Malaysia: From Kampung to Twin Towers

Abstract

Malaysia: From Kampung to Twin Towers. By Richard Leete. Shah Alam: Oxford Fajar, 2007. Pp. 358. The publication of Malaysia: From Kampung to Twin Towers coincides with the celebrations of fifty years of Independence in Malaysia. It documents the economic and social progress that Malaysia has achieved over the past fifty years and some of the development challenges that it faces today. The book begins with a chapter that examines how changes in Malaysia's demography over the past fifty years have profoundly influenced its economic development. This is followed by chapters on the growth and transformation of the economy, and poverty eradication and the restructuring of society. The final chapters examine achievements in the areas of education, health, and greater gender equality. The tone of this book is perhaps set in the forward, which states that at Independence Malaysia was on par with Sri Lanka, the Philippines, Ghana, Morocco and Senegal in terms of per capita income. However, fifty years on, its per capita income is double that of Sri Lanka, three times that of the Philippines and Morocco, and six times that of Ghana and Senegal. The message is that Malaysia's record is one of success, which deserves to be celebrated and to be emulated by other developing countries. However, it also true that Malaysia has slipped in the East Asian growth league table and its performance in the East Asian neighbourhood has been mediocre. Both South Korea and Taiwan, which started out with lower levels of per capita GDP, have well surpassed Malaysia fifty years later, while several that started almost on par or at lower levels of per capita GDP have grown much faster. In terms of total factor productivity, Malaysia has also lagged behind. Since Independence, Malaysia has been ruled by just one political party, and the policies of that party, particularly the New Economic Policy and its current variant, have been instrumental in charting the development and growth trajectory in Malaysia. As there is no counter factual to the NEP and no way of gauging what growth rates would have prevailed in its absence, perhaps the challenge is then is to explain how Malaysia was able to do as well as it did it spite of the NEP. Was it just good luck and did good policy have much to do with it? Leete maintains that unlike many other resource-rich countries, Malaysia did not succumb to the curse of reliance on its natural resource abundance and is one of the leading exporters of high technology electronics. However, underlying the impressive growth of the Malaysian manufacturing are a number of serious shortcomings. These include a high concentration in the electronics sub-sector, high foreign ownership, weak linkages, and human resource constraints. …