THE INDUSTRIALISATION BY INVITATION THEORY SIR ARTHUR LEWIS

WHO WAS SIR ARTHUR LEWIS? SIR ARTHER LEWIS WAS A ST. LUCIAN BORN ECONOMIST WHO PRODUCED A STUDY WHICH URGED CARIBBEAN GOVERNMENTS TO EMBARK ON A POLICY OF INDUSTRIALIZATION BY INVITATION. THIS STUDY WAS INSPIRED BY THE 1930’S REBELLION IN THE CARIBBEAN, WHERE THE CARIBBEAN EXPIRIENCED A HIGH LEVEL OF POVERTY.

WHAT IS THE INDUSTRIALIZATION BY INVITATION MODEL §THIS IS WHERE CARIBBEAN GOVERNMENTS WOULD ENCOURAGE MULTINATIONAL COOPERATIONS TO ESTABLISH INDUSTRIAL INTERPRISES IN THE REGION WHILE PROVIDING SUITABLE PHYSICAL PLANTS EQUIPTED WITH UTILITIES. THIS HELPS TO ENCOURAGE INVESTMENTS.

THE PURPOSE OF THE POLICY • TO STIMULATE NEW INVESTMENTS IN THE REGION – LED TO ECONOMIC GROWTH, POSITIVE SOCIAL BENEFITS • REDUCE THE HIGH UNEMPLOYMENT SITUATION • EARN ADDITIONAL FOREIGN EXCHANGE –CREATE A MORE DIVERSED ECONOMY • ESTABLISHMENT OF MANUFACTURING INDUSTRIES BY CARIBBEAN ENTREPRENURS • TRANSFER OF TECHNOLOGY AND SKILL – USED TO STRENGTHEN THE INDUSTRIAL BASE OF THE REGION.

THE STRENGTHS LEADING TO ITS SUCCESSES • IT STIMULATED FOREIGN INVESTMENTS IN THE CARIBBEAN------- • FOR PUERTO RICO CAPITAL INVESTMENT INCREASED FROM $1. 4 BILLION IN 1960 TO $24 BILLION IN 1979 • LEAD TO AN INCREASE IN GDP------- • IN PUERTO RICO A RAPID INCREASE IN INVESTMENT LEAD TO THE GROWTH OF THE GDP FROM $723. 9 MILLION IN 1950 TO $16. 4 BILLION IN 1982

• • • PERSONS FOUND EMPLOYMENT IN THE UNITED STATES OF AMERICA OWNED MULTINATIONAL CORPORATIONS----IT LED TO THE FULL UTILISATION OF PHYSICAL RESOURCES-------STRONG PRIVATE SECTOR INITIATIVE AND GOVERNMENT SUPPORT---- • IN BARBADOS THESE JOBS WERE LOW- PAYING BUT WORKING CONDITIONS WERE BETTER THAN THE SUGAR PLANTATIONS • MULTINATIONAL COMPANIES MINED BAUXITE IN JAMAICA AND GUYANA • DEDELOPMENT OF THE TOURIST INDUSTRY – A MAIN ECONOMIC SECTOR IN SEVERAL CARIBBEAN COUNTRIES

THE WEAKNESSES LEADING TO ITS FAILURES • THE POLICY DID NOT CREATE THE LEVEL OF EMPLOYMENT EXPECTED------- • MULTINATIONAL CORPORATIONS WERE ABLE TO TAKE ADVANTAGE OF LONG TAX HOLIDAYS, AND LOW WAGES BY MOVING TO OTHER DESTINATIONS WHEN THE HOLIDAYS WERE OVER. • IN PUERTO RICO UNEMPLOYMENT ROSE FROM 12% IN 1960 TO 20% IN 1975 AND IN JAMAICA IN 1970 18% OF THE WORKFORCE COULD NOT FINE EMPLOYMENT. • THIS OCCURRED IN BARBADOS WITH THE EXIT OF INTEL AND THE CARIBBEAN DATA SERVICE.

• CREATED A DEPENDENCY ON NORTH AMERICA. ----- • POLLUTION CAUSING ENVIRONMENTAL PROBLEMS------ • THIS OCCURRED IN EVERY CARIBBEAN COUNTRY UNDER THIS POLICY • IN PUERTO RICO, THE INFLUX OF NORTH AMERICAN CHEMICALFIRMS HAS CAUSED CONSIDERABLE ENVIRONMENTAL PROBLEMS

WHERE HAS THIS POLICY BEEN IMPLEMENTED • IN PUERTO RICO, 1947 OPERATION BOOTSTRAP • IN TRINIDAD , 1950 INDUSTRIALISATION BY INVITATION PROGRAMME • IN BARBADOS OPERATION BEEHIVE • JAMAICA ALSO INVITED NORTH AMERICAN COMPANIES SUCH AS REYNOLDS ALCAN AND KAISER TO MINE BAUXITE • THEY ALL HAD THEIR ADVANTAGES AND DIS ADVANTAGES

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