REGIONAL ECONOMY Flashcards

Question

SG: equity

Answer 1

ideology of meritocracy: where people are awarded their ability and hard work -> pragmatic foundation to feed capitalist economy institutions to ensure equity: - compulsory savings (CPF) - provision of basic social security benefits (medicare, edusave, bursaries, elder subsidies) - provision of efficient and world class public transport (SBS, MRT, LTA) - compulsory and world class education system - affordable and quality public housing #effect -> create job opportunities in SG - from 13.5% unemployment in 1959 to 2% in 1990s -> built a workforce that was based on hard work, thrift and self-help -> 80% of Singaporeans live in HDB flats, more than 90% of Singaporeans own their housing

Answer 2

however, SG’s policies focusing on equity has come under criticism over the years. tension between prioritising growth and widening inequity by 2000s. - system of awarding government/ public service scholarships has come under fire for being elitist as it tends to favour those who already come from higher SES -> social inequality, widening income gap - Gina Coefficient rising from 0.4 in 1990s to 0.48 in 2007 *in SG’s pursuit of economic growth, equity was made a secondary goal*

Answer 3

pursuit of foreign expertise and investment: - sought support from UN to send economic advisors - 1961 Economic Development Board: attract foreign capital - develop Jurong Industrial Town: provide a manufacturing base in Singapore - 1967 Economic Expansion Incentive Act: granted tax benefits to foreign corporations up to 5 years, helped to lower foreign investors’ production costs by about 20% #effect 1960s GDP growth at 6% per year, manufacturing share of GDP grew from 10% in 1960 to about 15% in the late 1960s

Answer 4

government re-skilled workforce and focus on services - 1981 National Computer Board: establish good knowledge and training of workers in IT-related industries -> provide sufficiently IT-savvy workforce required to attract global IT firms to produce and sell their software through SG - NCB committed $2 billion from 1991-1995, and $4 billion from 1996-2000 #effect - proportion of skilled employees rise up 11% in 1979 to 22% in 1985 - IT domestic and export sales had increased by more than 10 times by 1990

Answer 5

ideological subscription to Burmese Way of Socialism: - all internal trade in essential supplies declared government monody - all private companies nationalised -> isolationist -> over-centralisation of economy #effect - by 1963, some 15 000 private businesses were expropriated by the state - 200 000 Indians forcibly expropriated, shrinking of business class -> held specialised professions serving as merchants and moneylenders -> served as a critical bridge between Western finance and Burmese cultivators -> industry and mining suffered from lack of managerial and technological expertise and coordinated planning - left Burma with few trade partners - exports went down by 50% 1987 demonetisation policy: - render 75% of currency worthless - serious riots, 8888 uprising

Answer 6

collectivisation: Revolutionary Council’s control over pricing and distribution -> extremity of strategies -> decrease in FDI due to lack of investor confidence #effect -> vast majority of population became poor - 1963-1968 economy registered a negative growth rate of -1.2% a year - by the 1960s, production of rice and teak and still not reached pre-war levels - by 1970, Burma decreased to just 2% of the world rice trade from 28% during

Answer 7

tenancy law of 1965: distributed land based on needs and not efficiency #effect by 1970s, paddy yield stagnated around 31 baskets per acre - remains a significant proportion of wealth accumulated in the hands of the powerful (military and political elites) - highest income 5X more than the lowest

Answer 8

1988: government made adjustments to attract foreign investors - tried to head from socialism towards free market - permitted the modest expansion of private sector - allowed some foreign investment - invited foreign investors to enter joint ventures with state-owned enterprises - 1988 SLORC introduced new foreign investment laws - lifted restrictions on private companies trading in rice and other basic commodities #effect - increase in foreign investment from US$10 million in 1988, to US$150 million in June 1989 *but still low compared to other SEA states due to high competition for capital and competitive wages*

Answer 9

*changes were cosmetic in nature* 1996 military crackdown on NLD and Aung San Suu Kyi’s house arrest - US banned all new investments -> saw many foreign investments pulling out -> lack of investment due to fear over political uncertainty government monopoly: - continued presence of SOEs which have close relationships with the military Junta - Union of Burma Economic Holdings was the biggest company in Burma in 1990, owned and supported by the military -> continued state hindrance - lack of capable economic policy-making institutions: - Central Bank of Burma lacked expertise and independence in formulating economic policy - government still controlled the financial sector with 4 government owned banks holding 90% of kyat deposits and foreign exchange deposits #effect - high inflation averaging 20-30% annually in the 1990s - excessive deficit in the balance of trade of USD 1 billion by 1997

Answer 10

1975-1986 the economy was tightly controlled by the Communist Party of Vietnam - strictly adhered economy to socialist principles and planning - diminished capitalist structures in the South - establishment of New Economic Zones - further agricultural collectivisation: - land was taken from those judged to be wealthy for redistribution to the poor - farmers in the South were compelled to combine their labour and sell a quota of grain to the state at fixed prices #effect: huge resistance from peasants in the South, resisted participation in any collective program that eliminated property rights - required oppressive approach by party - efforts were in vain: - decline of national income by 2% from 1976-1980 - by 1982, only 0.6% of households in South Vietnam’s most fertile regions had joined the agricultural cooperatives -> inefficiency of state agricultural sector: - small private plots produced 2-3 times the yield per hectare of state-run collective farms - rice production fell from 11.3 million tonnes in 1976 to 9.9 million in 1979

Answer 11

by 1965, 90% of peasant households were organised into collective farms. attempts at collectivisation of agriculture sought to achieve equity though there were questionable outcomes of efficiency and output: standard of living remained low for most - national income dropped 2% (1978-1980)

Answer 12

poor performance of economy in initial period as Communist government sought to follow socialist principles in addressing economic issues and rebuilt its economy almost from scratch. - average GNP was only half the rate of population growth - national income grew at about 1/5 of the rate of population growth - failure of collectivisation - most economic targets sets in the second Five Year Plan not met

Answer 13

(change in leadership catalysed reformist aims) economic reforms under Doi Moi: - 1987 Investment Law: established EPZs where foreign companies could import materials, use low-cost labour for assembly and export final products insertion of market principles into agriculture reforms through introduction of privatisation: - Politburo adopted Resolution 10 in 1988: privatised agricultural sector - farmers guaranteed a 10-15 year tenure on land they cultivated #effect - re-emerged as a major rice exporter in 1989 since 1950s - growth rates started to increase to 8% per annum by mid 1990s #change in relations: Vietnam began to reach out to international community, entered talks with UN to end its occupation in Cambodia from 1989 onwards - warming of relations with SEA states by 1991 - 1994 US lifted trade embargo on Vietnam - 1995 formally joined ASEAN #effect -> represented the final breakdown of last external barriers to Vietnam’s economic development -> allowed the flow of foreign investment at a greatly increased rate -> total of $173 million investments by SEA states -> expansion of international and regional trade

Answer 14

uneven development and income disparities: - development was more rapid in the south than in the north - 1993-1998, poverty fell from 32.7% to 11.1% in Southeast but Northern regions only 78,6% to 59.6% - wealthiest to poorest gap increased to 12 times by 1999 - minority groups 14% of population but 29% of them in poverty