Assignment 2

BME 2044 Malaysian Economy Prepared for: Madam Sherly George Group members Mohamad Fairuz Bin Yahaya 1041105413 Salman

Table of content

Service industry The service industry can be determined as an Industry that provides services rather than goods. Economists divide the products of all economic activity into two broad categories, goods and services. Industries that produce banking, goods (tangible objects) wholesale include and agriculture, retail trade, mining, tourism, manufacturing, and construction. Service industries include everything else: communications, telecommunication, all professional services such as engineering and medicine, education all consumer services, and all government services. The proportion of the world economy devoted to services rose rapidly in the 20th century. In the U.S. alone, the service sector accounted for more than half the gross domestic product in 1929, two-thirds in 1978, and more than three-quarters in 1993. Worldwide, the service sector accounted for more than three-fifths of global gross domestic product by the early 21st century. As of in Malaysia, we can see that service sector continuing to drive the Gross Domestic Product (GDP) each year.

(On-line source from "”)

Everything that grows also changes its structure. Just as a growing tree constantly changes the shape, size, and configuration of its branches, a growing economy changes the proportions and interrelations among its basic sectors agriculture, industry, and services. We can see in a middle and high income country, whereby agriculture is not the main contributor to a country GDP which is different for service industry the main driver of the economy. Malaysia aim to become a high income country is no doubt heading into the direction of high income country. There for we can fore cast the demand for more expert and labor in the service industry will continue to rise in the near future. For the purpose of this research, we decide to focus on the tourism industry and look at it from economy point of view. In this report we will also discuss further about: • • • • • The importance of tourism industry How tourism sector have contribute to the GDP of a nation and more specifically the Malaysian economy.. Factor that effect tourism industry Challenges and issue for tourism industry. Suggestion on how to improve the industry.

while less than one-sixth of them had rates of growth in excess of 2. it is the opposite. . clothing. To fully understand the importance of service industry. It appears that the generalization about the shift of employment to services has considerable validity at the detailed industry level. automobiles. Thirty-eight of the industries are in the goods sector twenty-three in the service sector.The Growing Importance of Service Industry.5 per cent. we need to first understand why there is a shift in the level of employment towards service sector. For the goods industries. The fraction of the industries in each sector experiencing different annual rates of growth is also shown. We are now a "service economy" more than half of the employed population is not involved in the production of food.63) by industry have been calculated at the sixty-one industry level of detail provided by the National Income Division of the Office of Business Economics. We see that a large percentage of the service industries had rapid rates of growth of employment and only a very few had decline or slow rates. Only two of the service industries showed declines in employment and almost half of them grew at rates exceeding 2. History has told us that the shift of employment to the service industries has been particularly dramatic. houses. Almost one third of the goods industries showed an absolute decline in employment between 1929 and 1963. a research has been done to investigate the reason behind the shift in employability. Average annual rates of change of employment (1929 .5 per cent per annum. Year after year we can see that the employment level is more focus on service rather than other sector such as manufacturing and agriculture. and other tangible goods. In the United States. In table 2 (below) we can see the change in employability of labor.

pp. 1964. Survey of Current Business. 30. 1954 E4ilion. Table 55. July. 1963. 202—3. Table 28. p. NoJional Income.(Source: 1929.) .

" The shift of employment to services has many important implications. in output. "We may well now turn to examine what much careful generalization of available fact shows to be the most important concomitant of economic progress. The Clash of Progress and Security. other things remaining the same. to a lesser extent. Possible increase in cyclical variability in output per man-hour.According to economy expert. Growing need for workers with more formal education. published in 1935. Fisher in his book. (Source National Bureau of Economic Research) . the movement of working population from agriculture to manufacture. With the growth of the service industries. B. These opportunities include: • • • • • • • • • • Growing employment opportunities for women and older workers. Growing opportunities for part-time employment and urban self-employment. Growing stability in employment and. Growing importance of nonprofit organizations (public and private). Possible decreasing importance of unions and growing importance of professional organizations. there also increase some opportunity. Allan G. Declining relative importance of physical capital. namely. but they serve to indicate the likely effects of the relative growth of services. The trends discussed here may be offset by other changes that are also taking place in the economy. Possible trend toward greater personalization of work. Growing importance of small firms. and from manufacture to commerce and services.

