Sir Arthur Lewis

St. Lucia

Sir Arthur Lewis is St. Lucian

Born to Antiguan parents ( January
23, 1915)

He holds a Bachelor of Commerce

Degree from the London School of Economics
PhD in Industrial Economics from the same institution.
He published a series of articles as Professor at
University of Manchester and later became Professor in
Economics at Princeton University.

Economic Adviser to the Prime Minister of Ghana (1957-1963)

Deputy Managing Director of the UN Special Fund

Vice-Chancellor of the University of the West Indies (1959)

Knighted in 1963

Instrumental in helping to set up the Caribbean Development Bank from

1970 to 1974 where he held the position of Director of the bank

In 1979 he won the Nobel Memorial Prize in Economics, becoming the

first black person to win a Nobel Prize in a category other than peace.

He died June 15, 1991

A study produced 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.

 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.

 Agriculture

had reached its limits of internal

and externally profitable cultivation

The

growth rate of the population was faster

than the growth of agriculture

manufacturing base had to be established

to absorb agricultural output and to create
employment opportunities

A country should specialise in

manufactures to which its resources
are most appropriate and avoid the
others.

"To start manufacturing in a new

country is a formidable enough
problem; therefore countries must
seek manufacturers who are already
established in the market, and try to
persuade them to set up branches in
the new country." These
multinationals would bring with
them the vital access to markets.

These products could be sold to the

dominant industrial markets and to
nearby Latin America.

Jamaica (Sugar and

bauxite)

MNCs such as Tate and

Lyle; Kaiser invited to
manufature sugar
products and mine
bauxite

UK and American
markets

 Freedom

from US income taxes

Tax- free repatriation of profits
Free construction of industrial plants
equipped with utilities
Duty- free importation of machinery
10 -15 year tax holidays
(silence on the issue of low wages paid to
workers in the industrial sector)

In

1947 Puerto Rico launched

an industrial initiative called
Operation Bootstrap (capital
investment increased from $1.4
billion to $24 billion by 1979)
In

the 1950s Trinidad launched

its industrialisation by invitation
programme (natural gas
manufacturing)
In

the 1950s Barbados

launched Operation Beehive
(implemented garment
factories)
In

the 1950s Jamaica invited

North American companies such
as Reynolds, Alcan and Kaiser to
mine bauxite

ADS

DISADS

1. Stimulated new investment

in the region (e.g. Puerto
Rico)

1. It did not create the level of

employment opportunities
that were envisaged.

2. Fuel a reduction of the high

unemployment situation
(e.g. Barbados garment
sector)

2. MNCs took advantage of the

long tax holidays and lowwage regimes by moving to
other destinations when the
holidays were over. For
example the exit of Intel and
Caribbean Data Services
threw many workers into
absolute poverty.

3. Stimulated the export

sector and earn additional
foreign exchange
4. Encouraged the
establishment of
manufacturing industries by
Caribbean entrepreneurs
5. The industrialisation
programme led to the full
utilisation of physical
resources.

3. created a dependence on
North American capital in the
Caribbean
4. Problems for sustainable
development
5. Most profits were repatriated
to Northern parent
companies