New Industries in the Caribbean free essay sample

Caribbean economies from their earliest periods of colonization were essentially agrarian based (during slavery). Economical activities included livestock farming and small farming done by the peasants. There were also trading and commerce which included the establishment of shops, inns and taverns. Large plantations were worked by a mass of slaves with the premier crop being Sugar Cane. When the colonizers first came to the West Indies they mainly grew crops such as coffee, cotton, ginger, banana and cocoa mainly for export. However during the second half of the 18th century, these crops lost their comparative advantage to sugar. When sugar experienced its depression the planters relaxed their stronghold over control of the land and some estate workers turned their attention to the peasant sector and other industries. NEW INDUSTRIES By the beginning of the twentieth century, the peasantry had begun to play a very important role in the diversification of the West Indian economies. The Royal Commissions before the Norman Commission, and the Norman Commissions had made recommendations for the development of the peasantry (Curtis: p 32). Many of the export crops recommended by the Norman Commission were already being cultivated by the peasantry. For these crops to have greater success, the peasantry would need capital for greater investment. But this capital was not forthcoming. This was due to the fact that they had limited capital, occupied small plots of land because they were charged a lot for these lands. Additionally the peasants cannot produce at subsistence level. The black peasantry in particularly faced a number of obstacles which included the increase in land prices, eviction from lands, refusal to subdivide and sell lands and also heavy taxations. The planters most of the times sold large pieces of lands for lower cost to the whites in comparison to the ex-slaves. Rice, which had been cultivated earlier as a subsistence crop in Guyana began to assume importance as a cash crop in the late nineteenth century. The abandonment of sugar cultivation on some estates made more land available, as did the opening up of riverain crown lands in 1898 on what for some were manageable terms of purchase. By 1900 government interest was being channeled through the board of agriculture ith conducted experiments in different rice varieties and supplied seed to the growers. A more objective was to develop a uniform grain size to reduce wastage in the milling process and by 1908 this had been substantially achieved. All of this stimulated further expansion so that, whereas in 1891 the land under rice amounted to only 4000 acres, there was a tenfold increase in the following two decades, and by 1917 for every ten acres planted in sugar, Guyana, eig ht acres were planted in rice. Expanding rice acreage was accompanied by the mushrooming of small mils. In 1914 there were 86 of them in existence. They were hardly elaborate structures but they were linked to the large mercantile firms in the capital and they controlled growers in the villages through a system of advances. Many of the millers, like many large rice growers were Indians who employed Indian labour, and the evidence suggests that ethnicity hardly guaranteed favourble treatment. In 1905 it was exporting to the Caribbean. Rice enjoyed considerable prosperity during the first war. In the inter-war period alternative sources of supply to the Caribbean market dried up and this provided the main basis for the steady expansion of the industry in Guyana. Guyana is by far the most important producer of rice in the Commonwealth Caribbean. There were about 20 thousand peasant farmers in 1952; by 1965 their numbers were believed to have more than doubled, reaching 45 thousand. There were 222 rice mills in 1960 and 199 in 1970. All were privately owned, except two which were owned and operated by the Rice Development Company. Bananas were first introduced into Jamaica in 1516. However the first exports took place in 1869 after the depression of sugar. As the industry flourished American companies came in to handle the trade as the peasants supplied bananas to a US [Boston] banana trader Lorenzo Dow Baker. Boston Fruit Company later formed to trade in Bananas with Caribbean and Central America which later became the United Fruit Company [UFCo]. By 1890 the value of Banana exports exceeded that of sugar and rum, and it retained this position except for a few years until the Second World War. By 1937 Jamaica provided twice as many stems as any other country in the world. It thus became a plantation crop-corporations and large entrepreneurs. Banana soon became the principal exports from Jamaica, and Windward Island. Trading partners also changed-Destination was now USA. During the war the industry declined because the ships could not be spared to transport the product. By the beginning of the nineteenth century coffee was also an important crop in Jamaica (The Banana production was done mainly by the Middle class mulattoes). During the depression sugar farmers in Trinidad turned their attention to cocoa which was the first major export of the island, and