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JC History Tuition Online - How was Thailand affected by the Asian Financial Crisis

How was Thailand affected by the Asian Financial Crisis?

Topic of Study [For H2 History Students]:
Paper 2: Economic Development after Independence
Section B: Essay Writing
Theme II Chapter 2: Asian Financial Crisis

Examine the causes of the regional currency crisis to understand its significance on Southeast Asia [Video by Business Explained]

Overview
The Asian Financial Crisis of 1997 was a devastating problem that impacted fast-growing economies in Southeast Asia. Before the crisis, the region was fuelled by unprecedented growth, as seen by the rise of the ‘Tiger economies’ like Singapore.

The epicentre: Thailand
With the Bank of Thailand (BOT) at the helm of the nation’s push for financial liberalisation from the 1980s to the early 1990s, few had expected the central bank to assume partial responsibility for the underlying problems.

Since the 1960s, the Thai baht was tied to the American dollar. This arrangement proved beneficial in accelerating the Thai government’s switch from import-substitution industrialisation (ISI) to export promotion. The establishment of export processing zones (EPZs) was carried out in tandem with the large capital inflows from newly industrialised economies, such as Taiwan.

Like a moth to a flame: Enter the BIBF
Furthermore, the BOT had accepted Article 8 of the International Monetary Fund (IMF) Agreement on 20 May 1990. It meant that BOT agreed to open the Thai economy to a larger degree of financial liberalisation. Notably, the Bangkok International Banking Facilities (BIBF) was formed in March 1993 as an offshore banking centre, turning the nation in to an investment hub that could compete with Singapore.

As a result of Thailand’s market-friendly measures, the economy gained from a tremendous amount of capital inflow.

In fact, between 1988 and 1996 Thailand was the recipient of the largest capital inflows relative to GDP in the world. According to the Bank of Thailand, between 1988 and 1996 Thailand received a staggering cumulative amount of US$100.3 billion, about 55 per cent of 1996 GDP, or 9.4 per cent of GDP on average per annum.

An excerpt from “The Asian Financial Crisis: Crisis, reform and recovery” by Shalendra Sharma.

An impending disaster
However, excessive capital inflow proved to be more detrimental than beneficial for Thailand. In particular, the influx of short-term capital, also known as ‘hot money‘, have debilitating effects on the economy, such as a widening current account deficit and an appreciation of the real exchange rate.

Although capital control measures were introduced on 8 August 1995, such responses proved futile. By mid-1997, Thailand’s external debt stood at US$94 billion. Its current account deficit was nearly 8.5% of the Gross Domestic Product (GDP).

In anticipation of the Thai government’s inability to finance their ever-growing foreign debt, foreign investors brought their money out of the nation. On 10 May 1996, the Bangkok Bank of Commerce (BBC) collapsed, causing widespread panic in the financial market. In December 1996, more than 50 percent of the companies listed on the Stock Exchange of Thailand (SET) declared falling earnings. On 5 February 1997, Somprasong Land Company defaulted.

On 5 February came the first Thai default, by the company Somprasong, on a foreign loan repayment. Later that month, it was announced that the largest of the finance companies, Finance One, was seeking a merger with a bank to stave off collapse. In the face of widespread fears of an impending financial implosion, Financial Minister Amnuay and central bank governor Rerngchai Marakanond suspended trading of financial sector shares on the stock exchange and went on national television to announce a series of emergency measures designed to reassure nervous markets.

An excerpt from “The Asian Financial Crisis and the Architecture of Global Finance” by Gregory W. Noble and John Ravenhill.

Although the Thai Prime Minister Chavalit Yongchaiyudh had claimed that the baht would never be allowed to devalue, a massive depreciation occurred on 2 July 1997. Subsequently, the Chavalit administration turned to the IMF for help.

What can we learn from this article?
Consider the following question:
– How far do you agree that the Asian Financial Crisis was inevitable?

Join our JC History Tuition and learn to answer essay questions on the Asian Financial Crisis. The H2 and H1 History Tuition features enriching and skills-oriented online classes to consolidate what you have learnt at school and apply them to examination-based questions. Get concise study notes and receive tutor feedback to correct your writing errors productively.

