By M. Bakri Musa

Chapter 5: Understanding Globalization

Foreign Investments in the Third World

Countries like Malaysia that were once colonized are rightly sensitive about their independence. Thus they tend to look upon foreigners, including investors, with suspicion. The typical Third World initial experience with foreign investors had been with companies of imperial powers. These companies were concerned primarily with plantations and extractive industries. In Malaysia they were involved in rubber plantations and tin mining. The exploitative nature of such investments was quite obvious. Rubber, tin, and other precious commodities were exported to Britain where they were turned into high-value manufactured goods and then sold back in Malaysia and elsewhere at exorbitant prices. Meanwhile the rubber tappers and tin miners were paid pittance for their efforts. The bulk of the profits were kept in Britain with little if any repatriated to Malaysia. No wonder such investments became easy targets for the nationalists.

Even though those early investments were clearly lopsided and exploitative (asymmetric, to use a modern phrase), nonetheless Malaysia benefited immensely. First, the country would never have known that it was capable of growing rubber had the British not started the plantations. Rubber is not indigenous to the country; the British brought the seedlings from South America via London’s Kew Gardens.
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