British and US oil companies set up the world's largest oil refinery transhipment complex in the Caribbean after the Suez Crisis and a technological revolution in oil tanker design in 1956. Trinidad and Tobago became one of the world's largest oil refinery and transhipment centres. In 1969 the British oil companies began to withdraw their investments and requested the nationalisation of their assets.
In 1985 the US companies withdrew their investments in response to the US government's deregulation of the domestic oil industry and financial incentives to bring their investments back home. Requested nationalisation led to the state-ownership of the oil sector.
The government of Trinidad set up state-owned petrochemical and iron and steel industries, with some of the world's most sophisticated technology, to utilise the country's large natural gas reserves. But by 1988 state capitalism had failed to provide the expected economic and social benefits, despite the drain on limited financial reserves and massive foreign loans. The government's reliance on the oil sector as the `prime mover' of the economy had caused sectoral and trade imbalance, high inflation, increased unemployment, currency instability, debt crisis and political instability which culminated in an attempted coup in July 1990.
The root cause of the failure of state capitalism was the governments' rush to industrialise and the structure of the state petroleum enterprises. The lack of accountability and responsibility of top management and government interference led to poorly run, unprofitable industries in which government waste and corruption were common.
| Identifer | oai:union.ndltd.org:ADTP/235995 |
| Date | January 1994 |
| Creators | Holton, Graham E.L., gelholton@pacific.net.au |
| Publisher | La Trobe University. Institute of Latin American Studies |
| Source Sets | Australiasian Digital Theses Program |
| Language | English |
| Detected Language | English |
| Rights | http://www.latrobe.edu.au/copyright/disclaimer.html), Copyright Graham E.L. Holton |
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