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JC History Tuition Online - What is the SIJORI Growth Triangle - Economic Development Notes

What is the SIOJRI Growth Triangle?

Topic of Study [For H2 History Students]:
Paper 2: Economic Development after Independence
Section B: Essay Writing
Theme II Chapter 1: Paths to Economic Development

Growth Triangle: What is it about?
In December 1989, the Deputy Prime Minister of Singapore, Goh Chok Tong, proposed the idea of a ‘Growth Triangle’. Countries could capitalise on the complementarity of resources and the geographical proximity to promote economic integration.

For Singapore, it had skilled labour and well-developed transportation and communications infrastructure. For Malaysia and Indonesia, Johor and Riau Islands had abundant natural resources like gas, water and land.

Thus far, the “Growth Triangle” has been implemented through a series of bilateral arrangements, rather than through one multilateral agreement, with development primarily led by the private sector. The three governments in turn coordinate investments, immigration, and other policies and plans to adjust to the requirements of the private sector.

An excerpt from “The Growth Triangle of Singapore, Malaysia and Indonesia” by Terence P. Stewart and Margaret L. H. Png.

The SIJORI
The Singapore-Johor-Riau (SIJORI) Growth Triangle was created as a tripartite arrangement between Singapore, Malaysia and Indonesia on 20 December 1989. Notably, the Singapore-Riau link had contributed to the development of industrial parks and tourist resorts in the Indonesian islands like Batam and Bintan.

SIJORI was formed in 1989 and covers a population of more than 8 million people. It is built on a vertical division of labour, whereby Singapore serves as the supplier of advanced electronic infrastructure, technology, financial and insurance services, a comfortable international entrance port, and international know-how. The Batam island (in Riau, Indonesia) supplies low-cost labour and land, whereas Johor (Malaysia) provides semi-skilled labour, industrial sites and competence.

An excerpt from “Rethinking Regionalism” by Fredrik Söderbaum.

What can we learn from this article?
Consider the following question:
– Assess the view that regional cooperation was vital in shaping the economic development of Singapore in the 1990s.

Join our JC History Tuition to learn more about Paths to Economic Development in independent Southeast Asia. The H2 and H1 History Tuition programmes feature online classes, study references, essay and SBCS outlines.

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JC History Tuition Online - What is the Winsemius report - Economic Development Notes

What is the Winsemius report?

Topic of Study [For H2 History Students]:
Paper 2: Economic Development after Independence
Section B: Essay Writing
Theme II Chapter 1: Paths to Economic Development

Find out how the Dutch economist Albert Winsemius contributed to Singapore’s economic development [Video by The HEAD Foundation]

Who is Albert Winsemius?
Albert Winsemius began his career as a price controller in the Netherlands. After the end of the Second World War, Winsemius assumed the role as a director-general of industrial development in the Finance Ministry. After Singapore attained self-government in 1959, Winsemius made a visit to Singapore. He was involved in the United Nations Development Programme (UNDP) team to determine Singapore’s capacity for industrialisation.

The Report
Then Prime Minister Mr Lee Kuan Yew had welcomed the Dutch economist’s review of Singapore’s economic conditions. Alongside the finance and Deputy Prime Minister Dr Goh Keng Swee, Winsemius served as an economic advisor to the government from the early 1960s to mid-1980s. There were two key observations that were made in his report.

The first was that Singapore did not lack entrepreneurs but they were mainly in commerce and not in manufacturing. This suggested the need for the government to participate directly to operate certain basic industries if neither foreign nor local enterprises were prepared to do so.

… The second point recommended the establishment of a nonpolitical EDB with divisions for financing, industrial facilities, projects, technical consulting, services, and promotion. The report recognized that the EDB’s core function should be the promotion of investment and that it should eventually hand over its financing activities to an industrial development bank.

An excerpt from “Lessons from East Asia” by Danny M. Leipziger.

Notably, the Singapore government had accepted the report’s recommendations. On 1 August 1961, the Economic Development Board (EDB) was established as a statutory board to plan and implement strategies for Singapore. The EDB was helmed by Hon Sui Sen, overseeing the industrialisation policies, particularly the development of the Jurong Industrial Estate.

