Economic and Social Impacts of Imperialism in Indochina

27.4.3: Economic and Social Impacts of Imperialism in Indochina

As French Indochina was the colony of financial exploitation, economic and social development in the region aimed to benefit the French and a small group of local wealthy elites, with limited investments to produce immediate returns rather than long-term benefits for the local populations.

Learning Objective

Explain how French imperialism affected the people of Indochina

Key Points

  • The Vietnamese, Lao, and Khmer ethnic groups formed the majority of their respective colony’s populations. According to a 1913 estimate, around 95% of French Indochina’s population was rural and urbanization grew slowly over the course of French rule. French was the principal language of education, government, trade, and media, widespread among urban and semi-urban populations and the elite and educated. Local populations still largely spoke their native languages.
  • French Indochina was designated as a colonie d’exploitation (colony of economic exploitation) by the French government, but both exploitation and economic development differed significantly across the main regions of the colony. The economic and social policies introduced under Governor-General Paul Doumer, who arrived in 1897, determined the development of French Indochina.
  • Vietnam was to become a source of raw materials and a market for tariff-protected goods produced by French industries. Funding for the colonial government came from taxes on local populations, and the French government established a near monopoly on the trade of opium, salt, and rice alcohol. The exploitation of natural resources for direct export was the chief purpose of all French investments, with rice, coal, rare minerals, and later rubber as the main products.
  • At the turn of the 20th century, the growing automobile industry in France resulted in the growth of the rubber industry in French Indochina. Plantations were built throughout the colony, especially in Annam and Cochinchina. France soon became a leading producer of rubber and Indochinese rubber was prized in the industrialized world. The success of rubber plantations in French Indochina resulted in an increase in investment in the colony by various firms. However, because all investments aimed to attain immediate high returns for investors, only a small fraction of profit was reinvested.
  • Economically, the French did not develop Laos and Cambodia to the scale that they did Vietnam. The colonial government’s budget originally relied largely on tax collections in Cambodia as its main source of revenue, and Cambodians paid the highest taxes per capita in French Indochina. As French rule strengthened, development slowly began in Cambodia, where rice and pepper crops allowed the economy to grow. As the French automobile industry grew, rubber plantations like the ones already in Cochinchina and Annam were built and run by French investors.
  • Economic progress made under the French benefited the French and the small class of the local wealthy created by the colonial regime. The masses were deprived of economic and social benefits. The French imposed high taxes to finance their ambitious program of public works and recruited forced labor from local populations without protection against exploitation in the mines and rubber plantations.

Key Terms

French Indochina
A grouping of French colonial territories in Southeast Asia consisting of three Vietnamese regions of Tonkin (north), Annam (center), and Cochinchina (south), Cambodia, and Laos, with the leased Chinese territory of Guangzhouwan added in 1898. The capital was moved from Saigon (in Cochinchina) to Hanoi (Tonkin) in 1902 and again to Da Lat (Annam) in 1939. In 1945 it was moved back to Hanoi.
colony of economic exploitation
A colony conquered to exploit its natural resources and native population. The practice contrasts with the colonies of settlement conquered to establish a branch of the metropolis (Motherland) and for the exploitation of its natural resources and native population.

 

French Indochine Society

The Vietnamese, Lao, and Khmer ethnic groups formed the majority of their respective colony’s populations. Minority groups such as the Muong, Tay, Chams, and Jarai were collectively known as Montagnards and resided principally in the mountain regions of Indochina. Ethnic Han Chinese were largely concentrated in major cities, especially in Southern Vietnam and Cambodia where they became heavily involved in trade and commerce. According to a 1913 estimate, 95% of French Indochina’s population was rural and urbanization grew slowly over the course of French rule. Since French Indochina was seen as a colonie d’exploitation économique (economic colony) rather than a colonie de peuplement (settlement colony), by 1940 only about 34,000 French civilians lived in the region, along with a smaller number of French military personnel and government workers.

During French colonial rule, French was the principal language of education, government, trade, and media. It became widespread among urban and semi-urban populations and among the elite and educated. This was most notable in the colonies of Tonkin and Cochinchina, where French influence was particularly prominent, while Annam, Laos, and Cambodia were less influenced by French education. Despite the dominance of French among the educated, local populations still largely spoke their native languages.

A French government official and Lao children in Luang Prabang, 1887, French National Library.

The French did not plan to expand the Laotian economy and geographic isolation also led to Laos being less influenced from France compared to other French colonies. In a 1937 estimate, only 574 French civilians along with a smaller number of government workers lived in Laos, a figure significantly smaller than in Vietnam and Cambodia.

Economy

French Indochina was designated as a colonie d’exploitation (colony of economic exploitation) by the French government, but both exploitation and economic development differed significantly across the main regions of the colony.

The economic and social policies introduced under Governor-General Paul Doumer, who arrived in 1897, determined the development of French Indochina. The railroads, highways, harbors, bridges, canals, and other public works built by the French were almost all started under Doumer, whose aim was a rapid and systematic exploitation of Indochina’s potential wealth for the benefit of France. Vietnam became a source of raw materials and a market for tariff-protected goods produced by French industries. Funding for the colonial government came from taxes on local populations and the French government established a near monopoly on the trade of opium, salt, and rice alcohol. The trade of those three products formed about 44% of the colonial government’s budget in 1920 but declined to 20% by 1930 as the colony began to economically diversify. Indochina was the second most invested-in French colony by 1940 after Algeria, with investments totaling up to 6.7 million francs.

