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

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i  INPUT OUTPUT ANALYSIS AND  THE  F I R S T MALAYSIA PLAN 1966  1970.  -  by C o l i n G. B e n t B.Comm., D i p . E d . , U n i v e r s i t y o f M e l b o u r n e ,  A Thesis Submitted The  In P a r t i a l  Requirements  F o r The  MASTER OF i n the  Fulfillment Degree  THE  Of  Of  ARTS  Department of  ECONOMICS.  We a c c e p t t h i s t h e s i s required standard  196^+.  as c o n f o r m i n g t o t h e  UNIVERSITY OF B R I T I S H COLUMBIA May, 1970.  '  In  presenting  this  an a d v a n c e d  degree  the L i b r a r y  shall  I  f u r t h e r agree  for  scholarly  by h i s of  this  written  thesis at  permission  for extensive  p u r p o s e s may be g r a n t e d  for  It  Department  financial gain shall  of  The U n i v e r s i t y o f B r i t i s h V a n c o u v e r 8, Canada  Columbia  requirements I agree  r e f e r e n c e and copying of  this  that  not  copying  for  that  study. thesis  by t h e Head o f my D e p a r t m e n t  is understood  permission.  the  B r i t i s h Columbia,  it freely available for  representatives. thesis  fulfilment of  the U n i v e r s i t y of  make  tha  in p a r t i a l  or  or publication  be a l l o w e d w i t h o u t my  ABSTRACT T h i s paper i s d i v i d e d i n t o f o u r d i s t i n c t 1.  An  explanation  o f the meaning o f i n p u t / o u t p u t a n a l y s i s ,  e s p e c i a l l y the d e r i v a t i o n and d i r e c t and 2.  s i g n i f i c a n c e o f the t a b l e  An o u t l i n e o f the d e c i s i o n s taken i n c o n s t r u c t i n g  Accounts - e s p e c i a l l y the  t a b l e from a set o f  treatment and  the National  valuation of  imports  exports? producer v e r s u s p u r c h a s e r p r i c e v a l u a t i o n  transactions} double e n t r y 3.  An  of  indirect requirements.  West M a l a y s i a n i 9 6 0 t r a n s a c t i o n s  and  sections.  and  problems of i n c o n s i s t e n t and  of  incomplete  records.  explanation  o f the method o f f o r e c a s t i n g from  output t a b l e s . T h i s i n c l u d e s  input/  discussion of :  a.  A method o f e s t i m a t i n g  aggregate demand f o r Malaya f o r  1970.  b.  A method o f p r o j e c t i o n o f value added f o r each s e c t o r ,  1970.  c.  The  likely  Results;  s t a b i l i t y o f the i n p u t a. D i f f e r e n c e s  p r o j e c t i o n s due  between the i 9 6 0 and  to changes i n L e o n t i e f i n v e r s e s  added c o e f f i c i e n t s over time, as the b. Comparison o f the F i r s t Malaysia Plan p r o j e c t i o n s t l i k e l y to be reached i n 1 9 7 0 ? projections The  so  c o e f f i c i e n t s over time. 1965  and  table  value  economy undergoes change.  table p r o j e c t i o n s with  i . A r e the P l a n ii.Why are  the  projections  some o f the  table  inaccurate?  paper concludes t h a t 1. The  output t a b l e are g e n e r a l l y  projections  s u p e r i o r to those from the  2. Under c o n d i t i o n s even 5 y e a r s i s too  from the  19&5  input/  i960 table.  o f s t r u c t u r a l change,  f a r ahead to expect i n p u t / o u t p u t a n a l y s i s to  y i e l d a c c u r a t e p r o j e c t i o n s f o r most  sectors.  iii  TABLE OF CONTENTS. I.  Introduction.  p.l- 2  II.  Explanation  p.3 - 7  III.  C o n s t r u c t i o n o f the i 9 6 0 T r a n s a c t i o n Table. 1 C l a s s i f i c a t i o n and a g g r e g a t i o n . 2 Producer v e r s u s p u r c h a s e r p r i c e s . 3 Net o r gross s e c t o r output. k Treatment o f t a x a t i o n . 5 Treatment o f exports. 6 Treatment o f imports. 7 V a l u a t i o n o f imports and exports. 8 Treatment o f u n s p e c i f i e d column. 9 Problems i n the s e t o f n a t i o n a l accounts. 10 R e c o n c i l i a t i o n o f my i 9 6 0 t r a n s a c t i o n s t a b l e with G.D.P.  p.8 - 19  IV.  Consistent Forecasting.' A P r o j e c t i o n o f f i n a l demand f o r 1970. B P r o j e c t i o n o f g r o s s output and v a l u e added f o r 1970. C Accuracy o f i n p u t output a n a l y s i s as a forecasting tool.  p.20  o f Input Output A n a l y s i s .  - 25  V.  Results. (1) Comparison o f i 9 6 0 and 1965 t a b l e projections. (2) Reasons f o r d i f f e r e n c e s between i 9 6 0 and 1965 t a b l e p r o j e c t i o n s . (3) Are the P l a n p r o j e c t i o n s l i k e l y to be realized? (k) The d i s c r e p a n c y between the 1965 t a b l e p r o j e c t i o n s and a c t u a l performance through 1968.  p. 26 - 43  VI.  Conclusions.  p.44  VII.  Bibliography.  VIII.  Appendices. 1 C l a s s i f i c a t i o n of industries. 2 i 9 6 0 t r a n s a c t i o n s t a b l e f o r Malaya. 3 Treatment o f f i n a l demand s e c t o r s . 4 Correspondence with Department o f S t a t i s t i c s , Malaysia. 5 1965 t r a n s a c t i o n s t a b l e f o r Malaya. 6 I n t e r i n d u s t r y flow program.  p.^5  - ^8  p.^9 p.50 p. 51 p.52 p.53 -  5k  iv  LIST OF TABLES. I.  C l a s s i f i c a t i o n of Industries.  I I . P r o j e c t i o n s o f F i n a l Demand f o r 1970. I I I . 1970  P l a n and Table P r o j e c t i o n s .  IV. Value Added C o e f f i c i e n t and L e o n t i e f Inverse Changes i 9 6 0 to 1965.  -1I. The  INTRODUCTION b a s i c purpose of t h i s paper i s to enquire i n t o  suitability  the  o f input output a n a l y s i s as a f o r e c a s t i n g t o o l .  In order to do t h i s ,  Is(a) constructed  from a s e t o f N a t i o n a l  a transactions  Accounts o f West  table  Malaysia.  (b) estimated f i n a l demand p r o j e c t i o n s for 1970.  . '  to p r o j e c t value  (c) used an I n t e r i n d u s t r y Plow Program 1970.  added f o r each s e c t o r f o r  These p r o j e c t i o n s are then compared w i t h O f f i c i a l p r o j e c t i o n s from the  F i r s t Malaysia  Plan.  I t should  be emphasised  t h i s comparison i s l e g i t i m a t e , s i n c e the O f f i c i a l  that  Plan  estimates were made i n d e p e n d e n t l y o f i n p u t output a n a l y s i s . How  The  O f f i c i a l P l a n E s t i m a t e s Were Made.  (a) aggregate t a r g e t s . The  output and  o f the P l a n were determined on the  income growth t a r g e t s  basis of a p r i o r i  o f the maximum a t t a i n a b l e growth r a t e s d u r i n g During the p e r i o d I 9 6 I - 6 5 , s e r v i c e s grew a t the very  production  o f non  so r a p i d l y i n the  arbitrarily  chose 7$p«a.(in r e a l  However, the  Unfortunately,  terms). p.a.(constant  c l o s e to the growth r a t e i n the  they o b v i o u s l y  and  them what growth r a t e to s e t , they  E x p o r t s were envisaged to grow a t 2.h% T h i s was  export goods  o f expanding spending  F i r s t Plan p e r i o d ( 1 9 6 6 - 7 0 ) .  l a c k i n g a model to t e l l  1966-70.  the p e r i o d  r a p i d r a t e o f 9»2$ p.a.  government r e a l i s e d i t would be i n c a p a b l e  notions  prices).  early sixties,  and  assumed t h a t the growth o f exports c o u l d  not  be a c c e l e r a t e d much i n j u s t 5 y e a r s , slow maturing t r e e crops i s heavy.  s i n c e the dependence on  -2-  Gross Domestic Product these  two  r a t e s . T h i s works out to 1  or, k.8fo p.a. The  would grow at a weighted average of i n terms o f r e a l  product,  i n current p r i c e s .  t a r g e t s i n the P l a n imply an o v e r a l l Incremental C a p i t a l -  Output R a t i o c o n s i d e r a b l y h i g h e r p r e v a i l e d i n the p e r i o d I 9 6 I - 6 5  ( by ~j ) than t h a t which (3«9  )•  (b) s e c t o r a l growth t a r g e t s f o r Malaya were l o o s e l y r e l a t e d to these  aggregate t a r g e t s . They were i n i t i a l l y  d e r i v e d from  a p r i o r i assessments of the growth p o t e n t i a l i n each i n d u s t r y , then a d j u s t e d With t h r e e exceptions a p p l i e d . The mining and was  were rubber p l a n t i n g ?  f o r e s t r y ; and  i n d u s t r i e s , i n which income o r i g i n a t i n g  assumed to f o l l o w the t r e n d a l r e a d y p r o j e c t e d f o r Malayan  production,  All  p.a.  a r b i t r a r y annual growth r a t e s were  exceptions  quarying  so as to average out a t  v a l u e d at average export p r i c e s .  o f t h i s w i l l serve to i l l u s t r a t e  the k i n d o f h i g h l y  model b u i l d i n g t h a t went i n t o the f o r m u l a t i o n o f the Hence, a t the end to  of the a n a l y s i s , I may  as w e l l as to decide on the u s e f u l n e s s o f i n p u t  i  D.  Plan.  be i n a p o s i t i o n  c r i t i c i z e some o f the s e c t o r a l p r o j e c t i o n s i n the  a n a l y s i s f o r p r o j e c t i o n i n Malaya's  simplified  Plan,  output  case.  Snodgrass. Four L e c t u r e s on Development P l a n n i n g and Statistics. 11. The s t r u c t u r e o f the f i r s t M a l a y s i a p l a n .  p.35  -3-  II. The  EXPLANATION  OF INPUT OUTPUT ANALYSIS  i n p u t output method i s e s s e n t i a l l y an attempted a p p l i c -  a t i o n o f the theory  of general  e q u i l i b r i u m to empirical  q u a n t i t a t i v e a n a l y s i s . The economy i s v i s u a l i z e d as a combination o f a l a r g e number o f interdependent a c t i v i t i e s . Each o f these a c t i v i t i e s i n v o l v e s the.purchase o f goods and s e r v i c e s o r i g i n a t i n g i n other  branches o f the economy on the one  hand, and the p r o d u c t i o n  o f goods and s e r v i c e s which are  s o l d to and absorbed by other the other.  s e c t o r s o f the economy on  Each i n d u s t r y o r s e c t o r r e q u i r e s c e r t a i n i n p u t s  which i t a c q u i r e s output to o t h e r  from other  sectors?  i t then s e l l s i t s  s e c t o r s to meet t h e i r i n p u t  requirements.  Each exchange o f goods and s e r v i c e s between s e c t o r s i n the model.is recorded  i n double e n t r y f a s h i o n as both a s a l e  o f output and a purchase o f i n p u t .  The b a s i c s t a t i c  version  o f the model i s n o r m a l l y p r e s e n t e d i n the form o f 3 t a b l e s ? ( 1 ) the t r a n s a c t i o n s t a b l e (2) the t e c h n i c a l c o e f f i c i e n t t a b l e (3) the t a b l e o f d i r e c t and i n d i r e c t (1)  The T r a n s a c t i o n s  Table.  requirements  This i s constructed  on the b a s i s  t h a t the aggregate s a l e s o f a p a r t i c u l a r s e c t o r are equal to the aggregate  purchases o f t h a t s e c t o r .  The t r a n s a c t i o n s  t a b l e shows how the output o f each i n d u s t r y i s d i s t r i b u t e d among other  s e c t o r s o f the economy.  At the same time i t  shows the i n p u t s to each i n d u s t r y from the other i n d u s t r i e s or  sectors.  _4-  M a t h e m a t i c a l l y t h i s can be expressed as f o l l o w s - the economy c o n s i s t s o f n s e c t o r s , and t o t a l p r o d u c t i o n  i n any one  s e c t o r (X^) i s d i s t r i b u t e d as f o l l o w s .  (1)  ^ i ^ ' i l * * * * " ^ i j"** * • * * ^ i n " ^ i ( i ^ =  =  , , , ,  » -) n  Xi = t o t a l output o f i n d u s t r y i X--= amount o f commodity i r e q u i r e d by i n d u s t r y j F.^ = autonomous f i n a l demand f o r commodity i (2)  We can a l s o use an e x p r e s s i o n  incorporates  f o r i n p u t flows which  the c o n d i t i o n i n the t a b l e t h a t t o t a l  inputs  o f the f a b r i c a t i n g s e c t o r s equal t o t a l output i e .  Xj=J^.  + X y .. .X^+Vj+Mjf j = r l . . , n ) = X ( i = j = l i  i  n)  X- = t o t a l purchases made by s e c t o r j V- = value added by s e c t o r j* MJ = purchases o f imports by s e c t o r j  (11)  The T e c h n i c a l C o e f f i c i e n t Table.  A f t e r a t r a n s a c t i o n t a b l e has been c o n s t r u c t e d  f o r a given  year, a t a b l e o f t e c h n i c a l c o e f f i c i e n t s can be developed from i t . of inputs  A t e c h n i c a l c o e f f i c i e n t t a b l e shows the amount required  from each i n d u s t r y to produce one  d o l l a r s worth o f output o f a g i v e n  industry.  c o e f f i c i e n t s are c a l c u l a t e d f o r processing  Technical  sector industries  only and may be expressed i n e i t h e r monetary o r p h y s i c a l terms. The t a b l e s f o r West M a l a y s i a terms.  a r e expressed i n monetary  -5-  Two steps a r e i n v o l v e d i n the c a l c u l a t i o n o f t e c h n i c a l (1)  coefficients: inventory  g r o s s output i s a d j u s t e d  by s u b t r a c t i n g  d e p l e t i o n d u r i n g the p e r i o d covered by the t a b l e  to o b t a i n a d j u s t e d  g r o s s output f o r each s e c t o r ,  ( l l ) d i v i d e a l l the e n t r i e s i n each column by the a d j u s t e d  Notice  industry's  gross output f o r each i n d u s t r y .  t h a t the model employs the assumption o f f i x e d t e c h n i c a l  c o e f f i c i e n t s i e . the demand f o r p a r t o f the output o f one non autonomous s e c t o r X: by another non autonomous s e c t o r X- i s a unique f e a t u r e o f the l e v e l o f p r o d u c t i o n  X • = a X-j= the a^.= the and i  where  The  i;  :Xj (i,j=l,...n) t o t a l output o f i n d u s t r y j t e c h n i c a l c o e f f i c i e n t d e f i n e d by X.. X- above. J  model's second t a b l e i s thus the [a..."] matrix  the t r a n s a c t i o n s t a b l e thus: The  i n X.. i e .  computed from  a. .= X'J;  t a b l e o f 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 o f l i m i t e d  usefulness  because i t shows o n l y t h e " f i r s t round" e f f e c t s  o f a change i n the output o f one i n d u s t r y on the i n d u s t r i e s from which i t purchases i n p u t s . however f o r a g e n e r a l  (Ill)  The Table  T h i s forms the b a s i s  s o l u t i o n o f an i n p u t output problem.  o f D i r e c t and I n d i r e c t Requirements.  An i n c r e a s e i n f i n a l  demand f o r the p r o d u c t s o f an i n d u s t r y  -6-  w i t h i n the processing and  s e c t o r w i l l l e a d t o both d i r e c t .  i n d i r e c t i n c r e a s e s i n the o u t p u t o f . a l l  the p r o c e s s i n g  industries i n  s e c t o r . F o r example, when i n d u s t r y A expands  o u t p u t i t uses more B and C, but because C and B have expanded t h e y need more A,D,S,etc; and these e f f e c t s w i l l continue  t o spread throughout t h e p r o c e s s i n g  An i n t e g r a l p a r t o f i n p u t - o u t p u t  sector.  a n a l y s i s i s the c o n s t r u c t i o n  o f a t a b l e which shows t h e d i r e c t and i n d i r e c t e f f e c t s o f changes i n f i n a l  demand. I t shows the t o t a l e x p a n s i o n o f  o u t p u t i n a l l i n d u s t r i e s as a r e s u l t o f t h e d e l i v e r y o f one d o l l a r ' s worth o f output o u t s i d e the p r o c e s s i n g  s e c t o r by  each i n d u s t r y . T a k i n g t h e i n v e r s e o f t h e d i f f e r e n c e between an i d e n t i t y m a t r i x and the i n p u t c o e f f i c i e n t m a t r i x y i e l d s t h e t a b l e w i t h 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  + Fj_  +  (2)  X j=  a  i  i n  (i=l,....,n)  ij j  ( i , , . . , n )  x  Substituting ( 2 ) into ( 1 ) x  i ~ il l*'• a  x  +  a  ij j •• x  0  +  a  in n x  +  F  i  ( i=l,..,n)  which may be w r i t t e n more c o m p a c t l y i n v e c t o r form as X  = AX + F  o r X -AX= F ie.(I-A)X=F The as:  general  where A = ( a - ) and I i s t h e i d e n t i t y  s o l u t i o n , by m a t r i x X=  (I-A)~ F 1  matrix.  i n v e r s i o n , may now be expressed  -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) usually transposed (I-A)  is our third table, and is ,t , 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 ) : VAl ( 2. - 1 (ll) v- = O O M  t  where VA^ = value added for sector i . Xj_ = gross output of sector i . v^ = Value added coefficient. Therefore, V A  i =  v  iXi  That i s , 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 i 9 6 0 TRANSACTIONS TABLE. 1. C l a s s i f i c a t i o n  and Aggregation.  The p r i m a r y c l a s s i f i c a t i o n a l r e a d y determined  c r i t e r i a i n the t a b l e were  i n advance o f my work,ie.  the b a s i c s e c t o r  d e s i g n o f the t a b l e had been decided on.My task was: (a) to f i t a s e t o f n a t i o n a l accounts o f West M a l a y s i a i n t o this  29 s e c t o r c l a s s i f i c a t i o n , '  (b) to modify the form o f the t a b l e where n e c e s s a r y .  Appendix Table 1 shows the c h a r t o f accounts used by West M a l a y s i a and the way t h a t I c l a s s i f i e d these i n t o the 29 s e c t o r s f o r the t a b l e ,  (a) B r o a d l y speaking, the accounts  agricultural  classify  s e c t o r s a c c o r d i n g to commodities,(for  example  i n d u s t r y H 3 r u b b e r e s t a t e s and s m a l l h o l d i n g s , a r e c l a s s i f i e d ?  t o g e t h e r even though the a c t i v i t i e s a r e 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  b a s i s ( e g . chemical p r o d u c t s i n c l u d e s such d i v e r s e i n d u s t r i e s as^the manufacture o f v e g e t a b l e o i l s and the manufacture o f p a i n t s and v a r n i s h e s ) . (b) The degree  o f a g g r e g a t i o n used i n the accounts  and the t a b l e depends l o o s e l y on the importance i n n a t i o n a l income. For example,for  important  o f the item  sectors l i k e  rubber,the manufacture o f rubber p r o d u c t s and rubber p r o c e s s i n g have been g i v e n seperate s e c t o r s r a t h e r than b e i n g i n c l u d e d i n say, the chemical i n d u s t r i e s s e c t o r o r m i s c e l l a n e o u s manufacturing.  This contrasts with a high  of a g g r e g a t i o n i n r e l a t i v e l y  s m a l l e r s e c t o r s l i k e food  i n d u s t r i e s ( 6 ) , o r chemical p r o d u c t s ( 1 8 ) .  degree  -92.  Producer v e r s u s Purchaser p r i c e s .  The  accounts a t my d i s p o s a l had estimates i n both producer  prices  ( i e . the p r i c e r e c e i v e d by the p r o d u c e r ) ,  prices  ( t h e p r i c e p a i d by the p u r c h a s e r ) ;  and purchaser  the d i f f e r e n c e i s  composed o f marketing c o s t s , which i n c l u d e such t h i n g s as transport  c o s t s , wholesale and r e t a i l trade mark ups,  insurance  and warehouse c o s t s , and n e t i n d i r e c t  I t was decided  t o use the producer p r i c e v a l u e s  taxes. i n constructing  the t a b l e s because p u r c h a s e r p r i c e t a b l e s s u f f e r from  three  disadvantages, (I)  The row t o t a l o f each s e c t o r , which forms the output  c o n t r o l t o t a l f o r computing i n p u t c o e f f i c i e n t s ,  i n c l u d e s the  marketing c o s t s i n c u r r e d i n each d e l i v e r y o f t h a t output.  sectors  Now marketing c o s t s w i l l p r o b a b l y v a r y as the i n t e r -  s e c t o r a l d i s t r i b u t i o n o f output changes, and thus l e a d to v a r i a t i o n s i n the value production  o f t o t a l output even i f the a c t u a l  o f t h a t s e c t o r remains unchanged.  T h i s means t h a t  c o e f f i c i e n t s estimated i n the base y e a r are l i k e l y to be (II)  With p u r c h a s e r p r i c e s , a l l marketing c o s t s a r e counted  twice - i n the v a l u e and  unstable.  o f the output o f the p r o d u c i n g  industry,  as i n p u t s to t h a t i n d u s t r y from the marketing c o s t s  sectors.  Under the producer p r i c e s system, on the other hand, a l l outputs, i n c l u d i n g the c o n t r o l t o t a l s , are v a l u e d marketing c o s t s are t h e r e f o r e  f.o.b. p l a n t , and  counted o n l y once.  -10-  (111) the  With producer p r i c e s , marketing c o s t s w i l l v a r y with  input  s t r u c t u r e o f an i n d u s t r y , which i s g e n e r a l l y more  s t a b l e than the output s t r u c t u r e , computed i n the base y e a r  from a t a b l e v a l u e d a t producer  p r i c e s i s l i k e l y to be more s t a b l e purchaser p r i c e s . explicitly  so t h a t the c o e f f i c i e n t s  than one v a l u e d a t  As w e l l , the system o f producer p r i c e s •  s e p a r a t e s each element which makes up the f i n a l  p u r c h a s e r s v a l u e so t h a t the v a l u e o f each  transaction  corresponds more c l o s e l y to the flow i n p h y s i c a l u n i t s .  Thus the added s t a b i l i t y the  estimation  o f the c o e f f i c i e n t m a t r i x makes  o f the t a b l e i n producers p r i c e s more  desirable.  3.  Net o r Gross Sector  The  t a b l e I have c o n s t r u c t e d  actions,  Outputs. includes  i n t r a industry  trans-  so t h a t a l l c e l l s on the p r i n c i p a l d i a g o n a l a r e  entered, i e . g r o s s i n d u s t r y output i s counted. simple matter to produce another t a b l e e x c l u d i n g  It i s a such  trans-  a c t i o n s f o r p a r t i c u l a r a p p l i c a t i o n s o f the t a b l e , i f n e c e s s a r y .  k.  Treatment o f T a x a t i o n .  a. D i r e c t Taxes: i e . t a x e s l e v i e d on f a c t o r s e r v i c e s are not distinguished  i n t h i s t a b l e s i n c e the value o f the s e r v i c e s  b e f o r e t a x a r e entered. b. Net I n d i r e c t Taxes form p a r t o f the margin between the  -11-  producers p r i c e and the p u r c h a s e r s p r i c e , and under the former system  consequently,  o f v a l u a t i o n they are g e n e r a l l y ent-  ered i n a s p e c i a l primary i n p u t row  ( i e . i n row  primary  f a c t o r s o f p r o d u c t i o n ) , and i n the column o f the p u r c h a s i n g industry.  Thus a l l g e n e r a l s a l e s taxes l e v i e d on  and footwear, of  f o r example, are r e c o r d e d a t the  clothing  intersection  the primary f a c t o r s o f p r o d u c t i o n row and the  clothing  and footwear column.  5'  Treatment  '  of E x p o r t s .  The method o f r e c o r d i n g E x p o r t s i s p e r f e c t l y s t r a i g h t  forward:  t h a t p a r t o f the output o f a g i v e n s e c t o r which i s exported i s entered i n a f i n a l demand column under "Rest of the World". N o t i c e t h a t there i s no c o r r e s p o n d i n g row,  s i n c e the"Rest o f  the World" s e c t o r i s not a domestic p r o d u c i n g s e c t o r , but o n l y a r e c i p i e n t of f i n a l goods.  