ECONOMIC GROWTH AND THE PUBLIC SECTOR IN MALAYA AND SINGAPORE 1948-1960

Abstract

This thesis seeks to set out some of the major interrelationships between economic growth and the public sector in the Malayan-Singapore economy which covers the two territories of Malaya and Singapore in the postwar period up to 1960. In the beginning there is an analysis of income growth, based on· the available statistics and emphasising the components of final demand of which one is public consumption. An attempt is then made to go deeper into the two main factors behind demand growth namely population growth and trade expansion. Apart from just population growth, attention is also drawn to some aspects of the demographic context such as age-structure, rural-urban distribution, employment growth and its pattern. Apart from just the growth of exports and imports, an attempt is made to separate entrepot trade from 11 domestic origin" trade followed by an analysis of the latter and a discussion of the terms of trade.

The second part of the thesis considers he public sector in detail with one chapter seeking to show the place of the public sector in Malaya through a set of social accounts and narratives of the planning experience there and the government policies towards the rubber industry. In order to examine the question of how the growth in public demand was financed, a chapter on taxation establishes some salient points about the whole range of taxes found in the two territories. A chapter on current expenditure s sets out the summary results of a detailed economic functional classification of Government expenditures which was largely of the writer's own doing. Another chapter examines capital expenditures in a similar manner, current expenditures are found to have stepped up considerably in the later fifties, with a dramatic shift to Social Services in respect of Malaya, In showing the composition of public demand, these two chapters are not therefore unrelated to the chapter on population which showed a large growth in young dependents and expansion of employment in tertiary industry. The penultimate chapter examines the budgetting-expanditure process in which expenditure and revenue estimates are shown to end up as very different from actuals. Although resulting surpluses were earned which enabled investment abroad to grow, the constant expectation of deficits probably led to a lower level of expenditures than would otherwise have been the case. Government borrowing is found in the same chapter to have been negligible in Singapore and of late expansion in Malaya. The last chapter surveys constitutional development in both territories, and brings together the various answers to the questions which had been listed in the first chapter as an aid to the treatment of the subject.