Open Collections

UBC Theses and Dissertations

UBC Theses Logo

UBC Theses and Dissertations

Input output analysis and the first Malaysia plan 1966-1970 Bent, Colin G. 1970

Your browser doesn't seem to have a PDF viewer, please download the PDF to view this item.

Notice for Google Chrome users:
If you are having trouble viewing or searching the PDF with Google Chrome, please download it here instead.

Item Metadata

Download

Media
831-UBC_1970_A8 B46.pdf [ 3.95MB ]
Metadata
JSON: 831-1.0102176.json
JSON-LD: 831-1.0102176-ld.json
RDF/XML (Pretty): 831-1.0102176-rdf.xml
RDF/JSON: 831-1.0102176-rdf.json
Turtle: 831-1.0102176-turtle.txt
N-Triples: 831-1.0102176-rdf-ntriples.txt
Original Record: 831-1.0102176-source.json
Full Text
831-1.0102176-fulltext.txt
Citation
831-1.0102176.ris

Full Text

i INPUT OUTPUT ANALYSIS AND THE FIRST MALAYSIA PLAN 1966 - 1970. by C o l i n G. Bent B.Comm., D i p . Ed., U n i v e r s i t y o f Melbourne, 196^+. A T h e s i s S u b m i t t e d I n P a r t i a l F u l f i l l m e n t Of The Requirements For The Degree Of MASTER OF ARTS i n t h e Department o f ' ECONOMICS. We a c c e p t t h i s t h e s i s as c o n f o r m i n g t o t h e r e q u i r e d s t a n d a r d THE UNIVERSITY OF BRITISH COLUMBIA May, 1970. In p r e s e n t i n g t h i s t h e s i s in p a r t i a l f u l f i l m e n t o f the r e q u i r e m e n t s f o r an advanced deg ree a t t he U n i v e r s i t y o f B r i t i s h C o l u m b i a , I a g r e e t h a t t he L i b r a r y s h a l l make i t f r e e l y a v a i l a b l e f o r r e f e r e n c e and s t u d y . I f u r t h e r ag ree t ha p e r m i s s i o n f o r e x t e n s i v e c o p y i n g o f t h i s t h e s i s f o r s c h o l a r l y pu rpo se s may be g r a n t e d by the Head o f my Department o r by h i s r e p r e s e n t a t i v e s . I t i s u n d e r s t o o d t h a t c o p y i n g o r p u b l i c a t i o n o f t h i s t h e s i s f o r f i n a n c i a l g a i n s h a l l not be a l l o w e d w i t h o u t my w r i t t e n p e r m i s s i o n . Department o f The U n i v e r s i t y o f B r i t i s h Co l umb i a Vancouve r 8, Canada ABSTRACT This paper i s divided into four d i s t i n c t sections. 1. An explanation of the meaning of input/output analysis, e s p e c i a l l y the derivation and s i g n i f i c a n c e of the table of d i r e c t and indirect requirements. 2. An outline of the decisions taken i n constructing the West Malaysian i 9 6 0 transactions table from a set of National Accounts - e s p e c i a l l y the treatment and valuation of imports and exports? producer versus purchaser p r i c e valuation of transactions} and problems of inconsistent and incomplete double entry records. 3. An explanation of the method of forecasting from input/ output tables. This includes discussion of : a. A method of estimating aggregate demand f o r Malaya f o r 1970. b. A method of projection of value added fo r each sector, 1970. c. The l i k e l y s t a b i l i t y of the input c o e f f i c i e n t s over time. Results; a. Differences between the i 9 6 0 and 1965 table projections due to changes i n Leontief inverses and value added c o e f f i c i e n t s over time, as the economy undergoes change. b. Comparison of the table projections with the F i r s t Malaysia Plan projectionst i.Are the Plan projections l i k e l y to be reached i n 1970? ii.Why are some of the table projections so inaccurate? The paper concludes that 1. The projections from the 19&5 input/ output table are generally superior to those from the i 9 6 0 table. 2. Under conditions of s t r u c t u r a l change, even 5 years i s too f a r ahead to expect input/output analysis to y i e l d accurate projections f o r most sectors. i i i TABLE OF CONTENTS. I. Introduction. p . l - 2 I I . Explanation of Input Output Analysis. p.3 - 7 I I I . Construction of the i960 Transaction Table. p.8 - 19 1 C l a s s i f i c a t i o n and aggregation. 2 Producer versus purchaser price s . 3 Net or gross sector output. k Treatment of taxation. 5 Treatment of exports. 6 Treatment of imports. 7 Valuation of imports and exports. 8 Treatment of unspecified column. 9 Problems i n the set of national accounts. 10 R e c o n c i l i a t i o n of my i 9 6 0 transactions table with G.D.P. IV. Consistent Forecasting.' A Projection of f i n a l demand f o r 1970. B Projection of gross output and value added f o r 1970. C Accuracy of input output analysis as a forecasting t o o l . V. Results. (1) Comparison of i960 and 1965 table projections. (2) Reasons f o r differences between i 9 6 0 and 1965 table projections. (3) Are the Plan projections l i k e l y to be realized? (k) The discrepancy between the 1965 table projections and actual performance through 1968. VI. Conclusions. VII. Bibliography. VIII. Appendices. 1 C l a s s i f i c a t i o n of ind u s t r i e s . 2 i 9 6 0 transactions table for Malaya. 3 Treatment of f i n a l demand sectors. 4 Correspondence with Department of S t a t i s t i c s , Malaysia. 5 1965 transactions table f o r Malaya. 6 Inter industry flow program. p.20 - 25 p. 26 - 43 p . 4 4 p.^5 p .^9 p .50 p. 51 p . 5 2 p . 5 3 - ^8 - 5k i v LIST OF TABLES. I. C l a s s i f i c a t i o n of Industries. I I . Projections of F i n a l Demand f o r 1970. I I I . 1970 Plan and Table Projections. IV. Value Added C o e f f i c i e n t and Leontief Inverse Changes i960 to 1965. - 1 -I. INTRODUCTION The basic purpose of t h i s paper i s to enquire into the s u i t a b i l i t y of input output analysis as a forecasting t o o l . In order to do t h i s , Is(a) constructed a transactions table from a set of National Accounts of West Malaysia. (b) estimated f i n a l demand projections for 1 9 7 0 . . ' (c) used an Interindustry Plow Program to project value added for each sector for 1 9 7 0 . These projections are then compared with O f f i c i a l projections from the F i r s t Malaysia Plan. It should be emphasised that t h i s comparison i s legitimate, since the O f f i c i a l Plan estimates were made independently of input output analysis. How The O f f i c i a l Plan Estimates Were Made. (a) aggregate targets. The output and income growth targets of the Plan were determined on the basis of a p r i o r i notions of the maximum attainable growth rates during the period 1 9 6 6 - 7 0 . During the period I 9 6 I - 6 5 , production of non export goods and  services grew at the very rapid rate of 9»2$ p.a. However, the government r e a l i s e d i t would be incapable of expanding spending so r a p i d l y i n the F i r s t Plan period ( 1 9 6 6 - 7 0 ). Unfortunately, lacking a model to t e l l them what growth rate to set, they a r b i t r a r i l y chose 7$p«a.(in r e a l terms). Exports were envisaged to grow at 2.h% p.a.(constant p r i c e s ) . This was close to the growth rate i n the early s i x t i e s , and they obviously assumed that the growth of exports could not be accelerated much i n just 5 y e a r s , since the dependence on slow maturing tree crops i s heavy. -2-Gross Domestic Product would grow at a weighted average of these two rates. This works out to i n terms of r e a l product, 1 or, k.8fo p.a. i n current p r i c e s . The targets i n the Plan imply an o v e r a l l Incremental C a p i t a l -Output Ratio considerably higher ( by ~j ) than that which prevailed i n the period I96I - 6 5 (3«9 )• (b) sectoral growth targets for Malaya were loosely r e l a t e d to these aggregate targets. They were i n i t i a l l y derived from a p r i o r i assessments of the growth p o t e n t i a l i n each industry, then adjusted so as to average out at p.a. With three exceptions a r b i t r a r y annual growth rates were applied. The exceptions were rubber planting? forestry; and mining and quarying industries, i n which income o r i g i n a t i n g was assumed to follow the trend already projected f o r Malayan production, valued at average export p r i c e s . A l l of t h i s w i l l serve to i l l u s t r a t e the kind of highly s i m p l i f i e d model building that went into the formulation of the Plan. Hence, at the end of the analysis, I may be i n a p o s i t i o n to c r i t i c i z e some of the sectoral projections i n the Plan, as well as to decide on the usefulness of input output analysis for projection i n Malaya's case. i D. Snodgrass. Four Lectures on Development Planning and S t a t i s t i c s . 11. The structure of the f i r s t Malaysia plan. p.35 -3-I I . EXPLANATION OF INPUT OUTPUT ANALYSIS The input output method i s e s s e n t i a l l y an attempted a p p l i c -ation of the theory of general equilibrium to empirical quantitative analysis. The economy i s v i s u a l i z e d as a combination of a large number of interdependent a c t i v i t i e s . Each of these a c t i v i t i e s involves the.purchase of goods and services o r i g i n a t i n g i n other branches of the economy on the one hand, and the production of goods and services which are sold to and absorbed by other sectors of the economy on the other. Each industry or sector requires c e r t a i n inputs which i t acquires from other sectors? i t then s e l l s i t s output to other sectors to meet t h e i r input requirements. Each exchange of goods and services between sectors i n the model.is recorded i n double entry fashion as both a sale of output and a purchase of input. The basic s t a t i c version of the model i s normally presented i n the form of 3 tables? (1) the transactions table (2) the technical c o e f f i c i e n t table (3) the table of d i r e c t and i n d i r e c t requirements (1 ) The Transactions Table. This i s constructed on the basis that the aggregate sales of a p a r t i c u l a r sector are equal to the aggregate purchases of that sector. The transactions table shows how the output of each industry i s d i s t r i b u t e d among other sectors of the economy. At the same time i t shows the inputs to each industry from the other industries or sectors. _4-Mathematically t h i s can be expressed as follows - the economy consists of n sectors, and t o t a l production i n any one sector (X^) i s d i s t r i b u t e d as follows. (1) ^ i = ^ ' i l * * * * " ^ i j"** * • * * ^ i n " ^ i ( i = ^ , , , , » n - ) Xi = t o t a l output of industry i X--= amount of commodity i required by industry j F.