Table of Contents

Introduction: ................................................................................................................................................. 2
Historical background: .............................................................................................................................. 2
Ethnic and Religious Composition: ........................................................................................................... 3
Political structure and interest groups: .................................................................................................... 3
Status at international level: ..................................................................................................................... 4
Agriculture sector: ........................................................................................................................................ 4
Industrial Sector: ........................................................................................................................................... 5
Service sector: ............................................................................................................................................... 6
Import and exports: .................................................................................................................................. 6
GDP annual growth rate in Malaysia: ....................................................................................................... 7
Forecasted GDP of Malaysia: .................................................................................................................... 7
Unemployment in Malaysia: ..................................................................................................................... 7
Malaysia foreign direct investment: ......................................................................................................... 7
Population of Malaysia: ............................................................................................................................ 7
Malaysia GINI index: ................................................................................................................................. 8

1
Introduction:
Malaysia is located in the southeast of the Asian continent; therefore this region is often
referred to as Southeast Asia. There are two major parts to this country, Peninsular Malaysia to
the west and East Malaysia to the east, in additional numerous smaller islands surrounding
both landmasses. Peninsular Malaysia is situated on the southernmost section of the Malay
Peninsula, south of Thailand, north of Singapore and east of the Indonesian island of Sumatra;
East Malaysia comprises most of the northern part of Borneo island, with land borders shared
with Brunei to the north and Indonesian Borneo to the south.

Located near the equator, Malaysia's climate is categorized as equatorial or tropical climate,
being hot and humid throughout the year. The average rainfall is 250 centimetres a year. and
the average temperature is 27 °C (80.6 °F). The climates of the Peninsula and the East differ, as
the climate on the peninsula is directly affected by wind from the mainland, as opposed to the
more maritime weather of the East. Malaysia faces two monsoon winds seasons, the Southwest
Monsoon from April to September, and the Northeast Monsoon from October to March. The
Northeast Monsoon brings in more rainfall compared to the Southwest Monsoon.

Malaysia covers 328,657 square kilometers 99.63% of land and 1,190 square kilometers 0.37%
of water, making it the 66th largest nation in the world with a total area of 330,803 km2
(127,724 sq m).

Historical background:
Malaysia is a federal constitutional monarchy located in Southeast Asia. It consists of thirteen
states and three federal territories and has a total landmass of 330,803 square kilometres
(127,720 sq mi) separated by the South China Seainto two similarly sized regions, Peninsular
Malaysia and East Malaysia. The capital city is Kuala Lumpur, while Putrajaya is the seat of the
federal government. With a population of over 30 million, Malaysia is the 44th most populous
country. Malaysia has its origins in the Malay kingdoms present in the area, which, from the
18th century, became subject to the British empire.

Malaysia became an independent state in 31 August 1957, after gaining its sovereignty from
The United Kingdom. The population of Malaysia is 29,179,952 (2012) and the nation has a
density of 89 people per square kilometer.Since its independence, Malaysia has had one of the
best economic records in Asia, with its GDP growing at an average of 6.5% per annum for
almost 50 years. The economy has traditionally been fuelled by its natural resources, but is
expanding in the sectors of science, tourism, commerce and medical tourism.

The British presence in the region reflected several patterns: direct colonial rule in the Straits
Settlements, relatively indirect control in some of the peninsula’s east-coast sultanates, and

2
family or corporate control in Borneo. Regardless of the political form, however, British rule
brought profound changes, transforming the various states socially and economically.

Ethnic and Religious Composition:

Malaysia, religious lines generally follow ethnic lines. Almost all Malays are Muslims; most
Indians are Hindus, with a substantial minority of Muslims, Sikhs, and Parsees; and most
Chinese are Confucian Buddhists, with a minority Muslim representation. Christianity has won
some adherents among the Chinese and Indians. The indigenous peoples of Sabah and Sarawak
are still largely animist, although many have become Christian. Shamanism is also practiced on
East Malaysia. According to a 2000 government census, about 60% of the population were
Muslim, 19% Buddhist, 9% Christian, and 6% Hindu. About 3% practiced Confucianism, Taoism,
or other traditional Chinese religions. Other faiths include animism, Sikhism, and Baha'ism.

