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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 MALAYSIA 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