The exploitation of natural resources for direct export was the chief purpose of all French investments, with rice, coal, rare minerals, and later also rubber as the main products. Doumer and his successors up to the eve of World War II were not interested in promoting industry, which was limited to the production of goods for immediate local consumption. Among these enterprises—located chiefly in Saigon, Hanoi, and Haiphong (the outport for Hanoi)—were breweries, distilleries, small sugar refineries, rice and paper mills, and glass and cement factories. The greatest industrial establishment was a textile factory at Nam Dinh, which employed more than 5,000 workers. The total number of workers employed by all industries and mines in Vietnam was some 100,000 in 1930.

At the turn of the 20th century, the growing automobile industry in France resulted in the growth of the rubber industry in French Indochina and plantations were built throughout the colony, especially in Annam and Cochinchina. France soon became a leading producer of rubber and Indochinese rubber became prized in the industrialized world. The success of rubber plantations in French Indochina resulted in an increase in investment in the colony by various firms. With the growing number of investments in the colony’s mines as well as rubber, tea, and coffee plantations, French Indochina began to industrialize as factories opened in the colony. These new factories produced textiles, cigarettes, beer, and cement, which were then exported throughout the French Empire. Because the aim of all investments was not the systematic economic development of the colony but the attainment of immediate high returns for investors, only a small fraction of the profits was reinvested.

Palace of the Governor-General (Norodom Palace) in Saigon, about 1875, photo by Émile Gsell.

Saigon became a principal port in Southeast Asia and rivaled the British port of Singapore as the region’s busiest commercial center. By 1937, Saigon was the sixth busiest port in the entire French Empire. French settlers further added their influence on the colony by constructing buildings in the form of Beaux-Arts and added French-influenced landmarks such as the Hanoi Opera House and Saigon Notre-Dame Basilica.

Economically, the French did not develop Laos to the scale that it did Vietnam, and many Vietnamese were recruited to work in the government in Laos instead of the Laotian people, causing conflicts between local populations and the government. Economic development occurred very slowly in Laos and was initially fueled primarily by rice cultivation and distilleries producing rice alcohol. Although tin mining and coffee cultivation began in the 1920s, the country’s isolation and difficult terrain meant that Laos largely remained economically unviable to the French. More than 90% of the Lao remained subsistence farmers, growing just enough surplus produce to sell for cash to pay their taxes.

Originally serving as a buffer territory for France between its more important Vietnamese colonies and Siam, Cambodia was not initially seen as an economically important area. The colonial government’s budget originally relied largely on tax collections in Cambodia as its main source of revenue and Cambodians paid the highest taxes per capita in French Indochina. Poor and sometimes unstable administration in the early years of French rule in Cambodia meant infrastructure and urbanization grew at a much slower rate than in Vietnam, and traditional social structures in villages remained in place. However, as French rule strengthened after the Franco-Siamese War, development slowly began in Cambodia, where rice and pepper crops allowed the economy to grow. As the French automobile industry grew, rubber plantations like the ones in Cochinchina and Annam were built and run by French investors. Economic diversification continued throughout the 1920s, when corn and cotton crops were also grown. Despite economic expansion and investment, Cambodians still continued to pay high taxes and in 1916, protests broke out demanding for tax cuts.

Infrastructure and public works were developed to some extent under French rule, and roads and railroads were constructed in Cambodian territory. Most notably, a railway connected Phnom Penh with Battambang on the Thai border. Industry was later developed but was primarily designed to process raw materials for local use or for export. As in nearby British Burma and British Malaya, foreigners dominated the work force of the economy due to French discrimination that kept Cambodians from holding important economic positions. Many Vietnamese were recruited to work on rubber plantations and later immigrants played key roles in the colonial economy as fisherman and businessmen. Chinese Cambodians continued to be largely involved in commerce but higher positions were given to the French.

 

Effects of Colonial Rule

Whatever economic progress was made under the French, it benefited the French and the small class of the local wealthy created by the colonial regime. The masses were deprived of economic and social benefits. Through the construction of irrigation works, chiefly in the Mekong delta, the area of land devoted to rice cultivation quadrupled between 1880 and 1930. During the same period, however, the individual peasant’s rice consumption decreased without the substitution of other foods. The new lands were not distributed among the landless and the peasants but were sold to the highest bidder or given away at nominal prices to Vietnamese collaborators and French speculators. These policies created a new class of Vietnamese landlords and a class of landless tenants who worked the fields of the landlords for rents of up to 60 percent of the crop, which was sold by the landlords at the Saigon export market. The mounting export figures for rice resulted not only from the increase in cultivable land but also from the growing exploitation of the peasantry.

The peasants who owned their land were rarely better off than the landless tenants. Peasants continually lost their land to the large owners because they were unable to repay loans given them by the landlords and other money lenders at exorbitant interest rates. As a result, the large landowners of Cochinchina (less than 3 percent of the total number of landowners) owned 45 percent of the land, while the small peasants (who accounted for about 70 percent of the owners) owned only about 15 percent of the land. The number of landless families in Vietnam before World War II was estimated at half of the population.

The French had imposed high taxes to finance their ambitious program of public works and recruited forced labor with no protection against exploitation in the mines and rubber plantations, although the scandalous working conditions, the low salaries, and the lack of medical care were frequently attacked in the French Chamber of Deputies in Paris. The mild social legislation decreed in the late 1920s was never adequately enforced.

Apologists for the colonial regime claimed that French rule led to vast improvements in medical care, education, transport, and communications. The statistics kept by the French, however, appear to cast doubt on such assertions. In 1939, for example, no more than 15 percent of all school-age children received any kind of schooling and about 80 percent of the population was illiterate, in contrast to precolonial times when the majority of the people possessed some degree of literacy. With more than 20 million inhabitants in 1939, Vietnam had one university with fewer than 700 students. Medical care was well organized for the French in the cities, but in 1939 there were only two physicians for every 100,000 Vietnamese.

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