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92 

The Jamaican Bauxite Industry & Decolonization 
Monica Silberberg 

 

Monica Silberberg will be graduating from the University of Toronto this year, 

receiving her Honours Bachelor of Arts with a double major in History and Urban 

Studies. The following essay was selected to be presented at the 2012 Latin 

American and Caribbean Studies Conference at York University. In addition to her 

studies, Monica has been dancing with the University of Toronto’s Silhouettes Dance 

Company throughout her undergraduate career. 

Abstract: This paper looks at the role of multinational corporations (MNCs) in the 

bauxite-alumina industry of Jamaica from the industry’s establishment in 1952 to the 

implementation of a tax levy on bauxite and the partial nationalization of the industry 

in 1974. The examination of the positive economic and societal developments 

resulting from the presence of bauxite companies in Jamaica will be contrasted with a 

discussion of the negative economic and social implications caused by MNCs. It is 

argued that the effects of multinational investment in the bauxite-alumina industry 

were largely more negative than positive. MNCs contributed to poor economic and 

social conditions in Jamaica which respectively led to the rise of social activism in 

the late 1960s, and subsequently the election of the People’s National Party (PNP), a 

democratic socialist government responsible for the major structural changes to the 

bauxite-alumina industry in 1974. The reforms made to the bauxite-alumina industry 

by the PNP are addressed in this paper along with a discussion of the economic, 

political, and ideological motivations involved. In addition to improving social 

conditions in Jamaica, this paper contends these reforms reflected a form of national 

resistance against MNCs as neo-colonial actors.  

Since the discovery of alumina rich soils in Jamaica, 
Guyana, and Suriname, North American corporations have 
dominated the bauxite-alumina industry within the Caribbean. Some 
critics argue that MNCs are a form of neo-colonialism; it is also 
argued that the presence of MNCs have contributed to the economic 
growth of lesser-developed countries (LDCs). Both arguments are 
valid with regard to the Caribbean bauxite-alumina industry.  
 

Bauxite is the raw ore from which aluminum is extracted 
after under-going a three-stage refining process. First is the mining 
and drying stage, where the ore is extracted from the earth and 
dehydrated. In the second stage, beneficiation, aluminum oxide 
(alumina) is chemically separated from the ore by washing it with 



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hot caustic soda.1 The third and final stage is the extraction of 
aluminum from the alumina through a smelting process which 
requires large amounts of power.2 The value added is about 250% in 
the second stage and 225% in the third stage – Jamaica however only 
participates in the first and second stages.3 The alumina produced 
after the second stage in Jamaica was shipped directly to ports on 
the Gulf of Mexico and thereafter to alumina plants in Louisiana, 
Arkansas, and Texas to complete the process of aluminum 
extraction.4 

 
Jamaica‟s bauxite deposits were discovered in 1942. Since 

Jamaica at this time was a British colony, it was proclaimed by the 
British government that all bauxite lands were exclusively Crown 
property.5 The people and government of Jamaica were not given a 
voice when England leased Jamaican bauxite land to MNCs from the 
United States and Canada. The exportation of bauxite began in 1952, 
and three major U.S. companies (Alcoa, Kaiser, and Reynolds) 
became involved in the flourishing bauxite extraction industry in 
Jamaica.6 Alcan, a Canadian company, was also involved but the 
initial agreement regarding the price of Jamaican bauxite concerned 
only U.S. companies. In the initial agreement, the British 
government and the MNCs determined the division of bauxite 
revenue, leaving the Jamaican government out of the negotiations. It 
should be noted that even though Jamaica was still a colony, the 
parliament elected in 1944, which was Jamaica‟s first general 
election with universal adult suffrage, enjoyed a degree of internal 
self-government. Under the initial agreement, Jamaica received “an 
incredibly low royalty” which was “deliberately fixed at a low rate of 
a shilling [or about 12 cents (U.S.)] per ton for the first five-year 

                                                           
1 Norman Girvan, The Caribbean Bauxite Industry ([Mona] Jamaica: Institute of 

Social and Economic Research, University of the West Indies, 1967) 15. 
2 Iserdeo Jainarain, Trade and Underdevelopment: A study of the small 

Caribbean countries and large multinational corporations (Georgetown, Guyana: 

