Economic Development Flashcards
What were 3 goals of SEA’s economies and what are they measured by?
- Economic growth - Measured by GDP growth, increase in productive capacity
- Economic nationalism - nationalism of wealth and production for SELF SUFFICIENCY
- Equity: fair distribution of wealth away from ethnic minority (Thailand, Indonesia, Malaysia: Chinese; Burma: Indians)
what types (3) economies prioritised growth or equity, and over which time periods?
Capitalist economies: prioritised growth
- Thailand, Indonesia (under Suharto’s new order post 1965), Phillipines, Singapore, Malaysia
Socialist economies: prioritised equity:
- Burma (after Ne Win’s coup overthrew U Nu in 1962), Vietnam
Both: “3rd way” - Socialist principles as an ideology, capitalist means used:
- Burma (under U Nu 1948-62), Indonesia (under Sukarno’s guided democracy 1957-65)
What were some overall trends of SEA economies (effectivenesss, adaptations (e.g.), general performance level)
- Capitalist economies more effective than socialist ones up till 1980s
- Socialist economies adapted in 1980s
- e.g. Vietnam Doi Moi - market reforms that opened up to market forces, abandoned central planning - collectivisation ended and farmers could sell crops on market for profit) - SEA economies generally well-performing
High income: SG
Middle income: Malaysia, Thailand, Indonesia, Burma
Low income: Vietnam, Burma
challenges of SEA’s economies (4, classified by time period)
- Pre-war (WW2) challenges
- Wartime challenges
- Post war circumstances
- Cold War circumstances (doesn’t apply to all countries)
Pre war (WW2) challenges of SEA economies: (5)
- Colonial powers left no educated professionals and competent domestic institutions
- Limited infrastructural developments (stopped at railways and roads)
- Mainly agrarian based economies (focused on cash crops like opium etc) — undiversified economy vulnerable to global commodity prices
- Colonial powers unwilling to introduce industrialisation (fear of domestic competition)
- Highly inequitable society - private capital concentrated in non-indig minority communities (e.g. Chinese in Malaya)
Wartime challenges faced by SEA economies: (3)
- Destruction of infrastructure
- Burma, Philippines fought over twice (first Japan then takeover by allies) - Food scarcity
- Inaccessibility to external markets and exports
How many people in Vietnam died due to food scarcity during the war and why?
1-2 million died of famine (1944-45) as surplus rice was shipped to Japan
How many percent of boats, locomotives, and roads got destroyed in Burma during WW2
90% boats, 85% locomotives, 70% roads
What percentage of Philippines (Manila) was destroyed during WW2
80% of Manila (including industrial and service sectors)
What was the main difficulty of economic reconstruction after WW2
Policies of returning colonial powers
How was phillipines post war economic growth hampered by the return of the colonial powers
- US content to give phillipines independence, but tried to continue exploitation of resources
- fueled growth, but led to challenges in equity and economic nationalism
- 1946 Bell Act: us coporations allowed to exploit natural resources in return for aid for economic reconstruction
How did the return of the UK post war hamper the eocnomic development of its different colonies
- those with less perceived importance (lack of natural resources) such as Burma : indep granted
- colonies with rich natural resources and economic potential (Malaya) kept, SG kept for its position as trading port
- countries under communist threat and low levels of indigenous nationalism (Malaya) kept
What did the British broadly do in Malaya post war (what type of economy, what policies etc, what effect)
- cheap labour, export oriented plantation economy
- co-opted/suppressed trade unionism
- communal divide and rule tactics
- led to post war rubber boom
How did the UK proceed in Burma after the war?
