You are on page 1of 1

STAGE OF ECONOMIC DEVELOPMENT IN MALAYSIA.

Before 1957, Malaysia was a lowincome agrarian economy, whose mainstays were rubber and tin
production and entrept trade centered on Penang and Malacca. Business enterprises were smallscale,
largely localized, and predominantly familybased.

During the 1960s and 1970s, Malaysia was a typical less-developed country, dependent on agricultureprimarily rubber and palm oil, and mineral extraction of mainly tin. Most of the population (mostly
Malays) were peasants who livedin the rural areas. They occupied most of the lower rung of Malaysian
society,accounting for most of the urban and rural poor. Malaysia has transformed itself from a povertystricken nation, rural-based and dependent on agriculture and mineral extraction during the 1960s, to one
with arapidly changing economy, where manufactures accounted for 80.5% of it exports in 1998.
The following 20 years (197190) consisted of defining events and strategies that fundamentally
restructured the economy, and may be called the distributional epoch in modern Malaysian economic
history. The race riots of May 1969 were a turning point and led to the introduction of the New Economic
Policy (NEP) in 1971, the publication of the Second Malaysia Plan (197175), and the Outline
Perspective Plan (OPP) (197190). The 19912000 growth phase traversed the difficult years of the Asian
financial crisis and the period of exchange controls. The 1970s ushered in a new phase of economic
growth, marked by the rapid riseof construction and manufacturing and a strong strategic emphasis on
equitable or fair distribution, specifically through affirmative action policies.
The 1970s also ushered in a new phase of economic growth, marked by the rapid rise of construction and
manufacturing and a strong strategic emphasis on equitable or fair distribution, specifically through
affirmative action policies.So the focus innovation are on four manufacturing industries: (i) rubber and
(ii) palm oil products (both resource based); and (iii) electronics/electrical products and (iv) the
transport/automobile industries (both of which are not resource based).
Over the 1990s, the outsourcing of manufacturing activities and the development of Malaysia as a
regional products and distribution center for highend electronics products has
contributed to the structural transformation of the electronics industry. Structural change in the electronics
industry has, since 1999, led to industrial electronics overtaking electronics components. Some 901 new
companies entered the industry over 19962005. The increasing importance of industrial electronics has
been due to the expanding manufacture of high valueadded products such as computers, computer
peripherals, and telecommunications equipment
According to a report of HSBC Malaysia will become the world's 21st largest economy by 2050, with a
GDP of $1.2 trillion (Year 2000 dollars) and a GDP per capita of $29,247 (Year 2000 dollars). The report
also says "The electronic equipment, petroleum, and liquefied natural gas producer will see a substantial
increase in income per capita. Malaysian life expectancy, relatively high level of schooling, and above
average fertility rate will help in its rapid expansion."

NAME
: MUHAMMAD FAIZ KAMARULZAMAN
ID CARD :5780308