THE SOUTHEAST ASIAN CASE
By Ronald D. Palmer
|Since the 1970-1980 period is the key decade|
before the recession of the 1980s and the
beginning of globalized capital flows, it is
useful to stop momentarily and compare 1970
and 1980 data.
Indonesian GDP was 8.5 billion rupiah in 1970 and nearly doubled to 17.6 billion in 1980.
Malaysian GDP nearly tripled, from 15.8 to 34.2 billion ringgit, in the decade.
Philippine GDP almost doubled, from 83.4 to 154.9 billion pesos.
Singapore GDP more than doubled, from 8.5 to 18.4 billion Singapore dollars by 1980.
Thai GDP almost doubled, from 220.2 to 432.2 billion baht.
In short, from 1950 to 1980, economic nationalism
had been a successful strategy in Southeast Asia.
The 1975-1985 era began with the fall of Vietnam, Laos, and Cambodia to communist forces in 1975.
Laos was the least developed of the three, both economically and politically. Despite the abdication of King Savang Vatthana, the new successor communist regime was drawn from the same élite that had previously served the monarchy. Nevertheless, Laos like other communist regimes had its era of rehabilitation camps, retribution against minorities such as the Hmong, who had been allies of the United States in the war, and other political undesirables. However, this period was transitory and Laos soon sought to establish normal relation with the United States, Thailand, and the World Bank. Indeed, Laos came under virtual World Bank tutelage. Lao development was slow in the 1970s.
Cambodia underwent savage Khmer Rouge oppression from 1975 to 1979. Perhaps two million of its citizens were murdered. The intelligent, the literate, the urban, were declared to be the class enemies of the Cambodian people by the Khmer Rouge. A generation of recovery, learning, and development was lost. The Khmer Rouge sought to make time stand still or go backwards.
Vietnam was flushed with victory in 1975 and jubilantly adopted a virtual carbon copy of the Soviet Russian development model. The generation of aging leaders who had successfully waged war were convinced communist ideologues, but they proved unable to apply ideological organizing principles to the homely problems of economic development. One feels that the Vietnamese leadership turned to making war against the Khmer Rouge in December 1978 with relief. Waging war was something they knew how to do. The Soviets subsidized the Vietnamese war effort in Cambodia. They also made vast amounts of low-cost fertilizer and energy supplies available. Strains on the Soviet economy became evident in the 1980s, however, and by 1985, when Gorbachev assumed power, the Soviets were forced to cease their support of the Vietnamese economy.
Little progress was taking place in Laos as the 1975-1985 period ended.
Vietnam was mired down in the Cambodian war in 1985. At that time, when Gorbachev took power in the Soviet Union, Vietnam was informed that Soviet economic problems were so severe that its military and economic assistance would be ending. This put pressure on the Vietnamese leadership to adopt new policies. If Russia were no longer to be a strategic partner, Vietnam would be forced to improve relations with the America. Movement toward the development of such policies began at the Sixth Party Congress of the communist party of Vietnam in 1986. The wartime leadership was retired and market opening policies adopted. Vietnam began withdrawing its military units from Cambodia and seeking normalization of relations with the United States, including supporting U. S. efforts to account for servicemen missing during the war. The Seventh Party Congress took place in 1991 and confirmed these policies. Meanwhile, Vietnam began achieving seven and eight percent rates of growth. Relations with the United States were normalized in 1995 and Vietnam entered the Association of Southeast Asian Nations (ASEAN).