Industrial Development

Assumptions, Least Cost Location

Edu Level: Unit2

Date: Aug 11 2025 - 5:03 PM

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Colonial Legacy:
- Focus on plantations, not industry (lack of iron ore/coal, small markets).
- Post-independence: high import bills → push for industrialization & tourism.
- Resource examples: T&T & Suriname (petroleum); Jamaica, Guyana, Suriname (bauxite).
Pre-1950 Industry: small-scale agricultural processing (rum, bread, clothing).
Industrialization by Invitation (1950s) – Sir Arthur Lewis
- Attract foreign investment with incentives → hoped for economic diversification, exports, employment, skills transfer.
- IDC established in each territory.
- Examples: Puerto Rico (Operation Bootstrap), Barbados (Operation Beehive), St. Lucia (Hewanorra), St. Vincent (Camden Park).
Outcomes:
- Employment for jobless/part-time workers, especially women.
- Higher wages than agriculture.
- Some skill gains for migration opportunities.
Challenges:
- Capital-intensive industries (few jobs, often part-time).
- MNCs left after incentives ended or profits dropped.
- Dependency on foreign capital, environmental pollution.
Policies:
- EPZs: low-wage export zones.
- Import Substitution Industrialization (ISI): aimed to reduce imports, but often inefficient, poor quality, reliant on imported machinery/materials.
- Economists suggest governments facilitate private sector, not control production.
Sustainable Development:
- Policies must adapt to global market realities and ensure long-term competitiveness.