As of the 2010 Population and Housing Census, 61.3 percent of the population practices Islam;
19.8 percent Buddhism; 9.2 percent Christianity 6.3 percent Hinduism; and 1.3 percent
traditional Chinese religions

Political structure and interest groups:

Malaysia is a parliamentary democracy with a federal constitutional monarch, the Yang di-
PertuanAgong, as head of state. The politics of Malaysia is based on a federal constitutional
monarchy, in which the King is head of state and the Prime Minister is the head of government.
There are state governments in each of Malaysia’s 13 states, in nine of which the heads of state
are hereditary rulers. Each state has its own constitution, a council of state or cabinet with
executive authority, and a legislature that deals with matters not reserved to the federal
parliament. There are also three federal territories, namely Kuala Lumpur, Labuan and
Putrajaya

Legislative power is divided between federal and state legislatures. The bicameral
federalparliament consists of the lower house, the House of Representatives and the upper
house, the Senate. Malaysia is a federal parliament. The Senate has 70 members—26 elected
from the state legislatures and 44 appointed by the king. The last general election took place in
May 2013; the next is due in 2018.

The Malaysian bureaucracy is dominated by ethnic Malays. Malay domination is largely the
result of ethnic preference in personnel policy and practice to provide employment to the
economically disadvantaged Malays and to ensure their control of the bureaucracy.

3
Status at international level:
Malaysia is classified as a developing country. Malaysia has had one of the best economic
records in Asia, with its GDP growing at an average of 6.5% per annum for almost 50 years. The
economy has traditionally been fuelled by its natural resources, but is expanding in the sectors
of science, tourism and commerce. It is also one of the few developing countries to subsidise
heavily on education and healthcare.Its healthcare services have been highly regarded as one
the best in the world and the UN Development Programme has called Malaysia healthcare
system "a model to other developing countries". The country is coming close to developed
status. Since the 1970s, Malaysia has gone from relying primarily on raw natural resources to
becoming a leading exporter of natural gas and lower-cost consumer goods – especially
electronics and electrical appliances to developed nations.

Malaysia is classified as an upper middle-income nation. GDP per capita stands at $11,000
(figures as of 2014), making it the third richest country. Malaysia has been successful in
eradicating absolute poverty—less than 1% of the population today is considered “absolute
poor," down from around 50% in 1970—and it is one of only 13 countries identified by the
Commission on Growth and Development to have recorded an average growth rate of more
than 7% per year for 25 years or more.

Agriculture sector:
Agriculture is now a minor sector of the Malaysian economy, accounting for 7.1% of Malaysia's
GDP in 2014 and employing 11.1% of Malaysia's labour force, contrasting with the 1960s when
agriculture accounted for 37% of Malaysia's GDP and employed 66.2% of the labour force.
Malaysia’s agriculture industry was responsible for 9.1% of its GDP in 2010. The British
established large-scale plantations and introduced new commercial crops (rubber in 1876, palm
oil in 1917, and cocoa in the 1950s).. The 3 main crops—rubber, palm oil, and cocoa—have
dominated agricultural exports ever since, although the Malaysian share of the world's
production of these crops declined steadily during the last 2 decades. In addition to these
products, Malaysian farmers produce a number of fruits and vegetables for the domestic
market, including bananas, coconuts, durian, pineapples, rice, and rambutan (a red, oval fruit
grown on a tree of the same name in Southeast Asia). The Malaysian tropical climate is very
favorable for the production of various exotic fruits and vegetables, especially since Peninsular
Malaysia seldom experiences hurricanes or droughts.

As rice is a staple foodstuff in the everyday diet of Malaysians and is a symbol of traditional
Malay culture, the production of rice, which stood at 1.94 million metric tons in 1998, plays an
important part in the country's agriculture. However, the overall production of rice does not
satisfy the country's needs, and Malaysia imports rice from neighboring Thailand and Vietnam.

