University of Warwick institutional repository: http://go.warwick.ac.uk/wrap A Thesis Submitted for the Degree of PhD at the University of Warwick http://go.warwick.ac.uk/wrap/1295 This thesis is made available online and is protected by original copyright. Please scroll down to view the document itself. Please refer to the repository record for this item for information to help you to cite it. Our policy information is available from the repository home page. A natural harmony? Government, Business and British Interests in Southea4 Asia, 1945-1951 Thesis submitted for the degree of Doctor of Philosophy at the University of Warwick By Young-joo, Jung March 2002 ABSTRACT This thesis seeks to illuminate the nature of the British national interest in Southeast Asia (SEA), as defined and pursued by the Attlee government, 1945-1951. The analysis is undertaken by examining the relationship between government and business in the region, identifying areas of consensus and conflict. It is established that the British government intended to do its utmost to aid British firms in SEA to re-establish their businesses after the disruption to production and trade caused by the war, as a means of protecting its own subjects and assets, and also of furthering British political and commercial interests in the region. However, this was at a time when the need to divert resources to reconstruct and support the domestic British economy made the task of assisting business overseas problematic, to the extent that government's ability to provide material support was limited. Whilst such logistical difficulties were real, it can also be said that differences over the level of assistance to business were heightened by ideological division between businessmen, on the one hand, and government officials, on the other. These themes are explored through an analysis of the interactions of British enterprises which had business interests in Siam (Thailand), Indonesia and Malaya, with the British government and the local British authorities in these countries. This examination takes place against the background of a readjustment in Britain's relations with these countries in the aftermath of the war. Given the urgency of reconstruction at home, the Attlee government was lessening Britain's overseas commitments. In SEA the British government firmly believed economic and social betterment to be pivotal to the task of quickly establishing stability and also, later on, in protecting the region from Communist expansionism. Therefore US cooperation was sought as a source of necessary resources, but at the same time the British were bound to protect British- based business interests against US competition, not least because of their valuable impact on the value of Sterling. The Attlee administrations' endeavour to obtain US cooperation however often proved to be ineffective because of the US government's reluctance to be involved in this particular part of Asia. In practice, government assistance to and protection of business were not always possible in the aftermath of the war and firms needed to transform themselves to adapt to new times. Despite this, the two worked closely together and the British government often showed a great willingness to provide moral and practical support for British enterprises. In retrospect, this cooperation only worked where the demands of business did not conflict with the interests and policy of government, and under such circumstances, business was seldom satisfied. Those firms that did survive achieved this primarily by implementing their own strategies and some accomplished a great deal throughout the 1950s and beyond. A natural harmony? Government, Business and British Interests in Southeast Asia, 1945-1951. CONTENTS Abstract Abbreviation Acknowledgements Introduction Chapter 1. The British Government's Assessment of the Value and Significance of Southeast Asia for the National Interest 1.1. British Interests in Southeast Asia in relation to Britain's National Interest 1.1.1. Strategic Significance 1.1.2. Economic and Financial Importance 1.1.3. Political Importance 1.2. British Policy in Southeast Asia 1945-47: the Objectives and Aims 1.3. Forms of Cooperation with Other Powers 1.3.1. Resumption of the Colonial Powers and the South East Asia Command 1.3.2. Cooperation with the United States of America 1.3.3. Expectations towards the Asian Countries and the Commonwealth 1.3.4. Cooperation between the United Kingdom, the United States of America and the Soviet Union Chapter 2. Regional Policy-Making and Business/Government Relations 2.1. The process of Regional Policy-Making 2.1.1. The Metropole: the Colonial Office and the Foreign Office 2.1.2. The Process of Regional Policy-Making in the Periphery 2.1.2.1. The British Territories: the Malayan Government 2.2. Britain and Regional Cooperation in Southeast Asia 2.2.1. The Colonial Office and Regional Cooperation 2.2.2. Regional Cooperation in the Post-War Period: the