How effective has the role of government been in promoting economic

development in independent Southeast Asian states?

Role of the government is defined as the contribution by the individual Southeast
Asian government or their organization in economic development. Economic
development is defined mostly by the wealth generated by each Southeast Asian
country, and qualified by economic equity and nationalism. The essay seeks to
argue that although the pursuit for economic growth turned out to be unfruitful
for some, most Southeast Asian governments have been effective in promoting
economic development as the first and foremost aim of economic growth which
almost all Southeast Asian government had come to recognize as paramount
was relatively achieved.
Most Southeast Asian governments have been effective in achieving
commendable rates of economic growth over a sustained period of time with a
smooth functioning capitalist free market economic system. For example in
Singapore, government-backed statutory boards like the Economic Development
Board (EDB), Housing and Development Board (HDB) and Port of Singapore
Authority (PSA) were set up to promote economic development and financial
institutions. Government long-term policy of pro-investment meant that there
was minimal reliance on the local private sector. As such, economic growth rates
averaged 8% from 1960 to 1999. In the late 1980s, real per capita income
reached $75000 a year, which was among the highest in the world and on par
with many Western nations. Likewise in Vietnam after Doi Moi, bureaucratic
controls over the management of State-Owned Enterprises (SOE) were removed,
allowing the running of commercial practices. The National Assembly approved
the establishment of private-owned companies in all sectors except defense. As
such, economic growth doubled from 3% in 1986 to 6% in 1990. Hence, with the
capitalistic free market system, many Southeast Asia countries have been
relatively successful in achieving economic growth.
However, some Southeast Asian government that employed the command
economic system failed to meet the local population expectations of postindependence economic prosperity, achieving only abysmal levels of economic
growth due to the sidelining of their economy by the US-dominated global
economy. For example in Burma, after the 1962 military coup, Burmese way to h
outlined the ideological underpinnings of the new military governments
economic policies. This radical shift towards socialism, and extreme nationalism
was largely due to Burmas disappointing economic performance under the
capitalist system and the general perception among Burmese nationalists that
Europeans, Indians and Chinese businessmen dominated the economy. Likewise
in Indonesia, under Guided Democracy, Sukarnos approach was to encourage
economic growth through the quest for some form of self-sufficiency that had
isolated Indonesia from the western world. Dutch property was confiscated and
most business owned by Western interests in 1957 to 19558 was nationalized.
As a result, Indonesias international trade collapsed, hyper-inflation soared and
by the mid 1960s, prices were rising by 600% per annum. Hence, certain
countries who followed the command economy model suffered badly.
Some Southeast Asian governments were relatively successful in achieving their
aim of economic equity by instituting and enforcing discriminatory policies to
ensure a more equitable distribution of economic resources, assets and tax
liability. For example in Burma, the demonistisation of large denomination bank
notes and their replacement with the new 45 and 90 kyat denominations, at a

stroke made 60% of the currency in the peoples pockets worthless, thereby
narrowing economic inequalities. Similarly in Malaysia, the New Economic Policy
(NEP) launched in 1971 corrected the economic imbalance and eventually
eliminated the identification of race with economic function. The NEP adjusted
the socio-economic parity of its ethnicities, namely between the bumiputra and
the other races. It alleviated poverty and created a Malay middle class out of a
predominantly poor peasant population. Hence, by practicing positive
discrimination, some Southeast Asian governments were relatively successful in
improving economic equity.
However, the half-hearted attempts by most Southeast Asian governments to
address the problem of growing income disparity in their countries accompanied
by the high rates of economic growth under the capitalist free market economic
system proved to be ineffectual. For example in Indonesia, under Suharto, 70%
of all private economic activity was in Chinese hands by the 1990s. Despite
Suhartos call for distribution of shares to pribumi entrepreneurs, little was
achieved and this only served to highlight the economic wealth of the Chinese
businesses and make them a more prominent subject of popular criticism. In
fact, the anti-Chinese violence sparked off in the early 1970s was a result of the
governments mismanagement of economic inequality along communal lines.
Likewise in Vietnam, after Doi Moi, there were growing social problems like ruralurban divide, prostitution and gambling. Hence, in certain Southeast Asian
countries, income disparity remained widespread.
Relative success in achieving the aim of economic nationalism by reducing or
eliminating foreign influence and control over their economies, through
nationalization policies and the establishment of State-Owned Enterprises
(SOEs), coupled with affirmative policies to protect the interests of indigenous
populations was achieved by some Southeast Asia government. For example in
Indonesia, from 1962 to 1974, the Revolutionary Council discriminated against
resident alien Asian communities, and particularly the Indians. Hundreds of
thousands of Indian migrants were repatriated to India despite some having lived
in Burma for generations. Between 1963 to 1964, all industries including foreign
and large scale domestic business like banks and transport system were
nationalized. Likewise in Vietnam, before the 1986 Doi Moi reforms, economic
resources and industries were nationalized to create agricultural cooperatives.
Hence, some Southeast Asian governments were relatively successful in in
achieving economic nationalism.
However, most Southeast Asian government had little choice but to accept some
degree of foreign influence and control over their economies under the capitalist
free market economic system in the increasingly globalized world despite the
achievement of political independence, therefore largely limiting their success in
promoting economic nationalism. For example in Singapore, due to the pro-FDI
strategy, multinational corporations (MNCs) had a primary share of the countrys
net economic worth. Singapores open-door policy towards trade and investment
made her dependent to external actors, as proven by the 1980s global recession
period where Singapores economic growth took a huge beating. For example in
the Philippines,
All in all, when it comes to the effectiveness of Southeast Asian government
intervention in their economies, it is all about trade-offs and which of the key
economic aims does each Southeast Asian government prioritize the most.
Naturally, as economic growth rises, equity will be increasingly difficult to

achieve. Also depending on the nature of economy, different levels of economic

sovereignty had to compromise for the sake of economic growth. Effectiveness in
economic development in this case is just about how successful is each
Southeast Asian government in flexibly combining the use of both capitalistoriented and socialist-oriented policies in their pursuit of these economic aims.
More growth-oriented capitalist system, coupled with the US-dominated post-war
environment, thus had an advantage in promoting economic growth. Considering
that most Southeast Asian economies eventually became more capitalistic than
otherwise, in term of relative progress the governments have indeed already
been largely effective at making great strides.

Additional arguments (optional)

Most Southeast Asian governments were effective in making the successful
transition from predominantly, primary commodities to heavily-industrialized
status in the form of export-oriented manufacturing industries, as part of their
post-independence economic restructuring. For example in
However, some Southeast Asian government failed to effectively implement
economic restructuring policies, thereby seriously impeding their countries postindependence progress towards industrialization and the envisioned economic
prosperity.