Economy of Malaysia

Mother Earth Travel > Country Index > Malaysia > Map Economy History

The Malaysian economy rebounded from a sharp recession in 1998 when real GDP contracted by 7.4% in 1998. The economy grew 6.1% in 1999 and a strong 8.3% in 2000, led by rapid growth in exports, particularly of electronics and electrical products, to the United States, Malaysia's principal trade and investment partner. When the U.S. economy began to slow in late 2000, Malaysian exports declined, and the Malaysian economy slowed dramatically. Though the government introduced two fiscal stimulus packages in 2001, equal to U.S.$1.9 billion, most analysts predict growth of under 1% for the year. Since September 1998, the Malaysian ringgit has been pegged at an exchange rate of RM3.8/U.S.$1.0.

Malaysia successfully developed from a commodity-based economy to one focused on manufacturing. Today the Government of Malaysia seeks to make the leap to a knowledge-based economy. At independence, Malaysia inherited an economy dominated by two commodities--rubber and tin. In the 40 years thereafter, Malaysia's economic record had been one of Asia's best. From the early 1980s through the mid-1990s, the economy experienced a period of broad diversification and sustained rapid growth averaging almost 8% annually. New foreign and domestic investment played a significant role in the transformation of Malaysia's economy. Manufacturing grew from 13.9% of GDP in 1970 to 33% in 2000, while agriculture and mining, which together had accounted for 42.7% of GDP in 1970, dropped to 8.4% and 6.9%, respectively, in 1999. Malaysia is one of the world's largest exporters of semiconductor devices--electrical goods, and appliances, and the government has ambitious plans to make Malaysia a leading producer, and developer, of high-tech products, including software.

The Government of Malaysia has taken an active role in guiding the nation's economic development. Malaysia's New Economic Policy (NEP), first established in 1971, sought to eradicate poverty and end the identification of economic function with ethnicity. In particular, it was designed to enhance the economic standing of ethnic Malays and other indigenous peoples (collectively known as "bumiputeras" in Bahasa Malaysia). Rapid growth through the mid-1990s made it possible to expand the share of the economy for bumiputeras without reducing the economic attainment of other groups. One controversial NEP goal was to alter the pattern of ownership of corporate equity in Malaysia, with the government providing funds to purchase foreign-owned shareholdings on behalf of the bumiputera population. In June 1991, after the NEP expired, the government unveiled its National Development Policy, which contained many of the NEP's goals, although without specific equity targets and timetables. In April 2001, the government released a new plan, the "National Vision Policy," to guide development over the period 2001-10. The National Vision Policy targets education for budget increases and seeks to refocus the economy toward higher-technology production.

GDP: purchasing power parity - $223.7 billion (2000 est.)
GDP - real growth rate: 6.1% (1999 est.), 8.3% (2000 est.)
GDP - per capita: purchasing power parity - $10,300 (2000 est.)
GDP - composition by sector:
agriculture:  14%
industry:  44%
services:  42% (2000)
Population below poverty line: 6.8% (1997 est.)
Household income or consumption by percentage share:
lowest 10%: 1.4%
highest 10%: 20.4% (1997 est.)
Inflation rate (consumer prices): 2.8% (1999), 1.7% (2000)
Labor force: 9.6 million (2000 est.)
Labor force - by occupation: local trade and tourism 28%, manufacturing 27%, agriculture, forestry, and fisheries 16%, services 10%, government 10%, construction 9% (2000 est.)
Unemployment rate: 3% (1999 est.), 2.8% (2000 est.)
Budget:
revenues:  $16.4 billion
expenditures:  $17.8 billion, including capital expenditures of $43 billion (2000 est.)
Industries: Peninsular Malaysia - rubber and oil palm processing and manufacturing, light manufacturing industry, electronics, tin mining and smelting, logging and processing timber; Sabah - logging, petroleum production; Sarawak - agriculture processing, petroleum production and refining, logging.
Industrial production growth rate: 8.5% (1999 est.), 12.1% (2000 est.)
Electricity - production: 59.044 billion kWh (1999)
Electricity - production by source:
fossil fuel:  91.61%
hydro:  8.39%
nuclear:  0%
other:  0% (1999)
Electricity - consumption: 54.872 billion kWh (1999)
Electricity - exports: 50 million kWh (1999)
Electricity - imports: 11 million kWh (1999)
Agriculture - products: Peninsular Malaysia - rubber, palm oil, cocoa, rice; Sabah - subsistence crops, rubber, timber, coconuts, rice; Sarawak - rubber, pepper; timber
Exports: $83.5 billion (1999 est.), $97.9 billion (2000 est.)
Exports - commodities: electronic equipment, petroleum and liquefied natural gas, chemicals, palm oil, wood and wood products, rubber, textiles.
Exports - partners: US 21%, Singapore 18%, Japan 13%, Hong Kong 5%, Netherlands 4%, Taiwan 4%, Thailand 3% (2000 est.)
Imports: $61.5 billion (1999 est.), $82.6 billion (2000 est.)
Imports - commodities: machinery and transport equipment, chemicals, food, fuel and lubricants
Imports - partners: Japan 21%, US 17%, Singapore 14%, Taiwan 6%, South Korea 5%, Thailand 4%, China 4% (2000 est.)
Debt - external: $43.6 billion (1999 est.), $41.8 billion (2000 est.)
Currency: ringgit (MYR)

SOURCES: The World Factbook, U.S. Department of State

Mother Earth Travel > Country Index > Malaysia > Map Economy History