- unable to provide economic assistance
- established economic planning board, took policy in its own hands
How did France and the Netherlands treat its colonies post war, what did it lead to
- need to use the Indochina and Dutch-indie’s natural resources post-war for the reconstruction of their home countries
- forceful reimposition of colonial control
Indonesia: Indonesian revolution
Vietnam: 2 Indochina wars
- warfare, economic destruction
- trade paralysis and stagnation
What were the Opportunities and indirect benefits of WWII and decolonization (5)
- SEAns rose to higher responsibility (governance and production)
- military, political alliances
- greater self-reliance
- infrastructure built, tech transfer
- region more integrated with the global market
Where and when did the land reforms in Vietnam take place
Central Luzon, during and after the war
What were the US’s 2 post war policies in phillipines and how did they work
Phillipines rehabilitation act:
- 620 million
- access to us market
Ratification of the bell act:
- US coporations allowed to use natural resources
- peso pegged to USD
- military bases in phillipines continued to be maintained
How did the Cold War lead to economic development of SEA countries
- significant economic aid
- superpowers strove to prop up their client states in the region
- major tech developments in 20th century, especially post Cold War (green revolution, electronics sales)
How much aid did Thailand receive during the Cold War period, over what time period
1950-75:
- 650 mil in economic aid
- 1 billion in military assistance 960% of Thai defense budget)
- 1 billion in military operating costs
How much did Japanese developmental aid into SEA rise by from 1965 to 1980, and why
244 mil (1965) to 3353 mil (1980)
- switch to cheaper foreign labour from other SEA states
What was the broad belief of the indep SEA states, according to who
- Nicholas tarling
- 3 economic goals (growth, equity, nationalism)
- government intervention and state planning required to achieve these
What is ISI, who used it
Import substitution industrialisation
- produce more imported goods locally
- self sufficiency
- employment outside agrarian sector
- transition phase to EOI
- diversification of economy
Socialist countries (Vietnam, Burma) used it
- no shift to EOI in mind
How could economic growth be measured
- GDP
- ISI to EOI shift
What is meant by economic nationalism, how was it seen
- attempt to indigenise wealth and production to establish self-sufficiency
- discrimination against foreigners, restrictions on foreign investments, protectionist measures
- often extended to exclusion of non-indig ethnic minorities (Chinese etc)
What does equity refer to?
- fair distribution of wealth and access to economic opportunities
What were some early instances of inequitable economies in SEA post war and decol
- Chinese economic dominance in Thailand, Indonesia, Malaysia
- Indian economic dominance in Burma
How did different economies address the different economic goals differently (broadly speaking)
- capitalist economies prioritised growth
- socialist economies prioritised equity in the pursuit of economic development
- these goals may not be complementary
What example can be used to illustrate that the economic goals were not always complementary
Ne Win; Burmese way to socialism
- economic equity achieved (bottom 25% earned 1/5 of top 25%)
- economic nationalism achieved (almost all foreign investment banned, state in control)
But:
- Economic stagnation
- living standards did not rise
**Which countries were inherently capitalist post war and decol, during what time period
- The Philippines
- Thailand
- Malaysia
- Singapore
- Indonesia during the New Order (after
1965) - South Vietnam (1954 – 1975)
**What were the countries that were inherently socialist post war and decol (central planning etc)
- Burma (after 1962 coup and Ne Win control)
- North Vietnam (1954 – 1975)
- Socialist Republic of Vietnam (from 1975)
What was the “third way” and what were the countries that adopted the “third way” post war and decol
- middle ground between capitalism and socialism
- governments focused on ideological objectives than sound economic development
- Burma under U Nu (before 1962)
- Indonesia under Guided Democracy under Sukarno
(1957 – 1965)
Why were SEA economies considered miracles (except Vietnam and Burma)
Average annual growth rates over time periods (1970-80, 80-90s) exceeded other regions significantly
What was the average annual growth rate of SEA from 1970 to 1980, 1980 to 1990 and 1990 to 1999, how did this compare to Asia
6.9%, 4.6%, 6.0%
Asia:
3.5, 5.6, 3.2
How did Singapore’s GNI per capita as a high income nation rise from 1970 to 1995
1050 to 26,730
How did the GNI per capita of middle income economies rise from the decades from 1970 to 1995 (take Malaysia)
Malaysia : 1970: 390 - 1980: 1,800 - 1990: 2,370 - 1995: 3,890
How can the effectiveness of different developmental strategies be evaluated
Socialist economies:
- worse in terms of income level
Amongst capitalist:
- key differentiating factors made SG stand out
What is the ultimate success for SEA economies (3 parts)
- sustainable growth
- equitable growth
- government still maintains significant control over economy (economic nationalism)
What were the 4 reasons behind the economic miracles
o Strong commitment of governments to economic development
o Sound economic policies
o Controlled integration into the global market
o Close security and economic ties to the US
Problems of ISI (3)
- protectionism: prevents new ideas and tech from coming in - hinders LR growth
- lack of competition from foreign firms; local firms more lax and inefficient - susceptible to cronyism and corruption (phillipines, Indo)
- becomes more difficult after the initial stage when more costly and technologically advanced
intermediate imports have to be substituted
What is meant by EOI
Export-oriented industrialisation
- when a country begins to develop industries that can produce goods in which it has a comparative advantage (more efficient production than other countries)
- goods produced for exports
- loosening of import restrictions for a more competitive market (foreign firms incentivised)
Rationale for EOI (3 main ones)
- overcomes limited size of domestic market (esp for smaller developing countries like Singapore)
- presence of foreign competition - drives economy to be more efficient
- loosening of protectionism -> technology and idea inflow from abroad
Rationale for EOI (3 main ones)
- overcomes limited size of domestic market (esp for smaller developing countries like Singapore)
- presence of foreign competition - drives economy to be more efficient
- loosening of protectionism -> technology and idea inflow from abroad
Problems of EOI:
- difficult for developing countries to compete at the start
- initial protection of local firms could result in cronyism -> over-protection -> failure to progress to EOI
- runs contrary to goal of economic nationalism (increased role of foreign interest)
Strategy considerations of SEA countries
- ISI vs EOI
- resource poor vs resource rich
- capitalist or socialist
What was the share of primary exports in Singapore in 1994 vs 1975
Decrease, 50 to 15%
What was the share of machinery imports in Singapore from 1975 to 1994%
Increase, 26% to 57%
What was the share of primary exports in Malaysia from 1975 to 1994?
