Paper short abstract:

Commodities that have long colonial history influences the nature of participation in GVCs. The colonial roots of natural rubber in Malaysia have led to state support for domestic large firms joining GVCs to the detriment of smallholders and the disintegration of domestic production linkages.

Paper long abstract:

This paper finds that the nature of a country’s participation in GVCs based on commodities with a long colonial history, are very much influenced by the legacies of the colonial production structure, which persists till today. Malaysia’s natural rubber which has its origins under the British colonial administration in the 1890s, had prioritised British-owned large estates and large firms to the disadvantage of peasant smallholders and domestic manufacturing firms (Lim, 1977). Research and Innovation were intensively pursued by the British colonial administration, leading to Malaya being the largest exporter of natural rubber (Rajarao, 2013). This innovative production mechanisms were applied to large estates and to manufacturing technologies in Britain itself. In the years of rubber price collapse, the British administration sought ways to stabilise the price to protect British interest. In the early years post-independence in Malaysia, during the classical through the two-tier developmentalism phase (Haggard, 2018; Sumner, 2018), measures were put in place to uplift the socio-economic conditions of smallholders. With the advent of GVCs, large domestic firms specialising in products using natural rubber emerged, but their reliance on domestic natural rubber production declined. The GVC structure does not emphasise production linkages (Neilson, 2014) between the large domestic firms and the smallholders, as how it was during the colonial period. The state has played less of a coordinating role in this recent period of mainstreaming developmentalism (Fine & Mohamed, 2022), which focuses on the micro-structures of the needs of large domestic firms in joining the GVCs.