BASINS RIVER. Luzon. Mekong. Java. Delta. Phraya. Chao. Delta. Malaya. Coast. West. Irrawaddy. Delta

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1 Part II Hinterlands

2 Hinterlands 75 Geography gives logic to the otherwise fragmented national economic histories of Southeast Asia. Over the very long term since 1850 the region s economic development may best be studied in terms of geographical units that are both larger and smaller than now familiar national economies. In this way the shape and structure of these national economies can be seen gradually to emerge. Figure II.1 identifies four regions that form the basis of the subsequent chapters on hinterlands and together encompass most of Southeast Asia. The Archipelago or macro-region of maritime Southeast Asia encompasses the islands and ports within an arc stretching from Luzon Strait north of the Philippines through Indonesia to the Kra Isthmus in southern Thailand (Chapter 3). Within this arc the major islands of Java and Luzon are considered separately as geographically similar cores of the emerging national economies of Indonesia and the Philippines (Chapter 4). River Basins encompass the rice plains of the Chao Phraya, Irrawaddy and Mekong, which become the cores of the emerging national economies of Thailand and Burma and of the regional economy of southern Vietnam the Red River, whose development history is more akin to southern China, is not part of this comparison (Chapter 5). The Peninsula stretches from the Kra Isthmus through Malaya to Singapore and is contrasted with the peninsula-like coastal strip of Annam (Chapter 6). Although this core of the emerging national economies of Malaysia and Singapore is treated as a special case, its historical experience resembles that of the islands of Java and Luzon rather than of the mainland river basins. Three phases of economic development recur through all four chapters. Before 1850 there was a network of trading cities whose hinterlands were sparsely populated except along navigable waterways and accessible coastlines. From the mid-nineteenth century frontiers were opened up by clearing the jungle for land-extensive, export-oriented agriculture. The core regions specialized on a narrow range of commodities (Table II.1). Sugar, coffee, tobacco and rubber were the main export commodities in Java; sugar, abaca and copra in Luzon. Rice and teak were prominent in the River Basins and tin, rubber and oil palm in the Peninsula. These commodities gave coherence to the economic development of the individual regions. Eventually accelerated population growth, closure of the land frontier and increasing density of settlement resulted in labour surplus and widespread poverty in much of these areas. By the early twentieth century there was already out-migration from the northern valleys and northeast regions of Siam, central Java and Madura and the Ilocos region of northwest Luzon. This phase of agricultural-led development continued with much diminished returns into the early postwar years of national independence. Since the 1970s, a third phase of industrialization has shifted the economic centre of gravity back towards main cities, which have been transformed into extended metropolitan regions with hybrid rural urban (desakota)

3 76 RIVER BASINS Hong Kong Irrawaddy Delta Chao Phraya Delta Isthmus of Kra Mekong Delta West Coast Malaya Singapore Java Luzon kilometres Core areas ANNAM MALAY ARCHIPELAGO PENINSULA THE Figure II.1 Supra-national and sub-national regions

4 Hinterlands 77 Table II.1 Major export commodities associated with the five supra-national regions Supra-region Archipelago Islands Java Luzon River Basins Peninsula Export commodities Various Sugar, tobacco, rubber Sugar, abaca, copra Rice, teak Tin, rubber, oil palm characteristics (see Part III). Connections by road between these urban regions and hinterlands have been much improved but the hinterland share of national production has declined with that of the agricultural sector. Hinterlands are now primarily sources of surplus labour to urban regions and are sustained by remittances. Part II therefore focuses on the articulation of hinterlands in their heyday between the mid-nineteenth and mid-twentieth centuries, leaving the new urban regions to be examined in Part III. The extent and rate of hinterland development between the 1850s and 1950s was determined by accessibility to international markets. Hitherto isolated tropical areas with abundant uncultivated land and an underemployed labour force enjoyed a vent for surplus (Myint 1971: ). Production could at first extend no further than porterage distance from natural waterways. Modern transport technologies extended the frontier by reducing the steepness of the transport cost gradients. Individual chapters show the dramatic impact of the shifts in line-haul modes from water (coastal shipping, rivers and canals) to rail, to highways (later expressways) and to air. A recurrent theme is monopoly and competition. When all flows are handled by a single line-haul mode (inland waterway, railway or coastal shipping) and each landing, station or port has a captive hinterland, there is complete monopoly (Figure II.2). The area of monopoly is extended by the development of feeder roads and consolidated where a denser feeder network allows consolidation of transport facilities at larger landings, stations or ports. Conversely, incipient competition occurs where trunk roads from other regions give spot access and localized competition occurs between inland waterway, rail, coastal shipping and road transport. Sporadic competition happens where trunk road transport links the inland waterway, railway or coast at several points and ties feeder roads into the long-distance highway network. General competition occurs where trunk roads parallel line-haul modes with traffic losses according to the nature and availability of traffic. By the 1960s many areas outside the core sub-national regions were experiencing general competition but there were still pockets where competition from road transport was incipient or sporadic, allowing the inland waterway, rail transport or coastal shipping to retain a substantial share of the traffic.

5 78 Hinterlands Complete MONOPOLY Extended Consolidation COMPETITION Incipient Sporadic General NODES LINKS Landings Stations Ports Monopoly Inland waterway Deprived Railway Expanded Competition Coastal Shipping Road Figure II.2 Monopoly and competitive transport states (Source: Based on Rimmer 1971a: 105) Transport organization, regulation and efficiency are also important. By the late-colonial period, railways in Java, Luzon and Malaya were already experiencing strong price competition from road transport and, as in Europe and North America, turning to government for regulatory protection. After independence the efficiency of state-owned railways and the efficacy of such protection both declined markedly. Underinvestment in road infrastructure did not prevent a large shift in traffic despite worsening travelling conditions. Whatever the historical trajectory, railways have long been eclipsed throughout Southeast Asia.

6 Hinterlands 79 Each hinterland developed according to its own time path and some were incorporated into incipient nation-states much sooner than others. Thus the core regions of Java, Luzon, the Central Plain of Thailand and the West Coast of Malaya came to play a dominant role in national politics, commerce and society for reasons that had much to do with their head start in modern economic development. Other sub-regions which were prominent in the mid-nineteenth century such as Aceh or South Sulawesi in Indonesia, Cebu or Iloilo in the central Philippines, Chiang Mai in northern Thailand or Hue in central Vietnam have struggled against relegation to the periphery.