|HOW DO YOU PROCURE ECONOMIC DEVELOPMENT IN
A SMALL, RESOURCE POOR ISLAND?
What viable alternatives to dependence on foreign
investment are available to Caribbean microstates with
little or no natural
resources, negative rates of savings and puny internal
The dependence -on –foreign- investment option bespeaks
what is often disparagingly called the “Puerto Rican
also known as the Commonwealth model; or in the
colourful language of the late Lloyd Best, the
Puerto Rico’s capital import model offered foreign
businesses a range of attractive inducements to set up
shop on the island:
These inducements and incentives included factory
buildings, low cost loans, cheap labour and tax
exemptions, initially for
Led by Munoz Marin and Theodoro Moscoso, the Puerto
Rican experiment got going in the 1940s and it achieved
In constant dollars, Puerto Rican per capita income
increased fourfold between 1954-1973.
Between 1950 and 1973 the island’s GDP rose by a little
more than 300 per cent. Lamentably, this phenomenal rate
growth did little to cure Puerto Rico’s chronic
Even so, Puerto Rico remained an attractive option and
in the late fifties and early sixties Trinidad and
Tobago, Barbados and
Jamaica created Industrial development corporations,
which sought to replicate Puerto Rico’s successes.
Dr Eric Williams, the Trinidadian economic historian who
lived and worked in Puerto Rico for many years during
and fifties-was sold on the Puerto Rico model and
following his entry into Trinidadian politics (1955) and
electoral victory in 1956, Williams brought in the
Puerto Rican miracle worker, Moscoso, to show Trinidad
how to run things.
But Williams soon lost faith in the idea. By 1961 he was
lamenting the fact that the model was able to rack up
successes while leaving unemployment virtually
Williams’s ‘new thinking’ might have been influenced by
CLR “Nello” James (1901-1989), the Marxist theoretician
edited the Nation , theoretical organ of Williams’s
People’s National Movement (PNM): James edited the
1958 to 1961.
James was a very effective helmsman at the Nation;
perhaps his greatest achievement was his campaign
(conducted in the
pages of the Nation) for a black captain of the West
Indies team. The West Indies Cricket Board finally
Frank Worrell was appointed in 1961. Worrell was himself
a strong campaigner against racism and colourism in The
Indies; fed –up with the twin evils in his native
Barbados, Frank relocated to Jamaica. Some Bajans never
The Puerto Rican model ran into very heavy weather in
the late sixties; it was eventually toppled by the
recession of 1973.
It is worth noting that the idea of economic development
and industrialization in the British West had been
laughed off by
the economists in the British Colonial Office until the
painstaking scholarship of a young Arthur Lewis
literally forced them to change their minds.
Lewis challenged the Moyne Commission’s endorsement of
economic views contained in the 1897 Report of the West
Indian Royal Commission: The commission opined that
“there was no prospect for manufactured industries being
established on any considerable scale in the West
Lewis, who won a PhD at age 25, was also in Puerto Rico
in the forties, where, like Eric Williams, he worked for
American Commission, later the Caribbean Commission.
Borrowing heavily from the Puerto Rican model, Lewis
would eventually come up came up with a plan to secure
industrialization of the British West Indies, and this
was first published in 1949.
Lewis was economic advisor to Ghana’s Kwame Nkrumah in
the late 1950s: Nkrumah broke down and cried when Lewis
informed him that there was no money in his Treasury.
This situation arose as Nkrumah disregarded the advice
dispensed by Lewis. Nkrumah would say to the young
economist:” I know you’re right, but I am a politician;
I have to deliver the goods”.
It was Nkrumah who said: "Seek ye first the political
kingdom and all else shall be added onto you”: he soon
that securing the political kingdom was the easiest
Let’s return to the big question: What are the viable
alternatives to dependence on foreign investment?
The editors of BIGDRUMNATION invite your constructive
comments, criticisms and ideas