An Analysis on Malaysia

MALAYSIA: In-depth country analysis Background Malaysia, a federation of 13 states forming a constitutional monarchy, comprising two distinct regions separated by some 650 km of the South China Sea, was formed in 1963 when the former British colonies of Singapore and the East Malaysian states of Sabah and Sarawak on the northern coast of Borneo joined the Federation. Being a middle-income country, it has transformed itself since the 1970s from a producer of raw materials into an emerging multi-sector economy.

In the last decade, the economy has moved farther up the value-added production chain by attracting investments in high technology industries, medical technology, and pharmaceuticals. The political and legal system is largely based on the fact executive power lies with the government. The government is led by the prime minister and is composed of members of parliament who are in turn elected by their constituencies.

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The central organ of government is the cabinet, which is appointed by the prime minister. Economic Overview Malaysia, largely because of its expanding industrial sector, grew with 8%–9% yearly growth rate from 1987 to 1997.

During the 1997–98 Asian financial crisis, growth contracted and the government was forced to cut spending and defer several large infrastructure projects. The economy began recovering in 1999, and growth continued into the early 21st century. Malaysia is a large producer of rubber and tin; palm oil, crude petroleum and petroleum products, electronics, textiles, and timber are also important.

Since the late 1980s, the government has moved to privatize large industries that had been under state control, and foreign investment in manufacturing has increased significantly.

Subsistence agriculture remains the basis of livelihood for about 13% of Malaysians and agriculture provides about 8% of GDP. Malaysia’s exports include electronic equipment, petroleum and liquefied natural gas, wood and wood products, palm oil, rubber, chemicals, and textiles. The main imports are electronics, machinery, petroleum products, plastics, vehicles, iron and steel, and chemicals.