INDUSTRIALISATON BY INVITATION

BY:

Randy CorneliusLaunesha GrantJermel Charles

OBJECTIVESGive brief account of the History/Origin/Definition concerning industrialization by invitation

Outline some of the characteristics of industrialization by invitation

Highlight some of its beliefs and notable practices

History/OriginThe concept of industrialization by invitation is a study formulated by St. Lucian Economist Sir Arthur Lewis in 1949, following a spate of Caribbean rebellions due to the prevailing high level of poverty in the region indicated by high employment, poor housing and a narrow sector based on sugar.

Industrialisation by Invitation thesis was offered as a solution to the problems of Caribbean development, where an unlimited supply of labour is ensured which will keep wages down and thus produce cheaper commodities.

Arthur Lewis

Cont.dThe general idea was for Caribbean governments to encourage multi- national corporations to establish industrial enterprises in the region by the provision of suitable physical plants equipped with utilities.This was cited from caribstudies2.wikispaces

Characteristics of industrialization by invitation

A development strategy meant to attract foreign investment through generous tax incentives. These include:Freedom from US income taxesDutyfree importation of machinery10-15 year tax holidaySilence on the issue of low wages paid to workers in the industrial sector

Cont.dPathways to infrastructure in underdeveloped areas e.g. Barbados with its ten industrial estates which are located in suburban and rural areas.

It accommodates industries to offer employment. They employ a large number of local workers to carry out their day-to-day operations.

Managerial positions and overseer duties are rarely provided for locals which makes the hierarchy system very narrow so there is little advancement.

Beliefs & PracticesThe Industrialization by invitation notion holds that "scarcity of capital, skills and technology make it imperative to attract foreign investments".

Stated differently, Caribbean people did not possess the competence and innovation for progression of their nations, therefore more advanced nations would invest and assist in the development of the Caribbean region. Prior to their independence, Caribbean countries were mainly used for the production of raw materials such as sugar, coffee and cotton, which were exported to the mother country where further processing and manufacturing was carried out.

ContIn theory as well as practice "industrialization by invitation" was meant to attract both local and foreign investment through generous tax incentives which were mostly reserved for the benefit of foreign investors. Such incentives comprised of provision for basic infrastructure services such as harbours, airports and roads. Tariffs and quotas on imports to protect local goods against foreign competition was also another provision. This provision was important in that foreign goods, if not restricted, could easily penetrate and take control of the market, leaving no opportunity for local goods. State-supported training facilities for the local workforce in the form of technical institutions and universities added to the spur.

ContSome of the benefits are;Creation of employment, generation of foreign exchange, expansion of trade and the relief of social pressures and threat of upheaval.