Do|ng 8us|ness |n Ma|ays|a

0307,
Malaysla ls an emerglng markeL offerlng some of Lhe more unlque advanLages for forelgn
dlrecL lnvesLmenL
1he Malayslan lndusLrlal uevelopmenL AuLhorlLy (MluA) ls Lhe prlnclpal governmenL agency
for Lhe promoLlon and coordlnaLlon of lndusLrlal developmenL 1hls agency serves as a conLacL
polnL for lnvesLors who plan Lo seL up pro[ecLs ln manufacLurlng and lLs relaLed supporL
servlces ln Malaysla

lndla and Malaysla have LradlLlonally been close and frlendly 1here have been regular
exchanges of vlslLs beLween Lhe leaders of Lhe Lwo counLrles lncludlng Lhe vlslL by rlme
MlnlsLer ur Manmohan Slngh Lo Malaysla from 26 Lo 28 CcLober 2010 1hls followed Lhe
landmark SLaLe vlslL Lo lndla ln !anuary 2010 of Malaysla's rlme MlnlsLer Mohd na[lb lorelgn
MlnlsLers of boLh counLrles head Lhe !olnL Commlsslon whlch held lLs 3Lh meeLlng ln kuala
Lumpur on 3 May 2011 LxLernal Affalrs MlnlsLer of lndla vlslLed Malaysla from 2 Lo 3 May
2011 Lo lead Lhe lndlan delegaLlon Lo Lhe 3Lh !CM held ln kuala Lumpur Pe meL Lhe rlme
MlnlsLer of Malaysla as well as Lhe Pome MlnlsLer Commerce and lndusLry MlnlsLer pald an
offlclal vlslL Lo Malaysla ln !uly 2010 and also accompanled Lhe rlme MlnlsLer ln CcLober
2010 MlnlsLer of 8oad 1ransporL and Plghways pald an offlclal vlslL ln uecember 2010 and
MlnlsLer of Commerce and lndusLry also vlslLed ln lebruary 2011 Lo slgn Lhe Comprehenslve
Lconomlc CooperaLlon AgreemenL (CLCA)

nonom|n and Commern|a| Cooperat|on Lconomlc and commerclal relaLlons are emerglng as
Lhe malnsLay of Lhe bllaLeral relaLlonshlp Malaysla ls Lhe second largesL Lradlng parLner for
lndla wlLhln ASLAn and lndla ls Lhe largesL Lradlng parLner for Malaysla from among Lhe
counLrles of Lhe SouLh excludlng Chlna WlLh Lhe comlnglnLoforce of Lhe ASLAnlndla l1A ln
Coods from 1 !anuary 2010 Lhe bllaLeral economlc engagemenL ls expecLed Lo geL a furLher
fllllp uurlng Lhe vlslL of rlme MlnlsLer ur Manmohan Slngh ln CcLober 2010 lndla and
Malaysla have slgned an agreemenL slgnallng Lhe concluslon of negoLlaLlons on a
Comprehenslve Lconomlc CooperaLlon AgreemenL (CLCA) as a slngle underLaklng coverlng
goods servlces lnvesLmenL and oLher areas of cooperaLlon As a follow of Lhls AgreemenL
lndla and Malaysla slgned Lhe CLCA on 18 lebruary 2011 ln uLra[aya durlng Lhe vlslL of
Commerce and lndusLry MlnlsLer lL wlll now come lnLo force on 1 !uly 2011

1he flrsLever lndlaMalaysla CLCs lorum comprlslng 18 CLCs from boLh sldes was [olnLly
launched on 27 CcLober 2010 by rlme MlnlsLers ur Manmohan Slngh and uaLo Serl Mohd
na[lb Lo develop enhanced parLnershlp and cooperaLlon aL Lhe buslness level 1he Second
meeLlng of Lhe CLCs lorum Look place ln Mumbal on 20 May 2011

8llaLeral Lrade lncreased by 17 Llmes from uS $ 06 bllllon ln 1992 Lo uS$ 103 bllllon ln 2008
and has more Lhan doubled from uS$ 3 bllllon Lo uS$ 103 bllllon beLween 2003 and 2008 1he
global economlc crlsls had a negaLlve lmpacL on bllaLeral Lrade whereln Lhe Lwoway Lrade ln
2009 decllned Lo uS $ 73 bllllon Powever ln 2010 Lhere was a slgnlflcanL recovery of Lhe
bllaLeral Lrade as evldenL from a 23 lncrease compared Lo 2009 flgures Lo uS$ 894 bllllon
(lndla's exporLs uS$ 247 bllllon and lndla's lmporLs uS $647 bllllon) WlLh Lhe enLry lnLo
force of Lhe CLCA from 1 !uly 2011 Lhe bllaLeral Lrade has good prospecLs of lncreaslng furLher
ln Lhe comlng years

8ased on dlrecL lnvesLmenLs from Malaysla Lo lndla lL ls Lhe 21sL largesL lnvesLor ln lndla wlLh
cumulaLlve lul lnflows valued aL uS$ 18 bllllon from !anuary 1991 Lo 2008 ln addlLlon abouL
uS$ 6 bllllon ln Malayslan lnvesLmenLs are belleved Lo be lnvesLed ln lndla Lhrough Lhe
MaurlLlus rouLe noLable among Lhese are Maxls CommunlcaLlons ln Alrcel AxlaLa ln luLA
Cellular LLd khazanah ln lulC Apollo PosplLals ?es 8ank eLc Malayslan consLrucLlon
companles' largesL presence ouLslde Malaysla ls ln lndla 1hey have compleLed 32 consLrucLlon
pro[ecLs worLh uS$ 234 bllllon ln lndla whlle 33 pro[ecLs of slmllar value are under varlous
sLages of lmplemenLaLlon under a parLnershlp wlLh Malayslan AlrporLs CM8 compleLed
alrporL ln Pyderabad ln 2008 and Lhe second one ln uelhl ln !uly 2010

lndlan companles have lnvesLed abouL uS $ 2 bllllon maklng lL Lhe 7Lh largesL lnvesLor ln
Malaysla lndlan companles LhaL made ma[or acqulslLlons lnclude 8ellance lndusLrles LlmlLed
8allarpur lndusLrles LlmlLed Larsen 1oubro and Wl8C 1here are over 100 lndlan
companles lncludlng 60 lndlan [olnL venLures operaLlng ln Malaysla ln addlLlon Lhere are 60
lndlan l1 companles operaLlng from Malaysla l8CCn lnLernaLlonal LLd has been acLlvely
engaged ln Lhe developmenL of rallways ln Malaysla slnce 1988 and lL ls currenLly execuLlng a
double Lracklng pro[ecL (Seremban Cemas) worLh over uS $1bllllon

A Mou on CooperaLlon relaLlng Lo Lhe rovlslon of 1echnlcal AsslsLance Servlces on Plghway
ManagemenL and uevelopmenL was slgned ln uecember 2010 durlng Lhe vlslL of MlnlsLer of
8oad 1ransporL and Plghways Lo Malaysla






Po||l|ca| erv|rorrerl

Tre Va|ays|ar po||l|ca| erv|rorrerl |s slrorg|y lavourao|e lo
|rlerral|ora| ard doresl|c ous|ress deve|oprerl. lr parl|cu|ar
ur|led 3lales, ur|led K|rgdor-Va|ays|a o||alera| re|al|ors are
producl|ve across lre ooard. Va|ays|a |s a corsl|lul|ora| rorarcry
W|lr a par||arerlary sysler ol goverrrerl. lr pracl|ce roWever
poWer |s slrorg|y corcerlraled W|lr lre Pr|re V|r|sler. le ras
lrad|l|ora||y oeer lre read ol Tre ur|led Va|ays Nal|ora|
0rgar|zal|or ('uVN0), Wr|cr |s lre pr|rc|pa| parly |r lre goverr|rg
coa||l|or Wr|cr ras ru|ed Va|ays|a corl|ruous|y s|rce |ls
|rdeperderce lror lre ur|led K|rgdor |r 195Z. Currerl|y, lre
res|d|rg Pr|re V|r|sler |s Aodu||ar o|r Arrad 8adaW| (Wro re|d
oll|ce s|rce 31 0clooer 2003) ard r|s depuly |s 0epuly Pr|re
V|r|sler Vorared Naj|o o|r Aodu| Raza| (Wro re|d oll|ce s|rce Z
Jaruary 2001).
Tre l|ve-year lerr lor lre pos|l|or ol lre rorarcr |s rolaled arorg
lre ru|ers ol r|re oul ol lre lr|rleer slales |r Va|ays|a. loWever lre
ro|e ras over l|re oecore rore cereror|a| ard syroo||c. Tre
corsl|lul|ora| rorarcry |s ror|ra||y readed oy a pararourl ru|er
ard a o|carera| Par||arerl cors|sl|rg ol a ror-e|ecled upper rouse
PKF - Doing business in Malaysia
ard ar e|ecled |oWer rouse. Al lre currerl lerure, lre res|d|rg
rorarcr |s Tuar|u V|zar Za|ra| Ao|d|r lor| A|rarrur 3u|lar
Varrud A|ru|lal| 8|||ar 3rar, lre 3u|lar ol Tererggaru (s|rce 13
0eceroer 200). A|| Va|ays|ar Per|rsu|ar slales rave rered|lary
ru|ers excepl Ve|a|a ard Pu|au P|rarg ('Perarg). Trese lWo
slales a|org W|lr 3aoar ard 3araWa| |r Easl Va|ays|a rave
goverrors appo|rled oy lre goverrrerl. PoWers ol slale
goverrrerls are ||r|led oy lre Federa| Corsl|lul|or. urder lre
lerrs ol lederal|or, 3aoar ard 3araWa| rela|r cerla|r corsl|lul|ora|
prerogal|ves (e.g. lre r|grl lo ra|rla|r lre|r oWr |rr|gral|or
corlro|s). 3aoar ro|ds 25 seals, Wr||e 3araWa| ro|ds 28 seals |r lre
louse ol Represerlal|ves.
Tre adr|r|slral|ve cerlre |s al Pulrajaya, Wr||e par||arerl sl||| reels
|r Kua|a Lurpur, lre cap|la| ol Va|ays|a.
wr||e oe|rg ar ls|ar|c courlry, Va|ays|a erjoys good re|al|ors W|lr
lre ur|led 3lales (u.3.) rav|rg Wor|ed W|lr lre u.3. or rary
|ssues, |rc|ud|rg lor exarp|e, lre ur|led Nal|ors peace|eep|rg
operal|ors |r 3ora||a, Carood|a ard 8osr|a.
Va|ays|a |s a reroer ol Assoc|al|or ol 3oulr Easl As|ar Nal|ors
('A3EAN), lourded |r 19Z W|lr lrdores|a, lre Pr|||pp|res,
3|rgapore, Tra||ard, 8rure|, v|elrar, Vyarrar, Carood|a ard
Laos. Tre u.3. ras slrorg|y supporled A3EAN, ard parl|c|pales |r
ar arrua| d|a|ogue W|lr A3EAN reroers al lre |eve| ol Fore|gr
V|r|slers.
A3EAN |s al lre rorerl |rlegral|rg ar A3EAN Free Trade Area
('AFTA), Wr|cr |l successlu| Wou|d creale a s|rg|e rar|el ol over
5Z0 r||||or peop|e ard a coro|red 0ross 0oresl|c Producl ('00P)
ol u3S1 lr|||||or. Va|ays|a |s a|so a reroer ol As|a-Pac|l|c Ecoror|c
Cooperal|or ('APEC), Wr|cr |rc|udes lre u.3., Cr|ra, Japar ard
rosl ol lre olrer courlr|es ol lre Pac|l|c R|r.
PKF - Doing business in Malaysia 10



