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Malaysia’s Economy – A Brief Overview
From Exporting Raw Materials to One of Asia’s Powerhouses, Here’s a Brief Look at Malaysia’s Economy
From humble beginnings as an exporter of raw materials, today it is one of the economic powerhouses in Asia. Malaysia’s economy is growing fast, and here’s why.
In the Beginning
During the 1970s, Malaysia’s economy is primarily focused on exporting tin and rubber. The government since then has always been a champion of economic and social restructuring. It introduced the New Development Policy (NDP) in a bid to balance wealth redistribution and economic growth. The NDP was formerly known as the New Economic Policy (NEP).
Economic policy was put in place to encourage growth in the private sector. The following public-sector activities became privatised thus:
- National railway
- Automobile manufacturing
- Electricity companies
The Economy Today
Today, it is among the fastest-growing, strongest and among the most diversified economies in Southeast Asia. In fact, Malaysia’s economy ranks 4th among Southeast Asia’s largest economies behind Singapore, Thailand and Indonesia.
Malaysia’s economy continues to maintain import as its primary production methods. It is, however, also a major palm oil producer in addition to rubber. The country exports vast quantities of natural gas and petroleum, contributing to its growing strengths. Malaysia is also among the largest commercial hardwoods sources in the world.
As it continues to march forward, Malaysia’s economy is turning its emphasis towards export-oriented manufacturing. This is a move to further spur its economic growth. With its highly-educated local workforce, well-developed infrastructure and stable political environment, Malaysia is turning heads of investors globally. Especially investors from Taiwan and Japan.
Malaysia’s economy also continues to grow in strength thanks to the following attributes:
- The country’s rich mineral and mining resources, accounting for a substantial chunk of the GDP.
- Manufacturing, which has expanded rapidly since the 1970s. Manufacturing became the backbone of economic growth by the 21st century.
- The active and ever-growing financial sector, encouraged along by government policies. Malaysia’s government is known for promoting foreign investment and market competition.
- Well-endowed with natural resources in agriculture and forestry.
- Tourism, which is also a major sector in Malaysia’s economy. In 2014 alone, domestic tourists accounted form RM37.4 billion. The United Nations World Tourism Organisation (UNWTO) recognised Malaysia as the 10th most visited country in 2012.