War and Economic Development: Export-Oriented Industrialization in East and Southeast Asia

Author(s): Richard Stubbs

Source: Comparative Politics, Vol. 31, No. 3 (Apr., 1999), pp. 337-355
Published by: Comparative Politics, Ph.D. Programs in Political Science, City University of New
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 War and Economic Development

in EastandSoutheastAsia
Industrialization
Export-Oriented

RichardStubbs

Warand the evolutionof economies, states, and societies have historicallybeen inex-
tricablyintertwined.Certainly,as a numberof analysts have observed,war is a pro-
found agent of change.' Of course, wars, or collective violence on a broad scale,
come in many forms and sizes, from the widespreaddevastationand global reach of
the second world war to the limited and confined actions of many insurgencycam-
paigns. Yet, howeverlocal the consequences of wars may be, they invariablyhave a
majoreffect on the lives of those individualsand institutionsthey touch. And, as the
studies of the impact of war on the developmentof the economy, society, and state
system of Europehave detailed,majorwars can have an enormousinfluence over the
developmentof countriesand regions.2
Despite the evident importanceof wars to the course of history,they have had lit-
tle impact on analysts interestedin economic developmentbeyond Europe and the
majorpowers.3Nowhere has this lack of attentionto the economic consequences of
wars and preparationfor war detractedmore from our understandingof events than
in East and SoutheastAsia. From the early 1940s to the late 1980s this region was
beset by the second world war, the Chinese civil war, the Koreanwar, the Vietnam
war, "confrontation"over the formationof Malaysia, the Vietnamese occupation of
Cambodia,a series of local guerrillawars, and the overarchingcold war, which con-
stantlythreatenedto explode into open warfarein places such as the Koreanpenin-
sula and the Taiwan straits. In the same period emerged a number of strong states
and rapidly expanding economies, notably Japan, the four newly industrialized
economies (South Korea, Taiwan, Hong Kong, and Singapore), and the two near
industrializedeconomies (Malaysia and Thailand).Although the links between the
sequence of wars, on the one hand,and the developmentof these seven strong states
and successful economies, on the other,are highly complex, they clearly should not
be ignored.To what extent have wars and the threatof war been a crucial factor in
the developmentof these seven successful economies?
The intent here is not to ignore conventionalexplanationsof the economic suc-
cess of the region. Many valuable insights have emerged from the debate between
neoclassical economists who emphasize outward-looking,market-conformingpoli-
cies and the limited role of the governmentand "statists"who stress the intervention

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ComparativePolitics April 1999

of strong states in the economy to provide a comparativeadvantage for particular

industrialsectors and companies.4Similarly,an increased understandingof the ori-
gins of the region's economic success has come from analyses of the effects of
industrialproductcycles and the diffusion of particularJapaneseindustries,such as
textiles and light electronics, to the countries of East and SoutheastAsia as well as
from the role played by Confucian culture in the region's economic development.5
And, most recently, new insights have been gained from the debate around factor
accumulation and productivity growth in the region.6 The following analysis is
instead based on the argumentthat a complete analysis of the economic success of
these countries must take into account the sequence of wars that swept across East
and SoutheastAsia duringthe period of rapid economic development.Conventional
explanations have to be combined with an understandingof the economic conse-
quences of regional warfareand the preparationfor war to fully appreciatethe ori-
gins of the region's economic success. To date, the way in which wars have shaped
the region'seconomic developmenthas largelybeen ignored.7
In examining its impact on economic development,war should be broadly con-
ceived. As studies of warfarein Europehave shown, not just fighting and its reper-
cussions but also the threat of war and mobilization in preparationfor a possible
conflict are crucial in shapingeconomic development.8Moreover,the threator erup-
tion of internalwars can be just as influentialas interstatewar in molding state insti-
tutions, economy, and society.9The location of East and SoutheastAsia as a battle-
ground in the second world war and then in subsequentAmerican attemptsto con-
tain Asian Communism,in terms of both interstateand insurgencywars, has provid-
ed a significant geostrategiccontext for rapideconomic development.
The economies of these seven countrieshave unquestionablycome a long way in
a relatively short time. The World Bank has even designated them "miracle
economies."10However,it should not be assumedthat all these economies developed
in exactly the same way or at the same pace. For example, South Korea'seconomic
development,in terms of industrialstructureand timing, has differedin a numberof
respects from Singapore'sand Thailand's.Yet all have moved in roughly the same
general direction, achieving rapid economic growth primarily through changing
from import-substitutionindustrialization, which emphasized the substitution of
imports with domestically produced goods, to export-oriented industrialization,
which put a premiumon exportingcompetitivelypriced manufacturedgoods to over-
seas markets. While in most cases import-substitutionindustrializationwas never
completely abandoned,the switch to export-orientedindustrializationmarked the
beginning of rapideconomic growthin each of the seven successful economies.
The sequence of wars and threatsof war which engulfed the region from 1941 to
1989 played a major role in establishing successful export-orientedindustrializing
sectors in Japan, South Korea, Taiwan, Hong Kong, Singapore, Malaysia, and
Thailand. Geostrategic factors did not have a uniform impact on export-oriented

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 RichardStubbs

industrializationbecause each countryhad distinctiveeconomic and political institu-

tions and developed an export-led industrializingstrategy at differentpoints in the
sequence of wars. For example, those economies that turnedto export-drivenindus-
trializationrelatively early gained much more from geostrategic factors than later
convertssuch as Malaysiaand Thailand,where the impactwas more indirect.Across
the seven economies, however,there are interestingand instructivesimilaritiesin the
way in which war and preparationfor war contributedto the success of export-ori-
ented industrialization.

The Effects of War

Any countrypreparingfor war, directly involved in a war, or even close to the the-
ater of war can experienceits destructive,formative,and redistributiveeffects.' 1 The
states on whose territorywars are fought are more likely to sufferthe destructiveand
disintegrativeeffects of war. These effects include widespread loss of life, forced
migration, social and political dislocation, the greatly diminished capacity of the
institutionalstate and even its total destruction,severe shortages of essential com-
modities such as food and fuel, the destructionof the economic infrastructureand
productivecapacity,and the underminingand in the worst cases breakdownof the
economy and collapse of the debt-riddenstate. Of course, all of these effects may
combine to lead to civil war or revolutionwhich may perpetuatethe downwardspiral
of social, economic, and political disintegration.
States preparingfor war or on the peripheryof the theaterof war but allied in one
form or anotherto one of the protagonistsare more likely to experience the forma-
tive or developmentaland redistributiveor reformativeeffects of war. Formativeor
developmental effects include territorial gains, unification of society through
exploitation of the external threat, the centralization of government and power,
enlargementand rationalizationof state administrations,broadeningand deepening
of the state'srevenuebase, developmentof new technologies, mobilizationof under-
employedpeople and capital for productiveuse, and growth in sectors of the econo-
my that are given the opportunityto be innovativeor priorityby the governmentand
are not destroyedby fighting. Many of these formativeeffects have long-termconse-
quences. For example, taxes and bureaucraciesmay be reduced after wars, but they
never seem to returnto theirprewarlevels.
Redistributiveor reformative effects include domestic redistributionof wealth
through spending on the war effort, regional and international redistribution of
wealth throughaid to allies, redistributionof wealth throughchanges in tradingpat-
terns and the emergenceof new markets,the socialization and integrationof society,
increases in the educational and skill levels of large portions of the population,
habituationof governmentinterventionin the economy and society to promote eco-