^ = autonomous f i n a l demand for commodity i (2) We can also use an expression for input flows which incorporates the condition i n the table that t o t a l inputs of the f a b r i c a t i n g sectors equal t o t a l output i e . Xj=J^. +X iy .. .X^+Vj+Mjf j=rl..,n) = X i ( i = j = l n) X- = t o t a l purchases made by sector j V- = value added by sector j* MJ = purchases of imports by sector j (11) The Technical C o e f f i c i e n t Table. After a transaction table has been constructed for a given year, a table of technical c o e f f i c i e n t s can be developed from i t . A technical c o e f f i c i e n t table shows the amount of inputs required from each industry to produce one do l l a r s worth of output of a given industry. Technical c o e f f i c i e n t s are calculated f o r processing sector industries only and may be expressed i n eithe r monetary or physical terms. The tables f o r West Malaysia are expressed i n monetary terms. -5-Two steps are involved i n the c a l c u l a t i o n of technical c o e f f i c i e n t s : (1) gross output i s adjusted by subtracting inventory depletion during the period covered by the table to obtain adjusted gross output f o r each sector, ( l l ) divide a l l the entries i n each industry's column by the adjusted gross output f o r each industry. Notice that the model employs the assumption of fix e d technical c o e f f i c i e n t s i e . the demand f o r part of the output of one non autonomous sector X: by another non autonomous sector X- i s a unique feature of the l e v e l of production i n X.. i e . X i • = a i ;:Xj (i , j = l , . . . n ) where X-j= the t o t a l output of industry j a^.= the tech n i c a l c o e f f i c i e n t defined by X.. and X- above. J The model's second table i s thus the [a..."] matrix computed from the transactions table thus: a. .= X'J; The table of d i r e c t c o e f f i c i e n t s by i t s e l f i s of l i m i t e d usefulness because i t shows only t h e " f i r s t round" e f f e c t s of a change i n the output of one industry on the industries from which i t purchases inputs. This forms the basis however f o r a general solution of an input output problem. ( I l l ) The Table of Direct and Indirect Requirements. An increase i n f i n a l demand f o r the products of an industry - 6 -w i t h i n the processing s e c t o r w i l l l e a d to both d i r e c t . and i n d i r e c t i n c r e a s e s i n the output o f . a l l i n d u s t r i e s i n the p r o c e s s i n g s e c t o r . For example, when i n d u s t r y A expands output i t uses more B and C, but because C and B have exp-anded they need more A,D,S,etc; and these e f f e c t s w i l l continue to spread throughout the pr o c e s s i n g s e c t o r . An i n t e g r a l p a r t of input-output a n a l y s i s i s the c o n s t r u c t i o n of a t a b l e which shows the d i r e c t and i n d i r e c t e f f e c t s of changes i n f i n a l demand. I t shows the t o t a l expansion of output i n a l l i n d u s t r i e s as a r e s u l t of the d e l i v e r y of one d o l l a r ' s worth of output ou t s i d e the pro c e s s i n g s e c t o r by each i n d u s t r y . Taking the inverse of the d i f f e r e n c e between an i d e n t i t y matrix and the input c o e f f i c i e n t matrix y i e l d s the t a b l e with both d i r e c t and i n d i r e c t e f f e c t s , i . e . ( 1 ) X_ = X i i +.X_j + ' « « X i n + Fj_ ( i = l , . . . . , n ) ( 2 ) X ij= a i j x j ( i , , . . , n ) S u b s t i t u t i n g ( 2 ) i n t o ( 1 ) x i ~ a i l x l * ' • + a i j x j 0 • • + a i n x n + F i ( i= l , . . , n ) which may be w r i t t e n more compactly i n v e c t o r form as X = AX + F or X -AX= F ie.(I-A)X=F where A=(a-) and I i s the i d e n t i t y matrix. The general s o l u t i o n , by matrix i n v e r s i o n , may now be expressed as: X= ( I - A ) ~ 1 F -7-The matrix A in the previous notation is the table of Technical Coefficients (Table 2) derived from the Transactions Table (Table 1 ) as described earlier. The -1 Leontief Inverse (I-A) is our third table, and is , t usually transposed (I-A) , in order that the relevant information can be read along the rows rather than down the columns. Now, from the transactions table(see equation 2) : VA v- = l ( 2. -1 O O M t ( l l ) where VA^ = value added for sector i . Xj_ = gross output of sector i . Therefore, v^ = Value added coefficient. V A i = v i X i That is, given the value added coefficient and the projection for gross output, one can derive the value added projection for each sector. - 8 -•111. CONSTRUCTION OF THE i960 TRANSACTIONS TABLE. 1. C l a s s i f i c a t i o n and Aggregation. The primary c l a s s i f i c a t i o n c r i t e r i a i n the table were already determined i n advance of my work,ie. the basic sector design of the table had been decided on.My task was: (a) to f i t a set of national accounts of West Malaysia into t h i s 29 sector c l a s s i f i c a t i o n , ' (b) to modify the form of the table where necessary. Appendix Table 1 shows the chart of accounts used by West Malaysia and the way that I c l a s s i f i e d these into the 29 sectors f o r the table, (a) Broadly speaking, the accounts c l a s s i f y a g r i c u l t u r a l sectors according to commodities,(for example industry H3 ?rubber estates and smallholdings,are c l a s s i f i e d together even though the a c t i v i t i e s are d i f f e r e n t ) . Manufacturing,on the other hand, i s c l a s s i f i e d on an a c t i v i t y basis(eg. chemical products includes such diverse industries as^the manufacture of vegetable o i l s and the manufacture of paints and varnishes). (b) The degree of aggregation used i n the accounts and the table depends loosely on the importance of the item i n national income. For example,for important sectors l i k e rubber,the manufacture of rubber products and rubber processing have been given seperate sectors rather than being included i n say, the chemical industries sector or miscellaneous manufacturing. This contrasts with a high degree of aggregation i n r e l a t i v e l y smaller sectors l i k e food industries (6), or chemical products (18). -9-2. Producer versus Purchaser p r i c e s . The accounts at my disposal had estimates i n both producer prices ( i e . the pr i c e received by the producer), and purchaser prices (the p r i c e paid by the purchaser); the difference i s composed of marketing costs, which include such things as transport costs, wholesale and r e t a i l trade mark ups, insurance and warehouse costs, and net i n d i r e c t taxes. It was decided to use the producer p r i c e values i n constructing the tables because purchaser price tables s u f f e r from three disadvantages, (I) The row t o t a l of each sector, which forms the output control t o t a l f o r computing input c o e f f i c i e n t s , includes the marketing costs incurred i n each d e l i v e r y of that sectors output. Now marketing costs w i l l probably vary as the i n t e r -s ectoral d i s t r i b u t i o n of output changes, and thus lead to vari a t i o n s i n the value of t o t a l output even i f the actual production of that sector remains unchanged. This means that c o e f f i c i e n t s estimated i n the base year are l i k e l y to be unstable. (II) With purchaser prices, a l l marketing costs are counted twice - i n the value of the output of the producing industry, and as inputs to that industry from the marketing costs sectors. Under the producer prices system, on the other hand, a l l outputs, including the control t o t a l s , are valued f.o.b. plant, and marketing costs are therefore counted only once. -10-(111) With producer p r i c e s , marketing costs w i l l vary with the input structure of an industry, which i s generally more stable than the output structure, so that the c o e f f i c i e n t s computed i n the base year from a table valued at producer pri c e s i s l i k e l y to be more stable than one valued at purchaser p r i c e s . As well, the system of producer pr i c e s • e x p l i c i t l y separates each element which makes up the f i n a l purchasers value so that the value of each transaction corresponds more c l o s e l y to the flow i n physical units. Thus the added s t a b i l i t y of the c o e f f i c i e n t matrix makes the estimation of the table i n producers p r i c e s more desirable. 3. Net or Gross Sector Outputs. The table I have constructed includes i n t r a industry trans-actions, so that a l l c e l l s on the p r i n c i p a l diagonal are entered, i e . gross industry output i s counted. It i s a simple matter to produce another table excluding such trans-actions f o r p a r t i c u l a r applications of the table, i f necessary. k. Treatment of Taxation. a. Direct Taxes: i e . taxes l e v i e d on fac t o r services are not distinguished i n t h i s table since the value of the services before tax are entered. b. Net Indirect Taxes form part of the margin between the - 1 1 -producers p r i c e and the purchasers p r i c e , and consequently, under the former system of valuation they are generally ent-ered i n a sp e c i a l primary input row ( i e . i n row primary factors of production), and i n the column of the purchasing industry. Thus a l l general sales taxes l e v i e d on clothing and footwear, for example, are recorded at the i n t e r s e c t i o n of the primary factors of production row and the clot h i n g and footwear column. ' 5' Treatment of Exports. The method of recording Exports i s p e r f e c t l y s t r a i g h t forward: that part of the output of a given sector which i s exported i s entered i n a f i n a l demand column under "Rest of the World". Notice that there i s no corresponding row, since the"Rest of the World" sector i s not a domestic producing sector, but only a r e c i p i e n t of f i n a l goods. 