Global Politcal Economy

Global Political Economy

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TABLE OF CONTENTS

1.0 Introduction 2

2.0 Industrial development of Malaysia 4

2.1 Colonial industrialization 5

2.2 Industrial developments after independence 6

2.3 Export-Oriented industrialization 7

2.4 Phase II of ISIS industrialization 9

2.5 A case of Industrial development in Korea 11

2.5.1 Export-led industrialization 11

2.5.2 Industrial promotion incentives in South Korea 12

3.0 Lessons from Malaysia and South Korea 12

4.0 Conclusion 15

5.0 References 17

1.0 Introduction

There are many theories that explain political and economic development of developing countries. The most common ones are liberalism, Marxism, worldview system or global perspective, and realism (Sun et al. 2009, p.22). Market liberalization (also called neoliberalism) is deregulation of an economy. Deregulation is shifting of political and economic powers from the public to the private sector (Cohen 2008, p.16). Adam Smith advanced liberal approach to industrialization and economic development of countries in the 20th century. Other classical proponents of liberalism include David Ricardo, Keynes, and Milton Friedman (Cohen 2008, p.14-18). The rationale of market liberalization as an approach to economic prosperity of countries is that it privatizes economic activities of a country. According to Sun and his colleagues (2009, p.21), privatization of an economy promotes involvement of entrepreneurial industrialists in the economic development of a country. Privatization is achieved by limitation of public powers in the control of an economy (Gipin 2001,p.31-34). Other industrial scholars advocate for Marxism. According to Marxist approach to economic development, a strong and powerful public domain is required to check the sinister tendencies of the private sector to shift economy resources of a country to the hands...