SOAS, University of London (The School of Oriental and African Studies)

The Settlement of Decolonization and Post-Colonial Economic Development: Malaysia, Singapore and Indonesia Compared

Abstract

Compared to Malaysia and Singapore, Indonesia followed a quite distinct development path in the post-colonial era, especially as this affected foreign investment.  Indonesia nationalized Dutch assets between 1957 and 1959, and subsequently took remaining western enterprises into various levels of control between 1963 and 1965.  Malaysia and Singapore, however, retained a relatively liberal attitude towards the operations of expatriate enterprise, and, despite their increasingly ‘neutralist’ foreign policies from the late-1960s, remained ‘open’ to the global capitalist economy.  The central argument of this paper is that varying patterns of decolonization influenced these different outcomes. In particular, the financial and economic ‘settlements’ for Indonesia in 1949 and for Malaya/Malaysia in 1957 and 1963 (as well as the terms of the final rundown of military bases in Singapore after 1968) explain much about subsequent economic developments. Firm guarantees for Dutch businesses operating in Indonesia, plus the transfer of debt obligations to the Republic, will be contrasted with the looser arrangements pertaining for Malaysia and Singapore, and the ongoing supply of development and military aid by the UK.