DRAFT

Ul? -7706 THE WORLD BANK

DEVELOPMENT ECONOMICS DEPARTMENT Public Disclosure Authorized URBAN AND REGIONAL ECONOMICS DIVISION

URBAN AND REGIONAL REPORT No. 77-6

FUNCTIONAL DIVERSITY AT THE BASE OF THE URBAN SYSTEM IN PENINSULAR Public Disclosure Authorized

M.A. Cohen, J.C. English and H.B. Brookfield

APRIL 1977 Public Disclosure Authorized

These materials are for internal use only and are circulated to stimulate discussion and critical comment. Views are those of the authors and should not be interpreted as reflecting the views of the World Bank. Referenices in publications to Report should be cleared with the authors to protect the tentative character of this paper. Public Disclosure Authorized FUNCTIONAL DIVERSITY AT THE BASE OF THE URBAN SYSTEM IN PENINSUIAR MALAYSIA

Table of Contents

Page No. Introduction Data Sources 1 2 Study Region: Central Peninsular Malaysia 5 Urban Growth: Central Peninsular Malaysia 7 Typology of Towns 7 Urban Commercial Structure 10 (a) The Market Place (b) Shophouse Commercial 10 Activity 12 (i) Retailing 12 (ii) Wholesaling 15 (c) The Corporate Sector 15 The Regional Urban System 17 Urban Functional Diversity in Peninsular Malaysia 20 Conclusion 20 Introduction

The structure of urban systems, particularly challenges the at their bases, assumption that town size attributes and the range of functional of an urban area are positively correlated. In urban of developing countries the studies prevailing notions about what agglomerations that define exists in those the lower end of the urban urban places)L/ are hierarchy (the small. derived largely from macro-level extent from theory and to a empirical research. Structurally, lesser perceived as miniature these smaller towns are versions of larger cities.. phenomenon in light This is not a surprising of the indicators used to differentiate areas, i.e., number between urban employed in commercial activity degree of 'modernity' (Berry, 1969), or the (Abiodun, 1967). These are, the measurement however, ill suited to of the functional role of by commerce such centers. Usually and services,and supporting dominated of which a minimum of manufacturing, is artisinal in scope and most compared scale, small agglomerations on the basis of data may only be disaggregated below the sector these more appropriate measures level. Using of urban functional diversity, indicators which identify such as both commercial subsystems prises by product's exchanged, and trading enter- there is strong evidence accepted theoretical that the presently relationship that diversity town size and urban functional are positively correlated does not hold for those lie at the base of the urban centers which system in developing countries. This conclusion would have important implications of these smaller for the role agglomerations in the national always theoretical development process. spatial patterns of Nearly places--and organization, in which higher by definition larger centers--are order presumed to offer range of services that lower-smaller-places, a greater hinterland and to perform services areas that include lower for order places (Berry, 1967), most of the regional development underlie countries. plans formulated in the less The development of developed dominance-subordinance relationships link urban centers in a hierarchical which manner is often an unstated such plans. Most take as goal of given that, to a large extent, at the base of the the growth of towns urban system will be a function effect. as put forward of the 'trickle down' by proponents of hierarchical and growth diffusion (Hermansen, pole theory (Lasuen, 1969). 1972) rarely explicitly However, no less important, addressed, is the impact yet rural sector. of stimuli emanating from It is suggested at this the cultural stage,that differences among subsectors, defined in agri- terms of not only the crop also the capital and organizational cultivated but nature of the account for some of system of production, may the variation in the organization space economy. of the regional urban

Acceptance of the notion that urban places, and national level, both at the regional are linked through a dominance-dependence hierarchical series of differentiated relationships has been accompanied by a less obvious. pre-

1/ The term, small urban place, is not used to denote a size, but rather as a center of .a certain relative concept which defines which lie towards the those agglomerations base of a city size distribution. -2- conception that the effect of growth impulses be to over the long run will return the urban system to this relationships. equilibrium set of urban inter- This assumption would appear Although to be open to debate. research on this issue remains limited, Stabler and Williams (1973) working in Canada observed that not onlyis the system but there is an increasing homogenization dynamic, in the range of functions found in intermediate retail and lower order centers. that greater They argue consumer mobility accounts for relationships. this change in urban inter- The relevance of this conclusion urban and its implication system development in the for third world is a further point in the course of this study. to be raised

.,he discussion that follows concerns raised'above itself with the issues in the context of the urban system of Peninsular Malaysia. Our area of study is the regional space economy of Central Malaysia, a zone whose Peninsular urban agglomerations are all base of the Malaysian small and lie at the city size distribution. Attention commercial activity will focus on as an indicator of functional this sector, diversity. In Malaysia plus ancilliary activities such major employers as transportation, are the of the agglomerations' labor.forces 1974). (Neville, 1962; Jackson,

Data Sources

An examination of the urban commercial country requires system in any developing that the researcher consider commercial the role of the modern sector, as well as the traditional fortunately market-place system.. Un- there is a dearth of published such an exercise. data that can be utilized for While the Trades in Urban Areas 1970 is an of Peninsular Mlaysia exception, its utility is limited, the modern the data pertain to only commercial sector as it exists in the 48 urban areas with populations in excess of 10,000.