Foreign Office, the South East Asia Command, the Special Commissioner, the Commissioner-General and the Colombo Conference 2.3. The Culture and Process of Government/Business Relations V Chapter 3. The Work of Rehabilitation in Malaya 3.1. Japanese Occupation and Its Effects on Malaya 3.2. The Work of Relief and Rehabilitation in Malaya 3.2.1. The Rehabilitation Work of the British Military Administration for Malaya 3.2.2. Social Policy and a New Social Partner 3.2.3. The Malayan Union and Rehabilitation Work 3.2.4. Rice Supplies and Goods on a Regional Basis and the Role of the Special Commissioner 3.2.5. Rehabilitation Work and the Resurgence of the Trade Union Movement Chapter 4. Interactions between State and Firm in the Early Years of the Post-War Period 4.1. Dependencies First Policy 4.2. Interactions between State and Firm with Regard to Early Resumption of British Business Interests in Southeast Asia 4.3. Rehabilitation of British Business Interests in Malaya 4.3.1. Wartime Planning for the Malayan Extractive Industries 4.3.1.1. State's Wartime Planning in Malaya: Reconstruction, Rationalisation and Efficiencies 4.3.1.2. Firms' Own Post-War Planning 4.3.2. Rehabilitation Period 4.3.2.1. Inspection of War Damage on the Malayan Extractive Industries 4.3.2.2. Assistance by the British Military Administration for Malaya for the Rehabilitation Work 4.3.2.3. Rehabilitation of Malayan Extractive Industries and Malayan Dollar Earning 4.3.2.4. An Examination of Issues Related to Rehabilitation: Lack of Finance, High Taxation and Provision of Supplies Chapter 5. State and Firm: The Malayan Case 5.1. Dollar Deficit in the United Kingdom and Colonial Resources Development 5.2. Interactions between State and Firm during the Emergency vi Chapter 6. Interactions Between State and Firm During the Attlee Government: A Comparative Studies on the Cases of British Business Interests in Indonesia and Siam 6.1. The Historical Relations of Indonesia and Siam with Foreign Business Interests 6.2. The Japanese Occupation in Siam and Indonesia 6.3. The Case Study in Indonesia 6.4. The Case Study in Siam Chapter 7. Diversification and Flexibility: The Survival of British Firms in Southeast Asia Conclusion Bibliography vii Abbreviations BMA British Military Administration CCAO Chief Civil Affairs Officer CDC Colonial Development Corporation CDWA Colonial Development and Welfare Act CO Colonial Office ECAFE Economic Commission for Asia and the Far East FO Foreign Office GLUs General Labour Unions IEFC International Emergency Food Council KMT Kuomintang LTC London Tin Corporation MCA Malayan Chinese Association MCP Malayan Communist Party MCS Malayan Civil Service MNP Malay Nationalist Party MP Member of Parliament MPAJA Malayan People's Anti-Japanese Army MPU Malayan Planning Unit MREOC Malayan Rubber Estate Owners Company NEI Netherlands East Indies PMFTUs Pan-Malayan Federation of Trade Unions PMGLU Pan-Malayan General Labour Union POWs Prisoners of War RCC Rubber Consultative Committee RGA Rubber Growers' Association SACSEA Supreme Allied Commander South East Asia SCAP Supreme Commander for the Allied Powers SEA Southeast Asia SEAC South East Asia Command TUC Trades Union Congress UK United Kingdom UMNO United Malay National Organisation UNO United Nations Organisation USA United States of America WO War Office ix Acknowledgements The idea of doing a PhD in government/business relations during the Attlee government started in Dr. Leonard Schwarz's office at the university of Birmingham. As my tutor during the Master's year at Birmingham he helped me find a supervisor for the research and contacted Professor Calum MacDonald at Warwick. The Interview was held on the next day and the long journey of getting the doctorate done started immediately after that. Influenced by Calum's expertise in the British foreign policy during the Korean War, the first reading list was mainly the biographies of the politicians of the period, and the Anglo-American relationship. Unfortunately after three months, Calum was diagnosed as having cancer, and as a result, I was left alone to carry on the work. It was very hard then as I had just started the degree, and the research plan had not yet taken a shape. After a long gap, Dr. Charles Jones in the Department of Politics and International Studies was chosen and agreed to be my supervisor. I was even transferred to that department for administrative purposes. The next two years were a big struggle for me, not because of the heavy work, but of the lack of sense of belonging. Again Charles' expertise in business history heavily influenced the direction of my research. I began to read books and articles about FDI and portfolio investment. The process of combining the readings on these two quite different fields defined my research, which was narrowed down to the analysis of the conflicting yet consensual relationship between the British government and civil servants, and British investment in Southeast Asia.