Tuesday, September 05, 2006

A call for specialization

In Frieden's text, Global Capitalism, he explains that:

People, companies, regions, and countries cut back on economic activities they were less good at to concentrate on those at which they were particularly good. In earlier eras countries had tried to be self-sufficient, but now they focused on producing and exporting what they did best and trading for the rest.
When you really think about "what a region does best" it is synonymous to "what creates the most revenue" for that region. Therefore, people tend to focus on what brings the most profit to their country. The rise in one industry in a certain area draws away from previously successful industries; the introduction of a new and successful industry to a country usually leads a decline in other areas.

A change in culture becomes particularly clear when observing specialization in a developing country. Trinidad, a developing country located in the Caribbean, was a large exporter of cocoa until they struck oil off the coast of the small island. Today, one can hike through the pristine rainforest of Trinidad only to stumble across the many abandoned cocoa estates.

Because oil was a larger industry and generated more revenue, oil became "what the country did best". Oil was in, cocoa was out. The small island of Trinidad, consisting of less than 2,000 sq mi, is now in the top 5 countries to export oil.

The culture is sometimes adversely affected by this specialization of a country. It seems to me that part of the culture was left behind when the cocoa estates were abandoned. However, some Trinis still use their homes for drying cocoa mostly for small profits from selling the products locally rather than exporting it. It is good to see that the locals continue to carry on this process even at a small scale. If nothing else, it shows that even though the focus of industry may change in major cities, the uniqueness of the culture may remain in the small villages and towns.

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