6. Treatment of Imports. Imports may be treated i n 4 basic ways. Method 1; the method adopted here. A l l imports are allocated i n a single row to the consuming sectors. In t h i s case, a l l intermediate flows are of domestic products only and the construction of the import row requires an i d e n t i f i c a t i o n of the destination of imports. The drawback of t h i s method i s that i f some imports are - 1 2 -"competing"(a commodity that has a "good substitute" i n some domestically produced commodity),substitution w i l l tend to occur, r e s t r i c t i n g the usefulness,of the input c o e f f i c i e n t matrix as time passes. . Method 2 s A l l imports are d i s t r i b u t e d along the row of a s i m i l a r domestic sector - so flows contain imported and domestically produced elements without d i s t i n c t i o n . Here there i s no problem of i n s t a b i l i t y but the presence of non competing imports i n the rows gives r i s e to inaccurate estimates of output requirements when the inverse matrix computed from t h i s version' of the table i s post-multiplied by a b i l l of goods comprising f i n a l domestic demand and exports. Method 3i Tries to combine the virtues of the previous two, while avoiding t h e i r f a u l t s , by dis-triibuting only those imports which are judged to be competing along the rows of the corresponding domestic sector(thus obtaining stable input c o e f f i c i e n t s ) and d i s t r i b u t i n g the non competing imports as a seperate row( thus preserving the homogeneity of the output structure). This i s the method which i s most highly recommended, usually because i t i s more accurate than the others, but to use i t you need to be able to d i s t i n g u i s h between competing and non competing imports. Method k: A f i n a l p o s s i b i l i t y i s that a l l imported goods can be distinguished both by industry of o r i g i n and by industry of destination. This i s equivalent to the preparation of tv/o tables - one f o r domestic flows and one f o r imported products. -13- .. This method was impractical i n t h i s case because the s t a t i s t i c a l requirements were too demanding. I decided to use method one because; (I) I t i s the l e a s t demanding s t a t i s t i c a l l y , as competitive and non competitive imports are not distinguished i n national accounts. (II) In 1960-61 Malaysia began a p o l i c y of allowing her t r a d i t i o n a l l y large surplus i n the Balance of Payments on Current Account to run down, by su b s t a n t i a l l y increasing imports. Method one allows us to see the eff e c t s of t h i s change i n p o l i c y on the trade sector and the economy i n general. The weakness of using method one i n t h i s case,is that substantial import s u b s t i t u t i o n took place i n Malaysia during the 1960's. 7. Valuation of Imports and Exports. (a) The value of a country's exports f.o.b. at the port of embarkation consists of the producers value plus the various marketing costs necessary to get the goods to the port. Exports were recorded down the "Rest of the World" column according to the producer p r i c e of the commodity. I f any domestic marketing costs were incurred then they are entered i n t h i s column where i t intersec t s the wholesale and r e t a i l trade row. (b) The value of imports c . i . f . comprises three items: 1. the foreign port value. 2. f r e i g h t charges to the domestic port of entry. 3.insurance charges. A f o u r t h i t e m , i m p o r t d u t i e s l e v i e d by t h e d o m e s t i c g o v e r n m e n t , may be a d d e d t o g i v e what i s c a l l e d D o m e s t i c  P o r t V a l u e o f i m p o r t s a s t h e y e n t e r t h e d o m e s t i c e c o n o m y . The way i n w h i c h t h e d i f f e r e n t e l e m e n t s a r e u s u a l l y e n t e r e d i n a n i n p u t - o u t p u t t a b l e d e p e n d s u p o n t h e s y s t e m o f v a l u a t i o n ( p r o d u c e r s o r p u r c h a s e r s p r i c e s ) u s e d , a s w e l l a s u p o n t h e m e h t o d a d o p t e d f o r r e c o r d i n g i m p o r t s . T h e d o m e s t i c p o r t v a l u e ( i n c l u d i n g i m p o r t d u t i e s ) i s o f t e n p r e f e r r e d f o r v a l u i n g i m p o r t s , p r i m a r i l y b e c a u s e t h i s f i g u r e i s c o m p a r a b l e t o t h e v a l u e o f d o m e s t i c p r o d u c t s a t p r o d u c e r p r i c e s ( i e . d o m e s t i c p o r t v a l u e i s m e t h o d A b e l o w ' ) , I n t h i s c a s e , h o w e v e r , i t was d e c i d e d t o s e p a r a t e o u t i m p o r t ' d u t i e s a n d v a l u e i m p o r t s a t t h e i r c . i . f . v a l u e ( i e , m e t h o d B ) . T h i s s e p a r a t i o n was done m a i n l y b e c a u s e i t s eemed f e a s i b l e t o c o m p a r e a t some s t a g e t h e r a t i o o f i m p o r t d u t i e s t o i m p o r t s i n v a r i o u s s e c t o r s , a n d t o o b s e r v e t h e e f f e c t s o f c h a n g e s i n t h i s r a t i o o v e r t i m e . A l t h o u g h i t w o u l d be d e s i r a b l e t o i n c o r p o r a t e an X m p p r ' t s ^ ^ 6 5 r o w a S a s e P a r a ' t e a p p e n d a g e t o t h e t a b l e , t h i s i s n o t f e a s i b l e w h i l e t h e d a t a i s i n i t s p r e s e n t f o r m b e c a u s e i m p o r t s a r e c l a s s i f i e d i n t h e n a t i o n a l a c c o u n t s a c c o r d i n g t o w h i c h s e c t o r made u se o f t h e m , n o t a c c o r d i n g t o t h e n a t u r e o f t h e i m p o r t e d g o o d s . ( F o r E x a m p l e , i n d u s t r y 2129, f o r e s t r y , no i m p o r t s e n d e d up h e r e b u t 0.2 i m p o r t d u t i e s were l e v i e d a g a i n s t f o r e s t r y g o o d s . ) f o r e i g n p o r t v a l u e . + f r e i g h t a n d i n s u r a n c e c h a r g e s t o r e a c h o u r p o r t . •f m a r k u p «J + i n d i r e c t t a x e s + i m p o r t d u t i e s D o m e s t i c P o r t V a l u e = P u r c h a s e r p r i c e -15-An i l l u s t r a t i o n of the treatment of imports. An import of type A, which i s consumed by industry 6 has a foreign port value of $100j the cost of transport to the domestic port of entry, $10, i s borne by a foreign carriers the cost of insurance (also $10), i s borne by a domestic enterprise? and an import duty of |5 i s l e v i e d by the domestic government- so the t o t a l domestic port value of the import i s $125. This transaction would be entered i n the table as below. Sector Industry 6 Rest of World Gross Output. insurance 10 10 imports 1 2 0 • . 120 Total ' 120 import duties 5 To the extent that f r e i g h t and insurance on imports are provided by domestic services, the value of imports w i l l be overstated - the correct treatment i s to ignore t h i s and include these services again as an output of domestic industry (rows 25 and 27 ) that i s supplied to column 30 (Rest of the r;~~'~ World), i e . the margin items are double counted. 8.Treatment of Unspecified Column (32). For many goods and services which are used as inputs, i t i s not possible to specify the industries i n which these goods • and services are consumed. This i s , f o r instance, the case with stationery, cleaning materials, audit and s e c r e t a r i a l fees, p r i n t i n g and postage services. These t o t a l s have been o r i g i n a l l y deducted,by the Malaysian Department of S t a t i s t i c s , from the household column and t h e o r e t i c a l l y should be added to the Rest of the -16-World and Government Consumption columns, i f we had s u f f i c i e n t information to do so. 9• Problems involved i n Constructing the table from the Set  of Accounts. A. The production accountss were a l l consistent -in t h e i r double entry recording, hence the f i r s t 29 rows and columns were completed and v e r i f i e d from the other accounts. In one or two cases there was a s l i g h t discrepancy between the valuation of a p a r t i c u l a r transaction i n two d i f f e r e n t accounts. To make the double entries compatible, the average of any figure i n dispute was taken, and the balance between receipts and payments accounts maintained by putting a balancing item into the unspecified column and row. For example (1) Row 11 column 3. the entry i s (a)65.2 across the row. (b)64.8 down the column. (11) 65.O was the item entered i n t h i s space and (a)0.2 i s taken from the unspecified row entry i n column 3« (to keep column 3 t o t a l unchanged.) (b)0.2 i s added to the unspecified column entry i n row l l . ~ (to keep the row 11 t o t a l unchanged.) B . Treatment of the F i n a l Demand Sectors. Here, v e r i f i c a t i o n of entries was not possible because: ( l ) with the introduction of the r e s t of the world there i s no closed, (balancing) system of double entry records f o r a l l f i n a l demand trans-actions. (11) some of the accounts which I used to construct the f i n a l demand sections of the table were not complete and i n these cases I had to r e l y on -17-single entries from the other accounts to f i l l i n the columns. For example. Government (row 35a) - spending on Agriculture (row 1) was not recorded. I had to r e l y on a g r i c u l t u r a l receipts from government i n the a g r i c u l t u r a l account. For other s p e c i f i c d e t a i l s of problems encountered i n constructing f i n a l demand sectors, see Appendix 3» Other questions r e l a t i n g to the structure of the accounts and the preliminary structure of the table were sent to the Department of S t a t i s t i c s i n Malaysia f o r c l a r i f i c a t i o n . For a copy of these questions, (and the crux of the answers provided ), see Appendix ^. My completed I 9 6 0 Transactions Table appears as Appendix 2 ; the Government version of the 1965 Malayan Transactions Table i s i n Appendix 5« - 1 8 -10. R e c o n c i l i a t i o n o f My.i960 T r a n s a c t i o n s T a b l e w i t h  G r o s s D o m e s t i c P r o d u c t , ( a ) I960 e s t i m a t e o f G . D . P . f r o m t h e t a b l e . T h e r e a r e two m e t h o d s o f c a l c u l a t i n g G r o s s D o m e s t i c P r o d u c t f r o m t h e t r a n s a c t i o n s t a b l e . U s i n g a 2 s e c t o r e x a m p l e : 1 2 1 I n t e r m e d i a t e O u t p u t U n s p e c i f i e d F i n a l DemarK I n t e r m e d i a t e O u t p u t U n s p e c i f i e d I m p o r t s V a l u e A d d e d g h 3c ' 1 m n 0 P -u V I . B a l a n c e E q u a t i o n s . A ) a + b = g + h B) a + c + e = g + k + m + o C) b + d + f = h + l + n + p - 1 9 -I I . Estimating GDP using the value added method. GDP v a = o + p + u + v = '.fpM 6 1 0 1 . 4 i n my i 9 6 0 transactions table. I I I . Estimating GDP using the f i n a l sales method. GDPf s = c+d+s+q+u+e+f+t+r+v-m-n-s-t But,c = g+k+m+o-a-e d = h+l+n+p-b-f a+b = g+h GDPf S = GDP v a + Unspecified row t o t a l = 6 1 0 1 . 4 + 5 3 5 . 2 = $M 6 6 3 6 . 6 To v e r i f y t h i s answer; add Consumption Investment Inventories Government Exports minus Imports plus Unspecified column minus Unspecified row 3 6 2 5 . 3 754.8 1 0 0 . 