6.  Treatment  Imports may Method 1;  of  Imports.  be t r e a t e d i n 4 b a s i c ways.  the method adopted here.  i n a s i n g l e row  A l l imports are a l l o c a t e d  to the consuming s e c t o r s .  In t h i s case, a l l  i n t e r m e d i a t e flows are o f domestic p r o d u c t s o n l y and c o n s t r u c t i o n o f the import row  the  r e q u i r e s an i d e n t i f i c a t i o n o f  the d e s t i n a t i o n o f imports. The drawback o f t h i s method i s t h a t i f some imports are  -12-  "competing"(a  commodity t h a t has a "good s u b s t i t u t e " i n some  d o m e s t i c a l l y produced  c o m m o d i t y ) , s u b s t i t u t i o n w i l l tend to  occur, r e s t r i c t i n g the u s e f u l n e s s , o f the i n p u t c o e f f i c i e n t m a t r i x as time passes. . Method 2 s A l l imports are d i s t r i b u t e d a l o n g the row s i m i l a r domestic  of a  s e c t o r - so flows c o n t a i n imported  d o m e s t i c a l l y produced  elements without  and  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 g i v e s r i s e to i n a c c u r a t e estimates o f output requirements  when the i n v e r s e m a t r i x computed  t h i s v e r s i o n ' o f the t a b l e i s p o s t - m u l t i p l i e d by a b i l l goods comprising f i n a l domestic Method 3i  demand and  imports which are judged  of  exports.  T r i e s to combine the v i r t u e s o f the p r e v i o u s  while a v o i d i n g t h e i r f a u l t s  from  two,  , by dis-triibuting o n l y those  to be competing a l o n g the rows o f  the c o r r e s p o n d i n g domestic  sector(thus obtaining stable  i n p u t 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 imports as a seperate row(  competing  thus p r e s e r v i n g the homogeneity  o f the output s t r u c t u r e ) . T h i s i s the method which i s most h i g h l y recommended, u s u a l l y because i t i s more a c c u r a t e  than  the o t h e r s , but to use i t you need to be a b l e 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 t h a t a l l imported  goods  can be d i s t i n g u i s h e d both by i n d u s t r y o f o r i g i n and by i n d u s t r y o f d e s t i n a t i o n . T h i s i s e q u i v a l e n t to the p r e p a r a t i o n o f tv/o t a b l e s - one f o r domestic  flows and one  f o r imported  products.  -13-  ..  T h i s method was i m p r a c t i c a l i n t h i s case because the statistical  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 c o m p e t i t i v e  and non c o m p e t i t i v e imports a r e n o t d i s t i n g u i s h e d i n n a t i o n a l accounts. (II)  In 1960-61 M a l a y s i a began a p o l i c y o f a l l o w i n g h e r  t r a d i t i o n a l l y l a r g e s u r p l u s i n the Balance  o f Payments on  Current Account to run down, by s u b s t a n t i a l l y i n c r e a s i n g imports. Method one a l l o w s us to see the e f f e c t s o f t h i s change i n p o l i c y on the trade s e c t o r and the economy i n g e n e r a l .  The weakness o f u s i n g method one i n t h i s c a s e , i s t h a t s u b s t a n t i a l import  s u b s t i t u t i o n took p l a c e i n M a l a y s i a  d u r i n g the 1960's.  7. V a l u a t i o n o f Imports and E x p o r t s . (a) The value o f a country's exports f.o.b. a t the p o r t o f embarkation c o n s i s t s o f the producers marketing  costs necessary  to get the goods to the p o r t .  Exports were r e c o r d e d down the "Rest a c c o r d i n g to the producer domestic  marketing  value p l u s the v a r i o u s  o f the World" column  p r i c e o f the commodity. I f any  c o s t s were i n c u r r e d then they a r e entered  i n t h i s column where i t i n t e r s e c t s the wholesale  and r e t a i l  trade row. (b) The v a l u e o f imports  c . i . f . comprises  1. the f o r e i g n p o r t v a l u e . 2. f r e i g h t charges to the domestic 3.insurance charges.  three  items:  port o f entry.  A fourth  item,  government, Port The in  Value way  an  import  may be of  added  imports  i n which  the  input-output  (producers mehtod value  duties  or  levied  to  as  give  they  enter  different  well  for  recording  imports.  duties)  products  method  import duties Domestic Port  This  case, and  separation  was  compare  at  in  various  sectors,  this  ratio  over  incorporate table,  present  according industry import  an  is  and  their  the to  to  (  the  port for  ie.  •f + =  valuing  to  the  domestic  observe  6 5  imports which of  levied  of  r  it o  w  value  a  s  e  a  r  the  made  imported  imports  against  be P  '  a  t  e  data  feasible to  of  imports  changes  is  in  national  (For  goods.)  to  its  them,  up h e r e  in  to  appendage  i n the  goods.  forestry  of  import  method B ) .  desirable  use  ended  (ie,  duties  effects  classified  sector the  no  S  out  seemed  import  the  while  are  it  would a  markup i n d i r e c t taxes Purchaser price  separate  c.i.f.  ratio  feasible  nature  were  decided  Although  not  to  upon  comparable  prices  mainly because  2129, f o r e s t r y ,  duties  producer  was at  stage  because  the  is  valuation  charges  Xmppr'ts^^  according to  it  done  time.  this  form  accounts  some  figure  as  preferred  Value  imports  to  often  of  domestic  «J  however,  value  is  The  entered  below'),  foreign port value. f r e i g h t and i n s u r a n c e to reach our p o r t .  'duties  the  A  as  economy.  usually  used,  at  this  are  prices)  domestic  In  domestic  purchasers  value  +  Domestic  system  this  +  called  upon the  p r i m a r i l y because  is  the  domestic  depends  ( i n c l u d i n g import  value  is  elements  imports,  port  what  the  table  adopted  of  by  not Example,  but  0.2  -15-  An i l l u s t r a t i o n of the treatment of  imports.  An import o f type A, which i s consumed by i n d u s t r y 6 has f o r e i g n port value  of $100j the c o s t o f t r a n s p o r t  domestic p o r t o f entry, the  c o s t of insurance  enterprise?  and  $10,  ( a l s o $10),  i s borne by a domestic  an import duty o f |5 i s l e v i e d by the  T h i s t r a n s a c t i o n would be entered  Sector  Industry  insurance imports Total ' import d u t i e s To the extent provided  6  120 120 5  - the  import  i n the t a b l e as below. Gross Output.  insurance  10 120  on imports  are  of imports w i l l  c o r r e c t treatment i s to i g n o r e  this  27  ) t h a t i s s u p p l i e d to column 30  be  and  i n c l u d e these s e r v i c e s a g a i n as an output o f domestic (rows 25 and  domestic  10  • .  t h a t f r e i g h t and  o f the  Rest o f World  by domestic s e r v i c e s , the value  overstated  the  i s borne by a f o r e i g n c a r r i e r s  government- so the t o t a l domestic p o r t value i s $125.  to  a  industry  (Rest o f the ~~'~ r ;  World), i e . the margin items are double counted.  8.Treatment o f U n s p e c i f i e d For many goods and  Column  (32).  s e r v i c e s which are used as i n p u t s , i t i s  not p o s s i b l e to s p e c i f y the i n d u s t r i e s i n which these goods • and  s e r v i c e s are consumed. T h i s i s , f o r i n s t a n c e ,  stationery,  cleaning materials,  p r i n t i n g and  postage s e r v i c e s .  a u d i t and  the case with  secretarial  These t o t a l s have been o r i g i n a l l y deducted,by the  Malaysian  Department o f S t a t i s t i c s ,  from the household column  theoretically  added to the  should  be  Rest o f  fees,  the  and  -16-  World and  Government Consumption columns, i f we had  i n f o r m a t i o n to do  9•  sufficient  so.  Problems i n v o l v e d i n C o n s t r u c t i n g the t a b l e from the  Set  o f Accounts. A.  The  p r o d u c t i o n accountss  were a l l c o n s i s t e n t  double e n t r y r e c o r d i n g , hence the f i r s t were completed and v e r i f i e d or two  cases t h e r e was  29 rows and  a s l i g h t discrepancy  of any  taken,  and  (1)  11  between  row.  column 3.  the e n t r y i s (a)65.2 a c r o s s 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 u n s p e c i f i e d row e n t r y i n column 3« (to keep column 3 t o t a l unchanged.) (b)0.2 i s added to the u n s p e c i f i e d column e n t r y i n row l l . ~ (to keep the row 11 t o t a l unchanged.) B.  Row  the average  by p u t t i n g a  b a l a n c i n g item i n t o the u n s p e c i f i e d column and For example  one  different  the balance  r e c e i p t s and payments accounts maintained  In  between the  To make the double e n t r i e s compatible,  f i g u r e i n d i s p u t e was  their  columns  from the other accounts.  v a l u a t i o n o f a p a r t i c u l a r t r a n s a c t i o n i n two accounts.  -in  Treatment of the F i n a l Demand S e c t o r s . Here,  o f e n t r i e s was  verification  not p o s s i b l e because: ( l ) with the i n t r o d u c t i o n  o f the r e s t o f the world  there i s no  closed, ( b a l a n c i n g )  system o f double e n t r y r e c o r d s f o r a l l f i n a l demand t r a n s (11)  actions.  some o f the  accounts  which I used to c o n s t r u c t the f i n a l demand s e c t i o n s o f the t a b l e were not complete and  i n these  cases  I had  to r e l y  on  -17-  s i n g l e e n t r i e s from the o t h e r accounts For example. Government (row (row  1)  was  not recorded.  to f i l l  35a) - spending  I had to r e l y on  r e c e i p t s from government i n the a g r i c u l t u r a l  i n the columns.  on A g r i c u l t u r e agricultural account.  For o t h e r s p e c i f i c d e t a i l s of problems encountered  in  c o n s t r u c t i n g f i n a l demand s e c t o r s , see Appendix 3» Other q u e s t i o n s r e l a t i n g to the s t r u c t u r e o f the  accounts  and the p r e l i m i n a r y s t r u c t u r e o f the t a b l e were sent to the Department o f S t a t i s t i c s i n M a l a y s i a f o r c l a r i f i c a t i o n . For a copy o f these q u e s t i o n s , provided My  (and the crux o f the answers  ), see Appendix ^.  completed I 9 6 0 T r a n s a c t i o n s Table appears as Appendix  the Government Table  v e r s i o n o f the 1965 Malayan T r a n s a c t i o n s  i s i n Appendix 5«  2;  -18-  10.  Reconciliation  Gross  Domestic  I960  (a) There from  are the  Using  a  My.i960  of  Table  with  Product,  estimate  of  two m e t h o d s  G.D.P. of  transactions 2  Transactions  sector  from  the  calculating  table. Gross  Domestic Product  table.  example:  1  2  Intermediate Output  g  h  Unspecified  3c '  1  m  n  0  P -  Intermediate Output  Unspecified Final  DemarK  1  Imports  Value  I. A)  Added  Balance  u  Equations.  a + b = g + h  B)  a + c  C)  b +  +  e  = g  + k +  d +  f  = h +  l +  m +  o  n +  p  V  -19-  II. GDP  E s t i m a t i n g GDP u s i n g the value added method. = o + p + u + v  va  '.fpM 6 1 0 1 . 