The Jurong Project
The Report concluded that the development of industrial infrastructure was of paramount importance to Singapore’s growth and expansion of its manufacturing sector. Jurong was identified as a viable location for industrialisation, given its flat terrain and proximity to commercial port installations.

Jurong was the only waterfront area in Singapore that “possessed all the necessary conditions for development as an integrated town with the economic base centered around an industrial estate of considerable magnitude“. The Winsemius Report recommended establishing an integrated township that would consist of about 16,000 acres, significantly larger than the 9,000 acres a team of Japanese experts had proposed earlier.

An excerpt from “Infrastructure Strategies in East Asia: The Untold Story” by Ashoka Mody.

What can we learn from this article?
Consider the following question:
– How far do you agree that the Winsemius Report was the fundamental cause of Singapore’s successful industrialisation policies.

Join our JC History Tuition to learn more about Paths to Economic Development in independent Southeast Asia. The H2 and H1 History Tuition programmes feature online learning lessons that cover topical review, essay and source based case study skills development.

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JC H2 History Tuition Online - What is financial liberalisation - Economic Development - Essay Notes

What is financial liberalisation?

Topic of Study [For H2 History Students]:
Paper 2: Economic Development after Independence
Section B: Essay Writing
Theme II Chapter 1: Paths to Economic Development

Learn more about the economic impacts of the Doi Moi in Vietnam in shaping economic development [Video by the IMF]

The Pursuit of Economic Growth
As governments in independent Southeast Asian states raced to advance their economies through various approaches, financial liberalisation became of the pivotal efforts in fulfilling their targets. This trend was largely observed by the late 1980s across the nations in Southeast Asia.

Vietnam: Doi Moi
In 1986, Vietnam introduced free-market economic reforms known as Doi Moi (“economic renovation”) to revive its economy and spur growth. Led by the General secretary Nguyen Van Linh, the Vietnamese government passed the Foreign Investment Law (1987) that allowed foreign ownership for firms investing in areas like consumer goods. Two years later, the government floated the exchange rate, which supported further liberalisation of markets.

Thailand: Currency devaluation
In early 1980s, the Prem government sought to attract foreign investments to support its export-oriented industrialisation (EOI) policies and correct a trade deficit. In November 1984, the Thai baht was devaluated by 15%. This proved beneficial as foreign investments from Japan surged to $27.9 billion in 1990. In addition, the Bangkok International Banking Facility (BIBF) was set up in 1993, which provided tax incentives to its banks.

Singapore: Export Promotion
In comparison with its regional counterparts, Singapore embarked on financial liberalisation at a relatively earlier stage due to its inherent constraints, such as limited land size. As such, the government adopted EOI in the late 1960s, as observed by the Export Expansion Incentives Act (1967) that reduced the tax rate for selected industries to 4% for 15 years.

On 1 January 1971, the Monetary Authority of Singapore (MAS) was established. The MAS was granted the authority to regulate the financial services sector in Singapore. The MAS maintained a strong and stable exchange rate to attract foreign investments.

A Brewing Storm: The Washington Consensus
Against the backdrop of Crisis Decades that plagued many developed and developing economies in the 1970s and 1980s, particularly the Third World Debt Crisis, British economist John Williamson introduced the “Washington Consensus” term in 1989.

At that time, USA proposed that both the World Bank and the International Monetary Fund (IMF) should support debt management through a series of liberal reforms. These structural reforms included financial liberalisation, flexible exchange rates and free trade. In return, these developing countries would receive loans.

However, the increased emphasis on liberalisation proved disastrous to Southeast Asian economies. Without adequate regulatory frameworks, the adverse effects of currency speculation then triggered the Asian Financial Crisis in 1997.

What can we learn from this article?
Consider the following question:
– Assess the significance of financial liberalisation in shaping the economic growth of Southeast Asian states after independence [to be discussed in class].

Join our JC History Tuition and find out how you can apply your knowledge of Paths to Economic Development as well as other topics in the A Level History syllabus to essay and source based case study questions effectively. Our programmes are conducted online to support students taking either H1 or H2 History. Get feedback on how your answers can be further improved by consulting our JC History Tutor.

