Role of Foreign Capital in ASEAN Countries

Author(s): Pradeep Kumar Mehta and Atul Sarma

Source: Economic and Political Weekly, Vol. 15, No. 51 (Dec. 20, 1980), pp. 2152-2156
Published by: Economic and Political Weekly
Stable URL: http://www.jstor.org/stable/4369359
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December 20, 1980 ECONOMIC AND POL:TICAL WEEKLY

Notes
[The author wishes to thank Acqueil
Ahmad, S Bhaskar, Sekhar Chaudhuri,
Anil Deolalikar, Brijen K Gupta, and
Alan Heston for their comments and
suggestions and Michael Hiodinar,
Kamal Raina, and S C Sharma for their
research assistance.]
1 See Robert T Kudrle, "Agricul-
tural Tractors: A World Indus-
try Study", Cambridge: Ballinger,
1975, for an account of the inter-
national tractor industry.
2 Implement and Tractor (42nd
Annual Statistics Issue), Novem-
ber 7, 1979, p 66.
3 An exception is Japan, where
smaller garden-type tractors are
widely used in intensive cultiva-
tion of small plots.
4 See G S Aurora and Ward More- visited: Problems and Prospects"
house, "The Diemnma of Technologi- cyclostyled paper, np, nd (Ad-
cal Choice - The Case of the ministrative Staff College, Hydera-
Small Tractor", Economic and bad, 1977).
Political Weekly, Special Number, 6 Aurora and Morehouse, op cit,
1972, pp 1633-1644, and ibid, "The describe some of the struggles
Dilemma of Technological Choice which PTL's promoters encounter-
in India: The Case of the Small ed in trying to sell "unproven"
Tractor", Minerva (London), Octo- indigenous technology.
ber 1974, for a discussion of the 7 Sumit K Pal and B Bowonder in
conflict over indigenous and a paper on R and D in the elec-
foreign technology involving PTL tronics industry ("High Techno-
and HMT.
logy and Development in India",
5 See, for example, Aurora and Futures: The journal of Forecast-
Morehouse, ibid; V V Bhatt, ing and Planning, August 1978,
"Decision Making in the Public pp 337-341) have discussed this
Sector: Case Study of Swaraj dilemma for a country like India
Tractor", Economic and Political in an advanced and rapidly chang-
Weekly, Review of Management, ing field of technology such a.s
1978; and S Bhaskar, "Swaraj Re- electronics.

