The Politics of Open Economies: Indonesia, Malaysia, the Philippines, and Thailand

258 Pages·1997·6.47 MB·English

by  Alasdair Bowie

This book asks why some countries have responded to the external
constraints and opportunities arising from their global and regional
economic context by opening up their economies. In particular, the
authors examine the role domestic political and economic factors
play in shaping the decision to become more open, or more inward-
looking. The countries of Southeast Asia have generally enjoyed
economic success in the postwar period. The authors argue that one
of the explanations for this success has been their integration into
the global division of labor, and analyze decision-makers' reasons
for following this course. They place particular emphasis on exter-
nal events, notably the two oil shocks of the 1970s, and the more
recent outflow of investment capital and manufacturing capacity
from Japan and East Asia.

THE POLITICS OF OPEN ECONOMIES
CAMBRIDGE ASIA-PACIFIC STUDIES
Cambridge Asia-Pacific Studies aims to provide a focus and forum
for scholarly work on the Asia-Pacific region as a whole, and its
component sub-regions, namely Northeast Asia, Southeast Asia and
the Pacific Islands. The series is produced in association with the
Research School of Pacific and Asian Studies at the Australian
National University and the Institute of International Affairs.
Editor: John Ravenhill
Editorial Board: James Cotton, Donald Denoon, Mark Elvin, David
Goodman, Stephen Henningham, Hal Hill, David Lim, Ron May,
Anthony Milner, Tessa Morris-Suzuki.
R. Gerard Ward and Elizabeth Kingdon (eds.) Land, Custom and
Practice in the South Pacific
Stephanie Lawson Tradition Versus Democracy in the South Pacific
Walther Hatch and Kozo Yamamura Asia in Japan's Embrace
THE POLITICS OF OPEN
ECONOMIES
Indonesia, Malaysia, the Philippines, and Thailand
ALASDAIR BOWIE
George Washington University
and
DANNY UNGER
Georgetown University
CAMBRIDGE
UNIVERSITY PRESS
PUBLISHED BY THE PRESS SYNDICATE OF THE UNIVERSITY OF CAMBRIDGE
The Pitt Building, Trumpington Street, Cambridge CB2 1RP, United Kingdom
CAMBRIDGE UNIVERSITY PRESS
The Edinburgh Building, Cambridge, CB2 2RU, United Kingdom
40 West 20th Street, New York, NY 10011-4211, USA
10 Stamford Road, Oakleigh, Melbourne 3166, Australia
© Alasdair Bowie and Danny Unger 1997
This book is in copyright. Subject to statutory exception and to the provisions of relevant
collective licensing agreements, no reproduction of any part may take place without the written
permission of Cambridge University Press.
First published 1997
Typeset in 10/12 Monotype Baskerville [SE]
A catalogue record for this book is available from the British Library
Library of Congress Cataloguing in Publication data
Bowie, Alasdair.
The politics of open economies: Indonesia, Malaysia, the
Philippines, and Thailand / Alasdair Bowie and Danny Unger.
p. cm. — (Cambridge Asia-Pacific Studies)
Includes bibliographical references.
ISBN 0 521 58343 8 (he) - ISBN 0 521 58683 6 (pb)
1. Asia, Southeastern — Economic policy. 2. Asia, Southeastern -
Economic conditions. I. Unger, Danny, 1955- II. Title. HI. Series.
HC441.B69 1997
330.959 - dc21 96-49358 CIP
ISBN 0 521 58343 8 hardback
ISBN 0 521 58683 6 paperback
Transferred to digital printing 2002
To Karl D. Jackson
in thanks for his ceaseless enthusiasm.

Contents
List of figures pagex
List of tables X
Acknowledgments xi
1 Introduction 1
2 Southeast Asian economic growth: the international context 25
3 Indonesia 44
4 Malaysia 67
5 The Philippines 98
6 Thailand 129
7 Conclusion 157
Notes 193
Bibliography 224
Index 236
IX
Figures and tables
Figures
1.1 Operationalization of the five hypotheses page 23
1.2 Causal relationships suggested by the five hypotheses 24
2.1 Summary of the four events 42
Tables
1.1 Economic performance of ASEAN Four, 1960-94 page 2
1.2 GNP per capita: selected countries, 1972-92 2
1.3 Structure of production: ASEAN Four, 1970 and 1993 3
1.4 Composition of merchandise exports: ASEAN Four, 1970 and 1992 4
1.5 Relative openness to trade in goods: selected countries, 1973
and 1993 10
1.6 Relative openness to trade in goods: selected countries, 1950-93 12
2.1 Cumulative direct foreign investment in ASEAN Four from Japan
and USA, 1969-93 39
2.2 Trade between ASEAN Four and Japan and USA, 1963-91 40
2.3 Official development assistance to ASEAN Four from Japan and
USA, 1964-91 41
2.4 Aggregate trade with the ASEAN Four: Japan and USA, 1990 41
3.1 Structure of protection in the Indonesian economy, 1987 and 1994 62
5.1 Comparative export performance of the Philippines, 1952-57 107
5.2 Philippine revenue and expenditure, 1948-57 110