4

CHAPTER II THE WAR AND ITS AFTERMATH 1. The second world war inflicted heavy losses on South and South-East Asia. In the fields of battle physical damage caused by the fighting itself was aggravated by ' scorched earth' and ' denial' policies which followed the outbreak of war. Under the Japanese occupation many territories were despoiled and neglected, and economic assets built up over generations were allowed to waste away. Railway tracks and locomotives were removed; rubber plantations and tea estates reverted to the jungle ; power stations were driven without care or maintenance. After the war these disasters, combined with a world shortage of shipping, radically disorganised the production and transport of foodstuffs and raw materials within South and South-East Asia, with calamitous results for the economies of the area. 2. Economic dislocation and inflation in many parts of the area were added to the physical ravages of war. The Indian sub-continent, as the great Eastern base of the Allied armies, supplied the forces East of Suez with clothing from mills worked to capacity without normal renewals ; at the end of the war machinery was overstrained and in need of replacement. The railways, too, had carried an unusually heavy volume of war traffic and by 1945 were in urgent need of repair. Every effort was made to increase food production at the expense of crops such as cotton, jute and oil-seeds. Home consumption of such goods as cotton textiles had to be restricted in order to maintain exports in the interests of the war effort. These measures, together with the great increase in the money supply arising from war finance, created an inflationary situation which remained a source of serious weakness when the war came to an end. 3. If the state of insecurity had ended with the war, much more might have been done in South and South-East Asia during the ensuing five years to restore a healthy pattern of production and exchange. Unhappily political and social disturbances occurred in large areas with varying intensity at different times. Some Governments have been largely preoccupied with these disturbances and others, although well established, have been compelled to devote a large part -of their resources to defence and the maintenance of law and order. In the Indian sub-continent the transfer of political power to the new Governments of India and Pakistan was carried out smoothly, but the partition of the country itself caused considerable economic dislocation. Attempts are still being made to resolve certain matters which are costly to both India and Pakistan and a serious obstacle to economic advance. In Malaya economic rehabilitation has proceeded a long way, but the measures required to maintain law and order are a heavy drain upon the resources of the Government of the Federation of Malaya and upon the United Kingdom. In Thailand the economic situation has steadily improved. In Burma, IndoChina, and Indonesia grave dislocation has retarded the process of post-war recovery. 4. The central problem has been, and still is, the supply of food. It is here that the impact of the war and of post-war unrest has been most serious, for the effects of the disruption of major sources of supply have been accentuated by large population increases. Rice is the staple food of the hundreds of millions living in the area, and in 1938 over 5,500,000 tons were exported from Burma, Thailand and Indo-China, while imports into India, Ceylon, Malaya and Indonesia were 3,300,000 tons. Immediately after the war there were 15 million acres of abandoned rice fields in South-East Asia and exports