4 •710.2 3189 4 8380i6 2232,8 6TW7E 488.8 (b)GDP at market price i n the O f f i c i a l Accounts for Malaya i n i 9 6 0 = $M 6134 m i l l . Considering some of the s p e c i f i c d i f f i c u l t i e s I encountered i n constructing the table(see Appendix 3 and 4 ) , I am s a t i s f i e d with the accuracy of my two methods of estimating Gross Domestic Product,relative to the o f f i c i a l estimate. - 20 -IV. CONSISTENT FORECASTING " C o n s i s t e n t f o r e c a s t i n g " i s t h e term a p p l i e d t o t h e p r o j e c t i o n o f a t r a n s a c t i o n s t a b l e . T h i s does n o t mean t h a t t h e c o n s i s t e n t f o r e c a s t w i l l t u r n o u t t o be r i g h t , but what i t does i s ensure t h a t p r o j e c t i o n s f o r t h e i n d i v i d u a l i n d u s t r i e s and s e c t o r s w i l l add up t o a t o t a l p r o j e c t i o n . ( F o r example, i t ens u r e s t h a t f o u r wheels w i l l be p r o j e c t e d f o r e v e r y p r o j e c t e d c a r . ) There a r e two major s t e p s i n v o l v e d i n c o n s i s t e n t f o r e c a s t i n g : (A) i t i s n e c e s s a r y t o make p r o j e c t i o n s f o r each e n t r y i n t h e f i n a l demand s e c t o r s o f the i n p u t o u t p u t t a b l e , t h e n , (B) a new t r a n s a c t i o n s t a b l e i s p r o j e c t e d on th e b a s i s o f t h e assumed changes i n f i n a l demand. (A) P r o j e c t i o n o f F i n a l Demand f o r M a l a y a f o r 1970. A f t e r t h e • i n d i v i d u a l components o f f i n a l demand have been p r o j e c t e d , t h e i n d i v i d u a l f i n a l demand columns a r e added t o g e t h e r t o form a s i n g l e column. T a b l e I I . P r o j e c t i o n s o f F i n a l Demand F or 1970 1 Government Consumption P r i v a t e Consumption Gross C a p i t a l F o r m a t i o n E x p o r t s I mports GDP a t market p r i c e M alaya M a l a y s i a 1961-66 0.86 0.88 0.84 0.82 0.79 T o t a l M a l a y s i a 1970, c u r r e n t 2 p r i c e s . $M m i l l . 2226 6946 2248 4676 I6096 _4J£4 11502 Malaya Spendxng 1970, c u r r e n t p r i c e s . $M m i l l . 1914.36 6112.48 1888.32 3834.32 13749.48 3609.26 10140.22 1 Department o f S t a t i s t i c s , M a l a y s i a . N a t i o n a l Accounts  Of West M a l a y s i a . 1955-64. p.32 2 Department o f S t a t i s t i c s , M a l a y s i a . M id Term Review - F i r s t  M a l a y s i a P l a n 1966-70. (1969) p. 2.8 - 2 1 -(1) Notice from column one - i n most cases the proportion of Malaya i n the t o t a l of each expenditure category did not change over the period, but where s l i g h t change did occur the most recent figure was taken. For example, Imports i n 1963 & 64 =.84 1965 & 66 =.79 I used . 7 9 , ( 2 ) a. From the I 9 6 5 transactions tables GDP factor cost _ 6 8 8 3 . 1 GDP market price 7 9 1 9 - 8 Therefore, for 1970, GDP factor cost = 6 8 8 3 . 1 x 10140.22 7 9 1 9 , 8 = $M 8812 m i l l . b. According to the o f f i c i a l Plan output projection f o r 1970, GDP at f a c t o r cost f o r Malaya = $M 8650 m i l l . The fact that my method of c a l c u l a t i n g GDP at factor cost, (using the r a t i o of Malaya/Malaysia for each of the main spending categories) y i e l d s a r e s u l t close to the o f f i c i a l estimate of GDP, indicates that the use of the r a t i o to calculate aggregate demand f o r Malaya gives f a i r l y s a t i s f a c t o r y r e s u l t s . 1 JJiid p 6 8 . - 2 2 -(B) Projection of Gross Output and Value Added of Sectors to 1 9 7 0 . 1. Given the aggregate demand projection for 1970, t h i s i s di s t r i b u t e d down the f i n a l demand column according to the percentage d i s t r i b u t i o n of t h i s column i n 1965- Hence we have measures of aggregate demand f o r each industry producing. 2. The transactions table f o r 1965» a n d the estimated f i n a l demand data are recorded i n the Inter Industry Flow Program, (see Appendix 6 ) , which i . derives the Leontief inverse f o r 1 9 6 5 i i i ' derives t o t a l gross output for 1970 for each of the producing sectors.. 3. Since the r a t i o of value added (at factor cost) i s t o t a l gross output assumed to be constant over time, the value added at factor cost for each sector f o r 1970, can be calculated using the formula: Total Factor Payments - Net Indirect Taxes (1965) Total Gross Total Gross Output . (1965) Output ( 1970) 4 . The proceedure can be repeated, using the i 9 6 0 transactions table and the Program to estimate projected value added f o r 1970. (C) Accuracy of Input/Output Analysis as a Forcasting Tool. The s t a b i l i t y or constancy of the input c o e f f i c i e n t s , (a^.:) i s one of the c r i t i c a l assumptions of input/output analysis. I f t h i s assumption i s inappropriate then a l l estimates obtained by input/output analysis w i l l be inaccurate. These c o e f f i c i e n t s do not normally change rapidly, and the small changes that might occur over a r e l a t i v e short period would not lead to serious errors i n the projected transactions table. -23-My projections, however,are 5 years f o r the 19^5 c o e f f i c i e n t s and 10 years f o r the i 9 6 0 c o e f f i c i e n t table. Over these longer time spans, the input c o e f f i c i e n t s w i l l be affected by three kinds of changes: (1) changes i n r e l a t i v e p r i c e s . (2) changes i n the composition of sector output, or the appearance of new ind u s t r i e s . (3) the ef f e c t s of technological change. (1) Changes i n r e l a t i v e p r i c e s . I f the r e l a t i v e prices of factors of production change during the period covered by the projection, i t i s possible that input patterns and hence some of the input c o e f f i c i e n t s w i l l be changed. This w i l l only happen, however, i f input s u b s t i t u t i o n i s possible. For example, i n the 1965 table, the Metal Products and Machinery sector uses wood f u e l , coal f u e l and petroleum. I f the price of wood f u e l r i s e s , and i t can t e c h n i c a l l y substitute coal and o i l , at l e a s t i n part, then i t may do so to avoid the extra cost. Hence the input c o e f f i c i e n t s of t h i s sector's column with the wood and cork row, and with the products of petroleum and coal row w i l l change. (2) Changes i n the composition of sector output. This arises from an inadequate c l a s s i f i c a t i o n of economic a c t i v i t i e s , so that some sectors contain products with d i f f e r e n t input structures; eg.,in the i 9 6 0 Malayan table -24-chemical products and the products of petroleum and coal appear i n one sector - they do have d i f f e r e n t input structures (see 1965 transactions table), and i f i n the future the outputs of these products change non proportionately, the o v e r a l l input structure of the sector w i l l change. This argument also applies to the appearance of new industries within a p a r t i c u l a r sector. For example, the rapid growth of the m i s s i l e industry of the United States i n the 1950's, with a r e l a t i v e decline i n some parts of the a i r c r a f t industry, would have been hard to project i n 1950. Thus a 10 year input output forecast of the United States economy made i n 1950 would no doubt have understated the expansion of the m i s s i l e industry, and would have overstated the growth of the a i r c r a f t industry. This type of s t r u c t u r a l change i n the economy i s dramatically i l l u s t r a t e d with reference to the difference i n projections f o r 1970 between the Malayan i 9 6 0 and 1965 tables. I s h a l l return to t h i s l a t e r . (3) The e f f e c t s of technological change. Changes i n technology, by which i s meant a l l changes i n the physical input r e l a t i o n s between economic a c t i v i t i e s , can be c l a s s i f i e d ass (a) The sub s t i t u t i o n of some products f o r others i n a p a r t i c u l a r process (eg. the sub s t i t u t i o n of synthetic fo r natural f i b r e s i n t e x t i l e s . ) (b) Savings i n material of energy input into -25-p r o c e s s e s (eg. t h e c o n s t a n t d e c r e a s e i n the q u a n t i t y o f e l e c t r i c i t y r e q u i r e d t o manufacture a t o n o f aluminium.) ( c ) Changes i n t h e o u t p u t c o m p o s i t i o n o f p a r t i c u l a r p r o c e s s e s , ( For example, the i n c r e a s e i n t h e p r o p o r t i o n o f s p e c i a l s t e e l s i n i r o n and s t e e l p r o d u c t i o n . ) While i t i s d i f f i c u l t t o a t t r i b u t e o b s e r v e d changes i n t h e v a l u e s o f i n p u t c o e f f i c i e n t s t o p a r t i c u l a r c a u s e s , t h e g e n e r a l consensus seems t o be t h a t changes i n t e c h n o l o g y e x e r t o n l y a g r a d u a l i n f l u e n c e upon th e c o e f f i c i e n t s , and a f f e c t p r i n c i p a l l y t h e i n p u t s o f energy, and the i n p u t s o f 1 p r i m a r y f a c t o r s such as l a b o u r and c a p i t a l . The e f f e c t s o f t e c h n o l o g i c a l change on i n p u t c o e f f i c i e n t s can be h a n d l e d more e a s i l y w i t h i n a g e n e r a l framework o f i n p u t - o u t p u t a n a l y s i s t h a n the o t h e r 2 t y p e s o f change -i t i n v o l v e s t h e use, o f dynamic i n p u t - o u t p u t a n a l y s i s , which i s s t i l l i n i t s e a r l y s t a g e s o f t h e o r e t i c a l development'. No a t t e m p t w i l l be made h e r e t o a d j u s t the Malayan t a b l e s a c c o r d i n g t o changes i n t e c h n o l o g y . 1. U n i t e d N a t i o n s Problems Of I n p u t Output T a b l e s and  A n a l y s i s . p.!07« - 2 6 -V. RESULTS (1) Comparison of 1965 and i 9 6 0 Table Projections. F i n a l demand projections f o r Malaya i n 1970, were obtained i n section IV (see page 20 ). I t was estimated that consumption + investment + government spending + exports _:$M 13750 m i l l i o n . This figure i s d i s t r i b u t e d down the aggregate demand column according to the percentage of each sector i n t o t a l aggregate demand. For Example s (a) Agriculture and Livestock = 5*3$ aggregate demand i n 1965- The aggregate demand projection 1970 =13750. Therefore, Agriculture and Livestock 1970 = 5 .3^ of 13750 ' -s 728.8 (b) However, Agriculture and Livestock was only 5'lfo of aggregate demand i n the i 9 6 0 table - so the demand for Agriculture and Livestock i n 1970 = 5>1% of 13750 •as 701.2 Theoretically, we should compare the 1970 projections of (I) the i960 table using i960 percentage breakdown of aggregate demand. (II) the 1965 table using the 1965 percentage breakdown of aggregate demand. But much of t h i s discrepancy between our two projection measures may be the r e s u l t of the changing percentage of that item i n aggregate demand from i 9 6 0 to 1965, rather than any change i n the c o e f f i c i e n t matrix i t s e l f over t h i s period. - 2 7 -So I have also included the i960 table with the 1965 percentage breakdown of aggregate demand to make projections. I t i s the r e s u l t of t h i s projection that should be compared with the projections of the I965.1 table i n order to discover the changes i n the input c o e f f i c i e n t matrix that have taken place over time. . / For Example - Rubber Planting (a) The i960 matrix with i 9 6 0 aggregate demand percentages, greatly overstates projected production f o r 1970 (1919.4) compared with