This paper utilizes information generated in number of towns the field. In a and settlements, a census was their functions. taken of shophouses and Enterprises were listed displayed, according to the types of and then grouped according goods to a system which classifies cial activity by major product commer- types (see Table 1). Visits numerous market-places and were made to urban hawker locations to identify of these levels of enterprise. the dimensions Furthermore, to supplement material a limited number the census of random interviews were preneurs. These undertaken with entre- unstructured inquiries were the development sought as a rough guide to of an enterprise, its level supply. of operation and sources of -3-

Table 1: CLASSIFICATION SYSTEM FOR COMMERCIAL ACTIVITY

Classification of Goods by Product Types I. Food Products

(i) unprocessed perishables (ii) non-perishable /ood products2_1 (iii) prepared foods- (iv) liquor

II. Household Non-durables

(i) dry goodsL3 (ii) cloth (iii) shoes (iv) watches, clocks, costume jewelr (v) hardw4re items including crockery, glassware (vi) books-1 (vii) medicine

III. Household durables

(i) electronic goods/6 (ii) furniture

IV. Services

(i) barbers and'hairdressers (ii) tailors (iii) photographer (iv) coffee shops (v) hotel restaurant (vi) dentist (vii) clinics (viii) opticians (ix) goldsmiths, silversmiths (x) laundry (xi) shoemaker (xii) lawyers (xiii) associations/. (xiv) turf club Table 1 (continued)

Classification of Goods by Product Types V. Financial Institutions

(i) banks and finance companies (ii) pawnshop (iii) money-lender (iv) insurance

VI. Transport related activities

(i) bicycles--sales and repairs (ii) motor-bicycles--sales and epairs (iii) engine--repairs (iv) tires (v) cars

VII. Wholesaling activities

(i) industrial needsi-8 (ii) construction materials (iii) farm needs (iv) tinsmith (v) rubber dealers (vi) liquor (vii) tobacco (viii) timber

j. Includes cereals as well as manufactured food products. ]2 Includes sales of combinations of sweets, biscuits, cakes and soft drinks. /3. Includes small dry goods, toileteries, clothingz toys. /4 Includes outlets that undertake repairs. .5 Includes books, stationery and newspapers. _6 Includes radios, televisions, refrigerators, and fans. /7 Includes Chinese clan associations and private clubs. J8 Includes industrial, agricultural and business chainsaws. machinery, e.g., It might be argued that this data base is inadequate. such a census is by definition Certainly not exhaustive. On data so generated the other hand, the do provide a sufficiently accurate trading ac4ivities basis for compariidg in different towns. The omission cerning the of-information con- level of sales, rates of turnover,and also be criticized. numbers employed may While the utility of such the task statistics is recognized, necessary to collect them was Hopefully, outside the scope-of the enquiry. future researchers in this field This will begin to fill this void. limitation has been borne in mind in interpreting the data. istically the shophouse, which Character- is the dominant modern commercial small towns, is run by individual outlet in proprietors, and tends to be size. It is also a form small in of entrepreneurship that offers possibilities for internal only limited expansion. Limited capital trade areas and the resources, restricted generally low per capita income significant developmental of clients act as constraints (Jackson, 1974). is evidence, though Furthermore, there tentative, to suggest that,in variation in these aggl;omerations, the scale of shophouse enterprise of the products reflects more the nature bought and sold than differences 1974)... in urban location (IBRD,

Another critique may be that the information the multiple functions fails to recognize performed by many of thrt some the outlets. It is well known shophouse owners trade at wholesale, levels depending retail and intermediary on the produce and the client attempt (Danhauser, 1973), An was made to reconcile the problem stores of ,product diversity by dividing into 'specialized' and 'non-specialized' did not categories. However, provide more meaningful results this evidence and therefore the activity most formed the basis for categorization. in

Study Region: Central Peninsular Malaysia

The study area is Peninsular Malaysia's contemporary region. It encompasses frontier a zone east of the main range the districts of Kuala and which includes Pilah, and , into district with small extensions to the east and district Figure 1). to the south (see

Although through construction of the railroad of rubber as a significant and the introduction cash crop date from this area of Central the early twentieth century, Peninsular Malaysia has historically . role vis-a-vis the played a peripheral national economy. The penetration economy which is of the urban industrial so extensive on the west coast less widespread is both a more recent and phenomenon in this area. Since land have been cleared the 1950's vast tracts of and planted with oil Land Development palm.,and rubber by the Federal Authority (FELDA). An extensive on both program of rubber replating smallholdings and large commercial the estates has taken earnings derived from timber place. Today related activities are a major to the region's domestic product. contributor IBRD 12272 02 JUNE 1975 MALAYSIA 130 CENTRAL PENINSULAR MALAYSIA

KELANTAN E

- DLAGUN ,**.i el

LPIS JR iIAN TUT KEMAMAN

Ku pis

RAUs KUANTAN

ar Pusat

ran n-- PRIMARY ROADS ene)b TRA] LWAYS

RENTONG \ FELDA TOWNS STUDY AREA Ternerloh DISTRICT CAPITALS ------DISTRICT BOUNDARIES LUMPLAR Tt -.- STATE BOUNDARIES ULU\ LANGAT-5 3 JELEBU KILOMETERS - 0 30 c SELAVGOR - , -- · NEGER SOÖLAN 10

SER BAN 4~ K .pgHk ÅIN

south chkjö

searSEG AMAT . PRr DAckson ,r DICKSON'A

NMELAKA 10'UA

1020 -7-

Urban Growth: Central Peninsular Malaysia

The impact of the rural led growth has led to structure of the a change in the regional economy as well as developments regional urban system within the (see Table 2). In the late forties the study region, and early fifties like most of Peninsular Malaysia, affected by was significantly the communist insurrection which were encouraged, occurred at that time. People and in part forced, to concentrate parts of in selected settlements: Jerantut, Jerantut Ferry and during originated as New Villages the "Emergency" (Corry, 1954). Since the late 1950's the region's pattern of urban growth has deviated from the national norm. agglomerations with populations Several of less than 5,000 grew at rates the national average of well above 2.2% p.a. (1957-70): the emergent , Rompin, centers of , 1/ and Sungei Jerik are examples of this phenomenon. This has also been true-of two of the region's urban places, and Mentekab. larger They have experienced annual rates of 4.1% and 3.1% (1957-70), growth respectively. By contrast, Kuala with a growth rate of 0.3% (1957-70) Pilah has slowed to a near standstill.