Autoprint Ltd., 1976) 273. 
3 Jainarain, Trade and Underdevelopment, 273. 
4 Norman Girvan, Foreign Capital and Economic Underdevelopment in Jamaica 

([Kingston] Jamaica: Institute of Social and Economic Research, University of the 

West Indies, 1971) 28. 
5 Thakoor Persaud, Conflicts Between Multinational Corporations and Less 

Developed Countries: The case of bauxite mining in the Caribbean with special 

reference to Guyana, (New York: Arno Press, 1980) 55. 
6 Diane J. Austin, “Jamaican Bauxite: A Case Study in Multi-National Investment,” 

Journal of Sociology, 11:3 (1975) 53. 



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period.”7 Renegotiations took place in 1957 between the government 
of Jamaica and bauxite companies that increased the royalties 
received by Jamaica to 14 shillings, or about $1.68 U.S., for each ton 
of bauxite mined.8  

 
The government of Jamaica welcomed bauxite companies 

and encouraged the expansion of the industry. They were eager for 
foreign investment which they believed would stimulate a flagging 
economy constrained by a low level of industrialization and small 
domestic markets.9 It was hoped that with bauxite development 
there would come an expansion of other infrastructural and export 
industries to replace dependence on the declining sugar industry.10 
The role of the Jamaican government in promoting industrialization 
by attracting foreign investment reflects the ideas and 
recommendations of economist Sir Arthur Lewis. Producing such 
works as Industrial Development in the Caribbean (1951), and The 
Industrialization of the British West Indies (1952), Lewis argued 
industrialization was essential for economic development in the 
Caribbean, and that the process of industrialization should be state-
led through the attraction of investment from foreign businesses.11 
For Lewis, successful industrialization had to be export-oriented and 
attracting investment from those foreign businesses which were 
already established in foreign markets would be the fastest route to 
exporting manufactures.12 While the Jamaican government did not 
follow all of his recommendations, Lewis‟s influence is apparent by 
the legislation passed in Jamaica in 1956 to specifically encourage 
exports.13  

 
The policies pursued by the American government also 

contributed to the expansion of the bauxite-alumina industry in 
Jamaica. American aluminum reserves were severely depleted by the 
Second World War. With the outbreak of the Korean War and the 
development of the Cold War and the arms race, concern to build up 

                                                           
7 Persaud, Conflicts Between Multinational Corporations and Less Developed 

Countries, 57. 
8 ibid., 59. 
9 Austin, “Jamaican Bauxite: A Case Study in Multi-National Investment,” 53. 
10 ibid., 53. 
11 Mark Figueroa, Class Issues in Industrialization Policy: Lewis’s Ideas and the 

Case of  Jamaica 1945-1956, (Department of Economics, University of Salford, 

1991) 7. 
12 Figueroa, Class Issues in Industrialization Policy, 12. 
13 ibid., 18. 



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aluminum reserves heightened.14 The United States government 
wished to break up the monopolistic control of aluminum production 
held by the Aluminum Company of America (Alcoa) within the U.S. 
by providing handsome assistance to the expansion of other 
American companies, including Kaiser and Reynolds, which was 
provided under the Defence Production Act of 1950.15 The American 
government decided that on the grounds of national security, 
capacity in primary aluminum and related materials should be 
doubled; thus Kaiser and Reynolds acquired 65% of the programmed 
increase.16 

 
At the outset of the negotiations, technical knowledge of the 

bauxite industry and of market conditions was monopolized by the 
MNCs. The Jamaican government entered negotiations without the 
benefit of expert advice. They lacked knowledge concerning types of 
resources, volumes of resources, grades of ores, and market 
conditions making it nearly impossible for the Jamaican government 
to calculate an appropriate rate at which to value their natural 
resources.17 The bargaining position of the Jamaican government 
was further weakened by the fact that there were many LDCs on the 
seller‟s side of the market for these resources, while there were just a 
few MNCs on the buyer‟s side.18 Previously, the U.S. primarily had 
exploited its own resources of bauxite for the production of 
aluminum, importing additional supplies from Guyana and 
Suriname.19 The vertical integration of U.S. aluminum production 
meant that the raw bauxite ore, as opposed to refined aluminum, 
rarely reached the U.S. market and consequently the Jamaican 
government had few guidelines for setting a notional value for its 
unrefined bauxite.20 The colonial status of Jamaica further weakened 
their bargaining position as the British government was more active 
in the initial negotiations with the MNCs. These factors gave bauxite 
companies a considerable advantage in the negotiation process as 
the initial agreement ensured that the government of Jamaica 
received a very low royalty for every ton of bauxite mined.  

