Understanding Malaysia Economy

Malaysia is a country which located in South East Asia. Kuala Lumpur is the capital city of Malaysia. The federation of Malaysia consisted of two parts which were Peninsular and East Malaysia (Borneo Malaysia). enerally! Peninsular Malaysia has "" states and the East Malaysia consisted two parts which were Sa#ah and Sarawa$. Malaysia co%ers of a population a#out &' million people. ()* of the population are indi+enous Malays! ,-* ethnic .hinese! /* 0ndians and "* Kada1ans! 2aya$s and other nati%e tri#es. The official lan+ua+e of Malaysia is Malay! #ut En+lish is widely spo$en throu+hout the country. Malaysia practices 3ederal Parliamentary 2emocracy with a constitutional monarch. The Malaysian economic is an open economy where it handles domestic and internationally community. Malaysia is a +rowin+ fast economy which is also state oriented mar$et economy. Accordin+ to 4i$i 4ealth .olla#orati%e 5esearch (&6"" )! 7Malaysia8s economy is ran$ed , rd lar+est in South East Asia and ,6th lar+est in the world in &669:. Malaysia has #een +rown from a producer of raw materials into an emer+in+ multi sector economy. 3urthermore! Malaysia is situated near#y to Strait of Malacca. Strait of Malacca is a sea route which connects the 3ar East to Asia! Middle East and Europe. This strate+ic location of Malaysia +reatly increases the +rowth of forei+n trade. 4ith a twenty year history of economic +rowth! Malaysia pro%ides a +ood #asis for the study of how the economic had de%eloped so far. 4hen loo$in+ at one country8s +rowth! comparisons are sure to #e made with similar countries. 0t is easy to assume that other countries could e;perience the same le%el of +rowth if they followed the same path! #ut it is important to reali1e that e%ery country is uni<ue. The history! culture! location! +o%ernment! reli+ion and many other factors do effect economic de%elopment. This discussion will +o on to the recent economic trends practiced in Malaysia. Malaysia =0 and 2P

Since independence more than fi%e decades a+o! as a nation characteri1ed #y di%ersity! Malaysia has achie%ed remar$a#le success after success. >%erall! Malaysia has a sta#le economic +rowth. As a result! from a low income a+rarian nation dependent on ru##er and tin! Malaysia has emer+ed as a modern! industrial! hi+h middle income nation with stron+ economic fundamentals. Accordin+ to the (0M3! &6"&) the annual ross =ational 0ncome ( =0) +rowth

rate a%era+e was ) to '* in the "/)6! "/96 and towards to "/'6s. 0t continued +rowin+ rapidly to a#out "&* in the "//9 ? "//'. This is due to Asian financial crisis. Then in the year &666@ &66'! it8s a#out (* to )*. =ow in the year &6""! the =0 went a#out (*. (0M3! &6"&) The ross 2omestic Product of Malaysia depends on the manufacturin+ industries! a+ricultural 2P in &66'. The contri#utions of the manufacturin+ industries 2P. Accordin+ to 2P@PPP (Purchasin+ Power Parity)!

sectors and ser%ice sectors. Accordin+ to the article of Altius Directory (2013)! the a+ricultural sector had contri#uted /.9* towards the country were estimated as --.)*and that of ser%ice sector was -(.9* towards the country 5o$iah Ala%i ("//)) in Industrialization in Malaysia, as per Malaysia is ran$ed &/ in the world. A
th

2P +rowth rate of &6* was noticed towards the end of &6th

century. The 2P nominal of Malaysia in &66/ was estimated at AS B &69! -66 #illion in &66/. The 2P nominal per capita in &66/ was estimated at AS B'"66.