In 1970 the total population of the region was 275,817: lived-in gazetted urban agglomerations; 25% 18% lived in the six towns. Most of the agglomerations largest originated as market centers the surrounding agricultural servicing smallholder populations. Exceptions , Temerloh and Jerantut include which are major regional administrative centers and the New Villages mentioned above. The more ments with their recent FELDA settle- trading nodes are another anomaly. Typology of Towns

The rural economy may be subdivided into four sub-sectors, traditional kampong sector, the the estate sector, the integrated ment schemes and the exten,ive land develop- sector. As will be shown differently with each interacts the regional urban space economy.

(a) The kampong sector, with produce its Malay smallholders which rice and other foods for household consumption and rubber a cash crop, defines the as original village base, Catering of this consuming to the needs population is a sub-system of numerous small- 15tidispersed agglomerations, with ggpulations rarely in excess of two thousand. (b) By contrast, the estate sector, holdings statistically defined as in excess of 100 acres, has not complementary given rise-to any discernible urban sub-system. Rather, the local linkage effect of

1/ Maran is located just inside , on the Kuantan highway, but was Temerloh- included in the survey because significant role of its in theN nil-Tilangle area. -8-

Table 2: URBAN AND RURAL POPULATION, BY DISTRICT, 1970

Kuala Pilah Jerantvt District District Towns Kuala Pilah 2.2,508 Mentekab Bahau 11,308 Jerantut 4,449 9,113 Temerloh 6,070 Tanjong Ipoh Jerantut 1,361 Teriang 5,620 1,001 Ferry 446 Kerayong 1,727 Kuala Dangi 941 Senaling 1,476 Tembeling 790 111 Ayer 1,473 Mawang 573 Mengkuang Rompin 1,249 553 Kuala Kera Juasseh 1,208 474 1,120 Kampong Tengah 473 Kudau Batu 810 Kikir 426 496 336 Sanggang 393 Kuala Jelai 231 Parit Tinggi 150 Urban Pop. 28,930 32,950 5,000 % Urban 25.1 27.5 13.6 Rural Pop./li 86,504 86,797 31,799 % Rural 74.9 72.5 86.4 District Pop. 115,434 119,747 36,799

J1 The census defines agglomerations of all sizes as 'gazetted government' (Census, 1971, areas of local p. 23). In the region the concept has led to the use of this definitional inclusion under rural population 'illegal' such as of towns which are Sungei Jerik and FELDA settlements 300 families. which house upwards of

Source: 1970 Population and Housing Census of the Department of Federation.of Malaysia, Statistics, Malaysia, 1971. -9-

this rural sub-sector has been to favor the growth and development of the few existing towns.1/ This process of rural-urban interaction is set'ia notion by the limited local secondary effects of the plantation industryb i.e., consumption expenditures by estate workers, and minor equipment contracts with local urban based entrepreneurs, such as tinsmiths. (c) Through the relocation of large populations in nodal settle- ments, mostly on formerly unexploited lands, the integrated la.nd development operations have led to the enlargement of the regional urban system, especially at its base. FELDA agglomerations housing approximately 2,000 people and supporting small commercial areas have been created. Off-scheme spontaneous trading centers catering to settlers' demands have emerged. Existing urban centers, located close to the schemes have expanded in response to these new populations with monthly disposable family incomes in.excess of M$200 (US$85) (1973).

(d) The extensive sector is mainly concerned with timber extraction and land clearance prior to the establishment of FELDA schemes. Two features characterize this sector's interaction with the regional urban system. Links are primarily with the larger towns, and the impact is largely marginal and certainly only temporary. This is a function of the nature of the sector's work, its structural organization, and its high degree of mobility. When consideration is given to the inter-relationships between these rural sub-systems and their impact on the pattern of urban growth, it is possible to identify a threefold typology applicable to towns that lie at the base of the urban system. We distinguish among kampong settle- ments, FELDA scheme settlements and towns. For the first two we have identified urban fields that are intimately tied to their own respective agricultural sub-sectors and in whose domain they are located. Of the urban places surveyed, Juasseh, Rompin and Maran fall within the former category. Maran had a population of 1,230 in 1970. Its growth reflects the benefits of a location on the Temerloh-Kuantan Road, opened in 1974, and also the opening of the FELDA development known as Jengka. It lies in close proximity to the schemes of Ulu Jempol, Jengka I, and Pasir Besar, as well as the off-scheme urban centers of Sungei Jerik and Bandar PtisAt. The other regional towns are viewed as separate from these agglomerations. Larger than the FELDA and kampong towAs, they differ by interacting with all sectors of the rural economy, and perform both intra and extra-regional functions. The five surveyed include the three district capitals of Kuala Pilah, Temerloh and Jerantut, and the two lesser regional centers of and Bahau. Although located in the district of Tampin, Gemas was included in the study since it lies Pilah border. close to the Kuala FELDA and estate developments in the development this district.have affected of commerce in Gemas which in 1970 had a population of 5,214.