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ComparativePolitics April 1999

nomic development,social cohesion, and compliance, and opportunitiesfor a popu-

lar leaderto introducereformsnot possible in peace time.
Similarly, the way in which civil and guerrilla wars are fought, for example,
whetherthe military or the civilian side of the state is in charge of the counterinsur-
gency campaign,will determinewhether the fighting has a primarilydisintegrative
or formative impact on the state, economy, and society.12Equally important,soci-
eties can experience a mix of all three kinds of effects of war, either in one major
war or, as in this case, in a fairlyrapidsequence of wars.
In combinationand often in sequence, then, the effects of war can be critical to
the political and economic development of a country and region. Analyses of the
impact of wars on Europeanpolitical and economic developmentover the last few
centuriesalert us to a numberof linkages that may betterexplain the origins of East
and SoutheastAsia's recent economic success. First,war and the preparationfor war
give considerableimpetus to the creation of state structuresand promote the "civi-
lization of state power"throughthe developmentof a centralbureaucracydesigned
to mobilize resources for the expansion of the military.13Second, the relationship
between capital and coercion is key to understanding the impact of wars. The
sources of the capital used to preparefor or conduct war and the way it is mobilized
affect the developmentof the state, economy,and society.14Third,the interventionist
state in Europe was associated with the confluence of industrialization and the
preparationfor and fighting of wars. Moreover,war and mercantilismwent hand in
hand as states sought to enhance their economic position by preparingto wage or
actually fighting wars.15Finally,wars close old markets,open new ones, and gener-
ally change the existing patterns of trade.16Not only belligerents, but also other
countries in the region may be affected. The following analysis will explore these
linkages in East and SoutheastAsia through the impact of wars on the rise of the
strong state, injection of capital into the region, and emergenceof key marketsin the
shift to an export-orientedindustrializationstrategy.

The Strong State

One of the key conditionsfor the developmentof a successful export-orientedindus-

trializationstrategyin East and SoutheastAsia was a strong institutionalstate linked
to the business communityand able to adopt and fully implementthe necessary poli-
cy reforms.'7The presence of strong institutionalstates in East and SoutheastAsia
contrastswith most countriesof the ThirdWorld,where, as Migdal has noted, colo-
nialization and the penetrationof western capitalismtended to produce strong soci-
eties and weak states.18In most Third World countries, therefore, political power
rested with social groups thatdominatedthe commodityexport and import-substitut-
ing sectors. In their own intereststhese groups were inclined to oppose policies, such

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 RichardStubbs

as devaluation,reductionof tariffs,and lifting of restrictionson foreign direct invest-

ment, requiredto promoteexport-orientedindustrialization.
In the seven economically successful states of East and SoutheastAsia after the
second world war, societies were relativelyweak, and the institutionalstates became
relatively strong and autonomous. The reasons for this dichotomy between strong
state and weak society are tied to the series of wars in the region. First, the second
world war and its chaotic immediate aftermathdevastatedthe social and political
order of the region. Some of the disintegrative effects of war were widely dis-
cernible. From the "sea of rubble that was all that remained of western Tokyo in
September 1945" to the horrendousmalnutritioncaused by food shortages in parts
of Malaya (as peninsular Malaysia was called then), the physical evidence of the
upheavaland confusion left in the wake of the fighting and the Japaneseoccupation
was everywhere.19Less easy to detect but just as importantwas the dislocation of
the prewarpatternsof social and political order.The second world war, the civil war
in China and the consequent massive emigration to Taiwan and Hong Kong, the
Koreanwar,and the guerrillawars of SoutheastAsia, especially in Malaya,all weak-
ened the cohesion and influence of previously significant social groups and power-
brokers. Hence the East and Southeast Asian states that emerged after 1945 and
eventually became economically successful did not face the same strong social
oppositionto the developmentof export-orientedpolicies found in other areas of the
world.
Second, the formative effects of war on the state's capacity were evident in its
rapiddevelopmentin the seven successful economies. Expandedpolicy capacity was
prompted by the perception that Asian Communismposed an immediate and sus-
tained threat that requiredthe mobilization of all possible resources. Of particular
concern are two aspects of state capacity: coercive and civil. The expansion of the
coercive dimension of state capacity in South Korea,Taiwan,Thailand,and to some
extent Japanowed much to American military aid. This aid was liberally supplied,
with the express intent of containingthe perceived threatfrom the Communistgov-
ernmentsin North Korea, China, and North Vietnam.The police, intelligence agen-
cies, and especially military were speedily reinforced.In Malaya and Singaporethe
windfall revenues of the early 1950s, createdby the boom in commodity prices fol-
lowing the outbreakof the Korean war, allowed both governments to enlarge and
train the military and police and expand the operationsof the intelligence organiza-
tions to mount a successful counterinsurgency campaign against the Malayan
CommunistParty.20
Similarly,the civil side of governmentcapacity grew rapidly,in good part due to
the need to mobilize and coordinate financial, manpower,and other resources to
meet the military threat posed by Communist neighbors and insurgents. War and
militaryconfrontationinevitablyput pressureon a governmentto increase its size to
defend its very existence.21The economically successful East and SoutheastAsian

