CASL S1uu? LCCnCM?

Cl
MALA?SlA
kLSLN1LD 8
AMI1 8LnAL
AMI1 SCCD
ANkI1 DLSWAL
1AVLLLN kAUk
SLC1ICN8
8ackground
W Malaysla ls a naLlon puL LogeLher from fragmenLs of Lhe
8rlLlsh Lmplre
W 1he LerrlLorles on Lhe Malay enlnsula le everyLhlng
excepL Slngapore became lndependenL ln 1937 as Lhe
lederaLlon of Malaya 1hls ls now whaL ls wesLern Malaysla
W ln 1963 Lhe lederaLlon of Malaya was lncorporaLed wlLh
Slngapore and Sarawak and Sabah lnLo Lhe lederaLlon of
Malaysla
W ln 1963 Slngapore separaLed and Lhe remalnlng sLaLes ln
Lhe lederaLlon became known as Malaysla
W LasLern Malaysla has very llLLle ln common wlLh wesLern
Malaysla
roup
roporLlon
of
opulaLlon
Malay 49
Chlnese 32
lndlan 8
lndlgenous
eople
11
The ethnic composition of Malaysia is of significance because some public policies are based upon
ethnicity.
Lconomlc PlsLory
W ln Lhe 1970s Malaysla began Lo lmlLaLe Lhe four Aslan
1lger economles (8epubllc of korea (SouLh korea) 8epubllc
of Chlna (1alwan) Lhen 8rlLlsh Crown Colony of Pong kong
and Lhe 8epubllc of Slngapore) and commlLLed lLself Lo a
LranslLlon from mlnlng and agrlculLure Lo an economy LhaL
depends more on manufacLurlng
W Slnce Lhe 1980s Lhe lndusLrlal secLor has led Malayslas
growLh Plgh levels of lnvesLmenL played a slgnlflcanL role
ln Lhls
W WlLh !apanese lnvesLmenL heavy lndusLrles flourlshed and
ln a maLLer of years Malayslan exporLs became Lhe
counLrys prlmary growLh englne Malaysla conslsLenLly
achleved more Lhan 7 u growLh along wlLh low
lnflaLlon ln Lhe 1980s and Lhe 1990s
lorelgn Currency SpeculaLlon by
8ank negara Lhe CenLral 8ank of
Malaysla
W 1he decllne ln Lhe value of Lhe dollar relaLlve Lo oLher
currencles afLer Lhe laza Accord of 1983 resulLed ln a
decllne ln Lhe forelgn currency value of Malayslas $3
bllllon of forelgn exchange reserves
W WheLher Lhe laza Accord was Lhe cause of Lhe
devaluaLlon of Lhe dollar ls ln doubL buL neverLheless
Lhe Malayslan overnmenL felL vlcLlmlzed by a
consplracy of Lhe blg powers and declded Lo sLrlke back
by uslng Lhe lnformaLlon lLs cenLral bank obLalned from
oLher cenLral banks Lo speculaLe ln Lhe currency
markeLs
W 1he cenLral bank of Malaysla 8ank negara soon became a ma[or player ln
Lhe lnLernaLlonal currency markeLs deallng ln LransacLlon wlLh dollar
values on Lhe order of Lhe hundreds of mllllons
W lL Lrled Lo use lLs deallngs Lo Lrlgger auLomaLlc selllng rules on Lhe oLher
cenLral banks
W ln 1990 8ank negara sold masslve amounLs of pound sLerllng [usL as
8rlLaln was enLerlng lnLo Lhe Luropean Lxchange 8aLe Mechanlsm (L8M)
and drove down lLs value
W ln 1992 8ank negara boughL even larger amounLs of pound sLerllng on Lhe
assumpLlon LhaL 8rlLaln would malnLaln Lhe sLablllLy of Lhe pound as
requlred by Lhe L8M
W When 8rlLaln wlLhdrew from Lhe L8M and allowed Lhe pounds value Lo
fall 8ank negara losL $36 bllllon
W ln 1993 8ank negara losL anoLher $22 bllllon and by 1994 lL was lnsolvenL
and lLs losses had Lo be covered by Lhe overnmenL of Malaysla
As|an f|nanc|a| cr|s|s IMAC1 CN
MALASIAN LCCNCM
W 1he year 1997 saw drasLlc changes ln Malaysla
W 1here was speculaLlve shorLselllng of Lhe
Malayslan currency Lhe rlngglL
W lorelgn dlrecL lnvesLmenL fell aL an alarmlng raLe
and as caplLal flowed ouL of Lhe counLry Lhe
value of Lhe rlngglL dropped from M?8 230 per
uSu Lo aL one polnL M?8 480 per uSu
W 1he kuala Lumpur SLock Lxchanges composlLe
lndex fell from approxlmaLely 1300 Lo nearly
merely 400 polnLs ln a few shorL weeks
W AfLer Lhe conLroverslal sacklng of flnance
mlnlsLer Anwar lbrahlm a naLlonal Lconomlc AcLlon
Councll was formed Lo deal wlLh Lhe moneLary crlsls
W 8ank negara lmposed caplLal conLrols and pegged Lhe
Malayslan rlngglL aL 380 Lo Lhe uS dollar
W Malaysla refused economlc ald packages from Lhe lMl
and Lhe World 8ank surprlslng many analysLs 8y
refuslng ald and Lhus Lhe condlLlons aLLached Lhereof
from Lhe lMl Malaysla was noL affecLed Lo Lhe same
degree ln Lhe Aslan llnanclal Crlsls as lndonesla
1halland and Lhe hlllpplnes
W ln order Lo re[uvenaLe Lhe economy masslve governmenL spendlng
was made and Malaysla conLlnuously recorded budgeL deflclLs ln
Lhe years LhaL followed
W Lconomlc recovery has been led by sLrong growLh ln exporLs
parLlcularly of elecLronlcs and elecLrlcal producLs Lo Lhe unlLed
SLaLes Malayslas prlnclpal Lrade and lnvesLmenL parLner
W lnflaLlonary pressures remalned benlgn and as a resulL 8ank
negara Malaysla Lhe cenLral bank had been able Lo follow a low
lnLeresL raLe pollcy
W 1he Malayslan economy recovered from Lhe 1997 Aslan llnanclal
Crlsls sooner Lhan nelghborlng counLrles and has slnce recovered
Lo Lhe levels of Lhe precrlsls era wlLh a u per caplLa of $14800
CurrenL SLaLlsLlcs of Malayslan
Lconomy
SLaLlsLlcs
u $3811 bllllon (2009 esL)
8ank 30
u growLh 72
u per caplLa $14800 (2009 esL)
u by secLor agrlculLure 101 lndusLry 423
servlces 476 (2009 esL)
lnflaLlon (Cl) 04 (2009 esL)
opulaLlon
below poverLy llne
33 (2007 esL)
Labour force
by occupaLlon
agrlculLure (13) lndusLry (36)
servlces (31) (2003)
unemploymenL 3 (2009 esL)
Maln lndusLrles enlnsular Malaysla rubber and palm oll
processlng and manufacLurlng llghL
manufacLurlng lndusLry elecLronlcs Lln
mlnlng and smelLlng logglng and
processlng Llmber Lourlsm peLroleum
producLlon and reflnlng logglng
21s
LxporLs $1364 bllllon (2009 esL)
LxporL goods elecLronlc equlpmenL peLroleum
and llquefled naLural gas wood and
wood producLs palm oll rubber
LexLlles chemlcals
Maln exporL parLners Slngapore 139 Chlna 122
unlLed SLaLes 109 !apan
98 1halland34 Pong
kong 32 (2009 esL)
lmporLs $1193 bllllon (2009 esL)
lmporL goods elecLronlcs machlnery peLroleum
producLs plasLlcs vehlcles lron and
sLeel producLs chemlcals
Maln lmporL parLners Chlna 139 !apan 123
Slngapore 111 1halland 6
lndonesla 33 SouLh korea 46
1alwan 42 ermany 42 (2009
esL)
IMAC1 CI GLC8ALISA1ICN
on MALASIA
W lnflow of forelgn lnvesLmenLs
W 1rade as ma[or sources of economlc growLh
W lree flow of goods Lo Malayslan markeL
ASLAn Chlna !apanese 8Ck
W Malaysla as popular Lourlsm desLlnaLlon
W Socloeconomlc lmpacL demography
economlc dlsLrlbuLlon changes ln Lhe llfesLyle
Lhe way of dolng buslness culLure
NLW LCCNCMIC MCDLL NLW LCCNCMIC MCDLL
CVLkVILW
W 1he overall framework of new Lconomlc
Model was unvelled on 30 March 2010
durlng lnvesL Malaysla 2010
W 1he flrsL parL of nLM has been presenLed on
30 March whlle Lhe second parL of Lhe reporL
was presenLed LogeLher wlLh 10
Lh
Malaysla
lan Malayslan overnmenL 8udgeL
roposal ln CcLober 2010
W lor Lhe flrsL Llme a sLraLeglc plan was
creaLed ln dynamlc manner seeklng
consulLaLlon / feedback from all quarLers
lncludlng general publlc

