INDUSTRIALISATON

BY INVITATION

BY:

Randy Cornelius
Launesha Grant
Jermel Charles
OBJECTIVES
Give 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/Origin
The 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.d
The 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 taxes
Dutyfree importation of machinery
10-15 year tax holiday
Silence on the issue of low wages paid to workers in the
industrial sector



Cont.d
Pathways 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 & Practices
The 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.
Cont
In 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.
Cont
Some of the benefits are;
Creation of employment, generation of
foreign exchange, expansion of trade and
the relief of social pressures and threat of
upheaval.