The US Department of Commerce's 1989 guidebook, entitled Caribbean Basin Initiative, provides thumbnail sketches of commercial opportunities throughout the Caribbean for potential American investors. Haiti, the black republic occupying the western third of Hispaniola, is described therein as a particularly appealing locale: “Haiti's low wages, productive labor, strong private sector, and close proximity to the United States have been very attractive to offshore manufacturers, especially in electronics, apparel, toys, and sporting goods” (1988: 55).

The guidebook is not intended, of course, as an academic treatise, and it would be inappropriate to use it as a target. Yet its implications about Haiti (and very similar comments about other places in the circum-Caribbean region) are clear and important. Haiti's “low wages” and “productive labor” are portrayed as local cultural characteristics. And the happy combination of these indigenous Haitian characteristics with the “close proximity” of the world's largest national market suggests that it is not only economically rational but also helpful to all concerned that US manufacturers send component materials to these undemanding yet productive laborers for the fabrication of baseballs, playsuits, and TV parts for the North American market.

An historical-geographical assessment of Haiti provides a less exuberant but more instructive perspective. Aboriginal peoples called the entire island Quisqueya. It was “discovered,” claimed for Spain, and renamed Hispaniola by Christopher Columbus in 1492.

Introduction

South East Asia's interaction with the wider regional and international economic structures has undergone frequent and profound change. Broadly these changes may be related to the successive emergence and dominance of mercantile, industrial and finance capital. South East Asia has successively developed as a supplier of high-value luxury produce such as spice; a producer of bulk primary produce, recipient of associated investment and as a market for mass-produced industrial goods; and as a major location for labour-intensive manufacturing operations and investment. Within the region these phases in the evolution of the world-economy have been reflected in the relations of production and the spatial pattern of economic activity. The progressive integration of South East Asia into the world-economy established the dominance of a small number of core areas and produced a pattern of increasingly uneven development at all levels.

The restructuring of the world-economy during the 1980s is beginning to open up South East Asia to a new cycle of capitalist penetration. Central to this process is the ‘new orthodoxy’ of development: the minimisation of barriers to foreign investment and MNC activity, the exploitation of ‘comparative advantage’; and ‘allocative efficiency’. These developments are in general contrary to the interests of the region's domestic capital. However, while in general the ability of the region's economies to resist the pressures for restructuring have been eroded, the process is operating extremely unevenly.

Introduction

Many Western accounts of South East Asian economic and social structures are both distorted and highly selective. The colonial powers fostered the view of backward, changeless societies with weak, ephemeral political structures, despotic, often rapacious, rulers, endemic disease, almost uniform poverty and internecine warfare. This view remained implicit in much of the development literature of the 1950s and 1960s. For advocates of ‘modernisation theory’ the traditional societies of the pre-colonial, colonial, and post-colonial periods were static, bounded and conservative. In the more extreme views such societies were presented as lacking economic logic (Rostow, 1960). Others, such as Foster (1965), accepted that traditional societies had their own logical basis. Similarly, Schultz (1964: 36–57) described traditional agricultural production as, within its own terms of reference, containing few ‘allocative inefficiencies’.

For adherents to these views, pre-colonial South East Asia was dominated by communal, village-based production, over which weak centralised state structures had limited control and made limited demands. Production was dominated by agriculture to which craft activities were merely annexed. Such communities both aimed at, and largely achieved, self-sufficiency with little contact with the outside world (Murray, 1980: 6–7).

Over the last twenty years work by Western and Asian scholars has substantially undermined the picture of a static, undifferentiated, communal society. Increasingly it has been recognised that there was considerable variation within the region in the degree to which communal, individual and state structures had evolved. Insufficient attention is still paid to the processes of change.

Overview of South East Asian development strategies

This chapter examines the development strategies followed by the capitalist states of South East Asia since the 1950s in the context of their changing interaction with the world-economy. Major changes in policy show considerable similarity in form and timing throughout the region. This reflects the generally ‘open’ nature of the capitalist South East Asian economies, their high degree of interaction with the world-economy and their receptiveness to changes in the prevailing development ‘orthodoxy’, in particular through the advocacy of the IBRD and IMF. However, this changing orthodoxy is itself a reflection of change in the world-economy and indeed trails behind such changes.

