Malaysia Economic Growth

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Malaysia Economic Growth

At independence from the UK in 1957, Malaysia had a population of just 7.4 million. Its population has since grown swiftly. 2005 the country had around 26.8 million people and the current estimation is that it will rise by 2010 to around 29 million. Before Independence, Malaysia was a low‐income economy. Business enterprises were small scale, largely localized, and primarily family‐based. Over time, the economy has diversified beyond agriculture and primary commodities, such that manufactured goods show account for a larger share of GDP and total exports. Since 1970, Malaysia has based its economic development strategy on three long‐term policies: the New Economic Policy (NEP), 1970–90, the National Development Policy (NDP), 1990–2000, and the National Vision Policy (NVP),2001‐2010. Although the emphasis in these long‐term development policies has always been on economic growth, Malaysian development intends to benefit all groups or communities in society in an equitable manner. The overriding objective of the NEP, maintained in the NDP and the NVP, was to preserve national unity by eradicating poverty irrespective of race, and by restructuring Malaysian society to reduce the identification of race with economic function and geographical location. Growth with equity continues to be the guiding development strategy. Malaysia has evolved now as a developing multi-sector economy

Prime Minister Abdullah, after coming to power in 2003, has tried to develop economy of this south Asian country by introducing value added production. He took a number of measures to introduce hi-tech technologies and encouraged investments in high technology industries, medical technology and pharmaceuticals.

Government of Malaysia has made efforts to stop its dependence on export products. Exports of electronics goods have always been a major factor in Malaysia economy. Huge profit accrued from export of oil and gas and it has been a big factor for Malaysia’s economic development. There have been huge profits from high-energy prices, although there was high cost of gasoline and diesel fuel.

Through Ninth Malaysia Plan, a five-year national growth agenda in April 2006, had been forwarded by the government. This is a comprehensive plan for national budget from 2006-2010. Prime Minister Abdullah has made plans to develop various other areas that may attract people for business investment. There is a 6 percent growth in GDP per year, which is being maintained as per economic goals laid down by prime minister.

Economic development of Malaysia is largely dependent on various factors. Malaysia GDP as per purchasing power parity was estimated to be $397.5 billion in 2008. GDP as per official exchange for 2008 was $214.7 billion. Real growth rate of Malaysia GDP of 2008 has been found to be about 5.5 percent.

Different sectors contribute individually for Malaysia economic development. In financial year 2008, contribution of agricultural sector to Malaysia GDP was 9.7%, industrial sector contributed 44.6% and 45.7% came from service sector. Asian Development Bank (ADB), a Manila-based institution, shows Malaysia GDP to be 5.7 percent in fiscal year 2008.

Agriculture is an important sector to the country’s economic development. It was one of the highlighted issues during Tun Abdullah Ahmad Badawi’s tenure as Malaysia’s Prime Minister. Abdullah strongly believed that this industry could generate wealth and reduce poverty particularly among those from rural areas. Based on statistics, agriculture industry generates approximately 12 percent to the national gross domestic product (GDP) and also reduce unemployment rate in Malaysia

Several new commercial crops such as palm oil, cocoa and rubber were introduced and have been the main agricultural exports to global market.

Malaysian farmers also produced other high quality fruits and vegetables such as durian, coconuts, bananas, pineapples and paddy. The...
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