invoked as being separate to the colony to Kenya, & in the negotiations for Kenyan independence Mombasa is “retained” by the British over the rest of the coast

One place that hasn’t been mentioned is Guyana, somewhere which could easily be retained in the same way France does French Guiana if one of the following occurs:

1) Guyanese oil/gas reserves are discovered in the late 50’s/early 60’s - & it becomes a Caribbean version of north sea oil propping up the economy

2) Prior to the independence vote, Venezuela invades the Essequibo region & are defeated by a mixed force of British regulars. Concern about the risk of future invasion without British support causes a postponed vote to go in favour of maintaining British rule

I might actually write a timeline where some of these are kept actually. Some interesting butterflies could occur - though I suspect it’ll just be another cold-war timeline where Britain doesn’t consistently make the wrong decision at every hurdle

Regardless the retention of any of the colonies mentioned wholly reliant on a precedent set (likely by Malta who actually voted in favour of integrating into the UK in 1956) of joining the UK in a similar way to how France operates her “overseas departments”

 

[focus9912]

Realistically once India (& to a lesser extent Malaya) the entire enterprise of Empire was untenable. However with that being said I can see a world where Malta, Singapore, Suez (if we called the US bluff) are kept for strategic reasons & more of the Caribbean colonies are kept after the failiure of the West Indies federation


Regardless the retention of any of the colonies mentioned wholly reliant on a precedent set (likely by Malta who actually voted in favour of integrating into the UK in 1956) of joining the UK in a similar way to how France operates her “overseas departments”

Err....well...@Devvy is writing a (well, the second version of the) TL that basically covering this scenario...and currently (SPOILERS AHEAD) he had reached the point where the West Indies had been integrated, but before the Falklands conflict...

 

[BlueTrousers]

Of other places mentioned as “trade ports” I don’t particularly see the feasibility of Aden being retained as a sort of Anglo-Djibouti given the armed resistance that occurred during the 50s/60s. Mombasa however is an interesting idea that could be plausible if Britain intended to continue to use Africa as its breadbasket, becoming a Goa like enclave in east Africa where grain & animal produce are exported - but imo its only going to happen if somewhere along the line it’s separate from Kenya in the same way Singapore is from Malaya - perhaps the nominal treaty of coastal land leased from the Sultan of Zanzibar is invoked as being separate to the colony to Kenya, & in the negotiations for Kenyan independence Mombasa is “retained” by the British over the rest of the coast

I did wonder about Zanzibar remaining as a protectorate, but I think the most that can be expected from the UK's point of view is that it's held a little longer, facilitating a transition to a more stable form of governance, Zanzibar remaining independent of Tanganyika, and favourable a Anglo-Zanzibari relations.

 

[LoftonHenderson]

Some really great answers here.

Interesting about Africa being a breadbasket – how much of the African colonial exports were staple crops? I'd always thought the African colonies were more used for mineral wealth and luxury crops like tobacco

 

[paperclipknight]

Err....well...@Devvy is writing a (well, the second version of the) TL that basically covering this scenario...and currently (SPOILERS AHEAD) he had reached the point where the West Indies had been integrated, but before the Falklands conflict...

Now that is something I would read! Thanks for the heads up I’ll add it to my watchlist.

I did wonder about Zanzibar remaining as a protectorate, but I think the most that can be expected from the UK's point of view is that it's held a little longer, facilitating a transition to a more stable form of governance, Zanzibar remaining independent of Tanganyika, and favourable a Anglo-Zanzibari relations.

Hadn’t thought about Zanzibar tbh. Probably more likely than handwaving the keeping of Mombasa based on a technicality - would obviously depend on whether the sultan of Zanzibar actually wanted independence - without doing heeps of research as I’m currently working - from what I can tell is that the ending of the protectorate was unilateral so there’s definitely a basis of it being extended - for how long I don’t know however.

 

[BlueTrousers]

Hadn’t thought about Zanzibar tbh. Probably more likely than handwaving the keeping of Mombasa based on a technicality - would obviously depend on whether the sultan of Zanzibar actually wanted independence - without doing heeps of research as I’m currently working - from what I can tell is that the ending of the protectorate was unilateral so there’s definitely a basis of it being extended - for how long I don’t know however.

