Economy

Economy

Main article: Economy of Malaysia

A blue Proton Suprima

The Proton company is a Malaysian car manufacturer.

Malaysia is a relatively open state-oriented and newly industrialised market economy.[155][156] The state plays a significant but declining role in guiding economic activity through macroeconomic plans. Malaysia has had one of the best economic records in Asia, with GDP growing an average 6.5 per cent annually from 1957 to 2005.[38] Malaysia’s economy in 2014–2015 was one of the most competitive in Asia, ranking 6th in Asia and 20th in the world, higher than countries like AustraliaFrance and South Korea.[157] In 2014, Malaysia’s economy grew 6%, the second highest growth in ASEAN behind Philippines’ growth of 6.1%.[158] The economy of Malaysia (GDP PPP) in 2014 was $746.821 billion, the third largest in ASEAN behind more populous Indonesiaand Thailand and the 28th largest in the world.[159]

In 1991, former Prime Minister of Malaysia, Mahathir Mohamad outlined his ideal in Vision 2020, in which Malaysia would become a self-sufficient industrialised nation by 2020.[160] Najib Razak has said Malaysia could attain developed country status much earlier from the actual target in 2020, adding the country has two program concept such as Government Transformation Programme and the Economic Transformation Programme.[161]

According to a HSBC report, Malaysia will become the world’s 21st largest economy by 2050, with a GDP of $1.2 trillion (Year 2000 dollars) and a GDP per capita of $29,247 (Year 2000 dollars). The report also says “The electronic equipment, petroleum, and liquefied natural gas producer will see a substantial increase in income per capita. Malaysian life expectancy, relatively high level of schooling, and above average fertility rate will help in its rapid expansion”.[162]Viktor Shvets, the managing director of Credit Suisse, has said “Malaysia has all the right ingredients to become a developed nation”.[163]

In the 1970s, the predominantly mining and agricultural-based economy began a transition towards a more multi-sector economy. Since the 1980s, the industrial sector, with a high level of investment, has led the country’s growth.[38][164] The economy recovered from the 1997 Asian Financial Crisisearlier than neighbouring countries did, and has since recovered to the levels of the pre-crisis era with a GDP per capita of $14,800.[165][166] Economic inequalities exist between different ethnic groups. The Chinese make up about one-quarter of the population, but accounts for 70 per cent of the country’s market capitalisation.[167] Chinese businesses in Malaysia are part of the largerbamboo network, a network of overseas Chinese businesses in the Southeast Asian market sharing common family and cultural ties.[168]

Petronas Towers

The Petronas Towers house the headquarters of the national oil company Petronas and are the tallest twin-towers in the world.

International trade, facilitated by the shipping route in adjacent Strait of Malacca, and manufacturing are the key sectors.[169][170][171] Malaysia is an exporter of natural and agricultural resources, and petroleum is a major export.[38] Malaysia has once been the largest producer of tin,[172] rubber andpalm oil in the world. Manufacturing has a large influence in the country’s economy,[173] although Malaysia’s economic structure has been moving away from it.[174] Malaysia remains one of the world’s largest producers of palm oil.[175]

In an effort to diversify the economy and make it less dependent on export goods, the government has pushed to increase tourism to Malaysia. As a result, tourism has become Malaysia’s third largest source of foreign exchange, although it is threatened by the negative effects of the growing industrial economy, with large amounts of air and water pollution along with deforestation affecting tourism.[176] The tourism sector came under some pressure in 2014 when the national carrier Malaysia Airlines had one of its planes disappear in March, while another was brought down by a missile over Ukraine in July, resulting in the loss of a total 537 passengers and crew. The state of the airline, which had been unprofitable for 3 years, prompted the government in August 2014 to nationalise the airline by buying up the 30 per cent it did not already own.[177] Between 2013 and 2014, Malaysia has been listed as one of the best places to retire in the world too, with the country in third position on the Global Retirement Index. This in part was the result of theMalaysia My Second Home programme to allow foreigners to live in the country on a long-stay visa for up to 10 years.[178] In 2015, Malaysia ranked in fourth position on The World’s Best Retirement Havens while getting in the first place as the best place in Asia to retire. Warm climate with British colonial background made foreigners easy to interact with the locals.[179]

The country has developed into a centre of Islamic banking, and is the country with the highest numbers of female workers in that industry.[180] Knowledge-based services are also expanding.[174] To create a self-reliant defensive ability and support national development, Malaysia privatised some of its military facilities in the 1970s. The privatisation has created defence industry, which in 1999 was brought under the Malaysia Defence Industry Council. The government continues to promote this sector and its competitiveness, actively marketing the defence industry.[181]

Science policies in Malaysia are regulated by the Ministry of Science, Technology, and Innovation. The country is one of the world’s largest exporters of semiconductor devices, electrical devices, and IT and communication products.[38] Malaysia began developing its own space programme in 2002,[182][183] and in 2006, Russia agreed to transport one Malaysian to theInternational Space Station as part of a multibillion-dollar purchase of 18 Russian Sukhoi Su-30MKM fighter jets by the Royal Malaysian Air Force.[184]The government has invested in building satellites in through the RazakSATprogramme.[185]