4 i n my i 9 6 0  = III.  transactions table.  E s t i m a t i n g GDP u s i n g the f i n a l s a l e s 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 GDPf  = g+h S  = GDP  va  +  = 6101.4 +  U n s p e c i f i e d row t o t a l 535.2  = $M 6 6 3 6 . 6 To v e r i f y t h i s answer;  add  minus plus minus  Consumption Investment Inventories Government Exports  3625.3 754.8 100.4 •710.2 3189  Imports U n s p e c i f i e d column U n s p e c i f i e d row  4  8380i6 2232,8  6TW7E 488.8  (b)GDP a t market p r i c e i n the O f f i c i a l Accounts f o r Malaya in i960  = $M 6 1 3 4 m i l l .  Considering  some o f the s p e c i f i c  in constructing satisfied  difficulties  I encountered  the t a b l e ( s e e Appendix 3 and 4 ) , I am  with the accuracy  o f my two methods o f e s t i m a t i n g  Gross Domestic P r o d u c t , r e l a t i v e t o the o f f i c i a l  estimate.  -20IV.  CONSISTENT FORECASTING  "Consistent  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  of a transactions table.  T h i s d o e s 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 ,  b u t what i t d o e s i s e n s u r e  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 sectors w i l l a d d up t o a t o t a l p r o j e c t i o n . ( F o r e x a m p l e , i t e n s u r e s t h a t f o u r w h e e l s w i l l be p r o j e c t e d  f o r every projected  There a r e two m a j o r 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  car. ) forecasting:  ( 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 e a c h e n t r y final  demand s e c t o r s o f t h e 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 assumed (A)  i n the  changes i n f i n a l  on t h e b a s i s o f t h e  demand.  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  of final  projected,  demand c o l u m n s a r e a d d e d  theindividual f i n a l  demand h a v e  been  t o g e t h e r t o form a s i n g l e column. Table I I .  P r o j e c t i o n s o f F i n a l Demand F o r 1970 Malaya Malaysia 1961-66  Government Consumption Private Consumption Gross C a p i t a l Formation Exports Imports GDP a t m a r k e t price 1 2  1  Total Malaysia 1970, c u r r e n t p r i c e s . $M m i l l .  2  M a l a y a Spendxng 1970, c u r r e n t p r i c e s . $M m i l l .  0.86  2226  1914.36  0.88  6946  6112.48  0.84 0.82  2248 4676 I6096 _4J£4  1888.32  3834.32 13749.48  11502  10140.22  0.79  3609.26  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 D e p a r t m e n t o f S t a t i s t i c s , M a l a y s i a . M i d Term R e v i e w - F i r s t M a l a y s i a P l a n 1966-70. (1969) p. 2.8  -21-  (1) N o t i c e  from column one  - i n most cases the  proportion  o f Malaya i n the t o t a l o f each expenditure category d i d not  change over the p e r i o d ,  the most r e c e n t i n 1963 1965  Imports (2)  a.  taken. For  & 64 =.84 & 66 =.79  Therefore,  f o r 1970,  b. A c c o r d i n g f o r 1970,  f a c t o r cost market p r i c e  GDP  GDP  example,  I used  From the I 9 6 5 t r a n s a c t i o n s GDP GDP  The  f i g u r e was  but where s l i g h t change d i d o c c u r  .79,  tables  _  6883.1 7919-8  f a c t o r cost  6883.1 7919,8 = $M 8812 m i l l . =  x  to the o f f i c i a l P l a n output p r o j e c t i o n  a t f a c t o r c o s t f o r Malaya = $M  f a c t t h a t my  10140.22  method o f c a l c u l a t i n g  GDP  8650 m i l l . at f a c t o r c o s t ,  ( u s i n g the r a t i o o f Malaya/Malaysia f o r each of the main spending c a t e g o r i e s ) estimate o f GDP,  y i e l d s a r e s u l t c l o s e to the  i n d i c a t e s t h a t the use  official  o f the r a t i o  to  c a l c u l a t e aggregate demand f o r Malaya g i v e s f a i r l y s a t i s f a c t o r y results.  1  JJiid  p68.  -22-  (B) P r o j e c t i o n o f Gross Output and Value Added o f S e c t o r s to 1 9 7 0 . 1.  demand p r o j e c t i o n f o r 1 9 7 0 , t h i s i s  Given the aggregate  d i s t r i b u t e d down the f i n a l demand column a c c o r d i n g to the percentage  d i s t r i b u t i o n o f t h i s column i n 1 9 6 5 -  have measures o f aggregate 2.  Hence we  demand f o r each i n d u s t r y producing.  The t r a n s a c t i o n s t a b l e f o r 1965»  a  n  d  the estimated  final  demand data are recorded i n the I n t e r I n d u s t r y Flow Program, (see Appendix 6 ) , which  i . d e r i v e s the L e o n t i e f i n v e r s e f o r  1965i 1970 3.  i i ' d e r i v e s t o t a l gross output f o r f o r each o f the p r o d u c i n g s e c t o r s . .  Since the r a t i o o f value added ( a t f a c t o r c o s t ) t o t a l gross  is  output  assumed t o be constant over time, the v a l u e added a t f a c t o r c o s t f o r each s e c t o r f o r 1 9 7 0 , can be c a l c u l a t e d u s i n g the formula: T o t a l F a c t o r Payments - Net I n d i r e c t Taxes ( 1 9 6 5 ) T o t a l Gross Output . ( 1 9 6 5 ) 4.  The proceedure  T o t a l Gross Output ( 1 9 7 0 )  can be repeated, u s i n g the i 9 6 0 t r a n s a c t i o n s  t a b l e and the Program to estimate p r o j e c t e d v a l u e added f o r 1 9 7 0 .  (C) Accuracy The  o f Input/Output  stability  A n a l y s i s as a F o r c a s t i n g T o o l .  o r constancy o f the i n p u t c o e f f i c i e n t s ,  (a^.:)  i s one o f the c r i t i c a l assumptions o f i n p u t / o u t p u t a n a l y s i s . I f t h i s assumption  i s i n a p p r o p r i a t e then a l l e s t i m a t e s o b t a i n e d  by i n p u t / o u t p u t a n a l y s i s w i l l  be i n a c c u r a t e .  These c o e f f i c i e n t s  do not n o r m a l l y change r a p i d l y , and the s m a l l changes t h a t might occur over a r e l a t i v e s h o r t p e r i o d would not l e a d t o s e r i o u s e r r o r s i n the p r o j e c t e d t r a n s a c t i o n s t a b l e .  -23My p r o j e c t i o n s , however,are 5 years f o r the 19^5 c o e f f i c i e n t s and  10 y e a r s f o r the i 9 6 0 c o e f f i c i e n t t a b l e . Over these  longer  time spans, the i n p u t c o e f f i c i e n t s w i l l be a f f e c t e d  by three k i n d s  o f 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 o f s e c t o r output, o r the appearance o f new i n d u s t r i e s . (3) the e f f e c t s o f t e c h n o l o g i c a l 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 p r i c e s o f f a c t o r s o f p r o d u c t i o n  change  d u r i n g the p e r i o d covered by the p r o j e c t i o n , i t i s p o s s i b l e that input patterns  and hence some o f the i n p u t c o e f f i c i e n t s  w i l l be changed. T h i s w i l l o n l y happen, however, i f input substitution i s possible. For example, i n the 1965 t a b l e , the Metal Products and Machinery s e c t o r uses wood f u e l ,  c o a l f u e l and petroleum. I f the p r i c e  o f 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 s u b s t i t u t e c o a l and  o i l , a t l e a s t i n p a r t , then i t may do so to a v o i d the  e x t r a c o s t . Hence the i n p u t c o e f f i c i e n t s o f t h i s  sector's  column with the wood and cork row, and with the p r o d u c t s of petroleum and c o a l row w i l l  change.  (2) Changes i n the composition o f s e c t o r output. T h i s a r i s e s from an inadequate c l a s s i f i c a t i o n o f economic activities,  so t h a t some s e c t o r s c o n t a i n p r o d u c t s with  d i f f e r e n t input  s t r u c t u r e s ; e g . , i n the i 9 6 0 Malayan t a b l e  -24-  chemical p r o d u c t s and the p r o d u c t s o f petroleum and c o a l appear i n one s e c t o r - they do have d i f f e r e n t input  structures  (see 1965 t r a n s a c t i o n s t a b l e ) , and i f i n the f u t u r e the outputs o f these p r o d u c t s change non p r o p o r t i o n a t e l y , the o v e r a l l i n p u t s t r u c t u r e o f the s e c t o r w i l l change. T h i s argument a l s o a p p l i e s to the appearance o f new i n d u s t r i e s w i t h i n a p a r t i c u l a r s e c t o r . For example, the r a p i d growth o f the m i s s i l e i n d u s t r y o f the United  S t a t e s i n the 1 9 5 0 ' s ,  with a r e l a t i v e d e c l i n e i n some p a r t s o f the a i r c r a f t i n d u s t r y , would have been hard t o p r o j e c t i n 1950. Thus a 10 y e a r input output f o r e c a s t o f the United  States  economy made i n 1950 would no doubt have understated the expansion o f the m i s s i l e i n d u s t r y , and would have  overstated  the growth o f the a i r c r a f t i n d u s t r y . T h i s type o f s t r u c t u r a l change i n the economy i s d r a m a t i c a l l y i l l u s t r a t e d with  reference  to the d i f f e r e n c e i n p r o j e c t i o n s f o r 1970 between the Malayan i 9 6 0 and 1965 t a b l e s . I s h a l l r e t u r n to t h i s (3)  later.  The e f f e c t s o f t e c h n o l o g i c a l change.  Changes i n technology, by which i s meant a l l changes i n the p h y s i c a l i n p u t 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 s u b s t i t u t i o n o f some products f o r o t h e r s p a r t i c u l a r p r o c e s s (eg. the s u b s t i t u t i o n o f s y n t h e t i c for natural fibres i n textiles.) (b) Savings i n m a t e r i a l o f energy i n p u t i n t o  ina  -25-  processes  (eg. the constant decrease  electricity (c)  Changes i n t h e o u t p u t  processes, special While  r e q u i r e d to manufacture  i n the q u a n t i t y of a ton of  aluminium.)  composition of  particular  ( For example, the i n c r e a s e i n the p r o p o r t i o n o f  s t e e l s i n i r o n and  i t is difficult  steel  production.)  to a t t r i b u t e observed  changes i n the  v a l u e s of i n p u t c o e f f i c i e n t s to p a r t i c u l a r causes,  the  g e n e r a l c o n s e n s u s seems t o be t h a t c h a n g e s i n t e c h n o l o g y exert only a gradual influence affect principally primary The  factors  upon t h e c o e f f i c i e n t s ,  the i n p u t s o f energy,  such as l a b o u r and  and t h e i n p u t s o f 1  capital.  e f f e c t s o f t e c h n o l o g i c a l c h a n g e on i n p u t  c a n be h a n d l e d  and  coefficients  more e a s i l y w i t h i n a g e n e r a l f r a m e w o r k  of  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 it  i n v o l v e s t h e use, o f d y n a m i c i n p u t - o u t p u t a n a l y s i s ,  is  still  No  attempt  i n i t s early will  stages of t h e o r e t i c a l  be made h e r e  which  development'.  to a d j u s t the Malayan  tables  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.  United Nations P r o b l e m s Of Analysis. p.!07«  Input Output Tables  and  -26-  V. (1)  RESULTS Comparison o f 1965 and i 9 6 0 Table  Projections.  F i n a l demand p r o j e c t i o n s f o r Malaya i n 1970, were o b t a i n e d i n s e c t i o n IV (see page 20 ).  I t was estimated  that  consumption + investment + government spending + exports _:$M million.  T h i s f i g u r e i s d i s t r i b u t e d down the aggregate demand  column a c c o r d i n g  to the percentage o f each s e c t o r i n t o t a l  aggregate demand. For Example s (a) A g r i c u l t u r e and L i v e s t o c k demand i n 1965Therefore,  = 5*3$ aggregate  The aggregate demand p r o j e c t i o n 1970  A g r i c u l t u r e and L i v e s t o c k  =13750.  