Malaysia, a southeast nation that seems to be on an acceleration of business development and economic growth in recent years. When it is about the economy of Malaysia, this country is now one of a model-nations among South Asian countries for its fabulous GDP income and fast-growing economy.
The government of the nation put a great afford in boosting nation’s trade and commerce. Moreover, the rich national resources and rapid incremental developments put the economy to the fabulous state we are seeing in present days. This content briefs the idea about Malaysia’s economy, along with economic history, economic growth and current economic affairs.
Brief Malaysia economy outlook
Malaysia’s recent trade and the economy are so impressive that even the world bank noted and ranked the country’s progress for having one of the most favorable nations for doing business, behind developed countries such as the UK, Australia, etc. However, not All business sectors went up at the same pace.
Some companies have more benefits. A large part of the Malaysian economy lies on the hands of those prominent companies. To make things easier for you, we have dedicated ourselves to investigate into various business areas in Malaysia. We have thoroughly studied the trendy trade and commerce and studied current market affairs in Malaysia.
Malaysian economic history
The economic development of Malaysia is remarkable in present time. At the beginning, however, it was not that bright. In the early 1960s the ethnic partitions took place that were inherited from centuries of segmented economic development.
The Malaysians were focused in their traditional villages. They were more interested in agricultural and domestic activities, while the Chinese handled Malaysian trade and commerce. This continued till the end of 60s.
During the 1970s, Malaysia began to imitate the four Asian economic strengths; South Korea, Taiwan, the British crown colony of Hong Kong and Singapore. This committed to a transition from dependence on mining and agriculture to an economy that is more dependent on production goods.
The predominantly mining and agriculture-based Malaysian economy in the 1970s took a transition to a more complex economy. During 1980s, the industrial sector led Malaysia’s growth to an impressive level. High investments have played an important role in this economic revolution.
With Japanese intervention on their investments of heavy industries, Malaysia seemed to thrive in a matter of years. Malaysian export industries became the most important source of national growth. This country has consistently achieved more than 7% of GDP growth along with low inflation during 80s and 90s.
Malaysia economic growth
During past terms, Malaysia undertook several controversial steps to uphold the economic growth. NEP or New economic policy schemes followed by National Development policy or NDP, contributed widely in the ups and downs of the economy in Malaysia. Although some of these policies were controversial, the economic growth eventually occurred over the time. The aim of the Malaysian government to eliminate poverty was at a reality.
The GDP per capita grew 31% during 60s which increased to 35% during 70s. However, the growth was not sustainable and the economy saw a sharp fall during the 80s, which was at a rate of 36%. Thankfully the arrow of national economy took a strong rise of 59% in 90s.
The credit for this impressive rise goes to the export-oriented industries. Malaysians finally took a leap from their traditional agriculture and resource dependent business to much dynamic and versatile manufactured sectors in Malaysia.
The economic growth further expended to an impressive rate of 8% during the end of 80s and throughout 90s. The economic expansion rate was so inspiring that the rate of growth surpassed all competitors in Asia and was second to China’s economy only.
The nation was now more focused on manufacturing microchips and semiconductors for major export purposes. Such export-oriented market hugely improved the infrastructure of the nation and turned out to be a model nation for economic structure.
The economic boom however, came up with its own set of problems. As the economy grew up rapidly, the poverty rate decreased with a flash. The low poverty level in the nation created various demand supply complexities.
The demand for labour went up. As a result, foreign labors started plunging into the nation. As a result, Illegal labor immigration to the nation went up along with money flowing out of the country as foreign companies started to establish their infrastructures for better investment opportunities in Malaysia.
Malaysian economy today
Today Malaysia is at a state where it is associated with other developed nations in the world. The world bank has recognized the nation for its ease of investment opportunities. Their economic reputation has surpassed many developed nations.
The pillar of this development comes up conveniently with rich natural resources. Malaysia is one of the renowned sources of tin, rubber, oil, and gas. The country is a manufacturer of more than half of the world’s palm oil. It also exports oil and gas.
The scenario of the Malaysia economy took a big leap since 80s and 90s. Rather than depending on domestic resources and agricultural activities only, the national labor force diverted to the manufacturing sector. These manufacturing goods were mostly focused on export-oriented electronic components and automotive parts.
A big chunk of manufacturing products also included edibles and home appliances for domestic market too. The national economic statistics show that the manufacturing sector boosted the national growth rate to 9% between 1980 to 2000 and further grew up to 3.4% per with in the years. 2000 and 2010.
The export sector took an uprising motion since 2000. Foreign investments and demands of electrical and electronic goods manufacturing and exportation were at the maximum. This export volume, however, slowed down in 2001 when such demand of electronic spare parts and semi-conductors of Malaysia slowed down.
The slowing down wasn’t permanent though. The export demand took an acceleration in 2002 when the oil and commodity prices rose up in international market. With that the economic growth also took a right turn in Malaysia.
After that Malaysia had to face the hard-global recession during 2008 and 2009, during this time the economic growth rate slowed down a bit and went down to 1.5% in 2009. But again, this was a temporary drawback as far as Malaysia’s national growth is concerned.
The country recovered the deficiency rapidly by 2010. The growth rate has been pushed up to 7.4% during this year. This growth of Malaysian economy continued to grow at a rate of 6% from 2011 to 2015.
Malaysia has a long vision of future for their economic strategy. For the sake of economy of Malaysia, government is undertaking long term economic plans to upgrade the manufacturing sector to a whole new level. They are mostly focusing on hi-tech industries now.
In addition, with that, the nation is now focusing on original in-house productions rather than just assembling imported components. The aim for Malaysian economy today is to reach to the industrialized-country status by the year 2020.
What kind of economy does Malaysia follow?
Malaysia typically follows a free economy. However, here the government controls national interests and monitors the usage of national wealth. The government also contributes their focuses on boosting trade, manufacturing, and business services in Malaysia.
How is the economy of Malaysia?
Malaysia has a newly established market which follows an open economy policy. This country has a robust and diversified economy which focuses mainly on the export business and high-tech products manufacturing. In 2015 these businesses alone earned the revenue of US$57.258 billion, After Singapore, these massive revenue counts the second-highest.
What is the main industry in Malaysia?
Malaysia focuses mainly on industries involved with electronics, constructions and automotive. These are the biggest industrial fields as far as the Malaysian economy is concerned. In present days, the manufacture of the solar panels is also getting top priority in Malaysia.
Which part of Malaysia has the highest reservation of oil?
Malaysia’s oil comes from offshore fields rather than on land fields. The major oil fields are stationed at the Sarawak basin, the Malay basin, and the Sabah basin.
What are some major export raw materials of Malaysia?
Major export raw materials are: Palm oil, tin, rubber, natural crude oil, gas.