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JC H2 History Tuition Online - What is industrialisation - Economic Development - Essay Notes

What is industrialisation?

Topic of Study [For H2 History Students]:
Paper 2: Economic Development after Independence
Section B: Essay Writing
Theme II Chapter 1: Paths to Economic Development

Jurong Town Hall was developed in 1968 to oversee the development of industrial estates in Singapore. It served as the headquarters for the Jurong Town Corporation (JTC) [Video by Urban Redevelopment Authority]

Historical Context: Why governments pursued industrialisation?
After the end of World War II, many Southeast Asian economies were severely damaged. These countries lost their physical infrastructure and were in dire need of immediate post-war recovery. In Philippines, nearly fourth-fifths of its infrastructure in Manila was wiped out by the war.

Additionally, the adverse consequences of the Japanese Occupation could be observed in the conversion of industries to support the war efforts of these adversaries. In Burma, the Japanese restructured its economy and caused severe famine. After the war, rice exports fell to 500,000 tons in 1950.

In view of these significant challenges, the governments in Southeast Asian states embarked on industrialisation.

1. Modernisation of the agricultural sector
For countries that had agrarian economies, industrialisation was carried out to raise production. Governments established state agencies and provided substantial funding to support producers in the agricultural sector.

In Malaysia, the Federal Land Development Authority (FELDA) [Lembaga Kemajuan Tanah Persekutuan] was established on 1 July 1956 under the Land Development Act. Its purpose was to support resettlement for the local families that had land with substantial oil palm or rubber.

In addition, FELDA received loans from the World Bank to finance infrastructural development. In particular, the Malaysian government supported the construction of roads, farms and water supply access.

2. Import-substitution industrialisation (ISI)
At the initial stages of economic development, many governments implemented ISI to nurture domestic firms. Their intent was to kick-start industrial production to grow the local economy rapidly.

In Singapore, the government reviewed the Winsemius Report that highlighted the importance of state-guided industrialisation. In 1959, the Pioneer Industries Ordinance was passed to grant exemptions from company tax for five years.

Furthermore, the Economic Development Board (EDB) was formed on 1 August 1961. Under the guidance of then Minister for Finance Dr Goh Keng Swee, the EDB would “plan, coordinate and direct” the industrialisation process.

3. Export-oriented industrialisation (EOI)
Yet, the emphasis on ISI was inadequate to sustain economic development in Southeast Asian states. Therefore, governments shifted their focus towards EOI.

As the global economy became more inter-connected due to the liberalisation of world trade, countries in Southeast Asia began to promote international trade.

In Indonesia, Suharto’s government signed the General Agreement on Tariffs and Trade (GATT), thus admitting the country as a member of GATT in March 1985. Also, the government reduced its tax rate and eased trade regulations.

Coupled with the process of financial liberalisation, the Indonesian government was successful in enabling the large inflows of foreign investment by the early 1990s.

What can we learn from this article?
Consider the following question:
– How far do you agree with the view that industrialisation was most important in shaping the economic development of independent Southeast Asian states [to be discussed in class]?

Join our JC History Tuition and find out how you can organise your content materials. We provide summary notes, essay outlines and source-based case study practices. Our exam-driven classes feature the refinement of reading and writing skills through the review of past examination questions. These programmes are offered to JC1 and JC2 students taking either H1 or H2 History.

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JC History Tuition Online - What is the Green Revolution - Economic Development - JC History Essay Notes

What is the Green Revolution?

Topic of Study [For H2 History Students]:
Paper 2: Economic Development after Independence
Section B: Essay Writing
Theme II Chapter 1: Paths to Economic Development

Learn more about the the Norman Borlaug, “Father of the Green Revolution”.

Origins of the Green Revolution: Enter Norman Borlaug
Many countries such as Mexico and India were facing hunger and poverty. Together with a growing population, rice producers could not keep up with the burgeoning demand for food.

After Norman Ernest Borlaug completed his studies at the University of Minnesota, he embarked on his research journey in Mexico. He held the belief that sustainable agriculture could be achieved. In time, Borlaug’s efforts had paid off. It led to the creation of disease-resistant wheat strains that paved the way for the Green Revolution.