the Plan (1115). This i s because i n i960 rubber prices reached t h e i r peak of 1070 per pound, so the value of the f i n a l use component of natural rubber was inordinately high i n that year ( r e l a t i v e to t o t a l aggregate demand i n i 9 6 0 ) . (b) Notice that when we use the 1965 aggrgate demand percentages, ( i e . abstract from t h i s boom demand year of i 9 6 0 ) , the i960 table gives a figure very close to the 1965 table( i n d i c a t i n g that the input c o e f f i c i e n t s f o r t h i s sector of the table had not changed s i g n i f i c a n t l y . ) -28-In t a b l e III on the f o l l o w i n g page, the r e s u l t s of p r o j e c t i n g s e c t o r a l value added, using the I 9 6 5 matrix, i s compared wit h p r o j e c t i o n s using the i 9 6 0 m a t r i x ( with both i 9 6 0 and I 9 6 5 aggregate demand i breakdowns), * I f one assumes that the 1970 p l a n p r o j e c t i o n s are accurate ( t h i s assumption w i l l be i n v e s t i g a t e d l a t e r ), then from column 5, i t i s c l e a r that f o r the m a j o r i t y of s e c t o r s the 1965 t a b l e p r o j e c t i o n s are b e t t e r than the i960 p r o j -e c t i o n s . (This i s not t r u e , however, f o r F i s h i n g , F o r e s t r y and Mining. ) The r e s t of t h i s paper s h a l l be devoted tos (a) E x p l a i n i n g the reasons f o r the d i f f e r e n c e s between the i960 and 1965 t a b l e p r o j e c t i o n s ( both using the I965 aggregate demand percentages). (b) Examining the accuracy of the p l a n p r o j e c t i o n s and why the 1965 t a b l e p r o j e c t i o n s i n some sec t o r s are ina c c u r a t e . Table I I I . 1970 Plan and Table Projections. MALAYA; tM m i l l - Current Prices. , (1) • (2) (3) (4) (5) i 9 6 0 Matrix i 9 6 0 Matrix 1 9 6 5 M a t r i x Plan Better Projection I96O7S 1 9 6 5 ^ 196555 Projection Column- 2 compared ~ \ with Column 3.  Agriculture and Livestock 881.4 1055.1 856.I 910 1965 Rubber Planting 1919.4 1190.7 1179.0 1115 1965 Forestry- 149.2 164.0 108.2 205 I960 Pishing 143.1 174.0 148.7 210 I960 TOTAL AGRICULTURE 3093.1 2583.8 2292.0 2440 Mining 472.3 582.7 705.3 475 I960 Manufacturing , J • • 691.7 664.8 994.5 1070 1965 Construction 247.1 349.8 373.1 530 1965 E l e c t r i c i t y and Water 108.1 137.6 154.5 200 1965 Dwellings 372.9 348.1 357.0 370 1965 Wholesale and R e t a i l Trade;' 1215.5 1194.8 1296.0 1370 1965 Other Services 1450.9^ 1685.5" 1660.8" Banking, Insurance etc. 111.4 H 8 6 0 3 133.4 >Z»S3-| 135.7 '2o87-4 21 tO Transport, Communications 298.0 314,2__ 290.9_ Gross Domestic Product at Factor Cost 8061.0 7994.7 8259.8 8615 -30-(2) Reasons f o r the differences between the i 9 6 0 & 1965 • Table Projections. In comparing the projections from my i960 table and the projections from the 1965 table, there are 2 possible reasons f o r discrepancy. (1) The value added c o e f f i c i e n t has changed. Given gross output projections f o r 19?0, the value added by each sector was calculated using: - . gross output projection 1970 ' value added gross output Clearly, the r a t i o of value added to gross output i n the I965 table may d i f f e r from that i n the i 9 6 0 table for any sector. Hence the two tables would y i e l d d i f f e r e n t value added projections f o r each sector, even i f the gross output projections yielded by both tables were the same. (2) Gross output projections given by the two tables w i l l be d i f f e r e n t because the Leontief inverse has changed. as s t r u c t u r a l change has occurred i n the economy. Eac?i column i n the transposed Leontief matrix shows the t o t a l d o l l a r production d i r e c t l y and i n d i r e c t l y required from the sector at the top of the table for each d o l l a r of delivery to f i n a l demand by each of the sectors at the l e f t of the table. On the following page table I v. shows the changes i n the value added c o e f f i c i e n t and i n the relevant row t o t a l s i n the Leontief inverse f o r each sector, and how these have affected value added projections f o r 1970. Table IV. Value Added C o e f f i c i e n t and Leontief Invers e Changes i 9 6 0 to 1 9 6 5 . MALAY. A: m m i l l - Current Price 3. value added at f . c . R~bw t o t a l s of i960 Matrix 1 9 6 5 % I965 Matrix gross 1 9 6 5T£ I 9 6 0 output 1 9 6 5 Leontief Inverse I 9 6 0 1 9 6 5 Agriculture and Livestock 1055.1 856.1 74.1 6 9 . 4 2.60 1.94 Rubber Planting 1 1 9 0 . 7 I I 7 9.O 9 5 . ^ 9 1 . 9 2.05 1 .99 Forestry- 1 6 4 . 0 108.2 75.2 6 7 . 4 1.90 1.59 Fishing 1 7 4 . 0 148.7 92.3 93.3 1.12 1.035 Mining 5 8 2 , 7 ; 705.3 6 I . 9 66.7 1 . 7 6 1.91 Manufacturing 664 .8 994.5 13 .4 16.6 19.05 (1.12) 18.70 Construction 3 4 9 . 8 373.1 32 .9 35 .4 1.27 1 .27 E l e c t r i c i t y and Water 137.6 154.5 59.1 65 .1 1 .34 1.36 Dwellings 348.1 357-0 9 0 . 0 9 2 . 1 1 . 0 0 1.00 Wholesale and R e t a i l Trade 1 1 9 4 . 8 1 2 9 6 , 0 48.2 53.7 3-58 2.94 Other Services ~"1 9 1 . 9 9 2 . 0 1.01 1.01 Banking, Insurance etc. ' 2133.1 2 0 8 7 . 4 7 2 . 8 74 .1 1 . 0 0 1 . 0 0 Transport and Communications 57.9 55 .6 1.27 1.23 Gross Domestic Product at Factor Cost 7 9 9 4 . 7 8 2 5 9 . 8 * The figure i n brackets i s the average f o r manufacturing, and i s derived by d i v i d i n g the aggregate figure by the number of manufacturing sectors (17). For example: 19.05 + 17 = 1.12. - 3 2 -From the table, i t can be seen that value added projections using the 1965 matrix i n Agriculture and Livestock. Forestry, Rubber Planting and the Composite Item (other services, banking and transport), are a l l below the i 9 6 0 matrix projections. This i s because both the value added c o e f f i c i e n t and the relevant row t o t a l of the Leontief inverse have f a l l e n between i960 and 1965 f o r these sectors. In Rubber Planting, both projections are f a i r l y close, yet dramatic changes took place i n the industry i n the I 9 6 0 *s. Two major forces were at work i n rubber production i n t h i s period. (1) The p r i c e of natural rubber f e l l from i t s i 9 6 0 peak of 1070 to a l e v e l of 690 per pound i n 1965. This was due to the increased competition a r i s i n g from the expansion of capacity f o r synthetic rubber production i n the i n d u s t r i a l countries, and the increasing s u b s t i t u t i o n of synthetic f o r natural rubber. (2) Over the same period, the volume of Malayan rubber exports increased by 12$. This was not s u f f i c i e n t to o f f s e t the dramatic f a l l i n rubber prices, but i t did help soften i t s impact on the economy. Thas example serves to show why i t i s more meaningful i n Malaya's case to use current rather than constant pr i c e s i n valuing production ( e s p e c i a l l y exports). The example also explains why the lower 1965 table projection f o r rubber was due to the f a l l i n the value added c o e f f i c i e n t over the period (as a r e s u l t of lower world rubber p r i c e s ) . - 3 3 -The rubber row t o t a l of the Leontief inverse f e l l only s l i g h t l y . In Fishing, the r i s e .in the value added c o e f f i c i e n t between i 9 6 0 and 1965 had been more than o f f s e t by a f a l l i n the relevant row of the Leontief inverse, so the 1965 matrix y i e l d s a lower projection than the i960 matrix. It i s i n t e r e s t i n g to note that f o r a l l of Agriculture, Forestry and Fishing, the relevant row t o t a l of the Leontief inverse, i n each case has f a l l e n over the period. Mining and E l e c t r i c i t y and Water Supply projections using the 1965 matrix are above the i 9 6 0 matrix projections because both the value added c o e f f i c i e n t and the relevant row t o t a l of the Leontief inverse have r i s e n between i 9 6 0 and 1965 f o r these sectors. With Manufacturing and Wholesale and R e t a i l Trade, the r i s e i n the value added c o e f f i c i e n t s between i 9 6 0 and 1965 have more than o f f s e t the f a l l i n the relevant row t o t a l s of the Leontief inverse over t h i s period, and the projections based on the 1965 matrix are higher than those based on the i960 matrix. In Construction and Dwellings the row t o t a l s of the Leontief inverse have not changed over time, yet the 1965 matrix y i e l d s higher projections because the value added c o e f f i c i e n t f o r 1965 i s higher than that f o r i 9 6 0 . -34-The table shows that considerable discrepancies ex i s t between projections from the two matrices - and that these discrepancies are e s p e c i a l l y marked i n Forestry, Manufacturing, Mining, and Agriculture and Livestock. These discrepancies are not s u r p r i s i n g i n view of (a) The s i g n i f i c a n t s t r u c t u r a l shange that took place over the period i960 to 1 9 6 5 * (b) The change from an outward to a r e l a t i v e l y inward looking strategy by the government. A. Structural Changes (a) Growth i n the period i 9 6 0 to 1965 was achieved without s i g n i f i c a n t expansion of export earnings, but rather was based on increases i n domestic demand. Hence the export sector declined from 48$ of Gross Domestic Product (at current prices) i n i 9 6 0 to 40$ i n 1965-(b) In current market prices, Gross Domestic Product grew at 5«2$ on average. The most rapid rates of growth were registered by i . the Construction  Sector (17 .9$ p»a. i n constant i 9 6 0 p r i c e s ) . The expansion here was due to rapid growth i n c a p i t a l expenditures on dwellings, non r e s i d e n t i a l o f f i c e buildings, schools, f a c t o r i e s , road and bridge construction and other public works. i i . Public U t i l i t i e s (11 .9$ p.a.) i i i . Manufacturing (11.1$ p.a.), e s p e c i a l l y building materials and l i g h t manu-facturing (eg. motor parts, tobacco manufactures). -35-B. An Inward Looking Strategy. Around i960 the Malayan Government dramatically changed its traditional "outward looking" strategy, and began to experiment with a policy of ad hoc import substitution. The most notable increases in self sufficiency occurred in mining, textiles, paper and paper products, rubber processing and rubber products, where in each case the ratio of gonMSMiy^mEOjr^ decreased gross output by 50% or more in 1965 over I960I- This would, for example, help to explain the rise in the Mining row total of the Leontief inverse in 1965 compared with i 9 6 0 . 