What are the major reasons for the differences?
Southeast Asia has been a high growth in the economy which includes Indonesia, Malaysia, the Philippines, Singapore, and Thailand. However, few countries are still lagging economically such as newly independent Myanmar, Cambodia, Laos, and East Timor. In general, these inequalities in economic growths are due to the policies and programs adopted by the government in East Asian region.
The major differences for the successful growth of Singapore and Thailand are Land and Natural resource – Initial condition: Malaysia, Singapore, and Thailand have initiated the economic growth by exploiting the natural resources (petroleum, tin, timber, gas, rubber) and abundant reserve of land, which allowed an initial role for the government. These countries benefited abundantly, from tax during the high price of these natural resources, which increased the government revenue.
Government policies: Investment in rural infrastructure, widespread access to basic education and health services (World Bank, 1993) and equally important, the export-oriented, labor demanding development strategy which all increased the employment opportunities and wages.
Education: Higher primary and secondary school enrollment resulted in a reduction in inequality of access to socioeconomic background and by gender. This education contributed significantly to the economic growth of these countries and further stimulated investment in education compared to other less developed economies.The increase in inward foreign direct investment (FDI).
Adoption of free trade policies: Association of Southeast Asian Nations (ASEAN) was formed on August 8, 1967, by Thailand, Indonesia, Malaysia, Singapore and the Philippines. This free trade policy has encouraged establishing a free trade among the members of ASEAN with virtually non-traffic and no traffic barriers.
Birdsall, Nancy, David Ross and Richard Sabot (1995), "Inequality and Growth Reconsidered: Lessons from East Asia", World Bank Economic Review, Vol 9 (3), 477-508
Ranis, Gustav (1995), "Another Look at the East Asian Miracle", World Bank Economic Review, Vol 9 (3), 509-534