Malaysia Economy (MIDA Report)



Malaysia is a country on the move. From a country dependent on agriculture and primary commodities in the sixties, Malaysia has today become an export-driven economy spurred on by high technology, knowledge-based and capital-intensive industries.


The structural transformation of Malaysia's economy over the last 50 years has been spectacular. Often dubbed the "lucky country" because of its wealth of mineral resources and fertile soils, Malaysia did not rest on its laurels but took decisive steps to progress from an economy dependent on agriculture and primary commodities to a manufacturing-based, export-driven economy spurred on by high technology, knowledge-based and capital-intensive industries.

Today, Malaysia offers the world its Multimedia Super Corridor (MSC) which brings together a legislative framework and a next-generation telecommunications infrastructure in eco-friendly surroundings to create the best environment for the development of multimedia industries.

The mid-1997 economic and financial crisis which hit several countries in the Asia Pacific Region and caused a currency crisis and stock market crash in Malaysia, provided further proof of the strength and resilience of the Malaysian economy. Within less than two years, helped by selective exchange controls and the pegging of the ringgit, Malaysia bounced back and went on track towards economic recovery.

Continuous Economic Growth

Malaysia's pragmatic and flexible management approach has enabled the economy to raise its competitivenes and enhance its resilience in facing challenging circumstances. Deliberate measure has been taken to make the economy more diversified and broadbased to ensure sustainable growth. Continuos efforts have been pursuit to enhance the services sector, accelerate value-added of the manufacturing sector as well as boost the agriculture and agrobased sector as the third engine of growth. New sources of growth continue to be promoted and developed such as biotechnology, information and communications technology, halal products and Islamic finance. Indeed Malaysia is developing as a knowledge-based economy, driven by human capital, innovation and ideas.

The global environment remains challenging in 2008, as a result of a persistently high crude oil price, inflationary pressures and monetary tightening, which has resulted in higher interest rates. However, Malaysia remain confident in facing these challenges to achieve a healthy growth rate for 2008, given the nation more diverse economic structure and strengthened domestic fundamentals.

Malaysia continues to enjoy healthy surplus in the external trade, low unemployment as well as strong international reserves and high national savings.

Malaysia Key Economic Indicators

2007
2008f

Population

27.17 million
27.73 million

GDP

RM503.06 billion
(US$157.48 billion)

RM534.52 billion
(US$167.32 billion)

GDP Growth

6.0%
5.0%

Per capita income

RM22,345
(US$6,994)
RM23,864
(US$7,470)

Inflation rate

2.0%
3.4%

Labour force

11.7 million
11.9 million

Unemployment

3.3%
3.3%

Total export (f.o.b.)

RM617.23 billion
(US$193.22 billion)
RM659.14 billion
(US$206.34 billion)
Total import (c.i.f.)

RM517.26 billion
(US$161.92 billion)

RM559.54 billion
(US$175.16 billion)

Major exports

Manufactured goods (electrical and electronic products, chemical and chemical products, machinery, appliances and parts, wood products, manufactures of metal as well as optical and scientific equipment)

Major imports

Intermediate goods (primary and processed food and beverages, primary and processed industrial supplies,primary and processed fuel lubricants, parts and accessories for transport equipment, parts and accessories of capital goods, and thermionic valves and tubes, ).

f - forecast

Sources:
1."Economic Report 2007/2008" published by the Ministry of Finance, Malaysia
2. Malaysia: Performance of the Manufacturing and Services Sectors 2007


High Level of Global Integration


Malaysia's total trade in 2007 was valued at RM1.11 trillion, an increase of 3.7 per cent from RM1.07 trillion in 2006. Exports increased by 2.7 per cent to RM605.1 billion in 2007
from RM589 billion in 2006. Imports increased by 4.9 per cent to RM504.6 billion from RM480.8 billion in 2006. The growth in exports in 2007 had resulted in Malaysia recording trade surplus for the tenth consecutive years valued at RM100.5 billion*.

The manufacturing sector accounted for 30.3% of Malaysia’s GDP in 2007 while exports of manufactured goods make up 74.8% of the country’s total exports*. From being the world’s largest producer of rubber and tin, Malaysia is today one of the world’s leading exporters of semiconductor devices, computer hard disks, audio and video products and room air-conditioners.


Malaysia’s rapid industrialisation was the result of the country opening itself relatively early in the 1960s to foreign direct investments (FDI). Today, its market-oriented economy, combined with an educated multilingual workforce and a well-developed infrastructure, has made Malaysia one of the largest recipients of FDI among developing countries.

Malaysia was ranked the fifth most competitive economy in Asia, after Singapore, Hong Kong, Taiwan, and China; and 19th worldwide based on the recently-released World Competitiveness Yearbook 2008, covering 55 economies.

Malaysia is a “natural choice” for offshore services in view of its low costs, particularly for infrastructure, the most attractive business environment among emerging markets, and high levels of global integration.


*Source - Malaysia: Performance of the Manufacturing and Services Sectors 2007


A Knowledge-based Economy

In the coming decade, an important policy component in Malaysia's development plans will be to enhance the knowledge content of the economy. There will be intensive research and technology development with support from venture capitalists, with ICT as the enabling technology.

The next 10 years will see a greater emphasis on human resource enhancement as availability of skilled and knowledge workers is a major pre-requisite to transform Malaysia from a production-based into a knowledge-based economy.

The last decade has seen a deepening and widening of Malaysia's industrial base as well as the further development of its services sector. As such, a strong foundation has been laid for the economy to move forward into the new globalised environment.

No comments:

Post a Comment

Biz Tweets