Role of Foreign Capital in ASEAN Countries

Pradeep Kumar Mehta

Atul Sarma

The economies of the countries of ASEAN (Indonesia, Malaysia, the Philippines, Thailand and
Singapore) are characterised by heavy foreign investment, particularly from the United States and Japan
and in more recent times from other sources as well. This paper attempts to study the role of foreig
capital in the economy of these countries.
Section I examines the various forms such investment has taken and Section 1i attempts to evalu-
ate the overall impact of such investment, especially in the light of the proclaimed economnic objectives
set by the ASEAN countries themselves. Its conclusion is that though the inflow of foreign capztal might
have contributed to a relatively high rate of growth of national and per carpita incomes, there has been
little impact on the basic economic structures of these countries. This, the paper argues, has been
necessarily, so because foreign? capital can never stimulate long term economic growth.
been offered one gets the impression in Indonesia during 1960s was hindered
that all the ASEAN countries were by economic stagnation and political
TO attract foreign capital all ASEAN
vying with one another to attract largerinstability in the country during this
countries offer a large number of incen-
inflow of foreign capital into their yes-period. The decline in the inflow of
tives.' These incentives and concessions
pective countries. Largely as a responseforeign capital to Thailand during 1975
to foreign investors include tax-holidays
to the liberal policies pursued by thesecould be attributable to the reactions
and concessions, exemption from customs
governments for creating suitable climateof the foreign investors to the policy
duties, allowance for depreciation, remit-
for foreign investment, foreign inves-changes in respect of business ownership
tance of profit, dividend and interest,
tors displayed keen iiaterest in takingsuch as alien business registration law
payment for technical assistance, offer-
advantage of the market and resourceand alien-occupation law.5 All in all,
ing of land on advantageous terms,
potentials of the region. As a tesult, direct foreign investment formed a very
autonomy in employing foreign person-
increasingly larger sums began to flowhigh proportion of the gross domestic
nel and so on and so forth. Table 1 investment in most of the ASEAN
into the ASEAN countties. Table 2
brings out the extent of the impact of countries and constituted as much as
shows that net direct foreign investinent
tax holidays on post-tax profit in the
in most of the ASEAN countries grew31 per cent in Singapore in 1974.6
case of four ASEAN countries. As a
increasingly higher over the years. The With such inflow, the economies of
matter of fact, following the massive
Table also points up to two extreme the ASEAN countries came to be do-
tax concessions, the effective tax rate on
cases. Because of extreme openness in minated by foreign capital. It may be
corporate profit (tax rate after the ad-
Singapore the trend of inflow of foreign noted that Singapore had not imposed
justment for the concessions) was much
capital displayed continuous increase any restriction on the extent of foreign
lower than the standard rate; it varied
whereas in the Philippines there 'was ownership while the other ASEAN coun-
from 15-45 per cent among the ASEAN.2
a negative inflow.3 The sudden decline tries, through a number of restrictive
However, the concessions and the incen-
in the inflow of foreign capital into policies, had tried to control the extent
tives actually offered by the different
Indonesia during 1973 and 1974 might of foreign ownership. For example, the
countries were different in magnitude
be attributed to the recessionary forces Indonesian government insisted that
and intensity depending on the national
that emerged in the developed countries projects involving foreign capital should
priorities.
be in the form of joint venture, and
Looking into the details of the con- around this period.4 It may also be
noted that the inflow of foreign capitalsome of the important sectors such as
cessions and incentives that had actually

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ECONOMIC AND POLITICAL WEEKLY December 20, 1980

