Malaysia has experienced rapid growth since the late 1980's. Now its real growth is approximately 6 to 8% each year. Compared to other countries in the world, it could be said that the Malaysians are doing relatively well among the developed countries and the ASIAN region.
Malaysia suffered one of the worst recessions in the mid-1980's. But after this period, with investments from foreigners, improvement in technology, capital expansion in manufacturing sectors and so on, this country has since enjoyed an increasing amount of capital and GNP. Certainly, co-operation among the regions of ASIAN governments has also contributed a lot to this matter, namely Singapore, Thailand, Indonesia, Brunei and even countries such as Japan, South Korea, Thailand--the list goes on.
Before the 1980's era, the economy of Malaysia was focused on the raw materials it provides to the world. Among these commodities are rubber, tin, palm oil, and sugar. Most of these commodities are exported overseas. But with the advancement of technology and subsidies offered by the government, the focus shifted from agriculture towards manufacturing. In addition, incentives such as infrastructure, tax credits, cheap labour and stable government have been part of the successful improvement in the economy. Furthermore, the government always pays close attention to the level of education of its people. Obviously, the level of literacy has increased significantly since the country's independence from the British government in 1957.
If Malaysia wants to improve its economy in the future, perhaps it should concentrate on labour, technology, capital investments, education, and economic co-operation between Asian governments, just to name a few. But it is the government itself that plays an important role in determining the success or failure of the economy. In other words, the success of Malaysia's economy depends heavily on the actions of the government. For instance, not long ago Malaysia's premier, Dr. Mahatir, announced that all business activities with the British would have to come to a halt because a newspaper in Britain reported that the government in Malaysia is corrupt. Following this incident, Dr. Mahatir requested British PM John Major to take action by banning the related newspaper company. However, things did not turn out as expected by Mahatir. So he announced that all business with the British should stop. Since then, the relationship between the two countries has been restored to its normal level.
Politics is indeed an essential factor in the Malaysian economy. Though race discrimination has been reduced significantly, this matter still remains to this day a sensitive issue where the people are afraid to voice their views.
Another aspect would be the Asian economic co-operation conference. This was established to further and increase relationships among the countries in this region. Free trade agreements, lower import taxes (if any), free flow of capital goods, education assistance to poorer countries and so on are among the benefits that may result for each country. Some critics have argued that the conference will not be successful because of unstable relationships among governments.
The bottom line: if Malaysia wants to get ahead of its competitors, it should change or improve its current business strategies and government business policies. More trade talks with other countries are needed of course. And most importantly, it is the people of Malaysia that are now becoming the main resources of the economy in the 21st Century.
David Lee, Winsor, Canada
lee1a@server.uwindsor.ca