| Research Abstract |
Predominantly manufacturing-related industrial activity has been increasing in a region that includes Singapore, Southern Johor State in Malaysia, and Riau Province in Indonesia---a region known as the Growth Triangle, or SIJORI (Singapore-Johor-Riau). Cross-border economic activity by transnational corporations "TNC" has led to the creation of this integrated economic region through the development of a transnational subcontracting system. SIJORI has rather deep roots in the history of the region. By World War II, the island of Singapore was already linked to Johor Bahru, the capital of Johor State, by "the Causeway", a structure built under British colonial rule to support the export of rubber from Malaysia. In the early 1960s, extensive manufacturing infrastructure was developed in the Jurong area of western Singapore to promote the economic integration of the region. At the time, Singapore and Malaysia were trying to unite by establishing a common federal government, and this indus
… More
trial infrastructure---developed with the assistance the international community---was intended to promote this future federation. Although the federation broke apart soon after its creation in 1965, Singapore and Johor nonetheless maintained a mutual relationship, as they had since the early twentieth century. Owing to these strong ties, the Singaporean government has been more effective in introducing direct foreign investment to Malaysia than in other Southeast Asian countries.
It is commonly believed that the activities of the Singaporean government at the end of the 1980s led to the establishment of SIJORI in the 1990s. However, Malaysian federal and state governments built much of the manufacturing infrastructure in Johor for the purpose of promoting local industrialization, beginning as early as the 1970s; the Malaysian government is thus responsible for having injected a great deal of capital into the development of Johor, as it has done in other peripheral regions. The Indonesian government, moreover, undertook similar efforts in Riau. SIJORI was created because the three nations spanned by the region agreed to cooperate to achieve economic growth despite their political differences. Both American and Japanese TNCs have also played crucial roles in the rapid economic growth that has been realized in the region. Nevertheless, the region's economic base is neither independently stable nor essentially speculative in nature. Rather, companies in the region have been deeply influenced by both the American and Japanese domestic markets. Against this backdrop, Japanese TNCs reduced their activities in the region after the Asian economic crisis of 1997. Less
|