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ComparativePolitics April 1999

states were no exception. However,these countries also had the funds necessary to
develop their civil capacity.Americanaid and the revenue from the prosperitygener-
ated by the Korean war were key factors in the development of sizable, skilled
bureaucraciesthat could contributeto defense. Just as significant, these bureaucra-
cies were also able to plan and implementpolicies designed to promoteindustrializa-
tion.22
Third,as a consequence of the reformativeand redistributiveeffects of the pre-
vailing geostrategiccontext the relationshipbetween the state and society was great-
ly altered.Certainly,the security situationthroughoutthe region placed social forces
on the defensive and therebyenhancedthe state'sautonomy.People were preparedto
give their governmentsmore powers to deal with the perennialand very immediate
threats to society's security. Generally,the hegemonic project of building a strong
economy to meet the Communistthreatwas widely accepted. Laborwas essentially
suppressed as independentworkers' organizations and, indeed, all other left-wing
groups were closed down by governments fearful they might be a cover for
Communist activities. Moreover, businesses that often owed their success to the
state's dispersalof scarce capital or other forms of state subsidizationwere anxious
to cooperatewith the state. In most cases the state was thus able to frame the coun-
try's economic development policies without having to take undue account of
domestic pressures. Popularand interest-basedresistance to the introductionof an
export-orientedindustrializationstrategy could be overcome. And, as the economy
expandedand the Communistswere successfully kept at bay,the government'slegiti-
macy, rooted in performanceratherthan representationas in western liberal democ-
racies, was substantiallyenhanced.
These factors enabled the institutional states of the successful seven East and
SoutheastAsian economies, most usually in response to a balance-of-paymentscri-
sis, to move away from a strict import-substitutionindustrialization strategy and
implementthe policies necessary for the developmentof an export-orientedstrategy.
In 1950 the western ban on trade with the newly constituted Communist Chinese
governmentforced the British colonial administrationin Hong Kong to abandonits
traditionalentrep6t role and adopt an export-orientedstrategy. Japan increasingly
emphasized export-led growth from the mid 1950s as the ministry of international
trade and industry(MITI) sought ways to deal with balance-of-paymentsproblems
associatedwith increasedimportsof raw materialsand a reductionin the purchaseof
goods and services by U.S. forces in the region. Similarly,Taiwanand South Korea
turned to export-orientedindustrializationin the early and mid 1960s, respectively,
because of balance-of-payments difficulties and American pressure.23 The
Kuomintanggovernmenthad few links to Taiwanesesociety and was relativelyinde-
pendent of social pressures.The 1961 military coup led by GeneralParkChung Hee
in South Korea also produced a relatively autonomous state. For Singapore, which
found itself abruptlythrownout of Malaysia in 1965, the options were limited, and

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 RichardStubbs

export-led economic developmentwas the only rationalpolicy it could adopt. The

People'sAction Party(PAP)was able to use the battle with the Communistsfor con-
trol of the governmentand the regional geostrategic threats to the survival of the
small new state to maintaina tight grip on Singaporeansociety.
For the near industrialized economies the shift to an export-oriented strategy
came much later. In Malaysiapossible resurgenceof the Communistguerrilla force
in the mid 1970s, continued ethnic tension, and Vietnam's intentions after its
December 1978 invasion of Cambodiagave the governmentjustification for main-
taining strict control over opposition to its policies. Malaysia was thus able to move
graduallytowardsan export-ledindustrializationstrategyduringthe 1970s, shifting
into high gear in the early 1980s. In Thailandthe long dominantposition of the mili-
tary and the bureaucracywas furtherreinforcedby the need to mobilize resources
against the internalthreat from Communistguerrillas and the external threat from
CommunistVietnam. These factors, plus the U.S. aid that poured into the govern-
ment's coffers duringthe Vietnamwar, eventuallygave the governmentthe capacity
to fashion an increasinglymore complex economy.24The main shift to an export-led
strategycame in 1984 and 1985, when the governmentsharplydevaluedthe baht and
substantiallychangedthe importand exporttariffstructures.
Not all states were equally strong and equally able to initiate all aspects of an
export-orientedstrategy.The "strong state" of South Korea differs markedly from
the institutionalstates of Malaysia and Thailand.However,aided by the geostrategic
context, all seven states were capable of shaping their economies and were strong
enough to adopt and implement export-orientedpolicies when faced with a crisis
that called for a new economic strategy,in direct contrastto the institutionalstates of
manyThirdWorldcountries.25When faced with an economic or political crisis, most
otherThirdWorldgovernmentseither did not sufficiently control their economies to
initiate an effective export-led strategy or were too politically weak to overcome
social and economic interests intent on perpetuatingthe dominantimport-substitu-
tion approach.The obvious counterexampleto the success of the East and Southeast
Asian countries is the Philippines, where the succession of Spanish and American
colonial rulers left a legacy of weak central government and relatively powerful
regional strongmen.Neither the second world war nor the Huk rebellion seriously
underminedthe traditional social and political order, and there was no cold war-
induced expansionof the institutionalstate.As Gary Hawes has noted, "the lack of a
strong state leadershipand the complementarytendency of the state to respond in
preferential,partisanfashion to demands from segments of the bourgeoisie charac-
terized the Philippines after independence."26Moreover, in contrast to the state
building that accompanied the counterinsurgencycampaigns against Communist
guerrillasin Malaysiaand Thailand,power in the Philippines duringthe martiallaw
years of Marcos' regime revertedto regional autocratsafter a brief initial period of
centralizationof authority.27Because regional powerbrokershave prospered from

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ComparativePolitics April 1999

import substitution,attemptsto deal with numerous balance-of-paymentscrises by

launchingan export-orientedstrategyhave been fraughtwith difficulties. Finally,the
weak predatorycentral state set the stage for pervasive pork-barreland provincial
patronagepolitics. Thus, until recently little money was invested in economic infra-
structureand other measuresthat might attractexport-orientedforeign direct invest-
ment.

The Supply of Capital

To develop an export-orientedindustrializationstrategythe successful economies of

East and Southeast Asia had either to develop an export capability out of their
import-substitutionindustriesor to attractexport-orientedforeign direct investment.
The key to the introductionof an export-led strategywas the availabilityof capital.
Geostrategic factors ensured the necessary supply of capital in most of the seven
successful Asian economies. Just as important,these same geostrategic factors also
providedthe incentive-enhancement of the defensive capacity of the country-for
the constructionof roads,railways,and port and airportfacilities. This infrastructure
later served to move raw materials into and finished goods out of the countries.
Hence war and the threatof war played a critical formative,reformative,and redis-
tributiverole in the emergingeconomies of East and SoutheastAsia.
In Japan the Korean war injected the much needed capital into the economy.
Special procurementincome from orders placed by the U.S. military seeking sup-
plies for troops in Korearose from zero in 1949 to nearly U.S.$600 million in 1951
and U.S.$850 million in 1952. Because of Japan'sstrategiclocation and vital role in
containingAsian Communismthe Americanscontinuedafterthe war in the 1950s to
spend nearly U.S.$600 million a year in Japanon bases, personnel, and other mili-
tary-related matters.28Between 1952 and 1956 more than a quarter of Japan's
importswere paid for by U.S. militarypurchases.29The Koreanwar clearly stimulat-
ed export industries.In 1952, for example, "63 percent of all Japaneseexports were
taken by the war."30Moreover,the Koreanwar encouragedthe U.S. to provide tech-
nology to Japan'sfledgling industries.Many of Japan'smajor industrialcompanies
were saved by what prime ministerYoshidareferredto as the "gift of the Gods."31As
Borden has noted: "Most critically,the boom advancedJapaneseindustrialmodern-
ization, the key to subsequent export recovery."32In addition, the Vietnam war,
"which allowed Japanese firms to earn at least an extra U.S.$1 billion per year, on
average, from all sources during 1966-1971," pulled Japanout of the 1965 slump,
pumped money into key infant export industries, furtheropened up both U.S. and
Southeast Asian markets to Japanese goods, and generally marked the "opening
stage of economic 'maturity'for Japan."33
Hong Kong was forced into export-orientedmanufacturingby a combinationof