42 per cent annually with an average annual growth of 17. The government has steadily increased the allocated budget for this sector over the last few years.5 million in the 7th Malaysian plan to RM1009. Tourism industry is currently the third largest foreign exchange earner. Mount Kinabalu also help in attracting large number of tourists.0 million (EPU. Increase in tourism receipts in 1982-2007 periods was about 42 times on an average of 12. hill resort and Southeast Asia’s highest mountain. Travel and tourism is the country’s second largest income spinner after manufacturing.0 million in the 8th Malaysian plan period. Tourism receipts increase significantly over the last three decades. 2001). This explains how important tourism is to the Malaysian economy. In the 9th Malaysian plan period.7 million in 1982 to 13.58 per cent. experiences 60% increase in its allocation (EPU. White sandy beaches. The department was quiet ineffective. 19 national parks.17 per cent(figure 1). It has been increased from RM605. . For instance. The department was upgraded to the Tourism Development Corporation in 1972.97 million in 2007 with an average annual growth rate of 10. tourists’ arrivals have increased from 2. the allocation reached to RM1367. Back then tourism was not very high in Malaysia anyways. Malaysian economy’s current account balance remains relatively resilient with manufacturing and tourism taking the lead. after manufacturing. In the 80’s increased finances meant that more people were had their own cars and better road transportation services were provided which in turn increased tourism as tourists could now travel easy from place to place without having to worry about the method of travelling. jungle. The Tourism department was set up in 1957 but they hardly have any data so it’s very difficult to say how tourism effected the economy back then.Tourism and Malaysian Economy Malaysia is a great tourism destination due to its outstanding combination of both modern and cultural ways. and to 20. 2006). Tourism receipts increase with the increase of tourist arrivals.3 million in 2002.

Figure 2 Ministry of Tourism Malaysia .

Figure 3 Ministry of tourism Malaysia .

to encourage tourists to spread development to rural region and reduce concentration in the town area to provide direct benefit to the rural people. Fourth. attain greater participation from the private sector in developing the tourism industry with the public sector as the coordinator. . supporter and facilitator. Fifth. To minimize negative socio-cultural and environmental impact of tourism in the process of development. This created a flow of jobs in the tourism industry and further improved the experience of tourists who came to visit Malaysia. With the rise of tourism came the gargantuan rise in hotel and hotel related services (989 hotels in 1990 to an almost 80 per cent increment at 1.The Malaysian Ministry of Tourism highlighted five policies:• • • • • To emphasize on the development of the tourism industry and attain maximum economic benefit from the industry. Third.776 hotels in 2001). to tailor-plan the tourism development in line with the state’s unique characteristics of beautiful nature.

rubber and palm oil to a dynamic and vibrant industrializing nation is attributed to a variety of pull factors. Malaysia's political and economic stability. cost productive workforce. The transformation of the country's economy from one based on primary commodities like tin.Figure 4 The Malaysian economy has made an enormous leap since 1957. developed infrastructure comparable to that of any western country and a host of other amenities make this country an enticing . prudent and pragmatic investor friendly business policies.

Although initially after independence Malaysia was an agriculture based nation.269 trillion. Agriculture now contributes very little to the overall employment rate and GDP of the for investors. Exports showed a positive growth with an increase of 8.7% to RM 694.7% compared to 2010. now it has changed completely. the highest total trade ever recorded. Their total trade in 2011 reached RM 1. It’s been observed that the GDP of the nation is directly related to the income from tourism. Malaysia has achieved 14 continuous years of trade surplus. an increase of 8.23 billion. Figure 5 the economic growth rate Source: Investment Lobby Figure 6: Growth rate Source : National Statistics . Manufacturing has become the country’s main source of income and employment followed by tourism.55 billion for the year 2011 and imports rose by 8.6% to RM 574.

