View the information below regarding the economy of Malaysia. The summary and statistics contains
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Malaysia Country Page.
GNP: $ 88 billion.
Annual real GDP growth rate: 4.1%.
Per capita (GDP) income: $ 3,869.
Natural resources: Petroleum, liquefied natural gas (LNG), tin, minerals. Agriculture: Products--palm oil, rubber, timber, cocoa, rice, tropical fruit, fish, coconut.
Industry: Types--electronics, electrical products, chemicals, food and beverages, metal and machine products, apparel.
Trade: Merchandise exports--$ 93.4 billion: electronics, electrical products, palm oil, petroleum, liquid natural gas, apparel, timber and logs, plywood and veneer, natural rubber. Major markets--U.S. 20.2%, Singapore 17.1%, Japan 11.2%. Merchandise imports--$ 75.3 billion: machinery, chemicals, manufactured goods, fuels, and lubricants. Major suppliers--U.S. 16.6%, Japan 17.8%, Singapore 11.9%.
Economy of Malaysia
The Malaysian economy rebounded from a sharp recession in 1998 when real GDP contracted by 7.4% in 1998. The economy grew 6.1% in 1999 and a strong 8.3% in 2000, led by rapid growth in exports, particularly of electronics and electrical products, to the United States, Malaysia's principal trade and investment partner. When the U.S. economy began to slow in late 2000, Malaysian exports declined, and the Malaysian economy slowed dramatically. Though the government introduced two fiscal stimulus packages in 2001 equal to U.S.$1.9 billion, the economy grew a mere 0.4% for the year. Economic growth resumed in 2002 with a 4.1% increase; the economy is expected to grow 4.5% in 2003. Since September 1998, the Malaysian ringgit has been pegged at an exchange rate of RM3.8/U.S.$1.0.
Malaysia remains an important trading partner for the United States. In 2002, bilateral trade between the United States and Malaysia totaled U.S.$34.3 billion. U.S. exports to Malaysia were $10.3 billion, and U.S. imports from Malaysia were $24 billion in that year. Malaysia was the United States' 11th-largest trading partner and its 16th-largest export market. During the first 8 months of 2003, U.S. exports to Malaysia totaled $6.9 billion while the United States imported $16.2 billion from Malaysia.
Malaysia successfully developed from a commodity-based economy to one focused on manufacturing. Today the Government of Malaysia seeks to make the leap to a knowledge-based economy. At independence, Malaysia inherited an economy dominated by two commodities--rubber and tin. In the 40 years thereafter, Malaysia's economic record had been one of Asia's best. From the early 1980s through the mid-1990s, the economy experienced a period of broad diversification and sustained rapid growth averaging almost 8% annually. New foreign and domestic investment played a significant role in the transformation of Malaysia's economy. Manufacturing grew from 13.9% of GDP in 1970 to 30.4 % in 2002, while agriculture and mining, which together had accounted for 42.7% of GDP in 1970, dropped to 8.4% and 7.4 %, respectively, in 2002. Malaysia is one of the world's largest exporters of semiconductor devices, electrical goods, and appliances, and the government has ambitious plans to make Malaysia a leading producer and developer of high-tech products, including software.
The Malaysian Government encourages Foreign Direct Investment (FDI), and the United States continues to be the largest investor in Malaysia. In 2002, the Malaysian Government approved U.S.$702 million in new manufacturing investment by U.S. companies, with the bulk in the electronics and electrical sectors. The cumulative value of U.S. private investment in Malaysia exceeds $20 billion, 60% of which is in the oil and gas and petrochemical sectors with the rest in manufacturing, especially semiconductors and other electronic products, according to an American Chamber of Commerce 2002 survey.
The Government of Malaysia has taken an active role in guiding the nation's economic development. Malaysia's New Economic Policy (NEP), first established in 1971, sought to eradicate poverty and end the identification of economic function with ethnicity. In particular, it was designed to enhance the economic standing of ethnic Malays and other indigenous peoples (collectively known as "bumiputeras" in Bahasa Malaysia). Rapid growth through the mid-1990s made it possible to expand the share of the economy for bumiputeras without reducing the economic attainment of other groups. One controversial NEP goal was to alter the pattern of ownership of corporate equity in Malaysia, with the government providing funds to purchase foreign-owned shareholdings on behalf of the bumiputera population. In June 1991, after the NEP expired, the government unveiled its National Development Policy, which contained many of the NEP's goals, although without specific equity targets and timetables. In April 2001, the government released a new plan, the "National Vision Policy," to guide development over the period 2001-10. The National Vision Policy targets education for budget increases and seeks to refocus the economy toward higher-technology production.