Excellencies, Ladies and Gentlemen,
I want to start by expressing my profound appreciation to Professor Peter Timmer for his wonderful and touching presentation. I would also like to thank Professor Tim Harper for coming to Malaysia to participate in the book launch, and for his kind words. And my warmest thanks to all of you, for taking time off on this Saturday morning to be here.
Some of you may be asking why I have written a book on globalization—and why now? The idea was sparked in part during research for my previous books, as the unique nature of Perak’s experience became apparent. I wanted to explore this further, by taking a deeper look at the state’s historical development, and the ways in which it has been shaped by processes of globalization. By taking a long-term perspective, I felt that greater insight could be gained into Perak’s current situation, and the various challenges that lie ahead, especially in this period of heightened global uncertainty.
Looking back, it is clear that one of the great triumphs after World War II was the prolonged boom in international trade, which helped to raise incomes around the world. This was due in part to the remarkable and sustained decrease in tariffs, supported by tumbling transport and communication costs, as well as the development of common policies governing international monetary flows. As countries opened up, they flourished. The liberalization of international trade was based on the recognition of mutual benefit. This also contributed to the evolution of the broader infrastructure of global governance. As is widely acknowledged, multiple issues - from global public health to the impacts of climate change - can only be effectively addressed through international collaboration.
However, with the prevailing difficult geopolitical situation—including ongoing tensions between the United States and China, and brutal wars in Gaza and Ukraine—achieving global cooperation is more challenging than ever. The world's two largest economies are engaged in an escalating trade war and trade barriers are being reinstated. It may even be Time-up for TikTok!
As globalization has slowed—and some commentators would even argue that it is starting to reverse—trading arrangements among regional groupings have deepened. North America, Europe and Asia have all expanded their own regulations and rules governing trade and investment. Alternative and competing regional technology platforms are also emerging. A multipolar and more fractured world thus seems to be emerging, characterized by a collapse, or at least a significant diminishment, of international cooperation. And this would make it much more difficult to take the drastic and coordinated actions needed for combating climate change, and for achieving net zero by 2050.
So at a time of growing awareness of the negative aspects of globalization, it may be useful to remind ourselves of some of its considerable benefits. And while Perak’s history certainly demonstrates some of the vulnerabilities associated with export-led growth, it also highlights the huge potential upside when natural resource endowments coincide with global demand to create comparative advantage. Perak has undoubtedly suffered as global trade patterns have shifted. But it has greatly prospered as well.
In the book, I look back over two centuries of globalization’s changing impacts - both positive and negative - on Perak, and on its towns and communities. I compare the state to other regions with abundant natural resources, including Cornwall and Sheffield in the United Kingdom, and Pittsburgh and Scranton in the United States. All are places that initially prospered, but then lost their competitiveness and were subsequently blighted by the same forces of globalization that had previously blessed them. While Sheffield, Pittsburgh, and Cornwall, have all found new ways to thrive, Scranton has yet to recover.
Perak’s early growth was driven by tin, with inflows of capital, technology, and new ideas from Cornwall in the first decades of the colonial period. By the end of the 19th century, Perak’s production had already overtaken Cornwall’s. The state’s prosperity continued, boosted by the spectacular rubber boom that was sparked by the advent of the mass production of automobiles. Its people enjoyed fast-rising standards of living. New towns and settlements were established, schools and hospitals were built, and Perak’s infrastructure was among the most developed on the peninsula.
After independence, Perak fared less favourably, however. Still heavily reliant on exports of tin and rubber, it remained exposed to dramatic swings in global demand, as well as competing sources of supply. It began to trail behind other Malaysian states, which were better placed to benefit from the globalization of manufacturing activities that was starting to occur. What economists call “economies of agglomeration” favour locations that move first on industrial development, have greater economic density, and possess better transport links to the outside world, all areas in which Perak was lacking. Its skilled youth began to migrate to neighbouring states where more opportunities and higher incomes could be found.
The 1985 tin crash, which saw prices halving in just a few years, brought devastation to Perak’s communities. Massive job losses and the closure of mines accelerated the outflow of residents. Perak’s tin towns lost the skills and ingenuity of those who had been drawn there by the mines and their associated industries. By the early 1990s, the tin and rubber industries - on whose revenues the modern state had been built - were fading into insignificance.
Since then, Perak has diversified its economy further into manufacturing and services, and modernized its agricultural sector in order to rebuild its economic base. Considerable effort has been devoted to this process, and there are many success stories in all sectors. My book concludes with some suggestions on what more Perak can do to continue to regenerate its economy and improve the welfare of its residents. It is my hope that with a New Vision, Perak can look forward to a period of renewed prosperity.
Let me end by thanking the team from Oxford University Press for their excellent work in publishing this book. I do hope that you will all enjoy reading it as much as I did researching and writing it.
