From Commodity Booms to Economic Miracles

Indonesia, Malaysia, and Thailand emerged unexpectedly in the 1960s and 1970s as fast-growing, labour-intensive manufacturing countries. Their industrial growth rates closely matched those of Japan, South Korea, and Taiwan for more than two decades. This sudden export-led ‘miracle’ took place in the context of political instability and ethnic tensions, after more than two decades of modest success with post-independence, import-substituting industrialization strategies there and in other Southeast Asian nations. Cambodia and Vietnam joined the export-led manufacturing club in the 1990s, followed by Myanmar in the 2000s. The Philippines was the only Southeast Asian nation to miss the late twentieth-century ‘miracle’. Southeast Asia experienced some impressive GDP per capita growth between 1870 and 1940, but, outside of the Philippines, manufacturing stagnated and modern enterprises were confined to commodity export processing. The chapter analyses the region’s dismal industrial performance before the 1960s, and why manufacturing grew so fast in the following decades.