Ecorory

Va|ays|a, a r|dd|e-|rcore courlry, lrarslorred |lse|l lror 19Z1
lrrougr lre |ale 1990s lror a producer ol raW raler|a|s |rlo ar
ererg|rg ru|l|-seclor ecorory. 0roWlr Was allr|ouled |arge|y lo
exporls, pr|rar||y |r e|eclror|cs.
As a resu|l, Va|ays|a Was rard r|l oy lre g|ooa| ecoror|c doWrlurr
ard lre s|urp |r lre |rlorral|or lecrro|ogy ('lT) seclor |r 2001 ard
2002. 00P |r 2001 greW or|y 0.5 oecause ol ar esl|raled 11
corlracl|or |r exporls, oul a suoslarl|a| l|sca| sl|ru|us pac|age
equa| lo ur|led 3lales 0o||ar ('u30) 1.9 o||||or r|l|galed lre Worsl
ol lre recess|or, ard lre ecorory reoourded |r 2002 W|lr a 1.1
|rcrease.
Tre ecorory greW al 1.9 |r 2003, rolW|lrslard|rg a d|ll|cu|l l|rsl
ra|l, Wrer exlerra| pressures lror 3evere Acule Resp|ralory
3yrdrore ('3AR3) ard lre lraq war |ed lo caul|or |r lre ous|ress
corrur|ly. 0roWlr lopped Z |r 2001, oul s||d lo 5 |r 2005, 5.9
|r 200, ard .3 |r 200Z. As ar o|| ard gas exporler, Va|ays|a ras
prol|led lror r|grer Wor|d erergy pr|ces, a|lrougr lre cosl ol
goverrrerl suos|d|es lor doresl|c gaso||re ard d|ese| lue| ras
r|ser ard ollsel sore ol lre oerel|l. Va|ays|a urpegged lre
R|rgg|l lror lre u30 |r 2005, oul so lar lrere ras oeer ||ll|e
rovererl |r lre excrarge rale.
lea|lry lore|gr excrarge reserves, |oW |rl|al|or, ard a sra||
exlerra| deol are a|| slrerglrs lral ra|e |l ur|||e|y lral Va|ays|a W|||
exper|erce a l|rarc|a| cr|s|s over lre rear lerr s|r||ar lo lre ore |r
199Z. Tre ecorory rera|rs deperderl or corl|rued groWlr |r lre
u.3., Cr|ra, ard Japar, Wr|cr are lop exporl desl|ral|ors ard |ey
sources ol lore|gr |rveslrerl
Tre goverrrerl ras a|so la|er a slrorg pro-acl|ve ro|e |r lre
deve|oprerl ard lre |rduslr|a||zal|or ol lre Va|ays|ar ecorory.
Tr|s ras |rc|uded s|gr|l|carl slale seclor |rveslrerl, a c|ose a|||arce
oelWeer goverrrerl ard lre pr|vale ous|ress corrur|ly, ard a
PKF - Doing business in Malaysia 11
var|ely ol po||c|es ard progrars lo oo|sler lre ecoror|c slalus ol lre
Va|ay ard |rd|gerous corrur|l|es, corror|y relerred lo as
8ur|puleras.







Vajor exporls ard |rporls

Tre e|eclr|ca| ard e|eclror|cs |rduslry |s Va|ays|a's |ead|rg |rduslr|a|
seclor, corlr|oul|rg s|gr|l|carl|y lo lre courlry's rarulaclur|rg
oulpul, exporls ard erp|oyrerl. lr 2001, gross oulpul ol lre
|rduslry lola||ed u3018.2 o||||or, Wr||e lre |rduslry's exporls ol
e|eclr|ca| ard e|eclror|cs producls arourled lo u303. o||||or or
1.1 ol lola| rarulaclured exporls. Tre |rduslry crealed 39,188
joos opporlur|l|es, accourl|rg lor 3. ol lola| erp|oyrerl |r lre
rarulaclur|rg seclor.
0lrer suoslarl|a| exporl earr|rgs are a|so der|ved lror ||quel|ed
ralura| gas ard pelro|eur producls, pa|r o||, crer|ca| ard crer|ca|
producls, racr|rery, app||arces ard parls, ard Wood oased
producls. Tre ur|led 3lales ol Arer|ca, Japar, 3|rgapore, lre
Peop|e's Repuo||c ol Cr|ra (PRC) ard Tra||ard Were lre lop l|ve
exporl desl|ral|ors, accourl|rg lor 52 ol Va|ays|a's lola| exporls |r
Feoruary 2009
As lre courlry |s a l|r|sr|rg desl|ral|or lor rarulaclur|rg ard
assero|y, rajor |rporls are re|aled lo |ls exporls ard |rc|ude
e|eclr|ca| ard e|eclror|c corporerls, crer|ca| ard crer|ca|
producls, corporerls lor racr|rery, app||arces ard parls. Tre
ur|led 3lales ol Arer|ca, Cr|ra ard Japar represerl lop lrree
|rporl sources.

lrporl corlro|s
Tre 0overrrerl |ev|es cuslor dul|es or sore goods erler|rg
Va|ays|a. Cuslors c|eararce rusl oe oola|red lo |rporl ary
goods. lrporlal|or ol l|rearrs or loys resero||rg l|rearrs,
rarcol|cs, ooscere ard porrograpr|c raler|a|s, ard p|raled red|a
are roWever pror|o|led ard carry severe pera|l|es.
PKF - Doing business in Malaysia 12



Regu|alory erv|rorrerl
Tre suprere |aW ol Va|ays|a |s a Wr|ller ledera| corsl|lul|or, Wr|cr
car or|y oe arerded oy a lWo-lr|rds rajor|ly |r Par||arerl. Tre
|ega| sysler |s oased or Erg||sr corror |aW. Tre l|gr Courls
rave gerera| superv|sory ard rev|s|orary jur|sd|cl|or over a|| lre
3uoord|rale Courls, ard jur|sd|cl|or lo rear appea|s lror lre
3uoord|rale Courls |r c|v|| ard cr|r|ra| rallers. Tre Courl ol
Appea|, |r lurr, rears a|| c|v|| appea|s aga|rsl dec|s|ors ol lre l|gr
Courls. Tre Courl ol Appea| a|so rears appea|s ol cr|r|ra| dec|s|ors
ol lre l|gr Courl.
Tre Federa| Courl ray rear appea|s ol c|v|| dec|s|ors ol lre Courl ol
Appea| Wrere lre Federa| Courl grarls |eave lo do so. Tre Federa|
Courl a|so rears cr|r|ra| appea|s lror lre Courl ol Appea|, oul or|y
|r respecl ol rallers reard oy lre l|gr Courl |r |ls or|g|ra|
jur|sd|cl|or.
Trere |s a para||e| sysler ol slale 3yar|ar Courls Wr|cr ras
jur|sd|cl|or or|y over rallers |rvo|v|rg Vus||rs.