TABLE I IMPACT OF TAX HOLIDAYS ON POST TAX PROFITS independence, the sources became more
diversified, with the US and Japan ac-
Maximum Increase in Maximum Number of
Countries Post Tax Profit Rate under Years of Effectiveness of counting for the major share. In recent
Tax-Holiday (Per Cent) Tax-Holidy times there has been a further shift in
that US investors who used to rule the
Indonesia 80.2 6
Malaysia 81.8 10 roast in 1960s are now relegated to the
Singapore 60 to 66.7 15 second place and the Japanese investors
Thailand 18.8 to 38.9 13 have emerged dominant in most of the
ASEAN countries in 1970s. Further,
Source: 'Private Foreign Investment', Economic Bulletin for Asia and the Pacific, some new countries such as Australia
December, 1976, p 84.
have also emerged as potential investor
in this region. Indeed the Philippines
TABLE 2: NET DIRECT INVESTMENT
is the only country where the US inves-
(in millions of SDR)
tors have continued to be dominant. The
Year Malaysia Indonesia Philippines Thailand Singapoie domination of US' capital in the Philip-
pines can be attributed to the Laurel-
1967 43 -10 43
1968 30 -2 -5 60 26 Langley Agreement (1955) under which
1969 80 32 2 51 38 the US investors were treated on equal
1970 94 83 -25 43 93 footing, particularly in the exploitation
1971 100 139 -1 39 116 of the natural resources, with native
1972 105 191 -11 63 174
1973 114 13 46 65 222 investors. Even after the expiry of the
1974 311 -41 3 151 476 agreement in July 1974, a number of
1975 189 392 -1 71 561 compensating concessions continued to
1976 - - -5 625
be offered. The relative decline in the
US private capital inflow in the ASEAN
Source: Balance of Payment Year Book, Annual Issue, Dcember, 1977.
countries during 1970s has been due
TABLE 3: GROWTH RATES OF GNP AND PER CAPITA GNP mainly to certain non-economic factors
such as strained political relationships,
Growth Rate Indonesia Malaysia Philippines Thailand Singapore anti-US feelings and withdrawal of
(Per Cent) special privileges. On the whole, the
GNP US and Japan are the two countries
1960-73 4.5 6.1 5.4 7.8 12.9 which between themselves account for
1965-73 6.9 5.9 5.8 7.3 10.2 the major part of foreign capital in
ASEAN countries.
GNP per capita
1960-73 2.4 3.9 2.3 4.8 7.1
1965-73 4.5 3.7 2.6 4.5 9.4
However, the motivation of these two
Per capita GNP major investors in ASEAN countries,
in 1973 in US$ 130 570 280 270 1830 has not been the same. While US
investors were motivated by a desire
Source: World Bank Atlas, 1975 and World Tables 1976.
to earn profits and expand into
new markets, the promotion of Japanese
public utilities, atomic energy, defence, 24.7 per cent respectiviely.7 The point
export was the most important consider-
mass-media, were closed to foreign to note is that even if the preference of
ation with the Japanese investors. US
capital. Similarly, of late, Thailand most of the ASEAN countries for joint
firms, facing tough competition in the
has passed the Alien Business Registra- ventures was satisfied, the hold of foreign
home market were keen to expand mar-
tion Law and the Alien Occupational capital did not get reduced because the
kets and enjoy more or less monopoly
Law under which the wholly foreign decision making authority still rested profits in the industrially backward
owned firms are directed to reorganise with the foreign participants. For exam-
developing countries; on the other
themselves in the form of joint ventures ple, even in Indonesia where more
hand, Japanese investors, facing shor-
with some Thai partners, with foreign aggressive policy for local participation tages of natural resource and labour
participation restricted to 60 per cent. had been pursued for long, it was at home, were in search of a continuous
On the other hand, in the Philippines, observed: "At the management levels, supply of inputs of the firms at home
while fully foreign ownership has been particularly, all members of the execu- and potential market for Japanese
allowed in 20 specific sectors, in the tive board are Japanese. When the
goods. As a matter of fact, Japanese
rest of the sectors foreign capital is not Indonesian partner insists on representa- investment in resource-rich ASEAN and
to exceed 40 per cent, and is entirely tion, they are generally given the posi- other similarly placed countries was used
barred in some sectors like retail trade, tion of director of general affairs or as an alternative to slow domestic deve-
rice corn industries and banking. How- personnel. The result of this concession lopment.9 One important survey high-
ever, in recent years, some of the prohi- is that in the events of labour and tax lighted the fact that Japanese foreign
bited areas such as banking institutions problems, the Indonesian is held res- ventures in agriculture, fisheries, fore-
have been opened up for foreign ponsible, while all other decisions stry and mining helped the country in
investment. regarding pricing raw material, quality achieving or exceeding the original tar-
Despite such restrictions, S3.1 per control, etc, are taken by Japanese gets set fori the delivery of the primary
cent of the total approved foreign capi- partner".$
products to Japan.' Thus it emerges
tal in Indonesia was invested in fully Prior to independence of these coun- that foreign private investors' search for
foreign owned enterprises and the ratio tries, the foreign capital originated from dividend or market or a continuous
for Thailand and Malaysia were 13.2 and the xespective colonial powers. Following supply of inputs for the industries at

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 Deceniber 20, 1980 ECONOMIC AND POLITICAL WEEKLY

TABLE 4: GDP BY ORIGIN

(Percenage)
Indonesia Malaysia Philippines Thailand Singapore

1960 1973 1960 1973 1960 1973 1960 1973 1960 1973

Agriculture 53.92 40.88 39.97 30.48 32.16 36.41 44.04 34.29 6.06 2.56
Mining 3.69 8.35 4.74 5.19 1.12 2.94 1.04 1.81 na na
Manufacturing 8.35 9.23 8.77 15.42 18.77 21.27 11.62 17.67 9.16* 26.16*
Services** 34.04 42.07 46.52 48.91 47.95 39.38 42.94 46.22 84.78 71.28

