The impact of the 1930s depression on the Philippines shows a mixed picture, differing according to region and social class. Most probably the Philippines as a whole suffered less than neighbouring countries. Comparative figures show that for the years 1934 to 1938, consumption levels in the Philippines were the highest in Asia outside Japan. However, national averages do not tell the whole story. Declining prices hit agrarian commodities unevenly, and as each commodity was concentrated in a particular ecological region, the regional impact of the crisis was uneven.

The economic decline in the advanced capitalist countries was transmitted to the tropical colonies through four mechanisms — the decline in trade, the change in relative prices in favour of the advanced countries, the decline in capital flows to the colonies, and finally a steep decline in the world price level. The Philippines was affected by all these mechanisms, but less severely than some of its neighbours, because its status as a colony and trading partner of the United States provided it with a number of privileges. Although the country could not escape from price declines, some of its export commodities found a protected market in the United States, enabling it to maintain export volumes and (in the case of sugar) its price level.

Trade between the Philippines and the United States had increased very considerably over the years. The Payne-Aldrich Tariff Act of 1909 and the Underwood Tariff Act of 1913 had instituted reciprocal free trade between the two countries. When the depression hit the United States, the American Government adopted various trade restrictions. The Smoot-Hawley Tariff Act of 1930 substantially increased the import duty on Cuban sugar, but not on Philippine sugar. The Jones-Costigan Act of 1934 applied quotas on sugar imports into the United States, but the Philippines received a much more favourable quota than did Cuba.

INTRODUCTION

In colonial Indonesia, as in several surrounding countries such as Malaysia and Thailand, the period 1914-42 was characterized by a large expansion in agricultural exports. In particular, the islands outside Java, the Outer Islands, gained economic significance in the colony by supplying large volumes of export products for the world market. An important share of these exports, up to an estimated 45 per cent or more of total agricultural exports, originated from indigenous peasants. These smallholders cultivated rubber, copra, coffee, pepper, and a number of other crops. Also they collected forest products such as rattan, damar, and copal, which they sold to earn a supplementary money income. This development of cash crop exports by smallholders, who gradually discarded (part of) their subsistence agriculture and became increasingly dependent on rice imports paid for in cash, has been described by, for example, Myint. The development of Indonesian agriculture and the coexistence of smallholders and European agricultural estates have been studied recently by a number of scholars.

This chapter studies the entrepreneurial strategies of Indonesian smallholders in the Outer Islands, focusing on the period during which the prices on the world market deteriorated severely due to the world depression. The focus is explicitly on the indigenous entrepreneur. European or American agricultural estates, as well as the oil and tin companies (concentrated in the provinces of East Sumatra, Palembang, Bangka, Belitung, and Southeast Kalimantan), are not dealt with in this chapter. It can be argued that Western enterprises, although perhaps beneficial to the national economy, had only limited growth effects on the regional economies and, more or less, formed economic enclaves. This indicates that the economy was essentially dualist and that a separate analysis of the indigenous economy is justified.

When the depression set in, in 1929, most prices of raw materials on the world market had already been falling for several years, for some commodities from 1925.

Study of the economic history of Southeast Asia is coming on these days. Even so, work on the impact of global trade cycles remains underdeveloped, and critical attention to the historical geography of such phenomena has barely begun. This essay is an attempt to compare regions and provinces of the Philippines in terms of the economic experience of the vulnerable strata of society during the depression of the 1930s. My purpose is to develop an analytical framework for the exploration of the sub-national impacts of the slump and then, in essence, to map the depression in space and time. The differences among places are strongly traceable to the profile of local cash crop specialization and to the market demand and political economy surrounding each crop. It is worth noting that trade cycles were not the only, or even the primary, cause of episodic economic hardship in the archipelago during the twentieth century. In a concurrent project, I have been impressed by the impact of droughts, usually but not always associated with El Niño climatological patterns, on rice production. Likewise, the diffusion of the epizootic rinderpest from the mainland so thoroughly annihilated the herd of carabao work animals at the end of the 1880s and again in the early twentieth century that a great many fields went unploughed and unplanted. There were near famine conditions in several provinces in the early 1900s. Finally, imperial warfare at the turn of the century and in the 1940s was also the proximate cause of great human suffering. In metropolitan Manila, the starvation of 1944-45 and, in living memory at least, the combination of inflation and unemployment in the Marcos depression of the mid-1980s were both more harmful than the slump of the 1930s. Trade cycles were important events from the point of view of their potential impacts on human welfare but they were hardly singular.

