Welfare Developmentalism in Singapore and Malaysia

Abstract

Singapore and the then Malaya shared a similar history as British colonies from the nineteenth century until after the Second World War. Malaya gaining political independence in 1957 and Singapore in 1965. Independence of Singapore was enabled through a brief period of membership in Malaysia (1963-5). The extractive colonial economy of British Malaya and the entrepôt economy of Singapore left the two territories at the point of political independence without any significant industrialization. Malaya was dependent on declining fortunes of rubber and tin exports, while Singapore remained a ‘trading post’ increasingly unable to utilize adequately the rapidly increasing local-born population. Industrialization, which was synonymous with social and economic development and both with nation-building, was thus the overwhelming preoccupation of the two independent governments. To the extent that then Malaya and subsequently Malaysia had a resource extraction economy and a sizable population which provided a domestic consumption sector, pressure for industrialization was less immediate than in Singapore. Furthermore, Malaya could follow the popular economic wis-dom of the 1960s of an ‘import substitution’ industrialization development strategy. Indeed, as a member of Malaysia, Singapore looked toward the larger domestic market as the immediate destination of the products of its nascent industries. It was only after political separation that Singapore changed course to export-oriented industrialization, following the by then well-trodden path taken by South Korea, Taiwan and Hong Kong, and before then by Japan.