1970 = 5 . 3 ^ o f 13750  '  -s 7 2 8 . 8  (b) However, A g r i c u l t u r e and L i v e s t o c k 5'lfo  was  only  o f aggregate demand i n the i 9 6 0 t a b l e - so the demand  f o r A g r i c u l t u r e and L i v e s t o c k  i n 1970 = 5>1% o f 13750  •as 7 0 1 . 2 T h e o r e t i c a l l y , we should compare the 1970 p r o j e c t i o n s o f (I) the i 9 6 0 t a b l e u s i n g  i 9 6 0 percentage breakdown o f  aggregate demand. ( I I ) the 1965 t a b l e u s i n g the 1965 percentage breakdown o f aggregate demand. But much o f t h i s d i s c r e p a n c y between our two p r o j e c t i o n measures may be the r e s u l t o f the changing percentage o f t h a t item i n aggregate demand from i 9 6 0 to 1965, any  13750  rather  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  than  period.  -27-  the i 9 6 0 t a b l e with the 1965 percentage  So I have a l s o i n c l u d e d  breakdown o f aggregate demand t o make p r o j e c t i o n s . I t i s the r e s u l t o f t h i s p r o j e c t i o n t h a t should the p r o j e c t i o n s o f the I965.1 the  changes i n the i n p u t  place  with  t a b l e i n o r d e r to d i s c o v e r  c o e f f i c i e n t m a t r i x t h a t have taken  over time.  For Example  be compared  . /  - Rubber  Planting  (a) The i 9 6 0 m a t r i x with i 9 6 0 aggregate demand percentages, greatly overstates  projected  compared with the P l a n  production  (1115).  f o r 1970  T h i s i s because i n i 9 6 0 rubber  p r i c e s reached t h e i r peak o f 1070 p e r pound, of the f i n a l high  o f n a t u r a l rubber was i n o r d i n a t e l y  t h a t when we use the 1965 aggrgate demand percentages,  abstract  from t h i s boom demand year o f i 9 6 0 ) ,  g i v e s a f i g u r e v e r y c l o s e t o the 1965 t a b l e ( the  so the v a l u e  i n t h a t y e a r ( r e l a t i v e to t o t a l aggregate demand i n i 9 6 0 ) .  (b) N o t i c e (ie.  use component  (1919.4)  input  the i 9 6 0  i n d i c a t i n g that  c o e f f i c i e n t s f o r t h i s s e c t o r o f the t a b l e had not  changed s i g n i f i c a n t l y . )  table  -28-  I n t a b l e I I I on t h e f o l l o w i n g page, t h e r e s u l t s o f p r o j e c t i n g s e c t o r a l v a l u e added, u s i n g t h e I 9 6 5 m a t r i x , with p r o j e c t i o n s using the i960 matrix  i s compared  ( w i t h b o t h i 9 6 0 and  I 9 6 5 a g g r e g a t e demand i breakdowns), * I f one assumes t h a t t h e 1970 p l a n p r o j e c t i o n s a r e a c c u r a t e ( t h i s a s s u m p t i o n w i l l be i n v e s t i g a t e d l a t e r ), t h e n from column 5, i t i s c l e a r t h a t f o r t h e m a j o r i t y o f 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 a r e b e t t e r t h a n t h e i 9 6 0 ections.  ( T h i s i s n o t t r u e , however, f o r F i s h i n g ,  proj-  Forestry  and M i n i n g . )  The r e s t o f 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  the i 9 6 0 and 1965 t a b l e p r o j e c t i o n s  between  ( b o t h u s i n g t h e I965  aggregate demand p e r c e n t a g e s ) . (b) and  Examining the accuracy o f the p l a n  projections  why t h e 1965 t a b l e p r o j e c t i o n s i n some s e c t o r s a r e  inaccurate.  Table  I I I . 1970 Plan and Table P r o j e c t i o n s . MALAYA; tM m i l l - Current P r i c e s .  , (1) i 9 6 0 Matrix I96O7S ~  • (2) i 9 6 0 Matrix 1965^  881.4  1055.1  856.I  910  1965  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  3093.1  2583.8  2292.0  472.3  582.7  705.3  475  I960  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 S e r v i c e s  1450.9^  1685.5"  1660.8"  A g r i c u l t u r e and L i v e s t o c k Rubber P l a n t i n g  TOTAL AGRICULTURE Mining Manufacturing  ,J  •  •  (3) 1965Matrix 196555 \  (4) Plan Projection  Banking, Insurance e t c .  111.4 H 8 6 0 3  1 3 3 . 4 >Z»S3-|  135.7 '2o87-4  Transport,  298.0  314,2__  290.9_  Communications  Gross Domestic Product at F a c t o r Cost  8061.0  7994.7  8259.8  (5) Better Projection Column- 2 compared with Column 3 .  2440  21 t O  8615  -30(2)  Reasons f o r the d i f f e r e n c e s between the i 9 6 0 & 1965 • Table P r o j e c t i o n s . In comparing the p r o j e c t i o n s from my i 9 6 0 t a b l e and the  projections  from the  1965  t a b l e , there  2 possible  are  reasons f o r d i s c r e p a n c y . (1)  The  value added c o e f f i c i e n t has  gross output p r o j e c t i o n s f o r 19?0, s e c t o r was  c a l c u l a t e d using:  changed. Given  the v a l u e added by  -  g r o s s output p r o j e c t i o n 1970  each  . '  value added g r o s s output  Clearly,  the r a t i o o f value added to gross output i n the  I 9 6 5 t a b l e may sector.  d i f f e r from t h a t i n the  Hence the  added p r o j e c t i o n s  two  i960 table for  any  t a b l e s would y i e l d d i f f e r e n t value  f o r each s e c t o r ,  even i f the g r o s s output  p r o j e c t i o n s y i e l d e d by both t a b l e s were the same. (2)  Gross output p r o j e c t i o n s g i v e n  w i l l be d i f f e r e n t because the L e o n t i e f as s t r u c t u r a l change has  occurred  by the  two  i n v e r s e has  i n the  economy.  tables changed.  i n the t r a n s p o s e d L e o n t i e f m a t r i x shows the  total  production  from the  d i r e c t l y and  i n d i r e c t l y required  dollar sector  a t the top o f the t a b l e f o r each d o l l a r o f d e l i v e r y to demand by each o f the On  s e c t o r s a t the l e f t o f the  the f o l l o w i n g page t a b l e I . shows the v  added c o e f f i c i e n t and inverse  i n the r e l e v a n t row  f o r each s e c t o r , and  added p r o j e c t i o n s f o r  1970.  how  column  Eac?i  final  table.  changes i n the t o t a l s i n the  value Leontief  these have a f f e c t e d value  Table IV. Value Added C o e f f i c i e n t and L e o n t i e f Invers e Changes i 9 6 0 to MALAY. A: - Current P r i c e 3. m mill i960 Matrix  I965 Matrix 1 9 6 5T£  1965%  value added a t f . c . g r o s s output I960  1965  1965.  R~bw t o t a l s o f L e o n t i e f Inverse I960  1965  A g r i c u l t u r e and L i v e s t o c k  1055.1  856.1  74.1  69.4  2.60  1.94  Rubber P l a n t i n g  1190.7  II79.O  95.^  91.9  2.05  1.99  Forestry-  164.0  108.2  75.2  67.4  1.90  1.59  Fishing  174.0  148.7  92.3  93.3  1.12  1.035  Mining  582,7  705.3  6I.9  66.7  1.76  1.91  Manufacturing  664.8  994.5  13.4  16.6  Construction  349.8  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  90.0  92.1  1.00  1.00  48.2  53.7  3-58  2.94  91.9  92.0  1.01  1.01  72.8  74.1  1.00  1.00  57.9  55.6  1.27  1.23  Wholesale  and R e t a i l  Trade  Other S e r v i c e s Banking,  1194.8  1296,0  ~"1  Insurance e t c .  T r a n s p o r t and  ;  ' 2133.1  2087.4  Communications  Gross Domestic Product at F a c t o r Cost  7994.7  19.05 (1.12)  18.70  8259.8  * The f i g u r e i n b r a c k e t s i s the average f o r manufacturing, and i s d e r i v e d by d i v i d i n g the aggregate f i g u r e by the number o f manufacturing s e c t o r s (17). For example: 19.05 + 17 =  1.12.  -32-  From the  t a b l e , i t can 1965  u s i n g the  be  seen t h a t v a l u e added  m a t r i x i n A g r i c u l t u r e and  Rubber P l a n t i n g and  the  projections  Livestock.  Composite Item ( o t h e r  Forestry,  services,  t r a n s p o r t ) , are a l l below the i 9 6 0 m a t r i x p r o j e c t i o n s .  banking and  T h i s i s because both the v a l u e added c o e f f i c i e n t and r e l e v a n t row i 9 6 0 and  t o t a l o f the L e o n t i e f  1965  f o r these  In Rubber P l a n t i n g ,  both p r o j e c t i o n s are f a i r l y  close,  yet  i n d u s t r y i n the  I960*s.  major f o r c e s were a t work i n rubber p r o d u c t i o n  in this  period.  (1)  The  i 9 6 0 peak o f 1070 was  i n v e r s e have f a l l e n between  sectors.  dramatic changes took p l a c e Two  the  due  to the  of c a p a c i t y countries,  i n the  p r i c e o f n a t u r a l rubber f e l l  to a l e v e l o f 690 per pound i n 1965.  increased  competition  a r i s i n g from the  f o r s y n t h e t i c rubber p r o d u c t i o n and  from i t s  the  i n the  This expansion  industrial  increasing s u b s t i t u t i o n of synthetic  for  n a t u r a l rubber. (2)  Over the  by 12$.  rubber exports i n c r e a s e d to o f f s e t the  same p e r i o d ,  dramatic f a l l  s o f t e n i t s impact on the  production  current  sufficient i t did  help  economy. i t i s more meaningful i n Malaya's  exports).  The  example a l s o e x p l a i n s why  for  rubber was  over the p e r i o d  not  r a t h e r than constant p r i c e s i n v a l u i n g  (especially  due  T h i s was  i n rubber p r i c e s , but  Thas example s e r v e s to show why case to use  the volume o f Malayan  to the f a l l  the  lower 1965  table projection  i n the v a l u e added  coefficient  (as a r e s u l t o f lower world rubber p r i c e s ) .  -33-  The  rubber row t o t a l o f the L e o n t i e f i n v e r s e f e l l  only  slightly.  In F i s h i n g , the r i s e .in the value  added c o e f f i c i e n t  i 9 6 0 and 1965 had been more than o f f s e t by a f a l l r e l e v a n t row o f the L e o n t i e f i n v e r s e ,  between  i n the  so the 1965 m a t r i x  y i e l d s a lower p r o j e c t i o n than the i 9 6 0 m a t r i x .  It and in  i s interesting  t o note t h a t f o r a l l o f A g r i c u l t u r e ,  F i s h i n g , the r e l e v a n t row t o t a l o f the L e o n t i e f  Forestry  inverse,  each case has f a l l e n over the p e r i o d .  M i n i n g and E l e c t r i c i t y and Water Supply p r o j e c t i o n s u s i n g the 1965 m a t r i x are above the i 9 6 0 m a t r i x p r o j e c t i o n s because both the value  added c o e f f i c i e n t and the r e l e v a n t row t o t a l  o f the L e o n t i e f i n v e r s e 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 in  the v a l u e  added c o e f f i c i e n t s  more than o f f s e t the f a l l  between i 9 6 0 and 1965 have  i n the r e l e v a n t row t o t a l s o f the  L e o n t i e f i n v e r s e over t h i s p e r i o d , and the p r o j e c t i o n s based on the 1965 m a t r i x a r e higher  than those based on the i 9 6 0  matrix.  In C o n s t r u c t i o n  and Dwellings the row t o t a l s o f the L e o n t i e f  i n v e r s e have not changed over time, y e t the 1965 m a t r i x y i e l d s h i g h e r p r o j e c t i o n s because the v a l u e f o r 1965 i s h i g h e r  than t h a t f o r i 9 6 0 .  added  coefficient  -34-  The  t a b l e shows t h a t c o n s i d e r a b l e  discrepancies  between p r o j e c t i o n s from the two m a t r i c e s  exist  - and t h a t these  d i s c r e p a n c i e s are e s p e c i a l l y marked i n F o r e s t r y , Manufacturing, Mining, and A g r i c u l t u r e and L i v e s t o c k .  