The Impact of "Oil Crisis" on Southeast Asia

Abstract

 In Southeast Asia, direct effects of the "Oil Crisis", such as inflation, disturbance of production, balance of payments crises, and the loss of income due to deterioration in the terms of trade, while undoubtedly real, have proved to be factors which could be overcome even in seriously affected countries such as Thailand and the Philippines. The single most important impact was indirect, in the form of a decline in demand from recessionridden industrialized countries. A continued recovery of the economies of these countries will be strategically important for the economies in Southeast Asia.
  Changes in industrial structure and in the pattern of international division of labor will continue into the future. One neglected factor in this development is the relative rise, in the long run, of ocean transportation costs due to a rise in the price of oil. A further study of the effects of changes in ocean transportation costs will be particularly relevant for Southeast Asia, which is likely to be greatly affected by such changes.