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The Beginnings of Crony Capitalism: Business, Politics and Economic Development in Malaysia, c. 1955–70

Published online by Cambridge University Press:  21 April 2004

NICHOLAS J. WHITE
NICHOLAS J. WHITE
Affiliation:
Liverpool John Moores University
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Extract

The term ‘crony capitalism’ describes the close relationship between the state and big business in contemporary Southeast Asia. Yoshihara argued in 1988 that cronyism produced an entrepreneurially weak, ersatz capitalism. Crony capitalists were ‘private-sector businessmen who benefit[ed] enormously from close relations’ with leading officials and politicians, obtaining ‘not only protection from foreign competition, but also concessions, licences, monopoly rights, and government subsidies’. Yoshihara's thesis has been subject to some criticism, but, in summarizing that debate, Ian Brown states that ‘there are…substantial areas of the South-East Asian political-economic landscape where government and business remain bound to the protection of inefficient vested interest, to the defence of monopoly and preference, and where speculations and short-term profit-taking are rife’. Entrepreneurial weaknesses in Southeast Asia appeared fully exposed by the financial crisis of 1997, when the economies of the region could not withstand the cruel buffetings of the international economy.

Type
Research Article
Information
Modern Asian Studies , Volume 38 , Issue 2 , May 2004 , pp. 389 - 417
Copyright
© 2004 Cambridge University Press

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Footnotes

An earlier version of this paper was presented to the Economic History Society Conference, University of Birmingham, 7 April 2002. The author would like to thank the Institute for Southeast Asian Studies Library, Singapore, the Arkib Negara Malaysia, Kuala Lumpur, the Bank of England and the HSBC Group, London for access to their records. Archival research for this article was made possible through grants from the British Academy Committee for Southeast Asian Studies and the Research Committee, School of Education, Community and Social Science, Liverpool John Moores University.