F|rarc|a| serv|ces
8ar| Negara Va|ays|a |s lre cerlra| oar| ard |s respors|o|e lor
superv|s|rg lre oar||rg sysler. ll a|so |ssues lre Va|ays|ar
currercy, acls as oar|er ard l|rarc|a| adv|ser lo lre goverrrerl,
adr|r|slers lore|gr excrarge corlro| regu|al|ors, ard |s |erder ol
|asl resorl lo lre oar||rg sysler.
As al lre erd ol Jure 2008, lrere Were 9 doresl|c ard 13 |oca||y
|rcorporaled lore|gr correrc|a| oar|s operal|rg lrrougr a relWor|
ol 2,200 orarcres across lre courlry. A W|de rarge ol rercrarl
oar||rg serv|ces are prov|ded oy 15 rercrarl oar|s, rary ol Wr|cr
rave all|||al|ors W|lr rercrarl oar|s eslao||sred overseas.
0lrer oar|s |rc|ude 15 ls|ar|c oar|s Wr|cr prov|de a|| lre
corverl|ora| oar||rg serv|ces, oased or ls|ar|c corcepls ol
PKF - Doing business in Malaysia 13
oar||rg ard cred|l. lr add|l|or, sever corverl|ora| oar|s a|so
prov|de ls|ar|c oar||rg serv|ces lrrougr a ded|caled ls|ar|c
W|rdoW.
3|x Va|ays|ar oar||rg groups rave a preserce |r 18 courlr|es
lrrougr orarcres, represerlal|ve oll|ces, suos|d|ar|es ard jo|rl
verlures. Trere are a|so 21 lore|gr oar|s Wr|cr ra|rla|r
represerlal|ve oll|ces |r Va|ays|a. Trey do rol corducl rorra|
oar||rg ous|ress oul prov|de ||a|sor serv|ces ard lac|||lale
|rlorral|or excrarge oelWeer ous|ress |rleresls |r Va|ays|a ard
lre|r courlerparls.
Tre |rlroducl|or ol lre lrareWor| lor |rveslrerl oar|s |r 2005
prov|ded lor lre deve|oprerl ol lu||-l|edged |rveslrerl oar|s
lrrougr corso||dal|or ard ral|ora||sal|or oelWeer rercrarl oar|s,
sloc|oro||rg corpar|es ard d|scourl rouses. lrveslrerl oar||rg
acl|v|l|es ra|r|y |rc|ude cap|la| ra|s|rg acl|v|l|es sucr as
urderWr|l|rg, |oars syrd|cal|or ard corporale l|rarc|rg,
raragererl adv|sory serv|ces, arrarg|rg lor lre |ssue ard ||sl|rg ol
srares, as We|| as |rveslrerl porllo||o raragererl. Tre
deve|oprerl ol |rveslrerl oar|s W||| errarce lre capac|ly ol
l|rarc|a| |rsl|lul|ors |r Va|ays|a lo oeller serve |ls corporale
cuslorers lrrougr a W|der rarge ol l|rarc|a| ard adv|sory acl|v|l|es
or par W|lr lre serv|ces prov|ded oy |rlerral|ora| |rveslrerl oar|s.
Va|ays|a a|so ras a corprerers|ve ls|ar|c oar||rg sysler.
Preserl|y, Va|ays|a ras l|lleer lu||-l|edged ls|ar|c oar|s, lrree ol
Wr|cr are lror lre V|dd|e Easl, prov|d|rg a oroad speclrur ol
l|rarc|a| producls ard serv|ces oased or 3rar|ar pr|rc|p|es. Al lre
sare l|re, lrere are l|ve corverl|ora| oar|s lrree ol Wr|cr are
rajor lore|gr oar|s, oller|rg ls|ar|c oar||rg producls ard serv|ces
v|a lre ls|ar|c oar||rg W|rdoW sel up.
Tre erlry ol lre lrree lore|gr ls|ar|c oar|s errarces lre
corpel|l|or ard sl|ru|ales |rroval|or arorg lre ls|ar|c oar||rg
p|ayers, ard al lre sare l|re corp|ererls lre Va|ays|ar p|ayers |r
lapp|rg |rlo slraleg|c groWlr areas sucr as |rveslrerl oar||rg ard
PKF - Doing business in Malaysia 14
Wea|lr raragererl. lr add|l|or, lrese |rsl|lul|ors a|so rave p|ars
lo ra|e Va|ays|a as lre|r l|rarc|a| ruo lor lr|s reg|or.
lr lerrs ol producl oller|rg, rore lrar 0 ls|ar|c l|rarc|a| producls
ard serv|ces are rade ava||ao|e |r lre rar|el. Tre erergerce ol
reW |rroval|ve producls ard l|rarc|a| |rslrurerls lral |rcorporale
g|ooa||y accepled 3rar|ar pr|rc|p|es sucr as corrod|ly ruraoarar
depos|ls, ls|ar|c prol|l rale sWap, rusyara|ar rularaq|sar rore
l|rarc|rg ard su|u| rusyara|ar |r lre |rduslry rave lurlrer
e|evaled lre doresl|c ls|ar|c l|rarc|a| seclor lo lre rexl slage ol
advarcererl.
Va|ays|a ras severa| deve|oprerl l|rarc|a| |rsl|lul|ors (0Fls) lral
Were sel up W|lr spec|l|c oojecl|ves lo deve|op ard prorole slraleg|c
ecoror|c seclors, |rc|ud|rg lre rarulaclur|rg ard exporl seclors,
sra|| ard red|ur erlerpr|ses (3VEs), as We|| as lre agr|cu|lure,
|rlraslruclure ard rar|l|re seclors. Trese 0Fls corp|ererl lre
oar||rg |rsl|lul|ors oy prov|d|rg ar array ol l|rarc|a| ard rorl|rarc|a|
serv|ces lo supporl deve|oprerl ol lre slraleg|c seclors.
Trese |rc|ude lre prov|s|or ol red|ur lo |org-lerr |oars, equ|ly
cap|la|, guararlees lor |oars ard a rarge ol supp|ererlary l|rarc|a|
ard ous|ress adv|sory serv|ces. '8ar| Perusaraar Kec|| &
3ederrara Va|ays|a 8errad' or lre 3VE 8ar|, Wr|cr Was
eslao||sred |r 0clooer 2005, ollers l|rarc|a| producls sucr as lerr
|oars ard Wor||rg cap|la| |rc|ud|rg slarl-ups ard 3VEs |r reW
groWlr areas, parl|cu|ar|y lo lrose |r proless|ora| serv|ces, exporlor|erled
acl|v|l|es ard lrarcr|se ous|resses. 8ar| Perlar|ar
Va|ays|a ras recerl|y oeer corporal|sed lo 8ar| Perlar|ar Va|ays|a
8errad (Agrooar|) |r order lo slrerglrer |ls ro|e lo oe rore
ellecl|ve |r reel|rg lre reeds ol lre erl|re va|ue cra|r ol agr|cu|lura|
acl|v|l|es, |rc|ud|rg lre agro-oased |rduslr|es.


Currercy deror|ral|ors
Tre R|rgg|l (uroll|c|a||y |roWr as lre Va|ays|ar do||ar), |s lre oll|c|a|
rorelary ur|l ol Va|ays|a. ll |s d|v|ded |rlo 100 ser (cerls) ard |ls
PKF - Doing business in Malaysia 15
currercy code |s VYR or RV. Va|ays|a co|rs are r|rled |r 1
deror|ral|ors:-
5 ser (RV 0.05)
10 ser (RV 0.10)
20 ser (RV 0.20)
50 ser (RV 0.50)
Va|ays|ar oar|roles rave |org lo||oWed a co|our codes or|g|ral|rg
lror co|or|a| l|res as lo||oWs:-
RV1 - o|ue
RV5 - greer
RV10 - red
RV50 -lurquo|se
RV100 - v|o|el





