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Why did postcolonial states take contrasting political approaches toward the agricultural economy in pursuit of promoting economic development? Focusing on a comparative historical analysis of postcolonial development in the Asian rubber belt, this paper traces critical events that engendered varieties in peasantry embeddedness, which subsequently defined postcolonial development in the region. Peasantry embeddedness refers to types of political approaches to agricultural development stemming from patterns of agrarian and power relations between the state and peasants. The variation in peasantry embeddedness is rooted in the critical events of peasant emancipation and peasant repression in the first twenty years after the end of colonialism in the region. This study demonstrates that postcolonial states' experiences with either peasants’ repression or peasants’ emancipation are a historical contingency. Utilizing an innovative critical events framework to supplement a comparative historical analysis (García-Montoya and Mahoney 2020), this study offers new insights to address theoretical puzzles of colonial origins of postcolonial development and the geopolitical explanations of underdevelopment in Asia. It exemplifies how the events that unfolded after the end of colonialism were more consequential than events during colonialism for the diverging paths to development in Malaysia and Indonesia. This study also highlights specific forces brought by Cold War geopolitics to the region that effectively incited the episode of state-organized violence against communist movements.