Sources: As in Table 3
* Including mining
** Residual

TABLE 5 : OCCUPATION STRUCTURE mny, not only by way of direct income

Indonesia Malaysia Philippines Thailand Singapore
Sectors 1970 1970 1973 1970 1973
Agriculture 72.0 59.0 52.9 82.0 0.42
Mining na na 0.47 na 0.32
Manutacturing 8.0* 12. 0* 10.69 4.0* 35.97
Services* * 20.0 29 .0 35.94 14.0 63.29
Souirce: Year Book of Labour Statistcs, ILO, 1974; "The Far East and Australia",
1973.
* Including mining sector.
** Residual.
TABLE 6: UNEMPLOYMENT
Countries 1960
Indonesia 92.4 90.4 84.3
W Malaysia 25.0 93.0 154.7
Philippines 557.0 947.0 624.0
Singapore 54.4 54.4 35.7
Source: Year Book of Labour Statisics (ILO) 1974
home, coupled with ASEAN countries'
open door policy, resulted in massive
inflow of foreign capital to these coun-
tries.
These prime motives of the major
investors often determine the sectoral
distribution of foreign capital in ASEAN
countries. By and large, all ASEAN
countries followed a policy of inward-
oriented industrialisation during 1960s
while during 1970s they followed a
policy of outward-oriented industrialisa-
tion. Thus, simnilarity in industrial
policy formulation might have given
rise to similar industrial pattern. Dur-
ing the 1970s, there was a shift in foreign
investment from the traditional sector
(agriculture, forestry and mining) to
non-traditional sector (manufacturing
and trade, including banking). The
inflow of investment in petroleum sub-
stantially increased in Singapore and
Indonesia. Some of the recent agree-
ments made with a number of foreign
firms indicate that this sector Would
continue to figure prominently in foreign
investment schemes."
Looking into the sectoral distribution
of foreign capital in individual countries, ment generation in the domestic econo-
(Percentage)
(in Thousands)
1965 1973
one can note the following features:
(i) Despite official policy, the min-
ing sector in Indonesia has at-
tracted substantial inflow of
foreign capital though the rela-
tive share has declined over
time.
(ii) Of late, trade and commerce in-
cluding banking, has drawn sub-
stantial proportion of foreign
capital.'2
(iii) In the case of Thailand, almost
entire foreign capital was invest-
ed in the manufacturing sector
until 1970. After that, the in-
vestmnent became more diversified,
the service sector taking a large stantially over the years in most of the
share.
(iv) Within the manufacturing sector,
consumer goods industry attract-
ed relatively larger share of
foreign capital in most of the
countries, particularly during the
1960s. However, during the
later period basic industries have
attracted considerable foreign
capital.
II
The effectiveness of foreign capital in
a developing economy can be best
judged in terms of income and employ-
and employment generation but also
by way of stimulating growth through
linkage effects. If the developing coun-
tries have to be on the path of self
sustained growth, foreign investment
should act as the first stimulant to
generate forces of development within
the economies. That is possible only
if the technology transferred via foreign
capital is appropriately absorbed in the
domestic economies.
During the period for which the
data have been considered in the study,
the countries with high inflow of foreign
capital showed high rates of growth
(Table 3). However, it is not possible
to maintain that the foreign investment
made in these countries was appro-
priately absorbed in the economies there-
by showing a high rate of growth. The
Indonesian experience during 1964-66
when the inflow of foreign capital de-
clined substantially indicates that foreign
investment was not absorbed in the
economy. That is, the rate of growth
of GNP declined with the decline in
the inflow of foreign capital. On the
whole, foreign capital might have
contributed to the relatively high growth
rate of GNP and per capita income in
these countries. But what is disturbing
is that income distribution was highly
skewed.
Table 4 showing the GDP by origin
indicates that the share of the primary
sector in GDP had not declined sub-
ASEAN countries. Nor did the share
of manufacturing sector increase con-
siderably except in Singapore. Similarlv,
except for Singapore; major part of
workforce was engaged in the primary
sector, and the manufacturing sector
was yet to become a significant source
of employment (Table 5). What is
more, the extent of unemployment in-
creased substantially in Malaysia and
the Philippines whereas in Indonesia
and Singapore it declined to some ex-
tent (Table 6). Again, the income dis-
tribution became more skewed in these
countries. For example, in Singapore,

