225356 | MUHAMMAD SAIFUDDIN BIN SAUPI

THE EVOLUTION OF ECONOMIC IN MALAYSIA

Malaysias economy has transform drastically since Independence in 1957. In 1957,
Malaysia was a low income country whose economy depends on two key commodities which are
production of rubber and tin. At that time, most of the businesses were in small-scale and
predominantly family-based. The evolution of Malaysian economic can be divided into four
broad phases which are first phase (1957-1970), second phase (1971-1990), third phase (19912000) and fourth phase (2001-2007).
In the first phase which are from year 1957 to 1970, the early stage of industrialisation
has occurred in late 1950s and is focused on the production of consumer goods for the local
market as well as further diversify agricultural production other than rubber and tin. At this time,
agricultural exports activities also have been carried out. In 1970s, the emphasis placed on
manufactured exports as existing exports activities is not really impressive in economic
development.
For the second phase which are from year 1971 to 1990, Malaysian economy has
changed radically. In this phase, Malaysian economic has been restructured. Malaysia's economy
at the moment is no longer dependent on a few primary commodities and production also has
been expanded with manufacturing accounting for a growing share of national output and
employment.
Race riots in Mei 1969 led to the launch of a New Economic Policy in 1971 that aims to reduce
economic disparities between ethnic followed by the publication of the Second Malaysia Plan
(197175), and the Outline Perspective Plan (OPP) (197190).
Next, in the third phase which are from year 1991 to 2000. Economic growth at this
time is affected due to the Asian Financial Crisis and the period of exchange controls. Currency
crisis hit the country in July 1997. Despite currency crisis, the Malaysian economy registered a
7.8 percent growth in 1997. This indicates that the economic sector is not greatly affected by the
currency crisis that hit the country
The last phase is from year 2001 to 2007. This phase is one of slow growth following the
terrorist attacks in the United States on September 11, 2001, as well as more competitive external
economic conditions that have heightened some of Malaysias vulnerabilities.

225356 | MUHAMMAD SAIFUDDIN BIN SAUPI

References
Ariff, M. (1998). The Malaysian Economic Experience and Its Relevance for The OIC Member
Countries. Islamic Economic Studies, Vol. 6, No. 1, 1-41.
Yusof, Z., & Bhattasali, D. (2008). Economic Growth and Development in Malaysia: Policy
Making and Leadership. Commission on Growth and Development.