Colonial Legacies Colonial Legacies Economic and Social Development in East and Southeast Asia Anne E. Booth University of Hawai‘i Press Honolulu © 2007 University of Hawai‘i Press All rights reserved Printed in the United States of America 12 11 10 09 08 07 6 5 4 3 2 1 Library of Congress Cataloging-in-Publication Data Booth, Anne. Colonial legacies : economic and social development in East and Southeast Asia / Anne E. Booth. p. cm. Includes bibliographical references and index. ISBN 978 - 0 - 8248 -3161-5 (hardcover : alk. paper) 1. Southeast Asia—Economic conditions—20th century. 2. Southeast Asia—Social conditions—20th century. 3. Southeast Asia—Colonial influence. 4. East Asia—Economic conditions— 20th century. 5. East Asia—Social conditions—20th century. 6. East Asia—Colonial influence. I. Title. HC441.B64 2007 330.95’041—dc22 2007006545 University of Hawai‘i Press books are printed on acid-free paper and meet the guidelines for permanence and durability of the Council on Library Resources. Designed by Paul Herr Printed by The Maple -Vail Book Manufacturing Group Contents Acknowledgments vii A Note on Terminology ix CHAPTER 1 1 Introduction CHAPTER 2 18 Economic Growth and Structural Change: 1900 –1940 CHAPTER 3 35 Agricultural Expansion, Population Growth, and Access to Land CHAPTER 4 67 What Were Colonial Governments Doing? The Myth of the Night Watchman State CHAPTER 5 88 International Trade, Balance of Payments, and Exchange Rate Policies: 1900 –1940 CHAPTER 6 112 Growth and Diversification of the Market Economy CHAPTER 7 131 Changing Living Standards and Human Development v vi Contents CHAPTER 8 148 The Greater Asian Co-Prosperity Sphere: 1942–1945 CHAPTER 9 164 The Transition to Independent States CHAPTER 10 196 Conclusions Bibliography 205 Index 233 Acknowledgments his study is the result of several years of work, and I am grateful to the TSchool of Oriental and African Studies (SOAS) for providing me with a supportive research environment. A year’s sabbatical leave in 2001, part of it spent at the Institute of Southeast Asian Studies in Singapore, allowed me to begin the thinking and background reading for what has turned out to be a more ambitious project than the one I had initially contemplated. I am also grateful to the Leverhulme Foundation, which awarded me a major research fellowship for two years from October 2004. This freed me from most of my teaching and administrative obligations, and allowed me to concentrate on writing. A project of this kind inevitably requires long hours in libraries, and I am happy to acknowledge the assistance I have had in London from staff in the SOAS library and the British Library of Political and Economic Science at the London School of Economics. In addition, I have spent valuable time in the libraries of Cornell University, the University of Wisconsin at Madison, the Menzies and Chifl ey libraries at the Australian National University in Can- berra, and libraries at the National University of Singapore and the Institute of Southeast Asian Studies in Singapore. I am grateful to the staff of all these institutions for their patient help. I would like to thank my colleagues in the History and Economic Devel- opment Group in London, on whom I have tried out some of the ideas that eventually found their way into this study. I have also benefi ted greatly from seminar presentations in London, Norwich, Canberra, Singapore, Leiden, Madison, and Tokyo. I have had valuable comments from, among others, Gregg Huff, Jean-Pascal Bassino, William Clarence-Smith, Janet Hunter, Chris- topher Howe, Stephen Morgan, and Howard Dick. Comments from two pub- lisher’s referees were also very helpful in preparing the fi nal version of the manuscript. I cannot blame any of these people for the result, but I am very grateful for their help. I am also grateful to the editor of the Economic History Review for permis- sion to draw on my article to appear there in 2007 in Chapter 4 of this study. vii A Note on Terminology n this study, the colonies in East and Southeast Asia will usually be referred Ito by the names that came into popular use in the postcolonial era rather than by the names that were in use before 1945 or their offi cial names in more recent decades. Thus what was the Netherlands Indies will be referred to as Indonesia, and the island of Taiwan will be referred to as Taiwan rather than Formosa or the Republic of China. Thailand will be used in preference to Siam (the offi cial name until 1939). Korea will be used rather than Chosen and Burma rather than Myanmar. The term “British Malaya” refers to the Straits Settlements, the Federated Malay States (Selangor, Pahang, Negeri Sembilan, and Perak), and the Unfederated Malay States (Johore, Trengganu, Kedah, Per- lis, Kelantan, and Brunei). During the 1950s, all these territories were often referred to as the Malayan Federation. The term “Malaysia” is