After (( years of national independence! the present &6""! 2omestic Product ( 2P) percapita has increased to ASB&'9./ (4orld 2ata Ban$! &6",). This

ross 2P

+rowth of a#out (* and 9* in the year of "/'6s and "//6s were increasin+ due to e;port of industriali1ation and also the hi+h technolo+y manufacturin+ industry. Cowe%er! in mid "//9 to "//'! the 2P +rowth was not maintained due to the financial crisis which dra++ed down the &6"&) Accordin+ to (Cassan Khan! &66&)! Malaysia8s real 2P to @"6*. (0M3! 2P +rew annually at a re+ular pace of ).)*

from "/(( to &666.The ratio of pri%ate in%estment to the 2P rose from /* in "/(6 to nearly &6* in the /6s. There was a si+nificant structural chan+e due to the +rowth process. .urrency System of Malaysia

The currency of Malaysia is Malaysian 5in++it. The Malaysian 5in++it can #e sym#oli1ed as MD5 and di%ided into "66 cents. 0t is +enerally $nown as Malaysian dollar and was issued #y Ban$ =e+ara. (Malaysia Business Ad%isory! &6",) 2urin+ the last & decades the %alue of Malaysian currency has shown remar$a#le sta#ility! mainly due to the countryEs steady economic +rowth and re+ular state inter%ention into the currency e;chan+e rate. The Malaysian dollar was floated in "/9,! and in that year its e;chan+e rate stood at around 5M&.-( per ASB". At the same time! the Malaysian dollar #ecame the sole unit of le+al tender! as Sin+apore and Brunei currencies were e;cluded from free circulation in the country. The +o%ernment periodically re%ised its e;chan+e control re+ulations! introducin+ further 2

li#erali1ation of the controls. 0n "/'(! the Malaysian rin++it was %alued at 5M&.-' per ASB"! and this e;chan+e rate remained practically unchan+ed until the "//9 Asian financial crisis. 0n &6",! it is around 5M,.6( per ASB". 2urin+ the period #etween "/9, and "//9! inflationary pressure was relati%ely small! with a pea$ inflation rate of around "9 percent in "/9-. 5emar$a#le sta#ility was supported #y a %ery hi+h rate of sa%in+s. Malaysia has one of the hi+hest sa%in+s rates in the world! at a le%el of around -6 percent of 2P. Cowe%er! Malaysians also #orrow rampantly! with a lar+e proportion of in%estments directed to the #oomin+ property mar$et and stoc$ mar$et. >utstandin+ loans were e<ui%alent to "96 percent of 2P #y the end of "//9! one of the hi+hest such ratios in the world. The Malaysian #an$in+ system is well esta#lished! with ,' commercial #an$s operatin+ in the country in "//)! includin+ "- forei+n #an$s and "& merchant #an$s. (Malaysia Money! &66") Malaysia =atural 5esources Malaysia has rich natural resources of a+riculture! forestry and minerals. The most si+nificant profit for Malaysia is a+ricultural plant such as palm oil! ru##er! pine apple! to#acco and etc. The products li$e palm oil and ru##er were e;ported to forei+n in a hi+her rate which contri#uted to the economy of Malaysia. 0n the term of forestry! the lo++in+s contri#uted an amount for the country8s economy. The most %ital plantation is tim#er! ru##er plants and palm trees. 0n the term of mineral! Malaysia has a lar+e deposit of mineral such as tin and petroleum which added to the country8s economy too. Palm oil is also a maFor +enerator of forei+n e;chan+e. ( ome1 G Sundaram! "//9) 3rom "/th century! lo++in+ #e+an to ma$e a lar+e input to the forestry sectors. There are still a#out (/* of Malaysia is co%ered with forests. Lots of serious erosion pro#lem #e+an in "/)6s to the forests due to lo++in+ of trees rapidly. Cowe%er! has declined. Many lar+e areas are #een treated and plantin+ a+ain trees are practiced as Malaysia o%ernment o%ernment has ti+htened up laws to protect the natural o%ernment8s commitment the rate of tree cuttin+ resources! ecolo+y system and deforestation. 4ith the

are conscious a#out the pro#lems faced. Accordin+ to (Malaysian 0n%estment 2e%elopment Authority! &6"") there are many plans which are pro%ided #y Malaysian +o%ernments for the enrichment of land with rattan plantin+ and ru##er trees plantation where#y ,"&.,6 s<uare $ilometres ("&6.( s< mi) are used. Tim#er species li$e meranti tembaga! merawan and sesenduk are planted a+ain to enrich and enhance the forest resources from depletin+. The culti%ation of %alua#le and hi+h <uality trees li$e tea$ and also trees