1/ Some of the large estates support commercial Ludang-Geddes centers. The one on the estate in eastern the researchers was described to as a "township in its own right." - 10 -

Urban Commercial Structure

In many developing countries the urban commercial infrastructure is composed of interacting distributive systems. In Malaysia we identified three, the market-place institution, the shophouse commercial outlet, and the corporate enterprise. Despite the considerable overlap in goods traded, each serves a specific function which complements rather than conflicts with the other commercial institutions. It is in the context of their roles in the urban centers studied that a partial explanation of urban functional diversity can be found.

The level of trade, i.e., wholesale, intermediary, retail and micro-retail, practiced by an enterprise defines another dimension of the urban commercial system. Knowledge of the role of an enterprise permits the analysis of the process of interchange both between and within the various distributive mechanisms, and the identification of the organization of regional commercial space.

Basic to theoretical statements explaining the urban hierarchy is acceptance of the premise that there exists higher to lower orders of goods and services. While this conceptual framework was derived in developed countries under vastly different economic conditions, it was assumed apply, despite differences to. in the actual components of each level, to developing countries. Comparisons of per unit costs of consumer goods' indicated that household needs could be grouped in three categories. Going from lower to higher oldergoods in Malaysia, we can list provisions including both perishable and not,-perishable foodstuffs, household non-durables, and household durables. Within the categories of services and transport related activities similar differences can be identified.

The discussion that follows separates out the three basic distri- butive institutions. This is a matter of analytical convenience, and does not imply that any of these three network structures occur in isolation. Instead, and as will be shown, their interconnectedness is an important. element in the regional commercial system.

(a) The Market-Place

In Central Peninsular Malaysia the market-place, a fixed location where buyers and sellers assemble at well defined intervals to exchange goods and services, persists both as a periodic and as a daily commercial institution. In many of the kampong towns the traditional market is a weekly occurrence organized by the local kampong committee who set'up the stalls and collect fees--30 to 50--from vendors. The buyers are essentially local residents. The selling population is composed of either 'BRmpong people, many of whom trade foodstuffs or batik, or itlaerants, a large number of whom trade in manufactures. Itinerant vendors divide into two groups. One includes the small-scale petty - 11 -

traders who buy in bulk from wholesalers or retailers for resale on the kampong market-places. Most live in a centrally located town travelling by public transportation to a different market-place each day. The other encompasses those sellers who are agents, employees or relatives of town shopkeepers. They operate "mobile branches" selling alone the market circuit. The order of resale is largely retail and micro-retail, e.g., part of a bar of soap. The institution serves only as a consumer source of supply; it is not concerned with bulking as are the rural periodic market-places in much of West Africa (Hodder and Ukwu, 1969).

Like the kampong market-place the daily markets in the larger towns of Temerloh, Jerantut, Kuala Pilah and Bahau are also a retail institution. However, ita more frequent occurrence is less a function of a larger tributary population than the position of the town as a food deficit zone and the market-place's primary role as the urban population's major source of perishables. These foodstuffs are rarely sold in either shophouses or corporate establishments.

Historically, even though many of the study region's urban daily markets may have originated as periodic trading sites, in only a few cases are these original functions still in evidence. The role of such weekly markets has also altered. They no longer supply the local kampongs; instead they serve as focal regional places of exchange. The, Sunday market in Temerloh is an example of this phenomenon. Larger number of buyers and sellers are attracted to the market-place; a multiplicity of

Percentage distribution of Temetloh Market Sellers by Goods Sold Goods Percent Food Products 74 Fruit and vegetables 48 Other non-processed food 15 Prepared food 9 Food prepared on market-place 2 Household non-durables 23 Dry goods 3 Cloth, clothes, shoes 12 Hardware 4 Books, toys 1 Other 3 Miscellaneous 3 Dentist neg Tailor neg Mats 1 Fruit trees 1 -12 -

trading functions can be observed; a greater range of items is displayed; traders from both inside and outside the town's immediate hinterland to exchange goods and services.1/ coide

While the survival of the.market-place as a source of perishables is well understood, consumer the significance of this institution the indispensable service and it provides in the very small often overlooked. On urban places is. and around FELDA schemes an unplanned system appears market-place to have evolved. On the schemes, be numerous stallholders can found offering perishables for sale. At the same time, and regulations which prevent because of non-settlers from practicing their scheme, itinerant vendors, trade on any who are either independent entrepreneurs the agents of town shopkeepers, or hawk their wares at regular usually close to intervals, payday, outside the schemes' gates.

(b) Shophouse Commercial Activity

(i) Retailing

The prevalence of provision outlets'and town (see coffee shops in every Table 3) is probably the most striking feature and readily explained of the small town commercial system. cipally Since the former are prin- concerned with the sale of household non-perishable necessities, particularly food products such as cereals and a non-subsistence spices, the presence of farming population immediately presents a demand for their trade. Moreover, in Malaysia, it is a form of commerce whose ment requirements, in relation invest- to the retailing of other non-perishables, are low (see Table 4). Not surprisingly this type of not only numerically retail outlet is dominant, but also the most ubiquitous.

