Economic and Social Survey of Asia and the Pacific

2412-0979 (online)
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The Economic and Social Survey of Asia and the Pacific monitors regional progress, provides cutting-edge analyses and guides policy discussion on the current and emerging socio-economic issues and policy challenges to support inclusive and sustainable development in the region. Since 1957, the Survey has also contained a study or studies focusing on a significant aspect or challenge relevant to the economies of Asia and the Pacific region.
Economic and Social Survey of Asia and the Far East 1956

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31 Dec 1956
9789210599351 (PDF)

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This latest edition of the Survey analyzes current economic and social developments in the region against the background of events in the world economy. It also focuses on the serios problems of growth and transformation of the area's least developed and Pacific Island developing economies.

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  • Introduction

    Favourable economic conditions continued to prevail in most countries of the ECAFE region in 1956. Production gains were widespread, especially in newly developing industry. Real economic progress was made, judging from increased developmental expenditures. Somewhat disturbing, however, was the appearance in many countries of inflationary tendencies with which governments, becoming more actively engaged in promoting economic development, would have to cope.

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  • Expand / Collapse Hide / Show all Abstracts The regional situation

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    • The current economic situation
    • Salient features of economic development plans

      The present chapter describes and compares the economic development plans (in some cases called programmes) of the countries of the ECAFE region in terms of their main elements or salient features. In view of the comparative newness of development planning in this region, attention has been concentrated on obtaining a point of departure for analysis by assembling the basic data on the subject, so far as that has been possible. It is, of course, understood that “plans” and “planning” are very flexible terms. The plans of some countries involve the difficult business of breaking rather sharply with the past, especially as concerns the amount and composition of investment, while in some other countries the plans bear closer resemblance to projections of economic trends already established. The material is presented in six sections, as follows: (1) the plans, (2) their scope and general character, (3) their magnitude, (4) the composition of planned public expenditures, (5) finance, (6) techniques.

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  • Expand / Collapse Hide / Show all Abstracts Country surveys

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    • Afghanistan

      Owing to reduced volume of consumer imports accompanied by an unfavourable cereal harvest, some increase occurred in Afghanistan’s general price level between May and October 1955. Transit trade through Pakistan remained sluggish to the end of 1955/56, except for temporary recovery during the period November 1955 to February 1956. By utilizing the northern transit route and air transport to Bahrein, Beirut and India, the country made every effort to retain its traditional export markets and to import essential consumer and capital goods. The value of exports and imports during 1955/56 expressed in Afghanis was higher than that reached in 1954/55. With a rapid inflow toward the end of 1955, the shortage of consumer imports experienced earlier was somewhat eased in the first quarter of 1956, and substantially so in the second and third quarters. During 1956/57, and particularly with the adoption of the Five-Year Plan for 1956/57 to 1960/61, developmental activities in the country took an upward trend. The Government negotiated external loans and grants on a substantial scale to provide for foreign exchange and technical assistance needed for implementing the Plan.

    • Burma

      The Burmese economy has made some recovery from its unfavourable situation in 1954 and 1955, caused by the slump in the price of rice, the country’s chief means of earning foreign exchange. The basic difficulties seem to have, however, remained, despite active efforts to overcome them or mitigate their effects.

    • Cambodia

      Agricultural production in the crop year 1955/56 showed a recovery after the setback of 1954/55. Industrial production, construction and the volume of transport also rose somewhat in 1956. However, because of an extremely small rice crop in 1954/55, total exports in the first half of 1956 were low, and a growing proportion of imports was financed by foreign aid.

    • Ceylon

      The year under review was marked by two unfavourable developments of external origin. One was the fall—amounting to 13 per cent in the first nine months of the year—in the terms of trade; however, since the terms of trade had risen to their post-war peak in 1955, the fall, though substantial, left them far above the recession levels reached in 1952 and 1953. The second was the closure of the Suez Canal in November 1956. For a trading economy, the bulk of whose trade passed through the canal, this was a disturbing blow. It not only interrupted and delayed the flow of exports and imports, but also increased freight and insurance costs.