When did things really change in Indonesia in modern times? Where do we situate the decisive break with the past in the formative processes of change which culminated in the nation-state and national economy of Indonesia today? In the sphere of politics the answer is easily given: 17 August 1945 with the declaration of Indonesian independence, even if the Japanese invasion in the spring of 1942 had effectively brought Dutch colonial rule over the archipelago to an end — although Indonesian independence was formally acknowledged by the Dutch Government only in December 1949. The answer is less clear-cut when we turn to economic development. Dutch domination of Indonesian export production only came to an end with the nationalization of most Dutch-owned business enterprises in late 1957 and early 1958. This is surely the latest possible date for the decisive turnabout. At the other extreme, the hardship experienced by Indonesian export industries during the worldwide economic depression of the 1930s can be seen as a stark reversal of trends, with economic expansion being replaced by a stagnation that was to continue through to the 1950s and early 1960s. This chapter argues that the turning point in the development of the modern Indonesian economy may indeed be found in the depression of the 1930s — thus preceding the fundamental reorientation in political development by at least a decade.

A turning point in economic life implies a shift to a different phase of development in the long run. This indeed occurred in Indonesia, where two periods of rapid economic expansion — the quarter of a century leading up to 1930, and another quarter of a century from the inauguration of the New Order in the late 1960s through to the late 1990s — are separated by an intervening period of stagnating or even declining incomes and standards of living. Another implication is that earlier conditions are not simply restored after a while but give way to a different type of development.

For much of the 1920s and 1930s, the world rice market was in turmoil: and this clearly had an important impact on the Thai economy, given that rice accounted for such a high proportion of the kingdom's exports and that the cultivation of rice was central to the livelihood of most Thais.

Disarray in Thailand's domestic rice market was clearly evident during the late 1920s. In one notable instance, in 1928 there was a dispute between some Chinese-operated rice mills and seven European export firms — the East Asiatic, Arakan, Borneo, Anglo-Siam, Steel Brothers, Windsor, and De Cooper Johnson — in which the latter sought to amend the terms of delivery and payment stipulated in their agreements. Originally, the export firms would pay for the rice when the miller bought it as paddy, and they accepted it for delivery at the mill. The exporters now proposed to pay the millers after delivery, and after inspection of the rice at their own warehouses. The proposal was not accepted by the rice millers. They pointed out the significant liability that could arise in the transportation of goods. A single shipwreck could result in a catastrophic loss for a rice mill. When the dispute could not be resolved, the seven firms ceased to purchase rice for export to Europe. Consequently, the export of Thai rice to Hong Kong and Singapore rose, but its price dropped sharply. This reduced the prices obtained by Thai farmers for their paddy. In the period from November 1927 to September 1928, the rice price in Hong Kong tumbled from HK$9.25 to HK$7.60 per picul, while in Singapore it fell from 9.25 baht to 8.25 baht per picul. As a result, paddy prices in Bangkok plunged by 15 baht per kwian (roughly one ton), or about 15 per cent, in just one month.

During the 1930s, British Malaya was caught between two opposing tendencies — an attempt by the British Government to deal with the depression by promoting unity among the Dominions, Colonies, and Protectorates that made up the British Empire; and a move by the local colonial administration to achieve a greater degree of autonomy in economic affairs. The former can be seen in the policy of Imperial Preference introduced following the Ottawa Conference in 1932, while developments in the procurement of labour and food supplies illustrate the latter. On balance, changes introduced during the decade left Malaya more self- sufficient, and less dependent on imperial or regional connections.