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 RichardStubbs

two majorgeostrategicevents: the Communistvictory in China in 1949 and the out-

breakof the Koreanwar.First,as the Communistarmy swept southwardsand people
fled the fighting, there was a massive influx of skilled textile workers,entrepreneurs,
machinery,and funds into Hong Kong from Shanghai. More than 330,000 people
arrivedin Hong Kong from the mainlandin 1949 and 1950. From 1947 to 1951 the
numberof spindles installed in Hong Kong rose from 6,000 to 180,000.34Second, in
response to China's entry into the Korea war and the widespread perception that
Communism was attempting to spread its influence throughoutAsia Britain, the
United States, and other western powers placed an embargo on trade with the new
regime in Beijing. Hong Kong lost its entrep6trole and was thus forced to adopt an
export-orientedstrategy.Building on the resources gained from the Shanghai exo-
dus, including equipmentand capital, textiles became the main driving force behind
Hong Kong's economic success in the 1950s and 1960s, and, overall, manufacturing
provideda rapidlyincreasingportionof the colony's GDP.
In Taiwanthe U.S. governmentmade every effort to fortify the Taiwaneseecono-
my to counterthe threatfrom the People's Republicof China. Between 1949 and the
mid 1960s the U.S. contributedaroundU.S.$1.7 billion in economic aid. These funds
served to stabilize the economy, finance land reform, and start the import-substitu-
tion industrialization strategy. Around 27 percent of U.S. economic aid went to
mixed public and privateenterprises,and 6 percentwent to purelyprivate enterpris-
es. The Taiwanese government and its American advisors sought to develop the
import-substitutioncapacity of the economy.35As Wade has noted, a strong import-
substitutionmanufacturingsector was a prerequisiteto the successful initiationof a
strong export-orientedmanufacturingsector.36Indeed,the export-led strategyrelied
in good part on entrepreneursand firms that had previously led the import-substitu-
tion drive. American foreign direct investmentwas also importantfor the initiation
of the export-oriented industrialization strategy from the mid 1960s. The U.S.
Agency for InternationalDevelopment(AID) heavily publicizedTaiwan'sattractions
as a site for investment, and the U.S. government facilitated and protected U.S.
investorsin Taiwan.
U.S. aid was also important in the development of South Korea's export-led
industrialization.Between 1953 and 1969 South Koreareceived over $4.2 billion in
economic assistance.This Americanaid "financednearly 70 percentof total imports
from 1953 to 1962" and "was equal to nearly 80 percentof total fixed capital forma-
tion."37With the help of the funds providedby the U.S., the Korean governmentin
the first half of the 1960s adopteda policy of developmentdefined as "guidedcapi-
talism."38In the second half of the 1960s U.S. aid plus an increase in revenues
allowed the South Korean government to take on the role of "development
investor."39
For Singapore the confluence of its separationfrom Malaysia, the end of con-
frontationwith Indonesia,and the escalation of the Vietnam war paved the way for

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ComparativePolitics April 1999

the influx of mainlyAmericanforeign direct investmentand the turnto an export-led

industrializationstrategy.Given Singapore'svery small populationand hence small
domestic market,separationfrom Malaysia forced the PAP governmentto abandon
import substitution and to adopt an export-oriented industrialization strategy.
Fortuitously, trade resumed with Indonesia, and government revenues increased
when confrontationended in 1965. The increased involvement of the U.S. in the
Vietnamwar after 1965 was also responsiblefor a relativelylarge influx of U.S. dol-
lars from spending by U.S. personnel on leave. For example, estimates suggest that
in 1967 alone U.S. servicemen spent U.S.$108 million in Singapore.40Most impor-
tant, U.S. foreign direct investmentstartedto flood into Singapore.Initially,at least,
this investmentwas in large measure tied to the rapid expansion of the petroleum
refining industryas demandfrom Vietnam increased.Also, higher revenues allowed
the governmentitself to become "an entrepreneurin a big way."41Togetherthe gov-
ernmentand the multinationalcorporationsrapidlyexpandedSingapore'sexport-ori-
ented manufacturingsector.
As in Taiwanand South Korea, in ThailandU.S. aid was influentialin setting the
stage for the ultimateshift to an export-ledindustrializationstrategy.However,in the
Thai case the link between U.S. aid and the initiationof the export-orientedstrategy
in the mid 1980s was not nearly so direct. In ThailandAmerican aid was originally
prompted by both domestic Communist insurgents and Vietnamese Communist
expansion. Overall, between the mid 1950s and 1976 the U.S. spent nearly U.S.$3.5
billion in Thailand.42These funds promoted,among other things, the developmentof
an import-substitutionmanufacturingsector upon which the later turn to export-led
developmentcould build. However,it was essentially Japaneseforeign direct invest-
ment in the 1980s that led to the export boom that swept the Thai economy to pros-
perity.This wave of Japaneseinvestment,induced in part by the sharp appreciation
of the yen, had been plannedfor some time. Japanesecompanies saw the advantages
of investing in a country that had benefited so much from U.S. aid that it had an
abundanceof cheap, relativelyskilled labor,a good infrastructure,and a bureaucracy
capable of implementingplanned policy reforms. The increase in Japanese foreign
direct investmentwas parallelledby a massive increase in Japaneseaid, U.S.$1.2 bil-
lion between 1982 and 1986, as the American governmentput pressureon Japanto
take greater responsibility for the promotion of security in Southeast Asia.43This
pressurewas promptedby the threatto regional stabilityposed by Vietnam'soccupa-
tion of Cambodia and the general intensification of the cold war under Reagan's
administration.The aid was aimed largely at infrastructureprojectsand the develop-
ment of a manufacturingcapacity that greatly facilitatedthe export-orientedstrategy
made possible by the flood of Japaneseforeign direct investment.
In Malaysiathe move to export-led industrializationwas less precipitousand less
influencedby wars or the threatof war. However,the legacy of the Koreanwar boom
in the form of the country'srelatively good infrastructure,extensive education sys-

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 RichardStubbs

tem, and centralizedadministrationshould be noted. Internalconflicts, such as the

