Striving for Inclusive Development: From Pangkor to a Modern Malaysian State traces the evolution of what is now Malaysia from a far-flung colonial trading outpost at the time of the Pangkor Engagement in 1874 to a modern, diversified economy, is divided into five parts, in 10 chapters, which chronicle the events and the transformations—as well as the people—that marked this journey.
This publication, Striving for Inclusive Development: From Pangkor to a Modern Malaysian State, presents the results of the author’s continuing research. It is based on the comprehensive analysis of primary economic and social data, extensive study of archival documents, and an in-depth review of the extant colonial and contemporary economic literature. The analysis reveals the impressive progress Malaysia has made, while also illuminating the challenges that remain. Faced with the possibility of the country falling into the ‘middle-income trap’, a new approach is now needed to realize the goal of transforming Malaysia into a more prosperous, resilient and cohesive nation.
In Part 1, Forming a Nation and a Mosaic Population, comprises two introductory chapters that focus on how Malaysia and its institutions were formed, and how its population grew. It outlines the historical evolution of the separate geographical entities of the Malay peninsula over the past 150 years, their changing governance, and how they eventually came together to form Malaysia. It describes the institutions that the British progressively established during their lengthy rule, primarily if not exclusively in order to consolidate their economic and strategic interests. These include political and administrative structures, a legal and security system, and economic policies intended to facilitate investment, trade, and fiscal stability. The author also gives an overview of the history of Malayan population census-taking, and of how colonial administrators introduced an ethnicity-based classification that served to separate different communities. It assesses how colonial immigration policy responded to meeting the labour-force needs of the peninsula’s growing extractive economy, and the huge impact that migration had on population growth and ethnic composition.
In Part 2, Enhancing Human Well-being, traces the development of the country’s segmented education and health systems, and the steps taken by colonial and Malaysian governments to build human capital and advance well-being. The author reviews the nature of Malaya’s highly segmented education system, where few children—almost all of them from privileged families—had opportunities beyond the basic primary level. Then, the author examines how Malaya’s health policy evolved to support colonial economic development. As infectious diseases took a heavy toll on migrant workers and threatened to decimate the labour force, improved sanitation and health services became imperative.
In Part 3, Expanding and Diversifying the Economy, presents the book’s core economic analysis. It starts with a discussion of the establishment of institutions, and the expansion of the trade-in tin and rubber in the colonial period, and proceeds to an evaluation of economic performance since independence. The analysis begins in the late 19th century when most of the world’s tin was mined in the Federated Malay States. The first two decades of the 20th century then saw Malaya become the world’s leading producer of rubber, as demand soared, largely as a result of the advent of the mass production of automobiles in the United States. Malaya’s economy was ravaged, however, by the Great Depression of the 1930s, when rubber and tin prices collapsed. In the absence of social safety nets, many people suffered great hardship during these years. Dissecting the factors underlying post-independence economic growth, the analysis focuses on the increase in productivity and considers the effects that structural change and the demographic transition have had on Malaysia’s economy.
Part 4, Achieving Growth with Equity, turns to the processes by which the transition from a predominantly agricultural economy to a modern one led to a huge reduction in poverty, and to more equitable income distribution. The author analyzes, at the commodity and state level, the role of agriculture in the country’s structural transformation and in the enormous reduction in absolute poverty. Later, the author begins an analysis of consumption inequality in colonial Malaya, where Europeans—and a tiny minority of other communities who were living a high-status European lifestyle—were vastly better off than the masses. Indeed, differentials in private consumption expenditure widened during the first four decades of the 20th century.
Part 5, Creating an Inclusive and Sustainable Future, concludes this book-length inquiry with a forward-looking assessment of some of the central challenges facing Malaysia today. It underlines the fact that the country has made impressive development progress since the end of colonial rule, and that all communities have played an important role. But the time is now ripe for Malaysians to evaluate their circumstances afresh and make key choices about future directions.