In 1964, Borlaug joined the Centro Internacional de Mejoramiento de Maíz y Trigo (CIMMYT) that specialised in the improvement of maize and wheat as well as the Consultative Group for International Agricultural Research (CGIAR). The CGIAR later became the central network for international organisations that engaged in research on food security.

Over the years, Borlaug’s contributions led to the improvement of new crops like barley, sorghum and triticale.

International Rice Research Institute (IRRI)
In 1960, the Philippine Government oversaw the creation of the IRRI. The institute set up its headquarters in Los Baños, Laguna (near Manila). With funding support from the Ford and Rockefeller Foundations, the IRRI aims to reduce poverty and hunger via rice research.

In 1978, the government capitalised on the Green Revolution by launching the Masagana 99 (Rice production programme) to improve credit access to rice farmers and achieve rice self-sufficiency. As a result, the local farmers benefited from the cultivation of high-yielding varieties (HYVs).

Impacts on Southeast Asian economies
The Green Revolution was a boon to many economies in the region. In Thailand, the government increased its investments in fertilisers and high-yielding strains of rice. From the late 1960s to early 1970s, rice production doubled.

In Indonesia, Suharto introduced the BIMAS (agricultural guidance programme) to facilitate the distribution of high-yielding rice varieities. By 1985, poverty was significantly reduced and the country attained self-sufficiency in rice.

“BIMAS is a system of agricultural extension, planned and on a mass scale, that aims to raise agricultural production, and at the same time to increase the propserity of farmers and of society…”

Soedarsono Hadisapoetro, Agriculture Minister (1978-1973)

Conclusion: Was the Green Revolution important?
In view of these developments, it is imperative to consider the significance of the Green Revolution in driving the growth of the economies in independent Southeast Asian states. Its importance has to be understood by analysing the state-guided approaches as well as the outcomes.

What can we learn from this article?
Consider the following question:
– How far do you agree that the economic development of independent Southeast Asian states was largely the result of external factors [to be discussed in class]?

Sign up for our JC History Tuition and find out how you can organise your content for the topic on Paths to Economic Development. Given the wide spectrum of issues to consider, we have derived a condensed set of notes to support your revision.

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JC History Tuition Bishan Singapore - What are the main aims of economic development - JC History Essay Notes

What are the main aims of economic development?

Nicholas Tarling’s three aims
According to the distinguished historians, Nicholas Tarling and Norman Owen, who published The Cambridge History of Southeast Asia, there are three aims of economic development: growth, equity and nationalism. We will be examining the significance of these aims individually to understand why there is a high degree of government intervention in the post-independence Southeast Asian states.

Topic of Study [For H2 History Students]:
Paper 2: Economic Development after Independence
Section B: Essay Writing
Theme II Chapter 1: Paths to Economic Development

Aim #1: Economic Growth
One of the most common aims of economic development involves economic growth, which is typically measured in the monetized value of the goods and services produced within a country, seen in terms of Gross Domestic Product (GDP).

To assess the economic performance of a country, it is important to examine the ability of governments to achieve short-term and long-term economic growth.

Also, another relevant aspect is the percentage share of GDP contributed by the three sectors: agriculture, industry and finance. As a country advances, a large proportion of growth is derived from the secondary and tertiary sectors (industry and finance).

Aim #2: Economic Equity
The second aim involves the reduction of income gap between the rich and the poor. In some Southeast Asian states, leaders advocate the equality of opportunity, which can be measured by the percentage of population that suffering from poverty.

As such, their policies are extensively focused on a more equitable distribution of resources. For example, governments introduce legislation to facilitate land reforms for state acquisition and re-distribution to rural households.

Aim #3: Economic Nationalism
The third aim refers to the indigenization of wealth and production to reduce foreign ownership of domestic sectors of economy. Following the process of decolonization, many Southeast Asian states sought to reduce foreign influence in their economic development.

This aim is usually achieved by implementing policies of nationalization. The governments impose strict controls to limit or eradicate foreign ownership. At same time, state-owned enterprises are formed to replace these foreign companies. For example, in Indonesia, the Dutch assets in petroleum were nationalized, thus forming the Permina, known as the state-owned oil company. Later, it was renamed as Pertamina.