                                                           
14 Austin, “Jamaican Bauxite: A Case Study in Multi-National Investment,” 53. 
15 ibid., 54. 
16 Jainarain, Trade and Underdevelopment, 273. 
17 Persaud, Conflicts Between Multinational Corporations and Less Developed 

Countries, 68. 
18 Persaud, Conflicts Between Multinational Corporations and Less Developed 

Countries, 68. 
19 Austin, “Jamaican Bauxite: A Case Study in Multi-National Investment,” 54. 
20 ibid., 54. 



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Another condition of the initial negotiations was the 
duration of the mining lease or permit obtained by the company. In 
1957 and 1967, Jamaica granted leases to the companies operating 
there for twenty-five years.21 These leases not only covered bauxite, 
but all natural resources existing in the lease-hold area. To ensure 
that the profits over time met the cost of establishing the plants, and 
to control competition, the bauxite companies bought land in 
Jamaica far beyond their ability to utilize in the immediate future.22 
Often deposits of bauxite were depleted before a company‟s lease on 
the land expired. These lands were commonly used for agricultural 
production so that companies could fully capitalize on their lease. 
For example, Alcan used bauxite-depleted land under their lease to 
raise cattle. Alcan admitted in 1971 that their agricultural operations 
were a way to help eliminate the cost of importing items necessary 
for alumina production.23 

 
Given the superior power of MNCs to control capital flows 

and exploit markets in the international arena, it is unrealistic to 
suppose that Jamaica would have easily developed an independent 
competitive aluminum industry.24 It can be argued that MNCs have 
provided capital, expertise, and markets for the exploitation of 
Jamaican bauxite more efficiently than could an independent effort 
by the Jamaican government or private Jamaican entrepreneurs. 
Several positive economic and societal developments have occurred 
in Jamaica resulting from the bauxite-alumina industry‟s presence. 
Within a decade of productive operations, bauxite-alumina rose to 
constitute almost half of Jamaica‟s domestic exports by value.25 
Moreover, bauxite companies‟ activities have had positive spill-over 
effects on other industries in Jamaica. For instance, bauxite 
companies spend locally well over $3,000,000 a year on materials, 
supplies, and services and in 1963 freight payments to the 
government-owned Jamaica Railway Corporation exceeded 
$1,500,000.26 

 

                                                           
21 Jainarain, Trade and Underdevelopment, 274. 
22 Tramm, “Multinationals in Third World Development: The Case of Jamaica‟s 

Bauxite Industry,” 4. 
23 Tramm, “Multinationals in Third World Development: The Case of Jamaica‟s 

Bauxite Industry,” 4. 
24 Austin, “Jamaican Bauxite: A Case Study in Multi-National Investment,” 56. 
25 B.S. Young, “Jamaica‟s Bauxite and Alumina Industries,” Annals of the 

Association of American Geographers, 55:3 (1965): 451. 
26 Young, “Jamaica‟s Bauxite and Alumina Industries,” 452. 



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The government used the revenue generated from the 
mining industry to finance the development of public infrastructure 
and social services including housing, water supplies, sanitation, 
community development, education, and health.27 Those employed 
by the bauxite-alumina industry were also paid significantly higher 
wages than those in other sectors of the Jamaican economy.28 Since 
people were making more money their standard of living increased; 
this combined with an increase in government spending. Bauxite 
companies have also been credited with expanding educational 
opportunities for Jamaicans and decreasing illiteracy.29 The 
development of schools in bauxite industrial regions, such as 
Mandeville, can be attributed not only to an increase of government 
spending but also to an increase of population (Jamaicans migrating 
to these areas looking for work in the industry) and the pressure 
from bauxite workers, now sufficiently wealthy to send their children 
to post-primary schools.30 Mandeville also experienced an increase 
of entrepreneurism which is further indicative of the industry‟s 
positive influence on societal development: “In Mandeville, the 
proliferation and success of such businesses as boutiques, gas 
stations, and fast food restaurants, all catering to the needs of newly 
arrived and consumer-oriented bauxite industry personnel attest to 
the positive influence of the multinationals on social mobility.”31 