used for papers are also #een practiced. >il palm has replaced ru##er as the leadin+ Malaysian e;port to other countries. (Malaysian Tim#er 0ndustry Board! &6"") The three main mineral resources which are %ery important in Malaysian economy will #e petroleum! +as and tin. Before "/'6s! Malaysia had #een the world8s #i++est e;ported of tin and after "/'6s! the demand for tin has drastically declined. Tin has played a maFor role in the "/ th and &6th century #ecause of the demand from Europe and other countries. After "/9&! +as and petroleum has ta$en o%er tin minin+ as demand for tin has dropped. Many oil fields ha%e #een found in Sa#ah! Sarawa$ and Teren++anu and these has contri#uted to the Malaysian economy. These resources are run #y Petronas! Malaysia and there are also other >il .ompanies which are E;;on@Mo#il! 5oyal 2utch Shell and few others. >ther important minerals are +old! copper! #au;ite! iron@ore! coal! clay! $aolin! silica! limestone! #arite! phosphates and stones such as +ranite! mar#le #loc$s and sla#s. (La#uan Li#erty Port Mana+ement! &6"") MalaysiaEs wide and shallow continental shelf consists of se%eral deep water potential re+ions. Malaysia has (66!666 $m& a%aila#le for oil and +as e;ploration. >il fields in Malaysia are produced around (" out of 96 fields. Accordin+ to the article HA #rief on the >il 0ndustry in Malaysia8 stated that in Ianuary &66-! MalaysiaEs oil reser%es were estimated to #e -.'- #illion #arrels (9)/!666!666 m,)! while natural +as reser%es stood at '9 trillion standard cu#ic feet (&!-)6 $m,). The country ma$es a#out 6.6669( #illion #arrels (""/!666 m,) #arrels of crude oil e%ery day and &.&6 trillion standard cu#ic feet ()6 $m,) of natural +as condensates per year. Minister in the Prime MinisterEs 2epartment! Mustapa Mohamed has re%ealed that MalaysiaEs oil reser%es situated at a#out -.'- #illion #arrels (9)/!666!666 m,) while natural +as reser%es increased to '/ trillion cu#ic feet (&!(66 $mJ) in &66-. (La#uan Li#erty Port Mana+ement! &6",) This was an increase of 9.&*. As of Ianuary "! &669! Petronas reported that oil and +as reser%e in Malaysia amounted to &6."' #illion #arrels (,.&6'K"6 / m,) e<ui%alent. (La#uan Li#erty Port Mana+ement! &6"") Malaysia can produce oil up to "' years and +as for ,( years accordin+ to the estimation #ased on the current production rates #y the o%ernment. Malaysia is ran$ed on the &- th for world oil reser%es and ",th for +as in &66-. ()* of the oil reser%es can #e found in the Peninsula Malaysia while "/* e;isted in East Malaysia. >il royalties are collected #y the +o%ernment where#y (* are passed to the states and the rest is $ept #y the federal +o%ernment. (La#uan Li#erty Port Mana+ement! &6"")