What can we learn from this article?
Consider the following question:
– The pursuit of economic growth is the most important aim that Southeast Asian governments should prioritize on after independence. Discuss. [to be discussed in class]

Now that you have examined the three aims of economic development, you should look for practice questions to apply your knowledge. You can also join our JC History Tuition as we provide summary notes and practice questions (with reference answers) to demonstrate the applicability of knowledge for examinations.

Furthermore, we conduct other related JC tuition classes, like GP Tuition, Economics Tuition, JC Chemistry Tuition, JC Math Tuition and China Studies in English Tuition. For Secondary Tuition classes, we offer Secondary English Tuition, Secondary Math tuition, Secondary Chemistry Tuition and Secondary Economics Tuition. Call 9689 0510 to sign up now!

JC History Tuition Bishan Singapore - How did Myanmar develop its economy - JC History Essay Notes

How did Myanmar develop its economy?

Overall Economic Assessment of Myanmar
After Myanmar attained independence on 4 January 1948, the government pursued economic development, which is strongly guided by nationalistic and socialist influences. In view of the political challenges, there was strong government intervention. Over time, the military took a prominent role in maintaining political stability, while guiding the development of the economy. By the 1980s, Myanmar engaged in economic liberalization, encouraging the inflow of private investment.

Examine how the Chinese ‘Belt Road Initiative’ (BRI) will transform Myanmar’s economy.

Topic of Study [For H2 History Students]:
Paper 2: Economic Development after Independence
Section B: Essay Writing
Theme II Chapter 1: Paths to Economic Development

1948 to 1962: U Nu’s Democratic Governance
Before Myanmar attained independence, the British colonial powers transformed its economy by focusing in agricultural production. By 1930s, nearly two-thirds of the labour force were involved in the agrarian sector. Following World War II, the devastation caused by war left many infrastructure in ruins.

Therefore, the government embarked in the Pyidawtha Plan, which is a eight-year economic plan that set higher targets for growth. The purpose was to rebuild the public infrastructure for economic recovery. Due to the high degree of foreign ownership in the economic sectors, nationalisation became one of the foremost approaches. For instance, the Land Nationalisation Act (1948) was passed to facilitate the consolidation and re-distribution of land for agricultural development.

1962 to 1988: Ne Win’s Burmese Way to Socialism
However, the country was faced with political instability due to internal divisions. Military intervention became necessary to restore stability, thus paving the way for the rise of Ne Win’s leadership. Ne Win’s military government centralised its economic development based on the ideology of ‘Burmese Way to Socialism’, which placed great emphasis on state control across economic sectors.

For example, the Burma Oil Company used to be a joint venture during U Nu’s time. In 1963, this company was nationalised. Likewise, in the banking sector, the government maintained a tight control to ensure that all domestic capital was in the hands of the state. As for the agricultural sector, the Tenancy Law (1965) was passed, which facilitated land redistribution.

1988 to 1997: State Law and Order Restoration Council (SLORC)
Following the resurgence of democratisation in the 1980s, the government engaged in economic liberalisation. The financial sector benefited from this increased openness, as seen by the Foreign Investment Law (1988). This law allowed foreign companies to invest in local ventures. Furthermore, the Financial Institutions Law (1992) was passed to allow the establishment of private commercial banks.

As a result of economic liberalisation, Myanmar’s Gross Domestic Product (GDP) increased by 7.3% per year in the period of 1992 to 1997. Additionally, financial openness contributed to greater inflow of foreign direct investment (FDI), which approximated at US$2.8 billion at one point in time.

In summary, the strong government intervention was a common feature in Myanmar throughout the time period since independence to 1997.

What can we learn from this case study?
Consider the following question to understand this country-specific case study:
– Assess the role of the government in shaping the economic development of Myanmar after independence. [to be discussed in class]

Now that you have considered the strategies employed by the government in guiding economic development of Myanmar, it is important to apply this knowledge by writing A Level History essays. Alternatively, you can sign up for our JC History Tuition. We provide summary notes, essay outlines and source-based case study question answers for effective revision.

