Malaysia Economy Facts
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.
- 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).
- 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. Check findjobdescriptions to learn more about 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)
US $ 354 348 M (2018)
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)
1.0 percent (2019)
Government debt’s share of GDP
55.6 percent (2018)
US $ 206,315 million (2018)
US $ 176,762 million (2018)
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)
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).
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.
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.