Economic Setting:

Malaysia

Reported by:

Florence B. Suerte

(BSEd 3-B, Group 3)

Economic Setting:

Malaysia

• The economy of Malaysia oncerelied principally on theproduction of raw materials forexport, most importantlypetroleum, natural rubber, tin,palm oil, and timber. AfterMalaysia gained independence

Economic Setting:

Malaysia

in 1957, however, thedevelopment of themanufacturing sector tookpriority. From the mid-1970s tomid-1990s Malaysia had one ofthe world’s fastest-growingeconomies, mainly due to rapid

Economic Setting:

Malaysia

industrialization. In the late1980s industry replacedagriculture as the largestcontributor to the grossdomestic product (GDP). Theservices sector, especiallytourism, also drove growth.

Economic Setting:

Malaysia

In 1991 the Malaysiangovernment launched theambitious “Vision 2020”program, which envisionsMalaysia attaining the status of adeveloped nation by 2020.Toward this goal, the

Economic Setting:

Malaysia

government has invested heavilyin modernizing the infrastructureof the Kuala Lumpurmetropolitan area. Themodernization is designed topropel Malaysia into the digitalage and position it as a hub for

Economic Setting:

Malaysia

incentive for the development oflabor-intensive exportmanufacturing. In the 1970s thegovernment implemented apolicy to encourage exportmanufactures and foreigninvestment, and the rate of

Economic Setting:

Malaysia

high-technology businesses inSoutheast Asia. However, thecountry’s reliance on exports ofmanufactured goods, such ascomputer microchips and otherelectrical components, has madeits economy susceptible to

Economic Setting:

Malaysia

regional and global economicdownturns. Malaysia was one ofmany Asian countries thatsuffered economic declineduring a regional economic crisisin 1997 and 1998. This crisis ledto the delay of some

Economic Setting:

Malaysia

infrastructure projects andpossibly of the Vision 2020 goal.

Economic Setting:

Malaysia

The nation’s economy expandedan average of 5.9 percentannually in the period 2006. In2003 Malaysia’s annual budgetincluded revenues of about $21billion and expenditures ofabout $25 billion. The country’s

Economic Setting:

Malaysia

GDP was $150.7 billion in 2006.Industry, including mining andconstruction, accounted for 50percent of the GDP; services, 41percent; and agriculture,forestry, and fishing, 9 percent.

Economic Setting:

Malaysia

Some 5 percent of Malaysia’sland is under cultivation for fieldcrops and 18 percent is used forplantation agriculture. Malaysiaranks as the world’s leadingproducer and exporter of palmoil. The country was once the

Economic Setting:

Malaysia

leading producer of naturalrubber, but in the early 1990sThailand and Indonesiasurpassed Malaysia afterMalaysia began shifting to moreprofitable crops such as palm oil.Other important export crops

Economic Setting:

Malaysia

are cacao, sugarcane, pepper,coconuts, and pineapples. Theprincipal subsistence crop is rice.Cassava and bananas are alsoimportant.

Economic Setting:

Malaysia

The country is a leading worldsupplier of tropical hardwoods.Exports of raw timber havedeclined since the mid-1990s, inpart because the government ofMalaysia introduced measures toencourage the local production

Economic Setting:

Malaysia

of finished goods, such asplywood and furniture. Mostwood processing takes place inWest Malaysia, where logexports are banned, whileSarawak provides the bulk ofraw timber.

Economic Setting:

Malaysia

In 2005 Malaysia’s annual fishcatch was 1.4 million metrictons, nearly all of it from oceanwaters. Aquaculture (the farmingof fish and shellfish) hasexpanded rapidly to help supplythe domestic market.

Economic Setting:

Malaysia

However, domestic productionof fish has not kept pace withincreasing consumption, andMalaysia is an importer of fishproducts.

Economic Setting:

Malaysia

Export trade totaled $127 billionin 2004. Major exports includesemiconductors and electricalequipment, palm oil, chemicals,petroleum, machineryappliances and parts, wood andwood products, and textiles. The

Economic Setting:

Malaysia

chief buyers of exports are theUnited States, Singapore, Japan,China (including Hong Kong), andThailand. Imports were valued at$104 billion in 2004. Majorimports include electrical andelectronic products, machinery

Economic Setting:

Malaysia

and transportation equipment,chemicals, manufactures ofmetal, petroleum, and iron andsteel products. The leadingsuppliers of imported goods areJapan, the United States,Singapore, China, Taiwan, andSouth Korea.

Economic Setting:

Malaysia

Malaysia is a founding memberof the Association of SoutheastAsian Nations (ASEAN) and is afull participant in the ASEANFree Trade Area (AFTA),established in 1992 with the goalof establishing nearly free trade

Economic Setting:

Malaysia

among member nations. Withthe formal implementation ofAFTA in 2002, member nationswere to gradually reduce tariffbarriers to 5 percent or less.Malaysia became a member ofthe World Trade Organization(WTO) in 1995.

Economic Setting:

Malaysia

The Malaysian unit of currency isthe ringgit, consisting of 100 sen(3.70 ringgits equal U.S.$1; 2006average). Malaysia’s central bankand bank of issue is the BankNegara Malaysia, in KualaLumpur. There is a stockexchange in Kuala Lumpur.

Economic Setting:

Malaysia

Source:

Microsoft ® Encarta ® 2009. © 1993-2008 Microsoft

Corporation. All rights reserved.

Economic Setting:

Malaysia

Terima Kasih!!!

Economic Setting

as we

Understanding

Economic Community

for

establish an

Republic of the Philippines

CAPIZ STATE UNIVERSITY

Dumarao Satellite College, Dumarao, Capiz

Theme: “Understanding Better the Political, Economic & Socio-Cultural

Settings of Southeast Asian Nations forPeace, Prosperity & People”

May 25, 2015 (8:00-11:30 am)

Campus Library