 
While the growth of the economy, an increase in the 

standard of living, and high wages were all seemingly positive effects 
of the bauxite-alumina industry in Jamaica, there is more to the 
story. The negative consequences of the industry include problems of 
land acquisition and environmental damage. When companies first 
approached local farmers to buy their bauxite-rich soil, many saw it 
as an opportunity of a lifetime.32 They sold much of their land and 
after a brief period of economic comfort, they found themselves 
almost or entirely landless. Bauxite companies became large 
landowners and according to company statistics (which are believed 
to be understated) Alcan in 1972 owned 49,000 acres of Jamaican 
land and Alpart owned 26,000 acres in central and southern 

                                                           
27 ibid., 460. 
28 Austin, “Jamaican Bauxite: A Case Study in Multi-National Investment,” 57. 
29 Young, “Jamaica‟s Bauxite and Alumina Industries,” 460. 
30 Tramm, “Multinationals in Third World Development: The Case of Jamaica‟s 

Bauxite Industry,” 7. 
31 ibid., 8. 
32 ibid., 3. 



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Jamaica alone.33 Together Kaiser, Reynolds, and Alcan own almost 
30% of the parish of Manchester.34 With so much land designated to 
extractive industries, one can imagine the severity of the 
environmental damage caused. The environmental damage that has 
ensued includes loss of soil fertility and the disruption of long-
established topographical configurations.35 Other environmental 
dangers include the threat to indigenous water supplies, air pollution 
to nearby areas from the plants themselves as well as from mud 
lakes.36  

 
The industry also in many ways contributed negatively to 

the economic and social development of Jamaica, particularly by 
sharpening inequalities. The Jamaican government gained certain 
advantages in the development of bauxite, but not nearly to the 
extent that foreign corporations did. The revenue garnered by 
Jamaica was far below the value of the bauxite and alumina which it 
exported. Between 1950 and 1956, revenue was merely 3% of the 
bauxite and alumina export value.37 Even after renegotiations in 
1957, revenue had amounted on the average to only 17% of the 
industry‟s output.38 In 1970, Alcoa, the world‟s largest bauxite 
company, had total sales and operating revenue above the entire 
value of Jamaica‟s national production of goods and services.39 As 
mentioned, only the first two stages of aluminum production were 
done in Jamaica. Based on the data for 1950-1967, it was calculated 
that a lack of forward linkages resulted in 95% of the gross value 
generated from Jamaican bauxite being accrued abroad rather than 
domestically.40 

 
The wages received by bauxite workers in Jamaica did not 

compare to their counterparts in metropolitan countries, yet they 
were still substantially higher than in other sectors of the Jamaican 
economy. Few benefited from the high wages paid by the bauxite 

                                                           
33 Tramm, “Multinationals in Third World Development: The Case of Jamaica‟s 

Bauxite Industry,” 4. 
34 ibid., 4. 
35 ibid., 4. 
36 ibid.,” 4-5. 
37 ibid.,,” 8. 
38 ibid., 8. 
39 ibid., 9. 
40 R.M. Auty, “Multinational Corporations and Regional Revenue Retention in a 

Vertically Integrated Industry: Bauxite/aluminum in the Caribbean.” Regional 

Studies, 17:1 (1983): 4. 



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companies as they only provided employment for 1.1% of the 
working population – this figure includes not only workers directly 
involved in the mining of bauxite, but also those employed in 
company-financed construction and farming activities.41 Moreover, 
the majority of high-ranking, managerial positions were held by 
personnel from metropolitan countries and rarely were Jamaicans 
trained to fill these positions.42 Thus, Jamaicans occupied the low-
level, manual labour positions and lacked occupational mobility.  