    • China
    • Hong Kong

      A substantial increase in the total value of trade, a continuing high level of private and public construction activity and further progress in manufacturing combined to make 1956 a comparatively prosperous year in Hong Kong. Trade with most major trading partners increased; the estimated total value of trade for the year exceeded even that of 1950, a boom year because of the Korean conflict. Increased competition from manufactured products of Japan and other more recently developing countries of Asia, however, suggested the need for continued improvement in productivity.

    • India

      The central developments in India in the year under review related to the transition from the first to the second Five-Year Plan. The first Plan gathered momentum rapidly in the last two years, and this has of late been reflected in signficant internal and external strains. The second Plan envisages heavier tasks.

    • Indonesia

      Indonesia’s economy achieved a degree of internal financial stability in 1956 but the balance of payments deteriorated. Inflation, one of the country’s most pressing problems since a spiral trend developed in late 1954 and the first half of 1955, became less acute between mid-1955 and the end of the third quarter of 1956. However, the danger of a resumption of the upward trend in prices and the cost of living was inherent in the situation at that point and was confirmed by the statistical evidence available for the final quarter.

    • Japan

      The pressure of population on land in Japan, accentuated by the loss of territory and a net inflow of 5 million repatriates during 1945–1950, is being alleviated by birth control measures and by a rapid increase in industrial production. For the present, however, largely because of increased labour force participation, the country is confronted with a substantial problem of unemployment and underemployment. The new Five-Year Plan for economic self-support undertakes not only to sustain the rate of economic growth in general, but also to promote employment through the extension of public works and small and medium-sized industries.

    • Korea

      During 1956 the major economic difficulties of southern Korea, confronted with the two severe tasks of defence and reconstruction, were slightly alleviated. A larger inflow of foreign aid helped to increase production and meet essential consumption needs, thus narrowing the gap between production and demand in certain sectors and slowing down the rate of rise in prices. Despite certain improvements, government revenues for the fiscal year 1955/562 did not meet government expenditures. Defence and reconstruction requirements were met largely by external aid and partly by deficit financing. Exports, which rose, paid for 7 per cent of imports (including aid imports) in the first six months of 1956. It appeared that substantial external aid would continue to be needed for some time, until the country’s economy could achieve both internal and external equilibrium.

    • Laos

      Laos, which achieved independence in 1954 after years of warfare, returned to conditions of peace only after settlement of differences with the northern provinces in late 1956. Furthermore, after abrogation of the former quadripartite agreements at the end of 1954, Laos had to start almost from the beginning to build up the necessary institutions to carry out its new responsibilities.

    • Malaya and British Borneo

      In the economies of the Malayan area (Federation of Malaya and Singapore, Brunei, North Borneo and Sarawak), the contribution of exports to the gross domestic product usually ranges from one-third to over one-half. In 1956, the export and domestic activities of these economies were at comparatively stabilized levels, in comparison with boom conditions prevailing in 1955. The effects on their incomes of the decline in their terms of trade in 1956—the result of the fall in export prices, especially of rubber, and a small rise in import prices over the 1955 level—were largely offset by an increased volume of exports and a rise in domestic activities. These economies, with high marginal as well as average propensities to import, reacted to the high level of export earnings in 1955 and 1956 by increased imports, especially of consumer goods.

    • Nepal

      Efforts to achieve currency and exchange stability, and the adoption of a five-year plan, appear as the main events of the year in the Nepalese economy. Restrictions on currency issue, introduction of selective import control and active participation by the newly formed Central Bank (Nepal Rashtra Bank) in the monetary affairs of the country somewhat strengthened the exchange position of the mohur (Nepali rupee) against the Indian rupee. Steps taken by the Government to revive the entrepôt trade and reform its tariff policy were also expected to contribute to exchange stability. Nepal's draft Five-Year Plan (1956/57–1960/61) appeared likely to have the support of substantial foreign aid to help assure its implementation.

