Abstract
This chapter attempts to delineate a model of resource-based industrialization by focusing on the experience of the Malaysian palm oil industry. The chapter examines how the palm oil industry upgraded its exports from crude palm oil to processed palm oil and became the world’s largest producer and exporter of palm oil for over 40 years until Indonesia surpassed it in the mid-2000s. It is true that Malaysia is blessed with suitable natural conditions for oil palm cultivation. However, the chapter argues that these are necessary, but not sufficient, conditions for successful development and it stresses the importance of other factors such as government policies, technological features specific to the industry, and changing circumstances in the world economy.
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Notes
- 1.
Figures are based on World Bank country data.
- 2.
Figures are as of 2011, based on Malaysia MATRADE data.
- 3.
However, the share of Malaysian palm oil exports has declined gradually in recent years, mainly due to the rapid expansion of Indonesia’s palm oil exports. Indonesia became the world’s largest exporter of palm oil in 2008.
- 4.
A certain percentage of CPO is exempted from export duties.
- 5.
As a result, Malaysian palm oil farming increasingly depends on foreign workers, particularly those coming from Indonesia.
- 6.
Based on my interview with a Japanese health-care company on 4 January 2013.
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Oikawa, H. (2016). Resource-Based Industrialization of the Malaysian Palm Oil Industry. In: Sato, Y., Sato, H. (eds) Varieties and Alternatives of Catching-up. IDE-JETRO Series. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-137-59780-9_9
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DOI: https://doi.org/10.1057/978-1-137-59780-9_9
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