4
In 1999, Malaysia produced 10.55 million metric tons of palm oil, remaining one of the world's
largest producers. Almost 85% or 8.8 million metric tons of this was exported to international
market. Malaysia is one of the world's leading suppliers of rubber, producing 767,000 metric
tons of rubber in 1999. However, in the 1990s, large plantation companies began to turn to the
more profitable palm oil production. Malaysia also is the world's fourth-largest producer of
cocoa, producing 84,000 metric tons in 1999.

Logging in the tropical rainforest is an important export revenue earner in East Malaysia and in
the northern states of Peninsular Malaysia. In 2000, Malaysia produced 21.94 million cubic
meters of sawed logs, earning RM1.7 billion (US$450 million) from exports. Malaysia sells more
tropical logs and sawed tropical timber abroad than any other country, and is one of the biggest
exporters of hardwood.

Industrial Sector:
Malaysia is a newly industrialized country that experienced an economic boom and underwent
rapid development during the late 20th century. Prior to this rapid of rapid industrialization,
Malaysia was the world’s largest producer of tin, rubber and palm oil. When the tin market
collapsed during the early 1980s, the Malaysian government was forced to diversify and
modernize the economy. Since then, the government has played an active role in
industrialization and economic development. The Malaysian government was responsible for
encouraging the relocation of labour intensive industries to neighboring countries such as
Thailand and Indonesia. Malaysia's industrial sector accounts for 36.8%, over a third of the
country's GDP in 2014, and employs 36% of the labour force in 2012.

At the same time, the government also promoted higher value industries such as electronics,
information technology, and multimedia. Today, Malaysia has moved into the third stage of
economic development, with growing emphasis on services

In 2001 the manufacturing sector accounted for 40% of GDP, up from 33% in 1996, and for
almost 90% of exports. In 2010, Industry was responsible for 41.6% of Malaysia’s GDP. Malaysia
had the 37th highest industrial production growth rate in the world at 7.5%. In Peninsular
Malaysia, some of the key industries include Rubber, oil palm processing and manufacturing,
light manufacturing, pharmaceuticals, medical technology, electronics, tin mining and smelting,
logging, and timber processing. The Eastern Malaysian states of Sabah and Sarawak are keenly
focused on logging, petroleum producing and refining and agriculture processing.

5
Service sector:
The services sector, which accounts for about 53.9% of Malaysia's Gross Domestic Product
(GDP), remains a key driver of growth for the Malaysian economy. The contribution of services
to GDP is on an increasing trend and by 2020 the contribution of services is targeted to reach
58%.

Services in Malaysia have been growing in importance for the economy in the past few years. In
2010, Services was responsible for 49.3% of the GDP. The concerted development of the service
industry is part of the national development strategy to venture into new growth areas and
broaden the economic base for exports. It is also expected to provide the basis for sustained
growth in the economy in order to achieve the vision of becoming a developed nation by 2020.

According to the 10th Malaysia Plan (RMK 10), the goal for the service industry is to achieve
61% of GDP share by 2015 – with an annual growth of 7.2%. Under the IMP3, non-government
services are targeted to grow at an average annual rate of 7.5%. Construction services are also
expected to increase annually by 5.7%. The Malaysia government is also expected to invest
nearly RM687.7 billion or US$228.384 billion dollars over the next fifteen years into services
alone.

Presently, Malaysia has a thriving finance industry, particularly in Islamic banking. To date, it is
the largest Islamic banking service provider in Asia Pacific. Malaysia is also competing with
Bahrain to be the world leader in Islamic banking. In April 2009, the Malaysian government
introduced new licenses for investment banking, Islamic banking, Islamic insurance and
insurance business. The threshold for foreign equity ownership was also raised from 49% to
70%, thus allowing foreign banks to open new branches and micro-credit facilities in the
country.