Decrease, 69% to 24%
How did the share of machinery imports in Malaysia increase from 1975 to 1994?
33% to 62%
How did the share of primary exports in Thailand decrease from 1975 to 1994
76% to 26%
How did the share of primary exports decrease in the phillipines from 1975 to 1994?
78% to 18%
How did the share of machinery exports increase in Thailand from 1975 to 1994?
35 to 49%
How did the share of primary exports in Indonesia change from 1975 to 1994?
98% to 47% (halved)
Why did the 2 socialist countries choose to operate a command economy closed to the outside world? (Separate)
Vietnam: Hostility of the international environment against them in the context of the Cold War
Burma: Burmese way to socialism as ideological foundation
When did Vietnam start becoming capitalist?
- after Doi Moi (1985) economic reforms
When did Vietnam start decollectivising
1981, 88
What were characteristics of the major economic reforms in Vietnam (and their years)
- De-collectivisation (1981)
- Substantial reduction of trade restrictions (1989)
- Decentralisation of government control (1989)
- Encouragement of foreign investment (1987)
- Privatisation of state owned monopolies (1992)
- End or partial end of state monopolies (1995)
What were the characteristics of the economic miracle of east Asia as characterised by the world bank’s report (5), whose role did they support as a key factor?
- High level of domestic savings and investment
- Tax policies favouring investment
- Secure, bank-based financial system with regulation and supervision
- Pro-export trade and incentive structure
- Openness to foreign investment and tech
- emphasised government’s role and intervension
_____ conceived the role of the government to be _____ and ______
Nicholas Tarling - planning and participation
(After 1970s capitalist countries also adopted some form of national and economic planning)
What were some of the economic and national plans adopted by capitalist countries post 1970s (5)
- Indonesia’s repelita: 1
- Malaysia: First Malaysia plan (1969)
- Burma: 20 year plan (19720
- Thailand: 3rd 5 year plan
- Republic of Vietnam: 4 year national economic plan
The ___ of the state and sound ____ were critical elements for the success of development strategies
Efficiency and sound governance of the state
The key to the superior performance of East Asian newly industrialised countries (NICs) was the ability of the state to direct the ______ in the direction which is required by _______ development at _________ (Rigg)
Direct the accumulation process in the direction which is required by capitalist development at appropriate points in time
What were the other private businesses and factors in play for economic development (other than the government)
- Ethnic minorities (Chinese and Indian communities)
- Foreign aid and investment
- Regional and global technology developments
How much of total private sector investments in Indonesia in the 1970s was accounted for by the Chinese, and how?
75%
- political patronage, close personal ties to Suharto
What resulted from the AFC for the Chinese in Indonesia
Immense violence due to economic inequity
What oercenateg of the private sector in Malaysia was owned by the Chinese (due to the social contract)
85%
What role did the Indians play in Burma (and negative effect: hint their role as money lenders)
Dominated the banking and money lending services (chettiars) from British colonialisation
- perpetuated bad rural debt
How did Ne Win’s military government deal with the Indians in the mid 1960s
Forcibly repatriated most ethnic Indians
What were the 3 types of foreign aid that southeast Asian states got
- Politically motivated aid from superpowers
- Aid from japan
- Investment from multilateral organisations
What was the green revolution and when did it occur (what developments did it focus on)
1930s to 1970s
- global initiatives introduced to increase global food production and avoid famine (due to rapid increase of world population)
- high-yielding grains (IR8), chemical fertilisers, pesticides, irrigation
Where was the IRRI international rice research institute based, when was IR8 developed
Phillipines, ir8 developed in mid 1960s
By what percentage did Malaysian yields improve over 1954 to 1970 due to the development of high-yield varieties
120%
What were significant regional and global developments that shaped economic growth in SEA (2 main ones, one specific to SG)
- Green revolution
- Tech and electronics industry from 1970s to 1980s (Singapore, Malaysia, Philippines, Thailand)
- Service sector (Singapore post 1980s)
