Term Paper on "Impacts of Types of States on Economic Development in Southeast Asia"

/>2. Types of Southeastern Asian states and their impact upon economy

According to Internet encyclopedias, the southeaster part of Asia is divided into two major parts: the mainland region and the archipelago. The mainland region consists of the following states: Cambodia, Laos, Malaysia, Myanmar, Singapore, Thailand and Vietnam. The archipelago is made up of the following: Brunei, East Timor, Indonesia, Malaysia and the Philippines.

These countries are highly different one from another and have registered both economical increases and decreases, depending on the conditions and challenges they were faced with. To better understand the factors that influence each country's economy, as well as the impacts of the state upon the economy, one needs to closely analyze the south Asian states which played a relevant role in the history of Asian economy. Cambodia, Vietnam, Malaysia, Brunei and the Philippines are countries which faced significant changes and their current economic status is directly linked to these changes and the defining features of the state.

Malaysia

Malaysia is a country with relatively small space dimensions, and such is its economy. What differentiates Malaysia from other neighbors she has, is the way of organizing and structuring its economy. The country's economy is generally opened to international trade, unlike its neighbors' economy which is generally characterized by the policy of closed doors and internal production of all necessary commodities.

The country's geographical position has supported its economic growth by aiding it maintain for centuries its status of "center for trade." Historically challenged, Malaysia has managed to overcome its status of small economy by the general perception of economy held by the ruling powers of the country.

Unlike its southern neighbors, who enclosed their economy within the geographical boundaries of the territory, the government of Malaysia understood the real meaning and importance of international trade. Opening up to imports and exports, Malaysia was able to sustain long-term relationships with numerous international partners that eventually aided the economic growth of the country. "Current Gross Domestic Product per capita grew 31% in the Sixties and an amazing 358% in the Seventies but this proved unsustainable and growth scaled back sharply to 36% in the Eighties rising again to 59% in the Nineties led primarily by export-oriented industries."

The current economic status of the country is directly linked to the open minded perception of the Malaysian ruling powers and their continuously sustained efforts towards creating an open economy, based on international relationships of mutual trust and respect, understanding, fairness and correctness.

Cambodia

In spite of recent progress, the Cambodian economy continues to suffer from the legacy of decades of war and internal strife. Per capita income, although rapidly increasing, is low compared with most neighboring countries. The main domestic activity on which most rural households depend is agriculture and its related sub-sectors. Manufacturing output is varied but is not very extensive and is mostly conducted on a small-scale and informal basis. The service sector is heavily concentrated in trading activities and catering-related services."

The poor country of Cambodia is suffering the negative effects of war and previous enclosure from the rest of the international economies. Nowadays, Cambodia is an agriculture-based society, having the great majority of its entire population concentrated on land working activities. Given the large number of inhabitants, the country disposes of an impressive workforce which demands only low wages. However, the workforce has limited experience and necessary preparation for performing the desired activities.

Aside from unskilled workforce, Cambodia's economical growth is also stunted by natural calamities and unfavorable weather conditions such as floods, droughts "inefficient state-owned enterprises, a rapidly growing labor force that cannot be absorbed by agriculture, delays in exploiting energy resources (natural gas), insufficient power supplies, and slow implementation of economic reforms."

Vietnam

Similar to the case of Cambodia, Vietnam's economy was as well highly affected by military confrontations of both internal nature (such as riots) as well as international confrontations (wars). However, the country was able to fully overcome the negative effects of the battles and recover to the extent of becoming one of the strongest economies in the southeastern region of Asia.

Vietnam is now the world's largest robusta coffee, cashew nuts and pepper exporter, and the second largest rice exporter worldwide. Vietnam has the highest percent of land use for permanent crops, 6.93%, of any nation in the Greater Mekong Subregion."

Contrary to the general perception of Vietnam as a still conflicted territory and poor land, the country was continuously supported by international partners in its constant battle against poverty. The main reason why the country has been able to fully recover after the destructive wars is the government of the country.

Ruled by democratic powers, the country has been able to develop long-term partnerships with numerous states across the globe. Due to this relationships, and the moral and financial support received, the country has strengthen its economy. Therefore, the state did impact the economy in the meaning that the democratic way of thinking and opening up to international partners have supported economic growth.

Philippines

In 2005, The Philippines was ranked number 24 in the strongest economies in the world by purchasing power parity and it is considered a newly industrialized country, NIC. Generally agriculture-based, the country was able to overcome its initial status by launching itself into industrial activities.

Numerous specialized economist have analyzed the economic growth of the Philippines and have reached rather intriguing conclusions. For instance, Paul Hutchcroft associated the country's development with the concept of "booty capitalism" and evaluated it from a patrimonial point-of-view. Hutchcroft explains that the term patrimony should be understood in two different meanings. The first meaning, the one we are generally familiar with, understands patrimony as the totality of benefits generated by capital accumulation in the political sector.

As to the second meaning of patrimony, that is "oligarchic patrimonialism," Hutchcroft believes it to be the reason behind the economic growth of the Philippines. In this order of ideas, the author points out that a highly efficient method of applying "oligarchic patrimonialism "is that of eliminating as much as possible the bureaucracy. "Unlike administrative patrimonialism, in which the primary beneficiaries are members of a state bureaucracy, the oligarchic variety enables a politically influential business elite to extract privileges from a largely incoherent bureaucracy." The method of diminishing bureaucracy has significantly contributed to the economic growth of the southeastern Asian country.

4. Export-oriented economies vs. non-export-oriented economies

One of the most relevant features in international economy is the ability to trade, one of the most significant revue sources. But trade is not just a fountain of financial resources, it also a characteristic feature of a country's economy, a means of wellness, development and international recognition. If one country's ability to trade is not internationally exploited, the economy of that country is prone to leave scars on the lives of its inhabitants. Unfortunately, this is the case of some southeastern Asian countries.

While being enclosed in an economy with limited international trade, countries like Cambodia, Laos, or East Timor were forced to produce within the boundaries of the country all the commodities necessary to a decent life. This was extremely difficult and generally unattainable, therefore, these countries had to suffer prologued years of insufficient subsidiaries. By cutting all connections with the civilized countries across the globe, the government powers insured their authorial ruling and supported economic collapse. Lack of imports and exports eventually brought about the current poverty in the southeastern Asian states.

On the other hand, not all countries in the… READ MORE