Indonesia (2.250.381). Australia (558.536). The top ten tourist generating markets from January to December 2011 were Singapore (13. as evidenced by the growth in shopping spend for the year 2011. The international shopping attractions have also earned a place in the hearts of the international tourist community.565 jobs were created in the tourism sector.974) and Philippines (362.048). Its contribution to the national income and employment is enormous.4bil to the Gross National Income (GNI) of the country. In 2011 alone. Brunei (1.101).239. The tourism sector contributed a total of RM37. Malaysia has .372.714.3 billion compared to RM56. Overall it is easy to understand why the Malaysian government is so persistent with the tourism industry.577. Thailand (1.Tourism industry has once again seen an increase this year. Tourist arrivals rose to 24. United Kingdom (403.5 billion the previous year.196 in 2010 while receipts climbed to RM58.442. China (1. Japan (386.324 compared to 24.134.411). a total of 55.940).056). India (693.647).404).

ecotourism. Incentives. shopping. In a survey that have been done by us. They are: • • • • • Transportation Culture Shopping healthcare political stability .premised itself as a diverse tourist attraction that offers world class attractions such as culture & heritage. Conventions and Exhibitions (MICE). we have conclude that there are several factor that drive the tourism from other country to travel to other country. which affords visitors from all over the world a plethora of choices to enjoy. Meetings. international events and health tourism.

It is attributed to the ease and accessibility of modern transport that has spurred the widespread growth of nature tourism within the United States and overseas. This reality coupled with changing work patterns and innovative marketing has driven international mass tourism through the years. motels and rest facilities for land travel.” acknowledging that linkage by air. the state of infrastructure. Culpan (1987. goods.Transportation and tourism Transportation links the various destinations and ferries people. . p 546) identified transportation modes and management as the “important ingredients of the international tourism system. Tourism is all about travel. and the motor vehicle has made travel to anywhere possible. destination. and the role of transportation in its operation is vital. a means of getting around the place and leaving it once the duration of the trip is over. auto repair. and transport. Transportation in tourism is most often seen as just part of the tourism system which is in charge of bringing the tourists to the destinations. sea and land modes is essential for the operations as well as the availability of support services such as fuel stations. Access to tourism sites vary according to the nature of the site. and services. and the efficiency of the public transport system. The improvement in transportation modes plus low fares has increased the accessibility of areas once considered off-the-beaten-path. It is largely due to the improvement of transportation that tourism has expanded. Advances in transportation have widely eased travel. The advent of flight has shrunk the world. Page and Lumsdon (2004) contend that the transportation system of a tourist destination has an impact on the tourism experience which explains how people travel and why they choose different forms of holiday.


temporal and purchasing behaviour of tourists as shoppers. • Shopping for essentials whilst on holiday. souvenir purchases or through activity choices. Coles (2004: 379) identifies 'the spatial. deduced from a range of previous research into the area • Shopping as an ancillary function of the visitor attraction (eg gift shops) or destination (eg ‘bucket and spade’ shops at the seaside) • Shopping for travel and tourism products within retail sectors which are. Of course there is a degree of supposition to aligning shopping and tourism because it is difficult to plot retail spending patterns against tourists and non-tourists because of the differing nature of tourist activity. the type and nature of goods acquired as part of shopping episodes and tourists’ shopping performances' . influenced by seasonality. The following categories attempt to define the types of shopping activity that are tourismrelated. as a result. tents and travel accessories. • Shopping as a distinct tourism activity. • Shopping to experience local culture through an engagement with local products. local craftspeople and a desire to purchase something which truly ‘belongs’ to and is ‘from’ the destination. Examples of this include swimming costumes. where the experience is designed as a ‘shopping destination’ and for the most part therefore. requires participants to travel as a pre-requisite to shopping. through food and drink.Malaysia as a Shopping Destination It is almost a given that most tourist activity is inextricably linked to some form of shopping. Why shop? There are numerous issues at play in trying to decipher what is happening with tourists when they engage in shopping activity. carried out mainly by those taking selfcatering holidays who need to stock up on food and household items.