Table 4: AVERAGE INVESTMENT FOR COMMERCIAL ESTABLISHMENTS, 1970

Type of Establishment M$ Type of Establishment M:$ Provision Outlets 10,400 Chemist Goods 22,500 Bicycles and Parts 12,000 Motorcycles 31,000 Furniture 15,000 Electrical Goods 36,600 Books, Stationery 18,800 Clothing, Textiles 45,300 Hardware, China 20,700 Jewelry, watches 58,600 Footwear 21,100 Used cars 60000 New cars 300.000 Source: Cnsis of Wholesale and Retail Trades in the Urban Areas,of Malaysia, 1970. Peninsular Department of Statistics, Malaysia. If A major market is held in Temerloh every Sunday. Its regional is emphasized by the large importance number of.vendors--between 320-350 24, 1973--and their on November origins. Some of the vendors with tified from trucks were iden:- towns such as Bahau (selling fruit ware dealers),-Kuala trees), Kuala Pilah (hard-' Lumpur (cloth dealer), Petaling Ipoh (cloth Jaya (shoe-salesman), and clothing vendor) and Kota Bharu racial (batik seller). The distribution of vendors was 83% Malay, 14% Chinese and 3% Indian. Table 3: ORGANIZATION OF COMHERCIAL ACTIVITY

Total House- Popula- No. of hold tion House- Estab- Food Non- hold Coffee Other Other (1970) lishments Products Transport Rubber Durables Durables Shops Whole- Services Finance Services Kampong towns: Percentage Distribution of Establishments Dealers galing

Rompin 553 18 Juasseh 33 6 474 24 - 22 22 33 - - 1 11 Maran 1230 - 17 34 26 21 8 21 5 21 21 - 21 ..--3 FELDA towns: - 3 Sungei Jerik n.a. 78 16 28 Ulu Jempol n.a. 5 23 10 50 19 Jengka - - 9 - I n.a. 4 40 10 Bandar 25 - - - Pusat n.a. 21 - 50 25 10 5 - - Pasir Besar - 75 - 461 12 42 10 - 8 - 42 - 8 - Towns: - - Temerloh 6070 175 10 Jerantut 19 9 14 4449 43 21 19 .3 14 Kuala Pilah 21 14 6 6 12508 193 14 21 5 Bahau 21 17 3 2 2 - 9113 110 12 26 3 Gemas 15 19 5 4 10 .4 .5214 43 17 27 4 21 7 7 6 4 3 23 28 5 7 2 -

. Settler families. -14-

The abundance of coffee shops reflects their multifunctional and vital role in this country. Increases in disposable income create an immediate demand for places of recreation and coffee shops are first establishments among the to open. It is suggested that the disproportionately large number of such cutlets on the FELDA schemes, the saloons and social clubs in Sungei Jerik, and the coffee shops in Bandar Pusat can be explained in this manner..

Apart from furniture stores that have been found in all the urban places surveyed, there is a near absence of outlets specializing both in household durables and non-durables in most kampong and FELDA settlements. Only the towns of Kuala Pilah, Temerloh and Bahau supported a full range of stores selling durables. These centers plus Jerantut and Sungei Jerik also featured enterprises stocking electrical goods. The spatial distribution of these retail functions suggests two tentative propositions. First, increased use of public an transport and higher rates of vehicle ownership have made buyers more mobile. In turn, it becomes possible, and perhaps preferable, for consumers to visit larger centers where the selection of these items is in all likelihood greater. Second, since most electrical products require a relatively high level of per unit expenditure and many are bought on hire-purchase, the urban locations of these stores are associated with the higher threshold levels of income and consumption necessary to support this specialized retail activity. Unfortunately, no budget data exist to verify these statements.

The location of financial institutions reflects not only factors of consumer demand, but also the impact of administrative directives. In most cases the siting of such establishments depends on the head office's or company's own evaluation of the local economy or the presence of a sizeable government administration in the town. Not unexpectedly,banks were identified in the towns of Bahau, Temerloh, Gemas, Jerantut and Kuala Pilah. The location of pawnshops in these urban centers,and their numbers, is in keeping with government regulations which require that the number of pawnshops be limited to one per town.

The absence of bicycle sales and repair shops in FELDA settlements might have been expected given the FELDA settlers' predilections for motor- cycles. However, the rise in motorcycle ownership estimated in 1973 at 35 percent per annum.is not just a FELDA characteristic, it is a nation-wide trend. This tendency, together with the increasing number of private individuals purchasing cars raises the following question. Will outlets for these two types of vehicles, cars and motorcycles)be established smaller regional in centers, or are the terms of trading that the necessary in motorcycles such level of capitalization is outside the town entrepreneurs? scope of small At present, insufficient data exist for this question. answering (ii) Wholesaling

Information collected for the Census of Wholesale and Retail Trades in the Urban Areas of Peninsulr Malasia. 1970 on the basis of wholesale indicated that turnover per head of town population, Pilah ranks 7th,.and Temerloh-Mentekab Kuala. 16th among the Malaysia. The 48 major towns in dominance of the former is explained the rubber by the position of trade (see Table 5). In Kuala percent Pilah it accounts for 57.3 of combined wholesale and retail turnover, and 67.5 percent the turnover classified as wholesale. of The business is limited to 18 dealers who employ only 70 persons; 9.3 percent of the total workforce in wholesale and retail trade. Other wholesaling activity is to the resale of more ubiquitous limited commodities, particularly provisions. The motor trade is indicative of of another contrasting feature the towns. Of negligible importance commerce in Kuala.Pilah, this form of appears to'play a major role in Temerloh-Mentekab. A visit to the twin-towns indicated short four motor vehicle dealerships, established since 1967. all They include a Mercedes agency, Mazda shop, a Datsun agency a Peugeot and and a Ford agency. There is of considerable specialization also evidence in activities which have backward with the region, particularly linkages those which are logging include tractors, farming, related. These logging and earthmoving equipment, and industrial machinery business and equipment, lumber and materials and timber outlets, building builder's hardware, and sellers petroleum. of chemical products and

