What is meant by “industrialization by invitation” and did it lead to economic development in the region? BY unengaged Lewis’ autobiographical statements show he was a a product of dying colonial order, and in turn was an intellectual contributor to the decentralization process. He was strongly against imperialism which lead to his interest in the problems of underdevelopment. Three seminal publications The first of these is the Industrialization of the West Indies . Lewis was averse to the ideas of the Economic Plan for Jamaica.
His side of the argument stemmed from a tint with the Caribbean Commission in which he studied Puerco Rice’s policies and he took this knowledge and used it as lessons for the West Indies. One critique was of the comparative advantage in the export of primary goods and importation of manufactured goods. He argued that the over population of the islands provided an economic rationale for an industrialization strategy based on the export of labor intensive manufacturers.
Sir Arthur Lewis, SST. Lacuna’s first Nobel Prize winner, has released several publications on underdevelopment. Of these publications is the concept of “Industrialization by invitation”. This 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.
Lewis’ idea emphasized the need for industrialization to be introduced into the Caribbean in order for substantial development. Therefore Caribbean economies should adopt industries that are in alignment with their natural resources.
Caribbean Mr.Lewis proposed a model of his own dubbed the ‘Dual Economy’. He stated that there was the traditional(agricultural sector) and the capitalist (profit making sector), the two sectors of the Caribbean economy. The traditional sector tend to focus on hiring as many as possible thus productivity declined whereas the capitalist sector focused on profit making and high productivity. Lewis recommended a shift of the excess labor room the traditional to capitalist sector, in turn increasing the capital of the economy.
This concept bears that the Caribbean is well structured for an industrialized society and that labor was readily available to accommodate this structural change. 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 harbors, 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. Though this entire concept was based on a development strategy for Puerco Rice called “Operation Bootstrap” and was successful for that island this was opposite for most of the remaining Caribbean region.