Economy of Malaysia

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Malaysia
World economic rank	38. (nominal) 26. (PPP)
currency	Malaysian Ringgit (MYR)
Conversion rate	1 MYR = EUR 0.21
Trade organizations	WTO , ASEAN
Key figures
Gross domestic product (GDP)	$ 314.497 billion (nominal) (2017) $ 930.750 billion ( PPP ) (2017)
GDP per capita	$ 9,813 (nominal) (2017) $ 29,041 (PPP) (2017)
GDP by economic sector	Agriculture : 8.4% Industry : 36.9% Services : 54.7% (2017)
growth	▲ + 5.4% (2017)
inflation rate	3.8% (2017)
Employed	14.94 million (2017)
Employed persons by economic sector	Agriculture : 11% (2012) Industry : 53% (2012) Services : 48.6% (2012)
Unemployment rate	3.4% (2017)
Foreign trade
export	$ 188.2 billion (2017)
Export goods	Electronics, chemical products, crude oil
Export partner	Singapore : 14.7% China : 12.6% USA : 10.3% Thailand : 5.7% Hong Kong : 4.8% (2016)
import	$ 163.4 billion (2017)
Import goods	Machines, electronics, mineral products, automobiles
Import partner	China : 19.4% Singapore : 9.8% Japan : 7.7% USA : 7.6% South Korea : 5.0% (2016)
Foreign trade balance	$ 24.8 billion (2017)
public finances
Public debt	52.5% of GDP (2017)
Government revenue	$ 51.23 billion (2017)
Government spending	$ 60.26 billion (2017)
Budget balance	−2.9% of GDP (2017)

The economy of Malaysia is the economy of the Southeast Asian state of Malaysia . It is a largely open economy based on a state-oriented free market economy . Malaysia has been one of the fastest growing economies in the world in the last few decades, interrupted only by the Asian crisis of 1997/98. Overall, the GDP per capita, adjusted for purchasing power, expanded from about $ 6,800 in 1990 to $ 29,400 in 2017. Malaysia is counted among the higher middle income countries by the World Bank and plans to catch up with the higher income countries in the future.

In 2016, Malaysia was ranked 25th worldwide in the Global Competitiveness Report of the World Economic Forum , making it the Asian country with the sixth highest competitiveness. In 2017, the country ranks 23rd out of 180 countries in the index for economic freedom .

General

Malaysia is a country rich in natural resources and raw materials ( tin , rubber , palm oil , petroleum ). Malaysia is also home to the automobile manufacturers Perodua and Proton as well as the oil multinational Petronas . Since the beginning of the 1990s, there has been rapid industrial development, which has moved the country into the ranks of the up-and-coming emerging countries ( panther states ). Malaysia is economically and politically one of the most stable countries in Southeast Asia, in which the convergence of tradition and modernity, Islam and capitalism is propagated.

It is a member of ASEAN , the D-8 and the G-15 . As a result of this orientation, the country underwent a fundamental change from a previously majority agricultural state to a technical and capital-intensive industrial location with high development potential. The Asian crisis that began in 1997 also hit Malaysia, but the economy has since recovered and is growing again by around 5 to 6%. In 2007, goods worth 155.73 billion US dollars were imported and exported at the same time to 186.76 billion US dollars. The inflation rate was around 3.8%. The gross domestic product in 2017 was US $ 9,813 per inhabitant.

Unemployment was 3.4% in 2017. Malaysia is a member of the International Cocoa Organization .

history

1945 to 1957

The British returned after the Second World War by Malaya back and wanted the old, based on low wages and export-oriented plantation economy rebuild. That this succeeded was due to the rubber boom after the war and the British divide-and-rule policy. After the end of the war, the economy of Malaysia was still heavily dependent on the export of rubber and tin and the import of rice for about two decades - even after independence. Malaya's per capita income, which has long been one of the highest in the region, rose again in the post-war period due to high raw material prices and the rapid rebuilding of the export economy.

Some nationalists complained that a large part of the profits from the rubber trade were being used to rebuild Britain, but failed to convince their compatriots to immediately demand independence.

In the 1950s, production was affected by the communist rebellion and per capita income grew by an average of only 1%. However, the colonial rulers prevented any major effects on the economy.

1957 to 1971

Economic conditions after independence in 1957 looked promising for rapid and sustained growth. The legacy from the colonial era includes a well-developed infrastructure, efficient administrative mechanisms and a thriving export sector of agricultural products with great potential for further development. By this time Malaysia was already ahead of most of its neighbors in terms of per capita income, education and health care.

About 52% of the population of the Malaya Federation were Malays , who dominated politics and administration, but were relatively poor. Most Malays had comparatively unprofitable agricultural activities. The Chinese (about 37% of the population), on the other hand, had more economic power and dominated most modern professional groups. But they did not come close to the political power and ethnic solidarity of the Malays.
This gave rise to a problem that ran through the entire history of the Federation of Malaya and, later, of Malaysia: the dilemma of having to achieve economic policy goals on the one hand, but also maintaining political stability and harmony among the ethnic groups on the other to have to.

