Paper 2 Theme 2 — Economic Development after Independence

H2History(Paper2)Theme2:EconomicDevelopmentafterIndependenceArgument Burma Vietnam ThePhilippines Indonesia Thailand Malaysia SingaporeContextForeigndominationofeconomicresources Foreignfirms●EastAsiaticCompanyofBurma(ricemillers)●JohnDickenson&Company(paperdistributors)●SteelBrothers(rice,oil,timber,shipping) 1946PhilippineRehabilitationAct●Provided$620minaid1948●Filipinoparticipationinimporttradehoveredaround20% Dutchplantationsandfirms●300Dutchplantationsand300firmsinotherareas(e.g.mining,trade,finance,utilities)wouldlaterhavetobeexpropriatedbythegovernment Presenceoflocalcapital●ActiveChinesebusinessclass,e.g.NaiLert(cars),NaiBoonrawd(brewery),NaiKokliang(cigarettes)●1929:over20,000ricetradersand12,000timbertraders 1971●63%ofcorporatewealthwasforeign-owned,35%tootherMalaysians(largelyChinese),and2%toMalays Politicalinstability 1980s:8888Protests●LedtoWesternsanctions Stable●Nochangeofgovernmentsinceindependence 1983:Aquino’sassassination●Triggeredcapitalflight,whichwascatastrophicgivendependencyonforeignloans Stable●30yearsofSuhartorule 1973-76:Politicalchaos●Ledtowidespreadcapitalflight Stable●Nochangeofgovernmentsinceindependence Stable●Nochangeofgovernmentsinceindependence Physicaldestructionofinfrastructure WWII●Lostallitsoilrefineries,90%ofitsboatsand70%ofitsroads●1950:GDPwasamere⅗ofpre-warlevels,withagriculturalproductiononlyat65% 1964-75:2ndIndochineseWar●7.5mtonnesofbombsweredropped,doublethatofWWII●MostbridgesontheHanoi-LangsonandHanoi-Vinhlineswereblownup●29/30provincialcapitalsweredamaged,with9completelydestroyed WWII●80%ofManilawasdestroyed Agrarianeconomicendowment Rice●Totalexportsreached$173mbeforethewar Rice,rubber,coffee●SouthVietnamhadfertilefarmlandsandaconduciveclimate Sugar,vegetableoil,fruits/nuts●Earlyindustrialmanufacturingcentredaroundtheprocessingofexportcrops,e.g.sugarmilling,vegetableoilproduction,cigarmaking Plywood,rubber Rice,teak,rubber,tin Rubber,oilpalm,tea,pineapples●1957:85%ofexportearningsderivedfromtinandrubber Alreadyexport-oriented●1950s:Exportswere127%ofGDP●1947:31%services,23%commerce,17%manufacturing,8%agricultureNaturalresources Teak,oil,gems,silver●Shanstate:abundantteak,oil,gemsandsilver Coal,gold,zinc,iron,tin●ConcentratedintheNorth Oil●Indonesiawasanoilexporter Tin,rubber Tin,rubber●1957:85%ofexportearningsderivedfromtinandrubber None Lackofskilledworkforce Limitededucation●Educationwasrestrictedtotheelite,whowereonlyofferedlow-rankingcivilservicepositions Braindrain●By1982:Afurther1mrefugeeshadfledSouthVietnamafterthecommunistvictory,includingprofessions,intellectualsandtechniciansInternationalshocks Oilcrisis●1972-80:Oilpricessurged Oilcrisis●1972-80:Oilpricessurged 1980s:Lowpetroleumprices●Hurttheshiprepairingand