May 1969 race riots, have also had an impact on the way in which Malaysia devel-
oped its export manufacturingcapacity. The first indications of the government's
interest in encouraging export-oriented industrialization came with the 1968
InvestmentIncentivesAct. Following the race riots of 1969 and the perceived need
to create morejobs, the governmentdecided in 1971 to acceleratethe move towards
an export-orientedstrategyand establishedspecial free tradezones.44During the last
half of the 1970s the textile and electronic industriesgrew rapidly due to the influx
of American, Japanese, Singaporean, and European foreign direct investment.
However,the major expansion of Malaysia'sexport capacity came in the mid 1980s
when Japaneseinvestmentflooded the country in search of cheap, relatively skilled
labor,good infrastructure,and a competentadministrationreasonablyclose to Japan.
Between 1988 and 1996 U.S.$6.1 billion of Japanese foreign direct investment
entered the Malaysianeconomy.45Other investors, from such places as Taiwan and
Singapore, provided similarly significant investments in Malaysia's manufacturing
sector. And, as in Thailand, Japanese aid was extremely helpful in promoting the
export-orientedstrategy.
Warsand the threatof war were not the only sources of funds for the initiationof
export-orientedindustrialization,nor was the link between war and the provision of
capital to promote export-orientedindustrializationalways immediate and direct.
However,war and the threatof war undeniablygenerateda significant portionof the
capital needed to move these East and SoutheastAsian countries to an export-led
economic developmentstrategy.

Markets

Goods produced for export need markets. Wars, and especially the Vietnam war,
were crucial in creating markets for export manufacturingin Japan and the four
newly industrializingeconomies. As Seiji Naya has commented: "The conflict in
Vietnamhas affected considerablythe tradeand tradepatternsof Asian countries."46
In particular, the escalation of the Vietnam war and the markets generated by
American spending on it had marked formative, reformative, and redistributive
effects on South Korea, Taiwan, and Singapore, all of which put an increasingly
greateremphasison export-orientedmanufacturingduringthe 1960s.
The Koreanwar and the U.S. military'sspecial procurementshelped to resurrect
Japan'sexport industries, and the Vietnam war had a further impact on Japanese
exports. The Vietnam war also increased Japanese exports to Korea, Taiwan, and
Singapore,which had their own procurementordersto fill. Moreover,as prosperity
grew in the region, consumersboughtmore Japaneseproducts.47Equally significant,
the U.S. market became a major destination for export products from Japan and

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ComparativePolitics April 1999

otherpartsof East and SoutheastAsia.48In contrastto what had happenedduringthe

Korean war, one analyst notes, during the Vietnam war "procurementof the great
majorityof goods and services destined for Vietnam [took] place in the USA itself,
and the wages and salaries of serving personnel [were] also largely paid in the
USA.'"49Consequently,the booming U.S. economy seemed able to absorb unlimited
amountsof cheap consumerproductsfrom overseas. Japanexporteda range of prod-
ucts from color televisions to automobile parts to airplanes. "Overall Japanese
exports to Americabetween 1965 and 1972 grew at an averageannualrate of 21 per-
cent."50
The Vietnamwar provedto be most significant for Taiwanand South Korea.Both
countrieswere able to export to the theaterof war a numberof productsfrom their
fledgling export manufacturing sectors. For Taiwan, by 1967 over 85 percent of
cement, nearly 75 percent of chemical fertilizer, over 70 percent of iron and steel,
and about 50 percentof machineryexportswent to Vietnam.For South Korea,nearly
95 percent of all steel products,over 50 percent of all transportationequipment,and
over 40 percent of certain kinds of chemical productswere exported to Vietnam.51
Overall, Taiwan's exports to Vietnam rose from 3.8 percent of total exports in
1960-61 to 13.4 percentin 1966-67, while South Korea'sexportsto Vietnamrose by
nearly 1,000 percent from 1962-63 to 1966-67.52 Moreover,as Woo points out, the
Vietnam war "markedthe coming of age of some of Korea's largest conglomer-
ates."53
In Singapore the end of confrontationwith Indonesia and the growing regional
prosperitycreatedby U.S. spendingon the Vietnamwar led to what Goh Keng Swee,
a formerfinance minister,called "anunparalleledexpansionof our entrep6ttrade."54
The number of vessels using Singapore'sharbordoubled between 1964 and 1971,
and the total merchandisetrade similarly doubled between 1964 and 1970.55Most
remarkably,petroleumexports to Vietnamrose from Malayan$62million in 1964 to
M$393.5 million in 1969.56Although there was little value added for Singapore
because the petroleum was simply transshippedin Singapore harbor,the develop-
ment of the petroleumindustryearned Singaporethe title of "Houstonof Asia" and
greatly contributedto its current status as the third largest refining center in the
world.57 Repairs to oil tankers and other ships, necessitated by expanded U.S.
involvement in the Vietnam war, also increased during the late 1960s.58 Perhaps
most important,similarto the other economies embarkingon an export-led strategy,
Singaporebenefited immensely from being able to export to the booming U.S. mar-
ket. For example, the value of Singapore'sexports to the U.S. rose from U.S.$52 mil-
lion in 1966 to over U.S.$850 million in 1974.59As in Taiwan and South Korea,
Singapore'stiming was impeccable in terms of being able to take advantageof the
overheatedU.S. war economy.
Forboth Malaysiaand Thailandthe regionalwars were only of indirectbenefit in
providing export markets. Both countries profited from the increase in commodity

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 RichardStubbs

prices duringthe Vietnamwar,but, because they developed an export-orientedstrat-

egy much laterthan South Korea,Taiwan,and Singapore,the marketsfor their rapid-
ly expanding exports had to be more diversified. The main markets included the
U.S., Japan and the neighboring Asian industrializing countries, and Europe. Of
course, the valuableAmericanmarketwas still open because of U.S. commitmentsto
cold war allies. And, ironically, the U.S. pressure on Japan during the 1980s and
1990s to open up its domestic marketto more importswas a huge boon to Malaysian
and Thai exporters.For example, Malaysia'sexportsof manufacturedgoods to Japan
rose from U.S.$380 million in 1986 to U.S.$5.9 billion in 1995, while Thailand's
exports to Japanrose from U.S.$285 million in 1985 to U.S.$6.2 billion in 1995.60
Of course, the bulk of firms engaged in export manufacturingin both Malaysia and
Thailandwere Japanesecompanieswith access to their home market.
Overall, then, the sequence of geostrategic events, especially the Vietnam war,
helped the seven successful East and SoutheastAsian economies find markets for
their fledgling export manufacturingindustries.The Koreanwar gave a huge boost
to Japan'sand Hong Kong's battered economies. The timing of the Vietnam war
could hardlyhave been better in boosting sales of the emerging export industriesof
Japan,South Korea,Taiwan, and Singapore. Malaysia and Thailandbenefited indi-
rectly by being able to export goods to Japanand the newly industrializingcountries,
whose consumermarketsowed much of their developmentto the wars in the region.

