If I may, I would like to speak directly to the author of this book on the impact of globalization on the long-run development of Perak, His Royal Highness Sultan Nazrin Shah. It has been my privilege and delight to be engaged in this work since he first visited my office at Harvard some 40 years ago. He explained that he wanted to do a Ph.D. thesis focused on improving the welfare of rural people. Not many Ph.D. students show up at Harvard with that objective, and since it matched closely with my own professional interests, I readily agreed to work with him. At the time, I did not know that the “rural people” he wanted to help were his subjects in the Malaysian state of Perak. I was in for a long, and fascinating, voyage.
This is the third volume from Oxford University Press that HRH has published. The first, Charting the Economy, published in 2017, was based on his PhD thesis for the Program in Political Economy and Government at the Kennedy School of Harvard University. The production of that thesis was an epic journey, covering many years and miles. It was completed and approved in 2000. The painstaking assembly of historical data on the level and distribution of per capita income in Peninsular Malaya from 1900 to 1950 now serves as the foundation for all research on the economic history of the Malaysian economy.
I wrote a description of the book when it was published.
“Malaysia’s economic progress since World War II has been the best in Southeast Asia among those countries with significant rural populations. This progress was accomplished despite extraordinary dependence in the early part on two commodity exports—tin and rubber—and the severe volatility that was caused by such dependence.
This carefully researched volume…contrasts the British colonial management of Malaya’s commodity-based economy with the much more diversified and increasingly stable economy of post-independence Malaysia. If any reader wants to know why economic history is relevant, this book provides a very clear answer.”
The second volume from Oxford University Press, Striving for Inclusive Development, was published in 2019. I served as an advisor during the research and drafting of this volume, especially on the role of the agricultural sector in driving the rapid reduction in poverty seen since Malaysia’s independence. One major finding was that the State of Perak differed quite significantly in several dimensions from the country-wide macro and sectoral stories analyzed in the volume. Understanding those historical differences became the objective of the book being launched today: Globalization: Perak’s Rise, Relative Decline, and Regeneration. The book is also a very fond tribute “to Perakians everywhere.” Somewhat presumptuously, I include myself.
This volume on the economic history of Perak arrives at a critical time. It illuminates several debates that are engaging world leaders and academics alike. These include at least five separate but connected issues and themes.
First is the highly mixed and changing impact of globalization on countries, regions, communities, and families that became quite visible during the financial crisis in 2007/08. A complex picture is emerging of national gains and local losses;
The second issue is the unreliability of long supply chains that was revealed by the Covid-19 pandemic. Consequently, many efforts are underway to “de-risk” manufacturing operations and service enterprises dependent on timely imports. The ultimate costs of such de-risking strategies are yet to be determined;
The third debate is over the difficulties in rebuilding blighted and hollowed-out economies that lost their source of competitiveness (at least twice for Perak). This is a process that involves finding new sources of comparative advantage for both firms and workers;
The fourth theme focuses on the complex challenges of attracting and retaining educated youth when opportunities elsewhere seem more promising, challenges now faced by most rural economies in the world, and;
The fifth theme raises the most speculative, and important, issue of all—the likely role of globalization going forward. The first round of modern globalization in the late 19th and early 20th century ended badly, with World War I and the Great Depression. The second round, which began after World War II, had a remarkable impact on economic growth and poverty reduction in most countries. Even if this round ends badly, as many analysts predict, the benefits to countries from engaging in the exchange of goods, services and ideas are likely to be too powerful to keep globalization at bay forever.
The volume stresses this long-term perspective and the complicated role that globalization played in developing Perak, with its whipsaw effects of progressive booms and busts in foreign investments and market demand. Perak was a global player before the term was invented.
A thoughtful discussion of other examples of “sufferers” from globalization highlights Perak’s unique historical experience, while drawing out general lessons that are relevant going forward. Sheffield in England and Scranton in the United States, both discussed in the book, have been struggling to find a path to revitalization. Another devastated city, Pittsburg, lost its foundation industries in glass- and steel-making. However, with its unique backing from local civic organizations, foundations, and an economy already deeply invested in technology and health care, Pittsburg is thriving once again. But, as indicated, the Pittsburg story is unique, and no historical examples offer Perak a clear path forward. In fact, Perak’s experience, now so vividly documented and articulated, will offer lessons to many economies in search of strategies to cope with de-industrialization and the desolation that can accompany a sudden exit of the global economy.
The book provides a clear description of the historical origins of Perak’s economic dynamics, and the nature of political relationships that have changed from local to colonial rule, and eventually to a federal system that emphasizes Malay control of political power. With that power came control of budget allocations and decisions on which states should participate in government contracts. Perak often lost out in this process, by political design. This detailed history is essential to understanding Perak’s current dilemma as a multi-ethnic society seeking to re-build its economic base. It is a fascinating story, carefully told, with a statistical backdrop that will satisfy the most demanding cliometric reader.
Despite the heavy burden of history and all the current challenges, the book concludes on an optimistic note. Perak’s extensive natural resources, now mostly renewables, can be managed sustainably. When linked to modern digital technologies that permit hi-tech workers to be productive almost anywhere, they offer a comfortable and environmentally-rich standard of living for current and future residents. The key to success will be effective local leadership, and here Perak is well placed. The state could do no better than to follow the guidance from the author, HRH Sultan Nazrin Shah.
Before I end, let me note another publication by HRH Sultan Nazrin Shah with a quite different focus, one that appeals to the antiquarian in me. When I was on the faculty at Harvard from 1977 to 1998, my family lived in a colonial house built in 1736. It housed our collections of Early American furniture, Oriental rugs, Chinese and Vietnamese blue and white porcelain, and Javanese bronzes. There were small collections of Chinese jade carvings and British pewter. Imagine my delight when I received a copy of Landmarks of Perak, published in 2006, while I was on a lecture tour of Malaysia in October, 2011. The volume is a lavishly illustrated photo essay on the historical buildings in Perak. I will miss very much an opportunity to visit some of those buildings highlighted in the volume, but in the meantime, I enjoy sampling the history. It is a rich story, elegantly told.
In closing, I would like to convey my deep thanks for this opportunity to join the celebration today and I wish you, and the book, great success.