 
Wage inequalities between the mining sector and other 

sectors of the Jamaican economy had destabilizing effects on the 
economy, for example wage disparities have exacerbated labour 
power distribution problems. Peasant farmers who represent the 
majority of the non-unionized workers in Jamaica were by and large 
frustrated with the marginal profits from small-scale farming when 
compared to the mining sector. This led to a persistent and 
increasing trend of internal migration from rural to urban areas, 
where it was hoped that more profitable employment, particularly in 
the mining and related industries, might be found.43 The 
consequences of this internal migration led to fewer employment 
opportunities in the mining industry and thus many migrants were 
left unemployed or underemployed. Furthermore, the rapid 
urbanization of bauxite-producing regions initiated overcrowding 
and housing shortages.44 Wage disparities between the public and 
private sector have also frustrated government expenditure on 
infrastructural industries and social services.45 Generally speaking, 
the private sector pays considerably higher salaries to their workers 
than does the public sector. Thus, the government must now 
compete with the private sector for trained technicians and 
managerial staff who remain in short supply.  

 
 The impact of MNCs perpetuates a dependent economy 
characterized by radical disparities in wages, high levels of 
unemployment and a small group of privileged workers and 
expatriate managers. Ultimately the economic, social, and 
environmental damage caused by MNCs in the Jamaican bauxite-

                                                           
41 Austin, “Jamaican Bauxite: A Case Study in Multi-National Investment,” 56. 
42 ibid., 56. 
43 ibid., 57. 
44 Persaud, Conflicts Between Multinational Corporations and Less Developed 

Countries, 141. 
45 Austin, “Jamaican Bauxite: A Case Study in Multi-National Investment,” 57. 



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alumina industry far outweighed the benefits received by Jamaica at 
large. Only a small portion of the population experienced the 
economic benefits of the industry causing many to resent the 
presence of MNCs on the island. 
 
 Jamaica gained constitutional independence from Britain 
in 1962, and with it many hoped that the new national government, 
the Jamaica Labour Party (JLP), would improve the poor economic 
and social conditions. However, drastic change did not immediately 
occur and the structural economic crisis and deterioration of living 
standards at the end of the 1960s was one of the main causes of the 
subsequent increase in social activism in Jamaica.46 Along with calls 
for more social justice and equality, an awakening of racial self-
consciousness led to a greater public interest in political and cultural 
affairs.47 With this came the election of the People‟s National Party 
(PNP) in 1972, publicly committed to the ideology of „democratic 
socialism‟ and determined to reshape Jamaican society, economy, 
and external relations accordingly.48 Led by Michael Manley, the 
PNP held office for some eight and a half years (between 1972 and 
1980) and instituted a series of social reforms involving significant 
changes to the bauxite-alumina industry. 
 
 Manley expressed his government‟s commitment to the 
creation of an economy that would be more independent of foreign 
control and more responsive to the needs of the majority of the 
people.49 The first sign of this change came in January 1974 when the 
government announced its intention of renegotiating tax agreements 
signed with the American and Canadian-owned bauxite and alumina 
companies. These agreements at the time produced only a token 
yield for the Jamaican government, and had not been altered since 
the 1950s when the industry was established. Jamaica had also been 
frustrated by the lack of significant revenue from its large alumina 
output and could point to no prospects for further expansion of its 

                                                           
46 Holger Henke, Between Self-Determination and Dependency: Jamaica’s 

Foreign Relations 1972-1989, (Jamaica: University of the West Indies Press, 

2000) 14. 
47 Henke, Between Self-Determination and Dependency, 14. 
48 Anthony Payne, “Jamaica: the „democratic socialist‟ experiment of Michael 

Manley,” in Dependency under challenge: The political economy of the 

Commonwealth Caribbean, ed. Anthony Payne and Paul Sutton (Manchester, UK: 

Manchester University Press, 1984) 18. 
49 Payne, “Jamaica: the „democratic socialist‟ experiment of Michael Manley,” 

23. 



