studies from the 1950s until the end of the 1970s”. There are
two elements to this approach as noted by Martinussen – a
state-building strategy that aims to anchor the state in the
surrounding society, extending state institutions so that they
reach down and out to the citizens. The second element of
this approach is state-managed development which sees
the use of state bureaucracy as an engine of growth and
development via central planning and resource allocation.
In the 1980s our region found itself in a situation where
traditional export sectors suffered declines in the real value
of these commodities relative to imports (declining terms
of trade), and this was exacerbated by fiscal profligacy
Trinidad and Tobago’s
first attempt at crafting a
development strategy was an
approach developed with the
incentives and protective barriers
recommended by Arthur Lewis.
and excessive, unsustainable levels of either foreign and/
or domestic debt. These crises provided the impetus for
pursuing market-based economic strategies in the late 1980s
in Barbados, Guyana, Jamaica, and Trinidad and Tobago.
The strategies pursued saw a shift from government/stateled economic management to, among other things, trade
liberalization and multilateral support loans as well as
financial sector reforms.
Trinidad and Tobago’s economy has gone through periods of
booms, recessions, adjustment programs and liberalization.
Trinidad and Tobago’s first attempt at crafting a development
strategy was an approach developed with the incentives and
protective barriers recommended by Arthur Lewis. However,
instead of producing for export as Lewis advised, what was
developed was a lucrative, fast-growing domestic, and later,
regional market for consumer goods. That policy, in the
immediate pre- and post-independence period, 1960 – 1972,
aimed to establish an independent country, create sustainable
employment, reduce income inequality, achieve food security
and improve overall life for all citizens. The central feature of
the program was an ‘Industrialization Strategy’ introduced
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Caribbean Investment iQ December 2013
in the 1950s under which a wide range of incentives was
offered to induce investments. The aim of the program was
to establish both ‘Import Substitution’ and export oriented
manufacturing industries. Some specific measures that the
government implemented to expand the local manufacturing
sector were:
1. Duty free import of materials and machinery for
constructing and equipping factories up to five years
2. Five year income tax holiday and tax free dividends for up
to seven years
3. Major revision of the tariff structure in 1962 leading to
increase in tariff on certain manufactured goods
4. Implementation of a ‘Negative Import List’ in 1966 to
protect certain industries like Domestic Textiles and
Garment, Furniture, Food Processing, Packaging and
Petro-Chemicals
At that time, the economy was enjoying growth rates
averaging 3.5% per annum, energy accounted for 80% of
exports and 28% of government revenue and the current
account ran a deficit of 8.5% of GDP.
Jamaica followed a similar path to Trinidad and Tobago.
Jamaica’s development strategy of the 1950s promoted an
industrialization process based on State incentives offered
to investors, particularly foreign investors. The strategy
was “successful” in that it resulted in phenomenally high
growth rates - more than 7% per annum. When Jamaica
gained independence in 1962 (the same year as Trinidad
and Tobago), the process of economic diversification