A new shape for the economy
Western rule changed the whole shape of our country's economy. It created an export economy that depended heavily on two products, tin and rubber. When world prices for these were high, the country earned a lot; when prices fell, it suffered. This heavy dependence on a few exports made the economy less balanced and less stable.
A dual (plural) economy
The colonial economy split into two parts, a "dual economy." One part was modern — mines, estates, banks and towns, mostly run with foreign capital and immigrant labour. The other part was traditional — Malay villages growing rice and other food. These two parts hardly mixed, and wealth from the modern sector often flowed out to Western companies rather than to local people.
Key idea
Colonial rule created a dual economy: a rich modern export sector run by foreigners and immigrants beside a poorer traditional sector where most Malays remained.
Growth, but uneven
There was real growth: new towns, railways, ports and busy trade. But the benefits were uneven. The west coast of the Peninsula, where the mines and estates were, developed faster than the east coast. Much profit left the country, and local Malays gained less from the wealth their land produced. This uneven, export-based pattern shaped the economy for many years.
Remember
- Economy depended heavily on tin and rubber exports.
- Prices rose and fell, so the economy was unstable.
- Dual economy: modern sector vs traditional sector.
- Development was uneven; profits often flowed overseas.