Coles.In highlighting these tourist performances Shields (cf. (1994:16) describes four types of tourist and demonstrates the link between their tourist activity and their shopping patterns. therefore. as part of the tourist experience and as a result is embedded within the experience that tourists have come to expect. It is crucial to recognize that shopping in this context is discussed as a leisure activity. This is summarised in the table below and clearly shows a link between the different styles of shopping behaviour and different travel groups Tourist interest Shopping preference Culture Local arts and crafts Natural and built heritage Local arts and crafts and printed materials Souvenirs to display at home which often carry the logo of the visited Urban entertainment destination Active outdoor pursuits Souvenirs associated with these outdoor activities It is the purpose of the original trip. ‘modern’ shopping center) • position shopping and retail within marketing material. linked to the type of person who would engage in a given activity that influences shopping choices. a powerful argument that destinations must seek to: • • • • define the ‘local’ product define the brand for that local product seek to support traditional and local crafts and producers define the destination shopping profile (‘quaint’ market towns. and “Dhokalia identified three . However. when shopping becomes an activity for the sake of shopping it is somewhat different. What motivates tourists to become shoppers? Littrell et al. 2004:379) identifies a social emphasis on consumption which places shopping at the heart of many people's recreational activities. There is.

roadside stalls and night markets in towns throughout the country. Malaysian duty-free zones are on the islands of Labuan and Langkawi. A major attraction is the colorful. restaurants and hundreds of shops offering a tremendous range of goods. there are bazaars. bustling night market or 'pasar malam' . . international airports and city centres. For light. High-class shopping malls where everything is designed for shopper convenience. the best time of the year to visit is during The Malaysia Mega Sale Carnival. Local regulations ensure items are price-tagged and prominently displayed. particularly at department stores in shopping complexes where prices are fixed. the constantly changing product range available in Malaysia includes an extensive collection of designer labels from the fashion capitals of the world. family or social interaction and shopping as a pleasure activity in its own right with social and relaxation dimensions” (Moscardo 2004: 305). Cash is accepted at night markets while major credit cards are accepted in most shops in the malls and shopping complexes. The exemption of duty on a number of items has resulted in more competitive pricing and makes shopping in Malaysia an even more attractive option. casual shopping. foreign currency exchange counters. supermarkets. computers. contain banks. Duty-free items like cameras. Kuala Lumpur. Malaysians love shopping. which explains the huge number of luxury malls. There are also some duty-free shops in Kuala Lumpur and Penang. If you are a shopaholic. pens.main motives for shopping: utilitarian. From the exotic and antique to modern electronic and audio-visual equipment. perfumes. around August – September when the entire country offers large discounts.found in most neighborhoods on certain days of the week . street-side stalls and stores in the capital. mobile phones. local foods and fruits. cigarettes and liquor are among the most inexpensive in the world. Malaysia is a great shopping destination in Southeast Asia.which stocks a bewildering variety of goods. watches. cosmetics. Shopping at one is a fun experience.

Despite the low prices. It can be quite a humorous exercise as the traders are generally friendly and enthusiastic. bargaining at nights markets is workable. .

The important role of art and heritage is also confirmed by market research from Canada.8 million person-trips. In most cases.Culture as a tourist attractions Tourism has assumed a vital role in the development of destinations around the world. Tourism. . The volume of historic/cultural travel grew 13% between 1996 and 2002.4 million person-trips to 216. This gradually changed towards the end of the century.S. on the other hand.3). which indicates that almost 100 million trips taken by U. from the 1980s onwards “cultural tourism” became viewed as a major source of economic development for many destinations in most of the world. culture is a major asset for tourism development as well as one of the major beneficiaries of this development. as the role of cultural assets in attracting tourists and distinguishing detestations from one another become more obvious. cultural or heritage event or activity..S. residents in 2003 were culture-related. (Source: Estimates from UNWTO figures) In the U. from 192. In particular. Cultural resources were seen as part of the cultural heritage of destinations. slightly faster than domestic travel as a whole. was largely viewed as a leisurerelated activity separate from everyday life and the culture of the local population. Culture is a major factor in the attractiveness of most destinations. largely related to the education of the local population and the underpinning of local or national cultural identities. surveys of “historic/cultural travellers” indicate that 30% of domestic tourists are influenced in their choice of destination by a specific art. almost 50% of the total (Table 2.