It looks like the Arab Nationalist Party, representing the Arab elite, wanted independence ASAP, while the Afro-Shirazi party, representing the African majority, wanted a longer period of British rule to secure their position before independence. The UK didn't seem to think much of either, describing the Arabs as extremists and the Africans as inept, but recognised that the situation was broadly:

• Elections would lead to bloodshed
• A stable coalition government without elections therefore was a necessary precondition for independence
• Without independence, there would be bloodshed.

I could imagine continued UK rule in Zanzibar looking a little like a second Aden, fighting an ongoing insurgency to maintain their position until that became untenable.

Interestingly, while I've dismissed the idea of Zanzibar retaining the Kenyan coastal strip, the UK wasn't quite so sure. Keeping the Mombasa coastal strip attached to Zanzibar, with the whole lot under British rule, was considered as an option in 1959. Unfortunately the BDEEP project (which is excellent for this sort of discussion, though sometimes uncomfortable) doesn't have the paper dealing specifically with Zanzibar, which would be quite illuminating.

It does seem, though, that Zanzibar was seen as the kind of place one might intervene, rather than the kind of place one might intervene from.

 

[Jürgen]

The problem is that a colony could easily be a money pit for the government, but private actors made massive amount of money on them and paid more than the loss back in taxes. It’s hard to measure such thing. I think the “collapse” in British manufacturing after the War do indicate that the empire was indirect profitable.

But if I had to downscale the British Empire, I think that limit the empire to the Dominions, Malaysia, the Persian Gulf possessions, Hong Kong, Malta, Singapore, Aden and the Suez would makes the most sense and be the most viable. I would try to get rid of most of Africa in as painless way possible and try to keep an informal empire around. There’s no way that India and Pakistan would not have broken off from British influence, so don’t try to keep influence there and don’t let them be part of the Commonwealth [1]

[1] The Commonwealth should only be made up by states which was part of the empire or the informal empire.

 

[paperclipknight]

It looks like the Arab Nationalist Party, representing the Arab elite, wanted independence ASAP, while the Afro-Shirazi party, representing the African majority, wanted a longer period of British rule to secure their position before independence. The UK didn't seem to think much of either, describing the Arabs as extremists and the Africans as inept, but recognised that the situation was broadly:

• Elections would lead to bloodshed
• A stable coalition government without elections therefore was a necessary precondition for independence
• Without independence, there would be bloodshed.

I could imagine continued UK rule in Zanzibar looking a little like a second Aden, fighting an ongoing insurgency to maintain their position until that became untenable.

Interestingly, while I've dismissed the idea of Zanzibar retaining the Kenyan coastal strip, the UK wasn't quite so sure. Keeping the Mombasa coastal strip attached to Zanzibar, with the whole lot under British rule, was considered as an option in 1959. Unfortunately the BDEEP project (which is excellent for this sort of discussion, though sometimes uncomfortable) doesn't have the paper dealing specifically with Zanzibar, which would be quite illuminating.

It does seem, though, that Zanzibar was seen as the kind of place one might intervene, rather than the kind of place one might intervene from.

That’s really interesting & explains the Zanzibari revolution almost immediately after independence - in theory this could be a reason for an extension of the protectorate until such a point a stable coalition government could be formed. Albeit only leading to another Aden situation, until the British garrison pulls out some time in the 70’s in an ATL version of the Mason Review.

I’ll have a look at the Hansard archive to see if I can find anything in regards to parliamentary debate regarding the Mombasa strip being retained as part of Zanzibar over being given to the nascent Kenyan state. Would be interesting to see the rational behind it.

If kept as part if the protectorate was more than a passing comment there’s definitely some weight behind Mombasa being kept as British territory after the end of the protectorate. If I were to write a TL (which I have been meaning to do at some point) I’d go down the route of Britain assuming direct governance over the strip due to the deteriorating situation on Zanzibar itself, then keep it as & when the protectorate itself is ended on grounds of “we’ve been running it as a BOT for the last 10 years, let’s make it official”

 

[paperclipknight]

The problem is that a colony could easily be a money pit for the government, but private actors made massive amount of money on them and paid more than the loss back in taxes. It’s hard to measure such thing. I think the “collapse” in British manufacturing after the War do indicate that the empire was indirect profitable.