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 ECONOMIC AND POLITICAL WEEKLY December 20, 1980

TABLE 7: EXPORTS AS A PERCENTAGE OF GDP ed in the Philippines, Thailand and

Singapore wN7hile it declined in Malaysia
Year Indonesia* Malaysia*" Philippinest Thailandtt Singaporett (Table 8). Even with the massive in-
flow, of foreign capital in the manu-
1960 12.8 51.2 I13.3 17.5 10.1
1973 16.3 45.6 19.9 22.0 43.2 facturing sector, the import stiucture
bad not substantially changed in most
Source. Santakumar S. : 'Post-war Development Pattern of ASEAN Economies', of the ASEAN counitries. The import
The Malaysian EIonondic Review, April 1977, p 91.
of manufactured products claimed an
* At 1960 prices
** West Malaysia only: at 1959 prices. However, export as a percentage of overwhelming share in the total import.
GDP was 45.4 in 1970 for Malaysia as a whole. With no basic change in the trade
t At 1967 prices. pattern the terms of the trade were
tt Current prices.
generally iiinfavourable in Malaysia, the
Philippines and Thailand (Table 9).
TABLE 8: IMPORT AS A PERCENTAGE OF GNP
The favourable terms of trade in Indo-
nesia has to be viewed in the light of
Year Indonesia1 Malaysia2 Philippines 3 Thailand 4 Singapore I
the fact that the two very important
1960 6.67 45.16 13.92 15.40 63.05 items of export belong to the category
1973 n a 41.17 30.87 29.40 161.60 of non-renewable resources, crude
mnetal and fuel, and that in Singapore
Source Import and GNP Statistics.
in the light of the fact being in the
1 at 1960 prices
2 at 1965 prices nature of an entrepot, its trade, was
3 at 1967 prices based on import of iinputs and export
4 at 1962 prices of manufactured goods after processing.
5 at 1960 prices Another point to note is that the net
factor income from abroad had been
TABLE 9: TERMS OF TRADE
consistently negative in all ASEAN
countries except Singapore (Table 10).
Year Indonesia Malaysia Philippines Singapore Thailand The negative factor income is a drain

1960 185.7 n a 108.0 n a 90.2 on the domestic economies unless it is

1965 150.8 115.1 96.6 103.4 94.5 compensated by the developments with-
1967 108.3 102.1 97.4 101.1 94.0 in the domestic economy.
1968 95.6 96.4 101.1 97.9 97.6
1969 97.6 101.0 101.4 101.7 101.7 From the above analysis, it emerges
1970 106.0 104.1 106.9 97.9 91.2 that the massive inflow of foreign
1971 144.2 89.8 92.9 100.9 76.4 capital in ASEAN countries might have
1972 168.5 79.5 78.0 102.7 79.7
contributed to the relatively high rate
1973 189.0 87.7 96.5 147.9 104.7
Average annual' of growth of the GNP and per capita
Growth rate (3) 12.1 -3.4 -2.3 4.6 -1.5 income. But if this massive inflow
1967-73 of foreign capital has not made a dent
on the basic economic structure of
TABLE 10: NET FACTOR INCOMEOS these countries. Even at the end of
nearly txvo decades since the large in-
(in millions at constant prices)
flow of foreign capital began, there had
Year Indonesia Malaysia Philippines Thailand Singapore been little diversification 'in occupation
(US $) (MS $) (Pesos) (Baht) (S $) and economic structure. Nor had
there been much change as to the pre-
1960 -3.2 -270.0 -907.0 -0.1 31.0 dominance of the primary sector, GDP
1965 -3.5 -274.0 -130.0 n a 50.0 and exports. In other words, foreign
1967 -3.7 -115.0 -297.0 0.1 55.0
1970 -4.7 -276.0 -489.0 0.1 102.0 investment failed to stimulate economic
1973 -6.0 -330.1 -205.0 -9.6 200.0 developmnent through backward and
forward linkages. As a matter of fact,
Source The World Tables 1976 one can argue that the superstructure
that has been built with the working
60 per cent of the population earned ports as a percentage of GDP moved up of foreign capital might crumble as
per capita income whibh was less than in the ASEAN countiies except Malay- soorl as the inflow of foreign capital
one fifth of the national average; the sia (Table 7).15 But the share of the taperes off. The point to note is that
ianagerial and administrative group (4 primary commodities in the total mer- this superstructure has been built at a
per cent of the total population) had chandise exports was still extremely very heavy cost way of extending a
median income, as high as 6 times that high, though the share had a slight large number of concessions and incen-
of 61 per cent of the total population.-3tendency to decline over the years. tives. It is possible that over the years
Similar situations of high inequality in Relatively speaking, in Singapore the there might have emerged a dual sys-
incomne distribution were noticed in the predominance of the primary commodi- temr in most of the ASEAN countries
case of other ASEAN countres as well.t ties was considerably low even in 1960 in that certain sectors with high pro-
It may now be worthwhile to examine and much lower in 1975, mainly be- mises of dividend attracted foreign
the impact of foreign capital on foreign cause of the very nature of the econo- capital and came to be associated with
trade pattern of these countries. Dining my. On the other hand, the import as more sophisticated methods of produc-
the period between 1960 and 197.3 ex- a percentage GNP substantially increas- tions and the rest, wvith their anachro-

