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Clustering early challenges to economic development

A. Challenges from colonial legacy
B. Challenges from WWII/Decol
C. Challenges from inherent SEA conditions
D. Challenges from external conditions


What were the early challenges to econ devt?

1. Absence of industrial base
2. Absence of domestic capital
3. Absence of skilled labour
4. Absence of experienced leaders
5. Absence of autonomous business class
6. Economic destruction and reconstruction
7. Political unrest and insurgencies
8. Colonial economic policies
9. Foreign/colonial ownership of strategic industries
10. Domestic patronage (govts lacked transparency)
11. Resource-curse
12. Difficulty of accessing international markets, international protectionism
13. CW + difficulty for socialist economies


Examples for absence of industrial base?

SG: British had developed SG as an entrepot - not an industrial centre - annual growth rate under 2% in 1950s. No agrarian sector, inconsequential domestic market - not self-sufficient

V: Lack of transport infrastructure - overseas shipments held up at docks, national highway filled with potholes, at one time, estimated ⅓ of all trucks idle due to a lack of spare parts


Examples for absence of domestic capital?

P: Heavy foreign loaning, reliance on foreign aid, by 1972, total foreign debt was US$2.2b

I: 1967 Intergovernmental Group on Indonesia (IGGI) comprised of 14 nations - major funnel for foreign aid - $2.5B for 1985/86


Examples for absence of autonomous business class?

I: Absence of domestic bourgeoise capable of replacing Dutch influence in the economy (e.g. banking, trading, estate houses, etc)
Link to colonialism - less econ space

Contrast: T - more economic space due to independence, thus growth of an autonomous business class


Examples for economic destruction and reconstruction?

B: Lost all its oil refineries, 90% of its boats, 85% of locomotives, 70% of its roads. Docks and factories severely damaged

P: By end of war, 80% of Manila had been destroyed, including industrial and modern services sectors - factories, warehouses, power plants, hospitals, universities, etc


Examples for political unrest and insurgencies?

B: Domestic political instability, civil war among the minorities presented unfavourable conditions for economic development

V: Prolonged experience of war (2 indochina wars)


Examples for colonial economic policies?

SG: British had developed SG as an entrepot - not an industrial centre - annual growth rate under 2% in 1950s

M: British policies for admin convenience compounded ethnic differences - different admin frameworks established for each ethnic grp - e.g. Chinese Protectorate 1877, protection of Malay rice cultivation - inevitable effects on economic activity

B: Post-war Britain unable to provide substantial economic assistance