Telia: An excellent case study on export of capital
TeliaSonera’s former CEO is acquitted in court, nine years after the billion-dollar bribery scandal in Uzbekistan.
It is widely known that the world, to put it bluntly, is divided into “rich” or “developed” countries and “poor” or “underdeveloped” countries. Marxism’s explanation for this phenomenon is called imperialism. Lenin was the first to define imperialism in a comprehensive and scientific manner as the highest stage of capitalism. He describes its characteristic features and form as follows:
”And so, without forgetting the conditional and relative value of all definitions in general, which can never embrace all the concatenations of a phenomenon in its full development, we must give a definition of imperialism that will include the following five of its basic features:
(1) the concentration of production and capital has developed to such a high stage that it has created monopolies which play a decisive role in economic life;
(2) the merging of bank capital with industrial capital, and the
creation, on the basis of this “finance capital”, of a financial
oligarchy;
(3) the export of capital as distinguished from the export of commodities acquires exceptional importance;
(4) the formation of international monopolist capitalist associations which share the world among themselves.
(5) the territorial division of the whole world among the biggest capitalist powers is completed.”
The fourth item on this list concerns the export of capital, which refers to the process by which imperialist powers exploit oppressed nations and transfer value into the coffers of their financial oligarchs.
In this article, we will describe this process by analyzing our own circumstances, and in particular, we will examine it through the lens of the company Telia. We will look at Telia’s history—since the company has been both state-owned and privately owned—to illustrate this process. We will then explain the concept of capital export using Telia as a case study.
INTRODUCTION
In connection with the period of change commonly referred to as neoliberalism, which was a response to imperialism having entered its final stage of decline around 1980, the Swedish government sold an agency to itself as part of a long and drawn-out process to divide this agency into different sections, retaining what was too complicated to hand over to the market (the Swedish Post and Telecom Authority – which still exists today) and offloading the rest to private operators (frequency management, radio broadcasting). This agency was called Televerket until 1992, when it was renamed Telia. Two years later, the last of the non-complex parts of the entire operation (manufacturing of telecommunications equipment) were sold off.
The fact that the state makes decisions based on fluctuations in capital is something most of us are already aware of. However, much less is written about why this process of capital export occurs and how it relates to capital export as a phenomenon—in other words, Swedish imperialism’s exploitation of the Third World. We will therefore examine the basis for privatization by studying Telia’s history (and, of course, mentioning the billion-krona scandal). There is nothing specific about telecom companies that made them particularly interesting for this article—they have no intrinsic value in themselves but were simply chosen to illustrate how capital export can take various forms. Understanding the essence of this is thus the main thesis of the text.
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–“What will you do if [the information about the bribery scandal] turns out to be true?”
–“Resign, I suppose.”
– Lars Nyberg, CEO of TeliaSonera from 2007 to 2013, interviewed by Sveriges Radio in 2012.
THE HISTORY OF TELIA
We shall thereby begin with the story of Telia.
The spread of telephony began in Sweden around 1880. During the latter part of the 19th century, the Swedish Industrial Revolution was in full swing. By driving small-scale production out of business and promoting large-scale production, the bourgeoisie was able to reap huge profits. During this period, when the pre-monopolistic market still existed, it was necessary for capitalists to reinvest a significant portion of their profits in innovation in order to outcompete other capitalists. The first telecommunications companies began as private enterprises. Stockholms Allmänna Telefonaktiebolag (SAT) was the largest of them. At that time, the state controlled only telegraph operations, through the Swedish Telegraph Administration.
When technological advances reached a point where calls could be made over distances of up to 1,000 kilometers, SAT submitted a request to expand telephone lines between Stockholm, Gothenburg, Malmö, and Sundsvall. This request was denied, as the government believed that the Telegraph Administration should be responsible for this type of connection. The solution that was implemented was to transform the Telegraph Administration into the Telecommunications Administration and nationalize the telephone system in Sweden.
