The economics of the handloom industry of the east coast of Malaya
E.K. Fisk, an economist at the Australian National University’s Research School of Pacific Studies, published this comprehensive economic survey of Malaya’s largest surviving cottage industry in 1959, drawing on detailed fieldwork conducted by the Rural and Industrial Development Authority (RIDA) in Trengganu and Kelantan during 1957–58. His central argument is that the industry’s future depends not on expanding mass cotton production but on improving the quality of its entrepreneurial organisation to serve higher-value silk and metallic-thread markets, both domestic and overseas.
Summary
The East Coast handloom industry in 1957–58 comprised 4,209 registered weavers—every one of them a woman—operating 3,886 looms concentrated almost entirely in two areas: Kuala Trengganu (3,344 weavers) and Kota Bharu, Kelantan (826 weavers) (pp. 14–15). The principal product is kain songket, a sarong woven from imported Chinese spun silk yarn with gold or silver thread patterns, alongside plain silk and smaller quantities of cotton-rayon mixtures. Fisk estimates total 1957 output at approximately 225,000 yards of cloth valued at roughly $1,500,000, with kain songket accounting for the majority of both volume and value (pp. 23–24, 67). The industry’s structure closely resembles the domestic system of pre-industrial Britain: large Singapore-based import firms supply raw materials to middlemen, who in turn provide capital, technical services (dyeing, warp preparation, pattern setting), production planning, and marketing to groups of cottage weavers who work on piece rates (pp. 18–20). In Trengganu, 86.6% of active weavers work exclusively for middlemen; in Kelantan the figure is 92.5% (pp. 20, 31).
The economic conditions of the weavers are stark. The average monthly income during active weaving months is $16.75, which annualises to approximately $134 per weaver or $11.20 per month across the year (pp. 38–39). At an average of 4.1 hours per day over 26 working days, the return on labour is just 15.65 cents per hour (p. 39). Seasonal stoppages are severe: 78.1% of Trengganu weavers halt work during the north-east monsoon, 40% during the padi harvest, and a further 6.9% during Ramadan, reducing the effective working year to approximately nine months (pp. 22–23). Ninety-five per cent of Trengganu weavers are completely illiterate, and only 12% understand all ten subsidiary processes required in the weaving operation (pp. 36, 45–46). Despite these low absolute returns, weaving adds approximately 24% to the average household’s cash income, making it economically significant in these low-income East Coast communities (p. 40).
Fisk devotes substantial analysis to the entrepreneurial problem, arguing that the middleman system—while inefficient and sometimes exploitative—performs functions that neither the weavers themselves nor a government agency could readily replicate in the short term. He rejects weavers’ cooperatives as impractical given the illiteracy and limited business experience of the workforce, and cautions against full government takeover. Instead, he advocates a combined strategy: selective assistance to the most capable existing middlemen (particularly in Kelantan, where a smaller number of larger, more efficient operators have already emerged through natural economic growth), supported by RIDA’s East Coast Textile Centre (for raw material supply, improved dyeing, quality testing, and branding) and the Small Industries Services Institute (for market research, distribution, and financial services) (pp. 50–54, 56–65).
Key Findings
- The industry’s total estimated 1957 output was approximately 111,880 pieces (223,760 yards) of cloth valued at $1,564,000, of which kain songket represented 72,700 pieces worth $1,284,000 (p. 24).
- The minimum capital investment required per active weaver is approximately $375, of which only about $82 (19%) is fixed capital in equipment; the remainder is working capital in raw materials, advances, and distribution stocks (pp. 33–34).
- Average annual income from weaving is approximately $134 per weaver, yielding a return of 15.65 cents per hour—far below returns available from rubber tapping in areas where that alternative exists (pp. 39–40).
- Only 12% of Trengganu weavers work the year round; 78.1% stop during the monsoon and 40% during the harvest, meaning the industry operates at well below capacity for much of the year (pp. 22–23).
- Fisk estimates that a 25% increase in demand could be met by existing resources without recruiting new weavers, given that 17% of registered weavers had already stopped working and a further 25% worked fewer than four hours per day (p. 67).
- The gross product of $1,500,000 breaks down into $700,000 for raw materials, $550,000 in payments to weavers, and $250,000 for distribution, marketing, and profits (p. 67).
Conclusion
Fisk’s definitive historical takeaway is that the handloom industry’s future lies exclusively in the production of high-quality, relatively expensive fabrics from silk, rayon, and metallic thread—not in mass cotton weaving, which he demonstrates would require prohibitively high tariffs and legislative protection from mechanised competition that Malaya cannot justify. The binding constraint on the industry’s development is not productive capacity but the quality of entrepreneurship: until middlemen can reliably meet specifications for quality, colour fastness, and delivery dates, the substantial potential of overseas markets (particularly the United States) remains inaccessible. Government action should therefore focus on selectively strengthening the best existing entrepreneurs while providing the technical and financial infrastructure through RIDA’s institutions.
Context
- The survey data underpinning this article was produced by RIDA’s Economic and Planning Division, with the Trengganu survey (1957/58) being the first large-scale survey of its kind conducted directly by the Authority’s staff (p. 9).
- The article reflects the post-independence policy environment of the Federation of Malaya, in which the elected government’s general policy favoured gradual development through private enterprise rather than immediate and complete government control of cottage industries (p. 69).