These  discrepancies  are n o t s u r p r i s i n g i n view o f (a)  The s i g n i f i c a n t s t r u c t u r a l shange t h a t took p l a c e  over the p e r i o d i 9 6 0 (b)  to 1 9 6 5 *  The change from an outward to a r e l a t i v e l y  inward  l o o k i n g s t r a t e g y by the government. A.  S t r u c t u r a l Changes  1965 was achieved earnings, demand.  (a)  Growth i n the p e r i o d i 9 6 0 to  without s i g n i f i c a n t expansion o f export  but r a t h e r was based on i n c r e a s e s i n domestic Hence the export  s e c t o r d e c l i n e d from 48$ o f Gross  Domestic Product ( a t c u r r e n t p r i c e s ) i n i 9 6 0 to 40$ i n 1965(b)  I n c u r r e n t market p r i c e s ,  Gross Domestic Product grew a t 5«2$ on average. r a p i d r a t e s o f growth were r e g i s t e r e d by Sector  ( 1 7 . 9 $ p»a.  i n constant  The most  i . the C o n s t r u c t i o n  i 9 6 0 p r i c e s ) . The expansion  here was due to r a p i d growth i n c a p i t a l expenditures dwellings,  non r e s i d e n t i a l o f f i c e b u i l d i n g s , s c h o o l s ,  road and b r i d g e  ( 1 1 . 1 $ p.a.),  factories,  c o n s t r u c t i o n and o t h e r p u b l i c works. ii.  ( 1 1 . 9 $ p.a.)  on  iii.  Public  Utilities  Manufacturing  e s p e c i a l l y b u i l d i n g m a t e r i a l s and l i g h t manu-  f a c t u r i n g (eg. motor p a r t s , tobacco manufactures).  -35B.  An Inward Looking Strategy.  Around i 9 6 0 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 by 50% or more in 1965 over I960Ihelp to explain the rise in the  gonMSMiy^mEOjr^ gross output  decreased  This would, for example, 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 - 6 5 , page 2 1 .  (3)  Are the P l a n P r o j e c t i o n s L i k e l y to be R e a l i z e d ?  (a)  Generals The p l a n p r o j e c t e d an average annual r a t e o f  growth o f G.D.P. o f 4.8$. constant due  1  Yet the volume o f G.D.P. a t  p r i c e s rose by 5*2$ p.a.  between 1966 and I968,  mainly t o the f a c t t h a t exports  grew by over 7$ i n  volume, more than f i v e times the r a t e p r o j e c t e d i n the p l a n . However, i n c u r r e n t p r i c e s the r i s e i n G.D.P. was s m a l l e r , l a r g e l y because o f the f a l l a l e s s e r extent In any case,  i n the p r i c e o f rubber and t o  i n the p r i c e s o f t i n and palm o i l .  the growth r a t e o f G.D.P. has been n e a r l y on  schedule with the t a r g e t t o 1968.3  (b)  A g r i c u l t u r e s T h i s i s the l a r g e s t s e c t o r i n the economy  and  i t s planned r a t e o f growth (5*5$ p.a.  was  markedly h i g h e r than growth i n the 1961 t o 1965 p e r i o d  (3'3$  p.a.  i n constant  This higher  i n constant  prices)^  1  prices).  t a r g e t r e f l e c t e d i n p a r t the growth o f rubber  output generated by r e p l a n t i n g i n the 1950's and most importantly, and  the dramatic expansion i n palm o i l ,  f i s h i n g output.  7$ p.a.  forestry  Rubber was expected t o grow a t about  i n r e a l terms to achieve  the p l a n t a r g e t .  (Of t h i s ,  f a l l i n g p r i c e s would h o l d income growth i n the i n d u s t r y t o 2fo p.a.)  Yet rubber grew a t an average o f o n l y 4.7$ p.a. i n  r e a l terms i n 1966 and 1967»  1. 2.  3.  4.  Department o f S t a t i s t i c s , Malaya. F i r s t Malaysia. P l a n p 52. " " " " Mid Term Review o f the F i r s t M a l a y s i a P l a n p 14. 2bj_, p 33.  Ibid, p 45.  -37-  Fisheries in  and  constant  Timber  prices,  already  were but  expected  in  the  first  grew  at  an  annual  rate  of  17.6$  grew  at  an  annual  rate  of  1 2 . 2 $ i n I966  planned So,  in  first  O i l and  effect,  aggregate  2 years of  ie.  rate  the  of  the  growth of  (c)  Manufacturings  increase average  in  is  constant  of  rate  of  an  plan  while  forestry  1967*  and  well  in  excess  of  The p l a n  average  However,  likely  the  plan  to  output  manifest out  expected  growth,  and  greater  than  to  of  1965-7  in  rate  of  in  owing to  from 1966  a  that and  a  expected was  1967  target  p.a.,  10$  9•8$  was  increase  to  to  highest and  basic  record  10$.  the  food  chemicals,  were  different  the  of  rate  whereas  p.a.,  10.1$  of  the  hence  I967-7O  in  prices).  singled  products,  on t a r g e t ,  incorporated  i t has proven d i f f i c u l t  are  production during  prices.  increase  current  almost  agriculture  i n manufacturing  requiring in  plan  growth  p.a.  which  the  Fisheries  terms,  been  agricultural  substantially  5.3$  (all  real  have  of  p,a.  6$  targets.  pattern  v  Kernals  about  targets.  1970 in  at  2 years  have  Palm  their  grow  they  Similarly,  exceeded  to  play  predict  and  For  m a c h i n e r y as  leading  role  annual  average  output  I965  example,  wood p r o d u c t s ,  a  However between  industries  growth r a t e s .  beverages,  metals  which  and  in  the  rubber ones  industrial gains  19^7  of  only  one  o f these (food and beverages)  a c h i e v e d more than 10fo growth  - w h i l e the h i g h e s t growth i n d u s t r i e s i n the range  12-25% p.a.,  were r u b b e r r e m i l l i n g and l a t e x p r o c e s s i n g , tobacco products, t e x t i l e s , p r i n t i n g and p u b l i s h i n g . I t should be p o i n t e d out t h a t by the end o f the p l a n p e r i o d the o r i g i n a l may a s s e r t  selections  themselves.  P r e l i m i n a r y and incomplete data i n d i c a t e t h a t the manufacturing s e c t o r c o n t i n u e d to expand r a p i d l y i n 1968.  One i n d i c a t o r  o f t h i s i s the 20$ growth i n consumption o f e l e c t r i c power by f i r m s d u r i n g the f i r s t h a l f o f the y e a r compared with a l6?o  g a i n i n ' t h e comparable p e r i o d 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 b a c k l o g o f a p p l i c a t i o n s t>r new p i o n e e r companies. By mid 1968, 95 a p p l i c a t i o n s w i t h a planned  c a l l e d up c a p i t a l o f $M115 m i l l , had been  approved  i n p r i n c i p l e by the government, some o f these p r o j e c t s are i n an advanced stage o f p l a n n i n g and should be expected to be implemented soon.  These o b s e r v a t i o n s support the  c o n c l u s i o n t h a t the manufacturing good average target,  sector w i l l maintain a  growth r a t e , i n the neighbourhood  o f the p l a n  i n the next few y e a r s .  A t t e n t i o n needs to be focused on the p a t t e r n o f manufacturing development as w e l l as i t s s i z e .  Much o f the p a s t growth  has been i n import s u b s t i t u t i o n and t h i s process  has-reached  a stage where the danger o f s e t t i n g up uneconomical i s becoming more r e a l .  plants  -39(d)  Mining;  k.6fo p.a.  Here p r o d u c t i o n was  expected  to d e c l i n e by  i n c u r r e n t p r i c e s from 1966to 1970  a c c o r d i n g to  the plan.''" For West M a l a y s i a , mining production i n 1966and 1967  grew  2 by 2.8$  p.a.  i n constant p r i c e s ,  terms events proved  but i n c u r r e n t d o l l a r  worse than e x p e c t a t i o n s , p r i m a r i l y  because o f a sharp f a l l  i n the world p r i c e o f t i n by  For M a l a y s i a as a whole value added i n mining 22$ in  from 1965 1965  was  to 1967. due  The  original f a l l  dropped  world output  strategic  of t i n f o r the  time i n 10 y e a r s , exceeded consumption.  by  in t i n prices  to s a l e s from the United S t a t e s  s t o c k p i l e , but by 1967  14$.  first  Similarly,  iron  ore p r o d u c t i o n and exports have d e c l i n e d because o f competi t i o n from A u s t r a l i a n ore i n the Japanese market, and  to  some degree because o f inadequate  the  p o r t f a c i l i t i e s on  east coast o f Malaya, (e)  C o n s t r u c t i o n ; The growth of c o n s t r u c t i o n i n d u s t r i e s  has been r a p i d s i n c e the beginning o f the 1960's, with average annual growth r a t e o f 11.4$ I96I-I965.  an  i n constant p r i c e s  A c c o r d i n g to the f i r s t p l a n , the t a r g e t r a t e 3  of  i n c r e a s e was  set at 8$ p.a.  i n c u r r e n t p r i c e s 1966-70,  which i n the l i g h t o f the experience o f the e a r l y  60's  seemed f a i r l y modest. But w i t h 1965, 1. 2. 3.  i . The  beginning o f the f a l l  in t i n prices in  the l a r g e d e c l i n e o f rubber p r i c e s i n 1967  (17$)  Department o f S t a t i s t i c s , Malaya. F i r s t M a l a y s i a P l a n p 52. " " " " Mid Term Review o f the F i r s t M a l a y s i a P l a n , p 14. I b i d , p 52.  -40-  and  palm  o i l  prices  i i . spending  The r e c e s s i o n  which  separation  slack  experienced  of  private  partly  investment  because  of  the  Singapore.  i i i .  Hence  was  of  government  1967(6%).  in  The  eventual  slowing  down o f  the  rate  of  .  investment.  construction  grew  at  an  annual  average  rate  of  only  1• 3.5%  in  With  the  I968,  I966  upturn  capacity  reasonable  recover  will  now be  this  2 year  (f)  Transport  and  reduce and  air  well on  its  to  and  had  already  !•  Ibid,  last  prices)  quarter  utilized.  growth  rate  Whether  of the  is .unlikely,  Communications  in  development M a l a y a was  $M546  spend  been  p.14  as  Funds  Borneo  1966-68,  in  the  level.  however,  constant  fully  the  planned  public  transport,  But  in  more  that  mill,  substanti3.11y(by  two  be  at  as  It  .  of is  a  construction 1970 a  target  result  of  slack.  developed.  the  (both  economy  to  achieved,  communications  planned  the  began  to  total  1965,  of  expectation  will  to  3% i n 1967  and  the  spending  |M702  between  I.966  facilities  w o u l d be  period  on  are  and  I.961  transport  mill.,and it  expenditures  25%),  these  During  1970  on road, already  was ie.  to  rail, relatively  diverted  to  concentrate  60.9%)  of  the  target  was  more  States.  |M332.5mill. spent,  so  (or  the  plan  plan  target  revised  -41-  upwards to $M?05.7 m i l l i o n f o r 1966 to 1970.  (g)  For other  s e c t o r s o f the economy, d i f f i c u l t i e s were  encountered i n comparing p l a n t a r g e t s with performance i n 1966  and 1967 because  i . P l a n t a r g e t s were a l l expressed  i n c u r r e n t 1970 p r i c e s .  ii.  A l l 1966and 1967 performance  f i g u r e s were expressed i n constant iii.  1964 p r i c e s .  No data on s e c t o r a l p r i c e changes  over the p e r i o d was a v a 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 a r e s e t out i n the t a b l e below: P l a n 1970* current p r i c e s  sector E l e c t r i c i t y , Water and Sanitary Services.  1966-67*  constant  10.0  11.4  Wholesale and R e t a i l Trade.  ^5  3.2  Dwellings.  4.0  2.5  P u b l i c A d m i n i s t r a t i o n and Defence.  4.0  4.5  Banking, Insurance and other s e r v i c e s .  6.0  5.2  prices  * F i g u r e s a r e a l l average annual r a t e s o f growth.  