A key figure in this early nationalization was the Moderate Party politician Arvid Lindman, who spearheaded the nationalization of both LKAB’s and SAT’s communications networks. Mr. Lindman had a long career: he was CEO of LKAB, Director General of the Telegraph Administration, Chairman of the Board at LM Ericsson, and Prime Minister twice, from 1906 to 1911 and from 1928 to 1930. As mentioned, he was a key figure in convincing the Riksdag, after many years of debate, to approve the Swedish Telegraph Administration’s purchase of SAT’s network in Stockholm for 47 million kronor (1918). Shortly thereafter, LM Ericsson and SAT merged. SAT was then the last private telecommunications company before nationalization, and the Swedish state thus had total control over telecommunications in Sweden starting in 1918, which it retained until the 1980s. In 1953, the Swedish Telegraph Administration changed its name to the Swedish Telecommunications Administration.
“The Telegraph Administration quickly succeeded in buying up the private companies outside Stockholm, but in the capital, competition with SAT was fierce. This competition drove down prices and ensured that Stockholm retained its position as a world leader in telecommunications. By the turn of the century, Sweden was one of the countries with the highest telephone density in the world. The satirical magazine Nya Söndags-Nisse wrote in 1897: ‘It remains to make the telephone portable, so that one can have it hanging by one’s ear, even when out running about the city.’”
There is nothing surprising about the fact that the development of the telecommunications industry was funded by the state. When pre-monopolistic capitalism transitioned to monopoly capitalism, it was precisely around these state projects that the largest and most prominent centralization of capital took place. Through the state’s nation-building and industrialization efforts—including electrification, water systems, sewage systems, railroads, and so on—capital was able to secure financing that was both larger and more decisive than what any individual private actor could offer. Through state contracts for infrastructure development, the state-monopolistic faction of the bourgeoisie emerged through its plundering of the state treasury.
The period of state ownership of the telecommunications industry was conducive to the development of its various sectors. During this time, factories were built to manufacture equipment, research was conducted to refine the technology, and masts and infrastructure were erected across the country. State ownership meant that the state-monopolistic faction within the emerging upper-middle class did not have to finance this development, but could instead later reap the rewards of this investment through enforced licensing and by placing “their people” in positions within the state apparatus. The costs of these major technological investments were thus borne by taxpayers, while they themselves reaped the profits.
But once the domestic industry was fully established, the technology refined, and the global market opened up, there was no longer a need for this government funding. At that point, capital was able to take on a new form to reach new heights.
PRIVATIZATION OF GOVERNMENT RESOURCES
In Scandinavia, all state-owned telecommunications companies were privatized in the 1990s. It began in Denmark and ended with a bankruptcy in Finland.
At the same time, new internet and mobile phone technologies were springing up like mushrooms, and the Western world was in a state of euphoria. Hundreds of new tech companies were heavily overvalued, only to go bankrupt a few months later. Scandinavian state monopolies were in full swing, and, as mentioned, Finland ultimately bore the brunt of the consequences.
Denmark was the first to privatize and inspired the rest with its impressive market capitalization. The Finnish Telecommunications Agency was privatized in 1998 and listed on the stock exchange as Sonera. Sonera acquired a number of 3G licenses just before the dot-com crash, lost all its money, and was forced to sell off the business.
Sweden’s prime minister at the time, Göran Persson, initially wanted Telia to acquire Telenor (hint: Telenor was originally Norway’s equivalent of Telia), but Telenor had already grown into a giant and was, at that point, much larger than Telia. Mr. Persson learns of the bankruptcy in Finland and personally calls the CEO of Finnish Sonera to politely ask if they could merge Sonera and Telia. The CEO of Sonera is, of course, thrilled given Sonera’s situation, and this is how TeliaSonera comes into being.
As we mentioned in the introduction to this text, we need to examine privatization as a phenomenon in a way that goes deeper than simply viewing it as a consequence of the so-called “neoliberal” era. This company serves as an excellent case study for this.
The fact that the telecommunications sector underwent extensive privatization in the 1990s is mainly due to the need to adapt its organizational structure to the new circumstances. State ownership had provided strong financial backing during the industry’s development and the expansion of infrastructure, but by the 1990s, the facilities and infrastructure had already been completed. Furthermore, the collapse of the Soviet Union had opened up large markets in the East where there were good investment opportunities. The CEOs of the telecom companies salivated at the thought of signing agreements with the state bureaucracy in these countries, where they could charge even more because they held a monopoly on specific technology, licenses, and infrastructure, and thus the bureaucrats did not have a particularly strong negotiating position. The agreements were, of course, paid for by the taxpayers in these countries. More on this later.
What is the overall economic situation like during this period?