by 1900 it had become the major export once again. It retained this position until 1921 when Ghanaian cocoa began to swamp the world market. During that time too cocoa was also an important crop in St. Lucia, St. Kitts and St. Vincent. In the 1930’s citrus, which had been cultivated in the stricken cocoa areas became important. So too did Pineapples in the 19th century. Relatively small scale farmers earned cash for production of bananas, coffee, cocoa and pimento for exports. They also produced tubers, fruits and vegetables for domestic markets. A substantial part of small farming was for subsistence with relatively small surpluses for sale. Bauxite, tourism and urban-based manufacturing and services replaced export agriculture as the dominant sectors of the economy in the post-war era, as the British West Indies pursued a programme of industrialization-by-invitation The mineral resources which include bauxite, aluminum, gold et cetera have been developed by foreign capital and for the export market, to a much greater extent than the main agricultural products. In Guyana the American-owned Bauxite industry shipped its first load of ore in 1922. Expansion was steady throughout the inter-war period but it was not until the second war that bauxite became an important force in the economy. The Jamaican bauxite industry was developed by American companies after the second war. Demand for aluminum by the United States military and space programmes and by the automobile and other consumer goods industries created a lucrative market for bauxite and aluminum. As of such in 1957 Jamaica became the world’s leading bauxite producer and the main U. S. supplier. The U. S. dollar earnings from this new export financed the import of capital goods manufacturing industries that were set up to produce for the growing domestic and regional markets. The investment cycle of the multinational bauxite mining companies began topping offs as the decade of the 1960s drew to a close. Bauxite and aluminum thus replaced sugar and bananas as the leading export product after the Second World War. In 1964 Jamaican bauxite industry had over 800 registered manufacturing establishments including a cement factory, cigarette factories, breweries and bottling plants, extiles, clothing factories and plant producing soap, margarine and edible oil. In February 1967 an agreement was announced between the Jamaican government and an American metal-fabrication company to erect an aluminum plant in Jamaica. The petroleum industry in Trinidad and Tobago is the oldest mineral industry in the common-wealth Caribbean. The first successful well dates back to 1857 but it was not until the first decade of this century that the industry was established. By 1909 the country was exporting oil and by 1919 five refineries were in operation. The industry is largely owned and controlled by foreigners. The production of crude oil is mainly in the hands of four companies-Texaco, Shell, Trinidad Northern Area owned by Trinidad Tesoro, Shell and Texaco as equal partners. However by 1980 the government had purchased all foreign operations except Amoco. The tourist industry was developed after the Second World War, and this two is foreign owned and controlled. This industry is an offshoot of the banana and bauxite industry especially in Jamaica. The establishment and development of the tourist industry were facilitated by incentive legislation and special institutions. Jamaica passed the Hotels Aid Law, 1944, granting accelerated depreciation allowances and duty-free importation of materials for the construction and furnishing of hotels, and the Hotel Incentives Law, 1968, granting tax holidays and other concessions. The Hotel Aids Act passed in Barbados in 1967 allows duty free importation of building materials and equipment and grants a tax holiday of ten years. And all three territories set up Tourists Boards to promote and service the industry. As in the other generating sectors of the economies, there is a large proportion of foreign ownership in the tourist industry. In 1971 thirty-five per cent of the hotels in Jamaica were wholly foreign owned, 56 per cent wholly locally owned and 9 per cent joint ventures. Foreign ownership was more pronounced in Barbados. Foreigners owned 61 per cent of the capacity there: 33 per cent was owned by nationals of the United Kingdom. 16 per cent by Canadians and 12 per cent by Americans. Barbadians owned 34 per cent, and 5 per cent was jointly owned. Local ownership was dominant (80 per cent) among the smaller establishments which provided 25 per cent of the total capacity. Trade and commerce was also taking place in many places in the British West Indies as well. According to Beckles and Shepherd (1993) â€Å"export trade in the British Islands showed in a number of the units spectacular increases to the peak of prosperity between 1929 and 1940. † British Guiana traded with Europe and North America, commodities such as sugar cane, coffee and fruits. Trinidad exported petroleum products such as oil to places such as North America and the United Kingdom. Jamaica too traded tropical fruits, sugar cane, coffee, cocoa and other commodities with Europe and