Conclusion

"Warsmake states,"arguesTilly.61However,wars and preparationfor war also shape

societies and economies in significant ways. The relationshipbetween geostrategic
events and economic developmentis complex but nonetheless needs to be examined
in detail. Because of the lack of a systematic appreciationof how wars affect politi-
cal, economic, and social change, our understanding of political and economic
events in key regions of the world,especially East and SoutheastAsia, is incomplete.
On the effects of wars and the threatof war on the economic developmentof East
and SoutheastAsia, three points stand out. First, the sequence of events is crucial.
The destructive,formative,and redistributiveeffects of war all played a part in the
rise of the East and SoutheastAsian economies. However,the order in which these
effects occurred and the point in the sequence at which the decision to adopt an
export-orientedstrategy was taken were vital to the nature and degree of a state's
successful economic development. The widespread destruction and dislocation
caused by the second world war, the Chinese civil war, the Korean war, and the
region's guerrilla wars underminedmuch of the old social and political order. But
the rise of Asian Communism, the Korean war, some of the guerrilla wars, the
Vietnamwar, and the pervasive cold war providedthe incentive and the funds from

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ComparativePolitics April 1999

U.S. aid, increasedcommodity prices, and increasedtradeto build strong institution-

al states. These newly reconstructed institutional states were relatively unencum-
bered by opposition from traditionalsocial and political forces and could effectively
manage the move into export-orientedindustrializationand the expansion of their
respective economies. Moreover, the formative, reformative, and redistributive
effects of the geostrategicenvironmentwere furtherreinforcedby the victory of the
Vietnamese Communists in 1975, the Vietnamese invasion of Cambodia in 1978,
and the intensificationof the cold war in the early 1980s. The incentives for a strong
state remained,and funds continuedto be made availableas Japaneseaid substituted
for American aid and as Japaneseforeign direct investmentflooded into the region.
Relatively strong states continuedto oversee the expansion of export-orientedindus-
trializationand rapideconomic development.
Second, the linkages between wars and economic development in East and
SoutheastAsia indicatethe importanceof understandingthe ways in which wars and
the threatof war influence the accumulationof wealth and the distributionand redis-
tributionof capital.The reversalof the destructiveand dislocative effects of the sec-
ond world war could not have been achieved without the threat from Asian
Communismand the general geostrategic environment,which induced the massive
influx of Americanmilitary procurementfunds, American aid, and the timely open-
ing of the American marketto Asian exports. Of course, American funds alone did
not produce the remarkable success of the seven East and Southeast Asian
economies. Rather,the injection of such large amounts of capital was a necessary
though not sufficient condition for the successful shift in the seven economies to an
export-oriented strategy. Moreover, confronting the Communist threat provided a
hegemonic project that encouraged government officials and business leaders to
ensure that the funds were used to good effect in building up the infrastructure,
expandingthe capacityof the institutionalstate, and promotingvarious sectors of the
economy.
Finally, wars and the threatof war breed mercantilism.In times of war and even
when war is simply on the horizon, institutionalstates give priority to building up
their war-fightingcapacity.A strong,independenteconomy is given precedenceover
ideas of free trade and liberalization.America during its civil war and Britain and
other Europeanpowers during the first and second world wars attest to this war-
induced protectionist impulse. The neomercantilist export-orientedpolicies of the
successful economies of East and SoutheastAsia can be said to fit into this general
pattern.62Similarly,during war states and the private sector often cooperate exten-
sively to defend national integrity. In a number of the East and Southeast Asian
economies the state developed special relations with the major companies. These
companies grew as states either dispensed U.S. aid or directed funds generatedby
increased governmentrevenues from rising exports createdby the burgeoningover-
seas marketsassociated with the Koreanand Vietnamwars. Hence the privatesector

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 RichardStubbs

expanded as it cooperatedwith the state; in turn, the state increased its capacity to
frame economic policy throughits close relationshipwith business. Given the suc-
cess that the economies of East and SoutheastAsia have enjoyed, this relationship
and the habit of state interventionin the economy may be difficult to set aside in the
near future.
Overall, then, wars and the threat of war in East and SoutheastAsia have had a
profoundeffect on the institutionalstates and economies of the region. A complete
understandingof the shift from an import-substitutionto an export-orientedindustri-
alization strategy in the region can not be fully gained without reference to the
impact of the geostrategic environment on the institutional states and successful
economies. Geostrategicfactors must be incorporatedinto conventionalarguments
that explain the economic success of these countries. They amplify conventional
explanationsin numerousways. For example, they show why strong states that could
effectively manage export-orientedeconomies emerged in the region. They identify
some of the key sources of the resourcesrequiredto build the economic infrastruc-
ture and develop a successful export-orientedmanufacturingsector. And they also
help answerthe questionwhy investmentin East and SoutheastAsia was sustainedat
such a high level and for such a long period.63Krugman'sargumentthat accumula-
tion ratherthan productivitydriven growth generatedthe region's economic success
should be assessed in light of the role war and preparationfor war played in mobiliz-
ing capitaland otherresourcesand directingthem into particularsectors of the econ-
omy.64In the same vein, Japanese investment in and the diffusion of particular
Japaneseindustriesto the new and near industrializingeconomies have to be evalu-
ated in the context of the favorable economic and political climate which the
geostrategic factors helped to create.65More generally, there is a clear need to
expand our appreciationand understandingof the complex set of linkages between
war and economic development.While some attempthas been made for Europeand
the majorpowers, there is still a great need to explore this relationshipin otherparts
of the world.

NOTES

This article was first presented as a paper at the British International Studies Association, Durham
University,December 1996. 1 would like to thankthree anonymousreviewersand the editors of this jour-
nal as well as Amitav Acharya, Mitchell Bernard,Michael Donnelly, Paul Evans, Peter Ferdinand,and
Grace Skogstadfor their comments at various stages in the developmentof the argument.Thanksalso go
to the Social Science and Humanities Research Council of Canada for a research grant and Susan
Dejesus, Nicole Gallant,and StephanieSerrafor their researchassistance.
1. See, for example, Bruce D. Porter, Warand the Rise of the State: The Military Foundations of
Modern Politics (New York:The Free Press, 1994), p. 3; and ArthurA. Stein and Bruce M. Russett,
"EvaluatingWar:Outcomes and Consequences,"in Ted RobertGurr,ed., Handbookof Political Conflict:
Theoryand Research(New York:The Free Press, 1980), p. 399.