Excrarge corlro|s
Tre lore|gr excrarge adr|r|slral|or ru|es |r Va|ays|a serve lre
purpose ol prov|d|rg ar appropr|ale lrareWor| lral W||| |rl|uerce
cap|la| l|oWs ard lac|||lale currercy r|s| raragererl lo prorole
l|rarc|a| ard ecoror|c slao|||ly ol lre courlry.
Tre del|r|l|ors ol res|derls ard ror-res|derls, |r lre corlexl ol
lore|gr excrarge corlro|, are as lo||oWs:-
0el|r|l|or ol resident
Va|ays|ar c|l|zer (exc|ud|rg persors Wro rave oola|red
perrarerl res|derl slalus ol a lerr|lory ouls|de Va|ays|a ard are
res|d|rg aoroad); or
Va|ays|ar c|l|zer W|lr perrarerl res|derl slalus ol arolrer
courlry oul res|des |r Va|ays|a; or
Nor-Va|ays|a c|l|zer W|lr perrarerl res|derl slalus |r Va|ays|a
ard res|des |r Va|ays|a; or
8us|ress erlerpr|ses/soc|el|es Wr|cr are operal|rg ard are
reg|slered or approved oy ary aulror|ly |r Va|ays|a.
PKF - Doing business in Malaysia 16
0el|r|l|or ol non-resident
Nor-Va|ays|ar c|l|zer; or
Va|ays|a C|l|zer Wro ras perrarerl res|derl slalus aoroad ard
res|des aoroad; or
Fore|gr eroass|es, r|gr corr|ss|ors, supraral|ora|s, cerlra|
oar|s; or
8us|ress erl|l|es eslao||sred aoroad.
Nor-res|derls are lree lo |rvesl |r Va|ays|a |r ary lorr. Trey ray
a|so oola|r l|rarc|rg lror ||cersed orsrore oar|s (||cersed
correrc|a| ard ls|ar|c oar|s |r Va|ays|a) oolr |r R|rgg|l ard
lore|gr currercy.
lr add|l|or, lrey are ao|e lo erler |rlo lore|gr excrarge corlracls
W|lr ||cersed orsrore oar|s lo rarage lre|r excrarge r|s|
exposures ar|s|rg lror lre|r r|rgg|l |rveslrerls.
Nor-res|derls are a||oWed lo excrarge lre|r lore|gr currercy |rlo
R|rgg|l ard v|ce versa ol ary arourl as We|| as repalr|ale lre|r
cap|la|, prol|ls ard |rcore earred lror Va|ays|a |r lore|gr currercy.
lr ||re W|lr lre Va|ays|ar goverrrerl's a|r lo reduce cosl ol do|rg
ous|ress ard ercourage oeller r|s| raragererl acl|v|l|es, res|derls
are a||oWed lo rarage lre|r lurds lrrougr doresl|c ard lore|gr
p|acererl ol lore|gr currercy lurds, urderla|e |rveslrerl acl|v|l|es
ouls|de Va|ays|a ard erler |rlo r|s| raragererl arrargererl W|lr
||cersed orsrore oar|s |r Va|ays|a.
0overrrerl po||cy or lore|gr |rveslrerl
Va|ays|a ras a|Ways We|cored |rveslrerls |r |ls rarulaclur|rg
seclor. 0es|rous ol |rcreas|rg |oca| parl|c|pal|or |r lr|s acl|v|ly, lre
goverrrerl ercourages jo|rl-verlures oelWeer Va|ays|ar ard
lore|gr |rveslors.
6:ity Policy for New, 5,nsion or Diversific,tion Profects
PKF - Doing business in Malaysia 17
Tre |eve| ol exporls rad oeer used lo delerr|re lore|gr equ|ly
parl|c|pal|or |r rarulaclur|rg projecls. loWever, s|rce 31 Ju|y 1998,
lre Va|ays|ar goverrrerl rad re|axed lre equ|ly po||cy gu|de||res
lor a|| app||cal|ors lor |rveslrerls |r reW as We|| as
expars|or/d|vers|l|cal|or projecls |r lre rarulaclur|rg seclor. urder
lr|s re|axal|or, lore|gr |rveslors cou|d ro|d 100 ol lre equ|ly
|rrespecl|ve ol lre |eve| ol exporls.
loWever, lr|s re|axal|or d|d rol app|y lo spec|l|c acl|v|l|es ard
producls Wrere Va|ays|ar corpar|es rad lre capao|||l|es ard
experl|se. Trese acl|v|l|es ard producls |rc|ude paper pac|ag|rg,
p|asl|c pac|ag|rg (ooll|es, l||rs, sreels ard oags), p|asl|c |rjecl|or
rou|ded corporerls, rela| slarp|rg ard rela| laor|cal|or, W|re
rarress, pr|rl|rg ard slee| serv|ce cerlres. lr lrese cases, spec|l|c
equ|ly gu|de||res preva||ed.
To lurlrer errarce Va|ays|a's |rveslrerl c||rale, equ|ly ro|d|rgs |r
a|| rarulaclur|rg projecls Were lu||y ||oera||sed ellecl|ve lror 1Z
Jure 2003. Fore|gr |rveslors car roW ro|d 100 ol lre equ|ly |r a||
|rveslrerls |r reW projecls, as We|| as |rveslrerls |r
expars|or/d|vers|l|cal|or projecls oy ex|sl|rg corpar|es, |rrespecl|ve
ol lre |eve| ol exporls ard W|lroul ary producl/acl|v|ly oe|rg
exc|uded.
Tre reW equ|ly po||cy a|so app||es lo:
OCorpar|es prev|ous|y exerpled lror oola|r|rg a
rarulaclur|rg ||cerse oul Wrose srarero|ders' lurds rave
roW reacred RV2.5 r||||or or rave roW ergaged Z5 or rore
lu||-l|re erp|oyees ard are lrus requ|red lo oe ||cersed.
OEx|sl|rg ||cersed corpar|es prev|ous|y exerpled lror
corp|y|rg W|lr equ|ly cord|l|ors, oul are roW requ|red lo
corp|y due lo lre|r srarero|ders' lurds rav|rg reacred RV2.5
r||||or.
6:ity Policy A55lic,-le to isting Com5,nies
PKF - Doing business in Malaysia 18
Equ|ly ard exporl cord|l|ors |rposed or corpar|es pr|or lo 1Z Jure
2003 W||| oe ra|rla|red.
loWever, corpar|es car requesl lor lrese cord|l|ors lo oe
reroved. Tre goverrrerl W||| oe l|ex|o|e |r cors|der|rg sucr
requesls ard approva| W||| oe g|ver oased or lre rer|ls ol eacr
case. Corpar|es W|lr exporl cord|l|ors car app|y lor approva| lror
Vl0A lo se|| |r lre doresl|c rar|el oased or lre lo||oW|rg
gu|de||res:
Oup lo 100 ol lre|r oulpul lor lrose producls W|lr r|| duly or
lrose rol produced |oca||y
Oup lo 80 ol lre|r oulpul |l lre doresl|c supp|y |s |radequale
or lrere ras oeer ar |rcrease |r |rporls lror A3EAN lor
producls W|lr Corror Ellecl|ve Prelererl|a| Tar|ll (CEPT)
dul|es ol 5 ard oe|oW.
Protection of Foreign Investment
Va|ays|a's corr|lrerl |r creal|rg a sale |rveslrerl erv|rorrerl
ras persuaded rore lrar 1,000 |rlerral|ora| corpar|es lror over
50 courlr|es lo ra|e Va|ays|a lre|r ollsrore oase.
A corpary Wrose equ|ly parl|c|pal|or ras oeer approved W||| rol oe
requ|red lo reslruclure |ls equ|ly al ary l|re as |org as lre corpary
corl|rues lo corp|y W|lr lre or|g|ra| cord|l|ors ol approva| ard
rela|r lre or|g|ra| lealures ol lre projecl.















Ind|as ports to Ma|ays|a

India-Malaysia Economic and Commercial Relations
India and Malaysia have had long-standing commercial links dating to the pre-Christian era. In
modern times, Indian industry has been associated Ior Iour decades with the transIormation oI
Malaysia Irom an exporter oI primary products into an industrialized and broad-based economy.
The Iirst Indian joint venture, Godrej commenced operations in 1968, and in the seventies and
early eighties Malaysia hosted the largest number oI Indian joint ventures in any country. Indian
companies present involvement in Malaysia is in palm oil reIining, power, railways, inIormation
technology, bio-technology, manuIacturing industrial goods, higher education, civil construction,
and training.
Spectacular progress oI the Malaysian economy since the late eighties, the new selI-conIidence
oI Malaysian entrepreneurs, and the liberalization oI the Indian economy since 1991 have
triggered new dimensions in bilateral commercial and economic relations.
India and Malaysia are mutually important economic partners. Malaysia is India`s second most
important trading partner amongst the ASEAN countries and also India`s gateway to ASEAN
and China. India is the largest trading partner Ior Malaysia in South Asia.
Trade
India is Malaysia`s largest trading partner among countries oI the South, excluding ASEAN and
China. Similarly, Malaysia has now emerged as India`s second largest trading partner in the
ASEAN aIter Singapore.
Bilateral trade continues in 2007 touched US $ 8.14 billion (Indian exports US $2.1 billion and
imports US $6.03 billion) or about 24 growth over the 2007 Iigures. The two-way trade during
the Iirst eight months |Jan-Aug| oI 2008 has registered US $ 9.1 billion marking 34 growth
over the corresponding period in 2007.
India-Malaysia two-way trade since India initiated liberalisation measures in 1992 (US $ 0.6
billion) increased by 14 times by 2007. Noticeably, in 2005, it crossed US$ 5 billion mark Ior
the Iirst time. SigniIicantly, the two-way trade would double by 2008, as compared to Iigures in
2005.

@e tab|e be|ow summar|zes b||atera| trade f|ows and growt rates from 1998 onwards
The table below summarizes bilateral trade flows and growth rates from 1998 onwards.
Year Exports
(US$ mn)
Growth
rate ()
Imports
(US$ mn)
Growth
rate ()
Balance of
Trade (US$
mn)
Total Trade
(US$ mn)
Growth
rate ()
1998 481.30 1774.40 -1293.10 2255.70
1999 529.00 9.98 2038.00 14.86 -1509.00 2567.00 13.80
2000 725.00 37.05 1925.00 (-) 5.54 -1200.00 2650.00 3.23
2001 772.42 6.54 1577.03 (-)18.08 - 804.61 2349.45 (-)11.34
2002 643.37 (-)16.71 1760.96 11.66 -1117.59 2404.33 2.33
2003 672.53 4.51 2510.93 42.59 -1838.40 3183.46 32.41
2004 1288.79 91.63 3002.75 19.58 -1713.96 4291.54 34.80
2005 1104.46 (-)15.00 3971.31 31.21 -2866.85 5075.77 17.34
2006 1356.69 22.84 5217.56 31.38 -3860.87 6574.25 29.52
2007 2108.54 55.42 6031.13 15.59 -3922.59 8139.67 23.81
(Source: Department oI Statistics, Malaysia)



Malaysia has traditionally enjoyed a surplus primarily because India is a large importer oI palm
oil and petroleum. However, India`s exports to Malaysia have increased steadily Irom US $
672.5 million in 2003 to US $ 2.1 billion in 2007. Indian exports during the Jan-Aug 2008 were
US $ 2.1 billion, which marks 72 increase over the corresponding period in 2007, and that
Indian exports in 2007 recorded a 55.42 growth over 2006.
On the import side, the basket Irom Malaysia includes palm oil, petroleum, electronic goods,
wood and wood products, organic chemicals, man-made Iabrics, spun yarn, non-Ierrous metals
and machinery




Economy stats: India vs Malaysia
Indian Economy
stats
Malaysian
Economy stats
Aid as oI GDP 0.3 0.1

Ranked 113rd. 2 times more than Malaysia Ranked 130th.
Business eIIiciency 59.053 65.844

Ranked 33rd. Ranked 26th. 11 more than India
Economic Ireedom 1.5 2

Ranked 123rd. Ranked 80th. 33 more than India
Exports to US $3,233,200,000.00 $5,461,700,000.00

Ranked 19th. Ranked 13th. 69 more than India
GDP $4,164,000,000,000.00 $313,200,000,000.00

Ranked 5th in 2006. 12 times more than Malaysia Ranked 34th in 2006.
GDP growth ~ annual

9.23 annual 5.16 annual

Ranked 14th in 2005. 79 more than Malaysia Ranked 74th in 2005.
GDP (per capita) $3,751.99 per capita $12,155.27 per capita

Ranked 121st in 2006. Ranked 60th in 2006. 2 times more than India
GDP ~ PPP $3,362,960,000,000.00 $246,036,000,000.00

Ranked 4th. 13 times more than Malaysia Ranked 35th.
Gross National Income $477,000,000,000.00 $79,326,600,000.00

Ranked 12th. 5 times more than Malaysia Ranked 37th.
Gross national income
~ constant LCU
28322300000000 292607900000
Gross National Income
(per $ GDP)
$14.37 per $100 $34.60 per $100

Ranked 160th. Ranked 75th. 141 more than India
Human Development
Index
0.602 0.796

Ranked 128th. Ranked 61st. 32 more than India
Income category Low income Upper middle income
Income distribution ~
Poorest 10
3.5 1.7

Ranked 22nd. 106 more than Malaysia Ranked 90th.
Income distribution ~
Richest 10
33.5 38.4
DEFINITION: Share oI income or consumption (). The distribution oI income is
typically more unequal than the distribution oI consumption.
SOURCE: World Bank. 2002. World Development Indicators 2002. CD-ROM.
Washington, DC