The differing range of functional attributes Pilah's economic which define Kuala importance stems from the town's mediary center role as a key inter- in the rubber bulking process. location It is a traditional focal vis-a-vis the subregion's (the sector. Kuala Pilah district) kampon& While Temerloh-Mentekab's commercial this role, enterprises also perform the data suggest that the twin-toins' region is a centrality within the more-recent occurrence. Temerloh-Mentekab's saling functions expanding whole- appear to be closely linked modern agro-industrial with the development of the sector within and specifically, adjacent to the region. More the existing linkage functions consumer cater to the industrial demands of the extensive sector. and

(c) The Corporate Sector

Administratively and economically the traditional companies, or Agency Houses, export-import as they were commonly called always operated in structure in Malaysia, have and organization as They controlled .the internal corporate establishments. bulking of products destined the reverse distributive for export and flow of imports, but rarely directly with the operation concerned themselves of stores catering to their roles as providers final demand. Through of capital and goods and as markets for agricultural - 16 -

Table 5: DISTRIBUTION OF TURNOVER IN WHOLESALE TRADE, BY TYPE OF BUSINESS, 1970

Kuala Pilah Temerloh-Mentekab Number of Percent of Number of Percent of Type of Business Establishments Turnover: Establishments Turnover Food, Drink & Tobacco 11 20.4 14 29.6 Clothing, Books, Foot- wear, General 1 Wholesalers 3- 8.1 3L 2.3 Building Materials and-Builder's 53 Hardware 7 2.3 11.8 Motor Vehicle Machinery 4 1.7 12 20.4 Rubber Dealers 18 67.5 14 25.5 Lumber and Timber 7 .10.4 Total 44 100.0 7 100.0 (Value of turnover) (M$000) (36,032) (30,973).

Ll Includes a petrol seller /2 Excludes general wholesaler /3 Includes general wholesaler

Source: Unpublished data, Department of Statistics, alaysia -17- output, the corporate enterprises exerted spatial their influence over as well as structural organization the agglomerations of commerce. In the smaller under discussion, their in the impact is reflected indirectly rubber dealerships. These outlets are linked, both and spatially, in a hierarchical organizationally manner. The absence linked commercial outlets of independent but associated with the estate is of equal significance. system of production Because the distribution inputs and outputs and bulking of.both are subject to a centralized which is entirely administrative system internal to the estate jump space. enterprise, the flows of The regional urban space good economy is largely bypassed. The organizational similarity between FELDA Shops Corporation the Agency Houses and the is striking. Today shop is opened.concurrently a FELDA Stores Corporation with the arrival of schemes. It provides settlers on all FEDA the household necessities cipally foodstuffs, of the settlers, prin- clothing, and footwear. the sale of perishable It does not always hadle foodstuffs. Currently perishables are in most FELDA schemes sold by traders, on or off-scheme,retailers, their supplies from nearby who obtain towns. However, the FELDA is in the process of Stores Corpdration organizing the sale of vegetables settlers to grow their by encouraging.the own and sell their excess Other goods, such supplies to the organization. as household durables or but can be bicycles are not held ordered through the store. in stock Much of the Corporation's wholesale organized. purchasing is centrally Staples such as rice, flour from producers and sugar are bought directly or importers; rice which chases constitutes 35-45% of at present value, is total pur- bought directly from the and Padi Marketing Authority); L.P.N. (Federal Rice flour comes from the manufacturer; is bought from the FELDA sugar mill in . For other deals with no particular products the Corporation. wholesaler, but seeks location of warehouse out the cheapest market. facilities in Petaling The suppliers Jaya, however, does mean are likely to get the that biscuits and business. A few items including cigarettes are bought from the schemes local dealers, many of and supply settler retailers whom come to result, as well as the FELDA this local trade is relatively stores. As a surprisingly, small in both volume and the FELDA Stores Corporation's value. Not wholesale regional impact linkages, remains limited. in terms of

The Regional Urban System

Based,on a classification of independent towns and minor commercial stores, in thirteen centers, plus an examination both the market-place of the roles of and the corporate store, that a spatially differentiated there is some evidence system of commercial The number of suppliers specialization obtains. of household goods, especially viders of financial services, durables, of pro- and of outlets selling transport seem to be or repairing motor positively correlated with size of town. At the - 18 - same time, the ratios of both provision outlets and service enter- prises to total establishments show fairly clear negative correlations. Other patterns, including that of wholesaling, do not exhibit a clear trend. Certainly Temerloh stands out fairly clearly as a regional center, although wholesaling is of greatest relative importance in Kuala Pilah.