Infrastructure

The overall infrastructure of Malaysia is one of the most developed in Asia[186]and ranked 8th in Asia and 25th in the world.[187] Malaysia is ranked 19th in the world for its quality roads, quality of port infrastructure and quality of air transport infrastructure but ranked 39th in quality of electricity supply.[187] Itstelecommunications network is second only to Singapore’s in Southeast Asia, with 4.7 million fixed-line subscribers and more than 30 million cellular subscribers.[188][189] The country has seven international ports, the major one being the Port Klang. There are 200 industrial parks along with specialised parks such as Technology Park Malaysia and Kulim Hi-Tech Park.[190] Fresh water is available to over 95 per cent of the population. During the colonial period, development was mainly concentrated in economically powerful cities and in areas forming security concerns. Although rural areas have been the focus of great development, they still lag behind areas such as the West Coast of Peninsular Malaysia.[191] The telecommunication network, although strong in urban areas, is less available to the rural population.[188]

Energy

Main articles: Energy policy of Malaysia and List of power stations in Malaysia

Bakun Dam under construction in 2009

Malaysia’s energy infrastructure sector is largely dominated by Tenaga Nasional, the largest electric utility company in Southeast Asia, with over RM99.03 billion of assets. Customers are connected to electricity through theNational Grid, with more than 420 transmission substations in the Peninsular linked together by approximately 11,000 km[192] of transmission lines operating at 132, 275 and 500 kilovolts. In 2013, Malaysia’s total power generation capacity was over 29,728 megawatts. Total electricity generation was 140,985.01 GWh and total electricity consumption was 116,087.51 GWh.[193]Energy production in Malaysia is largely based on oil and natural gas, owing to Malaysia’s oil reserves and natural gas reserves, which is the fourth largest inAsia-Pacific after ChinaIndia and Vietnam.[194]

Transportation

Main articles: Transport in MalaysiaRail transport in Malaysia, and List of airports in Malaysia

The North–South Expressway, the longest highway in Malaysia

Malaysia’s road network is one of the most comprehensive in Asia and covers a total of 144,403 kilometres (89,728 mi). The main national road network is theMalaysian Federal Roads System, which span over 49,935 km (31,028 mi). Most of the federal roads in Malaysia are 2-lane roads. In town areas, federal roads may become 4-lane roads to increase traffic capacity. Nearly all federal roads are paved with tarmac except parts of the Skudai–Pontian Highwaywhich is paved with concrete, while parts of the Federal Highway linking Klang to Kuala Lumpur, is paved with asphalt. Malaysia has over 1,798 kilometres (1,117 mi) of highways and the longest highway, the North–South Expressway, extends over 800 kilometres (497 mi) on the West Coast of Peninsular Malaysia, connecting major urban centres like Kuala LumpurPenang andJohor Bahru. In 2015, the government announced a RM27 billion (US$8.23 billion) Pan-Borneo Highway project to upgrade all trunk roads to dual carriage expressways, bringing the standard of East Malaysian highways to the same level of quality of Peninsular highways.[195][196]

KTM ETS Class 91 (left) and KTM Komuter Class 92 (right) at Ipoh railway station

There is currently 1,833 kilometres (1,139 mi) of railways in Malaysia, 767 km (477 mi) are double tracked and electrified. Rail transport in Malaysia comprises heavy rail (KTM), light rapid transit and monorail (Rapid Rail), and afunicular railway line (Penang Hill Railway). Heavy rail is mostly used for intercity passenger and freight transport as well as some urban public transport, while LRTs are used for intra-city urban public transport. There twocommuter rail services linking Kuala Lumpur with the Kuala Lumpur International Airport. The sole monorail line in the country is also used for public transport in Kuala Lumpur, while the only funicular railway line is inPenang. A rapid transit project, the KVMRT, is currently under construction to improve Kuala Lumpur‘s public transport system. The railway network covers most of the 11 states in Peninsular Malaysia. In East Malaysia, only the state ofSabah has railways. The network is also connected to the Thai railway1,000 mm (3 ft 3 38 in) network in the north. If the Burma Railway is rebuilt, services to Myanmar, India, and China could be initiated.

Kuala Lumpur International Airport

Kuala Lumpur International Airport, Malaysia’s busiest airport

Malaysia has 118 airports, of which 38 are paved. The national airline isMalaysia Airlines, providing international and domestic air services. Major international routes and domestic routes crossing between West Malaysia andEast Malaysia are served by Malaysia AirlinesAirAsia and Malindo Air while smaller domestic routes are supplemented by smaller airlines like MASwings,Firefly and Berjaya Air. Major cargo airlines include MASkargo and Transmile Air ServicesKuala Lumpur International Airport is the main and busiest airport of Malaysia. In 2014, it was the world’s 13th busiest airport by international passenger traffic, recording over 25.4 million international passenger traffic. It was also the world’s 20th busiest airport by passenger traffic, recording over 48.9 million passengers. Other major airports include Kota Kinabalu International Airport, which is also Malaysia’s second busiest airport and busiest airport in East Malaysia with over 6.9 million passengers in 2013, andPenang International Airport, which serves Malaysia’s second largest urban area, with over 5.4 million passengers in 2013.

Port Klang in Selangor, the biggest and busiest port in Malaysia.

Malaysia is strategically located on the Strait of Malacca, one of the most important shipping lanes in the world. Malaysia has two ports that are listed in the top 20 busiest ports in the world, Port Klang and Port of Tanjung Pelepas, which are respectively the 2nd and 3rd busiest ports in Southeast Asia after thePort of Singapore. Port Klang is Malaysia’s busiest port, and the 13th busiest port in the world in 2013, handling over 10.3 million TEUs. Port of Tanjung Pelepas is Malaysia’s second busiest port, and the 19th busiest port in the world in 2013, handling over 7.6 million TEUs.