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industry by the aluminum companies.50 “It was in this context that 
the September 1973 nonaligned summit in Algiers crystallized the 
ideological legitimacy of the movement of Third World economic 
nationalism; it was followed rapidly by the Ramadan War in October 
and the OPEC [Organization of Petroleum Exporting Countries] 
offensive that doubled crude oil prices in October and then doubled 
them again in December of that year.”51 
 
 The oil embargo implemented by OPEC during the 
Ramadan War was a dramatic demonstration of what might be 
feasible in bauxite-exporting countries through collective action. 
Perhaps it even influenced the establishment of the International 
Bauxite Association the following year. The economic crisis that 
resulted from the sudden rise in oil prices severely affected Jamaica: 
in one year, from 1973 to 1974, the island‟s oil import bill rose from 
J$65 million to J$177 million.52 The prices for other imports rose as 
a consequence, especially food and manufactured goods, putting 
further pressure on the cost of living and the balance of payments.53 
In this situation, economist Norman Girvan points out three options 
that were available to the Jamaican government:  
 

1. Reduce oil imports severely, which would probably imply 
zero or even negative economic growth; 

2. Reduce non-oil imports, which would have a similar effect, 
since most capital and intermediate goods are imported; or 

3. Raise the additional foreign exchange required by higher 
taxes on the bauxite industry.54 

 
 Jamaica chose the third option by implementing a bauxite 
levy in January 1974. After some unsuccessful negotiations with the 
aluminum companies, the Jamaican government imposed a new 
tariff on the production of bauxite mined in Jamaica and exported to 
North America. This new tariff raised the 1957 royalty by roughly 
100% and replaced the old income tax with a levy set at 7.5 percent 

                                                           
50 Norman Girvan, Corporate Imperialism: Conflict and Expropriation, (New York: 

Monthly Review Press, 1976) 136-137. 
51 Girvan, Corporate Imperialism, 137. 
52 Payne, “Jamaica: the „democratic socialist‟ experiment of Michael Manley,” 

27. 
53 ibid., 27. 
54 Girvan, Corporate Imperialism, 137. 



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of the price of aluminum on the world market in the previous year.55 
The bauxite levy was very successful from an economic standpoint. 
Revenues increased from J$24.51 million per annum in 1973 to 
J$185 million in 1977.56 
 
 Before the levy was implemented, Manley had met with 
governments in Washington and Ottawa. In Washington, he assured 
Secretary of State Kissinger that the levy was “purely economic in its 
implication” and that, recognizing the strategic importance of the 
metal, Jamaica “would never seek to affect US access to our bauxite 
through the legitimate channels of its multinational corporations.”57 
However, contrary to Manley‟s declarations, the implementation of 
the bauxite levy suggests a political motivation as well. Taking office 
in 1972, it was the first time the PNP had held the majority in 
Jamaican Parliament. The bauxite levy was a way to demonstrate 
that the PNP were very different from the predecessor government 
and main political rival, the JLP, proving that the PNP were more 
nationalistic and quicker to defend the country‟s sovereignty.  
 
 The action of the Jamaican government was not limited to 
taxes; the PNP expressed their support for the formation of the 
International Bauxite Association in 1974 and proposed a total 
revision of the terms of the aluminum companies‟ operations in the 
country. The government stated that it would: (1) “find ways of 
increasing the foreign-exchange contribution of the industry” (other 
than higher taxes themselves); (2) “reacquire for Jamaica the large 
areas of land owned by the companies”; and (3) “secure government 
participation in the ownership of enterprises.”58 Following the 
imposition of the tax levy, the PNP government partially nationalized 
the subsidiaries of the MNCs involved in the mining of bauxite. The 
first nationalization occurred in November 1974 when the PNP 
announced that it had reached an agreement with Kaiser Aluminum 
for state participation in its mining facilities. The government would 
acquire 51% share in the bauxite mines at a cost of J$15 million 

                                                           
55 Keith Worrell, The Economy of Modern Jamaica: An Outline, ([Kingston] 

Jamaica: Bustamante Institute of Public & International Affairs, 1987) 20. 
56 Richard Allicock, U.S. and TNC Responses to Nationalizations by Left-Wing 

Governments in Chile, Guyana and Jamaica in the 1970s, (Dissertation: 

University of Windsor, 1991) 91.  
57 Henke, Between Self-Determination and Dependency, 55. 
58 Girvan, Corporate Imperialism, 140. 