Ranked 38th. Ranked 23rd. 15 more than India
Overall productivity ~
PPP
$7,279.30 $22,969.30

Ranked 50th. Ranked 39th. 2 times more than India
Research and
development spending
0.6 0.4

Ranked 39th. 50 more than Malaysia Ranked 50th.
Technological
achievement
0.2 0.4

Ranked 59th. Ranked 28th. 100 more than India
















Government stats: India vs Malaysia
Indian Government
stats
Malaysian
Government stats
Capital city New Delhi Kuala Lumpur
Corruption

General
government
Iinal
consumption
expenditure ~
annual
growth
9.8 5.38

Ranked 12th in 2005. 82 more than Malaysia Ranked 37th in 2005.
General
government
Iinal
consumption
expenditure ~
current US$
91,366,390,000 $ 16,863,420,000 $

Ranked 12th in 2005. 4 times more than Malaysia Ranked 33rd in 2005.
General
government
Iinal
consumption
expenditure ~
current US$
(per capita)
83.5 $ per capita 665.3 $ per capita

Ranked 112nd in 2005. Ranked 49th in 2005. 7 times more than India
General
government
Iinal
0.1 $ per $1 oI GDP 0.1 $ per $1 oI GDP
consumption
expenditure ~
current US$
(per $ GDP)

Ranked 105th in 2005. Ranked 89th in 2005. 14 more than India
Legal origin English English
Prime minister Manmohan Singh Najib Tun Razak
Status Iederal democracy Iederal pseudo-democracy
Start-up
procedures to
register a
business ~
number
11 9

Ranked 46th in 2006. 22 more than Malaysia Ranked 95th in 2006.
Time required
to build a
warehouse ~
days
270 days 281 days

Ranked 38th in 2006. Ranked 28th in 2006. 4 more than India
Time required
to enIorce a
contract ~ days
1,420 days 450 days

Ranked 4th in 2006. 2 times more than Malaysia Ranked 92nd in 2006.
Time required
to register
property ~ days
62 days 144 days

Ranked 66th in 2006. Ranked 28th in 2006. 132 more than India
Time required
to start a
business ~ days
35 days 30 days

Ranked 84th in 2006. 17 more than Malaysia Ranked 102nd in 2006.
Time to prepare
and pay taxes ~
hours
264 hours 190 hours

Ranked 80th in 2006. 39 more than Malaysia Ranked 110th in 2006.
Transnational
Issues ~
Disputes ~
International
since China and India launched a
security and Ioreign policy dialogue in
2005, consolidated discussions related to
the dispute over most oI their rugged,
militarized boundary, regional nuclear
proliIeration, Indian claims that China
transIerred missiles to Pakistan, and
other matters continue; various talks and
conIidence-building measures have
cautiously begun to deIuse tensions over
Kashmir, particularly since the October
2005 earthquake in the region; Kashmir
nevertheless remains the site oI the
world's largest and most militarized
Malaysia has asserted sovereignty over
the Spratly Islands together with
China, Philippines, Taiwan, Vietnam,
and possibly Brunei; while the 2002
"Declaration on the Conduct oI Parties
in the South China Sea" has eased
tensions over the Spratly Islands, it is
not the legally binding "code oI
conduct" sought by some parties;
Malaysia was not party to the March
2005 joint accord among the national
oil companies oI China, the
Philippines, and Vietnam on
conducting marine seismic activities in
territorial dispute with portions under
the de Iacto administration oI China
(Aksai Chin), India (Jammu and
Kashmir), and Pakistan (Azad Kashmir
and Northern Areas); India and Pakistan
have maintained the 2004 cease Iire in
Kashmir and initiated discussions on
deIusing the armed stand-oII in the
Siachen glacier region; Pakistan protests
India's Iencing the highly militarized
Line oI Control and construction oI the
Baglihar Dam on the Chenab River in
Jammu and Kashmir, which is part oI
the larger dispute on water sharing oI the
Indus River and its tributaries; UN
Military Observer Group in India and
Pakistan (UNMOGIP) has maintained a
small group oI peacekeepers since 1949;
India does not recognize Pakistan's
ceding historic Kashmir lands to China
in 1964; to deIuse tensions and prepare
Ior discussions on a maritime boundary,
India and Pakistan seek technical
resolution oI the disputed boundary in
Sir Creek estuary at the mouth oI the
Rann oI Kutch in the Arabian Sea;
Pakistani maps continue to show its
Junagadh claim in Indian Gujarat State;
discussions with Bangladesh remain
stalled to delimit a small section oI river
boundary, to exchange territory Ior 51
Bangladeshi exclaves in India and 111
Indian exclaves in Bangladesh, to
allocate divided villages, and to stop
illegal cross-border trade, migration,
violence, and transit oI terrorists through
the porous border; Bangladesh protests
India's attempts to Ience oII high-traIIic
sections oI the border; dispute with
Bangladesh over New Moore/South
Talpatty/Purbasha Island in the Bay oI
Bengal deters maritime boundary
delimitation; India seeks cooperation
Irom Bhutan and Burma to keep Indian
Nagaland and Assam separatists Irom
hiding in remote areas along the borders;
the Spratly Islands; disputes continue
over deliveries oI Iresh water to
Singapore, Singapore's land
reclamation, bridge construction, and
maritime boundaries in the Johor and
Singapore Straits; in November 2007,
the ICJ will hold public hearings in
response to the Memorials and
Countermemorials Iiled by the parties
in 2003 and 2005 over sovereignty oI
Pedra Branca Island/Pulau Batu Puteh,
Middle Rocks and South Ledge; ICJ
awarded Ligitan and Sipadan islands,
also claimed by Indonesia and
Philippines, to Malaysia but leIt
maritime boundary and sovereignty oI
Unarang rock in the hydrocarbon-rich
Celebes Sea in dispute; separatist
violence in Thailand's predominantly
Muslim southern provinces prompts
measures to close and monitor border
with Malaysia to stem terrorist
activities; Philippines retains a
dormant claim to Malaysia's Sabah
State in northern Borneo; Brunei and
Malaysia agreed in September 2008 to
resolve their oIIshore and deepwater
seabed dispute, resume hydrocarbon
exploration and renounce any
territorial claims on land; piracy
remains a problem in the Malacca
Strait
Joint Border Committee with Nepal
continues to examine contested
boundary sections, including the 400
square kilometer dispute over the source
oI the Kalapani River; India maintains a
strict border regime to keep out Maoist
insurgents and control illegal cross-
border activities Irom Nepal
Trademarks,
nonresidents
2,862 5,152

Ranked 53rd in 1993. Ranked 32nd in 1993. 80 more than India
Trademarks,
residents
42,723 6,861

Ranked 8th in 1995. 5 times more than Malaysia Ranked 24th in 1995.
United Nations
mission
http://www.indiaembassy.org
http://www.un.int/india/
http://www.un.int/malaysia/
UN
membership
date
30 Oct. 1945 17 Sep. 1957



