ECONOMY Since it became independent in 1957; Malaysia's economic record has been one of Asia's best. Real gross domestic product (GDP) grew by an average of 6.5% per year from 1957 to 2005. Performance peaked in the early 1980s through the mid-1990s, as the economy experienced sustained rapid growth averaging almost 8% annually. High levels of foreign and domestic private investment played a significant role as the economy diversified and modernized. Once heavily dependent on primary products such as rubber and tin, Malaysia today is a middle-income country with a multi-sector economy based on services and manufacturing. Malaysia is one of the world's largest exporters of semiconductor devices, electrical goods, solar panels, and information and communication technology (ICT) products.
Malaysia struggled economically during the 1997-1998 Asian financial crisis and applied several valuable lessons to its economic management strategies that contributed to the economy’s resilience to the 2008-2009 global financial crisis. GDP contracted 1.7% in 2009 compared to 4.6% growth in 2008, but has since rebounded, and is expected to be around 7% in 2010. Malaysian banks are well capitalized, conservatively managed, and had no measurable exposure to the U.S. sub-prime market. The central bank maintains a conservative regulatory environment, having prohibited some of the riskier assets in vogue elsewhere. Malaysia maintains high levels of foreign exchange reserves and has relatively little external debt.
The government continues to actively manage the economy with state-owned enterprises heavily involved in the oil and gas, plantation, ship building, steel, telecommunications, utilities, automotive, mining, and other sectors. Since 1971, ethnic preferences have been given to Bumiputras (ethnic Malays and indigenous peoples) by requiring 30% Bumiputra ownership in new businesses. Prime Minister Najib’s New Economic Model reform program includes changes to modify these ethnic preferences and to divest state enterprises while increasing the private sector’s role in stimulating higher levels of investment and boosting GDP growth. The NEM aims to create a business environment more conducive to long-term sustained economic growth, development, and investment, with the goal of Malaysia becoming a high-income, developed nation by 2020.
Malaysia has a managed float currency exchange regime. It gives flexibility for the ringgit to adjust to global economic and financial developments and has accorded a level of stability against the currencies of Malaysia’s major trading partners.
Nominal GDP: $191.5 billion.
Annual real GDP growth rate: 5.9% (2006); 6.3% (2007); 4.6% (2008); -1.7% (2009); 7.0% (government estimate for 2010).
Nominal per capita income (GNI): $6,897.
Natural resources: Petroleum, liquefied natural gas (LNG), tin, minerals.
Agricultural 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--$180.8 billion: electronic products, machinery, liquid natural gas, petroleum and petroleum products, telecom equipment. Major markets--Singapore 14.0%, China 12.2%, U.S. 11.0%, Japan 9.8%. Merchandise imports--$142.1 billion: electronic products, machinery, machinery parts and apparatus, petroleum and petroleum products. Major suppliers--China 14.0%, Japan 12.5%, U.S. 11.2%, Singapore 11.1%.