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payable over the next ten years at 8.5% interest.59 Similar 
agreements of partial nationalization were subsequently reached 
with other bauxite companies operating in Jamaica. These 
agreements gave Jamaica majority equity participation in the bauxite 
exploiting and processing subsidiaries of the MNCs, and minority 
equity in the alumina producing subsidiaries. Management and 
effective control of the enterprises still remained in the hands of 
MNCs however.60 
 
 All of the major bauxite companies protested the Jamaican 
imposition of the tax levy. They gave notice that they would apply for 
arbitration to the World Bank‟s International Center for Settlement 
of Investment Disputes (ICSID) and filed suit in 1974.61 Such an 
action proved useless since part of Jamaica‟s preparation for 
imposing the levy involved notifying the ICSID of withdrawal from 
that section of its convention dealing with natural resources.62 In 
effect, companies were left with no legal recourse and within a few 
weeks they indicated they would comply with the levy, albeit with 
verbal protests, but without any significant confrontations with the 
Jamaican government.63 The companies reacted to the measures of 
the Jamaican government by decreasing exports from Jamaica to the 
U.S., and increasing the production of their plants in Guinea to 
supply the American market.64 In 1975 the companies doubled their 
imports into the U.S. from Guinea, a new-comer to the industry, who 
were now threatened to experience similar economic and societal 
problems from the presence of these MNCs as Jamaica did. 
 
 The structural reforms made to the bauxite-alumina 
industry were not just a strategy to improve the poor economic and 
social conditions of Jamaica; there is also a broader component to 
these measures. The investment of MNCs in the Jamaican bauxite-
alumina industry is argued to be a form of neo-colonialism or 
economic imperialism. As mentioned, the presence of these 
companies has resulted in unsustainable development and persistent 
underdevelopment in Jamaica. The economy of Jamaica was 
dependent on the activities of MNCs and the revenue produced by 

                                                           
59 Allicock, U.S. and TNC Responses to Nationalizations, 91-92. 
60 Allicock, U.S. and TNC Responses to Nationalizations, 115. 
61 ibid., 154. 
62 ibid., 154. 
63 Girvan, Corporate Imperialism, 139. 
64 Allicock, U.S. and TNC Responses to Nationalizations, 156. 



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bauxite and alumina exports. As a former British colony only 
recently achieving political independence, the 1974 reforms 
symbolized the desire of the PNP to further decolonize by 
eliminating economic dependence on foreign corporations. The PNP 
stated that they were determined not to “accept our dependence as a 
natural and permanent condition” and to disengage from “a slavish 
obedience to the U.S.”65 
 
 Jamaica, like many other Third World countries, sought to 
attract large-scale foreign investment, hoping that it would stimulate 
the economy and expand other infrastructural and export industries. 
Ultimately, the MNCs did effectively provide capital, expertise and 
markets for the exploitation of Jamaican bauxite, but they also gave 
rise to various economic and social development problems in 
Jamaica. The negative consequences of the MNCs in Jamaica have 
been addressed in this paper and include economic dependency on 
foreign capital, radical wage disparities, environmental degradation, 
increased rural to urban migration leading to an increase in 
unemployment as well as housing shortages and overcrowding which 
had put tremendous pressure on the Jamaican government to 
provide appropriate infrastructure and social services. For many, the 
MNCs were a symbol of economic imperialism and a hindrance to 
the decolonization process. The 1974 reforms implemented by the 
PNP government represented not only an effort to improve economic 
and social conditions in Jamaica, but a legitimate challenge to the 
MNCs who dominated the industry. Whether or not these reforms 
were the correct course of action for Jamaica is a subject beyond the 
scope of this paper. However, the 1974 policies that intended higher 
returns and greater Jamaican control of the bauxite-alumina 
industry were a powerful statement of national resistance against 
MNCs as a form of neo-colonialism. 

                                                           
65 Henke, Between Self-Determination and Dependency, 54. 



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Works Cited 

 

Allicock, Richard. U.S. and TNC Responses to Nationalizations by Left-

Wing Governments in Chile, Guyana and Jamaica in the 1970s. 

Dissertation: University of Windsor,  1991. 

 

Austin, Diane J. “Jamaican Bauxite: A Case Study in Multi-National 

Investment.” Journal of Sociology, 11:3 (1975): 53-59. 

 

Auty, R.M. “Multinational Corporations and Regional Revenue Retention 

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