Stats for ASEAN Econ Change Flashcards
Indonesia ISI
Pertamina
70% of govt revenue by 80s, 78% of export earnings
Petrodollars used to invest further in ISI
Corruption: Suharto military 10 billion debt, 300% budget deficit
Mixed, can use for both sides
Indonesia Agriculture
BIMAS 1965 + Repelita I (1969-74)
Provided Padi farmers fertilisers + infrastructure + cash advances
23% of Repelita budget to irrigation
1/3 of GDP 2/3 of Employment
Self suffiency by 1985
Good - basis for growth in the later stages
Indonesia EOI
1967 Foreign Investment Law
Tax concessions, provisions against expropriation of foreign assets
Suharto willing to engage in econ measures - world bank, imf favoured
“Berkely Mafia” - Western trained Indonesian economists; policy formation and credibility
Millions of debt from World Bank loans
1972 debt levels > Sukarno times
Volker shock compunded debt (US increase i/r)
Mixed but is good growth
Indonesia FDI
Expansionary fiscal policy (direct government spending, lower tax) to encourage foreign investments
1967 Foreign Investment Law protected MNC assets from being nationalised
Doubled manufacturing production in 2 decades
Good
Explain Chinese dominance in IND
Suharto laws for econ equity
Bank credit only approved for firms 75% owned by indigenous people
Alibaba agreements to avoid (Ali in shopfront, Baba actually in charge)
3.8% population = 76% economy
Ethnic Chinese dominance in SEA
Bamboo Network
underlying principles, normas, informal relationships tying Chinese businesses together
55 million Chinese, control 500 of the biggest SEA public corporations, $500 billion total assets, $2 trillion in liquid assets
Cukong IND
Suharto’s 50 Chinese business elites
Helped carry out govt policies at least 3 decades
Entrepot Trade SG
Initial strat for growth
trash post-war equipment
13% unemployment
EOI SG
EDB 1961
Econ Expansion Act 1967
tax benefits for ‘pioneer’ companies
Jurong Industrial Town
20% COP reduction + english speaking workforce + politically stable
15% GDP growth, Unemployment at 3.5%
FDI SG
NDB 1981
Train IT workforce
Attract foreign companies to buy and sell software
IT sales 10x increase
Skilled employees up to 22% in 1985
Internal restructuring SG
CPF 1955
NTUC 1972
7.3% GDP growth
Malaysia ISI Initial Success
1959 Pioneer Industries Ordinace (ISI start)
1963 Tariff Advisory Board (TAB)
13% growth 60s-70s
Good at start, failure later
MY ISI failure later
Proton Car project 1983
Aimed at the growing car mkt but poor quality
Econ burden of RM1.6 Billion
Malay bureaucracy overlooked efficiency (preoccupied with econ restructure social inequality)
Public sector deficit RM15 Billion by 80s
Tiger economies
MY in the 1990s
SG of course
MY Agriculture
Largest rubber, palm producer exporter
12% GDP growth during 60s to 70s
MY FDI
Investment Incentive Act 1968
Incentive for pioneer industries + locations in less developed + labour intensive
Boost FDI, MNC, export, import
Export of G&S>50% of GDP
Investments grow 11% annually
MY EOI
Free Trade Zone Act (1971) encourage EPZ (Export Processing Zones)
Firms to export 80% of product, exempted from custom duties
Invited Japs for joint venture but reserve 30% stock for bumiputera
Malay middle class increase dramatically
9% growth in 90s
MY Equity
New Economic Plan 1971
Special priveleges for Malays in finance sector and Petronas
Poverty halfed to 17% in late 80s
avg Malay income still 1/2 Chinese, 2/3 Indian
reduce % of foreign ownership of capital but replaced by local non-malays
Limited success
Burma Nationalisation
Nationalisation U Nu 1948
poor 8 year plan
50s: rice exports down 2/3, mineral exports down 96%
Burmese Socialism
Burmese Way to Socialism 1962
isolationist, nationalist policy, promote self-sufficiency
Entrepreneurship discouraged, foreign investments dried up
Country bankrupted 1962-1988
Burma opening up
5 Year Plan (1996-2001)
Small scale capitalism, foreign investment welcome, trade with SEA
$2 billion in exports
GDP 6.4% growth
NOT SUSTAINED - Aung San imprisoned 1996 (slapped sanctions on Burma)
Govt banned nonessential imports/exports resulting in black market and inflation + 1/2 of govt budget to military
Burma equity
1965 Tenancy Law (collectivisation)
Distribute land based on need not efficiency
1.2% growth annually only
Highest income 5x higher than lowest (equity)
Poverty
Vietnam Socialism
Agriculture collectivisation
Farmers combine their labour, sell quota of grain to state at fixed price in exchange for consumer G&S below mkt rate
1982 - only 0.6% of Mekong Delta
1976-79 - nationwide rice production decreased by 2 million tonnes
National income decreasing 2% a year
Vietnam Agriculture
Doi Moi 1986
Farmers responsible for own plot of land - incentive to raise productivity levels
Vietnam net rice exporter again
Per capita rice production increase from 242kg to 293kg
Rice exports more than 3 million tonnes by 90s
Vietnam EOI
Doi Moi 1986
1995 join ASEAN - flow of investment from wealthier SEA neighbours
$173 million SEA investments
GDP 8% growth annually
Ho Chi Minh 15% econ growth
Thailand ISI
1959 Board of Investment & Industrial Promotion (BIIP)
Promote investment in “modern sector”, Tariff barriers
Thai economy could produce component parts + other intermediate capital goods
Creation of conglomerates of Sino-Thai families and indigenous elites - large, no incentive to innovate, inefficient
Can pair with TH lack of EOI
Thailand lack of EOI (initially)
By 1981 - Tariff increased in 53 categories of goods, only reduced in 19
BOT deficit, unstable economy - deficit up to 20 billion baht due to oil crisis 1973, govt borrowing = debt
Thailand Agriculture
Larger producer and exporter of rice, comparative advantage in agriculture
Abundant, available land meant majority of population could get into and stay in agriculture
Sustained (but slow) growth up till 1980s - main source of growth and revenue
Thailand EOI (textile market)
Opening of textile market
1972 Textile market boom, Import quota implemented on Jap by US allowed TH to capture bigger proportion of market
Textiles comprise 29% of total exports by late 80s
Manufactured exports up to 65% of export earnings by 1993
Thai FDI/EOI
Investment Promotion Act 1977
Aggressive attract FDI w low state intervention
Annual export rate 8-12% per annum up to AFC
Thailand fastest growing economy in world late 80s
Thailand AFC
Overdependence on foreign trade = AFC die
Econ vulnerable to external shocks (financial overexposure)
Potential short tern interests -> hot money inflows into real estate -> price bubble which caused AFC
Unregulated foreign credit flowing in -> US$57 billion in 1995 (7x increase)
