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Socially constructed ethnic devision of labour_labour control in Taiwanese firms in Msia & Vietnam

Using fieldwork data from Taiwanese-owned factories in Malaysia and Vietnam, the authors argue that the labour regime based on ethnic division of labour is a function of the degree of proletarianization, which depends on the state’s policies and one’s social capital. State policy protects native Malay and Vietnamese, and excludes the rights of migrant workers, regardless of whether these migrant workers are skilled or unskilled. Local ethnic Chinese, with higher social capital, find themselves somewhere between the two poles.

Authors: I-chun Kung and Hong-zen Wang from the National Chi Nan University, Taiwan. 

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Unintended Consequences: Social Policy, State Institutions and the ‘Stalling’ of the Malaysian Industrialization Project

This paper examines the relation of particular forms of social and labour market policy to economic development. Taking the history of Malaysian industrialization as its empirical case, the paper assesses the unintended consequences of redistribution policy, on the one hand, and migration policy, on the other, for the limited upgrading of the country’s electronics industry. It argues that, while the former has been central to social harmony in Malaysia’s multi-racial society, it has contributed to the underdevelopment of small and medium-sized firms capable of linking with the TNCs on the basis of knowledge-intensive and higher value-added operations. Migration policy, on the other hand, has allowed manufacturers to have continued access to supplies of low-cost, lower-skilled labour that have released the pressures that would otherwise have been there for technological and skill upgrading in the electronics industry. Only in Penang, where regional state institutions have intervened to encourage SME upgrading, has the national picture been moderated.

Malaysia’s industrialization project emerged at time when export competition in manufactured commodities was less intense than it is now. Largely as a result of federal government priorities and for other reasons explored in the paper, advantage was not taken of this ‘window of opportunity’. As a consequence, the country’s industrialization project - exemplified by its electronics industry - is now ‘stalling’ in the sense that it remains locked into low- to medium-technology operations. With the rise of China as a manufacturing exporter, this is a dangerous situation for a country’s principal industry to be in.

By Jeffrey Henderson and Richard Phillips.  Published on Economy and Society Volume 36 Number 1 February 2007: 78-102. Taylor & Francis Group.  [Download]

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Share of Labour and Capital in National Income of Malaysia: Estimates for 1960-2004

The national income accounts provide a summary of all transactions in an economy. Seen from the income side, the production process creates incomes for the owners of the inputs used in production including labour and capital. Official data on the income accounts from the income approach are not available on an annual basis. The information is required in the computation of factor shares, that is, the share of labour and capital in income. This paper discusses the derivation of a consistent series for 1960-2004. The estimates show a decline of the labour share over time, while the capital share is increasing.

By: Shyamala Nagaraj & Kim-Leng Goh. Faculty of Economics & Administration. University of Malaya.

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