Argument Burma Vietnam ThePhilippines Indonesia Thailand Malaysia Singapore10-foldfrom$3abarrelto$30●HighdependenceonenergyimportsslowedgrowthCommoditycollapse●1974-78:Sugarpricesfellby90%●Highdependenceoncommodityexportsrenderedthecountryhitbydecliningprices 10-foldfrom$3abarrelto$30●BenefittedIndonesiaasanoilexporter shipbuildingindustries,whichcomprised25%oftheeconomy●1985:Singaporeslidintoarecession ColdWarinfluence WeakeningSovietaid●Sovieteconomicaidaveraged$1bn,lowerthanthepromised$2.7bnSino-SovietSplit●1978:ChinacancelledallprojectsandwithdrewalltechniciansafterVietnamjoinedMoscow’sCouncilforMutualEconomicAssistance(CMEA)1979VietnameseinvasionofCambodia●LedtoembargoesimposedbytheUSanditsallies Non-AlignedMovement●Initialreceiptof$1bninmilitaryaidand$215mineconomicaidfromtheSovietUniondisappearedafterSukarnoestablishedhimselfasaleaderoftheNon-AlignedMovement 1950-75:USaid●Thailandreceived$650mineconomicaidand$1bninmilitaryaid,ontopofspendingfromAmericanservicemenstationedthere StrategiesCentralisedeconomicplanning 1947:EconomicPlanningBoard●Plannedruralreforms 1955:NationalPlanningBoard●FiveYearPlansfrom1961onwards 1969:RepelitaPlans 1959:NationalEconomicandSocialDevelopmentBoard 1961-64FirstDevelopmentPlan Nationalisation 1951:DefenceServicesInstitute●DSIformedtheFiveStarLine(freightlinesandtrucking)●BurmaNationalHousingandConstructionCompany(publicroads)●RangoonElectricWorks(electricalequipment)●ContinentalTradingHouse(fisheries)1963EnterpriseNationalisationLaw●StipulatedthatallmajorindustrieswouldbenationalisedbyJune●BanksnationalisedinFeb,withconsumerindustriesinAug 1978:Majorprivateenterprisesplacedunderstatecontrol●“Youthsquads”weresentoutatnighttoconfiscateallgoodsonbusinesspremises●Onlyretailtraderemainedinprivatehands●1980:Utilisationofindustrialcapacitywasbelow50% Dutchplantationsandfirms●300Dutchplantationsand300firmsinotherareas(e.g.mining,trade,finance,utilities)wouldlaterhavetobeexpropriatedbythegovernmentArticle33oftheConstitution●Strategicindustrieswillremainunderstatecontrol,e.g.Pertaminaforoil,shipandaircraftindustries●1975:Statefirmsproduced75%ofcement,halfofpaperproductsandmachinery,and40%offoodmanufacturing By1945:30stateenterpriseswerestarted●SiamSteamNavigationCompanyboughtoverbythegovernment●ThaiRiceCompanyhandled70-80%ofriceexports 1970s:Nationalisationofforeignfirms●PNBpurchasedcontrollinginterestsintheGuthrieCorporation●LondonTinbecameMalaysianMiningCorporation●1974:Petronasnationalisedtheoilindustry 1960s:Shipyards●JurongShipyard●KeppelShipyard1969:NeptuneOrientLines1969:SingaporePetroleumCompany1972:SingaporeAirlines

Argument Burma Vietnam ThePhilippines Indonesia Thailand Malaysia Singapore●AllricesoldtoTradeCorporationNo.1,andallimportsanddistributionhandledby24ThePeople’sStores1965LawtoInvestPowerstoConstructtheSocialistEconomy●Legalisedstatecontrolofalleconomicresourcesandactivities●AnextremeversionofIndonesia’sArticle33thatonlyguaranteedgovernmentinterventioninstrategicindustries1965●Statecontrolled60%ofmanufacturingand90%oflegaltradeCollectivisation 1963TenancyLaw●AgrarianCommitteesreallocatedland●Peasantshadtomeetproductionquotasanddeadlines,sellingtheirproducetothestateatfixedprices●Statedictatedwhatpeasantscouldgrowinsomeareas●1962-73:Riceexportsfellfrom1.5mtonnesto200,000tonnes●Oncetheworld’slargestoilexporterandthe“granaryoftheEast”,Burmabecameanetimporterofoilandrice 1965:90%ofpeasanthouseholdswereorganisedintocollectivefarms●Statepricesandthereforeoverallwageswerelow,hurtingmotivation●Comparatively,“fivepercentplots”,privately-ownedbyhouseholds,produced2-3xtheyieldsperhectareofstate-runcollectivefarmsandupto75%ofpeasants’incomes1978:NewManagementSystem●Workexchangeteamswereinitiallyformed(peasantsretainedlandbutenteredintoproductioncontractswiththegovernment),beforelarge-scalecollectivisationwaspursued●Eventually,allprivateagriculturalequipmentandlivestockwasseized●1976-79:Riceproductionfellby20%nationally(to9.8mtonnes)and60%intheMekongDelta(to398,000tonnes)○Asaresult,ricewasrationedatlowestwartimelevels

Argument Burma Vietnam ThePhilippines Indonesia Thailand Malaysia Singapore○Evenin1986,riceoutputwasfarbelowthatof1942●Byearly1980s:10,000outof13,000collectivesintheSouthhadcollapsedAnti-foreignnationalism 1958-60:DSIimposedhightaxeson—andsubsequentlyboughtover—foreignfirms●EastAsiaticCompanyofBurma(ricemillers)●JohnDickenson&Company(paperdistributors)●SteelBrothers(rice,oil,timber,shipping)Comprehensiverestrictivelaws●Chinesesqueezedoutofthecountry●1963-67:100,000Chineseleft●CantalkaboutENLandLIPSCE1960s:RepatriationofIndians●1960s:IndianshadbeenforciblyrepatriatedfromBurma,withanexodusof300,000Indiansin1964 1954Anti-ChineseRetailTradeNationalisationAct●ForcedtheChineseoutofcornandricetrading1958CongressBill●Mandatedthatimportantindustrieswere60%Filipinoowned●1948-65:Filipinoparticipationinimporttradeincreasedby3-foldto70% 1957onwards:Sukarno’sexpropriationofforeignfirms●300Dutchplantationsand300firmsinotherareas(e.g.mining,trade,finance,utilities)wereexpropriatedbythegovernment 1952Directive●Chinesetoestablishcentralisedassociationsforgoldtrading,jewellerytradingandbankingtocontrolChineseactivitiesFrom1947:Westerncompaniesthreatenedwithclosureandcompetition●E.g.Shell●1964-72:Foreigncapitalcomprisedonly12%oftotalcapital●1979:60%of500