Did Lewis’ theory of “industrialization by invitation” ( IBI ) lead to some of the societal. economic and fiscal jobs being experienced in the part? Discuss your response. Lewis’ theory of “industrialization by invitation” made a instance for the possibility of the creative activity of a fabrication sector in the islands in the part. contrary to the thoughts proposed by the Moyne Commission.
With the overpopulation of the islands. Lewis argued that non-agricultural employment chances were required and he saw the fabrication industry as a agency of accomplishing this end. Using the theory of comparative cost. Lewis felt that industrialization would be a feasible option for the West Indian islands. He noted. nevertheless. that given the fact that that locals lacked equal cognition and were comparatively inexperienced in this new enterprise. there would hold to be a impermanent trust on foreign investors.
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To pull them. local authoritiess would hold to play a really active function by offering assorted inducements and puting up Industrial Development Corporations. Lewis based his theoretical account on Puerto Rico’s Operation Bootstrap. ( Rose. 2002 ) provinces that by “early 1960’s the MDCs and some of the LDCs in the part had established the institutional and legal setup to suit the industrialisation development scheme. ” There was besides an inflow of “foreign capital and seeable light fabricating industries” ( Rose. 2002 ) .
It would look. therefore that Lewis’ theory was successful since some economic growing was seen by the MDCs. Be that as it may. closer scrutiny would uncover that the smaller islands did non menu every bit good in their efforts at industrialisation. In fact. even with the success of the MDCs. industrialisation by invitation achieved negative consequences. This was because most of the industries developed as a consequence proved to be capital intensive instead than labor intensive. therefore unemployment rates remained high.
The addition in rural to urban migration and the societal and political tensenesss experienced did nil to better the state of affairs. The foreign investors did non. as Lewis envisioned. offer sufficient preparation and aid to the locals. Alternatively. they maintained close ties with their ain states and the part was now swept up in yet another rhythm of dependence. Consequently. the execution of Lewis’ scheme can be seen as holding some consequence on some of the societal. economic and fiscal jobs experienced in the part.
The fact remains that the states in the part were forced to vie against each other for foreign investing therefore sabotaging any old efforts at integrating. a state of affairs which still exists today. Lewis’ scheme must non be thought of. though. as being entirely accountable for the region’s jobs. In portion. this can be seen to hold arisen because the region’s authoritiess. in implementing Lewis’ scheme. failed to take into history Puerto Rico’s close ties with the United States and their privileged entree to the U. S. markets.