1. Hainsworth and Davis. Import Substitution and Economic  Growth in West Malaysia i 9 6 0 - 65, page 21. (3) Are the Plan Projections L i k e l y to be Realized? (a) Generals The plan projected an average annual rate of growth of G.D.P. of 4.8$.1 Yet the volume of G.D.P. at constant prices rose by 5*2$ p.a. between 1966 and I968, due mainly to the fact that exports grew by over 7$ i n volume, more than f i v e times the rate projected i n the plan. However, i n current p r i c e s the r i s e i n G.D.P. was smaller, l a r g e l y because of the f a l l i n the price of rubber and to a l e s s e r extent i n the pric e s of t i n and palm o i l . In any case, the growth rate of G.D.P. has been nearly on schedule with the target to 1968.3 (b) Agricultures This i s the largest sector i n the economy and i t s planned rate of growth (5*5$ p.a. i n constant prices)^ 1 was markedly higher than growth i n the 1961 to 1965 period (3'3$ p.a. i n constant p r i c e s ) . This higher target r e f l e c t e d i n part the growth of rubber output generated by replanting i n the 1950's and most importantly, the dramatic expansion i n palm o i l , f o r e s t r y and f i s h i n g output. Rubber was expected to grow at about 7$ p.a. i n r e a l terms to achieve the plan target. (Of t h i s , f a l l i n g p r i c e s would hold income growth i n the industry to 2fo p.a.) Yet rubber grew at an average of only 4.7$ p.a. i n r e a l terms i n 1966 and 1967» 1. Department of S t a t i s t i c s , Malaya. F i r s t Malaysia. Plan p 52. 2. " " " " Mid Term Review of the  F i r s t Malaysia Plan p 14. 3. 2bj_, p 33. 4. Ibid, p 45. - 3 7 -F i s h e r i e s a n d T i m b e r w e r e e x p e c t e d t o g row a t a b o u t 6$ p , a . i n c o n s t a n t p r i c e s , b u t i n t h e f i r s t 2 y e a r s o f t h e p l a n t h e y h a v e a l r e a d y e x c e e d e d t h e i r 1970 t a r g e t s . F i s h e r i e s g rew a t a n a n n u a l r a t e o f 17.6$ i n r e a l t e r m s , w h i l e f o r e s t r y g r e w a t a n a n n u a l r a t e o f 12.2$ i n I966 a n d 1967* S i m i l a r l y , P a l m O i l a n d K e r n a l s h a v e b e e n w e l l i n e x c e s s o f p l a n n e d t a r g e t s . S o , i n e f f e c t , a g g r e g a t e a g r i c u l t u r a l p r o d u c t i o n d u r i n g t h e f i r s t 2 y e a r s o f t h e p l a n i s a l m o s t o n t a r g e t , o w i n g t o a p a t t e r n o f g r o w t h s u b s t a n t i a l l y d i f f e r e n t f r o m t h a t e x p e c t e d i e . t h e r a t e o f g r o w t h o f a g r i c u l t u r e i n 1966 a n d 1967 was 5.3$ p . a . i n c o n s t a n t p r i c e s . ( c ) v M a n u f a c t u r i n g s The p l a n i n c o r p o r a t e d a t a r g e t r a t e o f i n c r e a s e i n m a n u f a c t u r i n g o u t p u t o f 10$ p . a . , w h e r e a s t h e a v e r a g e r a t e o f i n c r e a s e i n 1965-7 was 9 • 8 $ p . a . , h e n c e r e q u i r i n g a n a v e r a g e r a t e o f i n c r e a s e o f 10.1$ i n I967-7O ( a l l i n c u r r e n t p r i c e s ) . H o w e v e r , i t h a s p r o v e n d i f f i c u l t t o p r e d i c t w h i c h i n d u s t r i e s a r e l i k e l y t o m a n i f e s t t h e h i g h e s t g r o w t h r a t e s . F o r e x a m p l e , t h e p l a n s i n g l e d o u t f o o d a n d b e v e r a g e s , wood p r o d u c t s , r u b b e r p r o d u c t s , c h e m i c a l s , b a s i c m e t a l s a n d m a c h i n e r y a s t h e o n e s w h i c h were e x p e c t e d t o p l a y a l e a d i n g r o l e i n i n d u s t r i a l g r o w t h , a n d t o r e c o r d a n n u a l a v e r a g e o u t p u t g a i n s o f g r e a t e r t h a n 10$. H o w e v e r b e t w e e n I965 a n d 19^7 o n l y one of these (food and beverages) achieved more than 10fo growth - while the highest growth industries i n the range 12-25% p.a., were rubber r e m i l l i n g and latex processing, tobacco products, t e x t i l e s , p r i n t i n g and publishing. It should be pointed out that by the end of the plan period the o r i g i n a l selections may assert themselves. Preliminary and incomplete data indicate that the manufacturing sector continued to expand r a p i d l y i n 1968. One indi c a t o r of t h i s i s the 20$ growth i n consumption of e l e c t r i c power by firms during the f i r s t h a l f of the year compared with a l6?o gain in'the comparable period a year e a r l i e r . A more r e l i a b l e i n d i c a t o r i s the backlog of applications t>r new pioneer companies. By mid 1968, 95 applications with a planned c a l l e d up c a p i t a l of $M115 m i l l , had been approved i n p r i n c i p l e by the government, some of these projects are i n an advanced stage of planning and should be expected to be implemented soon. These observations support the conclusion that the manufacturing sector w i l l maintain a good average growth rate, i n the neighbourhood of the plan target, i n the next few years. Attention needs to be focused on the pattern of manufacturing development as well as i t s s i z e . Much of the past growth has been i n import su b s t i t u t i o n and t h i s process has-reached a stage where the danger of s e t t i n g up uneconomical plants i s becoming more r e a l . -39-(d) Mining; Here production was expected to decline by k.6fo p.a. i n current p r i c e s from 1966to 1970 according to the plan.''" For West Malaysia, mining production i n 1966and 1967 grew 2 by 2 .8$ p.a. i n constant prices, but i n current d o l l a r terms events proved worse than expectations, p r i m a r i l y because of a sharp f a l l i n the world price of t i n by 14$. For Malaysia as a whole value added i n mining dropped by 22$ from 1965 to 1967. The o r i g i n a l f a l l i n t i n p r i c e s i n 1965 was due to sales from the United States s t r a t e g i c stockpile, but by 1967 world output of t i n f o r the f i r s t time i n 10 years, exceeded consumption. S i m i l a r l y , iron ore production and exports have declined because of compet-i t i o n from Australian ore i n the Japanese market, and to some degree because of inadequate port f a c i l i t i e s on the east coast of Malaya, (e) Construction; The growth of construction industries has been rapid since the beginning of the 1960's, with an average annual growth rate of 11.4$ i n constant prices I 9 6 I - I 9 6 5 . According to the f i r s t plan, the target rate 3 of increase was set at 8$ p.a. i n current prices 1966-70, which i n the l i g h t of the experience of the early 60's seemed f a i r l y modest. But with i . The beginning of the f a l l i n t i n prices i n 1965, the large decline of rubber p r i c e s i n 1967 (17$) 1. Department of S t a t i s t i c s , Malaya. F i r s t Malaysia Plan p 52. 2. " " " " Mid Term Review of the  F i r s t Malaysia Plan, p 14. 3. Ibid, p 52. -40-a n d p a l m o i l p r i c e s i n 1967(6%). i i . The r e c e s s i o n s l a c k o f p r i v a t e i n v e s t m e n t s p e n d i n g w h i c h was e x p e r i e n c e d p a r t l y b e c a u s e o f t h e s e p a r a t i o n o f S i n g a p o r e . i i i . The e v e n t u a l s l o w i n g down o f t h e r a t e o f . g o v e r n m e n t i n v e s t m e n t . H e n c e c o n s t r u c t i o n g rew a t a n a n n u a l a v e r a g e r a t e o f o n l y 1 • 3.5% i n I966 a n d 3% i n 1967 ( b o t h a t c o n s t a n t p r i c e s ) . W i t h t h e u p t u r n o f t h e economy i n t h e l a s t q u a r t e r o f I968, c a p a c i t y b e g a n t o be more f u l l y u t i l i z e d . I t i s a r e a s o n a b l e e x p e c t a t i o n t h a t t h e g r o w t h r a t e o f c o n s t r u c t i o n w i l l r e c o v e r t o i t s p l a n n e d l e v e l . W h e t h e r t h e 1970 t a r g e t w i l l now be a c h i e v e d , h o w e v e r , i s . u n l i k e l y , a s a r e s u l t o f t h i s 2 y e a r s l a c k . ( f ) T r a n s p o r t a n d C o m m u n i c a t i o n s D u r i n g t h e p e r i o d I.961 t o 1965, t o t a l p u b l i c d e v e l o p m e n t s p e n d i n g o n t r a n s p o r t a n d c o m m u n i c a t i o n s i n M a l a y a was |M702 m i l l . , a n d i t was p l a n n e d t o s p e n d $M546 m i l l , b e t w e e n I.966 a n d 1970 i e . t o r e d u c e s u b s t a n t i 3 . 1 1 y ( b y 25%), e x p e n d i t u r e s o n r o a d , r a i l , a n d a i r t r a n s p o r t , a s t h e s e f a c i l i t i e s a r e a l r e a d y r e l a t i v e l y w e l l d e v e l o p e d . F u n d s w o u l d be d i v e r t e d t o c o n c e n t r a t e more o n t h e two B o r n e o S t a t e s . B u t i n 1966-68, | M 3 3 2 . 5 m i l l . ( o r 60.9%) o f t h e p l a n t a r g e t h a d a l r e a d y b e e n s p e n t , so t h e p l a n t a r g e t was r e v i s e d ! • I b i d , p . 1 4 -41-upwards to $M?05.7 m i l l i o n f o r 1966 to 1970. (g) For other sectors of the economy, d i f f i c u l t i e s were encountered i n comparing plan targets with performance i n 1966 and 1967 because i . Plan targets were a l l expressed i n current 1970 p r i c e s . i i . A l l 1966and 1967 performance figures were expressed i n constant 1964 p r i c e s . i i i . No data on sec t o r a l p r i c e changes over the period was ava i l a b l e . The a v a i l a b l e s t a t i s t i c s are set out i n the table below: Plan 1970* 1966-67* sector current prices constant prices E l e c t r i c i t y , Water and Sanitary Services. 10.0 11.4 Wholesale and R e t a i l Trade. ^5 3.2 Dwellings. 4.0 2.5 Public Administration and Defence. 4.0 4.5 Banking, Insurance and other services. 