‘British Malaya’ refers to the lower part of the Malay Peninsula which, before 1941, included the crown colony of the Straits Settlements as well as four ‘Federated Malay States’ (Perak, Selangor, Negri Sembilan, and Pahang) and five ‘unfederated’ Malay States, all protectorates. The Governor of the Straits Settlements simultaneously served as High Commissioner for the Malay States. Rural Malays had a mixed economy, planting rice along with smallholdings of rubber or fruit trees. They rarely sought employment on mines or estates, which obtained workers from China or India. Mining and plantation industries along the west coast of the peninsula accounted for most of British Malaya's exports, and the greater part of the revenues collected by the colonial administration. In the Straits Settlements, Singapore and Penang functioned as trading entrepôts where merchants imported manufactured goods from industrialized countries for distribution throughout the region, and assembled cargoes of ‘Straits Produce’, a term which embraced a wide variety of primary products grown or collected in Southeast Asia, for shipment to markets outside the region.

The depression caused a fall in prices and a sharp reduction in demand for Malaya's exports. After many years of maintaining a favourable balance of trade, Malaya experienced a small trade deficit in 1928, and much larger deficits in the years 1930 to 1932 (see Table 13.1).

This chapter works from the proposition that as the economic crisis struck Lower Burma with full force in the final months of 1930, the agriculturists in the vast Irrawaddy delta — committed to the cultivation of rice for export — created or discovered a number of strategies to defend their material condition. They increased their sales of paddy — by expanding the area under cultivation or by diverting a larger share of the harvest to the market — in an attempt to maintain their money income as rice prices fell. They resisted the demands of the tax-collector, the landowner, and the moneylender, sometimes violently or with the threat of violence but often simply by absconding: alternatively, landowners, moneylenders, and the colonial administration calculated that, given these circumstances, it would be futile, unnecessarily provocative, or unjust to seek to press their claims in full or even in part. And finally they found a measure of relief in the fall in the prices of articles of common consumption, including, notably, imported textiles.

Support for this broad proposition can be found scattered through the contemporary records. For example, a settlement report noted that during the harvest months in 1932, tenants in Hanthawaddy District, when required to settle rent demands, simply ‘refus[ed] to pay anything more than what [they] could well spare’, despite the fact that rents had commonly been agreed between landowner and tenant in writing. Writing to their Rangoon bankers in 1934, a group of prominent Chettiar moneylenders reported that in their current dealings with the delta agriculturist, ‘we are not able to collect even a small portion of our [advances], not to speak of the arrears of interest’. An official note from Rangoon to Delhi at the beginning of 1931 explained that district officers involved in collection of the capitation tax had been instructed ‘to avoid unduly harassing’ assessees, and ‘to exercise careful discretion’ before initiating legal proceedings in cases of non-payment.

INTRODUCTION

In the study of economic history, the 1930s depression, which is often relegated from the discussion of political history, is an important subject for research. Its importance is due to its wide consequences for the economic activity and social conditions of various communities. The depression also greatly influenced the economic and social development of colonial Indonesian society. It marked the end of the liberal system which had been in place since 1870. The colonial government abandoned non-intervention in the economy and began to put various regulations and restrictions into effect.

The depression, which began in 1929 and lasted to about 1939, was worldwide in scope, and has been described as the most severe economic decline in the first half of the twentieth century. It adversely affected colonial Indonesia, which had been closely integrated into the international market through the development of a plantation economy. In the context of the general expansion of the colonial economy which began in the second half of the nineteenth century, the 1930s depression was a major turning point in the economic development of colonial Indonesia.

It has been said that colonial Indonesia felt the worst and longest impact of the world depression, that the 1930s depression was an economic catastrophe for colonial Indonesia. But this dark view rests on a number of misconceptions of the 1930s crisis. One reason for these misconceptions is the lack of comprehensive studies which focus on Indonesian economic history in general and on the 1930s depression in particular. Although the 1930s depression is mentioned in some macro-level studies, the treatment is rarely convincing. In the standard book of Indonesian national history, for example, there is merely a brief statement that the depression imposed economic pressures on the Indonesian people and created a wider gap between them and the Europeans.

The purpose of this chapter is to investigate and analyse some of the causes of the crisis in Indo-China in the 1920s and 1930s, in the context of the world crisis of 1929. How deep was the crisis, what were its main causes, how did it affect the north and the south of Vietnam, and whom did it affect? The approach here is to use empirical sources, which provide information on a year-by-year basis. Of particular importance is the Annuaire Statistique de l'Indochine, although it has obvious weaknesses: like most French sources of that period, it was more concerned with those economic factors which involved the relationship with France than with the actual situation in Indo-China. The Annuaire Statistique is, however, one of the few sources which allow for analysis of annual changes over longer periods of time. It is important to investigate changes in production and trade during the crisis in order to understand its causes and impact.

