What this lesson teaches
I can judge the outcomes of economic change in Southeast Asia for growth, equity and economic nationalism.
Syllabus 9174, Paper 2, Theme II, Learning Outcomes. evaluate the outcomes of economic change across different contexts and over time
Make a guess
Poverty fell sharply in fast-growing Southeast Asian economies. Do you think inequality fell too?
- Yes, less poverty means there is less inequality as well.
- Not always; gaps between town, country and regions often grew.
- No, because poverty did not really fall anywhere.
Show the answer
Not always; gaps between town, country and regions often grew.
Bangkok's incomes rose far faster than the rural northeast. Falling poverty and falling inequality are different things.
Inequality often persisted or grew, between town and country, between regions and between ethnic groups. Malaysia did most to narrow ethnic gaps.
Income distribution is about how evenly income is shared. It can improve even when poverty falls, or it can worsen.
Gaps between town and country grew in several countries. In Thailand, incomes in Bangkok rose far faster than in the rural northeast.
Malaysia set out to reduce ethnic inequality. Under the NEP, the Malay share of company ownership rose from about 2 per cent in 1970 to about 19 per cent in 1990. This fell short of the 30 per cent target. The income gap between Malays and Chinese narrowed.
But the NEP also widened gaps within the Malay community, as well-connected Malay businessmen gained most.
In Indonesia, overall inequality was moderate, but wealth was concentrated among Suharto's family and allies and among large Chinese-owned conglomerates. Resentment of this helped fuel anti-Chinese violence in 1998.
In the Philippines, a small number of landowning families held much of the wealth throughout the period.
- Malay ownership
- About 2% (1970) to about 19% (1990); target 30%.
- Thailand
- Bangkok pulls ahead of the northeast.
- Indonesia
- Wealth concentrated among cronies and conglomerates.
Worked example: Judging equity
Did growth bring a fairer share of wealth?
- Malaysia: ethnic gaps narrowed; gaps within groups grew.
- Thailand: regional gaps grew.
- Indonesia: wealth concentrated among cronies and conglomerates.
- The Philippines: land and wealth stayed with elite families.
Watch out for this
Falling poverty means that inequality also fell.
Poverty can fall while the rich gain even faster. Thailand cut poverty but saw the gap between regions grow.
Check your understanding
What happened to Malay ownership of companies under the NEP?
- It fell as Chinese and foreign firms bought up Malay-owned shares.
- It reached the 30% target by 1980.
- It rose from about 2% in 1970 to about 19% in 1990.
Show the answer
It rose from about 2% in 1970 to about 19% in 1990.
Right. It rose but missed the 30% target.