6.0 5.2 * Figures are a l l average annual rates of growth. Since the rate of domestic price increase i n the f i r s t 2 years of the plan was modest and not expected to increase much by the end of the plan period, one can loosely conclude that each of these t e r t i a r y sectors are growing at rates not inconsistent with the achievement of plan targets by 1970. - 4 2 -So, i n summary, i t does seem that the targets for aggregate A g r i c u l t u r a l production, Manufacturing, Transport and Communications, and the other t e r t i a r y sectors a l l have a good chance of being achieved. Only Construction and Mining seem to be overstated i n the targets(as well as parts of Agriculture, namely rubber production). Transport. Fisheries and Timber have been understated i n the plan. (4) The discrepancy between the 196 5 table projections and  actual per:fo"rma.nce through 1 9 b * 8 . Using the r e s u l t s outlined above, and the information from table I I I , i t i s obvious that the 1965 table projections are close to being r e a l i s e d for Total Agriculture, Manufacturing, and the Composite item. However.Forestry. Fishing. E l e c t r i c i t y and Water, and Construction have a l l been badly underestimated i n the 1965 table projection. Mining has been grossly overstated i n the table projection. Under these circumstances, how can the discrepancies between the 1965 table projections and the actual performance l i k e l y to be r e a l i s e d f o r 19?0 be explained? Notice that i n c a l c u l a t i n g value added fo r each sector from the table 1 (1)Aggregate demand for each sector was taken as that sector's % share of aggregate demand i n I965. ( 2 ) The Leontief inverse was used to get Gross Output for the sector. (3) The value added to Gross Output C o e f f i c i e n t was used to get value added of the sector. -4 3-So the inaccuracy of the 19^5 table projections i s due to one or more of these 3 items being inappropriate. For example, Mining production. Here the projection based on the 1965 table i s much higher than the production l e v e l l i k e l y to be r e a l i z e d by 1970. This i s because the l a t t e r figure i s based on the r e a l i z a t i o n that: (a) Malayan t i n resources are r a p i d l y approaching exhaustion, and although over 400 new mines have been opened since i960 i n response to r i s i n g world t i n prices, production has not been able to surpass the l e v e l s of the mid 1950's. (b) Iron Ore production has slowed noticeably. The industry enjoyed/a period of rapid expansion up to 19&3, but deposits declined and some f a l l i n prices also was experienced due to the a v a i l a b i l i t y of high grade ores i n the world market. Hence between 1965 and 1970: (1) The supply of mining to f i n a l demand sectors w i l l l i k e l y f a l l . (2) The row t o t a l of the Leontief inverse relevant to mining w i l l probably be reduced. That i s , s t r u c t u r a l change has taken place i n the economy in the period 1965 to 1970 which renders the 1965 input output table inappropriate f o r making projections for some sectors ( l i k e mining). CONCLUSIONSt 1. The projections based on the 19^5 matrix are generally. better than those based on the i 9 6 0 matrix. This i s true of Agriculture and Livestock? Rubber Planting? Manufacturing; Construction; E l e c t r i c i t y and Water; Dwellings; Wholesale and R e t a i l Trade. This i s to be expected on t h e o r e t i c a l grounds as the Leontief inverse based on the more recent data should more clo s e l y correspond to the conditions that should a c t u a l l y p r e v a i l i n the economy i n 1970. 2. Notice however,that:(a) i n some cases ( i e . Forestry, Fishing and Mining) the i 9 6 0 table projections are better. (b) i n some cases, r e a l l y large discrepancies e x i s t between actual performance and the pro-jections of the 1965 table. This i s e s p e c i a l l y true of Mining, but large errors also e x i s t i n Forestry, Fishing and Construction. This indicates that the use of even the 1965 matrix f o r projections of output for 1970 does not y i e l d meaningful r e s u l t s for many sectors, e s p e c i a l l y when the economy concerned has undergone considerable s t r u c t u r a l change (as i s the case i n Malaya). V I I . BIBLIOGRAPHY Asian Development Bank. "A Comparative Study of N a t i o n a l Income S t a t i s t i c s i n the P h i l i p p i n e s , M a l a y s i a , China and Taiwan". Occasional Papers, November 1969• H. C. Davis. Programming E s t u r i n e Water Q u a l i t y Management. Paper d e l i v e r e d to the F i r s t P a c i f i c Regional Science  Conference, Honolulu, 1969. r e p u b l i s h e d ) Department of S t a t i s t i c s , M alaysia. F i r s t M a l a y s i a P l a n  1966 - 70. (1965)« Department of S t a t i s t i c s , M alaysia. Mid Term Review of the  F i r s t M a l a y s i a P l a n . (I968). Department of S t a t i s t i c s , M a l a y s i a . N a t i o n a l Accounts of  West Malaysia 19 55 - 1964. G. B. Hainsworth and H. C. Davis. I m p o r t ^ S u b s t i t u t i o n and Economic Growth i n West Ma l a y s i a , i 9 6 0 - 65. (Unpublished MSS). "... B. Jensen. " An I n d i r e c t D e r i v a t i o n of Input Output C o e f f i c i e n t s " . Makere I n s t i t u t e of S o c i a l Research. (Unpublished). W. H. Miernyk. The Elements of Input Output A n a l y s i s . New York: Random Housed 1965. N a t i o n a l Bureau of Economic Research, Inc. Input Output  A n a l y s i s : An A p p r a i s a l . T e c h n i c a l Supplement. New York 1954. D. Snodgrass. Four Lectures on Development P l a n n i n g and  S t a t i s t i c s . (Unpublished) United Nations. Department of Economic and S o c i a l A f f a i r s . "Problems of Input Output Tables and A n a l y s i s " . Studies  i n Methods. S e r i e s F, no. 14. New York; S t a t i s t i c a l O f f i c e of the U.N., 1 9 6 6 . - 4 6 -TA.BLE 1. C L A S S I F I C A T I O N OF I N D U S T R I E S . (1) A G R I C U L T U R E a c c o u n t n o . 111 O t h e r A g r i c u l t u r e 112 L i v e s t o c k P r o d u c t i o n 116 P a l m O i l E s t a t e s 119 C o c o n u t E s t a t e s 123 T e a E s t a t e s (2) RUBBER P L A N T I N G 113 R u b b e r E s t a t e s a n d S m a l l h o l d i n g s (3) FORESTRY 129 F o r e s t r y . , (4) F I S H I N G 140 . * F i s h i n g ( 5 ) MINING ' 210 C o a l M i n i n g 220 M e t a l M i n i n g 240 - S t o n e Q u a r r y i n g (6) FOOD I N D U S T R I E S 125 T e a F a c t o r i e s 304 C a n n i n g a n d P r e s e r v i n g o f S e a F o o d 301 P r e p a r a t i o n o f M e a t 302 M a n u f a c t u r e o f D a i r y P r o d u c t s 303 C a n n i n g a n d P r e s e r v i n g o f F r u i t a n d V e g e t a b l e s 305 M a n u f a c t u r e o f G r a i n M i l l P r o d u c t s 306 M a n u f a c t u r e o f B a k e r y P r o d u c t s 307 S u g a r F a c t o r i e s a n d R e f i n e r i e s 308 M a n u f a c t u r e o f C o c o a , C h o c o l a t e a n d S u g a r C o n f e c t i o n a r y 309 M i s c e l l a n e o u s F o o d P r o d u c t s ( ? ) BEVERAGES 311 D i s t i l l i n g , R e c t i f y i n g a n d B l e n d i n g o f S p i r i t s 312 B r e w e r i e s , M a n u f a c t u r e o f S o f t D r i n k s e t c . (8) TOBACCO 320 T o b a c c o P r o d u c t s M a n u f a c t u r i n g (9) T E X T I L E S 331 S p i n n i n g , W e a v i n g a n d F i n i s h i n g o f T e x t i l e s 332 K n i t t i n g M i l l s 333-339 M a n u f a c t u r e o f C o r d a g e , R o p e , N e t e t c . CLASSIFICATION OF INDUSTRIES CONTINUED (10) CLOTHING AND FOOTWEAR 3 4 l M a n u f a c t u r e o f Footwear 3^3 M a n u f a c t u r e o f Wearing A p p a r e l and Made Up T e x t i l e Goods (11) WOOD AND CORK 351 Saw M i l l i n g , P l a n M i l l i n g e t c . .352 Other M a n u f a c t u r e o f Wood and Cork (12) FURNITURS AND FIXTURES 360 M a n u f a c t u r e o f F u r n i t u r e and F i x t u r e s (13) PAPER AND PAPER PRODUCTS 370 M a n u f a c t u r e o f Paper and Paper P r o d u c t s ( I M P R I N T I N G AND PUBLISHING 380 P r i n t i n g , P u b l i s h i n g and A l l i e d I n d u s t r i e s (15) LEATHER AND LEATHER PRODUCTS 390 M a n u f a c t u r e o f L e a t h e r and L e a t h e r P r o d u c t s (16) RUBBER PROCESSING 115 Rubber P r o c e s s i n g (17) RUBBER PRODUCTS 400 Ma n u f a c t u r e o f Rubber P r o d u c t s (18) CHEMICAL PRODUCTS 117 Palm O i l F a c t o r i e s 121 Coconut S m a l l h o l d i n g s 411 M a n u f a c t u r e o f I n d u s t r i a l C h e m i c a l s 412 M a n u f a c t u r e o f V e g e t a b l e and A n i m a l O i l s and F a t s 413 M a n u f a c t u r e o f P a i n t s , V a r n i s h e s and Laquers 419 M i s c e l l a n e o u s C h e m i c a l P r o d u c t s 420 M a n u f a c t u r e o f P r o d u c t s o f P e t r o l e u m and C o a l 612 Gas M a n u f a c t u r e and D i s t i l l a t i o n (19) NON METALLIC MINERAL PRODUCTS 430 M a n u f a c t u r e o f N o n - M e t a l l i c M i n e r a l P r o d u c t s (20) BASIC METAL INDUSTRIES 440 B a s i c M e t a l I n d u s t r i e s (21) METAL PRODUCTS, MACHINERY ETC. . r. 450 M a n u f a c t u r e o f M e t a l P r o d u c t s 46o M a n u f a c t u r e o f M a c h i n e r y 470 M a n u f a c t u r e o f E l e c t r i c a l M a c h i n e r y e t c . 480 M a n u f a c t u r e o f T r a n s p o r t Equipment -48-CLASSIFICATION OF INDUSTRIES CONTINUED (22) MISCELLANEOUS MANUFACTURING INDUSTRIES 490 Miscellaneous Manufacturing I n d u s t r i e s (23) CONSTRUCTION 510 C o n s t r u c t i o n (24) ELECTRICITY, WATER . 620 Water and S a n i t a r y S e r v i c e s (25) TRANSPORT AND COMMUNICATION 812 Other Road Transport 813 A i r Transport 814 S e r v i c e s I n c i d e n t a l to Transport e t c , 830 Communications (26) WHOLESALE AND RETAIL TRADE 710 Wholesale and R e t a i l Trade (27) BANKING AND INSURANCE , 730 Banks and Other F i n a n c i a l I n s t i t u t i o n s 740 Insurance 750 Real E s t a t e (29) OTHER SERVICE INDUSTRIES 921 Education 922 Medical and Health S e r v i c e s 924 R e l i g i o u s Organizations 926 L e g a l , T e c h n i c a l and Business S e r v i c e s . Non Business I n s t i t u t i o n s 940 Recreation S e r v i c e s 951 Domestic S e r v i c e s 952 H o t e l s and Restaurants 954 Laundries, Personal S e r v i c e s etc. APPENDIX 2 i States of Malaya. Interindustry Accounts i 9 6 0 . -—1 ^ a » v > It 1 fi <> i l o . 1 1 c j | i 1 l _V j t 1 1 « •! * ' li a. S(E' 1 •0 c H |l 1^ b a 1-A ' A Us £| JC' 0 (0 .(?>_ (8 (jo) (11) (120 (15) (16) f n ) / « ) I 1. A$ricvKv>r« a Livestock Vi I. RobW Plflrtd'nj J. fcrc$-{ry . . b'.j i _. ! 6. Feed Industries 7. 6 t *£r t .5e> . . ._.._._! — _ J _. »:l j ....... — — — — — — — ! 8. Tcbo-tto . , , , 9, Textiles . . 0. ClctWj ft. fc<rtvear . . — — — ] — — — — - — — — — -— — i i 1. KtcA\ fcrk M IS 2. FirrniWre 4 Fix-ftrts . . ,- | J. Popu I P<jp«r PraJvc4> I~ O'f Producit i fc. Rubfaer Process i«3 7. Rubber Products i8. Cfttw'ical Proiwts n-3_ [ fr-oAuttS I O'J 2.6.8o^c«4H.t M e r l e s ai. KeM Products <«d 01 ! Industries — _ . . . _l '3 ...9:1 _*y_ 07 — Ij I T i is ~ol 191 yitoA-fcrg* inji/ravt etc. tyGHw grVUfc ItvUujtrKS 1 — — — — — — — — — - -— — ~~~ j !JoJ«p»rf Trade. loc '.hoi i I12 I >• J i f l " 1 )! i-t 1 •-• is* -H 07 ' : 7 .8:3 /•3 u P:tt 17. 0.:? 4*7-z i l l 9f\t*arj Ricfrri of Total . . . . \ •12^5 i I ' ! 1 v-iiW-i m m .A-? 1'? M c-y. IS ' 7 ° 3 i f l m (1) J t !n i# i o « ( l » 3 « . . 1 Entirenuhoi Inters?.. 1 1- - - • 4:. I -p. • 1 — - - - - --.9:1) — - — • - _ . ; — i ;mill. producer p r i c e s . 1. 0 - 0 E U J . IT mi M (XX) (22) (if) M SI lb M. 0-2 Of ..IS. o-i 02 /•6 20 .51 *2o7 0-7 8-H m 14 1ST 0>b 6-0 4?L? -1 •a — 10.1 6-1 Hi Mo 01 Ik* •j- i HI Hi iro o-8 m M?J ./??••. JJJ'3 L'>Mli21 IS-b OS (27) (28) p q ) 1 '5-^ 2 "3 M l i s 111 31 0-J| III 37-foi ' 0'/'| i-l!"^Z| /3I-/T 3 ? 04, jr-fc /0-Oj 12 3 •3L (30 (^) j (35) J 1 /«oS-3 3/S?<f I";."I~~"."__"-] 3.3 4-? ^ - 2 J As M ivt> b'lf. m 1* H\ 0-6! Z t t ' t>.q.