Natural resources, population, skills and political stability shaped what each economy could do. They set the opportunities and limits for governments.
Natural resources mattered. Oil and gas gave Indonesia, Malaysia and Brunei large revenues, especially during the oil price rises of the 1970s. Fertile land let Thailand and Burma export rice.
Resources could also be a trap. Indonesia's heavy dependence on oil left it exposed when prices fell in 1986. Countries with few resources, such as Singapore, had to rely on trade, skills and foreign investment.
Population size shaped markets and labour. Large populations, as in Indonesia and the Philippines, offered a big home market and cheap labour, but also many people to feed and employ. Small Singapore had almost no home market, which pushed it towards exports.
Skills and infrastructure mattered. Singapore and Malaysia inherited ports, roads and an English-educated workforce from British rule. Indonesia and Burma had far fewer trained people at independence.
Political stability affected investment. Fighting in Burma and the turmoil of Sukarno's last years drove investors away, while stable governments in Singapore and Malaysia attracted them.
- Oil
- Indonesia, Malaysia and Brunei.
- Rice
- Thailand and Burma.
- Few resources
- Singapore.
Worked example: Comparing starting conditions
How did domestic conditions shape change?
- Singapore: few resources, a good port and skills; it had to export.
- Indonesia: oil wealth and a huge population.
- Burma: rich land but instability and few skills.
- Judgement: conditions set limits, but policies decided outcomes.
Watch out for this
Countries rich in resources always grew fastest.
Burma had rich land and resources but stagnated, while resource-poor Singapore grew fastest. Policies mattered more than resources.
Check your understanding
Why did Singapore's small size push it towards export-led growth?
- Its home market was too small to support large industries.
- It had large oil reserves.
- Its neighbours banned trade with it.