Sectors of Malaysia Economy Malaysian 0ndustry 4

Malaysia has two important industries which were minin+ and manufacturin+. 0n the term of minin+ industries! Malaysia8s economy +ets more profits from the e;port of the mine products. The three most important for the minin+ industries are oil! tin and +as. The minin+ for tin had started a lon+ time a+o. 0t had #een esta#lished durin+ the colonial period. Malaysia was considered as a world lar+est producer of tin till "/'6 (Malaysia8s Political Economy! "//9). The location of Mines in the peninsular Malaysia had made it for transportation throu+h the sea route. The production of crude oil and natural +as also #ecomin+ increased to a hi+her rate in Malaysia which +i%es profit to the country8s economy too durin+ the last few years. Accordin+ to the article of A Barrel 3ull (&6",)! 7Total oil production in &66/ was )/,!666 #arrels per day (##lLd)! of which ', percent was crude oil. More than half of total Malaysian oil production currently comes from the Tapis >il 3ield in the offshore Malay #asin:. 0n "///! the total production of li<uefied natural +as was estimated at ,.' #illion cu#ic feet (.ountry Analysis Brief! &6"") There were wide %arieties of manufacturin+ industries in Malaysia. This manufacturin+ industry is the important form in Malaysia for the contri#ution towards economy. The maFor manufacturin+ industries of Malaysia are electronics and furniture manufacturin+ industry as well as food processin+ industry. Accordin+ to (th Malaysian Student Leaders Summit! &6"" the industrial sector accounts for -'."* of total 2P or B),.- #illion. Malaysia8s industrial output is ran$ed ,& nd in the world. The industrial sector is re+ulated and promoted #y Malaysia 0ndustrial 2e%elopment Authority. 0nternational trade! facilitated #y the adFacent Strait of Malacca shippin+ route and manufacturin+ are #oth $ey sectors of the countryEs economy. Manufacturin+ has a lar+e influence in the countryEs economy! althou+h Malaysia8s economic structure is mo%in+ away from it. Malaysia has "' companies that ran$ in the 3or#es lo#al &666 ran$in+ for &66/. Ban$in+ and 3inance The #an$in+ and finance sector in Malaysia are under the control of Ban$ =e+ara. After the financial crisis in "//68s! a financial sector master plan was de%eloped. Accordin+ to the article of 7 !e De"elo#ment o$ debt markets in Malaysia, (2003) :! the o%ernment also launched the 3inancial Sector Master Plan! which outlines the strate+ies for the de%elopment of the financial sector! in March &66". (2atoE Saleh! &66&) The master plan resol%es $ey issues in a holistic manner and recommends a model structure specifically for the #an$in+ sector! ta$in+ into consideration the e;istin+ domestic en%ironment! re+ulatory and super%isory framewor$ and infrastructure. 3rom a #roader perspecti%e! the master plan pro%ides a clear and common %ision for the industry and strate+ies to #e pursued o%er the short! medium and lon+ term to achie%e this %ision. The May#an$ is the lar+est #an$ in Asia Pacific which practices

0slamic #an$in+ too. The Malaysian +o%ernment has decided to +i%e license to more sectors #y the end of &6"6 to increase the opportunity for 0slamic and Ta$aful #an$in+ (Sundaram! &66")%

Malaysia Trade Loo$in+ into Malaysia8s economy! the commodities play an important part where e;port and import are partly crucial. The import and e;port of commodities are %ital in Malaysia8s economy. Anited States has #ecome an important tradin+ partner for Malaysia. Two@way mutual trade #etween A.S. and Malaysia has totaled a#out ASB,6.( #illion in "///. E;ports of Malaysia to AS ha%e increased a#out ASB&".- #illion and imports of Malaysia from AS totaled a#out ASB/."#illion. Anited States8 "6th@ lar+est tradin+ partner is Malaysia and it is the "& th #i++est e;port mar$et in the world. 0n the year &666! A.S. e;ports totaled a#out ASB( #illion! while A.S. imports from Malaysia reached a#out ASB"".) #illion. 3orei+n 2irect 0n%estment (320) is always a positi%e outloo$ for the Malaysian o%ernment.

Accordin+ to Malaysian statistics ("///)! AS has appro%ed 320 in Malaysia where#y the new manufacturin+ in%estments totalin+ 5M(.& #illion (ASB".,9 #illion) and it is ran$ed first amon+ all countries. Malaysian 0n%estment 2e%elopment Authority (M02A) has appro%ed AS principal in%estment in chemicals! electronics! and electrical sectors. ASB"6 #illion of the cumulati%e worth of AS pri%ate in%estment has surpassed which is a#out )6* of oil and +as and petrochemical sectors with the rest in manufacturin+! particularly semiconductors and other electronic products. MalaysiaEs total trade in &66) which is a#out 5M(""."" #illion and it has increased #y &.&* to 5M(&&.,' #illion! in the first ) months of &669.

Accordin+ to (Altius 2irectory &6",)! The total e;port was of B "/'.9 #illion and the total import constituted a#out "(-.9 #illion. The +lo#al financial crisis had ad%ersely affected the trade system of Malaysia and in &66/! the e;port rate was declined to B"().- #illion and the import was declined to ""/.( #illion. The maFor commodities e;ported from Malaysia are ru##er! palm oil! petroleum! te;tiles! li<uefied natural +as! wood! wood products! chemicals etc. The most si+nificant commodities imported to the country are electronics! machinery! automo#iles! chemicals! plastics and etc. 6

Malaysia 2P rowth Accordin+ to the article of (Tradin+ Economics! &6",)! The rowth 2omestic Product ( 2P) 0= 2P +rowth rate in

Malaysia e;panded &./6* in the fourth <uarter of &6"& o%er the pre%ious <uarter.

