Workshop on trade implications of industrialization

Abstract

After a brief presentation of the paper by J. Jegathesan on "Industrial Development: Policy and Prospects", a number of points were made. These center around three main issues. 1. There was the broad question of whether policies aimed at encouraging labour intensive industries (as enun- ciated in the paper) were at variance with the objective of export-oriented industries, which were mostly capital intensive in nature. This conflict, it was argued, was a real one in the sense that import substitution in Malaysia was reaching a saturation point, and that export-orientation appeared logically consistent with this development. The distinction between labour and capital intensity was however difficult to make, nor, it was pointed out, necessary. In some cases, export- oriented industries can also be labour intensive. The Ministry of Trade considered primarily the dis- tinction between import substitution and export- orientation. The second issue concerns the role of SEDCs in the industrialization process. While the use of these to accelerate this process was fundamentally sound, practical problems were encountered. These included the lack of qualified manpower, technology as well as finance; in short, too limited resources were spread over too many projects. These difficulties were compounded by the fact that those areas that were most backward, and therefore merited greatest attention, were also the most deficient in the above resources. Consequently, SEDCs in richer states were also the most dynamic in their operations.