MALAYSIA: Economic Policy Analysis
1. Freedom Irom internal control: 4.7
Citizens oI Malaysia are Iree Irom positive or pro-active control by government agencies. They
are always Iree to move about and engage in any activity that is not prohibited by the
government Ior good reason. Citizens oI Malaysian oIten Ieel strongly about the government's
movements and decisions. As said they are Iree to accuse, compliment and express the way they
think the government is operating. Newspapers commonly publish editorials, and letters Irom the
public on current issues. There is no punishment Ior this, and no Iear oI consequences seeing as
how there usually are none. The Australian government encourages Ireedom and supports many
activities that its citizens take part in. Business entrepreneurship and Ioreign investment is also
highly encouraged and isn't bound by any well know laws, just the private ones that it agrees to.
I.e. rent payments, Iair wages, etc. This Ireedom provides the maximum opportunity to
Malaysian to do many things such as, create more small, medium industry or business and many
more.
Source: Personal
2. Freedom oI speech: 5.0
Citizens can say anything they want by speaking to anyone about anything they want. Citizens oI
Malaysia are all able to express themselves Ireely without censorship or restriction. The whole
country shares it's opinions openly, on places which are becoming more nice etc, and iI the
government`s doing good or not, views and opinion on new regulation and many more. So the
national debates, Iorums, speeches, protests, etc can all be discussed and shared in plain view,
without Iear oI annihilation, murder, banishment, etc. But somehow, a Iew oI most media are
shared with the government and this situation to some broad extent barred the social advance. So
thereIore, some media agencies will say and tell good things about the government and not
criticizing the government. But still overall, the citizens have the Ireedom oI speech to say
weather they agree or not and give their views. They could communicate in what ever way they
like.
Source: Personal
3. EIIective, Fair Police Force: 3.5
In Malaysia, the national armed Iorces are strong and suIIicient enough to protect the country.
Malaysia there`re many military branches which are created such as The Malaysian Army, Royal
Malaysian Navy, Royal Malaysian Air Force, Royal Malaysian Police Field Force, Marine
Police, Sarawak Border Scouts and many more. The Military expenditures at dollar Iigure is at
$1.69 billion (FY00 est.) Military expenditures - percent oI GDP: 2.03 (FY00) The Malaysia
police Iorce are overall good. But some how, the malaysia police are always corrupted. But still
that doesn`t change the sense oI responsibility police have Ior the society`s Iuture. However, they
are still eIIicient and Iair at other times.
Source : http ://www.1000countries.com/malaysia.., http: //www. Countrywatch.com 12/10/03
4. Private property: 4.5
Malaysia has an eIIective legal system and adequate legislation to protect private property.
Foreigners are permitted to purchase and secure mortgages Irom Iinancial institutions Ior
property, chattel and real estate in Malaysia with the exception oI agricultural land and
residential properties valued less than RM250,000 (US$65,800). Individual Ioreigners are also
barred Irom owning more than 20 percent oI the commercial properties in any single
development project, though their aggregate commercial holdings are not restricted. Intellectual
Property Rights (IPR) are covered by the Trade Description Act oI 1972, the Patent Act oI 1983,
the Copyright Act oI 1987 and the Industrial Designs Act oI 1996. Malaysia is a member oI the
World Intellectual Property Organization (WIPO), the Berne Convention Ior the Protection oI
Literary and Artistic Works, and the Paris Convention. Malaysia provides protection to all works
(inter alia video tapes, audio material, and computer soItware) published in Berne Convention
countries regardless oI when the works were Iirst published in Malaysia.
Source: http ://www.1000countries.com/malaysia.. 12/09/03
5. Commercial banks 5.0
The Malaysia banking system is a highly centralized managed system. They are operating under
a same set oI regulation. under the instruction and inspection oI the central bank. Individuals do
not have credit line and have no credit in the bank, but the mortgage loan is available. Now as
many state-owned enterprises are encountering the recession, the slackened debts have made
many Iinancial institutes sink into diIIiculty, their eIIect on the contribution to the growth oI
economy thereIore lessened.
Source: http: //www. Countrywatch.com 12/10/03
6. Communication Systems: 5.0
In Malaysia, there`s an extensive network oI communication Iacilities such as the telephone, tv,
radio, Iax, newspapers, magazines, computer networks and many more. Malaysia`s
communication systems are considered very good.
In Malaysia, there`re more than 4.6 million (2000) telephones, main lines in use. There`re about
5 million (2000) mobile cellular phones in use.
The telephone systems are, the general assessment are in modern system and the international
service are excellent. As Ior the domestic telephone system, there`s good intercity service
provided on Peninsular Malaysia mainly by the microwave radio relay, adequate intercity
microwave radio relay network between Sabah and Sarawak via Brunei. It have it`s own
domestic satellite system with 2 earth stations. As Ior the international telephone system,
Malaysia have submarine cables to India, Hong Kong, and Singapore. And with satellite earth
stations, 2 Intelsat one in the Indiana Ocean and one in the PaciIic Ocean.
In Malaysia, there`s also the radio broadcast stations, Irom AM 35, FM 391, shortwave 15 and
others. There`re about 10.9 millions radios. And as Ior the television broadcast stations, there`s
one ( plus 15 high-power repeaters) there`s more than about 10.8 millions televisions.
The Malaysia internet country code is, my. There`s about 7 internet services providers (ISPs)
(2000). There`s currently about 4.1 million internet users (2001)
source: http
://www.terrorismcentral.com/Library/Government/US/CIA/CIAFactsBook/FactBookCountryList
countrywatch.com/. 12/03/03
7. Transportation: 5.0
Malaysia's transportation system is very good and oI a high standard aIter years and years oI
development.
There`s good transportation Iacilities the movement oI merchandise and people, which thereby
improving the commercial activity oI the country. In Malaysia there`s all kinds oI transport Irom
rails, roads, ship, and air.
There`s about a total oI 1801 km oI railways. And the narrow gauge oI railways also 1801 km
which 1000 m gauge ( 148 km electriIied ) (2001). As Ior the roads in Malaysia there`s about a
total oI 64672 km oI highways built. Paved highways about 48707 km (including 1,192 km oI
expressways). In addition to these national and main regional roads, Malaysia has thousands oI
kilometers oI local roads that are maintained by local jurisdictions (1999). As Ior the unpaved
roads there`s about 15,965 km.
As Ior the waterways in Malaysia there`s about a total oI 7,296 km waterways. Peninsular
Malaysia is at about 3,209 km, Sabah 1,569 km, and Sarawak 2,518 km. There`s many ports and
harbors Ior the ship transportation in Malaysia, such as in Bintulu, Kota Kinabalu, Kuantan,
Kuching, Kudat, Labuan, Lahad Datu, Lumut, Miri, Pasir Gudang, Penang, Port Dickson, Port
Kelang, Sandakan, Sibu, Tanjung Berhala, Tanjung Kidurong, Tawau and many others more. As
Ior the merchant marine, there`s about a total oI 363 ships (1,000 GRT or over) totaling
4,952,119 GRT/7,229,299 DWT which includes some Ioreign-owned ships registered here as a
Ilag oI convenience: Australia 1, China 1, Germany 2, Hong Kong 15, Indonesia 3, Japan 4,
Monaco 1, Philippines 2, Singapore 78, South Korea 2, Vietnam 1 (2002 est.
There`s also the merchant marine ships by diIIerent types. Such as type: bulk 57, cargo 114,
chemical tanker 35, container 62, liqueIied gas 20, livestock carrier 1, passenger 2, petroleum
tanker 60, roll on/roll oII 5, specialized tanker 1, vehicle carrier 6 and many others.
As Ior the air transportation in Malaysia, there`s currently now about 116 airport in Malaysia
(2001). There`s also many diIIerent types oI airport with paved runways such as a total oI 34
over 3,047 m: 5 , 2,438 to 3,047 m: 5 , 914 to 1,523 m: 6, under 914 m: 7 (2001), 1,524 to 2,437
m: 11 and a lot more. As Ior the airport wit unpaved runways there`s about a total oI 82 1,524 to
2,437 m: 1, 914 to 1,523 m: 8 , and under 914 m: 73 (2001)
source: http
://www.terrorismcentral.com/Library/Government/US/CIA/CIAFactsBook/FactBookCountryList
countrywatch.com/. 12/03/03
8. Education: 3.7
Malaysia`s education is quite high. In Malaysia, their education systems mostly Iollowed the
british system.
There`s both government and private Schools in Malaysia. Attendance is compulsory between
the ages oI 5 through to 15. Education begins when children turn age Iive and attend
kindergarten aIter a year children attend a primary school (elementary) Ior 6 years. Upon
graduation oI primary school, students then attend a high school Ior a Iurther 6 or 7 years until
graduation. Between these times, parents could either choose Irom normal government schools,
chinese standard government schools, hindu schools, or private schools.
AIter high school and aIter passing the Iinal secondary major examination, they could either
choose to continue in college or stop studying. There are no compulsory requirements aIter
completing high school such as military duty etc, so students are given Iree reign and are able to
take up Iull time employment, travel, study, relax, etc.
In terms oI costs, primary and secondary education is Iree in government schools in all States
and Territories. Tertiary education however is not Iree. Students oIten take a government loan to
pay Ior Iees, books, etc and pay back the loan on individual terms once employed with the
qualiIications received Irom the institution. Private, catholic and other types oI schools also oIten
charge expensive Iees Ior educational services. Normally iI one study in a government school
one will just have to pay a small amount oI school Iees and as Ior the books, they could just loan
it.
Sources: Personal opinion
9. Social mobility 3.5
In Malaysia, the education system does not provide access by all persons to the tools needed by
individuals Irom deprived backgrounds to join the more elite classes. Generally the rights oI
individuals are protected and the ability Ior each person to make a good living is unrestricted.
The Iirst point that can be raised on this issues is that statistics on Malaysia's work Iorce show
that men are oIten paid more and oIten work in higher paying jobs than women. In 1994 it was
estimated that men on average earned more than women. The second point being that people are
hired Ior positions primarily Ior their qualiIications and experience within the industry.
Source: Personal opinion.
10. Freedom Irom Outside Control: 4.7
Malaysian citizens are Iree Irom control by any citizen, Iree Irom control oI any Ioreign
government or outside control. Although Malaysia is part oI the British commonwealth this has
little or no eIIects on the citizens, and does not excise any stronghold or Iorms oI control on what
the citizens are allowed to say or do.
Source: personal.
11. Foreign currency transactions : 4.0
Despite the imposition oI selective capital controls, Malaysia's current account remains Iully
convertible. Importers and exporters have suIIicient access to Ioreign exchange to meet their
needs. The Central Bank has shown Ilexibility in exercising the capital control measures imposed
in 1998. Ringgit earned by Ioreigners in the Iorm oI salaries, interest payments and dividends
may be converted into Ioreign currency Ior repatriation abroad. All payments to other countries
must be made in Ioreign currency, other than the currency oI Israel, Serbia or Montenegro,
through authorized Ioreign exchange dealers. Depending on the size oI their monthly receipts,
resident exporters and approved operational headquarters are allowed to retain a maximum oI
US$10 million in export proceeds in Ioreign currency accounts. Resident and non-resident
