The Dynamics of Industrial Development in a Resource-Rich Developing Society: A Political Economy Analysis

Abstract

This article criticizes the resource curse thesis for neglecting the interplay of international factors and domestic politics, that is the political settlement, in explaining industrial performance in a resource-dependent society – Trinidad and Tobago. Using political settlement, analysis secondary as well as interview data, it examines the dynamics at the macro and sectoral levels in iron and steel and telecommunications in Trinidad and Tobago. The historical evidence reveals that anti-colonial mobilizations spurred critical public investments in developmental institutions and industrial projects responsible for improving the country’s productive base and technological capability in the post- Black Power period. These investments were bolstered by a favorable geopolitical climate and the 1973 commodity boom. Sectoral case studies reveal how shifts in the country’s political settlement affected late-industrializing accumulation of accumulation technological capabilities. Hereafter neoliberal policies facilitated an increased role for external actors in economic policy and ethnic-based clientelism within the political economy.

“Power to the People!”: The Catalytic Role of the Black Power Movement in Trinidad and Tobago’s Industrialization

“…In answering the call to address these weaknesses, more recent scholarship looks beyond the relationship between political elites and the capitalist class and shows that the relationship between political elites and the masses has been consequential to state structures and policies. Working class movements (Edwards 2017, 2018; Perry 2018, 2022; Teichman 2019) and “restive popular sectors” (Doner et al 2005) have pushed state elites to alter industrial policy and construct more developmental institutions. How elites respond to each other (such as alliances or fragmentation) and to challenges from mass movements also determines the degree of state cohesion (Vu 2010) and durability of authoritarian regimes (Slater 2010).…”

“…The success of the new industrial policy required sophisticated technologies. The firms and plants, particularly those producing ammonia, urea, methanol, iron, and steel, as well as in the sugar industry and telecommunications required a high level of technical competency (Long 1987; Perry 2018). Cutting-edge technologies, for the most part, had to be imported from abroad or acquired through licensing arrangements from providers and turnkey contracting.…”

Continuity, change and contradictions in late steel‐based industrialization: The “global color line” in Trinidad and Tobago's postcolonial economy

“…Quantitative data were also sourced from the World Steel Organization, the Fedberal Reserve Bank of St. Louis commodity price index, and the World Trade Organization. This steel industry case was selected due to the availability of relevant data yet the remarkable dearth of empirical analyses of T&T’s experience (for an earlier analysis, see Perry, 2018). The next section reviews key theoretical and empirical literature.…”

The triple crisis of debt, demand and decarbonisation: a preliminary analysis of the impact of COVID-19 on commodity-dependent developing economies

“…The paper first provides an overview of the various effects and channels of disruption of the COVID-19 pandemic to longer development challenges associated with commodity dependence that has been made worse over the past two decades in CDDEs at the current conjuncture. The paper offers a more nuanced, historically informed and contingent view of the relevance of commodities in economic structures and implications for in long-term development (Edwards, 2017; Neilson et al , 2020; Perry, 2018; Porter and Watts, 2017; Wright and Czelusta, 2004). In particular, based on current reports and data, I provide an analytical basis to re-evaluate concerns around resource curses beyond price dynamics and supply factors (Figure 1), towards examining long-term challenges of demand, decarbonisation and debt that pose peculiar risks in a financialised global economy.…”

“…Dwindling rents may also be used in the socio-political structure to maintain legitimacy by the state such as through new incomes policies or fiscal safeguards for enterprises in the onshore economy that is the sector that absorbs the taxes and royalties produced by the commodity-producing sector (Best and Levitt, 2009). In the context of reduced income from the exports of surplus commodities, intense battles and struggles for rent may ensue among competing interests to continue flows of profits, while social sectors may lack resources and capacity to mobilise to obtain a greater share of the rent (Ngo, 2016; Perry, 2018). In the final analysis, the economic model of CDDEs are shaped by global forces and national political struggles that ascribe opportunities for rent accumulation that influence the nature of economic policy and diversification pathways in the long run.…”