1he New Lconom|c Mode|

lrom a Mlddle lncome Lo a Plgh lncome
Lconomy by 2020
new Lconomlc Model ls expecLed Lo be
anchored on
lnnovaLlon
creaLlvlLy
hlgh value sources of growLh
modern servlces secLor
skllled manpower
nLM CALS
nLM 8lnClLLS
nIGn
INCCML
SUS1AINA8ILI1 INCLUSIVLNLSS
MarkeL frlendly
MerlL based
1ransparenL
need based
nLM CALS CPA8AC1L8lS1lCS
S18A1LlC 8LlC8M lnl1lA1lvLS
lSSuLS CPALLLnLS APLAu
W Change" ls Loday's buzzword and wlLh good reason Powever
Lhe underlylng challenges for a change"
MlndseL
CulLure way of dolng Lhlngs
lnsLlLuLlonal changes
ollLlcal wlll
SaLlsfylng all quarLers?
SusLalnlng Lhe change
W lnLegraLlon of all sLraLeglc lnlLlaLlves
W MonlLorlng Lhe progress and success sLorles
W LxLernal envlronmenL global economy Lrade oLher presslng
lssues (eg Lerrorlsm cllmaLe change)
% Malaysla faced blg challenges due Lo globallsaLlon
% new Lconomlc Model (nLM) ls a dynamlc and sLraLeglc acLlon plan Lo brlng
Malayslan economy Lo greaLer helghLs
% 1he success of nLM depends on how Lhe people (Malayslans) manage and overcome
Lhe challenges for Lhe change
% 1o reach Lhe vlslon 2020 LargeL Lhe economy wlll have Lo grow beLween 2011 and
2020 aL an average annual raLe of approx 70 per cenL
% 1he overnmenL's focus seems Lo have shlfLed from vlslon 2020 Lo Plgh lncome
Lconomy"
1nANk CU