Malaysia is reported #y the 2epartment of Statistics Malaysia. Malaysia 2P rowth 5ate a%era+ed ".,6 Percent reachin+ an all@time hi+h of (./6 Percent in Septem#er of &66/ and a record low of @9.)6 Percent in March of &66/ (Tradin+ Economics! &6"&). Malaysia is a swiftly de%elopin+ economy in Asia. Malaysia was $nown as a middle income country which transformed itself since the "/968s from a producer of raw material into a risin+ multi sector economy. The +o%ernment of Malaysia is increasin+ its efforts to #oost up the domestic demand due to the dependence on e;port line. Cowe%er! electronics items are particularly si+nificant dri%er of Malaysia8s economics. Malaysia Economy >utloo$

The Malaysian economy is clearly on trac$ to achie%e hi+h income and ad%anced nation status #y &6&6. 5eal 2P +rew (.)* in &6"&! surpassed consensus forecasts of a little o%er (.6* and the TreasuryEs &6", Bud+et forecast of #etween -.( @ (.6*. The -M &6"& +rowth at ).-* year@on@year was the hi+hest since &M &6"6. The &6"& +rowth was dri%en #y continuin+ stron+ domestic demand! with impressi%e annual +rowth in #oth pri%ate consumption and pri%ate and pu#lic in%estment outlays. =et e;ports of +oods and ser%ices had meanwhile contracted #y almost ,6* due to the wea$nesses in e;ternal demand conditions and +enerally lower +lo#al commodity prices. (Malaysia Economic >utloo$! &6",) There is still insta#ility in the euro 1one! di%idin+ the Baltic sea countries and the Mediterranean countries with di%er+ent trends in competiti%eness. reater role for E.B and #etter #an$in+ system! coupled with continued structural adFustment measures and la#our mar$et reforms are clearly needed to address issues li$e continued de@le%era+in+ #y #an$s! restrained credit conditions and hi+h unemployment. EuropeEs current woes and stand@off o%er fiscal policy in the AS affect world economic acti%ity and reco%ery. Moreo%er! in de%elopin+ Asia! .hina needs re#alancin+! otherwise there will #e continued slowdown in the de%elopin+ AsiaEs lar+est economy. (Malaysia Economic >utloo$! &6",)

0nflation 5ate in Malaysia

Accordin+ to Tradin+ Economics (&6",)! 7The inflation rate in Malaysia was recorded at ".(6 percent in 3e#ruary of &6",: and the 0nflation 5ate in Malaysia is reported #y the 2epartment of Statistics Malaysia (&6",). Pre%iously! from "/9, until &6",! Malaysia 0nflation 5ate a%era+ed #etween ,.9(* reachin+ an all@time hi+h of &,./* in March of "/9- and a record low of @&.-6* in Iuly of &66/. 0n Malaysia! the most si+nificant +roups in the consumer price inde; are 3ood and non@alcoholic #e%era+es (,6 * of total wei+ht) and +as! water! electricity! housin+ and other fuels (&, * of total wei+ht). >thers will #e includin+ of Transport ("(*)N .ommunication () *)N 5ecreation and culture (( *) and 3urnishin+s! household e<uipment and routine household maintenance (- *). The outstandin+ components are 5estaurants and hotels at ,.&* and miscellaneous +oods and ser%ices at )., *. (Mahani! O.A! &66/) Accordin+ to the 2epartment of Statistics! the .onsumer Price 0nde; (.P0) for the period Ianuary to March &6", impro%ed #y ".( per cent to "6)." compared with "6-.( in the same period last year. The ".( per cent increase in the .P0 was #rou+ht a#out #y increases o#ser%ed in the indices of all the main +roups e;cept those of communication (@ 6.'*)N clothin+ G 3ootwear (@ 6.9*) and recreation ser%ices and culture ( @ 6."*). =ota#le increases amon+ these main +roups with hi+h wei+hts were housin+! water! electricity! as and other fuels (P ".,*)Q food and non@alcoholic #e%era+es (P &./*)N and transport (P 6.)*). >thers were alcoholic #e%era+es G to#acco (P &.6*N restaurants and hotels (P &.&*)N education (P&."*)N health (P "./*)N furnishin+s! household e<uipment and routine household maintenance (P ".) *) and miscellaneous +oods and ser%ices (P "., *). The &./ per cent increase in the inde; for food G non@alcoholic #e%era+es was the result of increases for food at home (P,."*)N food away from home ( P &.9* ) and coffee! tea! cocoa G non@alcoholic #e%era+es ( P ".9*). (.onsumer Price 0nde; Malaysia! &6",) 0mpact of lo#al 3inancial .risis The +lo#al financial crisis has #een one of the most si+nificant economic shoc$s in the post@war period. At its core! the crisis ori+inated in credit mar$ets in de%eloped countries ? centered particularly in the Anited States! the Anited Kin+dom and Europe #ut the fallout has had a si+nificant effect on acti%ity in e%ery country and re+ion. As the crisis intensified! there was a lar+e swin+ in the appetite of world financial mar$ets for ris$! and in their capacity to accept ris$. The result was a shift from the easy credit conditions that had pre%ailed for some years to a situation of ti+ht credit and in some cases dysfunctional mar$ets. This was accompanied #y a loss of consumer and #usiness confidence! with si+nificant effects on +lo#al acti%ity. 8