In the 1980s, economic stagnation set in not only in Sweden but throughout the world, as a result of the tendency of the profit rate to fall. This created global growth problems and difficulties in extracting surplus value. The solution to this is to increase the general exploitation of workers, and to achieve this development, the state-monopolistic system of social democracy and corporatism became insufficient—it was no longer economically viable. At the same time, new opportunities for making money emerged in the Third World, in countries where, for example, telecommunications were not as developed as in Sweden, and the state cannot control all resources. Keep in mind that this is the same period as the crisis of revisionism in the Soviet Union, and a whole host of semi-colonies—i.e., Eastern Europe and the former Soviet republics (all of them except, of course, the Russian Federation, which is imperialist and not semi-colonial)—were opened up to capital imports. This became an excellent opportunity for capital to be reallocated into private ownership to enable the export of capital—in the form of licenses, equipment, technology, etc.—to be paid for by the people of the Third World. Keep in mind, moreover, that the state-monopoly form of ownership for telecommunications had enabled an enormous centralization and concentration of capital and financed a world-class telecommunications infrastructure—that is, it had served its purpose. Now, in the new era, the most effective form was instead privatization with the world market in sight.
To access foreign markets, capital must be exported and a larger share of capital must be concentrated in the hands of private actors (investors), and this requires the abandonment of the social democratic model. This is achieved by cutting back on benefits for the working class and plundering the public coffers (and indebting the working class through bank loans).
How did “the man in the street” view this “neoliberal” transformation? Why was it even possible to sell off the state and saddle the working class with debt in this way? As Marxists, we know that the economic base of a society and its superstructure are dialectically linked, intertwined to a certain extent. What the bourgeoisie needs to do is to change society’s worldview and ideologically justify the change. Bourgeois ideology can be described as a form of parasite that manifests itself in many different ways, and this may well be one of them. One should also remember that this took time (the entire process began sometime in the 1970s and “concluded” in the 1990s, but continues to this day in various ways), and that the bourgeoisie had plenty of time to ensure that this ideological justification was carried out properly. Quite simply, necessary changes took place within the bourgeoisie’s own conception of what we understand as base and superstructure, and this must always be transferred to the working class.
The question of the bourgeoisie’s ideology and its relationship to material class interests is very interesting and will be explored in a separate article, as it deviates from the main purpose of this article; however, we should examine it briefly to provide some context. What did this justification look like in practice?
If you look at TV shows and commercials from the 1960s and compare them to those from the 1980s (and onward), you’ll see a clear difference that can be hard to put into words without the ideological framework of Marxism. About ten years before the “IT bubble” burst in the 1990s, people had begun to talk about the individual in a completely different way, where the state no longer fit into the picture of you and your family. For example, celebrating New Year’s as a holiday in its own right is actually a phenomenon that emerged from the “glitz and glamour” of the 1980s; before that, New Year’s had been part of Christmas celebrations in Sweden for over a thousand years. It was no longer about celebrating the community’s progress over the past year—now people were to embrace more modern, more American “traditions” and instead celebrate their own personal achievements and improvements. The state’s previously intended image as the “protector of the entire people” no longer fit into this new era.
AFTER THE PRIVATIZATION OF TELECOM
After a few years, TeliaSonera’s CEO (a man appointed by the Swedish government) decides that the Finnish board has the wrong vision for expansion and fires virtually the entire Finnish division of the company. This marks the beginning of a long series of naive acquisition attempts in the former Soviet Union, including in Russia, where they encounter fierce resistance. They approach all sorts of newly wealthy individuals who, in one way or another, managed to profit from the collapse of the Soviet Union, but first they head to Turkey.
a) Turkey
Why Turkey? When they went to Russia, word got around that Turkey was about to be taken over by Russian capital, and that the Turkish market would be a walk in the park for this Russian capital to take over. In 2005, the Swedish government thus quickly shifted its focus southward and began preparing to battle both domestic compradors and Russian billionaires, salivating over these newly discovered jewels in the southeast.