But if I had to downscale the British Empire, I think that limit the empire to the Dominions, Malaysia, the Persian Gulf possessions, Hong Kong, Malta, Singapore, Aden and the Suez would makes the most sense and be the most viable. I would try to get rid of most of Africa in as painless way possible and try to keep an informal empire around. There’s no way that India and Pakistan would not have broken off from British influence, so don’t try to keep influence there and don’t let them be part of the Commonwealth [1]

[1] The Commonwealth should only be made up by states which was part of the empire or the informal empire.

Realistically the dominions were already independent & I think Malaya & the African colonies were always destined to go the same way. A rump empire at its largest is only ever going to consist of UK, Guyana (a la French Guiana) & the West Indies, Malta, the Mombasa strip, Suez, Singapore & HK.

The Persian gulf protectorates are always an interesting one because we were actually requested to maintain a garrison there by one of the rulers (I can’t remember which off the top of my head unfortunately) which they would fund - it was declined as part of the Mason review iirc, a mistake either way.

An informal empire could work, but it would require the commonwealth being set up like a proto EU, & is my preferred of the many “Imperial Federation” that ideas float around periodically.

Theres always the question of the Raj being balkanised on independence forming a subcontinent of smaller countries - Bengal, the republics of Hyderabad & Kashmir etc. Perhaps as a means for Britain to maintain more influence over the region - similar to France & Francophone Africa. Could lead to some very interesting butterflies

 

[paperclipknight]

It looks like the Arab Nationalist Party, representing the Arab elite, wanted independence ASAP, while the Afro-Shirazi party, representing the African majority, wanted a longer period of British rule to secure their position before independence. The UK didn't seem to think much of either, describing the Arabs as extremists and the Africans as inept, but recognised that the situation was broadly:

• Elections would lead to bloodshed
• A stable coalition government without elections therefore was a necessary precondition for independence
• Without independence, there would be bloodshed.

I could imagine continued UK rule in Zanzibar looking a little like a second Aden, fighting an ongoing insurgency to maintain their position until that became untenable.

Interestingly, while I've dismissed the idea of Zanzibar retaining the Kenyan coastal strip, the UK wasn't quite so sure. Keeping the Mombasa coastal strip attached to Zanzibar, with the whole lot under British rule, was considered as an option in 1959. Unfortunately the BDEEP project (which is excellent for this sort of discussion, though sometimes uncomfortable) doesn't have the paper dealing specifically with Zanzibar, which would be quite illuminating.

It does seem, though, that Zanzibar was seen as the kind of place one might intervene, rather than the kind of place one might intervene from.

So after a little research on the Hansard directory I can only find two mentions of the ‘Mombasa coastal strip’ around the timeframe of relevance which I’ll link below.

The first being in 1958, where the ‘Secretary of State for the Colonies’ is asked under which pretext the government of Kenya (presumably post independence) could lease it from the sultan. Which was rebutted with a firm “we administer it as per the treaty”. There is also mention of Kenyan annexation of the land if it isn’t given to them. Presumably this is what you were referring to earlier.

https://hansard.parliament.uk/commo...21-46f0-ba58-3a8699f7d5f7/CoastalStrip(Lease)

The second which is more relevant to our discussions, and debated in 1963, was the status of Kenya assuming control of the strip upon independence which had been agreed by the British government & the Sultan of Zanzibar sometime during 1962.

https://hansard.parliament.uk/Commo...denceBill?highlight="have it in command from"

Given a scenario where if had been made clear to the Sultan that the protectorate would continue there’s a possibility in where the conversation in 1962 results in a different outcome & it remains Zanzibari territory post Kenyan independence subsequently allowing for BOT territory status of the protectorate ends.

With relation to the aforementioned threat of annexation by Kenya, could we see a minor Anglo-Kenyan conflict over the strip? Ark dispatched alongside a commando carrier sent out to reinforce the garrison

 

[Father Maryland]

I kind of like the idea of Sarawak remaining independent as a semi protectorate of Britain under the last Brookes claimant. Allowing it to become a crown colony seems a mistake in hindsight.