travelers may carry no more than RM1000 into or out oI Malaysia. Residents may not carry out
Ioreign currency more than the equivalent oI RM10,000 (US$ 2632). Non-residents may carry
out any amount oI Ioreign currency up to the amount they carried in.
An Asian Iinancial crisis in 1997 hit Malaysia's economy hard, ending almost a decade oI eight
percent annual GDP growth and exposing the country's external vulnerabilities. As the current
account deIicits oI the booming Asian economies like Thailand, Indonesia and Malaysia began to
look unsustainable and inconsistent with the 'soIt pegs' oI local currencies to the U.S. dollar,
market conIidence in currencies oI the Southeast Asian countries evaporated quickly, resulting in
large portIolio and bank deposit investment outIlows and a decline in equity and property values.
In reaction, Malaysian authorities launched policy changes designed to insulate domestic
monetary policy Irom external volatility. Measures adopted included currency and capital
controls and an exchange rate pegged to the U.S. dollar at R3.8/US$, a substantial devaluation
Irom the ringgit's value in 1996, about R2.5/US$, beIore the crisis. This new value Ior the peg oI
the ringgit to the U.S. dollar has held to the current time while Malaysia's external accounts have
strengthened signiIicantly. With capital controls in place, speculative selling oI the ringgit
became more diIIicult and costly and National Bank oI Malaysia was subsequently able to lower
interest rates as it re-established control over its monetary policy. Also, the government
established three institutions to speed recovery oI the Iinancial system weakened by the Asian
crisis. Danaharta, the asset management company, was established to purchase and manage the
many nonperIorming loans that were leIt on the books oI Malaysian banks Iollowing the
devaluation oI the ringgit and the abrupt cessation oI capital inIlows into Malaysia.
However, with the sudden reversal in Ioreign investors' interest in the emerging economies oI the
Southeast Asian region in 1997, Malaysia could no longer aIIord the high level oI investment
and importation oI capital goods. Imports Iell sharply and the trade surplus widened signiIicantly
so that in 1998, the current account had swung to a surplus oI US$9.5 billion Irom a deIicit oI
US$5.9 billion in 1997. Over this period, the value oI the ringgit had declined Irom RM2.5/US$
to RM3.8/US$. With the much weaker ringgit, Malaysia's terms oI trade made its exports much
more attractive in global markets and they expanded rapidly in 1999 and 2000, beIore slowing
during the global trade recession oI 2001.
Source : http : // www.
terrorismcentral.com/Library/Government/US/CIA/CIAFactsBook/FactBookCountryList http
://www.1000countries.com/malaysia.. 12/02/03
15. Political eIIectiveness 3.7
Malaysia has experienced little political violence since serious ethnic rioting in 1969. Since
1998, supporters oI the reIorm movement launched by Iormer Deputy Prime Minister Anwar
Ibrahim have staged a number oI largely peaceIul demonstrations. In a Iew cases, police and
demonstrators clashed, but there were no deaths or serious injuries.
As the United States pushed toward a war against Iraq in February 2003, Malaysian Prime
Minister Mahathir denounced US policy on the GulI country, warning that a US-led attack would
be seen as a "war against Muslims."
At that time, Malaysia was hosting a summit oI developing nations in the 114-member Non-
Aligned Movement (NAM), which was set to adopt a declaration condemning war with Iraq.
Mahathir accused the U S oI double standards in its contrasting attitudes towards North Korea
and Iraq. Ironically, in early April 2003, Malaysia's own government accused its religious
schools oI teaching hate, not religion, and stopped their state subsidy. More than 125,000
children in Malaysia receive an Islamic education in such institutions.
The commission's long awaited report on the law, which eIIectively allows Ior indeIinite
detention without charge or trial, says it ignores basic rights. Malaysia's security laws date Irom
1960, a time when the country was locked in a bloody struggle with communist guerrillas. It
allows Ior suspects to be held Ior up to two years iI they are deemed to threaten national security.
Police are not required to prove any wrongdoing. Detention orders can be extended indeIinitely
and are diIIicult to challenge.
In late April 2003, Malaysia's OIIicial Human Rights Commission - Suhakam - called Ior the
Internal Security Act to be replaced with laws modeled on Western anti-terrorism legislation. It
called Ior any new law to outline speciIic oIIenses, Ior detainees to be charged or released aIter
three months, Ior detention orders to be subject to judicial review and Ior the law to require
annual renewal. As it was initiated by a government body, this report represented one oI the
strongest challenges yet to the country's most controversial law.
However, critics say it will be used by the government to lock up political opponents.
Meanwhile, supporters oI the act believe it is essential to counter terrorism.
More than 70 alleged Islamic militants are currently detained under its provisions. But in early
June 2003, the Malaysian government released three opposition activists who were detained Ior
more than two years ago under the controversial Internal Security Act. The detainees were
arrested in April 2001 and accused oI plotting to overthrow the government, charges they all
denied. International rights group Amnesty International had adopted the activists as prisoners oI
conscience, and lawmakers Irom several countries including Denmark, Britain and the
Netherlands signed a petition asking Ior their release.
In late May 2003, the Malaysian government outlined a US$1.92 billion stimulus package in an
eIIort to oIIset the damage oI the disease, Sars (Severe Acute Respiratory Syndrome), and revive
the country's sluggish economy. The stimulus package, delayed successively since March, is the
country's third oII-budget spending program since 2001.
Measures included a relieI Iund and tax breaks Ior the tourism sector, liberalization oI Ioreign
investment rules and new Iunds to help traders. Two people have died oI SARS in Malaysia,
which was chosen as the venue oI a two-day global Iorum on the disease held on June 17.
(Conclusion) The political problems doesn`t really aIIect the business climate. But somehow
even when governments recognize and try to solve the problems, it`s just isn`t enough. The
government have to take more true and eIIective actions because it has somehow causes some
social burden to us and to help improve the country.
Source : http ://www.1000countries.com/malaysia.., http://www.business-in-
asia.com/malaysia3business.html.( business.in.malaysia.net), personal opinion and others
11/24/03
16. Institutional Stability 3.7
In Malaysia the most institution are stable, there`s stable governments which are quite good,
courts, schools, stable law enIorcement, businesses and many others. The government has
created many kinds oI institutions most oI them are really stable and are still eIIective. But still
there are some that changes quite Irequently, only a Iew. Though there`re many Iloods and other
small crisis that eIIects Malaysia, but still everything are quickly solved. But somehow there`s
also poorly Iunctioning institutions which exist Irom the village to the national level. In addition,
widespread and endemic corruption persists at all levels oI the political, administrative, judicial
and military systems. Thought there`s corruption going on but it doesn`t eIIect the country`s
institutional stability at all.
Source : Personal opinion.
17. Honest Government 3.0
In my very opinion, Malaysia corruption and bribery are done in almost anywhere especially on
small crimes such as to reduce ones speeding ticket, bribe the polis and have them not to give out
a ticket or Iine you ought to get. Besides this, corruption and bribery are done also in both either
a big businesses or a small business. And so thereIore, in Malaysia the government leaders does
not work hard to limit or eliminate the corruption created.
News reports and anecdotes indicate that corrupt practices exist. Malaysia considers bribery a
criminal act and does not permit bribes to be deducted Irom taxes. The Anti-Corruption Agency
(ACA) began operations in 1967. Since June 1997, senior state-level oIIicials have been required
to declare their assets to the ACA upon taking oIIice. Foreign businessmen are asked to report
any individuals who ask Ior payment in return Ior government services. ACA investigations are
reported in the newspapers. Transparency International, a nonproIit organization, ranked
Malaysia the 32nd least corrupt in its 1999 survey oI 99 countries. Malaysia's score oI 5.1 on a
scale oI zero (corrupt) to 10 (clean) placed it in a tie with Costa Rica, ahead oI countries such as
south Korea, Thailand, China, the Philippines and Indonesia, though behind others such as
Singapore, Hong Kong, Taiwan and most oI Western Europe. The Malaysian chapter oI
Transparency International is the Kuala Lumpur society Ior transparency and integrity.
Source : http ://www.1000countries.com/malaysia.., http: //www. Countrywatch.com and
personal opinion 11/25/03
18. Common Laws 4.7
For years now, the Malaysia government have the same set oI non-conIlicting laws, justice and
dispute resolution throughout the population. Also the administration and implementation oI the
legal system in Malaysia is uniIorm in all parts. As a conclusion, the Malysia legal system is
considered eIIective and is equally Iair. AIter independence on Aug. 31, 1957, the Federation oI
Malaysia was Iormed on July 9, 1963. As a constitutional monarchy, Malaysia's head oI state is
the "Yang di-Pertuan Agong," (paramount ruler) customarily reIerred to as the king. Kings are
elected Ior Iive-year terms Irom among the nine sultans oI the Peninsular Malaysian states. The
king has ceremonial duties and is also the leader oI the Islamic Iaith in Malaysia.
The executive branch oI the Iederal government is headed by the prime minister who is
appointed by the king. The cabinet members are appointed by the prime minister Irom among the
parliament members with consent oI the king. The Iederal government has authority over Ioreign
policy, deIense, internal security, the administration oI justice and citizenship. The current prime
minister oI Malaysia is Dr. Mahathir bin Mohamad, who has been in the position since 1981.
Legislative power in Malaysia is divided between Iederal and state legislative assemblies. The
bicameral parliament consists oI the "Dewan Negara" (Senate) and the "Dewan Rakyat" (House
oI Representatives). Among the 69 members oI the Senate who serve a six-year term, 43 are
appointed by the king and 26 are elected by the state legislature-two Irom each state. The 193
members oI the House oI Representatives are elected Irom single-member districts by universal
adult suIIrage to maximum terms oI Iive years. OI these, 145 are Irom Peninsular Malaysia, 27
are Irom Sarawak and 21 are Irom Sabah. Malaysia is divided into 13 states and two Iederal
territories (the capital and an island). Each state has its own written state-level constitution, a
legislative assembly, and a government headed by a chieI minister. Each state Legislative
Assembly can legislate on matters not reserved Ior the Iederal parliament.
The Malaysian legal system is based on English common law, judicial review oI legislative acts
in the Supreme Court at request oI supreme head oI the Iederation; has not accepted compulsory
ICJ jurisdiction. Under the constitution oI Malaysia, the judicial power oI the Iederation is vested
in two High Courts, one in Peninsular Malaysia and the other in East Malaysia, and in
subordinate courts. There is also a Supreme Court which is above the High Courts. Malaysia has
an eIIective legal system and adequate legislation to protect private property. Foreigners are
permitted to purchase and secure mortgages Irom Iinancial institutions Ior property, chattel and
real estate in Malaysia with the exception oI agricultural land and residential properties valued
less than RM250,000 (US$65,800). Individual Ioreigners are also barred Irom owning more than
20 percent oI the commercial properties in any single development project, though their