They succeed in taking over the market in Turkey, and for a while things go very well for TeliaSonera. The Turkish telecom company Turkcell (a very clever name!) is established as a joint venture between TeliaSonera and a specific Turkish comprador named Karamehmet. Through this jointly owned telecom company, TeliaSonera’s Finnish division, together with Karamehmet, creates a company called Fintur (also a clever company name! They could use the same naming format for all companies. It would be much easier to remember them and which country they belong to.) to pursue further license acquisitions in Azerbaijan, Moldova, and Georgia, through the respective telecom companies Azercell, Moldcell, and Geocell (Would you look at that!).
TeliaSonera later acquired this Fintur company in its entirety following the Turkish financial crisis, thereby gaining direct control over all of these telecom companies. Here are a few more that were owned by Telia for a time:
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Nepal – Ncell
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Uzbekistan – Ucell
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Kazakhstan – Kcell
The reason for the expansion eastward was thus that the opportunities in Turkey opened the door to further opportunities in the surrounding region.
An entirely new market emerged from the ruins of the former Soviet Union, and the fact that Telia/Sweden was the party that managed to take control of it was largely due to a combination of Sweden’s state-monopoly model, the early development of telecommunications, and the need for expansion to increase profits. TeliaSonera simply beat Russian capital to the punch in acquiring Turkcell.
b) Uzbekistan
As mentioned, Fintur enabled TeliaSonera and Turkcell to tap into markets here and there. One of them was the telecommunications market in Uzbekistan.
Uzbekistan was the country that thrust Telia into the spotlight in 2012 when the investigative TV program Uppdrag Granskning revealed that the company had bribed the Uzbek regime to establish a foothold there. Readers can easily find the full story online if they’re interested (and it’s quite an interesting story). Here, however, is a summary of the key points to help us understand the situation.
In July 2007, a contract was signed with a secret business partner through an Uzbek airline established 17 days earlier to gain a foothold in the Uzbek market. This secret business partner was a close friend of the president’s daughter. The airline was sold directly to TeliaSonera. The secret “local partner” was to receive the equivalent of $30 million and a small number of shares in TeliaSonera’s local company in Uzbekistan.
The “local partner” would eventually become a co-owner of TeliaSonera’s operator in Uzbekistan, contribute number ranges and frequencies, use a company in the British Virgin Islands (a tax haven), help TeliaSonera renew licenses as needed, and support them in the event of problems with the authorities. The Uzbek security services would also eventually gain direct access to TeliaSonera’s telephone, data, and text messaging services in order to track and arrest Uzbek citizens protesting against the local government. When Fintur submitted a report on negotiations regarding Uzbek licenses to TeliaSonera’s board, nicknames were used for the local partner, such as the “Uzbek Wallenberg,” etc. because the person in question is of little interest in the grand scheme of things, and because they presumably wanted to avoid potential scrutiny if the public found out that they had been negotiating with the business partner of a “tinpot dictator’s” daughter.
Similar events unfolded in Kazakhstan as well, where the company initially entered the market with the help of the aforementioned Fintur to establish Kcell. After much conflict with the Turkish side of Fintur, TeliaSonera eventually took full control of Kcell by purchasing shares from the Kazakh government through Fintur, listing Kcell on the stock exchange, and finally acquiring Kcell shares through TeliaSonera.
This is one of the reasons why such convoluted bribery schemes are used: it serves as a way to protect oneself from potential questioning and to use bureaucratic red tape to circumvent investigations. In this case, it ended with TeliaSonera having to shuffle around vice presidents and high-ranking board members to extricate itself from this “scandal.”
EXPORT OF CAPITAL AND ITS FORMS
Before we begin to examine the various forms of capital export, we should first define its core element, capital, and what it actually entails. Here, we learn from Marx:
”The expansion of value, which is the objective basis or main-spring of the circulation M—C—M, becomes his subjective aim, and it is only in so far as the appropriation of ever more and more wealth in the abstract becomes the sole motive of his operations, that he functions as a capitalist, that is, as capital personified and endowed with consciousness and a will. ”
– Marx, Capital, Part II: The Transformation of Money into Capital
The purpose of capital is thus to acquire more capital—capital is, therefore, value that creates added value. This is its simple definition. Money, or wealth, is therefore not capital in itself, but rather only when this wealth is used to be transformed into greater wealth. But it is also difficult, purely ideologically, for an individual with access to a large amount of money not to want to put this wealth into circulation in order to increase it. That is why we talk about capital and capitalists – people who primarily earn their livelihood through their ownership of capital. It is difficult to be rich without wanting to put one’s capital to work.