    • Pakistan

      Food production, exports, the development effort and the financing of defence have been outstanding problems in Pakistan's economic life. In 1955/56, the food situation again caused anxiety, owing to widespread flood damage to crops, which necessitated imports of large quantities of rice and wheat and raised the cost of living considerably in East Pakistan, a food deficit area. However, export earnings rose beginning in late 1955 and, because of strict import control on non-essential items, could be used in part for financing food imports. Devaluation and the consequent larger payments surplus, together with the sizable government deficit, expanded the money supply, but external aid and, to some extent, an increase in industrial production helped to ease the upward pressure on prices.

    • Philippines

      The accelerated tempo of economic development, financed by government borrowing in the public sector and credit expansion in the private sector, in late 1955 reversed the deflationary trend that had prevailed in the Philippines in the preceding three or four years. Greater expenditure resulted at first in substantial import expansion and considerable depletion of foreign exchange reserves, and later, after the tightening of import control, in rising prices. During 1955 and the first half of 1956, the balance of payments position would have been better had the terms of trade not deteriorated by an additional 10 per cent, partly offsetting further increases in production. The unfavourable internal-external price relationship underlying the disequilibrium in the balance of payments has been a major factor limiting the rate of progress of economic development. Unemployment remained high—at an estimated 13 per cent of the labour force.

    • Thailand

      The extent to which Thailand’s economy depends on the rice crop is attested by the fact that the share of rice in the total annual value of exports averaged 57 per cent in the decade 1946–55. To offset the adverse effect on its revenue produced by the falling trend in the export price of rice since 1953, the Government has succeeded in steadily increasing revenues from other sources. Government expenditures, however, have continued to exceed revenues, with heavy outlays on defence and development contributing substantially to this result. From 1950 to 1956, the Government has had constant recourse to deficit financing. This has had a tendency to lift private spending and imports, thus adding to the pressure on the country’s balance of payments caused by reduced export proceeds from rice and (in 1952/53) by the measures taken to raise the external value of the baht. Except for a very small surplus in 1955, Thailand’s balance on trade account has been adverse since 1953.

    • Viet-Nam

      In 1956 southern Viet-Nam began to emerge from the difficulties of the post-war period; for the first time it was in a position to take in hand the problem of economic development. In 1955, conditions of insecurity had prevented some areas from contributing to the economic advantage of the country as a whole. The arrival in southern Viet-Nam of about 900,000 refugees had brought crucial problems to a country with a total population of 11 million. By 1956, however, a substantial number of refugees had been resettled and, while many problems were still to be solved in this respect, they were no longer of such a magnitude as to threaten the stability of the country’s economy. The Government was able to counteract potential inflationary pressure arising from money brought and spent by refugees, expenditures of the French expeditionary forces, new investments and the relative scarcity of rice. Prices rose, but only moderately. Thus, substantial progress had been achieved by 1956, and at the same time a number of major problems remained to be solved before the country could attain economic equilibrium, stabilize the cost of living and rely on its own resources.

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  • Expand / Collapse Hide / Show all Abstracts Appendices

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    • Asian economic statistics
    • Trade agreements concluded during 1956

      For purposes of the present summary trade agreements are broadly defined to include: (1) trade and/or payments agreements for the exchange of commodities between two contracting parties, usually with provisions for (a) settlement on open account with a swing limit, or (b) cash settlement in national or other currencies mutually agreed upon. Such an agreement may be concluded for a period of years, and in addition a protocol may be signed, generally on a yearly basis, to specify the kind and amount of commodities to be exchanged; on the other hand, a protocol may also be concluded without prior conclusion of an agreement. (2) Barter agreements or protocols for the exchange of commodities between two contracting parties without the use of a medium of payment, to be settled through keeping of accounts in the currencies of the respective contracting parties at an agreed, usually official, exchange rate, or in that of a third country. (3) Commodity agreements for the purchase of one commodity by one contracting party from the other for cash payment. (4) Surplus agricultural commodity agreements for the sale of United States surplus agricultural commodities to another government which will pay in national currency, a substantial part of which is commonly used on a loan basis for financing development within the country. Such an agreement is sometimes followed by the conclusion of a processing agreement, whereby one of the commodities involved, e.g. raw cotton, may be processed by a third country at cost into finished products for use by the government receiving the United States surplus agricultural commodity.

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