Vent-for-surplus in Southeast Asian development since 1870

This paper develops a new vent-for-surplus model to analyze Southeast Asia's two phases of rapid export-led growth. During the first, from 1870 to 1929, international trade provided the 'vent' to utilize frontier land and labour surpluses in the production of primary commodities. Intra-regional exchange both allowed and created specialization. Four commodities— rice, rubber, tin and sugar — accounted for most exports. A second growth phase from 1970 depended on exporting manufactures and vented surplus labour through trade or its substitute of emigration. Western markets and regional integration again drove growth, transforming Southeast Asian countries from agricultural to predominantly industrial. This time, Southeast Asian development depended on integration with markets in the West but, crucially, also on supply chains within the region to enable specialization. By giving scope for consumer preferences and regional integration, the model can better explain the realities of Southeast Asia's growth and extreme specialization. In both phases, trade served as the growth engine, but in neither was technical change the chief expansionary source.