During the early stages of capitalism’s development, capital was accumulated and centralized primarily through the domestic market; however, in the most developed capitalist countries, domestic markets had, by and large, already reached saturation by the late 19th century, with a number of monopolies in place. For those who were already firmly established in their own country with their own monopolies, foreign markets began to become more lucrative. At this time, foreign markets were accessed simply by exporting goods to other countries through the same form of capital accumulation.
”England became a capitalist country before any other, and by the middle of the nineteenth century, having adopted free trade, claimed to be the “workshop of the world”, the supplier of manufactured goods to all countries, which in exchange were to keep her provided with raw materials. ”
– Lenin, Imperialism, the Highest Stage of Capitalism, chapter IV
Let’s let Lenin continue to explain the process of capital’s development in his masterful way:
”But in the last quarter of the nineteenth century, this monopoly was already undermined; for other countries, sheltering themselves with “protective” tariffs, developed into independent capitalist states. On the threshold of the twentieth century we see the formation of a new type of monopoly: firstly, monopolist associations of capitalists in all capitalistically developed countries; secondly, the monopolist position of a few very rich countries, in which the accumulation of capital has reached gigantic proportions. An enormous “surplus of capital” has arisen in the advanced countries.”
The surplus of capital in developed countries does not lead to an increase in the standard of living for the masses in those countries, because capitalism as a mode of production still requires that they be kept at the starvation level; otherwise, profits would decline. In less developed countries, much is lacking for them to become “developed,” including a properly established industrial base.
”As long as capitalism remains what it is, surplus capital will be utilised not for the purpose of raising the standard of living of the masses in a given country, for this would mean a decline in profits for the capitalists, but for the purpose of increasing profits by exporting capital abroad to the backward countries. In these backward countries profits are usually high, for capital is scarce, the price of land is relatively low, wages are low, raw materials are cheap.”
”The export of capital is made possible by a number of backward countries having already been drawn into world capitalist intercourse; main railways have either been or are being built in those countries, elementary conditions for industrial development have been created, etc. The need to export capital arises from the fact that in a few countries capitalism has become “overripe” and (owing to the backward state of agriculture and the poverty of the masses) capital cannot find a field for “profitable” investment.”
There is no need to take issue with Lenin’s explanations, and for a deeper understanding, it is up to the reader to study the aforementioned work. However, we will now move on to the various forms of capital export.
Capital export refers to the investment of capital outside one’s own country’s borders. We remind you once again that capital is defined as value that creates surplus value. Consider the labor theory of value and Marx’s brilliant Das Kapital; surplus value for the capitalist is created solely through the exploitation of the labor force; it is the worker who creates surplus value, which is the portion of the work produced after the worker has succeeded in reproducing their own labor power.
Once industrial development in a country has reached a level where the bourgeoisie has a large surplus of capital, they can export that capital. This can be done on various scales. Of course, any small-scale investor can export capital by purchasing a few shares in a foreign company. But this is usually irrelevant.
When we analyze the global economy and its various trends, we focus primarily on macro trends (i.e., major economic shifts and overarching tendencies) rather than minor exceptions. Since anyone who produces surplus value (whether monopoly capitalists or small business owners like the local pizza shop owner) can do so, bureaucratic capitalists and compradors in all countries can engage in capital export to some extent. But the qualitative difference between the capital exports of the imperialist countries and those of the oppressed nations lies in their scale and in their mass movements.
The main flow of capital export is from the financial centers of the imperialist countries—their financial oligarchy (which controls the banking system and industry)—to the oppressed nations, and in various forms, the surplus value returns to the center of the imperialist country. This is the essence of capital export.
A quick-witted observer might point out that there are several countries we would classify as oppressed nations—that is, non-imperialist ones—that also engage in such capital exports. These include countries such as Qatar, South Korea, Singapore, India, and others. There are certain trends here that are important to understand so as not to get lost in the complexities of the economy.
First, there are foreign entities where capital is concentrated by imperialist financial oligarchs and operates through third parties. Examples of this include Singapore and the United Arab Emirates. From the financial institutions in these countries, imperialists from other parts of the world can station officials who carry out their work on the other side of the globe. Another historical example was Pakistan, where between the 1970s and 1990s there was a bank with a number of underground connections, the BCCI (Bank of Credit and Commerce International), which, according to some investigative journalists from The New York Times, carried out over 90% of the world’s arms deals, drug trafficking, and tax evasion, and operated in over 70 countries. But these phenomena are merely intermediate stages in the movement of capital exports, and are in fact tools of the financial oligarchy within the imperialist countries.
