Lecture by Dwight King, Professor of Political Science


A. The Variation in Human Resources and Living Standards

1. Size of population (see handout in Appendix, row 1)

In size of population, SEA is a region of extremes. Which country has the largest population? Which three countries have the smallest population? In between these extremes are three countries whose population is about one-fifth the population of the USA. Which ones?

2. Standard of living (row 2)

The United Nations has designed a convenient measure called the Human Development Index (HDI), which is a composite measure of life expectancy (longevity), adult literacy and number of years of schooling (knowledge) and income adjusted for local cost of living. The HDI has a theoretical variance of zero to 1.0 (high).

On the basis of their score on the HDI, the countries of SEA form four tiers:

Top (highest) tier: Singapore, Brunei, Thailand, and Malaysia

Second tier: Philippines, Indonesia

Third tier: Vietnam, Burma, Laos

Fourth tier: Cambodia

Although the HDI focuses heavily on material aspects, we recognize that there are other important aspects of human development that may not be well measured by the HDI, including 1) a people’s self esteem or sense of worth and self respect, 2) expanded choices or freedom from alienating conditions of life and social servitude, and 3) spirituality.

3. Level of economic development (row 5)

The indicator used here is average purchasing power parity (PPP) per capita or income adjusted for local cost of living rather than gross domestic product per capita (GDP p.c.). Again the countries can be ranked in four tiers:

Top tier:        Brunei, Singapore

Second tier: Malaysia, Thailand

Third tier: Indonesia, Philippines

Fourth tier: Laos, Cambodia, Vietnam, and Burma

Note that a country’s ranking on income may be different from its ranking on HDI, e.g. despite $2300 less income, Singapore’s HDI is equal to Brunei’s, despite $1900 less income, Thailand’s HDI is equal to Malaysia’s, and despite $500 less income, Philippines’ HDI is higher than Indonesia’s. How can these discrepancies be explained?

4. School enrollment (row 3)

This indicator is of interest because the more educated the people in a country are, the greater should be that country’s potential for development in the future. Why does the Philippines rank higher than it does on HDI (2nd tier) and income (3rd tier)

5. Absolute poverty (row 7)

Usually defined in developing countries, not by income as we do in the USA but rather by caloric intake (about 2200/day for an adult). These data are unavailable for Cambodia and Laos, but we can assume that absolute poverty is relatively high there.

Absolute poverty is non-existent in Brunei and Singapore. But absolute poverty is a problem everywhere else. The data on income distribution (row 6) is unavailable for five countries. But maldistribution of income is a problem in those countries for which data exists .

Regarding the relationship among economic development, poverty, and human development, the following inferences can be drawn:

-despite impressive economic growth in many SEA countries, poverty remains a problem

-maldistribution of income is a problem in most countries

-economic development will not automatically improve the quality of life for the majority of the population. Supporting fiscal and social policies are required as well.

-economic growth is a necessary but not sufficient condition for improvement in quality of life for the majority

B. Causes of the variation

1. Different legacies of colonialism

2. Differences in extent of destruction in WWII and in rate of recovery

3. Different strategies and policies of development

All countries make choices, if only by default, a) to rely on exports or to focus on the domestic economy, b) whether to try deliberately to raise the level of the poorest or to emphasize the productive role of the elites, and c)whether to use scarce funds to stimulate the agricultural sector or manufacturing.

Two "inward oriented" strategies which focus on the domestic economy :

a. Basic Needs (e.g. Burma 1962-88, Indonesia 1949-65, Vietnam until 1986)
b. Import Substitution Industrialization (e.g. Philippines until mid-1980s, Indonesia 1967-82)

Two "outward oriented" strategies which focus on interacting with the global economy:

a. Reliance on human resources and foreign investment because lack natural resources (e.g. Singapore)
b. Reliance on exploitation of natural resources (e.g. Malaysia, Thailand, Indonesia)

The appropriateness of a given model depends on a number of factors, such as the size and the population of the country, its natural resources, its historical evolution, and distribution of wealth, and the degree of dependence on external powers.

4. Different rates of economic growth (row 9)

5. Differences in post-independence foreign capital inflows

6. Size of overseas Chinese minority

C. Challenges of the future

1. SEA region-wide threats to quality of life

2. Importance of Japan and increasingly China to economic growth

3. Learning the lessons of the economic crisis

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