Economical overview
Since independence in 1957, Malaysia has
developed from a commodity-producing developing country
to an upper-middle-income country, whose economy is
dominated by the manufacturing industry for export and a
large service sector, including in the form of tourism,
financial services and government.
High and long-term GDP growth has created increased
wealth and partly smoothed the economic gaps, even
though regional differences exist. The proportion of
poor Malaysians has fallen from nearly 50 percent in
1970 to less than 2 percent, according to the UNDP's
UNDP development program. Poverty remains to a greater
extent in rural areas than in cities. There are also
more poor people along the border with Thailand in the
north and in the state of Sabah in northern Borneo than
in the rest of Malaysia. The richest areas are Kuala
Lumpur and the state of Selangor, which surrounds the
capital.
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Countryaah.com:
Major imports by Malaysia, covering a full list of top products imported by the country and trade value for each product category.
The ethnic differences in the economic distribution
have diminished, but within the various ethnic groups
the differences are still large. This is especially true
of bumiputra (mainly the Malays, see Population and
Languages), which would benefit from the so-called
bumiputra policy introduced in the 1970s to help
alleviate the then-financial downfall of the Malays. One
explanation for the major class divisions among today's
Malaysians is that many of the benefits that bumiputra
has received over the years have gone to businessmen and
politicians rather than to poor Malaysians. Several of
the indigenous peoples are also disadvantaged (see
Social conditions).
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Abbreviationfinder.org: Check this abbreviation website to find three letter ISO codes for all countries in the world, including MYS which represents the country of Malaysia.
Bumiputra policy is criticized by many analysts for
distorting the labor market by giving Malaysians
priority over certain education and employment. As a
result, Chinese and Indians are now under-represented in
the state sector. When the bumiputra policy was
introduced, it was intended as a temporary measure until
1990, but it was only abolished in 2009, and then only
partially. The changes meant, among other things, that
Malaysians were no longer entitled to 30 percent of the
jobs in the state-owned companies - with the exception
of some energy and telecommunications companies. The
quota was changed so that 12.5 percent of jobs are now
reserved for Malaysians.
Malaysia has a market economy, but the state has a
more active governing role in the economy than is usual
in many western countries. Leading politicians often
have strong ownership interests in the business
community. This is especially true of the Malay
nationalist party Umno, which dominated politics from
independence from 1957 to 2018.
Prior to the 2008 international financial crisis,
Malaysia was for many years one of the world's fastest
growing economies. The highest growth rate was from the
beginning of the 1980s to the mid-1990s, thanks in part
to many domestic and foreign investments. In 1997,
Malaysia was hit by the so-called Asian crisis, a severe
economic crisis that swept across much of the continent.
The country's economy recovered in 1998 through various
stimulus measures. In addition, some costly construction
projects were canceled.
The global financial crisis of 2008–2009 marked a new
decline for the Malaysian economy. To prevent a deep
depression, in March 2009, the Government launched a
stimulus package with investments in infrastructure
projects, job creation measures and support for
companies. The recovery went faster than expected;
Already in 2010, high growth was again reported. The
upturn was due to a large domestic demand, especially
for electronic and electrical goods. Another reason was
the economic recovery that was also taking place at
Malaysia's most important trading partner.
Perhaps the most serious economic problem for
Malaysia is the state's high budget deficit that has
plagued the country since the late 1990s. In order to
keep the finances under control, the government cuts
down, among other things, high government subsidies on
fuel and electricity as well as on certain foods. A VAT
was required to replace a variety of taxes on sales and
service. In order to fulfill their election promises,
Prime Minister Mahathir Mohamad's newly re-elected
government reintroduced some subsidies in the summer of
2018, and VAT was abolished, at least temporarily.
Malaysia's exports are larger than imports, which
means that the country has a surplus in foreign trade.
Exports are mainly to Singapore and China. Other
important exporting countries are the United States,
Hong Kong, Japan, and Thailand. Imports are mainly
purchased from China, Singapore, the United States,
Taiwan, Japan and Thailand. In 2018, China was
Malaysia's largest trading partner for the 10th
consecutive year. From 2017 to 2018, trade between them
increased by 15 percent.
FACTS - FINANCE
GDP per person
US $ 11,239 (2018)
Total GDP
US $ 354 348 M (2018)
GDP growth
4.7 percent (2018)
Agriculture's share of GDP
7.7 percent (2018)
Manufacturing industry's share of GDP
21.9 percent (2018)
The service sector's share of GDP
52.0 percent (2018)
Inflation
1.0 percent (2019)
Government debt's share of GDP
55.6 percent (2018)
Currency
ringgit
Merchandise exports
US $ 206,315 million (2018)
Imports
US $ 176,762 million (2018)
Current account
US $ 7,590 M (2018)
Commodity trade's share of GDP
131 percent (2018)
Main export goods
electrical and electronic goods, oil, natural gas (in
liquid form), chemicals, textiles, transport equipment,
palm oil, rubber, pharmaceuticals, timber, timber
products
Largest trading partner
China, Singapore, USA, Japan, Thailand (2018)
2010
December
Anwar Ibrahim is suspended for six months
Anwar Ibrahim is suspended from office in Parliament for six months after a
vote in the Assembly. The reason is that in connection with a
government-initiated campaign against racism, "1Malaysia", he claimed that it
was inspired by an Israeli election campaign in 1999, "One Israel". Malaysia
lacks diplomatic relations with Israel (see also Foreign Policy and Defense).
August
Five years in prison for church fire
Two Muslim men are sentenced to five years in prison each for having set fire
to a church fire in January 2010.
June
The bumiputra policy is widening
The Government announces that the bumiputra policy (positive special
treatment of Malaysians) should now be extended to favor other economically
disadvantaged groups.
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