Linda Lim-SEAS 215 Economy W10

Linda Lim-SEAS 215 Economy W10 - From Rice to Chips: Making...

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1 From Rice to Chips: Making A Living in Southeast Asia Linda Lim Ross School of Business University of Michigan February 18, 2010 Southeast Asian Studies 215, CSEAS
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2 Natural Landscape of Southeast Asia
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3 Productivity, Economic Growth and Income Productivity = value added per worker = net output x price of output => Income Economic Growth = increase in output (=> increase in income) which comes from • increase in labor input (no. of workers, no. of hours worked) • increase in capital input (machinery, equipment) • increase in labor productivity (output per worker, skills) • technological innovation (makes capital and labor more productive) Income increases when you • produce more output per worker • produce higher-priced output => higher value-added
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4 Burma, Philippines, Indonesia, Vietnam (also Thailand, Cambodia, Laos, Malaysia)
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6 Subsistence Peasant Economy => Poverty In traditional peasant societies, individual families/ households produce all their own needs (food, handicrafts), and are poor. • Lack of specialization => low productivity => low income • Labor-intensive methods => low productivity => low income • Small market/limited demand => low price, low income • Lack of cash income => inability to buy essential manufactures and services e.g. pharmaceuticals, school fees • Low income => lack of savings for investment and increase in productivity => continued low income and economic insecurity (“poverty trap”) • Low income => many children (for child labor, lack of education and contraception, female subordination) => poverty
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8 Vietnam Catfish Thailand Indonesia Shrimp Chicken
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9 Philippines, Thailand, Malaysia Pineapples Sugar
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10 Vietnam Coffee Indonesia Coffee
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11 Rubber – Malaysia (Indonesia, Thailand, Vietnam, Cambodia, Laos)
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12 Malaysia Rubber
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13 Oil Palm - Malaysia, Indonesia, Thailand
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Linda Lim-SEAS 215 Economy W10 - From Rice to Chips: Making...

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