Second, there are bureaucratic-capitalist countries with a more developed industrial base. In these countries—such as South Korea, India, and Turkey—bureaucratic capital can accumulate a significant amount of surplus value in its role as suppliers and manufacturers for imperialism. This occurs primarily due to a technologically specialized industry (South Korea) or because the country’s size concentrates immense power in the hands of bureaucratic capital (India). Due to these countries’ semi-colonial status, they can play off the imperialists against one another to secure more favorable agreements. This enables a certain degree of capital centralization, which in turn allows for a certain degree of capital export. Most often, this capital is part of a chain where it is centralized elsewhere. Through various imperialist control mechanisms, this capital can be transferred back to the imperialist financial oligarchs via debt, interest rates, and other economic levers of pressure.
Here are a few examples:
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Airtel Africa operates mobile networks in over a dozen African countries. However, it is owned and controlled by the Indian company Bharti Airtel. This example is a common attempt to highlight India’s imperialist nature. But what lies beneath the surface? Well, even though Bharti Airtel is Indian, a significant portion of its ownership lies with British and American asset managers. The African money flows back to its former colonial master and to today’s superpower.
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Socopalm operates large palm oil plantations in Cameroon. To a local observer, the business may appear to be an African agricultural company. However, control is exercised through Socfinaf (also African) to the Luxembourg-based Socfin, which in turn is controlled by Vincent Bolloré’s group and the Fabri family.
In summary, we see a transfer of value from the monopolies in the imperialist countries—which control the lion’s share of the world economy—to the oppressed nations, where surplus value is created through a varying number of actors, and then back to the financial oligarchy in the imperialist countries. This is the macro trend.
This dynamic can sometimes be difficult to see, especially if one falls into the trap of studying only a country’s foreign direct investments. Many relationships between imperialist countries consist of these investments taking place among themselves, which can give the appearance that they are only exploiting each other’s working class. This is an extremely flawed method for analyzing capital export and imperialism.
It is important to understand that capital exports can take many different forms, but the underlying mechanism is always the same. To illustrate this point, we can provide a few examples of what this mechanism might look like.
We’ll start with a French example. France has large and advanced nuclear power plants. Many countries in Europe—including many imperialist countries—are dependent on and dominated by the French electricity monopoly. Through its control of the power grid in Europe, it appears that France, within the electricity sector, primarily exploits its neighboring countries. But what is needed for a nuclear power plant to produce electricity? Namely, the raw material uranium. France imports this raw material from oppressed nations such as Niger in the Sahel region of Africa. The French import uranium for one-eleventh of its market price. This means that it is the people of Niger who are bearing the burden of the French electricity monopoly. It is not through foreign direct investment that France dominates Niger, but through unequal trade.
Let’s take an example for the vegetarians. When you go to ICA and buy a juicy, marinated soy burger, you might want to think about its journey. It was likely produced by a soy farmer in Brazil. The soybeans were then seized by the latifundia (landowners). These soybeans are possibly purchased, through a couple of bureaucratic-capitalist middlemen, by international commodity traders such as Cargill (USA), ADM (USA), or Bunge (USA & Switzerland). It may then be sent on to a Dutch processing plant where it is turned into soy protein. From there, it is exported to a German hamburger factory before being purchased by Swedish wholesalers who bring it to the store. In this process, a great deal of trade has taken place between various imperialist countries, and, yes, in these countries, workers have, among other things, processed and packaged the goods, which means that surplus value has been added to or realized in these goods. But the main flow of value for this soy burger is from the oppressed nation to the wallets of the imperialist financial oligarchy.
Once we understand these macro trends, we can describe the various forms that capital exports can take. Capital exports can manifest themselves in many different ways, for example:
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Loans: A more developed country exports its capital through loans. It lends money to countries that are unable to resist this inflow of temporary capital, only to later demand repayment of this capital with interest by any means necessary. Oppressed nations usually lack the necessary capital to industrialize, expand their military, or undertake other projects such as climate adaptation. Furthermore, many are in such dire economic straits that they need loans out of desperation. This means these countries must pay debt and interest to imperialist nations or their various institutions, which affects the entire economy. Domestic companies must pay more taxes in these countries, state-owned enterprises must divert their profits to debt service, and so on.
