Policy Seminar
An Ecological and Historical Perspective on Rural Sector Development in Southeast Asia by Prof. Yujiro Hayami, Aoyama-Gakuin University, SIPEB, Tokyo
September 10, 1999 3:30 - 5:00 p.m.
International Food Policy Research Institute
2033 K Street, N.W., Washington, D.C., U.S.A.
This paper aims to outline an ecological and historical perspective of rural sector dynamics for Indonesia, the Philippines, and Thailand. Since the outbreak of the currency crisis in Thailand in July 1997, optimism has given way to pessimism on the development prospects of the Southeast Asian economies. However, it is a fact that several economies in this region achieved extraordinarily high growth rates during the four decades preceding the crisis. For the past high-performing economies in Southeast Asia to return to the track of sustained growth, it is necessary to design policies to revitalize agriculture based on the positive analysis of its past success and failure. Such a policy-oriented analysis will produce useful lessons to other developing regions.
The paper finds that major differences in agrarian structure are a significant factor underlying the agricultural growth performance of the three economies. As frontiers for opening new lands for cultivation were progressively closed, the initial advantage of the plantation system in large-scale land development began to be out-weighed by its disadvantage in monitoring hired labor. Thus, the peasant system, based on unsupervised family labor, became more attractive. This tendency seems to be manifested in the growing shares of Thailand in the world exports of tropical cash crops in recent years, in which Indonesia and Thailand used to have traditional comparative advantage. Furthermore, the programs of redistributive land reform in the Philippines intended to reduce inequality in land ownership distribution made land markets inactive, resulting in major distortions in resource allocation and serious under-investment in agriculture. The paper concludes with several policy recommendations for revitalizing the rural sector in Southeast Asia.
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