Industrialising Malaysia: Policy, Performance, Prospects

Industrialising Malaysia: Policy, Performance, Prospects

Industrialising Malaysia: Policy, Performance, Prospects

Industrialising Malaysia: Policy, Performance, Prospects

Synopsis

Despite growing concern over environmental issues and the sustainability of economic growth, industrialization is still generally associated with progress and development. This is particularly true of developing countries where industrialization is often the nation's top priority.
Industrializing Malaysiapresents a critical analysis of the experience of industrialization in Malaysia, examining the role, impact and efficacy of post-independence industrialization policies. The author refocuses attention on some major intended as well as unintended implications and consequences of policies and performance. A wide range of issues is covered: in addition to general historical commentaries and sectoral studies, there are analyses of direct foreign investment, technology, linkages, free trade zones, industrial estates, and rural development.

Excerpt

Ever since the Industrial Revolution from the late eighteenth century, economic progress and development have been closely identified with industrialisation. Although this association has come under increasing challenge in the last decade - partly owing to the environment and resource crises raising fundamental questions about the sustainability of economic growth - it continues to influence economic policymakers, especially in the Third World. Politicians and technocrats all over the world still appear to share this vision, and this is no less true in Malaysia. In fact, most influential Malaysians view industrialisation as the nation’s greatest priority and ticket to progress in the future.

While there are varied views about the industries to be prioritised in this process, there seems to be a consensus that industrialisation is the key to future development. Nevertheless, old debates - e.g. between import substitution and export orientation, or the balance between heavy and light industries, or the role of foreign capital or Chinese industrialists - continue to animate Malaysian discussions of industrialisation. There is also growing concern over issues which did not receive quite the same attention in the past (e.g. the environment, resources or even technology dilemmas), while some other issues (e.g. regional, spatial and other distributional considerations) appear to have receded in significance in recent years.

The story of Malaysian industrialisation really begins after Independence since there was not much manufacturing activity to speak of before 1957 owing to British policies consistent with a typical colonial division of labour. Colonies like Malaya were expected to supply raw materials and provide the market for manufactured imports from Britain, excet where transport and other considerations necessitated local processing. Furthermore, Singapore was the regional centre for the British Empire, and hence where most industries for Malaya were concentrated (Puthucheary, 1960; Wheelwright, 1963a, 1963b). When Malaya - or what is now known as Peninsular Malaysia - achieved Independence in 1957 without Singapore, the newly independent hinterland lost much of its modest industrial sector. The formation of Malaysia, including Singapore, in 1963 briefly revived the possibility of building on the colonial inheritance until the island’s secession less than two years later. . .

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