2  Since  the r a t e o f domestic p r i c e i n c r e a s e i n the f i r s t  years  o f the p l a n was modest and not expected t o i n c r e a s e  much by the end o f the p l a n p e r i o d , one can l o o s e l y conclude t h a t each o f these t e r t i a r y s e c t o r s a r e growing a t r a t e s not i n c o n s i s t e n t with the achievement o f p l a n t a r g e t s by 1970.  -42-  So,  i n summary, i t does seem t h a t the t a r g e t s f o r aggregate  A g r i c u l t u r a l production, and  the other  being  Manufacturing, Transport  and  Communications,  t e r t i a r y s e c t o r s a l l have a good chance o f  achieved.  Only C o n s t r u c t i o n  and M i n i n g seem to be o v e r s t a t e d  i n the  t a r g e t s ( a s w e l l as p a r t s o f A g r i c u l t u r e , namely rubber Transport.  F i s h e r i e s and  production).  Timber have been u n d e r s t a t e d i n the  plan. (4)  The d i s c r e p a n c y between the 196 5 t a b l e p r o j e c t i o n s a c t u a l per:fo"rma.nce through 1 9 b * 8 .  Using the r e s u l t s o u t l i n e d above, and t a b l e I I I , i t i s obvious t h a t the 1965  the  information  and from  table projections  are  c l o s e to being r e a l i s e d f o r T o t a l A g r i c u l t u r e , Manufacturing, and  the Composite item.  However.Forestry. F i s h i n g . E l e c t r i c i t y and  Water, and  have a l l been badly underestimated i n the 1965 Mining has  been g r o s s l y o v e r s t a t e d  table projection.  i n the t a b l e p r o j e c t i o n .  Under these circumstances, how  can the d i s c r e p a n c i e s  the 1965  the a c t u a l performance  t a b l e p r o j e c t i o n s and  to be r e a l i s e d f o r 19?0 Notice  be  1  between likely  explained?  t h a t i n c a l c u l a t i n g value  the t a b l e  Construction  added f o r each s e c t o r from  (1)Aggregate demand f o r each s e c t o r was  taken as  t h a t s e c t o r ' s % share o f aggregate demand i n I 9 6 5 . ( 2 ) The Output f o r the  used to get  Gross  sector.  (3) The was  L e o n t i e f i n v e r s e was  value  used to get value  added to Gross Output C o e f f i c i e n t  added o f the  sector.  -4 3  So the i n a c c u r a c y one  o f the 19^5 t a b l e p r o j e c t i o n s i s due to  o r more o f these 3 items being  Here the p r o j e c t i o n based on the 1965 t a b l e  Mining p r o d u c t i o n . i s much h i g h e r  i n a p p r o p r i a t e . For example,  than the p r o d u c t i o n  l e v e l l i k e l y to be r e a l i z e d  by 1970. T h i s i s because the l a t t e r f i g u r e i s based on the r e a l i z a t i o n t h a t : (a) Malayan t i n r e s o u r c e s approaching exhaustion,  are r a p i d l y  and although over 400 new mines have  been opened s i n c e i 9 6 0 i n response to r i s i n g world t i n p r i c e s , production  has n o t been a b l e to surpass the l e v e l s o f the  mid  1950's.  The  i n d u s t r y enjoyed/a p e r i o d o f r a p i d expansion up to 19&3,  (b) I r o n Ore p r o d u c t i o n  has slowed n o t i c e a b l y .  but d e p o s i t s d e c l i n e d and some f a l l i n p r i c e s a l s o was experienced  due t o the a v a i l a b i l i t y o f h i g h grade ores i n the  world market. Hence between 1965 and 1970: (1) likely  The supply  o f mining to f i n a l demand s e c t o r s  will  fall.  (2) The row t o t a l o f the L e o n t i e f i n v e r s e  r e l e v a n t to  mining w i l l p r o b a b l y be reduced. That i s , s t r u c t u r a l change has taken p l a c e i n the economy in  the p e r i o d 1965 to 1970 which renders the 1965 i n p u t output  table inappropriate (like  mining).  f o r making p r o j e c t i o n s f o r some s e c t o r s  CONCLUSIONSt 1.  The p r o j e c t i o n s based on the 19^5 m a t r i x a r e generally.  b e t t e r than those based on the i 9 6 0 m a t r i x . T h i s i s t r u e o f A g r i c u l t u r e and L i v e s t o c k ? Construction; and  Rubber P l a n t i n g ?  Manufacturing;  E l e c t r i c i t y and Water; Dwellings;  Wholesale  R e t a i l Trade.  T h i s i s to be expected on t h e o r e t i c a l grounds as the L e o n t i e f i n v e r s e based on the more r e c e n t data should more c l o s e l y correspond to the c o n d i t i o n s t h a t should a c t u a l l y p r e v a i l i n the economy i n 1970.  2.  N o t i c e however,that:(a) i n some cases ( i e . F o r e s t r y ,  F i s h i n g and Mining) the i 9 6 0 t a b l e p r o j e c t i o n s a r e b e t t e r . (b) i n some cases, discrepancies  really  large  e x i s t between a c t u a l performance and the p r o -  j e c t i o n s o f the 1965 t a b l e . T h i s i s e s p e c i a l l y t r u e o f Mining, but l a r g e e r r o r s a l s o e x i s t i n F o r e s t r y , Construction.  F i s h i n g and  T h i s i n d i c a t e s t h a t the use o f even the 1965  m a t r i x f o r p r o j e c t i o n s o f output f o r 1970 does n o t y i e l d meaningful r e s u l t s f o r many s e c t o r s , e s p e c i a l l y when the economy concerned has undergone c o n s i d e r a b l e change (as i s the case i n Malaya).  structural  VII.  BIBLIOGRAPHY  A s i a n Development Bank. "A Comparative Study o f 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 , C h i n a and Taiwan". O c c a s i o n a l P a p e r s , November 1969• H. C. D a v i s . 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 t o the F i r s t P a c i f i c R e g i o n a l S c i e n c e C o n f e r e n c e , H o n o l u l u , 1969. republished) Department o f S t a t i s t i c s , 1966 - 70. (1965)«  Malaysia.  F i r s t Malaysia Plan  Department o f S t a t i s t i c s , M a l a y s i a . F i r s t Malaysia Plan. (I968).  Mid Term Review o f the  Department o f S t a t i s t i c s , M a l a y s i a . West M a l a y s i a 19 55 1964.  N a t i o n a l Accounts o f  G. B. H a i n s w o r t h and H. C. D a v i s . I m p o r t ^ S u b s t i t u t i o n and Economic Growth i n West M a 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 o f Input Output C o e f f i c i e n t s " . Makere I n s t i t u t e o f S o c i a l Research. (Unpublished). W. H. Miernyk. The Elements o f Input Output A n a l y s i s . New York: Random Housed 1965. N a t i o n a l Bureau o f Economic Research, I n c . 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 L e c t u r e s on Development P l a n n i n g Statistics. (Unpublished)  and  United Nations. Department o f Economic and S o c i a l A f f a i r s . "Problems o f Input Output T a b l e s and A n a l y s i s " . S t u d i e s i n Methods. S e r i e s F, no. 14. New York; Statistical O f f i c e o f the U.N., 1966.  -46-  TA.BLE CLASSIFICATION (1)  (2)  AGRICULTURE account no. 111 112 116 119 123 RUBBER  OF I N D U S T R I E S .  Other A g r i c u l t u r e Livestock Production Palm O i l E s t a t e s Coconut E s t a t e s Tea E s t a t e s  PLANTING  113 (3)  1.  Rubber  Estates  and  Smallholdings  FORESTRY 129  Forestry  FISHING 140 . *  Fishing  (5)  MINING 210 220 240 -  Coal Mining Metal Mining Stone Quarrying  (6)  FOOD I N D U S T R I E S 125 Tea Factories 304 C a n n i n g and P r e s e r v i n g o f Sea Food 301 P r e p a r a t i o n o f Meat 302 Manufacture of Dairy Products 303 C a n n i n g and P r e s e r v i n g o f F r u i t and 305 Manufacture of Grain M i l l Products 306 Manufacture of Bakery Products 307 Sugar F a c t o r i e s and R e f i n e r i e s 308 Manufacture o f Cocoa, Chocolate and Confectionary 309 M i s c e l l a n e o u s Food P r o d u c t s  (4)  (?)  (8)  '  Vegetables  Sugar  BEVERAGES 311  Distilling,  312  Breweries,  Rectifying Manufacture  and of  Blending of Soft  Drinks  Spirits etc.  TOBACCO 320  (9)  . ,  TEXTILES 331 332  333-339  Tobacco  Products  Manufacturing  S p i n n i n g , Weaving and F i n i s h i n g o f Textiles Knitting Mills Manufacture o f Cordage, Rope, Net e t c .  C L A S S I F I C A T I O N OF INDUSTRIES CONTINUED (10) CLOTHING AND FOOTWEAR 34l Manufacture o f Footwear 3^3 M a n u f a c t u r e o f W e a r i n g A p p a r e l a n d 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 O t h e r M a n u f a c t u r e o f Wood a n d C o r k (12) FURNITURS AND FIXTURES 360 Manufacture 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 P U B L I S H I N G 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  Industries  ( 1 5 ) LEATHER AND LEATHER PRODUCTS 390 Manufacture o f L e a t h e r and L e a t h e r Products (16) RUBBER PROCESSING 115 Rubber  Processing  (17) RUBBER PRODUCTS 400  M a n u f a c t u r e o f Rubber P r o d u c t s  (18) CHEMICAL PRODUCTS Palm O i l F a c t o r i e s 117 Coconut S m a l l h o l d i n g s 121 M anufacture o f I n d u s t r i a l Chemicals 411 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 412 Fats Manufacture o f P a i n t s , V a r n i s h e s and Laquers 413 Miscellaneous Chemical Products 419 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 420 Gas M a n u f a c t u r e a n d D i s t i l l a t i o n 612 (19) NON METALLIC MINERAL PRODUCTS 430 Manufacture o f Non-Metallic M i n e r a l Products (20) B A S I C METAL INDUSTRIES 440 Basic Metal  Industries  ( 2 1 ) METAL PRODUCTS, MACHINERY ETC. .. 450 Manufacture o f Metal Products 46o Manufacture o f Machinery 470 Manufacture o f E l e c t r i c a l Machinery e t c . 480 Manufacture o f T r a n s p o r t Equipment r  -48-  CLASSIFICATION OF INDUSTRIES CONTINUED (22) (23)  MISCELLANEOUS MANUFACTURING INDUSTRIES 490 Miscellaneous Manufacturing  Industries  CONSTRUCTION 510 Construction  (24) ELECTRICITY, WATER . 620 Water and S a n i t a r y S e r v i c e s (25)  (26)  TRANSPORT AND COMMUNICATION 812 Other Road T r a n s p o r t 813 A i r Transport 814 Services I n c i d e n t a l to Transport 830 Communications WHOLESALE AND RETAIL TRADE 710 W h o l e s a l e 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 740 Insurance 750 Real Estate (29)  etc,  , Institutions  OTHER SERVICE INDUSTRIES Education 921 M e d i c a l and H e a l t h S e r v i c e s 922 Religious Organizations 924 L e g a l , T e c h n i c a l and B u s i n e s s S e r v i c e s . Non 926 Business I n s t i t u t i o n s Recreation Services 940 Domestic S e r v i c e s 951 H o t e l s and R e s t a u r a n t s 952 L aundries, Personal Services etc. 954  APPENDIX 2 i  -—  ^  1  a »  v >  fi  It  c  <> i  l  j  lo.  (0  .(?>_  I  1. A$ricvKv>r« a Livestock  *'  li  H |l  s ba U ^1 1- £|  (jo) (11)  A A  JC'  (120  (15)  (16)  ,,  —  ..  fcrk  2. FirrniWre 4 Fix-ftrts . . J. Popu I P<jp«r PraJvc4>  —  . IT  1  "3 M l i s  M  (XX)  (22)  (if)  —  —  —  —  ,-  —  —  —  —  — - —  —  M  IS  mi  !  ..IS.  —  -  '5-^2  6-1  —  i  —  0-J|  III  i  0-2  |  m 1* H\ 0-6!  1-3  jr-fc 14  I  173  lb  /0-Oj  M  "hc\  12 o-i  S2o-7  1ST  01  11  —  8^'  V?  ^ s J^JJ 1  Industries  As M  IS-b —  yitoA-fcrg* inji/ravt etc. tyGHw grVUfc ItvUujtrKS 1  j  ITi  is  —  —  \ ..  (1) J t ! n i # i o « ( l » 3 « .. 1 Entirenuhoi Inters?..  —  —  J if l"  i  I  —  1  —  0-7  --  •  4:.  • is* )! i-t-H 1 •-  ' !  I -  —  1  p. • -.9:1)  —  191 —  — - -  SI  /•6  8-H 0>b  iro  o-8  u  ':7  /3Soj 333-3 [  07  .8:3  /•3 P:tt  4*7-z 0.:?  c-y.  1'? M  '7°3ifl  IS  —  m  6-0 20  M. .51m *2o7  l!"^Z|  HI Hi •j-i Hi Ik*  7  /3I-/T 1  m  Mo  4?L? M?J ./??••.  