Attracting visitors interested in history and preservation.. which is growing rapidly and is seen as a “good” form of tourism to promote (Richards.S. Diversifying the local economy. these benefits include: • • • • • • • • • • Creating jobs and businesses.2). Creating opportunities for partnerships. According to the National Trust for Historic Preservation in the U. Building community pride in heritage. National Tourism Organizations (NTOs) or regional marketing organizations because it is seen as a very large market which attracts high spending visitors (Figure 2. Increasing tax revenues. Generating local investment in historic resources. Increasing historic attraction revenues. 2001). Preserving local traditions and culture. Cultural tourism is particularly attractive because of the raft of benefits it can deliver to local communities.(Source: Tourism Canada) These figures show the importance of culture in influencing tourism flows. Increasing awareness of the site or area's significant . Culture is also seen as an important aspect of the tourism product by NTAs.

By commercialize this product internationally. we can boost Malaysia attraction and also helps introduced Malaysia to the international market. tourism is used to support traditional livelihoods and crafts and sustain communities threatened with out-migration. but it also help create a employment opportunity in the market place. Not only this it also help motivate the young people to learn this traditional method and culture to younger generation.In many urban areas. . For example. The demand for this handicraft from tourist help keeps this traditional tradition alive so that it can be learned and brought forward to the future. Some other handicraft that exist in Malaysia that we need to keep alive are • • • The art of making “keris” The art of making “batik” Wau Bulan And many more. It is truly that Malaysia Truly Asia. In rural areas. a visit to Perak Darul Ridzuan would not be complete without purchasing a “labu sayong”. rejuvenating local economies and increasing property values. cultural institutions have been used to spearhead the regeneration of run-down areas.

Malaysia now have 4 world heritage site. of which 4 in the OECD area) are combining administrative structures for culture and tourism. Now. countries are beginning to link creativity and tourism directly. They are Melaka and George Town along the Straits of Melaka. in a single ministry. The listing of AHLV by Unesco is also 953rd on the World Heritage List in the current session of the World Heritage Committee here. and it also "testifies another dimension of the global recognition of Malaysia as a nation endowed with and committed to the conservation and protection of its world renowned heritage". In the case of the Malaysia. For example. with the help of the government. for example.The closer links between tourism and culture are also reflected in governance structures at national and regional levels. . Gunung Mulu National Park in Sarawak and Kinabalu Park in Sabah. A growing number of countries (about 25 in the world. the link between tourism and culture was originally made on the basis of the importance of “national heritage” for tourism and vice versa.

It is very important for countries attracting tourists to be able to show their advancements in the medical sector in order to attract more elderly tourists or families with small children.Health Standards and Tourism World wide tourism is always heavily affected by health standards and medical issues of any nation. . The fear of an epidemic can tarnish a countries reputation regarding health standards quiet heavily and this fear usually stays for a very long time even if the outbreak is brought under complete control. Tourists travel to other country to relax and to let go off stress and tension but if going to another country means living in fear of an epidemic that could affect you any time or any moment is not what tourists want. Countries that rely heavily on tourism may be hit very hard due to these circumstances. H1N1 or Foot and mouth disease have all damaged world tourism enormously and its not only the infected country that is hampered but also the neighboring countries since there is always a fear of the infection spreading. Tourists prefer going to countries with good medical conditions so that in any life threatening case they can get maximum service. SAARC. A more constant reminder is the low number of tourists in countries suffering from AIDS.

