Prospects for the FDI Export Model in Jamaica and the Caribbean

From Kingston, Jamaica, in the north, across the arc of Caribbean islands to Guyana in the south, Caribbean countries are busy revising their incentive programs, developed in the 1950s and 1960s to attract foreign investors into import-substituting industries. By the 1970s there was general disillusionment with this strategy and its foreign investment component, resulting in either a stiffening of the regulations or benign neglect. The current concern is with using foreign direct investment (FDI) to establish export-oriented industries. Such a model is now widely advocated throughout the region. This article seeks to analyze the viability of this model in the Caribbean region. It begins with a case study of the implementation of this strategy. During the period 1981-1988, the ruling Jamaica Labor Party (JLP) government of Edward Seaga attempted such an FDI export model. This experience, over only eight years, may be considered a nonrandom example of the possibilities of the model. This article goes on to locate the Jamaican experience in the wider context of the literature on the determinants of foreign investment and of the demands of capital for accumulation on a global scale.