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ComparativePolitics April 1999

2. See, for example, Charles Tilly, ed., The Formation of National States in Western Europe
(Princeton:PrincetonUniversityPress, 1975); CharlesTilly, Coercion, Capital, and EuropeanStates, AD
990-1992 (Cambridge,Mass.: Blackwell, 1992); and J. M. Winter,ed., Warand Economic Development:
Essays in Memoryof David Joslin (Cambridge:CambridgeUniversityPress, 1975).
3. See, for example, Karen Rasler and William R. Thompson, "Warand the Economic Growth of
MajorPowers,"AmericanJournal of Political Science, 29 (August 1985), 513-38.
4. See Bela Balassa, ed., The Newly Industrializing Countries in the WorldEconomy (New York:
PergamonPress, 1981); and Vittorio Corbo, Anne O. Krueger,and FernandoOssa, eds., Export-Oriented
DevelopmentStrategies: TheSuccess of Five Newly IndustrializingCountries(Boulder:Westview, 1985);
versus Alice Amsden, Asia's Next Giant: South Korea and Late Industrialization(New York: Oxford
University Press, 1989); Chalmers Johnson, MITI and the Japanese Miracle (Stanford: Stanford
University Press, 1982); Ziya Onis, "The Logic of the Developmental State," ComparativePolitics, 24
(October 1991), 109-26; and Robert Wade, Governing the Market: Economic Theory and the Role of
Governmentin East Asian Industrialization(Princeton:PrincetonUniversityPress, 1990).
5. Bruce Cumings, "The Origins and Development of the Northeast Asian Political Economy:
Industrial Sectors, Product Cycles and Political Consequences," International Organization (Winter
1984), 1-40; Walter Hatch and Kozo Yamamura, Asia in Japan's Embrace: Building a Regional
Production Alliance (Cambridge: Cambridge University Press, 1996), pp. 27-36; Gary G. Hamilton,
"Overseas Chinese Capitalism,"in Tu Wei-ming, Confucian Traditionsin East Asian Modernity. Moral
Education and Economic Culture in Japan and Four Dragons (Cambridge, Mass.: HarvardUniversity
Press, 1996); G. L. Hicks and S. G. Redding, IndustrialEast Asia and the Post-ConfucianHypothesis:A
Challenge to Economics(Hong Kong:Universityof Hong Kong Centreof Asian Studies, 1983).
6. Paul Krugman,"The Myth of Asia's Miracle,"ForeignAffairs, 73 (November-December1994),
62-78. For a critique see Stephan Haggardand Euysung Kim, "The Sources of East Asia's Economic
Growth,"Access Asia Review, I (Summer 1997), 31-63.
7. For exceptions, see, Cumings; and Jung-EnWoo, Race to the Swift: State and Finance in Korean
Industrialization (New York: Columbia University Press, 1991). However, most otherwise insightful
analyses of the economic success of the region either downplay or ignore the role of war, especially the
Vietnamwar. See, for example, Amsden; and Stephan Haggard,Pathwaysfrom the Periphery:Politics of
Growthin the Newly IndustrializingCountries(Ithaca:Cornell UniversityPress, 1990).
8. Tilly, Coercion, Capital, and EuropeanStates.
9. See Paul B. Rich and RichardStubbs, eds., The Counter-InsurgentState: Guerrilla Warfareand
State Buildingin the TwentiethCentury(Basingstoke:Macmillan, 1997).
10. World Bank, The East Asian Miracle: Economic Growthand Public Policy (New York:Oxford
UniversityPress, 1993). The WorldBank includes Indonesiaas a "miracleeconomy."However,Indonesia
is excluded from this analysis because its per capita income is much lower thanThailand'sand Malaysia's
and its manufacturingsector is less importantto its overalleconomy thanthe othercountries'.
11. These categories expand upon those outlined by Porter,pp. 11-19, by incorporatingpoints made
by RichardBean, "Warand the Birth of the Nation,"Journal of Economic Histor', 33 (1973), 203-21;
Brian Bond, Warand Society in Europe, 1870-1970 (Leicester: Leicester University Press, 1983);
FrangoisCrouzet,"Wars,Blockade and Economic Change in Europe, 1792-1815," Journal of Economic
History, 24 (1964), 567-88; Phyllis Deane, "Warand Industrialisation," in Winter,ed., pp. 91-102; Hugh
G. Wheeler, "Effects of War on IndustrialGrowth,"Society, 12 (1975), 48-52; Stein and Russett, pp.
400-2; and Michael C. Desch, "War and Strong States, Peace and Weak States?," International
Organization,50 (Spring 1996), 237-68.
12. See Paul B. Rich and Richard Stubbs, "Introduction:The Counter-InsurgentState,"in Rich and
Stubbs,eds., pp.1-25.
13. Tilly, Coercion, Capital, and EuropeanStates, p. 197.
14. Ibid. pp. 29-31; Charles Tilly, "WarMaking and State Making as Organized Crime," in Peter

