Malaysian Globalization (Anna, Dara, Melanie)

Category: Globalization

Malaysia has become a multisector economy since the 1970s. Prime Minister Abduallah has tried to attract technology, medical, and pharmaceutical industries. The country is also trying to loosen their independence on exports (which is their main source of economy. The gas and oil industries' price increases has brought a lot of profit to Malaysia. The appreciation of the ringgit (6% against the dollar) as lowered the price of imports though inflationary pressures have risen. Malaysia is keeping a healthy foreign exchange reserves and small external debt. Abdullah is trying to bring business investments to troubled areas though cities outside of Penang have not been doing well.

Malaysia's GDP 5.7%
Labor force is 10.91 million people
(13% is agriculture, 36% is industry, and 51% is services.)
The Inflation rate from consumer prices is 2.1%
(All these numbers are as of 2007)

There was an economic boom from 1974-1980, due to a transformation from raw material production to actual manufacturing. Prime Minister Muhammed tried to make Malaysia economically self-reliant from 1981-1986. This was called Malaysia Boleh, which literally translates into, "Malaysia can do it!"

Oil revenues cause economic growth from the late 1970s to the 1980s. This caused Malaysia to begin privitizing their state owned companies.

In 1990, Muhammed announced his plan to fully industrialize Malaysia, which he called "2020."

From 1991-1996, the export earnings of manufactured goods were much higher than that of raw materials. Malaysia had Asean's highest growth rate, and earned their place next to great manufacturing powers such as South Korea and Taiwan.

The 1997 Asian financial crisis caused the economy to decrease, and Malaysia, unlike other countries, rejected the IMF's recommended remedies. To stabilize their economy, the government imposed strict controls to prevent inflation and restricted currency markets. Malaysia fixed their exhange rate so that 2.45 ringget was equal to 1 USD (it still is).

From 1998-2000, authoritarianism rose within the government, and Malysia started showing signs of recovery from the crisis.

From 2001-2003, Malaysia's government strenghtened financial and currency controls to maintain stability in times of economic crisis.