Furthermore, we conduct other related JC tuition classes, like GP TuitionEconomics Tuition, JC Chemistry Tuition, JC Math Tuition and China Studies in English Tuition. For Secondary Tuition, we offer Secondary English Tuition, Secondary Math tuition, Secondary Chemistry Tuition and Secondary Economics Tuition. Call 9689 0510 to sign up now!

JC History Tuition Bishan Singapore - How did Philippines grow its economy - JC History Essay Notes

How did Philippines grow its economy?

About the Philippine economy
After the attainment of independence, the Philippines became one of the leading Southeast Asian economies that was comparable to neighbouring countries, like Malaysia and Singapore. The 1970s became the turning point due to internal economic mismanagement, thus contributing to political turmoil that ended with a switch to the new administration by the early 1990s.

Find out more about the modern economic development of the Philippines after independence.

Topic of Study [For H2 History Students]:
Paper 2: Economic Development after Independence
Section B: Essay Writing
Theme II Chapter 1: Paths to Economic Development

1946 to 1965: Post-independent Philippines
During the early stages of independence, Philippines was heavily reliant on primary exports, due to its trade links with USA. This can be explained by the pre-indpendence policies, like the Payne Aldrich Tariff Act (1909) that granted US access to some Philippine goods.

One significant approach involved economic indigenization via the establishment of the National Development Company, which facilitated the formation of state agencies to control key sectors of the economy. For example, the Philippine Sugar Institute was formed in 1951.

The second strategy involved agricultural development. Given the heavy reliance on primary exports for growth, the government engaged in major land reforms, as seen by the Rice Share Tenancy Act (1946). The purpose was for resource consolidation and re-distribution.

1965 to 1986: The ‘era of Marcos’
Under the leadership of Ferdinand Marcos, the government continued its extensive state intervention to guide the development of the Philippine economy.

The government undergone transition for import-substitution industrialization (ISI) to export-oriented industrialization (EOI), as exemplified by policies that encouraged the inflow of foreign investment. For example, the Board of Investment was formed. This public entity then implemented the Investment Incentives Act (1967) to facilitate the influx of foreign investment. Additionally, the Export Incentives Act (1970) was introduced to provide incentives for the production of manufactured exports.

Following the imposition of martial law in 1972, the government raised its level of intervention in the economy. There was greater state ownership in various sectors, as seen by organizations like the Philippine Sugar Commission and the Asia Brewery.

Around the 1960s to 1970s, Marcos also capitalized on the Green Revolution to enhance the productivity of agriculture. The International Rice Research Institute (IRRI) was set up to allow the development of high-yielding and disease-resistant rice varieties. In addition, the ‘Masagana 99’ (Rice Production Programme) was introduced to grant rice farmers access to fertilizer subsidies and credit. Hence, the farmers benefited from state support, as seen by the achievement of self-sufficiency in rice production by 1972.

1986 to 1997: Post-Marcos Era
Following the economic instability and political unrest that caused the transition to a new administration, the Philippine government sought to resolve these past setbacks urgently.

One such obstacle was the large external debt due to Marco’s extensive borrowing. Austerity measures were introduced to reduce deficits. Also, the Comprehensive Agrarian Reform Law was passed in 1988 to facilitate land reforms, thereby transferring ownership to farmers.

Besides, there was greater privatization to reduce excessive state ownership, which was recognized as an inefficient approach for economic development. For example, monopolies in industries like telecommunications and power generation were dismantled.

Over time, the post-Marco period was met with greater success due to the restoration of economic stability. Privatization was effective in providing the country with its much-needed revenue for recovery. Gross Domestic Product (GDP) growth rate in the 1990s averaged at 3.3%.

What can we learn from this case study?
Consider the following question to understand this country-specific case study:
– To what extent was state involvement beneficial to the economic development of the Philippines after independence? [to be discussed in class]

Now that you have examined the strategies and outcomes of the Philippine economy, we encourage you to attempt essay questions to review your knowledge thoroughly. An alternative approach is to join our JC History Tuition. We provide useful summary notes and essay outlines to enhance your knowledge application skills.

