Economy of Malaysia PDF Print E-mail
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Tuesday, 12 July 2011 20:13

MalaysiaMalaysia is a relatively open state-oriented and newly industrialised market economy. The state plays a significant but declining role in guiding economic activity through macroeconomic plans. Malaysia has had one of the best economic records in Asia, with GDP growing an average 6.5% from 1957 to 2005. In 2010 Malaysia's economy in Purchasing power parity terms, was the 3rd largest in ASEAN and 29th largest economy in the world.

In the 1970s, the predominantly mining and agricultural-based Malaysian economy began a transition towards a more multi-sector economy. Since the 1980s the industrial sector has led Malaysia's growth. High levels of investment played a significant role in this. The Malaysian economy recovered from the 1997 Asian Financial Crisis sooner than neighbouring countries, and has since recovered to the levels of the pre-crisis era with a GDP per capita of $14,800. Inequalities exist between different ethnic groups, with a major issue being that the Chinese minority accounts for 70% of the country's market capitalisation, even though it only makes up about one-third of it.

International trade, facilitated by the adjacent Strait of Malacca shipping route and manufacturing are both key sectors of the country's economy. Malaysia is an exporter of natural and agricultural resources, the most valuable exported resource being petroleum. At one time, it was the largest producer of tin, rubber and palm oil in the world. Manufacturing has a large influence in the country's economy, although Malaysia’s economic structure has been moving away from it.

In an effort to diversify the economy and make Malaysia’s economy less dependent on exported goods, the government has pushed to increase tourism in Malaysia. As a result, tourism has become Malaysia’s third largest source of income from foreign exchange, although it is threatened by the negative effects of the growing industrial economy, with large amounts of air and water pollution along with deforestation affecting tourism. The country has developed into a centre of Islamic banking, and is the country with the highest numbers of female workers in that industry. Knowledge-based services are also expanding.

Science policies in Malaysia are regulated by the Ministry of Science, Technology, and Innovation. The country is one of the world's largest exporters of semiconductor devices, electrical goods, and information and communication technology products. Malaysia is developing its own space programme and in 2006 Russia agreed to transport one Malaysian to the International Space Station as part of a multi-billion dollar purchase of 18 Russian Sukhoi Su-30MKM fighter jets by the Royal Malaysian Air Force. In an effort to create a self-reliant defensive ability and support national development, Malaysia privatised some of its military facilities in the 1970s. This has created a defence industry, which in 1999 was brought under the Malaysia Defence Industry Council. The government continues to try and promote this sector and its competitiveness, actively marketing the defence industry.

Last Updated on Wednesday, 13 July 2011 09:29