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Acquisition of industries: Industries are seized by buying them up for a sum that no national bourgeoisie in the oppressed country can match. Here, alliances are formed with comprador forces, placing them in a position to rule over their own people in the interests of imperialism. Through this, monopolies can be established in the less developed country. In Telia’s case, a monopoly on telecommunications technology was created through infrastructure such as telecommunications towers. The profits from this are funneled back to Sweden through, for example, customers, service fees, employed technicians, and general charges. Taxpayers in the oppressed countries are exploited.
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Unequal exchange: The financial oligarchs of the imperialist countries hold certain monopolies. These monopolies on technology from their industries, licenses, infrastructure, etc., create a dependency among the oppressed nations, thereby establishing a relationship (such as that between Niger and France) in which the imperialist countries can import raw materials at very low prices. Another example of this is in the arms trade: Through the war industry, weapons, fighter jets, etc., are manufactured to be sold to countries that cannot produce them themselves. These countries then become dependent on these contracts to maintain their military interests. These contracts create unequal trade conditions.
Although capital export can take various forms, it is important not to be blinded by appearances, but to focus on the essence. It is precisely the essence of capital export that reveals the exploitative relationship between the imperialist country and the oppressed nation. The core lies in the fact that a flow of value is transferred from the oppressed nation to the imperialist country. Whether this relationship is created through loans, arms contracts, licenses, or ownership structures is irrelevant, as this would be confusing form with content. Equating capital export with foreign direct investment thus leads to a confused understanding of capital export, which ultimately results in a mistaken perception of the contradiction between imperialism and the oppressed nations.
SUMMARY
The strategy for Telia—and, to a large extent, the Swedish government—was thus to expand into oppressed countries and take control of undeveloped markets (in line with standard modern capital export), bribed local compradors with billions (and gave tinpot dictatorships access to the entire communications network so they could track their populations and imprison protesters) to increase their profits. Swedish Wikipedia puts it this way:
“The strategic goal was to expand internationally to offset a declining market share in Sweden. It was made clear that the company would not compete on price but rather through high network availability and knowledgeable customer support. The market share in Sweden for fixed-line telephony still stood at over 95 percent. The mobile business expanded abroad through the acquisition of minority stakes in operators active in countries such as Namibia, Ecuador, Russia, and Latvia.”
– Wikipedia article Telia Sweden , section titled “1994”, no citation provided
Given how small Sweden is overall, with its ten million inhabitants, one can see the importance of gaining a foothold in foreign markets: for companies, the domestic market in a small country like Sweden becomes insufficient, which means that, under the laws of capitalism, they are forced to expand abroad. This applies generally to all companies but is all the more important for smaller countries. Compare the Swedish telecommunications market, with its ten million customers (which is also shared with a few other companies—after privatization, Telia no longer held a total monopoly), with, for example, dominating the entire Turkish market with its nearly 90 million inhabitants.
The main reason privatization became lucrative is, as we have previously described, that capital accumulation through state funds led to a surplus of capital, and that the state-monopolistic faction of the Swedish bourgeoisie was thus forced to export capital. State-run operations were sold to private entities (with ties to the state) that could carry this out in the most efficient manner. For imperialists in smaller countries such as Sweden, capital export therefore becomes much more important.
We can thus see that the various forms of capital export are secondary. What matters most are the trade chains between countries—the movement of capital—which look the same everywhere, regardless of whether we are talking about loans or unequal exchange, for example. In the imperialist country, the population can condemn precisely this “immoral” form of capital export that Telia employed, which subsequently also occurred. When the public in Sweden finally became aware of these “repugnant” business practices, they fired the CEO (TeliaSonera fired three vice presidents during the entire Turkey-Uzbekistan affair, just to be on the safe side), a few top executives, perhaps the entire board if it’s reported on Uppdrag Granskning, and appointed a new crew. Then the dance begins anew. This is how capital export works today, at least in the telecom world. Same methods, same goals, of course; the difference is that the Swedish state has to pretend to beat itself with a ruler sometimes to justify its cooperation and involvement in affairs linked to oppression and genocide.
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