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Abstract
Rapid structural change is now a major feature of several Southeast Asian
economies. It generally involves greatly expanded exports of certain commodities
and manufactures accompanied by a large growth in services, and poses serious
difficulties for traditional labour-intensive sectors. One important sector affected
in this way is that producing natural rubber in Malaysia, Indonesia and Thailand.
The difficulties mentioned occur through both "resource pull" effects - which
are especially important in raising real wages, and "spending" effects - which
tend to lead to an appreciation of the real exchange rate. These effects, and the
problems arising from them, are examined and compared for each of the rubber
sectors above.
While changes of this nature call for diminution in the size of traditional sectors,
there is also a need to improve economic efficiency, notably by adopting new
technology more appropriateĀ· to the emerging resource price configuration, and
by moving to an agriculture where off-farm employment and other linkages are
increasingly significant. Such adjustment may be both helped and constrained
by institutional factors and official policies, which accordingly require careful
review.
These crucial policy issues, and the degree to which necessary adjustments have been made, are investigated for the rather different contexts in each of the
three natural rubber-producing countries. The analysis is thought to have wider
relevance for other developing countries with traditional agricultural sectors