The Malaysian economy is one that is not one sector dependant. Just like the country which is divided by the South China Sea into the Peninsular Malaysia and Malaysia Borneo, the economy is divided between a service component (tourism) and a producer component (manufacturing). With a total population of just over 28 Million and bordering Thailand, Indonesia, Singapore and Brunei, Malaysia offers a complete package to any investor and is able to diversify its economy. Discussion: Malaysian economy witnessed an economic boom in the 1970s, following which it expanded to become a multi-sector economy from being a raw materials producer.
The country’s rich natural resources ensure sound developments in agriculture, forestry and mining. Economic growth is also attributed to its border with the Strait of Malacca which is an important international shipping crossroad, which promotes the country’s international trade. Malaysia’s well developed manufacturing sector produces a diverse range of goods. The first three quarters of 2009, however, witnessed steep decline in the country’s economic growth. Volume of exports reduced drastically due to reduced consumer goods demand globally.
The situation, however, improved somewhat in the Q4FY09. The main industries driving this improvement are the tourism, petroleum and electronics. Tourism is among the biggest foreign exchange earners for Malaysia. In 2008, the country was visited by 22,052,488 tourists; a considerable increase over the previous year. However, due to the 2008-2009 economic recession, the increase in the number of tourists in 2009 has been marginal totaling 23,646,191. The Malaysian government also plans to invest RM 899 million (US $271. 8 million) to boost tourism by upgrading the infrastructure.
It also plans to motivate front liners through training and increasing the number of tourism events and products (Monthly review, Feb 2009). Malaysia’s well-developed petroleum industry produces petroleum products, petrochemicals and natural gas. In 2008, the industry attracted an astronomical amount of Ringgit 57. 2 billion as investment. It ranks 14th in the world in terms of natural gas reserves and 23rd in crude oil reserves. The total production of oil stood at 691,600 barrels and natural gas at 5,891 million standard cubic feet.
Its diverse range of petrochemical products includes ethylene oxides, phthalic anhydride, olefins, acrylic acids, ethyl benzene, polyvinyl chloride, glycols, and polyolefins. As per BMI forecasts, Malaysia’s total demand for oil in Asia Pacific region would be 1. 92% while it would account for 8. 74% of the regions oil supply (White, 2009). Malaysia’s electronic industry is the backbone of its economic growth. It is among the largest exporters of electrical goods and appliances and semiconductor devices.
The consumer electronics devices market in Malaysia stands at around US$8. 6bn as of 2010. It caters to the requirements for computing devices, mobile handsets, and AV devices. There are expectations of the industry to grow up to US$11. 1bn by 2014 owing to rise in incomes. In 2009, 28% of consumer electronics spending was on computers whereas spending on mobile handset was 63% (Ahmad & Yusof, 2010). Conclusion: It should be noted that the Malaysian economy has emerged as a multi-sector economy in the 21st century from being a producer of raw materials in the 60s and 70s.
Great effort has been put by successive governments to promote value-addition in areas like pharmaceuticals, technology industries and medical technology. Presently Malaysia boasts of major industries producing electronics, electrical products, chemicals, foods and beverages, metal and machine products and apparel Malaysia has over its near past evolved from net consumer of finished products and exporter of raw materials to an exporter of finished products and net consumer of raw materials.
Reference: Ahmad, F. B & Yusof, S. M (2010). Comparative Study of TQM Practices Between Japanese and Non-Japanese Electrical and Electronics Companies in Malaysia: Survey Results, Total Quality Management & Business Excellence, Vol. 21, No. 1, pp. 11-20. Monthly review, (2009). Economic Performance, Country Report, Malaysia, Feb 2009, No. 2, pp. 14-15. White, L (2009). The Deal That Divided the Market, Euromoney, Vol. 40, No. 485, pp. 165-166.