ST o  '3 L'>Mli21  JJJ  -----  —  -  — •  -  _.;  —  rm  ivt> lb  01  3.3  11{ 5  i-  —  17.  1  -21. 10 i  OS  ~~~  1 v-iiW-i m m .A-?  1-  02  Ij  —  ~ol  •12^5 1  07  ...9:1_*y_  10.1  ISJ  I >•  i l l 9f\t*arj Ricfrri of  _l'3  _...  loc i I12 '.hoi  !JoJ«p»rf Trade.  i  04,  Ztt' t>.q.-8' W.  i  O'J  ..  j (35)  37-foi  I~  fr-oAuttS  Total  (^)  ' 0'/'|  n-3_  2.6.8o^c«4H.t M e r l e s ai. KeM Products <«d  3  3?  Of  i8. Cfttw'ical Proiwts  J  •3L  (30  (27) (28) p q )  i  !  —  —  —  31  b'lf.  Producit fc. Rubfaer Process i « 3 7. Rubber Products  !  UJ  111  fn)/«)  O'f  [  E  0  _.  _. »:l....... j  ]  —  0 - 0  Vi  _ J  —  ._.._._!  1.  -1 •a  '  b'.j  7. 6 t * £ r t . 5 e > . .  8. Tcbo-tto . , 9, Textiles . . 0. ClctWj ft. fc<rtvear  S(E'  a.  ..  6. Feed Industries  1. KtcA\  j  _V « •!  (8  I. RobW Plflrtd'nj J. fcrc$-{ry  ;mill. producer p r i c e s .  S t a t e s o f Malaya. I n t e r i n d u s t r y Accounts i 9 6 0 . 1 1 1 1 t 1 | i 1 1 •0 c  /«oS-3 3/S?<f  I";."I~~"."__"-] 4-? ^ - 2  J  123.9;/005^3  r  iS$6 S3S-;2;  -50-  APPENDIX 3s Treatment (I)  o f F i n a l Demand  Rest o f the World?  Sectors.  (column 3 0 ) completed  fully.  (column and row 31) (a) The i n c l u s i o n o f t h i s s e c t o r i s necess i t a t e d by i n a c c u r a c y i n the s t a t i s t i c a l d a t a . N o t i c e a l s o t h a t there i s a d i s c r e p a n c y between the row and the column t o t a l s of t h i s sector, (b) Data f o r the u n s p e c i f i e d column i s incomplete - and t h i s column was f i l l e d i n from the; double e n t r y r e c o r d s o f o t h e r accounts. (c) The double e n t r y r e c o r d s show minor d i s c r e p a n c i e s f o r t r a n s a c t i o n s d e s c r i b e d i n row 31 columns 1, 2 and 2 1 . (II)  Unspecified;  ( I I I ) Governments (column 34) The f i g u r e s f o r government spending are g r o s s l y incomplete, so I had t o r e l y on the double e n t r y r e c o r d s o f o t h e r accounts to, f i l l i n t h i s column. (IV) I n v e n t o r i e s s (column 3 3 ) ' Almost p e r f e c t 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 i n v e n t o r i e s and the double e n t r y from o t h e r accounts. The o n l y c l a s h i s i n row 31, a c r o s s ( 1 . 9 ) and down ( 2 . 1 ) , Householdsi (column 35) (a) Minor d i s c r e p a n c i e s i n the double e n t r y r e c o r d s occur i n - row 30* 1 0 2 6 . 0 a c r o s s and 1 0 3 3 ' 5 down - row 22: 37.8 • and 37-5 " (b) U s i n g producer p r i c e v a l u a t i o n , 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 t o be added from the r e c e i p t s o f the wholesale and r e t a i l s e c t o r . ( ) v  F i x e d A s s e t s : (column 3 2 ) (a) The summary account f o r f i x e d a s s e t s agrees with the double e n t r y t r a n s a c t i o n s t h a t have a l r e a d y completed t h i s column, except: Row 31 U n s p e c i f i e d i . i n the f i x e d a s s e t summary account t h i s cant be t r a c e d d i r e c t l y but e v o l v e s as a b a l a n c i n g item = 2 6 . 1 . i i . i n the u n s p e c i f i e d r e c e i p t s account t h i s item e q u a l s 3 3 « 7 (b) There i s a d i s c r e p a n c y between the i n d i v i d u a l c a p i t a l accounts and the summary account. T o t a l i n i n d i v i d u a l accounts = 7 4 2 . 7 T o t a l i n summary account = 754.8 The l a t t e r f i g u r e i s taken as fte c o r r e c t t o t a l s i n c e i t i s l i k e l y t h a t the i n d i v i d u a l accounts a r e incomplete. (VI)  -51-  APPENDIX 4: Correspondence with Department S t a t i s t i c s (1) Industry Question;  Answer; Question;  Answer;  Malaysia.  Classification.  I b e l i e v e t h a t t e a f a c t o r i e s (125) has been c l a s s i f i e d under Food i n d u s t r i e s . I s t h i s c o r r e c t ? 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? Beverages was used f o r a l c o h o l i c beverages o n l y . Why were palm o i l f a c t o r i e s o f f e s t a t e s : coconut p r o c e s s i n g ; and v e g e t a b l e and animal o i l s and f a t s a l l c l a s s i f i e d under Chemical i n d u s t r i e s i n the o r i g i n a l i960 t a b l e ? Why were they not c l a s s i f i e d under A g r i c u l t u r e ? They a l l i n v o l v e p r o c e s s i n g , and not s t r i c t l y food processing.  I a l s o r e q u e s t e d d e s c r i p t i o n s o f i n d u s t r i e s number 6 l l , 810, 811, 910, 911. No answer was p r o v i d e d , but f o r t u n a t e l y no t r a n s a c t i o n s i n v o l v i n g these were encountered i n the t a b l e which I c o n s t r u c t e d . (2)  Gross Domestic Product.  Question:  Answer:  (3)  F i g u r e s i n the account do n o t seperate the c o n t r i b u t i o n s o f s a l a r i e s and wages and e n t r e p r e n e u r a l income i n the value added f i g u r e . Do you have any i n f o r m a t i o n t h a t would enable me t o make t h i s d i s t i n c t i o n f o r each s e c t o r . The i n f o r m a t i o n i s not p a r t o f the N a t i o n a l Accounts but i s p r o v i d e d i n seperate s t a t i s t i c s elsewhere.  Household Spending  Question;  Answer:  Sector;  The household accounts a t my d i s p o s a l show t h a t no payments were made to the wholesale and R e t a i l Trade s e c t o r . Yet the double e n t r y i n the Wholes a l e and R e t a i l Trade income account shows t h i s s e c t o r r e c e i v i n g $M876.7 m i l l i o n from households. Can you e x p l a i n t h i s ? When u s i n g the producer p r i c e v a l u a t i o n o f t r a n s a c t i o n s ( i e . n e t o f markups ), i t i s c o r r e c t t h a t no payment to Wholesale and R e t a i l Trade i s recorded,  APPENDIX'5 : I n t e r i n d u s t r y Accounts 1965. S t a t e s , o f Malaya . MS m i l l .  (I)  (3)  (2)  (0  (5)  (0  (7)  (6)  (9)  (IO)  Producer p r i c e s .  (2D  (19)  (12)  (22) ( 2 3 )  (25)  (22)  (26)  (23)  (JO)  (31)  (32)  (33)  (3'.)  Dillv.-.-ci F r : ~ 1. J ; r f c i : l t i - - » I livestock  2. fiubbrr FU.-.Ur; J * ..Fcf.ti.tr y_  48.8  210.1  14.9  ..  I. MsM.ij  J. Mnizj  ..  mi  <AAAA  25.7 185.4  3A  705.2  .. 0.2  81.4  8.1  24.  teizirvcWw  0.4  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 P r c d w t l c i (I)  U.I  '.  2.8  0.3  0.5  31.51 0.2  0.4  0.4 0.3  0.1  0.1  0.3  8.0  57.9  19.6  11.5  10.6  160.2  25.4  Al  4.1  45.0  34.3  0.3  2.6  0.6  6.6  II.C  72.4  0.2  867.1 13.3  39.6  3.5  0.6  0.5  0.5  0.2  3.0  0.1  2.0  i.7  0.3  21.4  26.9  13.9  7.2  1.6  9.6 37.3  8.3  2.9  29JE  A5.6  4.5  22.1  2.6  0.3  9.0.  3?,.9  4.'. 9 i 5  62  20.  16.4 0.2  8.8  52.1  29.1  4.8  41.4  26.4  14.1  5S.? 136.4  324.7  20.2  4S.4  22.7  ItS.!  29.4  1.6  _J5J  3L4  J  71,9.5 I.OM.5  I I 4 . C 135.5 755  47.0 "679.5 23.  117.0 19.5  ±}AJA  2JA LI  10%. I 18.4  32.7  144.7:894.5 5 5 2 . 8 : 4 2 . 3 I72JI66.8  39.4  135.9:11.8  0.5 157.4  .5,1  7.6  6.3  2f.T  A'.  42.0 - 9 5 . f  LO JA? A.9. 2.0 5 C . 9  102.  35.4  3.3 0 . 9  30.5 26.0  6.3 Y.5  TjtiVf  0.4  110.0 65  i . 2 l.4,P  6.2  5.0  153.9 3 4 . 0  9TIT  1.2  2.0  31.2  0.9  6 0 . 1 3.0  33.1 43.1  79.1  , 2 9 3 . 8 5 9 .7 376.0  137.7 9 0 . 0  201.2  60.0  56.5  5.8  0.2  8 317.  105.9 0.1  131,1 333.4 1. 733 .9  900.4 200.3 209.6  )."6 6 6 ~ 0 "  4.9  l£2ii A 5  2.4  121,  2.C44.5 147.9  5 4 . 5 161.7  |.'.7.9 322. t  iilel  2,630.5 5 0 . 5 353.0  l?.0'  J3.2 il.jO'A  3,327.612,95 5.2 822.0 1,311.  7i>  l , i ? ; . J 4 ; , 7 4 | l . ; 27,"7?0.3  144.5  23.5  3kL_3!.3 .51.4  91.7  127.0  12.5J5L0  853.61  :AA  Al  ,I3 5  137.7  41.1  £4.0  18.5  JL«A 90.0  1.0 672.5  0.8  256.2  14.3  2.8  130.1  79.5 1 0 . 2  AA  M 0.5  41.7  182.1  LI  10.8  22.1  1.0  134.  (I) 5 a t * r l M «ftdU<^j .. E/\ttr'pr&r,:,l at Income,..  0.2  0.2  0.7  Total  fc/biidYes '..  1.5  ..  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.  Indirect Ta.:-.-:  3.6  16.6:  23.2  0.5 6.5  A l  25.6  Al  M  13. Paper ( Paper Prc-ducti  40.4  AI AI Ai 0.1  12. Ftralti-re S Fixtures . .  32.7  A'. 1.  8.8  1.2  9. IKSIL-J ..  14. Prlr.tlr.s t Publishing.. 15. Leather S leather Frcductt .. 16. Rubber P,-cxc::ing .. 17. Rubber Frc<Ji:ts lit- 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 l e s 22. K:tal Presets id fcehlnary 23. H s c . Manufacturing Indwtries ..  -1.5  AA  11. feed J Cork  1.015.1"  «5T  -1J  1QJ  10. Clothing t F c : l : e : r  577. 142.9  ..  6. F . " i Ifiius'.rlcs 7. E-jvera;:» . . 8. Tcb-.cca ..  30.0  309.3  ISL-9  .7,919,3  305.6 1 , 4 5 7 . 0 32.S  2 61.9  wrbi.i' aw"? Tf':i 0.2  84.0  6 3 5 . 5 12.0  7.3  36.1  - 0.4  .  '  :  APPENDIX  6  -53--:  INTERINDUSTRY  i  FLOW PROGRAM. . .  '  "  • " •  ;  ,',  Tli® U n i v e r s i t y -of B r i t i s h GoJ/aabia: ; '" . S c h o o l o f Coasuaisy. assd; S e g i o a a l P l s n a i w g  Dir. Davis PLANNING 521  (Fall)  IJSRPERIHDUStlt'Sf PLOW F3063£l Purpose;  Matrls < G £ s r a £ i ^  Machine:  X£»l 360/57  Inversion'^ ftrtmspositioa, e t e i ' • •  i Deck See-up; {card' §i»;/card'-#2^'efcc<>'>  ;  {  -  • .' '  :  • •' ;;. #1 .Request'!GOT-'eervic®'card  '  '"'."'•' •  ;  .  '  "  • -  •  '  .  ,  .  .  -  i  '  '  '  •  Pvrlat Haas uad efe?.ck typ<s 'of s e r v i c e d e e i r e d #2-..col.. r i i ^ i - H ^ ^ ^ ^ y ^ \  • f $.'-SIG PLC6'' ;'^¥J0SS3 SMITH #3 , '#4  '  .  .  (cosiputar  ''-•';;•••';  ...','/ "I:--  '  -  $ RUH  5 « *  SOURCE * . SPRINT - '* SIMK *  ;  T i t l e CaM.(Eaay > ® ' l e f t  PROB  'a..-'..,Cola»,;l-4j; bo .  SPUWCH - * BUKMY '*  No. 1}  blank)  #7 . C o n t r o l Card ( a l l e a t r i e s r i g h t  • .  .  ' - " v ; - ' v > ; . . ...  BAVXS  . • . #5...- T i t l e .Card .(eog« • PL 521 , #6  ' ;• '  adjusted)  order of i n p u t 'matrix  C©l'.'.'\7s. '•.'•.•'...'• - prists output m a t r i x •'•' ' + .do n o t p r i n t o u t p u t m a t r i x  e„  C o l o ; 8s output matrix j-:";.: IV. f m a t r i x , ( t r a n s a c t i o n s 2',-." A aatris.-- • • ;':.;.':. 3 ( I - A ) uaatria '' ..; .4 ,..(X-A) i a v e s s e roatrte ' '  d.  •  taatrix) ,..-'.(""••_, v  ' C o l . = 11-121 ; ' 0 or blank input taatris i s not t o ' b e \ >G o r d e r of a g g r e g a t e d m a t r i x  ;  •. e .  ,. \  C o l , 13-16:  ao« e f e o l u s n v e e t o r s . ,. to be m u l t i p l i e d  aggregated  by whieh o u t p u t ssatrijs  is  £«•, Col,; 20s .1.;  i n p u t 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 o u t p u t t a s t r l x i s p o e t - m a l t i p l i s d by d i a g o n a l taafcriit f o r s s d £roa>' i n p u t v a c t o r  -54-  h„  CJIO  32S  • •  •'•i-nr'^^r^^^^/byv^Its^ veetors desigaated l a Cole. 13-16  pum-ted:acywhefce oa card . £ossaaf'o£ ptsacbsd output and • of eho ifoara.-'•(:7F10.d7X,I3) when® -•<•'V^//^^v^c^^^^.^ao'o o£ deciaal ••pl-iices) say vary from ^:^' # -^ e»8° •<7FI0.,2 7X,B) punched '#9 f' :  Gtatp^^  :  9  r  :  :  f  Data cuk\&i>-~oi<?oi?s V - ' ' « V a» grcu^ias cards' ( i f Col*-' 12 ','aoe 0) i;''^•^4f--H'* F (Bioe ©sra®ftha®oaa coltaaa p®? «a'  #10 - #w2 ;  ( i f i-ia-'.c.oi. r•CI'S;vi?/v2 •-• €k>2,o. :CJS ss (i£ Cols,. 13-16 not 0) preceded :  -  ;  S  ;=V:V-"'^'? "V^^^^'^^^^^^--= V v-^'j^y ^«scSosr t i t l e cards. (1 t i t l e catrd r::  $n  1  ' • '.-7'[^  

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