Since the 1950s economic development strategies in all the pro-capitalist South East Asian states have emphasised rapid urban-industrial development. In addition as Hardjono (1983: 33) has noted: ‘insecure governments tend to concentrate their resources upon urban improvements in the interests of maintaining their own power and winning international recognition, of their country's status as a self governing nation’. Rural development has played an increasingly secondary role; although, in all the states except Singapore the rural areas have continued to receive a large proportion of development funds, it has generally been substantially less than their shares of the population and GDP.

Rural insurgency, particularly in Thailand and the Philippines and the strength of rural political lobbies, notably in Malaysia, have a significant part in maintaining expenditure on the rural sector.

Introduction

South East Asia has played a major role in the world-economy. It has supplied key raw materials, provided markets for developed world goods, received investment and, most recently, multinational manufacturing. To a degree these roles have been sequential, reflecting the evolution of imperialism, the progressive incorporation of the region into the world-economy and the accompanying development of capitalist relations of production.

Western recognition of South East Asia (map 1.1) as a distinct entity is comparatively recent. Until the 1940s a variety of terms were applied to these islands and peninsulas, for example, Further India, the Far Eastern Tropics and Indo-China. Thus, South East Asia was viewed as an eastward extension of India, a tropical appendage to the Far East or merely the area between India and China. These terms strongly reflect the imperial structures that had been established by the early 1900s, as indeed the adoption of the term South East Asia during the 1940s reflected a radically different situation.

The emergence of South East Asia as a major sub-division of the world economy can be discerned during the 1930s. This was principally the result of the weakening of the established imperial structures. In terms of British policy, events in East Asia and moves towards some form of independence for India shifted the focus of activity towards Burma and the Malay Peninsula. Additionally, from the mid-1920s South East Asia's resources and markets had become a focus of increasing rivalry between the USA and Japan.

Introduction

The territory acquired by the European powers before the nineteenth century retained the long-established relations of production. During the course of the 1800s and, most particularly, after 1870, capitalist relations of production were increasingly exported to South East Asia. Consolidation of control over the areas where these relations were being developed was both a necessary and integral part of the process. As we have seen in the case of Thailand, ‘control’ did not necessarily imply annexation. The crucial elements were the reserving and opening up of areas to the activities of metropolitan capital.

The growth of trade and production

The broadly based pattern of trade and production that existed prior to Western annexation of South East Asia underwent rapid and profound change. In general exports became narrowly based and oriented almost exclusively towards the needs of the individual colonial powers. The trade in high-value scarce products such as spice was supplemented, and later eclipsed, by the mass production of lower-value products. Many of these were long established in the region, such as teak, tin, coconuts, fibres and rice. Others were new: oil, rubber and palm oil. This process was initiated by the Dutch who began the large-scale export of sugar, coffee and later indigo from Java during the seventeenth century. These products rapidly supplanted spice in the VOC trade (Tate, 1979: 36).

South East Asian trade and Western penetration

The penetration of the Asian trading network by the Western powers was intimately connected with the rise of European capitalism. Thus the distinctive phases in the process reflect the development of the productive forces within those countries that were emerging as the core of the world-economy. The initial penetration by individual traders and, later, companies was the product of mercantile capitalism. This had neither the strength nor the imperative to move from control over South East Asia's external trade to control over territory and direct participation in production. Only in those areas lacking major political structures, for example the Philippines and parts of present-day Indonesia, was direct European control feasible before the nineteenth century. Not until the industrial revolution did the European nations become sufficiently powerful to dominate the major South East Asian states. This chapter sets out the general sequence of European penetration with the objective of illustrating the varied and changing nature of the processes that operated.

Prior to the penetration of the European powers South East Asia held a key position. Trade networks connected East Africa with China and supplied the Middle East, Mediterranean and European world with a variety of high-value goods such as silk, spices, drugs and porcelain. While a wide range of commodities originated in South East Asia, by far the most significant were spices (map 3.1).