An examination of the retail activity mix of the region's urban places indicates a greater degree of homogeneity than might have been expected. When one turns to the FELDA and kampong schemes one finds that financial services and wholesaling almost vanish, and services-- predominantly the ubiquitous coffee shop--emerge to absolute dominance. This trend is most noticeable among the emergent centers such as Maran and Sungei Jerik and the FELDA schemes, all of which are located either readily accessible to or within the land development schemes. While some may argue that newness in this case is an explanatory factor, it appears to us to be no more significant than size. Furthermore, closer scrutiny of Gemas, Bahau and Jerantut seems to confirm the proposition that their ranges of commercial attributes are more akin to the structures and kaniy of FELDA towns than those of their wholesaling counterparts. Thus, the data attest to the existence of a regional urban .system characterized by only two orders of places. Temerloh and Kuala Pilah can be ascribed to the higher level, while all the other towns can be viewed as lower order centers, i.e., service centers frequented local populations. by. Moreover, there is a uniformity in the commercial structure of lower order towns which suggests that it is the number of establishments, often in direct relation to their population, that distinguishes these centers from one another, not the degree of special- ization of the town's outlets. By contrast, Temerloh and Kuala Pilah are an "unmatched pair." It is suggested that explanation for this in- group differentiation lies with the economic organization of their res- pective dependent agricultural hinterlands.

It is appropriate to ask at this point, is the observed regional urban system, with its two orders and in particular large and homogeneous lower level, a long-run phenomenon, or a temporary feature of the lad- scape and associated with the frontier character'of Central Peninsular Malaysia? Classical central place theory differentiates between urban places in terms of the order of activities and services provided within centers of different hierarchical levels. In its pure theoretical form, this system is viewed as an ordering of firms, on a uniform plane, which would come about through the process of perfect competition for opportunity in space; the controlling factor being that of access to markets. But even if this ordering comes about through competition between Marshallian firms, it is recognized that an hierarchical order of relationships between firms must emerge, so that firms in higher order places may supply firms.in lower order places. the - 19 -

Although the evidence for such.relationships in Central Peninsular Malaysian system is conflicting, it can be argued that the observed structure of the two-level regional urban system is likely to persist. The.system of periodic markets. with the Temerloh Sunday market playing a,regional role, is a two-level,- intra-regional system. The itinerant vendors perform the linkage functions. Random interviews with store operators in the FELDA and kam on.& settlements suggested that only a limited proportion of their input linkages ran to higher order outlets within the region. Where goods"are obtained from outlets within the region, the supplier is most often a shophouse retailer selling in very small bulk units at a discount price. That is, both the buyer seller are operators of the and. same order in the hierarchy of organization, and their relative status in the chain of distribution emerges their geographical only from location. The few regional wholesale consumer goods.represent distributors of only a small proportion of the total of these regional towns. business Usually retailers' supplies are purchased extra-regional sources, from either directly from the supplier mediary agent 'or from an inter- who acts only as a channel for process. through-put in the distributive

Just as the organization of retail trade -in lower order towns does not lead to any clear dominance-dependence relationship among and in turn among towns, firms, similarly the structure of the new place, Temerloh, higher order is not encouraging this type of relationship. center, which is now This acquiring a regional importance, acts in the modert agricultural as a linkage production process. Simultaneously tional links in the smailholder the tradi- rubber trade, which probably gave rise to some inter-firm -hierarchy and were assumed to be coincident with the in space regional urban hierarchy, are increasingly innovations being undermined by occurring within this sector.i/.

On another plane there is some indication; that the evolution of the lower order centers into more functionally diffe-entiated places remain inhibited by will the increasing mobility of the population. ease of movement The greater of both the seller and the consumer-appear mentary trends to be comple- working against the.evolution of centers, intermediary regional and instead towards a greater homogeneity in among the retail functions a large number of small towns. A concentration activities of the more differentiated in possibly fewer and more spatially dispersed higher order urban places is simultaneously taking place. It might be suggested that what have observed is an old multiple we hierarchical urban system ceding to a new two-level structure. its place

1/ By purchasing latex directly from the smallholder the Malaysian Rubber Development Corporation is beginning to capture output formerly bought by the rubber dealers, thus undermining the latters' trade and in-turn eliminating functions that hierarchically differentiated many small urban places. - 20 - Urban Functional Diversity in Peninsular Malaysia

It is appropriate to question the general applicability of these results to other regional urban systems and towns that lie at the base of Peninsular Malaysia's city-size distribution. Such an exercise is,-however, severely constrained by the fact that the other comparable available only data applies to the Muda area Peninsular Malaysia. in Northeast These statistics (see Table 6) broadly our first conclusion confirm that town size and the range of .an of functional attributes urban area are not positively correlated. Our assertion that the organization of the regional urban space is a function of the form and structure of agriculture is also supported,,albeit tentatively. The wider distribution of credit facilities would appear to reflect inter- harvest demands of the dominantly rice smallholder population. While.neither area is typical of Peninsular Malaysia, certainly there and are few regions like Muda where rice exclusion of is grown to the all other crops, much of rural Malaysia the smallholder is.dominated by system of production. As impact producers, the smallholders' depends on the client to whom they sell their product. Where the smallholder resells within a highly competitive system of small to medium scale processors or redistributors, his linkages will tend to be predominantly local. Where this redistributive State owned activity is hndled by enterprises, estates or the like, local or even regional - links will be.of lesser significance. Since the trend would appear be in this latter direction, to the organization of rural Malaysia's economy is going.to be space increasingly influenced by the role holder as a consumer. of the small- As a result, we would suggest urban that the two order system in which the consumer depends on retail outlets located in urban places close to the place of residence for frequently bought items and in which higher orde7, goods are available in only a limited number of towns, is likely to be characteristic of much of the country. Conclusion

The regional-two ordered-urban system identified by this is in conflict with. study the multi-ordered assumption inherent urban systems in much of theory. A comparison of the commercial centers structure of those which lie at the base of the urban system suggest that the range of functions and town size are not positively.correlated. Instead levels of urban population the determine the number of, lower units rather order functional than the range of activities undertaken prises. by commercial enter-