In 2010, Malaysia was the 28th largest oil producer and the 17th largest natural gas producer in
the world

Oil and natural gas reserves in Malaysia are managed by PETRONAS – a Fortune 500 company
wholly owned by the Malaysian government

Services Sector is the next engine of growth to propel the Malaysian economy

Import and exports:

Malaysia was once the world’s largest producer of tin, rubber and palm oil. Its manufacturing
sector has a crucial role in its economic growth. The export industry was hit hard during the late
2000 economic recession drastically dropping to 78% i.e. FDI to RM4.2 billion in the first two
quarters of 2009. Total exports fell down to $156.4 billion in 2009 from $198.7 billion in 2008.
The imports also reduced from 154.7 billion in 2008 to $119.5 billion 2009.

6
GDP annual growth rate in Malaysia:
The Malaysian economy advanced 6.2 percent year-on-year in the September quarter of 2017,
compared to a 5.8 percent growth in the previous three months and beating market consensus
of a 5.4 percent expansion. It was the strongest growth since the June quarter 2014, boosted by
robust private consumption and faster rises in government spending, investment and exports.
On a quarter-on-quarter seasonally-adjusted basis, the economy grew by 1.8 percent, faster
than a 1.3 percent growth in the previous period. GDP Annual Growth Rate in Malaysia
averaged 4.78 percent from 2000 until 2017, reaching an all time high of 10.30 percent in the
first quarter of 2010 and a record low of -6.20 percent in the first quarter of 2009.

Forecasted GDP of Malaysia:

GDP Growth Rate in Malaysia is expected to be 1.40 percent by the end of this quarter of 2017,
according to Trading Economics global macro models and analysts expectations. Looking forward, we
estimate GDP Growth Rate in Malaysia to stand at 1.40 in 12 month’s time. In the long-term, the
Malaysia GDP Growth Rate is projected to trend around 1.60 percent in 2020, according to our
econometric models.

Unemployment in Malaysia:
In Malaysia, the unemployment rate measures the number of people actively looking for a job as a
percentage of the labor force. The unemployment rate in Malaysia fell to 3.4 percent in September of
2017 from 3.5 percent in the same month of the previous year. The number of unemployed persons
increased by 0.4 percent from a year earlier to 514,500 while the number of employed persons went up
more by 2.1 percent to 14,544,300. The labor force rose 2 percent to 15,058,800 persons. On a
seasonally adjusted basis, the jobless rate increased to 3.5 percent from 3.4 percent in the preceding
month. Unemployment Rate in Malaysia averaged 3.28 percent from 1998 until 2017, reaching an all
time high of 4.50 percent in March of 1999 and a record low of 2.70 percent in August of 2012.

Malaysia foreign direct investment:

Foreign direct investment into Malaysia increased to MYR 11.2 billion in the three months to September
2017 from MYR 8.3 billion in the previous period and compared to MYR 8.0 billion in the same quarter
of 2016. Considering January to September 2017, foreign direct investment came in at MYR 36.42
billion, higher than MYR 34.17 billion in the same period of the prior year. Foreign Direct Investment in
Malaysia averaged 13485.06 MYR Million from 2008 until 2016, reaching an all time high of 37325.00
MYR Million in the fourth quarter of 2011 and a record low of 2987.00 MYR Million in the third quarter
of 2015.

Population of Malaysia:
The total population in Malaysia was estimated at 31.7 million people in 2016, according to the
latest census figures. Looking back, in the year of 1960, Malaysia had a population of 8.2 million
people. The population of Malaysia represents 0.42 percent of the world´s total population

7
which arguably means that one person in every 242 people on the planet is a resident of
Malaysia.

Malaysia GINI index:

GINI index in Malaysia was reported at 46.3 in 2009, according to the World Bank collection of
development indicators, compiled from officially recognized sources
Gini index measures the extent to which the distribution of income (or, in some cases,
consumption expenditure) among individuals or households within an economy deviates from a
perfectly equal distribution. A Lorenz curve plots the cumulative percentages of total income
received against the cumulative number of recipients, starting with the poorest individual or
household. The Gini index measures the area between the Lorenz curve and a hypothetical line
of absolute equality, expressed as a percentage of the maximum area under the line. Thus a
Gini index of 0 represents perfect equality, while an index of 100 implies perfect inequality.