Economic Development of Southeast Asia Ian Coxhead University of Wisconsin-Madison Overview Week 1: Early modern development  Historical background – initial conditions  Getting growth started: resources, industry, agriculture  “Old style” global shocks: oil crisis, 1970s  Income growth, poverty and distribution Week 2: Development since mid-1980s  Post-Plaza Accord boom, bubble and bust  Globalization, again: trade liberalization and FDI  Enter the dragon: the rise of China  Topics: human capital, Asian regional integration, macro policy Approach and assessment Lots of reading!    Thinking about what we read:  short midweek homeworks @ 10% Connections to data  big research assignment, using SE Asian economic growth and development data @ 30% Just checking…  end-of-week tests @ 20% Having your say  Class participation @ 10% 1a Southeast Asia before the modern era Overview Why study “ancient” history? Precolonial SE Asia: the first globalization era Colonialism War, nationalism and revolution The region about 1970: a snapshot map Why study ancient history?  Precolonial SEA has some remarkable similarities with contemporary times:  Resource endowments relative to rest of world Natural resource abundance  Importers of advanced technologies  Trade relationships  Esp predominance of China & Northeast Asia  Vulnerability to world market shocks  Susceptibility to radical political and religious ideas   Of course, some differences too:  Then: labor shortage; now, mainly labor abundance relative to rest of world Is history fate? map Precolonial SE Asia (~1000-1600 AD) Mainland, Java, Sumatra: centralized kingdoms with capitals astride navigable rivers  Wealth based on local resource base and taxes on resource exports (rice, spices, specialty timbers)  E.g Ayuthaya (Thailand): about 25% gov’t revenue from taxes on trade between hinterland and rest of world  Major religions display strong centralizing tendencies Archipelago/Malay peninsula: decentralized political entities, capitals at coastal ports  Wealth based on resource exports and entrepôt trade between Red Sea ports, India and China  Spread of Islam (a decentralized religion) along maritime trade routes 10 ... assignment, using SE Asian economic growth and development data @ 30% Just checking…  end-of-week tests @ 20% Having your say  Class participation @ 10% 1a Southeast Asia before the modern... precolonial SE Asia Resources: land abundance, labor scarcity Trade: diversified; regional and global Econ structure: mainly diversified; subsistence-oriented; low-tech (no capital) “Southeast Asia. .. century to ~1950s) Econ motives for colonial rule  Trade access to East Asia (Manila, Cochinchina as bases/entrepots)  SE Asian natural resources (spices, timber, ag produce, minerals)  Treaty