The +lo#al financial crises arises #e+an in &66' from the #urstin+ of AS housin+ mar$et. The main impact of the +lo#al financial crisis towards Malaysia is the e;ports line. Accordin+ to the article & ra'ectory towards becoming a (ig! Income )ation (2011)* of (th Malaysian Student Leaders Summit &6""! earnin+s from +oods e;ports are contracted #y /.(* in &66/. Cardest hit was the primary commodities sector. E;port contractions continued well into &6"6. Cowe%er! there were stron+ si+ns of reco%ery! particularly pu#lic in%estment! e;pandin+ #y "&./* in &66/ followin+ two stimulus pac$a+es. Pri%ate consumption remained remar$a#ly resilient to economic contractions. The economic contraction tuned out to #e ".9* in &66/ #ut in &6"6 the economy re#ounded #y a lar+er than e;pected 9. Economic Transformation Pro+ram (ETP) The Economic Transformation Pro+ram (ETP) pro+ram is a comprehensi%e effort to that aim to transform Malaysia towards hi+h income country #y &6&6. Accordin+ to the article
t!

ra'ectory towards

becoming a (ig! Income )ation (2011) in t!e + Malaysian ,tudent -eaders ,ummit 2011! Malaysia8s +ross national income ( =0) per capita from AS2)! 966 or 5M&,! 966 in &66/ to more than AS2"(! 666 or 5M-'! 666 in &6&6. 0n order to do so! the Malaysian =0 must +row #y an a%era+e of )* yearly up to &6&6. Successful implementation of the ETP will see Malaysia8s economy under+o si+nificant chan+es! with an emphasis on the ser%ice industry. 0t aims to create ,.,million Fo#s #y &6&6 spread across the nation with focus on middle and hi+h income salaries. Successful implementation of the ETP will see MalaysiaEs economy under+o si+nificant chan+es to resem#le other de%eloped nations. 4e will continue our shift towards a ser%ice@#ased economy! with the ser%ices sector contri#ution +rowin+ from (' percent to )( percent in the same period. More than ,., million new Fo#s will #e created #y &6&6! spread across the country in ur#an and rural areas. The nature of these new Fo#s will result in a shift towards middle and hi+h@income salary #rac$ets. reater Kuala LumpurL Klan+ Ralley will #e transformed into a world@class city. 3inally! +rowth will #e achie%ed in a sustaina#le manner! without cost to future +enerations! throu+h initiati%es such as #uildin+ alternati%e ener+y +eneration capacity and conser%in+ our en%ironment to promote eco@tourism. Knowled+e Based Economy As Malaysia intend to transform itself into hi+h income nation! the role of s$illed wor$force is important to achie%e this +oal. 0n%estment in human capital is needed in order to create a s$illed 9