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 December 20, 1980 ECONOMIC AND POLITICAL WEEKLY

nistic methods of production. have been
struggling for mere survival.
Notes
I For details see:
(i) 'The Role of Foreign Private
Investment in Economic Deve-
lopment and Co-operation in
ECAFE countries', Economic
Survey for Asia and for East,
March 1970.
(ii) Stikker D V and Ryokichi H,
'The Impact of Foreign Private
Investment' in ADB Survey,
South East Asia's Economvj it
1970s, pp 370-42.
(iii) Qtuarterly Economic Review
(QER) of Indonesia, Malaysia,
Singapore and Brunei, the
Philippines, and of Thailand
anid Butrma; various issues.
Effective tax rate on corporate profit
was - Malaysia - 45 per cent,
Siingapore - 45 per cent. Thailand
15 per cent (on first 500 thou-
sand baht of net profit) to 25 per
cent (on profit in excess of one
tmillion baht); Philippine - 35 per
cent. See: 'The Role of Foreign
Private Investment in Economic
Development and Co-operation in
ECAFE countries', op cit,
:3 The privileged position of US in
the Philippines resulted in massive
outflow. See, Kaul, Manmohini
'Philippine Foreign Policy: Retro-
spect and Prospect', India Quarterl
Jan-March, 1977, pp 33-48.
4 'Private Foreign Investment', Eco-
nomic Bulletin for Asia and the
l'acific, December 1976, p 74.
5 Applications to Board of Invest-
nment (Thailand) came down from
111 in 1.975 (Baht 1950 million) to
107 in 1976 (Baht 1419 million).
See, QER of Thailanid and Bmrma.
VTol II, 1977, p 10. Also see, ibidI
NVol 1. 1975, p 8.
6 In the case of Singapore, it has
been estimated that to achieve a
growth rate of 5-7 per cent, Singa-
pore will require US $ 300-400
million of foreign capital every
year. See, QRE of Malaysia, Singa-
This ratio increased upto 34.1 per
cent in 1972. Such increase was
comparatively higher in resource
l)ase industries like textile (41 per
cent in 1968 to 45.6 per cent in
1972), food (80.2 per cent in 1968
to 97.3 per cent in 1972), Iron
and Steel (7.2 per cent in 1968 to
24.8 per cent in 1972). See Bald-
wiin W L and Maxwell M D (eds)
"Thle Role of Foreign Finanicial
Assistance to Thailand in- the
1980s", Lexington Book, 1975.
10 Yugin hoho (Quarterlv News for
the Export-Import Bank of Japan)
March 1969, as quoted in 'The 14 For details, see:
Role of Foreign Private Investment
and Co-operation in ECAFE Coun-
tries' op cit.
11 In Singapore, Shell had propose(d
an] expansion programme worth
Sinigapore $ 600 million. There was
also a proposal of Singapore $2,000
million from Sumitomo Chemicals,
w7hich was expected to be com-
pleted in 197.3 but, due to slow
nrogress it took more time. In the
Pilippines, of the-16 geographical
operations, at last there had reached
the stage where operation could be
started before 1980. In Indonesia,
ipto 1969, there were 28 contracts
involving US $ 30 million as bonus
pavment. Malaysia also made a few
such contracts' See, QER related to
respective countries, variouis recent
issues.
12 In Singapore, in 1973, 10 of the
already established institutions were
encouraged to issue certificate of
