The Relevance of Arthur Lewis Theory of Industrialisation by Invitation to the Caribbean

Topics: Investment, Industry, Capitalism Pages: 3 (846 words) Published: April 19, 2012
The relevance of Arthur Lewis' “Industrialization by Invitation” Model to Contemporary Caribbean society

According to Nassur Mustapha, development is defined as, ‘the progressive process of human, cultural, political, and economic and social change, which shapes people’s lives.’ The southern countries and particularly the Caribbean have been classified as developing countries, which are still somewhat dependent on the metropolis’ which once colonized them. It was Sir Arthur Lewis who first formulated a coherent strategy for industrial development in the Caribbean.  In the aftermath of the uprisings in the 1930s, Lewis, writing on the birth of the workers' movement in the Caribbean, advocated the need for industrial development based on the utilization of local raw materials (e.g., sugar refining, chocolate making, copra and dairy products).  His paper entitled "Industrialization of the British West Indies", published in 1950 provided a fully articulated framework for capitalist industrial development in the small states of the Caribbean. Lewis' writings on industrial development in the Caribbean over the 1938­1950 period suggest an export led labor-intensive strategy of industrial development.  There were two variants of his general strategy.  The first variant was the outcome of his critique of the Benham economic plan for Jamaica and was based on the use of local natural resources; that is, `export led natural resource based industrialization'. The second variant was based on the experience of Puerto Rico and placed great emphasis on foreign investment and the granting of fiscal incentives.  This variant has been coined export led industrialization by invitation'. The relatively low labour costs in Caribbean labour markets (occasioned by high levels of unemployment and low productivity in the agricultural sector) would be one incentive to industrialists seeking to minimize the costs of production. This relative price advantage would encourage the use of...
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