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V - Summary and Policy Implications
Published online by Cambridge University Press: 21 October 2015
Summary
In Malaysia and Thailand, the manufacturing sector has overtaken agriculture as the leading economic sector in recent years. However, both countries are resource-rich and primary commodities continue to play important roles in their production and export structures. The earlier phases of industrialization of the two countries were characterized by import substitution but with the increasing saturation of domestic markets and for other economic reasons, this has been replaced with export substitution strategies. Resource-based industries (RBIs) which are concerned with the downstream processing and manufacturing of the country's agro and mineral products have excellent prospects for development and can feature importantly in this drive to develop export-oriented manufacturing industries.
In Thailand, current industrial policies aim to promote manufactured exports, labour-intensive industries and resource-based industries in order to solve the basic problems of unemployment, unequal distribution of wealth, and income and trade deficits. Malaysia has chosen a fairly strong emphasis on exports but has paid some attention to the promotion of selected, import-substituting industries, mainly in consumer durables, intermediate inputs and certain capital goods industries. In the export manufacturing sector, the direction of expansion is towards more capital- and technology-intensive products, including resource-based products as well as machinery and electronics products.
The right amounts of capital and appropriate modern technologies are crucial requirements for the successful industrialization of any developing country. But capital is often a major constraint to the industrialization efforts. However, the influx of foreign capital (and technology) has enabled many a developing country, including Malaysia and Thailand, to achieve a more rapid rate of industrial growth than would otherwise have been possible. As with any industrial development, resource-based industrial development too requires large amounts of capital and appropriate technologies. Some of the required capital can be provided from the limited domestic sources, but others will have to come from foreign sources.
Primary resource products make up nearly 40 per cent of the exports of the two countries.
- Type
- Chapter
- Information
- Foreign Manufacturing Investments in Resource-Based IndustriesComparisons between Malaysia and Singapore, pp. 49 - 59Publisher: ISEAS–Yusof Ishak InstitutePrint publication year: 1990