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Reviewed by:
  • Malaysia: From Kampung to Twin Towers
  • Anita Doraisami
Malaysia: From Kampung to Twin Towers. By Richard Leete. Shah Alam: Oxford Fajar, 2007. Pp. 358.

The publication of Malaysia: From Kampung to Twin Towers coincides with the celebrations of fifty years of Independence in Malaysia. It documents the economic and social progress that Malaysia has achieved over the past fifty years and some of the development challenges that it faces today. The book begins with a chapter that examines how changes in Malaysia's demography over the past fifty years have profoundly influenced its economic development. This is followed by chapters on the growth and transformation of the economy, and poverty eradication and the restructuring of society. The final chapters examine achievements in the areas of education, health, and greater gender equality.

The tone of this book is perhaps set in the forward, which states that at Independence Malaysia was on par with Sri Lanka, the Philippines, Ghana, Morocco and Senegal in terms of per capita income. However, fifty years on, its per capita income is double that of Sri Lanka, three times that of the Philippines and Morocco, and six times that of Ghana and Senegal. The message is that Malaysia's record is one of success, which deserves to be celebrated and to be emulated by other developing countries.

However, it also true that Malaysia has slipped in the East Asian growth league table and its performance in the East Asian neighbourhood has been mediocre. Both South Korea and Taiwan, which started out with lower levels of per capita GDP, have well surpassed Malaysia fifty years later, while several that started almost on par or at lower levels of per capita GDP have grown much faster. In terms of total factor productivity, Malaysia has also lagged behind.

Since Independence, Malaysia has been ruled by just one political party, and the policies of that party, particularly the New Economic Policy and its current variant, have been instrumental in charting the development and growth trajectory in Malaysia. As there is no counterfactual to the NEP and no way of gauging what growth rates would have prevailed in its absence, perhaps the challenge is then is to explain how Malaysia was able to do as well as it did it spite of the NEP. Was it just good luck and did good policy have much to do with it?

Leete maintains that unlike many other resource-rich countries, Malaysia did not succumb to the curse of reliance on its natural resource abundance and is one of the leading exporters of high technology electronics. However, underlying the impressive growth of the Malaysian manufacturing are a number of serious shortcomings. These include a high concentration in the electronics sub-sector, high foreign ownership, weak linkages, and human resource [End Page 380] constraints. The East Asian success stories on the other hand were able to nurture and develop a world-class indigenous manufacturing sector. In contrast the Malaysian government played a fairly passive role, concentrating on developing a Malay capitalist class and greater Malay share ownership. However, unlike the East Asian success stories, Malaysia was able to rely on resource rents to make up for the weaknesses in this sector, to bail out loss-making state enterprises as well as firms of the well connected.

Leete also asserts that Malaysia has had stunning success with poverty eradication but concedes that the restructuring objectives of the NEP are perceived to have primarily benefited an elite minority and did not contribute to growth. Many costly errors were made in Malaysia both in the manner that the NEP was implemented and in terms of spawning a group of beneficiaries who are closely connected with the ruling party and have a vested interest in ensuring its continuation.

A political economy perspective is indispensable in gaining an understanding of both the achievements and the shortcomings of Malaysia's social and economic development. An occasional slap on the wrist was delivered with some critical observations at the end of some chapters, however it would have been far more beneficial if all of these could have been combined into one chapter assessing some of the failings of the Malaysian model...

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