Caribbean Islands Manufacturing
Although the manufacturing sector remained relatively small in
the 1980s, it spanned a wide range of activities from sugar
processing to automobile assembly. In 1985 manufacturing output
reached approximately US$542 million, or 7 percent of GDP. Light
manufacturing in particular experienced sharp declines of over 10
percent annually during the mid-1980s; nonetheless, the sector as
a whole was growing by the late 1980s because of the inclusion of
petrochemical and steel production in manufacturing data.
Historically, manufacturing was an insignificant sector in the
economy, dwarfed by agriculture and oil. In the postwar era,
however, import substitution industrialization development
strategies provided generous fiscal incentives toward new
investment in manufacturing. The Aid to Pioneer Industries
Ordinance of 1950 provided accelerated depreciation allowances and
duty-free importation of machinery and raw materials, which was
instrumental in attracting foreign investment to Trinidad and
Tobago. Likewise, the establishment of the Industrial Development
Corporation (IDC) in 1959 served to expand the sector's role in the
economy. By the 1960s, producers of manufactured goods were
protected through increased tariffs as well. These measures
encouraged the establishment of over 100 new manufacturing
operations by the mid-1960s. Increasingly, the sector moved beyond
agricultural processing and easily substituted goods toward the
assembly of consumer durables, such as televisions, refrigerators,
and automobiles. By the 1980s, most locally manufactured goods
remained protected through quantitative import restrictions.
The structure of manufacturing in the 1980s was a highly
protected, inward-looking industry that produced mostly for the
domestic and Caricom markets. Exports of manufactured goods in the
early 1980s, before petrochemicals and steel manufacturing were in
full force, accounted for as little as 2 percent of domestic
exports. Since the manufacturing industry tended to emphasize
mixing, bottling, and assembly, the value added of the final
product was generally low. As such, these activities often did
little to link various sectors of the domestic economy. Price
controls were also used by the government to reduce the power of a
few local producers, who faced minimal competition as a consequence
of import controls. The implementation of a heavy industry strategy
changed manufacturing by the late 1980s. Although light
manufacturing declined with the economy's general contraction in
the mid-1980s, it was believed that Trinidad and Tobago was
consuming more locally produced goods because it could not afford
the import splurge of the 1970s.
The manufacturing sector was broken down into six principal
subsectors: assembly, chemicals and nonmetallic products, food
processing, beverages and tobacco, printing, and wood products.
Discussion of manufacturing generally excluded oil and sugar, which
if included would have accounted for 45 percent of manufacturing in
1985. Assembly was the most important subsector, contributing more
than a quarter of manufacturing's output. Assembly included radios,
televisions, refrigerators, gas stoves, vehicles, batteries, tires,
and boat building. Less than 1 percent of assembly manufacturing
was exported. The second most important subsector was chemicals and
nonmetallic products, contributing 19 percent of the sector's
output and consisting of petrochemicals, paints, pharmaceuticals,
bricks, cement, and glass. This subsector grew rapidly in the 1980s
with the development of petrochemicals and new cement factory
capacity. Food processing, such as edible oils, feeds, meat, baked
goods, and dairy products, was the third most important subsector,
accounting for 16 percent of manufacturing. Trinidad and Tobago
continued to produce its world-famous flavoring, Angostura Bitters.
Beverages and tobacco, textiles, printing, wood products, and
miscellaneous manufacturing followed in importance, all
contributing between 5 and 10 percent of total manufacturing.
Data as of November 1987
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