used to refer to the modern state of that name, which includes all parts of British Malaya except the island of Singapore and Brunei as well as the former British protec- torates of Sarawak and Sabah (formerly North Borneo). Throughout the study, the term “Southeast Asia” will be used to refer to the region now covered by the ten member states of the Association of Southeast Asian Nations (ASEAN). In 2006, these were Indonesia, the Philippines, Singapore, Malaysia, and Thai- land (the original fi ve member states) plus Brunei, Cambodia, Laos, Vietnam, and Burma (Myanmar). East Asia refers to China (including the Hong Kong SAR), Taiwan (Republic of China), North and South Korea, and Japan. ix CHAPTER 1 Introduction his book attempts a comparative study of the economic and social devel- Topment of colonial territories in East and Southeast Asia in the fi rst four decades of the twentieth century and of the consequences of that develop- ment for the transition to independence after 1945. At the beginning of the twentieth century, fi ve colonial powers were active in East and Southeast Asia. Three were European. The British controlled from Delhi the vast South Asian subcontinent that extended from the Khyber Pass in the west to the borders of Burma with China, and with the independent Kingdom of Thailand in the east. In Southeast Asia, they controlled most of the Malayan peninsula, including the strategic port of Singapore, which was developed into an important Brit- ish naval base. The Dutch governed the huge Indonesian archipelago, from Sumatra to New Guinea, and the French controlled the contiguous territories of Vietnam, Cambodia, and Laos, a region known as French Indochina. After the defeat of Spain by American forces in 1898, President McKin- ley decided to impose an American administration on the Philippine islands. After a bloody struggle with Philippine nationalists, William Howard Taft was dispatched in 1900 to form a civilian government. McKinley instructed Taft to promote the “happiness, peace and prosperity of the people of the Philip- pine Islands” (Hutchcroft 2000: 277). This refl ected the strongly moralistic view that the administration took of its new colonial mission. Although Taft and several other supporters of the American occupation of the Philippines thought that the Americans could learn from both British and Dutch colonial policies in Asia, especially as they related to the development of infrastructure and commerce, by the 1920s the idea of the “exceptionalism” of American colonialism was widely held (Adas 1998: 46–50). Unlike the policies of the Europeans, who (according to many Americans) viewed their colonies as eco- nomic assets to be exploited mainly for the benefi t of the metropolitan power, American policy in the Philippines was dominated by the need to prepare the population of the Philippines for self-government and ultimate indepen- dence. Crucial to this strategy was mass education. In 1935, substantial self- 1 2 Chapter 1 government was granted to the Philippines, with a promise of complete inde- pendence after a further ten years. The fi fth colonial power in Asia in 1900 was Japan. As the only Asian country to acquire colonial possessions in the twentieth century, Japan was an “anomaly” in the history of colonial Asia (Peattie 1984: 6). Japan’s empire in East Asia was created between 1895 and 1913, largely as a result of mili- tary victories over two decaying imperial states, China and Czarist Russia. The island of Taiwan (or Formosa, as it was known during the Japanese period) was annexed from China under the Treaty of Shimonoseki, and an admin- istration was established under a Japanese governor-general in March 1896. The military pacifi cation of the island in the latter part of the 1890s was not unlike similar exercises carried out by the French in Tonkin, the Americans in the Philippines, or the Dutch in northern Sumatra at about the same time and was probably no more ruthless than these other military campaigns (ibid.: 19). By 1900, the island was largely under Japanese control. The Treaty of Ports- mouth, signed in the wake of the Russo-Japanese confl ict, gave Japan control over the Liaotung peninsula, which became known as the Kwantung Leased Territory. Finally in 1910, Japanese control over the Korean peninsula was consolidated in its formal annexation. Unlike in Taiwan, colonial status was fi ercely resented and resisted by Korean nationalists, but their opposition was put down by massive and often brutal police and military force. Japanese military strength in the fi rst decade of the twentieth century was based on its growing economic and industrial might. But Japan at that time was still very much a developing economy. Its per capita national income was well below that of the European colonial powers in Asia, and little more than a quarter of that of the United States (Table 1.1).