Malaysia has always been pretty much politically stable but has always been sensitive to problems in other countries which is shown by the dip in arrival receipts during the final years of the Cold war and the Gulf war. official authorities in the countries where tourists originate will start issuing advice against traveling to the destination. . It is also important to maintain a good political alliance with neighboring nations to ensure greater contribution from those countries. or be unable to visit the places they wanted to visit according to schedule. Tourists are often regarded as longing for relaxing and unconcerned holiday making and therefore are sensitive to events of violence in holiday destinations. Political violence is the exercise of such force that is politically motivated and can be exercised by governmental or anti-governmental groups. Faced with violent events in a country. Tourists might therefore choose an alternative destination with similar characteristics but in a more stable condition. Any sort of criminal acts or display of political instability can carnage the goodwill of the nation forcing tourists to opt for other more safer and controlled countries. one expects political violence to have detrimental impacts on tourism. For these and similar reasons.Political Stability and Tourism Political stability is absolutely necessary if a country is to depend on tourism regarding it’s GDP. fear of liability suits. might simply anticipate becoming involved in stressful situations. Depending on its exact definition. and the like and promote other destinations instead. political violence is regarded as an essential ingredient of the somewhat broader notion of political instability. Obviously if Malaysia had a bad relationship with China then Chinese tourists would be discouraged from visiting Malaysia. Tourist operators will start eliminating tours to the country due to insufficient bookings. If the violence becomes more widespread and prolonged. potential tourists might fear for their lives or physical integrity.

58 while the neighboring country average was 8. its even more dangerous. . Well-trained taxi drivers can help shape and improve tourists’ perception about Malaysia. The most frequent complaints by the respondents were the overcharging practice and the refusal to take passengers who were not agreeable to a flat fee. In 2008. ease of availability. If the tourists feel welcomed and comfortable it is very likely that they will come back due to the hospitality but on the other hand if the tourists feel hard done by or duped they might go for a different country next time. Taxi drivers have the huge responsibility to give a first good impression. This broad perception of safety concerns range from unwanted attention from drivers (for female passengers) to robberies and incidents of rape in remote locations. “The Expat” magazine ranked Malaysian taxis last out of 23 countries surveyed. One has only to travel a little to see how busy the taxi drivers are taking passengers from one destination to another. Each of the criteria was assessed on a 10-point scale. which are made of foreigners coming from more than 30 countries worldwide. and for anyone travelling alone at night. over 200 respondents. driver’s courtesy level and driver’s job knowledge. As a tourist in an unknown country tourists generally tend to travel by taxis.Issue and challenges Taxi and Tourism Taxi service in Malaysia has become quiet an industry. The Malay Mail conducted a survey. For females travelling on their own. Malaysia taxi scored a poor average point of 4. Although most taxi drivers are sincere and sufficiently educated there are always some cases where the passengers were tricked into paying more or taken to the wrong place and then just left there. were given an opportunity to review and assess the service provided by the local taxis. Among of the criteria measured are quality of taxi.44. In the survey.

8 per cent and taxis & rental of cars with 4. Most of the victims tend to be tourists or foreigners.3 per cent and 5. This was followed by bus services with 11.9 per cent respectively. This has become quiet a predicament. Recently a number of cases regarding customer harassments have come out.0 per cent respectively.7 per cent and 13. freight transport by road was the top contributor. It is quiet obvious that the taxi industry has a lot of potential but it required more rigid invigilation. As such the government must take steps to better train the taxi drivers and provide good vehicles to reduce accidents and improve customer service and satisfaction. This might attract more tourists and in turn contribute more to the countries National GDP and economic growth.Souce: department of statistics malaysia In terms of value of gross output and value added. It seems that some taxi drivers tend to think of them as easy prey.5 per cent and 75. accounting for 78. Also if the Government can provide more subsidies to taxi drivers it .

led to a crash in the tourism industry. the fear that the disease can easily cross the border. . Health hazard and Tourism Malaysia has a good reputation in regards to medical conditions but the fall in tourism during the SAARC and H1N1 virus shows how much of a blow these epidemics can have on Malaysia’s economy.would help them get further economically and improve the overall standard of living of the nation. Although Malaysia itself wasn’t that widely effected. Malaysia has since done well to get back and hold on to its tourists but better precautions have to be made to ensure that infections like these cannot effect Malaysia in the future even if it means more investment from the government in medical R&D.