deposit dominated in Singaporean
currency, and some more banks were
permitted to set up their branches
aind engage themselves in off-shore
operations. Furthermore. during
1970-75, 28.86 per cent of the total
foreign capital wvent into financial
instituitions. In the Philippines upto
1973. 16 foreign banks and finan-
INDIAN INSTITUTE OF MANAGEMENT,
BANGALORE
A limited number of copies of the paper and proceedings .
U Eu
c ial institutions were reported to
have invested in local institutions
and the government was negotiat-
ing(r with 12 more. In Malaysia in
1970. outt of 89 insurance com-
panies, 81 were incorporated abroad.
In Indonesia, 8 foreign banks had
l)een granted licence by mid-1973.
In Thailand. apart from 6 major
iivesting banks, at least four with
foreign equity participation began
operation in 1974.
13 "The Far East and Australsia",
197.3 pp 383.
(i) Virawan A, 'Foreign Invest-
ment in Developing Countries:
Thailand ' in Drysdale P (ed)
"Foreign Dircet Investment in
Asia and Pacific Region"
pp 235.
(ii) Baldwin W L and Maxwell M D
op cit, pp, 143.
(iii) Gupta S, 'Income Distribution.
Employment and Growth: A
Case Studv of Indonesia'
IBRD Staff Working Paper
No 212.
(iv) 'Family Income and Expendi-
tuire: 1971' BCS Survey of
Households, Bulletin, No 34.
pp 151, cited in Hagiwara Y.
'Formation and Development
of the Association of South
East Asian Nations' The Deve-
loping Economies December
197:3. Appendix, Table IV.
pp 460-61.
15 The (lecline in Malaysia was due
to sharp decline in prices and
adverse market situation for the
important traded commodities such
as natuiral rihbber, tin, etc. See.
'Export Structture and Export Insta-
bilitv: The Case of Peninsular
Malayvsia' The Developing Econo-
mies, September 1977.

pore and Brtnei, Vol 2, 1977, p20. of the National seminar on "Technological Choice in the Indian *
7 See (i) Carkar N (ed): "Foreign Environment" are available, at the concessional rate of Rs. 75!-
Investment an-d Economic Deve-
lopment int Asia"; (ii) Ryokichi HI. on a first come, first servcd basis, while stocks last. Th,e seminar '
'Changing. Pattern of Economic
Inter-Dependence in Asia: With was held in October 1977; the papers and proceedings have 3
Special Reference to the Relation-
ship between Developed and Deve- r ecently been publishead by Sterling Publishers, New Delhi. 3
loping Asian Countries", The
De.ekloping Ecotnomies, December The Fellowship Forum of the Instituite also brings out a
1973, p 344.
8 Panglaybiim J 'Business Relation journal called Abhipraya, for limited circulation.
Between Indonesia and Japan', The
Developing Economies, September All those interested in either of the above should write to
1974, p 294.
Vinod Shambhag, Editor, Abhinraya, Indian Institute of 0
9 It was found that Japanese firms
in Thailand consumed higher pro-
Management, 33, Langford Road, Bangalore 560027. 3
portion of local raw materials. In
1968, out of the total raw material
consumoed 20.8 per cent was local.

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