Fear of “confronting” the colonial economy has been one of the many stumbling blocks which retarded the development of a successful national 1st movement in Trinidad during the forties and early fifties. The meagerness of the territory’s economic and human resources, the smallness of scale on which it operated, and its dependence on the United Kingdom had convinced many would be reformers that self-propelled economic development was not a genuine possibility. It was in this context that a Puerto Rican style programme of “industrialization by invitation” was begun by the quasi-ministerial regime that governed Trinidad between 1950-1956. That programme had resulted in the establishment of about 35 industries the creation of 2, 195 jobs, and investment totalling $35m.
The “Operation Jobs” programme which was launched by the Peoples National Movement after it came to power in 1956 was only a promise to do better, and more efficiently what had been begun by its predecessors. It is generally agreed that the P.N.M. has improved on the performance of the former regime. It would have been surprising if it had not since it was able to draw on the experience and the foundations established by that regime. The Party also came to power on the wave of an upswing in the fortunes of the economy and much of the economic progress that the country witnessed after 1956 would have occurred without a change of regime. In fact, according to a C.S.O. Research Paper, the rapid growth of the economy began in 1954-1955, and not in 1956.
This is not to deny the real achievements of the P.N.M., however. Within the first years of its installation, it was able to make an exhaustive evaluation of the resources of the community, something which the previous regime had not done to any significant degree. The P.N.M. at least has the full measure of the problem with which it is faced, and its First Five Year Development Programme (1958-1962) was an ambitious attempt to come to grips with some of these. Properly speaking, it was not a systematic development plan but a framework of priorities designed to provide the infrastructure for servicing the programme of privately financed industrialization on which its “Operation Jobs” was to be based. The emphasis was put on expanding the country’s power and water supply, on improving road communications, health and education facilities, and on the preparation of industrial estates to attract capital. There was also a calculated shift away from the plantation sector of the economy where absentee and “Old World” interests were more securely entrenched. Only 2.1 per cent of the $218.5 million development budget was spent directly on agriculture and this mainly on small scale farming operations. The regime was also able to finance the programme almost entirely from public re-venues and local borrowings, even though this was only agreed upon following its failure to raise loans and aid on the international market. Foreign loans and grants provided only 7% of the development budget, an achievement that was later to prove embarrassing when attempts were made to find funds for the Second Development Plan, more than half of which was expected to be financed by external borrowings or grants.
Despite the fact that the real average rate of economic growth over the period 1951 · 1961 was in the vicinity of 8.5 per cent., (real national income increased by 6.6% per year). the largely capital intensive industrialization programme has failed to deliver the expectations of “Operation Jobs”. According to official 1966 figures, 87 new industries have been encouraged to operate in Trinidad by a variety of tax and other concessions (which are estimated to “cost” the Treasury about 20% of its recurrent budget) since December 1956. An additional 48 were in the planning stage. In terms of industries not assisted by the Government sponsored Industrial Development Corporation, the performance was equally modest. By March 1966 the number had increased from the December 1956 figure of 10 to 178, 120 of which had actually begun operations. If the pre P.N.M. industries and subsequent failures are taken into account, the entire 15 year industrialization programme had yielded around 350 industries, about 14,000 direct jobs and about half as many indirect jobs. The official estimate is that new industries are creating an average of about 2,500 jobs each year. By comparison Puerto Rico, with all its additional advantages, had managed to attract some 1,400 plants between 1951 and 1964. Over 900 of these were still operating at the end directly providing employment for some 64,000 people.
The modern manufacturing sector which ac-counts for 13% of G.D.P. has clearly failed to produce the results which had been confidently anticipated in 1956. In point of fact, it was the public sector which has functioned as the economy’s principal “absorbent sponge”. While total employment increased by 7% in 1963 and 5% in 1964, employment in the public sector increased by 10% and 9% respectively. Of the approximately 60,000 new jobs that had been created by the end of 1966 about 40% were yielded by the public sector. As praiseworthy as some of the P.N.M.’s efforts have been in the area of job creation, they are beggarly when one considers that population has been growing by about 3% per year and the labour force by about 4% per year. The problem is made worse by reason of the fact that women are seeking job opportunities more than previously and by increased life expectancy which swells the labour force at both ends of the age spectrum.
Ironically, the modest achievements in job creation have increased rather than decreased manifest unemployment. The lure of higher wages has been attracting people away from the rural areas into the co-urban complex (which is growing at about 5% p.a.) with all this means in terms of demands for greater welfare services. Unemployment has increased from 6% in 1956 to 14% in 1966 according to official estimates. most of which is among females and persons under 24 years of age (60%). Disguised unemployment is estimated to be in the vicinity of 14%. Some independent observers and radical critics claim that the true unemployment figure is nearer 33%. Government officials have privately admitted that the 14% figure is conservative, but strongly deny that it is anywhere near 33%. The Prime Minister, Dr. Eric Williams, in fact claims that if the unemployed were defined as those without and looking for jobs up to one week before the survey, instead of three months as is now done, the unemployment figure would be nearer 9 or 10% compared to 5% in the U.S. and 11% in Puerto Rico which both use the one-week formula. This latter formula, it is claimed, is not realistic in the context of undeveloped economies.
Whatever the true figure, it is clear that the job crisis is getting worse rather than better despite some further expansion of the manufacturing sector (8% in 1965 compared to 9.7% between 1951-1961). With the programme of import substitution showing signs of deceleration since 1962, economic growth has been slowing down markedly, and in 1965 real G.D.P. increased by only 3.6%, below the 5.1% projected in the 1964- 68 Plan. This performance is directly related to the completion of capital investments in the petroleum and sugar industry, losses due to deterioration in the terms of trade-estimated to be $323.5 between 1961 and 64, (a figure almost equal to the cost of the Second Five Year Development Programme) capital outflows, and shrinking capital inflows and tourist spending due to policies of economic nationalism in the U.S. and U.K.