Over the last decade. In the period 1980-2005.Literature Review In regard to the research made in the US. Malaysia) As we can see in table 2. . the services sector grew by 8. on average. hotels and restaurants by 7. (Source: Economic division department of stati stic. transport. electricity.7 per cent. we can relate to similar changes in our economy and work force in the service industry. storage and communication by 8. gas and water by 9. The main contributor of this data is services sub-sectors such as finance. The increasing role and contribution of the services sector in Malaysia can be measured from its rapid growth and increasing contributions to total output.3 per cent.5 per cent per year (Table 1). the services sector has registered strong and healthy growth. real estate and business services by 11.3 per cent per year. comparable to that of the manufacturing sector. the growth of service industries is also quite rapid when we compare it with the growth of service industries in the United States. growth in the services sector in this period exceeded the gross domestic product (GDP) growth of 6.3 per cent per year. And.5per cent. Government services grew at a lower rate of 5.7 per cent per year. insurance. total employment and export earnings of the country. and wholesale and retail trade.

(Source: Economic division department of stati stic. 1966. . he had generate data that we can see in table 3. Miller and Blair 1985) to calculate the growing trend of Malaysian economy from 1991 – 2000. Malaysia) In a research done by Proffesor Abul Quasem Al-amin (UKM) using the Leontief’s input-output (I-O) framework (Leontief. Wassily.

correlation. With the direct and indirect service incentive data that have been collected. However almost all researchers use direct method like regression. Proffesor Abul’s aims at studying the evolving nature of the services consumption for production directly as well as indirectly using Leontief Input-output analysis. the service intensity directly and indirectly of different industries in the Malaysian economy from the period 1990 to 2000. that is.(Source: The Services Sector's Contribution in the Malaysian Economy from 1990 to 2000 by Proffesor Abul Quasem Al-amin) The purpose of this research is to find the percentage of how much services indirectly use in an economy. It has been noticed that the contribution of the services sector in the GDP of Malaysia is growing progressively. Therefore. coefficient of variation to show the services sector contributions. These methods only show the direct impact of services sector in an economy. we can now calculate the average of each type of services and the coefficient of variation (CV) .

(Source: The Services Sector's Contribution in the Malaysian Economy from 1990 to 2000 by Proffesor Abul Quasem Al-amin) .

. public service and entertainment are quite significant and in the Malaysian economy the service consumption both directly and indirectly are remarkably high of different industries for their production throughout the study period. financial related service. The findings indicate that direct and indirect contribution of the services sector was almost same in the Malaysian economy from 1991 to 2000. This paper provided direct and indirect service intensities that revealed the contribution of services sector in the Malaysian economy.In this paper we analyzed the contribution of services sector for the production of different industries in the Malaysian economy. transport & communication. The findings indicate that the contribution of services sector almost steady during the time period and direct and indirect intensities of other sectors. trade.

QUARTERLY 20082012 (Source: Department Of Statist ic.TABLE 1: GROSS DOMESTIC PRODUCT AT CURRENT PRICES . Malaysia) .

