ABSTRACT
This chapter uses the Malaysian experience to analyse how certain social policy agendas – no matter how well intentioned – can sometimes begin to constrain, or indeed set limits, to continued industrialization. In the study of economic transformation, issues of social policy tend to enter the analysis by attention to ‘human capital’ and the means by which it might be ‘improved’. The chapter turns to a discussion of the social policy contexts within which Malaysian industrialization emerged and evolved. It suggests that while crucial to social stability, these contexts have had the unintended consequence of perpetuating the structural weaknesses of the country’s industrial base. The chapter demonstrates the continuing technological weaknesses, particularly in the electronics industry, and subsequently sketches the nature of China’s competitive threat. It summarizes the reasons for the stalling of Malaysia’s industrialization project and outlines the general implications of our analysis.