aggregate commercial holdings are not restricted. Intellectual Property Rights (IPR) are covered
by the Trade Description Act oI 1972, the Patent Act oI 1983, the Copyright Act oI 1987 and the
Industrial Designs Act oI 1996. Malaysia is a member oI the World Intellectual Property
Organization (WIPO), the Berne Convention Ior the Protection oI Literary and Artistic Works,
and the Paris Convention. Malaysia provides protection to all works (inter alia video tapes, audio
material, and computer soItware) published in Berne Convention countries regardless oI when
the works were Iirst published in Malaysia.
Source : http ://www.1000countries.com/malaysia.., http: //www. Countrywatch.com , personal
opinion and others 11/25/03
19. Central Bank: 4.0
The central bank in Malaysia is called Bank Negera Malaysia. The duty oI the central bank is
primarily to Iormulate and implement monetary policy. The bank's duties also include
monitoring the monetary and banking policies oI its divisional banks and also many others. The
Bank Negara Malaysia also serves as a tool Ior the central planning agencies and it also held the
assets external Iinancial consist oI claims on non-residents and, oI monetary gold and Special
Drawing Rights (SDRs). The Bank Negara is Iully owned by the Malaysia Government, to which
its proIits go to. ThereIore the Bank Negara are known to operate under government control and
isn't independent oI political control. The central Bank somehow is controlled by the government
in good condition and is doing the country`s economic good.
For instance, the Malaysian government authorities launched policy changes designed to insulate
domestic monetary policy Irom external volatility. Measures adopted included currency and
capital controls and an exchange rate pegged to the U.S. dollar at R3.8/US$, a substantial
devaluation Irom the ringgit's value in 1996, about R2.5/US$, beIore the crisis. This new value
Ior the peg oI the ringgit to the U.S. dollar has held to the current time while Malaysia's external
accounts have strengthened signiIicantly. With capital controls in place, speculative selling oI the
ringgit became more diIIicult and costly and National Bank oI Malaysia was subsequently able
to lower interest rates as it re-established control over its monetary policy. Also, the government
established three institutions to speed recovery oI the Iinancial system weakened by the Asian
crisis. Danaharta, the asset management company, was established to purchase and manage the
many nonperIorming loans that were leIt on the books oI Malaysian banks Iollowing the
devaluation oI the ringgit and the abrupt cessation oI capital inIlows into Malaysia. A Corporate
Department Restructuring Committee was set up to encourage collective debt workouts between
debtors and creditors. The government also promoted the consolidation oI more than 50 Iinancial
institutions through domestic mergers oI weak institutions into 10 stronger ones
Source: www.countrywatch, picosearch.com/cgibin/ts.pl and personal opinion date accessed
11/20/03
20. Domestic Budget Management: 4.3
The Iiscal balance experienced a substantial swing between 2000 and 2001 as the government
executed a well-timed expansion oI the central government deIicit to more than Iive percent oI
GDP to cushion the decline in external demand Irom the slowing world economy. The
consolidated Iiscal balance in Malaysia (all levels oI government and public enterprises) moved
Irom a surplus oI 0.7 percent in 2000 to a deIicit oI 2.1 percent oI GDP in 2001, providing a
Iiscal pulse to the economy oI nearly 3 percent oI GDP. That policy reaction, plus
accommodative moves Irom the central bank, helped return the economy to positive growth in
2002. Unemployment in Malaysia is low by western, developed country standards: it averaged
3.6 percent during the slow-growth year oI 2001 and dipped to 3.5 percent during 2002. By
contrast, the rate had been as low as 2.5 percent in the boom years oI the middle 1990's.
Malaysia's budget Iindings are published every year in the newspapers when it is released. The
government site exclaims that there will be a budget surplus Ior the Iiscal year oI 2003-2004.
This surplus is planned to be invested in to the current welIare system, tax reIorms, job
strengthening and training programs, youth initiatives, etc.
The real gross domestic product increased 4.1 percent in 2002 aIter having grown just 0.3
percent in 2001 compared to 7.9 percent in 2000 and 6.1 percent in 1999. The inIlation rate
(based on the GDP deIlator) has been a bit volatile in the past three years.
AIter Ialling marginally in 1999, the price level rose 5.5 percent in 2000 as higher energy prices
and booming export markets had their eIIect, and then declined by 2.5 percent in 2001 as
petroleum prices Ilattened out and rapidly Ialling global demand reduced the prices oI key
products and commodities produced by Malaysia. As commodity prices recovered in 2002, the
GDP deIlator rose 3.5 percent in that year. Consumer price inIlation has been lower and less
volatile throughout this period and Malaysia has not generally experienced the deIlation that
some oI its neighbors in Asia are suIIering with.
Source: http://www.malaysiagateway, http://www.smpke.jpm.my and
picosearch.com/cgibin/ts.pl 11/19/03
21. Government Debt: 4.0
Because oI the mostly centrally controlled Iinancing system, the Malaysia government can
manage its debt well. Malaysia has tightened up considerably on new obligations by the national
government and is enIorcing restrictions on borrowing by provinces, municipalities and their
banking entities. The internal debt to Iinance budget deIicit, is issued every year. It was a good
way to reserve the value oI in hand currency Ior most people. There`s also the loans and the
domestic debt have contributed very much to the rapid growth oI the economy and to the
improvement oI the liIe oI people, and the Malaysia government are operating it quite good.
The Malaysia`s overall balance in the second quarter oI 2002 saw a decline in the overall balance
to RM3.3 billion (RM7.2 billion was registered in the previous quarter), attributable to a
decrease in the current account surplus oI RM5.9 billion (RM6.9 billion previously), a net
outIlow amounted to RM6.2 billion in the Iinancial account (a net inIlow oI RM3.3 billion in the
preceding quarter) and errors & omissions oI RM3.6 billion (oI which RM5.2 billion was due
to revaluation gains). The overall balance, which accounted Ior RM10.5 billion in the Iirst halI
oI 2002, pronounced a turnaround Irom that oI -RM14.7 billion a year ago.
In the current quarter, the increase oI the net international reserves held by Bank Negara
Malaysia stood at RM3.3 billion, lower than the increase oI RM7.2 billion recorded in the earlier
quarter.
And in the Malaysia`s Iinancial account, during the second quarter oI 2002, Iinancial account
saw a turnaround oI -RM6.2 billion Irom an inIlow oI RM3.3 billion recorded in the Iirst quarter
2002. The reversal was reIlected by a net outIlow in the portIolio investment oI RM5.0 billion
mainly due to a redemption oI debt securities, which resulted in a reduction in the private sector's
external debt, Irom an inIlow oI RM2.9 billion in the preceding quarter, coupled with the
decreased net inIlow oI RM0.2 billion in the direct investment Irom a bigger inIlow oI RM2.3
billion registered in the earlier period. In the meantime, the oIIicial sector's contribution in the
other investment was -RM1.1 billion, a turnaround Irom RM2.9 billion reported in the previous
quarter, while the net outIlow recorded in the private sector had dropped to RM0.3 billion (Irom
-RM4.8 billion in the Iirst quarter 2002).
The small net outIlow oI RM3.0 billion oI the Iinancial account in the Iirst halI oI 2002 had
indicated a signiIicant drop Irom an outIlow oI RM22.2 billion recorded in the correspondence
period last year. The substantial shortIall was due to the other investment that accounted Ior a net
outIlow oI RM3.3 billion Irom -RM21.0 billion reported in the same period oI 2001.
Source: http://www.malaysiagateway, www.countrywatch, www.statistics.gov.my/ and
picosearch.com/cgibin/ts.pl, 11/20/03
22. Economic Statistics: 4.7
In Malaysia, plentiIul statistics are produce to increase awareness oI business opportunities and
especially to let many business investors know what`s happening and going on in a businesses
and in the country itselI. There`re many diIIerent kinds oI statistics published Ior example, in the
Ioreign investment statistics shows that the U.S. has consistently been a leading investor in
Malaysia. According to the Malaysian Industrial Development Authority. The U.S. was the
largest Ioreign investor in the manuIacturing sector with approved projects valued at US$1,641
million in 1998. Japan was second with U.S.$484 million, Iollowed by Taiwan, with US$255
million. The three made up more than 70 percent oI total Ioreign manuIacturing investments in
Malaysia in 1998. (note: manuIacturing investment only; upstream oil and gas investments not
included.)
There`s also the Malaysia economic perIormance statistics, which provide quite accurate
statistics. It shows that the real gross domestic product increased 4.1 percent in 2002 aIter having
grown just 0.3 percent in 2001 compared to 7.9 percent in 2000 and 6.1 percent in 1999. The
inIlation rate (based on the GDP deIlator) has been a bit volatile in the past three years. AIter
Ialling marginally in 1999, the price level rose 5.5 percent in 2000 as higher energy prices and
booming export markets had their eIIect, and then declined by 2.5 percent in 2001 as petroleum
prices Ilattened out and rapidly Ialling global demand reduced the prices oI key products and
commodities produced by Malaysia. As commodity prices recovered in 2002, the GDP deIlator
rose 3.5 percent in that year. Consumer price inIlation has been lower and less volatile
throughout this period and Malaysia has not generally experienced the deIlation that some oI its
neighbors in Asia are suIIering with. The Iiscal balance experienced a substantial swing between
2000 and 2001 as the government executed a well-timed expansion oI the central government
deIicit to more than Iive percent oI GDP to cushion the decline in external demand Irom the
slowing world economy. The consolidated Iiscal balance in Malaysia (all levels oI government
and public enterprises) moved Irom a surplus oI 0.7 percent in 2000 to a deIicit oI 2.1 percent oI
GDP in 2001, providing a Iiscal pulse to the economy oI nearly 3 percent oI GDP. That policy
reaction, plus accommodative moves Irom the central bank, helped return the economy to
positive growth in 2002. Unemployment in Malaysia is low by western, developed country
standards: it averaged 3.6 percent during the slow-growth year oI 2001 and dipped to 3.5 percent
during 2002. By contrast, the rate had been as low as 2.5 percent in the boom years oI the middle
1990's.
Besides that, in Malaysia there`s also a Department oI Statistics currently produces a wide range
oI economic and social statistics to help the economic growth and many more. Decisions on
statistics to be compiled are based on priorities and current needs oI the Government. Currently
they cover the Iollowing main areas: National Accounts; Balance oI Payments; External Trade;
ManuIacturing; Construction; Mining; Services; Prices; Demography; and, Socio-economic.
The main channel oI data dissemination by the Department is through publications. While some
publications Ior speciIic Iields are produced on an annual basis, yet others are produced on a
monthly, quarterly and halI-yearly basis. Furthermore, special publications are produced on an
ad hoc basis. These publications can be purchased at the headquarters as well as at the state
branches oI the Department. The Department also entertains user requests Ior data in the Iorm oI
diskettes and magnetic tapes. Unpublished statistics are also made available to users on request.
There`s also Consultancy services in the Iield oI sampling are also provided by the Department
to government agencies who require them. ..
There`s also monthly Statistical Bulletin which are meant to provide up-to-date inIormation Ior a
cross-section oI subject-areas and sectors oI the economy oI Malaysia