In the first decade after independence, politics was primarily characterized by suppressing burgeoning rivalries between ethnic groups. In terms of trade and industry, the colonial-era open door policy continued. At the same time, attempts were made to balance the inequalities between the ethnic groups. Some problems, such as rising unemployment in the cities, renewed controversy over education and language and emerging doubts among the non-Malay population as to whether their interests are adequately represented in the new state of Malaysia, led to disappointment in all parts of the population. These culminated in bloody riots on May 13, 1969. The government's reaction to these events was a clear change of direction away from an economic policy based mainly on economic considerations towards positive discrimination / quotas .

From 1971: New Economic Policy

This new direction in politics was embodied in 1971 by the New Economic Policy (NEP). The purpose of NEP was to maintain national unity through two goals:

• Eradicate poverty among the whole population
• Restructuring of society with the aim of eliminating the identification of ethnic groups with economic functions

To achieve the first goal, the development strategy should be reformulated. After the economy of Malaysia still relied heavily on the primary sector in the 1960s, poverty was now to be combated through export-oriented industrialization and an ambitious program for the development of rural areas. The second goal specifically meant improving the position of the Malays. They should receive more economic power through a reallocation of wealth and be privileged in the economy and education. Ethnic Malay people are often preferred to foreigners and the Malay Chinese who make up 34% of the population in business life.

Despite some liberalization measures, the country's economy is still highly regulated. Established in 1993, the state fund Khazanah Nasional acts as a strategic arm of the government, invests in numerous industries, such as telecommunications, media and creative industries, health services, information technology, transport sector, real estate and finance and energy generation and limits foreign investment such as that of the Chinese citizens of Malaysia . There is also another fund, KUB Malaysia, which is close to the ruling party UMNO and which pays attention to the ethnic distribution of its investments. To date, Malaysia has had a relatively low private business start-up rate.

Small and medium sized businesses

There are more than 100,000 small and medium-sized enterprises in Malaysia . The government gives them high priority. In 1996, the then Prime Minister Mahathir emphasized its importance for the sustainable and dynamic development of the Malaysian industry and declared the export orientation of small and medium-sized companies to be the goal. A 1998 study by the government organization Small and Medium Industry Development Corporation (SMIDEC) found that these companies operate over 90% of Malaysia's manufacturing facilities, but that only about 20% of them are export-oriented.

SMIDEC offers loans and support for medium-sized companies. Since April 2000, Bank Negara Malaysia has also made capital available to medium-sized and new companies through various financial institutions. The problem with expansion lies less in the amount of credit and support offered and more in the lack of awareness of their availability and the fear of complicated bureaucratic procedures. The Chinese dominating large parts of the economy, after decades of discrimination since the introduction of the New Economic Policy, are skeptical of government support. The strong support the Malays have led many to believe that state support is only for them.

There are two types of small and medium-sized businesses in Malaysia. The first includes companies led by a generation of young entrepreneurs. They are well educated and have a good understanding of computers and technology. These companies are still quite rare, but much of the support offered by the government is aimed at them.

The vast majority, on the other hand, are traditional family businesses. They are usually less modern. Their success is based more on hard work and long hours than on innovation. Many of these entrepreneurs have a relatively low level of school and university education, which affects their innovativity and the effectiveness of their management and marketing. Some of them even had to drop out of school to work in the family business. Many of them are dependent on personal contacts and recommendations because they do not do modern marketing. They try to keep labor costs as low as possible and therefore hardly invest in further training.

Monetary policy

After the Malaysian ringgit (MR) fell from 2.5 MR for one US dollar to 5 MR for one USD in 1997, it was pegged to the US dollar on September 1, 1998 at an exchange rate of 3.8 MR. Exchange rates were released on July 21, 2005 but are still controlled and based on a basket of multiple currencies. Most economic experts in Malaysia welcome the flexibilisation and expect the Malaysian economy to strengthen as a result.

Individual evidence

1. ↑ Gross domestic product 2016 (PPP) (PDF; 14 kB) In: The World Bank: World Development Indicators database . World Bank. February 3, 2017. Retrieved February 5, 2018.
2. ↑ ^{a b c} Data from the International Monetary Fund: World Economic Outlook Database , as of October 2014. Accessed November 26, 2014.
3. ↑ [1] Retrieved January 29, 2018
4. ↑ [2] Retrieved January 29, 2018
5. ↑ ^{a b c d} INSSE - Romania in figures 2010 ( Memento of November 14, 2010 in the Internet Archive ) (PDF; 2.8 MB) Retrieved on April 16, 2011
6. ↑ [3] Retrieved January 29, 2018
7. ↑ [4]
8. ↑ [5] Retrieved January 29, 2018
9. ↑ [6] Retrieved January 29, 2018
10. ↑ [7] Retrieved January 29, 2018
11. ↑ GDP per capita, PPP (current international $) | Data. Retrieved July 8, 2018 (American English). 
12. ↑ heritage.org
13. ↑ http://www.ad-hoc-news.de/malaysia-s-handelsbilanz%C3%83-%C2%BCberschuss-auf-rekord level --/de/Nachrichten/15436944?tfindex=LUS- Dax ( Memento from January 12, 2012 in the Internet Archive )
14. ↑ Ministry of Finance Malaysia: Ekonomic Report 2012/2013, chap. 6.1 (PDF file; 163 kB); Accessed December 18, 2012.
15. ↑ Global Entrepreneurship Monitor (GEM) 2014, online: Archived copy ( memento from September 19, 2015 in the Internet Archive ) (pdf), pp. 35, 37, 40, 51, 71.