The structure of the chapter is as follows. The first section deals with the context of the crisis and its main feature; then follows a discussion of the structure of agriculture in north and south Vietnam and in Cambodia; the impact of the crisis in the north and the south; the importance of the French colonial lobby in securing protection for rice; and finally the foreign trade of Indo-China during the crisis is set in the context of longer- term trends.

The two central concerns of the paper are: the role of French colonial policy during the crisis: and the ways in which the more commercialized south reacted to the crisis, compared to the impact in the more subsistence- oriented north. The broad thesis is that the greater the level of integration into the world market, the greater the impact of the world crisis on the local society.

INTRODUCTION

In the second half of 1997 and the first half of 1998, Indonesia went through a particularly difficult period. During the summer and autumn of 1997 the country had been faced with widespread forest fires and harvest failures due to severe drought. While this was going on, the financial crisis in Thailand triggered off devaluations in the Philippines, Malaysia, and Indonesia in July 1997. Indonesia was hit again in January 1998, when the rupiah found itself in free fall, foreign capital-owners withdrew their portfolio investments, and real or imagined price rises led to rural and urban unrest. The Year of the Tiger was off to a very bad start.

Whatever the ultimate outcome of these recent developments, already called the worst economic crisis in Indonesia since 1966, they do remind us of that other, much more (in)famous crisis, now almost seventy years ago. That in itself is good reason for a (re)study of the 1929 crisis and the depression of the 1930s. To my mind, it would be particularly promising to take a closer look at developments in the standard of living during those years, as this is still a topic of considerable controversy, or rather a topic on which people hold widely diverging opinions.

This has been so since the late 1930s, when the first accounts of the depression in the Indies were written. On the one hand there are the ‘pessimists’, according to whom the depression was an appalling disaster for the Indonesian population. The economist G. Gonggrijp, writer of an economic history of Indonesia, is an early representative of this school. More recent adherents to the pessimist school are J. A. A. van Doorn, William O'Malley, and W. F. Wertheim. I am somewhat hesitant to class D. H. Burger with the pessimists, but he certainly does not belong to the optimist school. In the late 1950s, he wrote a social and economic history of Indonesia, that was not published until 1975.

Arab entrepreneurs, on the defensive against Chinese competition in Southeast Asia since the 1880s, faced a new challenge in the depression of the 1930s. This chapter considers the Arab community in the Dutch East Indies and the Malay peninsula, which consisted overwhelmingly of Shafi'i Muslims from Hadhramaut in southern Arabia. Other groups of Hadhrami entrepreneurs were to be found in East Africa, the Red Sea, and South India. Small numbers of Hadhramis were established elsewhere in Southeast Asia, but little is known about these communities. As for Arab entrepreneurs in the Philippines, they were mostly Christians from Greater Syria.

The few indications on the position of Arabs in the economies of the Dutch East Indies and British Malaya underline both their wealth and their small numbers. There were only 4,949 Arabs enumerated in the 1931 census for the Malay peninsula and Brunei, but they were among the wealthiest communities. In 1936, they were reputedly the richest group in Singapore, in terms of ownership of assets per head. Dutch statistics rarely distinguished Arabs specifically, but the 1930 census showed that 71,355 ‘other Foreign Orientals’ were Arabs, compared to 30,018 Indians and some 14,000 others. In 1936, ‘other Foreign Orientals’ paying income tax had a higher income per head than either Chinese or ‘Natives’. Some 3,000 ‘other Foreign Oriental’ taxpayers earned about 9 million guilders in 1936, compared to 50 million for 27,000 ‘Natives’, 82 million for 37,000 Chinese, and 266 million for 65,000 ‘Europeans’. The last category is misleading, for it included all Japanese, plus various individuals who had acquired European status. A number of Arabs in the Dutch East Indies were reputed to be ‘multimillionaires’ at the end of the 1930s.

The problems of the 1930s are clear enough, but it is easy to forget the opportunities presented by the recession to this small but dynamic community.