Malaysia

The Malay Peninsula and indeed Southeast Asia has been a centre of trade for centuries

Various items such as porcelain and spice were actively traded even before Malacca and Singapore rose to prominence

Over time, Malaya became the world's largest major producer of tin, rubber, and palm oil.These three commodities, along with other raw materials, firmly set Malaysia's economic tempo well into the mid-20th century.

Instead of relying on the local Malays as a source of labour, the British brought in Chinese and Indians to work on the mines and plantations. Although many of them returned to their respective home countries after their agreed tenure ended, some remained in Malaysia and settled permanently.

As Malaya moved towards independence, the government began implementing economic five-year plans, beginning with the First Malayan Five Year Plan in 1955. Upon the establishment of Malaysia, the plans were re-titled and renumbered, beginning with the First Malaysia Plan in 1965.

The rapid economic boom led to a variety of supply problems, however. Labour shortages soon resulted in an influx of millions of foreign workers, many illegal. Cash-rich PLCs and consortiums of banks eager to benefit from increased and rapid development began large infrastructure projects.

This all ended when the Asian Financial Crisis hit in the fall of 1997, delivering a massive shock to Malaysia's economy.

As with other countries affected by the crisis, there was speculative short-selling of the Malaysian currency, the ringgit. Foreign direct investment fell at an alarming rate and, as capital flowed out of the country, the value of the ringgit dropped from MYR 2.50 per USD to, at one point, MYR 4.80 per USD. The Kuala Lumpur Stock Exchange's composite index plummeted from approximately 1300 points to nearly merely 400 points in a matter of weeks.

Malaysia refused economic aid packages from the International Monetary Fund (IMF) and the World Bank, however, surprising many analysts.

However, the post Y2K slump of 2001 did not affect Malaysia as much as other countries. This may have been clearer evidence that there are other causes and effects that can be more properly attributable for recovery.

Malaysia has enjoyed faster economic recovery compared to its neighbours since the crash. The pace of development today is seen to be more sustainable than ever before

The economic outlook is very positive, with the Government’s forecast gross domestic product (GDP) at 5.5 to six per cent for this year. Analysts expect the country’s economic resilience to accelerate its growth momentum. Some even expect the GDP to exceed six per cent, driven by a rebound in corporate investments, sustained consumption, improving external trade and accommodative fiscal and monetary policies.

Prospects for the stock market are encouraging as it catches up with other regional markets and sustains its heavy trading volumes with the anticipated strong economic growth

Kuala Lumpur’s pragmatic approach has enabled the country’s economy to raise its competitiveness and enhance its resilience in facing fresh challenges.

Proper steps have been taken to make the economy more diversified and broad-based to ensure sustainable growth.


Source: Wilkepedia