Furthermore, we conduct other related JC tuition classes, like GP Tuition, Economics Tuition, JC Chemistry Tuition, JC Math Tuition and China Studies in English Tuition. For Secondary Tuitionclasses, we offer Secondary English Tuition, Secondary Math tuition, Secondary Chemistry Tuition and Secondary Economics Tuition. Call 9689 0510 to sign up now and get discounts!

JC History Tuition Bishan Singapore - How did Indonesia build its economy - JC History Essay Notes

How did Indonesia build its economy?

Overall economic trend of Indonesia
From independence to 1970s, the Indonesian government was pre-occupied with its political development. Also, there was much emphasis on agriculture, given its substantial natural endowments. Although the country encountered several setbacks, astute government intervention resulted in the rapid economic growth from 1970s to 1980s due to the continued emphasis on industrialization. Nevertheless, given its large geographical size, the Indonesian economy has a massive potential for economic growth.

Find out more about the critical factors that explain the economic successes of modern Indonesia.

Topic of Study [For H2 History Students]:
Paper 2: Economic Development after Independence
Section B: Essay Writing
Theme II Chapter 1: Paths to Economic Development

1957 to 1965: ‘Guided Democracy’ [Soekarno]
Following the harsh and disruptive colonial rule and World War Two, the Indonesian government, under Soekarno’s leadership, pursuit economic nationalism to restore state control of key economic sectors. In 1957, the seizure of foreign-owned assets was carried out for state consolidation and re-allocation. For instance, the ‘Peraturan Presiden Nomor 10 tahun 1959‘ (Government Regulation 10) disallowed foreigners from conducting businesses in specific areas. At the same time, the regulation forced the transfer of business ownership to local citizens.

In addition, under the guidance of the Bappenas [Badan Perencanaan Pembangunan Nasional] (National Planning Council), the Indonesian government focused on national development. The plan involved an estimated spending of $30 billion rupiah on an annual basis. Land reform was also conducted to nurture the development of the agricultural sector, as observed by the Basic Agrarian Law (Peraturan Dasar Pokok-Pokok Agraria).

1965 to 1997: ‘New Order’ [Suharto]
After the sudden political transition, Suharto led a major economic transformation that resulted in the rapid modernisation of Indonesia. Together with his team of Western-educated technocrats, also known as the ‘Berkeley Mafia‘, Suharto introduced liberal economic policies.

The BULOG [Badan Urusan Logistik] (National Logistics Body) was established in 1966 for price stabilization in the agriculture sector. To protect the interests of the locals, the government introduce price control measures to reduce inflationary pressures for crops, such as rice.

At the same time, the BIMAS (Mass Guidance Programme) was implemented in 1969 to nurture the rice industry through the provision of access to foreign technology. Also, Suharto capitalized on the Green Revolution by providing disease-resistant and high-yielding varieties.

As a result, Indonesia flourished tremendously from its successful efforts in raising rice production. In fact, agriculture contributed to nearly one-third of the country’s Gross Domestic Product (GDP).

Another critical aspect of Indonesia’s rapid economic growth can be traced to its emphasis on export-oriented industrialization (EOI). It began with the provision of incentives to attract foreign investment, such as the New Investment Law of 1967, which guaranteed no corporate tax for specific projects.

Additionally, financial liberalization was pursued in the 1980s. For example, the government allowed the deregulation of money markets, as evidenced by the increase in number of private local banks from 63 in 1988 to 165 in 1995. By 1990, the privatization of the Jakarta Stock Exchange promoted investment activities. These changes can be explained by the easing of licensing regulations for foreign banks.

Hence, we can observe that the 1980s and 1990s were a notable period in which the government played a secondary role, thus allowing the private sectors to guide the economic development of Indonesia.

Furthermore, the government tapped on the economic expertise and domestic capital of its Chinese-dominated private businesses to flourish the economy. By 1996, a group of domestic conglomerates became the key pillar of the economy, such as the Salim Group (e.g. Indomie!) and Astra Group.

What can we learn from this case study?
Consider the following questions to understand this country-specific case study:
– How important was the government in shaping the economic development on Indonesia after independence? [to be discussed in class]

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