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 RichardStubbs

Evans, Dietrich Rueschemeyer, and Theda Skocpol, eds., Bringing the State Back In (Cambridge:
Cambridge University Press, 1985), p. 186; and A. C. Pigou, The Political Economy of War(London:
Macmillan, 1940), pp. 29-46.
15. Robert Gilpin, The Political Economyof InternationalRelations (Princeton:PrincetonUniversity
Press, 1987), pp. 31-34; and Porter,pp. 109, 167-69.
16. Deane, pp. 100-1.
17. See Amsden; Haggard;and Wade.
18. Joel S. Migdal, Strong Societies and WeakStates: State-Society Capabilities in the Third World
(Princeton:PrincetonUniversityPress, 1988).
19. Robert C. Christopher, The Japanese Mind: The Goliath Explained (New York: Linden
Press/Simon and Schuster, 1983), p. 17; Richard Stubbs, Hearts and Minds in Guerrilla Warfare:The
MalayanEmergency1948-1960 (Singapore:OxfordUniversityPress, 1989), p. 21.
20. Stubbs,pp. 107-14, 156-59.
21. See Bruce D. Porter,"Parkinson'sLaw Revisited:Warand the Growthof AmericanGovernment,"
Public Interest,60 (1980), 58.
22. Note, for example, that in Japan the U.S. occupying forces were relatively small and were thus
forced to leave in place the civilian bureaucracy,most significantlythat part of the bureaucracywhich had
run the wartime economy. See William Chapman,InventingJapan: An UnconventionalAccount of the
Postwar Years(New York:PrenticeHall, 1991), pp. 98-107. Taiwan,of course, inheritedits bureaucracy
from the Kuomintanggovernmenton the mainland.In Malayathe bureaucracywas given a majorrole in
the successful counterinsurgencycampaignand as a result grew from 48,000 federal, state, and municipal
employees in 1949 to 140,000 employees in 1959. See Stubbs,p. 263.
23. RyutaroKomiya and Motoshige Itoh, "Japan'sInternationalTradeand Trade Policy, 1955-1984,"
in Takashi Inoguchi and Daniel I. Okimoto, eds., The Political Economy of Japan: The Changing
InternationalContext,vol. 2 (Stanford:StanfordUniversityPress, 1988), pp. 173-76; and Haggard,p. 25.
24. See PasukPhongpaichitand Chris Baker, Thailand:Economyand Politics (Kuala Lumpur:Oxford
University Press, 1995), pp. 287-88; J. AlexanderCaldwell, AmericanAid to Thailand(Lexington:D. C.
Heath, 1974); and RobertJ. Muscat, Thailandand the UnitedStates: Development,Security and Foreign
Aid (New York:ColumbiaUniversityPress, 1990).
25. For a detailed review of the shift from an import-substitution to an export-led approach see
Haggard,pp. 51-125.
26. Gary Hawes, The Philippine State and the Marcos Regime: ThePolitics of Export(Ithaca:Cornell
UniversityPress, 1987), p. 32.
27. See Patricio N. Abinales, "State Building, Communist Insurgency and Cacique Politics in the
Philippines,"in Rich and Stubbs,eds., pp. 26-49.
28. Thomas R. H. Havens, Fire across the Sea: The VietnamWarand Japan 1965-1975 (Princeton:
PrincetonUniversityPress, 1987), p. 93.
29. LauraE. Hein, "Growthversus Success: Japan'sEconomic Policy in Historical Perspective,"in
AndrewGordon,ed., PostwarJapan as History (Berkeley:Universityof CaliforniaPress, 1993), p. I10.
30. Havens,p. 93.
31. John W Dower,Empireand Aftermath:YoshidaShigeru and the Japanese Experience, 1878-1954
(Cambridge,Mass.: HarvardUniversity Council on East Asian Studies, 1979), p. 316, quoted in Bruce
Cumings,"Japan'sPositionin the WorldSystem,"in Gordon,ed., p. 50.
32. William S. Borden, The Pacific Alliance: United States Foreign Economic Policy and Japanese
TradeRecovery,1947-1955 (Madison:Universityof Wisconsin Press, 1984), p. 146.
33. Havens, p. 96; John W. Dower, "Peace and Democracy in Two Systems: External Policy and
InternalConflict,"in Gordon,ed., p. 13.
34. John P. Burns,"Hong Kong,"in Steven M. Goldstein,ed., Minidragons:Fragile EconomicMiracles
in the Pacific (Boulder:WestviewPress, 1991), p. 108; and TheSouth ChinaMorningPost, Sept. 6, 1953.

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ComparativePolitics April 1999

35. Samuel Ho, Economic Development of Taiwan, 1960-1970 (New Haven:Yale University Press,
1978), pp. 110-17. U.S. militaryassistancefrom 1949 to 1967 amountedto $2.4 billion.
36. Wade,pp. 84-85.
37. Edward S. Mason, Mahn Je Kim, Dwight H. Perkins, Kwang Suk Kim, and David Cole, The
Economic and Social Modernizationo?'theRepublico/'Korea (Cambridge,Mass.: Council on East Asian
Studies, HarvardUniversity, 1980), p. 182-85. Over the same period South Koreareceived $4.1 billion in
U.S. militaryassistance.
38. Republic of Korea, Summary of the First Five-Year Economic Development Plan, 1962--1966
(Seoul: GovernmentPrintingCo., 1962), p. 28, cited in Whang In-Young,"The Role of Governmentin
Economic Development:The KoreanExperience,"Asian DevelopmentReview, 5 (1987), 75.
39. Ibid., p. 76.
40. See Economist Intelligence Unit, The Economic Effects of the Vietnamese Warin East and
SoutheastAsia, (London: The Economist Intelligence Unit, November 1968), p. 15. Also, Hong Kong
gained about U.S.$80 million from U.S. personnelon leave in 1967.
41. Interviewwith Goh Keng Swee, cited in W G. Huff, The Economic Growthof Singapore: Trade
and Developmentin the TwentiethCentury(Cambridge:CambridgeUniversityPress, 1994), p. 320.
42. John L. S. Girling, Thailand:Society and Politics (Ithaca: Cornell University Press, 1981), pp.
235-36.
43. Governmentof Japan,Annual Report of Japan v ODA 1987 (Tokyo: Ministry of ForeignAffairs,
1988).
44. James V Jesudason,Ethnicityand the Economy: The State, Chinese Business, and Multinationals
in Malaysia (Singapore:Oxford UniversityPress, 1989), p. 173.
45. ASEAN Centre, ASEAN-JapanStatistical Pocketbook (Tokyo: ASEAN Promotion Centre on
Trade,InvestmentandTourism,1991, 1994, 1997), Table IV-1.
46. Seiji Naya, "The Vietnam War and Some Aspects of Its Economic Impact on Asian Countries,"
TheDeveloping Economies, 9 (March 1971), 37.
47. See Havens,p. 94.
48. See Jung-en Woo, "East Asia's America Problem," WorldPolicy Journal, 8 (Summer 1991),
462-63.
49. Economist IntelligenceUnit, Effectsof the VietnameseWar,p. 3.
50. Havens,p. 95. Economic"
51. Naya, p. 45.
52. Ibid., p. 41; Economist IntelligenceUnit, TheEconomicE/fects cf'the VietnameseWar,pp. 21-24.
53. Woo, Race to the Swift, p. 96.
54. Huff, p. 309.
55. Ibid.,TableA6, on total merchandisetradeTableAl.
56. Koh Cher Siang, The Impact ol'the Warin Vietnamon the Economy of Singapore (1965--1969)
(Singapore:Economic Section, Economic DevelopmentDivision, Ministryof Finance,June 1970), p. 5
57. Tilak Doshi, Houston of Asia. The Singapore PetroleumIndustry (Singapore: 1989); and Kieran
Cooke, "SingaporeRefines Its Statusas an Oil Centre,"Financial Times,Feb. 18, 1993, p. 5.
58. Koh, p. 11.
59. ForeignTradeStatistics ofjAsiaand the Pacific (New York:United Nations, variousissues).
60. ASEAN Centre,ASEANJapanStatistical Pocketbook,variousyears.
61. Tilly, "WarMakingand State Makingas OrganizedCrime,"p. 170.
62. See B. J. Barry Jones, Conflict and Control in the WorldEconomy: ContemporaryEconomic
Realismand Neo-Mercantilism(Brighton:HarvesterPress, 1986), pp. 146-50.
63. Haggardand Kim, pp. 33, 48.
64. Krugman.
65. Pasuk Phongpaichit, Decision-Making on Overseas Direct Investment by Japanese Small and

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MediumIndustries(Bangkok: Economics ResearchUnit. ChulalongkornUniversity,February1987), pp.

15-19.

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