The Cold War brought aid, markets and spending to anti-communist states, while communist and closed states were cut off.
The USA wanted prosperous allies against communism. It gave aid and opened its market to Southeast Asian goods.
War brought money. US spending on bases and troops in Thailand during the Vietnam War boosted construction and services. Singapore earned income by supplying and repairing ships during the war.
Japan, an American ally, paid war reparations to Burma, the Philippines, Indonesia and South Vietnam in the 1950s. Its aid and investment grew in later decades.
Suharto's anti-communist New Order won Western aid. From 1967 a group of donor countries, the Inter-Governmental Group on Indonesia, lent to Indonesia regularly.
Communist and closed states lost out. Vietnam was isolated after 1975 and depended on Soviet aid, which shrank in the late 1980s. Burma chose isolation.
- US aid and markets
- For anti-communist states.
- Japanese reparations
- 1950s.
- Donor group for Indonesia
- From 1967.
Worked example: Linking the Cold War to economic change
How did the Cold War shape economies?
- Aid: US and Japanese aid to allies.
- Spending: the Vietnam War boosted Thailand and Singapore.
- Markets: open US markets for exports.
- Isolation: Vietnam and Burma cut off.
Watch out for this
The Cold War only harmed Southeast Asian economies.
It did great harm through war, but it also brought aid, spending and open markets to anti-communist states.
Check your understanding
How did the Vietnam War help Thailand's economy?
- US spending on bases and troops boosted construction and services.
- Thailand sold weapons to North Vietnam.
- The war ended all trade.