wor$force for the de%elopment of our country throu+h supplyin+ hi+h la#or producti%ity. So! in%estment in education re<uired to create talented s$illed wor$force for achie%in+ this +oal. Accordin+ to .conomic De"elo#ment, 2003! 7The ETP! lists Education as an =KEA! it aims to stren+then pri%ate education ser%ices #y increasin+ pri%ate consumption and in%estments as well as e;pandin+ education e;ports (encoura+in+ forei+n student enrollment). 0t en%isions a re#randin+ of Malaysia from into a maFor education and pi%otal hu# in the +lo#al education networ$. The main strate+y for this %ision is #y de%elopin+ =usaFaya Educity which will #e uni<ue afforda#le education for local and forei+ners. Economic Performance Stron+ e;pansion in pri%ate consumption and fi;ed in%estment lifted 2P +rowth to (.)* in

&6"&! close to the a%era+e +rowth rate in the ( years #efore the +lo#al financial crisis. rowth accelerated to ).-* in the fourth <uarter. Pri%ate consumption increased #y 9.9* and made a maFor contri#ution to 2P +rowth. 0t was dri%en #y a ro#ust la#or mar$et! +rowth in credit! and se%eral +o%ernment decisions durin+ the year. Employment +rew #y ,.)*! mostly in domestic@oriented sectors such as ser%ices! and the unemployment rate declined to ,.6*. A%era+e wa+es in the pri%ate sector rose #y a ro#ust (.6*. The +o%ernment8s contri#ution to pri%ate consumption came from a ",.6* increase in pu#lic sector wa+es in March &6"& directly #enefittin+ "6* of the wor$force! hi+her pu#lic sector pensions! and a ran+e of cash transfers to low@ and middle@income households. (Krishnan! &6",) .onclusion Accordin+ to 2atu$ Seri =aFi# Tun 5a1a$ (&6"6) the 3ederal o%ernment has set aside an

allocation of 5M&,6 million for the "6th Malaysia Plan ("6MP)! of which (( per cent or 5M"&) #illion is for the economic sector. This is followed #y the social sector (,6 per cent or 5M)/ #illion)! security sector ("6 per cent or 5M&, #illion) and +eneral administration (fi%e percent or 5M"".( #illion). (=ew Straits Times! Iun &6"6) Ban$ =e+ara o%ernor! Tan Sri 2r Oeti A$htar A1i1 (&6",)! stated that Malaysian economy is

e;pected to +row steadily at (* to )* in &6",! due to stron+ domestic demand! ro#ust pri%ate in%estment and a #etter +lo#al outloo$. She e;pects the economy is to #e sustained on the #ac$ of hi+her domestic demand and an impro%ement on the e;ports front as the +lo#al economy reco%ers. This shows that Malaysian economy is +rowin+ steadily and it is hoped that many forei+n in%estments will come in to in%est in Malaysia.

10

Malaysia is $nown as one of the fastest +rowin+ economics in the world especially since the stern directi%e to increase efficiency from the Prime Minister! 2atu$ Seri =aFi# Tun 5a1a$. The national %ision to ma$e Malaysia a fully de%eloped nation #y the year of &6&6 will see a new ima+e towards industriali1ation which leadin+ to the creation of talented society. The trend of national de%elopment challen+es the role of the food and a+ricultural sector. 4hile facin+ pro#lems related to production inputs! the sector is also e;pected to +row with other economic sectors. The support of inno%ation will #e a si+nificant for the e%ery product de%elopment in Malaysia. References

".

Altius 2irectory (&6",! Ianuary). Malaysia .conomy 2013. 5etrie%ed May -! &6",! from Altius

2irectoryQ httpQLLwww.altiusdirectory.comLBusinessLmalaysia@economy.php

&.

Ban$ =e+ara 5eport! Second Muarter 5eport! &666 Economic Plannin+ Anit. Ia#atan Perdana

Menteri. 3. /ountry Analysis 0rie$. (&6""! 2ecmen#er "-). .nergy In$ormation Adminstration. 5etrie%ed May ,

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Tradin+ Economy Q httpQLLwww.finforum.tradin+economics.comLmalaysiaLFo#@%acancies

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Iohnleem$. (&6""! Ianuary). Malaysia3s .conomy . 5etrie%ed April ,6! &6",! from 4i$i 4ealth

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ome1! E. T.! G Sundaram! I. K. ("//9). MalaysiaEs Political EconomyQ Politics! Patrona+e! and

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