SEA Econ change Table

Country Thailand Indonesia Singapore Malaysia Vietnam Misc Econ Objective First priority: Post-War Economic rehabilitation ● Rehab efforts at creating jobs and reducing poverty - essential to maintain social stability ● Thai govt leveraged on strengths and sought to reinstate the export of key primary products such as rice,rubber,tin and teak Had initial control over the economy before liberalisation - Siam Rice Agency - dictated and influence the direction of econ change in the economy Siam Rice Agency - Govt assumed monopoly control over the export of rice, brought in considerable revenue for government , national finances strengthened and some stability achieved in post-war period. Context of KW - Created favourable demand conditions for trade and improved TH’s position as a exporter of key commodities temporarily - Increased American interest led to the establishment of SEATO, economy benefit from military and econ cooperation, - Close US relations facilitated econ change as TH received more than 1 billion in econ and mil aid to curb the spread of communism in light of of pol devts in IndoChina - However KW boom not sustained and prices for key commodities plunged -> Export revenue falls, BOT impacted FURTHER exacerbated when TH’s neighbours presented serious competition in commodity export -> huge oversupply for rice and more - TH’s lead eroded when facing competition from newly independent regional counterparts First priority: Economic nationalisation and self-reliance Sukarno's government launched fierce attacks on Western interests and severed all economic and political ties with the West. - Decol Exp In an effort to dictate the nation's economic direction, Sukarno introduced the "Berdikari" campaign for national self-reliance, which included large-scale import-substituting industrial projects. The government also steered the country down a socialist path , focusing on the development of state-owned basic industries such as fertiliser, cement, paper, chemicals, spinning, and shipbuilding. However, the state-driven approach faced significant challenges. The shortage of expertise and capital severely hindered industrial development. As a result, Sukarno's state-directed economic policies led to a plummeting of industrial production and a significant decline in GNP. Ultimately, Sukarno's brand of economic nationalism, dictated by the state's ideological agenda, proved detrimental to Indonesia's economic development. This caused the country to fall behind other regional economies like Thailand, the Philippines, Malaysia, and Singapore, which, by aligning with the West, enjoyed generous assistance and investments that facilitated their economic growth. SHIFT Economic objectives: EG and pragmatism Suharto opportunistic in leveraging favourable external and internal circumstances to bring about growth First Priority: Economic Survival and Growth 1. Tiny Island state without any natural resources to depend on 2. Unlike some of its neighbours who systematically dismantled the economic and financial systems put in place by the colonial rulers, and rejected the forging of economic ties with their colonial masters out of a fear of neo-imperialism, Singapore resisted the massive nationalisation drives seen elsewhere in the region (eg Sukarno's Indonesia) and leveraged on the existing systems and networks left behind by the British, seeking to establish itself as an international trade and financial hub. 3. sensitive to econ inequities - sought to blunt chinese domination through emphasis on meritocracy, which enabled entire population with equal access to various opportunities for political/ socio-economic devt Strong Govt Intervention - intended to control key sectors of economy and maintain tight control over macroeconomic indicators - However, in contrast with the other economies in the region, Singapore's model of economic development was more liberal from the get-go, allowing for foreign investors and private enterprises to play a bigger role in the economy at a very early stage, compared to other countries in the region - State still maintained strong oversight over non-state agents and regulated the private sector -> did not erode competition and innovation Economic Strategy Main objective : Build infrastructure, attract First Priority: Revitalisation of Key Industry and Poverty alleviation Initially heavily reliant on rubber and tin exports, bumiputras engaged in low-wage agricultural activities, no opportunity for growth Interventionist Role Had initial control over the economy before liberalisation - MARA - dictated and influence the direction of econ change in the economy Majlis Amanah Rakyat (MARA) in 1966 as a strategic initiative to dictate and steer socio-economic development, particularly targeting the bumiputra population. MARA was instrumental in implementing state-directed policies aimed at reducing income disparities and promoting economic mobility. Through various MARA institutions, the government provided technical and vocational education specifically designed to equip the bumiputra population with the skills necessary to transition into higher-wage vocations and enter the burgeoning manufacturing sector. Pioneer status to attract FDI - granted tax relief, extensions for heftier investments - efforts to lure FDI successful - 60 percent of manufacturing sector financed by foreign capital Participation of Private sector Govt recognised that partnership with the private sector is crucial for growth and encouraged their participation. SHIFT 1969 Riots – A Key Turning Point: ● May 13, 1969 riots exposed deep First Priority: Equity and Self-sufficiency True to the Socialist character of the regime Agrarian nature of economy 1. Sweeping land reforms, policy of collectivisation - eventually attain self sufficiency 2. Inspired by USSR and China, firmly believed that agricultural collectivisation is the way to attain higher productivity and production 3. However, when compared to regional neighbours, production is considerably low First Reconstruction and Land Reforms (1955-57): ● 810,000 hectares of land confiscated and redistributed to 8 million peasants . ● Many landowners faced severe consequences (execution, imprisonment, or suicide). ● The state aimed to move from small-scale peasant economies to collective ownership and eventual nationalisation of land. Industrialization Focus in the 1960s: ● From the early 1960s , the DRV shifted to heavy industrialization to raise living standards and ensure the communist regime's political legitimacy . ● The Socialist Transformation (1958-60) and First Five-Year Plan (1961-65) laid the groundwork for this, followed by Second Reconstruction (1965-75). Collectivization of Agriculture: ● Mutual Aid Teams (MATs) (1953-58) allowed peasants to support each other while maintaining individual ownership. ● By 1959 , MATs evolved into elementary agricultural producers' cooperatives