No consistent pattern of activity mix defines the structure of the limited number of regional higher order urban ceiters. Comparisons of the structure of small towns reveal homogeneity at the intra-regional levels, and diversity inter-regionally. The evidence, which much more detailed examination, requires suggests that the differences reflect Table 6: ORGANIZATION OF COMMERCIAL ACTIVITY IN SELECTED TOWNS

Total No.of House- Popula- Estab- hold House- tion lishments Food Non- Other (1970) hold Coffee Other (1973) Products Transport Rubber Whole- Durables Durables Shops Services Finance Services Muda Area Towns. Percentage Dealers Salia Distribution of Establishments Langgar ' 897 58 SimpangTiga Sim7a19 36 9 950 24 19 16 Padang Sera 1100 50 4 16g- 112 30 4 8 21 3 - 10 Tokai 1194 __14 - 5 - 8 16 12 8 21 1 - 4 Sumpang Empat - 2 12 4 6 Kangkong - 25 13 4 1277 37 19 - 31 Kuala Perlis 1545 46 5 32 44 5 13 16 Tunjang 6 - - 16 1590 5534 19 25 - 8 Kota Sarang 13 3 35 9 2 3 Semut 18 1699 35; 13 4 7 -'58 1720 26 - 11 Sumpang Empat 34 38 20 3 9 6 12 - 3 (Perlis) 27 - 1736 6 - Arau 43 44 12 2037 .54,$51 5 12 Yan . 20 - Kechil 2398 31 15 2 9 - 32 44 4 13 27 5 2531 2 4 54 19 13 2 .2 Perdang 3121 9 1 9 .*. 51 43 26 4 Kuala 16 4 8 3 46166122 .64819- 19 4 Guar Chempedak 22 18 1 2 6813 74 5 - 14 8 Kangar 26 11 27 5 2 - 8758 138 14 7 23 - 9 16 23 21 - 11 11 11 4 7 Other TownsLI 28 - 8 - 3 Tapah 9193 168 Segamat 31 14 17796 258 9 11 21 17 20 3 6 11 28 5 2 5 L 'Data was derived 3 from a study by Jackson 3 5 6 Sources:. Unpublished (1974). Data, Muda River Study, James C. FAO/IBRD Cooperative Programme, Jackson, "The Structure and 1973. of Functions of Small Malaysian British Geographers" 61, Towns, "Transactions March, 1974, pp. 60-65. of the Institute - 22 -

the impact of varying linkage requirements of the and industrial surrounding agricultural sectors. The testing of this this line hypothesis, the next step in of research, is currently in progress.

The policy implications emerging from this study concern planning of the future the role of those towns .and villages base of the tirban that lie at the system. Already, it is obvious and the guidelines that trend extrapolation of ceritral place theory predictors may-not be the most effective of the growth of these urban places. Assessments of urban structures and the their nature of both extra and inter-regional activities emerge linkage as more reliable predictive parameters. recognized that our While it is results are tentative in nature, need for a wider they do suggest the, study of a problem which is Unfortunately potentially of major significance. this is rarely taken into account in rural-regional planning. - 23 -

REFERENCES

Abiodun, Josephine Olu, 1967. "Urban Hierarchy in a Developing Country." Economic Geography, 43, 4. pp. 347-67.

Berry, Brian, J.L., 1967. Geography of Market Centers and Distribution. Englewood Retail Cliffs, N.Y.: Prentice Hall

, 1969. "Relationships between Regional Economic Development and the Urban System: The Case of Chile." Tijdschrift Voor Economische en Sociale Geografie. 60. pp. 283-307. Cohen M., Brookfield H., and English J., systems 1974. "Urban and Regional Sub- in Peninsular Malaysia." Unpublished mimeo. IBRD Washington, DC Corry, W.C.S., 1954. "A General Survey of New Villages." Dannhaeuser, Norbert,, 1973. "Commercial Units, Marketing Trade Networks Channels and in a Central Luzon Town Setting." University Unpublished Ph.D., of California, Berkeley. 1973.

Government of Malaysia, Department of Statistics. Census and Retail Trades of Wholesale in the Urban Areas of Peninsular Department Malaysia, 1970. of Statistics. Kuala Lumpur.

. 1971. 1970 Population Department and Housing Census of Malaysia. of Statistics, Kuala Lumpur.

Hermansen, Tormod, 1972. "Development Poles and Related Theories: A Synoptic Review," in Growth Centers in Regional Economic Development, Niles Hansen (Editor). New York: The Free Press. pp. 160-203. Hodder, B.W., and Ukwu, U.I., 1969. Markets in We8t Africa. Ibadan University Press. Ibadan:

Jackson, James C., 1974. "The Structure and Function Towns." Transactions of Small Malaysian of the Institute of pp. 65-72. British Geographers. 61.

Jones, G.W., 1962. "The Employment Characteristics of Malaya,"' Malayan Small Towns in Economic Review. 10, 1. pp. 32-56.

Lasuen, J.R., 1969. "On Growth Poles." Urban Studies., 6,2. Neville, R.J., 1962. "An Urban Study of Pontian Kechil, Malaya." Journal South-west of Tropical Geography, 16. pp. 32-56. Stabler, J.C., and P.R. Williams, 1973. Central "The Changing Structure Place Hierarchy." Land of the Economics. 49, 4. pp. 454-458.