-8' "hc\ lb W. 173 1-3 11 -21. ISJ 10 i 11{ 5 rm S2o-7 8^' V? ^ s 1 J^JJ1 /3Soj 333-3 [ 123.9;/005^3 ST7o riS$6 S3S-;2; - 5 0 -APPENDIX 3s Treatment of F i n a l Demand Sectors. (I) Rest of the World? (column 30) completed f u l l y . (II) Unspecified; (column and row 31) (a) The i n c l u s i o n of t h i s sector i s necess i t a t e d by inaccuracy i n the s t a t i s t i c a l data. Notice also that there i s a discrepancy between the row and the column t o t a l s of t h i s sector, (b) Data for the unspecified column i s incomplete - and t h i s column was f i l l e d i n from the; double entry records of other accounts. (c) The double entry records show minor discrepancies f o r transactions described i n row 31 columns 1, 2 and 2 1 . (III) Governments (column 34) The figures for government spending are grossly incomplete, so I had to r e l y on the double entry records of other accounts to, f i l l i n t h i s column. (IV) Inventoriess (column 33) ' Almost perfect c o n c i l i a t i o n e x i s t s between the summary account f o r inventories and the double entry from other accounts. The only clash i s i n row 31, across ( 1 . 9 ) and down ( 2 . 1 ) , ( v) Householdsi (column 35) (a) Minor discrepancies i n the double entry records occur i n - row 30* 1 0 2 6 . 0 across and 1 0 3 3 ' 5 down - row 22: 3 7 . 8 • and 3 7 - 5 " (b) Using producer p r i c e valuation, the wholesale and r e t a i l trade markup 8 7 6 . 7 , does not appear i n the household spending account and has to be added from the receipts of the wholesale and r e t a i l sector. (VI) Fixed Assets: (column 32) (a) The summary account for fixed assets agrees with the double entry transactions that have already completed t h i s column, except: Row 31 Unspecified i . i n the fixed asset summary account t h i s cant be traced d i r e c t l y but evolves as a balancing item = 2 6 . 1 . i i . i n the unspecified receipts account t h i s item e q u a l s 3 3 « 7 (b) There i s a discrepancy between the i n d i v i d u a l c a p i t a l accounts and the summary account. Total i n i n d i v i d u a l accounts = 7 4 2 . 7 Total i n summary account = 7 5 4 . 8 The l a t t e r figure i s taken as fte correct t o t a l since i t i s l i k e l y that the i n d i v i d u a l accounts are incomplete. -51-APPENDIX 4: Correspondence with Department S t a t i s t i c s Malaysia. (1) Industry C l a s s i f i c a t i o n . Question; I believe that tea f a c t o r i e s (125) has been c l a s s -i f i e d under Food in d u s t r i e s . Is t h i s correct? Why was i t not c l a s s i f i e d with s p i r i t s and brewing under Beverages? Answer; Beverages was used for a l c o h o l i c beverages only. Question; Why were palm o i l f a c t o r i e s o f f estates: coconut processing; and vegetable and animal o i l s and fats a l l c l a s s i f i e d under Chemical industries i n the o r i g i n a l i960 table? Why were they not c l a s s i f i e d under Agriculture? Answer; They a l l involve processing, and not s t r i c t l y food processing. I also requested descriptions of industries number 6 l l , 810, 811, 910, 911. No answer was provided, but fortunately no transactions involving these were encountered i n the table which I constructed. (2) Gross Domestic Product. Question: Figures i n the account do not seperate the contrib-utions of s a l a r i e s and wages and entrepreneural income i n the value added figure. Do you have any information that would enable me to make t h i s d i s t i n c t i o n for each sector. Answer: The information i s not part of the National Accounts but i s provided i n seperate s t a t i s t i c s elsewhere. (3) Household Spending Sector; Question; The household accounts at my disposal show that no payments were made to the wholesale and R e t a i l Trade sector. Yet the double entry i n the Whole-sale and R e t a i l Trade income account shows t h i s sector receiving $M876.7 m i l l i o n from households. Can you explain this? Answer: When using the producer p r i c e valuation of trans-actions ( i e . net of markups ), i t i s correct that no payment to Wholesale and R e t a i l Trade i s recorded, APPENDIX'5 : Interindustry Accounts 1965. S t a t e s ,of Malaya . MS m i l l . Producer prices. (I) ( 2 ) ( 3 ) ( 0 (5) (0 ( 7 ) ( 6 ) ( 9 ) ( I O ) ( 1 2 ) ( 1 9 ) ( 2 D (22) ( 2 3 ) ( 2 5 ) ( 2 6 ) (22) ( 2 3 ) ( J O ) (31) ( 3 2 ) ( 3 3 ) (3'.) Dillv.-.-ci F r : ~ 1. J ; r fc i : l t i - - » I livestock 2. fiubbrr FU.-.Ur; J * ..Fcf.ti.tr y_ .. I. MsM.ij J. Mnizj .. .. 6. F . " i Ifiius'.rlcs 7. E-jvera;:» . . 8. Tcb-.cca . . 9. IKSIL-J .. 10. Clothing t Fc : l : e : r . . 11. feed J Cork 12. Ftralti-re S Fixtures . . 13. Paper ( Paper Prc-ducti 14. Prlr.tlr.s t Publishing.. 15. Leather S leather Frcductt . . 16. Rubber P,-cxc::ing . . 17. Rubber Frc<Ji:ts l i t - O s t e a l Prelects . . J9 , ' Frcf-j:t.s cf PetralciJ2 and Celt 20. Kcr.-Vctallle Kin e n I Predicts . . 21. Essie Ketal I r . i^ t r le s 22. K:tal Presets id fcehlnary 23. Hsc . Manufacturing Indwtries . . 24. teizirvcWw .. 25. Electricity J Ycter . . 26. Tn.-.spvtetf c.i and Cezi'jnlcatica . . 27. VhsUiats J Retail Trade 23. ?:-'/-.inj J le^rsncs etc. 2?. Dsrclllrrs . . 30. Cth-r Scrvlco Ir.iurtrles 31. Rest ef t b World 32. Iwporl THda. 33. l.v.;'--.olfiei Ji. I f i V t l f l o r l e S 35. P r l c : r / Fottors of Prcdwtlc i (I) Total (I) 5a t * r lM «ftdU<^j .. E/\ttr'pr&r,:,l at Income,.. Indirect Ta.:-.-: '. fc/biidYes '.. 48.8 210.1 32.7 1.0 3 7 . 3 _ J 5 J 71,9.5 4 7 . 0 " 6 7 9 . 5 1QJ 14.9 30.0 5 7 7 . 1.015.1" mi <AAAA -1J «5T 1 4 2 . 9 25.7 705.2 3A 6 . 5 3.6 0.4 1.5 U.I 0.5 41.7 3.5 8.3 2.9 2 9 J E A5 .6 0.2 8.1 81.4 M A l 0.5 0 .2 0.2 31.51 0.3 2.8 0.2 0.4 0.1 0.1 8.0 0.7 0.2 0.6 0.5 0.5 0.2 0.1 3.0 2.0 i .7 4 . 5 2 2 . 1 2.6 0.3 9 .0. 3?,.9 4.'. 9 i 5 1.6 1 3 5 . 9 : 1 1 . 8 1 17 . 0 1 9 . 5 2 . 0 1.2 9TIT 4 2 . 0 - 9 5 . f , I 3 J 5 3L4 ±}AJA I.OM.5 I I 4 . C 1 35 . 5 755 10%. I 134. 144.7 :894.5 2JA LI LO JA? A.9. 18 .4 3 2 . 7 7 . 6 2.0 5 C . 9 5 5 2 . 8 : 4 2 . 3 153.9 3 4 . 0 39.4 2 3 . I 7 2 J I 6 6 . 8 157 .4 0 . 5 .5,1 6.3 2f.T A'. 5.0 3.3 0 . 9 TjtiVf 102. 3 5 . 4 3 0 . 5 6 . 3 2 6 . 0 Y . 5 4.9 0.4 6 . 2 3 1 . 2 0.9 127 .0 56 .5 9 1 . 7 6 0 . 1 3.0 , 2 9 3 . 8 59 .7 0.2 6 0 . 0 )."6 6 6 ~ 0 " 376.0 i . 2 l.4,P 3 3 . 1 137.7 5.8 43 .1 90 .0 0.1 0.4 10.6 0 .3 0.3 4.1 0.3 62 20. 110 . 0 65 3kL_3!.3 79.1 201 . 2 72.4 22.1 39 .6 21.4 9.6 79.5 1 2 . 5 J 5 L 0 .51.4 8 3 1 7 . 9 0 0 . 4 6 . 6 26.9 7.2 10 .2 131,1 II.C 13.3 13.9 1.6 130.1 2 6 . 4 2 3 . 5 l£2ii 333.4 1. 733 .9 2 0 0 . 3 209 .6 105 .9 2 . 4 5 4 . 5 wrbi.i' aw"? Tf':i 0.2 161.7 185 .4 - 1 . 5 AA 8 . 8 1.2 A l 57.9 A I A I A i 0.1 23.2 160.2 45.0 867.1 8.8 16.4 29.1 0.2 0.8 14.1 2 5 6 . 2 A l 1 8 . 5 1 44 . 5 A 5 ISL-9 121, 305.6 1 , 4 5 7 . 0 2 .C44 .5 147 .9 3 2 . S 2 6 1 . 9 8 4 . 0 635.5 12.0 7.3 LI 25.6 10.8 2 5 . 4 3 4 . 3 2.6 M 5 2 . 1 4 1 . 4 0.5 4 . 8 3 2 4 . 7 £ 4 . 0 2 , 630 .5 5 0 . 5 3,327.612,95 5.2 36.1 309 .3 6 7 2 . 5 3 5 3 . 0 11.5 A l A'. 1. 40.4 16.6: 19.6 182.1 0.3 0.6 2 . 8 1.0 AA 1 4 . 3 41.1 136 .4 20.2 2 2 . 7 2 9 . 4 i i l e l 5S.? 4S.4 JL«A 137.7 9 0 . 0 ItS.! 853.61 : A A |.'.7.9 3 2 2 . t 822.0 l ? . 0 ' J 3 . 2 i l . j O ' A 1,311. .7,919,3 7 i > l , i ? ; . J 4 ; , 7 4 | l . ; 27,"7?0.3 - 0.4 . : ' -53--: ' "; • " • APPENDIX 6 i INTERINDUSTRY FLOW PROGRAM. . . ,', Tli® University -of B r i t i s h GoJ/aabia: ; '" . Dir. Davis School o f Coasuaisy. assd; S e g i o a a l Plsnaiwg PLANNING 521 ( F a l l ) IJSRPERIHDUStlt'Sf PLOW F3063£l Purpose; M a t r l s < G £ s r a £ i ^ Inversion'^ ftrtmspositioa, e t e i ' Machine: X£»l 360/57 • • ' { -Deck See-up; {card' §i»;/card'-i#2^ '-:efcc<>'> • .' ;' '"'."'•' • ' ;• ' • •' ;;. #1 .Request'!GOT-'eervic®'card ; . ' " • - • ' . , . . - i ' ' ' • . ' . . Pvrlat Haas uad efe?.ck typ<s 'of s e r v i c e dee i red (cosiputar #2-..col.. r i i ^ i - H ^ ^ ^ ^ y ^ \ ' - "v;- 'v>;.. ... • f $.'-SIG PLC6'' ;'^¥J0SS3 SMITH ''-•';;•••'; ...','/ #3 BAVXS "I:--- ' , '#4 $ RUH 5 « * SOURCE * . SPRINT - '* SIMK * SPUWCH - * BUKMY '* . •; . #5...- T i t l e .Card .(eog« • PL 521 PROB No. 1} , #6 T i t l e CaM.(Eaay > ® ' l e f t b lank) #7 . C o n t r o l Card ( a l l e a t r i e s r i g h t adjusted) 'a..-'..,Cola»,;l-4j; order of input 'matrix b o C©l'.'.'\7s. ' • . ' • . • ' . . . ' • . - prists output matr ix •'•' ' + .do not p r i n t output mat r ix • . e „ Colo; 8s output matr ix ' • j - : " ; . : IV. f matr ix , ( t r ansac t ions taatrix) 2',-." A aatris.-- • • ; ' : . ; . ' : . 3 ( I-A) uaatria '' ,..-'.(""••_, ,. ..; .4 ,..(X-A) i avesse roatrte ' v \ d . ' C o l . = 11-121 ; ' ; 0 or b lank input taatr is i s not to 'be aggregated \ >G order of aggregated matr ix •. e . C o l , 13-16: ao« e f e o l u s n vee tor s by whieh output ssatrijs i s . ,. to be m u l t i p l i e d £«•, Col,; 20s .1.; input u a t S i s w i l l be p r i n t e d g o • Cole;24: ;. 1 • traiaspos&d output tastr lx i s p o e t - m a l t i p l i s d by d i agona l taafcriit for s sd £roa>' input v a c t o r - 5 4 -h„ C J I O 32S • • •'•i-nr'^^r^^^^/byv^Its^ veetors desigaated l a Cole. 13-16 pum-ted:acywhefce oa card . '#9 : f ' Gtatp^^ £ossaaf':o£ ptsacbsd output and • of eho ifoara.-'•(:7F10.d97X,I3) when® -•<•'V^//^^v^c^^^^.^ao'o o£ deciaal ••pl-iices) say vary from :^:^'r#:-^ e»8° •<7FI0.,2f7X,B) punched #10 - #w2 Data cuk\&i>-~oi<?oi?s V - ' ' « V a» grcu^ias cards' ( i f Col*-' 12 ','aoe 0) i;''^ •; 4^f--H'* F (Bioe ©sra® ftha® oaa coltaaa p®? «a' ( i f i-ia-'.c.oi. r:•CI'S;vi?/v2;•-• €k>2,o.S:CJS-ss (i£ Cols,. 13-16 not 0) preceded ;=V:V-"'^ '?::r"V^ ^^ '^^ ^^ ^^ -^-= V v-^ 'j^ y1 ^«scSosr t i t l e cards. (1 t i t l e catrd $n ' • '.-7'[^ 

Cite

Citation Scheme:

        

Citations by CSL (citeproc-js)

Usage Statistics

Share

Embed

Customize your widget with the following options, then copy and paste the code below into the HTML of your page to embed this item in your website.
                        
                            <div id="ubcOpenCollectionsWidgetDisplay">
                            <script id="ubcOpenCollectionsWidget"
                            src="{[{embed.src}]}"
                            data-item="{[{embed.item}]}"
                            data-collection="{[{embed.collection}]}"
                            data-metadata="{[{embed.showMetadata}]}"
                            data-width="{[{embed.width}]}"
                            data-media="{[{embed.selectedMedia}]}"
                            async >
                            </script>
                            </div>
                        
                    
IIIF logo Our image viewer uses the IIIF 2.0 standard. To load this item in other compatible viewers, use this url:
https://iiif.library.ubc.ca/presentation/dsp.831.1-0102176/manifest

Comment

Related Items