| This study examines the opportunities and means available to a small mineral-producing Third World country to improve its bargaining position with the multinational corporations involved in the extraction of its minerals. Trinidad, which is a small producer of petroleum, is used as an illustrative case study. The data analyzed in this study were obtained from historical documents, newspapers, political party and labor literature, and elite interviews conducted in Trinidad over the period January 15, 1982, to April 25, 1982.; This study finds that nationalization of the multinationals involved in its mineral industry is not a feasible option for the small mineral-producing Third World country. The small size of the mineral reserves adversely affects the development of indigenous expertise in the exploration, production and marketing aspects of the mineral industry. The host country's initial dependence on the foreign investor for technological, managerial and marketing expertise is, therefore, likely to be maintained for the duration of the concession agreement.; Nationalization as a host country option is also deterred by the cost of compensation compared to the expected flow of profits from the industry under conditions of local ownership and management, by developmental pressures and the need for a steady stream of revenues from the industry, and by the vulnerability of the host government to sanctions from the foreign investor's home country, as well as from the international investing community. However, given the dependence of the host country on the foreign investor, the threat by the latter to uproot its operations becomes a very potent bargaining mechanism. Thus, in its bargaining with the foreign investor, the host government will try not only to increase its share of the revenues but also to keep the foreign investor operating in the country. The ability of the host government to achieve these goals depends on its ability to manage its domestic politics. |