3 per cent 2nd quarter 2011 The Services sector remained stable by posting 6. In addition. Accommodation & Restaurant sub-sector strengthened to 5. The Wholesale & Retail Trade sub-sector continued to be the main catalyst by registering a growth of 7. The Communication and Transport & Storage sub-sectors eased to 6.3 per cent.9 per cent in this quarter.0 per cent of share in Services sector increased by 6.1st quarter 2011 The Services sector was on a steady growth path by posting 5.6 per cent mainly attributed by higher loans and deposits.6 per cent driven by the trading activity in stock market and computer services.3 per cent growth in this quarter. The Real Estate & Business Services sub-sector rose by 7.8 per cent) mainly attributed by higher loans and insurance premium.5 per cent and 4.7 per cent respectively in this quarter.7 per cent driven by the trading activity in stock market. the Finance & Insurance sub-sector showed favorable momentum (6. The Wholesale & Retail Trade sub-sector which accounts for 23.9 per cent led by Restaurant segment.5 per cent and 4. . In addition. The Finance & Insurance sub-sector grew by 5.8 per cent led by the retail and motor vehicle activities. The Communication and Transport & Storage sub-sectors improved further to 6. The sub-sector was supported by the favorable momentum in the Wholesale and stable performance in Retail segments. The Real Estate & Business Services sub-sector rose by 8.

data and multimedia services.0 per cent growth. The Communication and Transport & Storage sub-sectors strengthened at 8. In this quarter. The favorable performance was led by the Wholesale & Retail Trade sub-sector which has reached to 9. Growth momentum of Communication sub-sector advanced to 8. increased to 6. In overall.1 per cent respectively.0 per cent.8 per cent. Transport & Storage sub-sector continued to grow at 6. with a share of 59.3rd quarter 2011 The Services sector remained as the key driver of the Malaysia's economy by recording 7. the Services sector for 2011 remained attractive at 6. The Communication sub-sector was mainly spurred by the telecommunication activity. the Finance & Insurance sub-sector improved to 6.4 per cent to total GDP. The Finance & Insurance and Real Estate & Business Services sub-sectors moderated to 4. 4th quarter 2011 The Services sector.4 per cent in this quarter.7 per cent respectively.2 per cent propelled by freight and passenger transportation. . Similarly. highway and port & airport operation activities supported the growth in Transport & Storage sub-sector.8 per cent backed by the higher usage of voice.6 and 6. while the water transport. Wholesale & Retail Trade sub-sector was the main contributor followed by Finance & Insurance and Communication subsectors.4 per cent underpinned by the robust performance in insurance activity.7 and 6.

Finance & Insurance expanded to 6. the growth in Motor Vehicles segment accelerated to 8.4 per cent during the quarter (Q1 2012: 0.4 per cent propelled by the higher consumption in mobile phone services and data communication. 2nd quarter 2012 The Services sector rose to 6. pharmaceutical products and personal care products.3 per cent supported by Wholesale & Retail Trade and Finance & Insurance.1st quarter 2012 The Services sector recorded a growth of 5. Meanwhile. the robust construction and oil & gas exploration activities have stimulated the growth in Business Services.0 per cent underpinned by Wholesale & Retail Trade and Communication. Meanwhile.9 per cent in Wholesale & Retail Trade was led by the Retail segment. In this quarter.6 per cent boosted by the higher fee income on banking activities and increase in premium income on insurance activity. Business Services picked up to 8. The growth of 6. The growth of 5.4 per cent in Wholesale & Retail Trade was supported by the expansion in Retail segment particularly in household appliances & equipments.8 per cent underpinned by professional services related to engineering activities. . Communication expanded to 9.2 per cent) propelled by the higher sales of motor vehicles. In addition.

Conclution . http://www. Mazharul** .my/url? sa=t&rct=j&q=&esrc=s&source=web&cd=3&ved=0CC4QFjAC&url=http%3A %2F%2Fpapers.cfm %2FSSRN_ID1008725_code845927.nber.Sources Online : • • • %3D1&ei=yVhOUIDTFumyiQeDjYHoAw&usg=AFQjCNFfhqhKEDIvIc6kZ1Hh EAep7wtOug&sig2=Gh0GR2exJrLFhP04Q7NgPA&cad=rja • & Chamhuri Siwar*** .cfm? abstract_id=1008725&http://www.aspx? title=The+Role+of+Shopping+in+Tourism+Destinations Journal: The services sector’s contribution in the Malaysian economy from 1990 to 2000 by AlAmin* http://papers.ssrn.

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