North America. In the late 1950s, Jamaica became the biggest supplier of bauxite to the United States. RACE: The Indians are concentrated mainly on the sugar estates while the Africans are concentrated in the villages and the towns. The Africans have always been more mobile geographically and socially and the chief supporters of the urbanization movement. They provide the overwhelming majority of the labour force in the bauxite industry and mining camps in the interior of Guyana, and the petroleum industry in Trinidad, and the bulk of the factory and service workers in both countries. Until the 1950s they occupied a somewhat monopolistic position in the white-collar and professional positions. The Indians supply the bulk of the field sugar workers and also the rice producers in Guyana. -Europeans owned most of the wealth-producing assets in the colonial economy. The indigenous Ihere, imported labour] populations were allowed to engage in small-scale peasant farming on the fringes of large white-owned plantations but mainly relegated to providing cheap labour for the white settlers in the expanding corporate economy. Where this posed problems, intermediary racial groups (Chinese, Indians, etc. ) were brought in to fill the gaps in labour supply. As export staples increased the wealth base of the colonial economy and as some diversification into minerals, tourism and manufacturing increased that wealth base further, commerce and services expanded. This opened up opportunities for small-scale capital and smaller entrepreneurial firms to operate alongside the large white-controlled corporations. (Thompson: p 244). In Jamaica, this intermediate minority group comprised immigrant white ethnics like the Lebanese and Jews (who joined a much older community of Jamaican Jews dating back to the period of colonization and settlement) and the Chinese, whose upper and middle echelons, occupying a shopkeeper niche, secured for the group the real and/or symbolic function of social whites. A racially mixed brown middle class also formed a component of this minority, intermediary ethnic group. The traditional white planter class was displaced both by foreign corporate capital, whose interests were concentrated on sugar, and later bauxite and tourism, and the intermediary ethnic groups with whom they eventually merged. The latter groups formed a domestic merchant and manufacturing sector alongside the transnational enclaves. A black rural middle class emerged on the basis of medium-sized holdings concentrating on export crops such as bananas, pimento, coffee and citrus. They comprised a tiny minority of the rural population, however, most of whom occupied a range between full-time peasants and full-time proletarians. The race related dualism of Caribbean economy was classically exhibited in the division between the (TNC or Jamaica-white-owned) plantation and (black) peasant economies of rural Jamaica. In 1938, this division was reflected in a tenure system which concentrated over fifty per cent of agricultural land into some 800 holdings and left nearly 100,000 poor peasants and their families with twelve per cent of the land* (Post, 1981: 2-3). In addition, the black peasant economy was itself internally stratified, partly along the lines of the division between export production and domestic food crop production, which was itself related to size of holding. In addition, there were roughly 80,000 households at the lower margins of the peasantry with an average of a quarter of an acre each. .A significant bureaucratic and professional black middle class emerged, but Blacks failed to challenge the entrenched economic positions of the intermediary-ethnic elites. In the meantime, economic frustration and disfranchisement led large numbers of peasant and working class Blacks to participate in a massive outward migration to Britain and a large-scale exodus from rural to urban areas, which translated rural poverty into urban ghettoes and urban poverty (ibid. : 252). In the late 1960s and early 1970s, many ethnic elites from the BWI began migrating abroad. This created unanticipated and unexpected new openings for black entry into the entrepreneurial class and facilitated large-scale entry of Blacks into the middle and upper levels of private sector management (ibid: 254). Blacks became well established within the corporate managerial elite and gained a foothold in many sectors of the economy manufacturing, construction, business services, tourism, commerce and agriculture alongside the still dominant minority ethnic groups. Their enterprises tended to be smaller, but a few were large. Other developments were the growth of import-trade higglering, which represented an expansion and in some cases a very lucrative enhancement of a traditional female working class role. The big corporate sector enterprises in insurance, banking, distribution, manufacturing, hotels and services remained under the predominant ownership of the economically dominant minority Jews, Whites, Lebanese and Browns. Indeed, migration of some of the less important families appears to have facilitated a consolidation and expansion of corporate ownership among the biggest capitalist families.