ITC e-CHOUPAL INITIATIVE: MALAYSIA

Introduction:
Malaysia has transformed from a traditional economy to one of the fastest growing economies in the
Southeast Asian region. The economy performed well throughout 2007, growing at a rate of 6.7 percent
in 2007 and 4.6 percent in 2008. However, the global economic recession has affected the Malaysian
economy, which is expected to have contracted by 3.6 percent during 2009. Private consumption is the
main driver of economic growth, but exports of electronics and electrical goods play an important role.
Because the export market is so important, economic growth is vulnerable to global fluctuations in
demand for these products.

The Malaysian Government announced two stimulus packages – the first in November 2008 and the
second in March 2009 – intended to cushion the impact of the current global economic downturn. The
second package totaled NZ$31 billion over two years. Key initiatives include new fiscal spending on
various infrastructure projects, public and private sector job creation and training projects, and tax cuts
and credits. The Government has also signaled its ongoing commitment to an open economy and
improving Malaysia’s ‘competitiveness and attractiveness’ for foreign investors as part of its policy
response.

Economic Indicator Malaysia

Population 27.76 million (2009 est.)
GDP US$207.350 billion (2009 est.)
GDP Growth Rate -3.6% (2009 est.)
GDP Per Capita US$7,468 (2009 est.)
Inflation -0.1% (2009 est.)
Total Imports US$157.1 billion (2008)
Total Exports US$199.8 billion (2008)
Currency 1 Ringgit (RM) = 100 sen
Exchange Rate NZ $1 = RM2.40 (as at February 2010)
US $1 = RM3.41 (as at February 2010)
Sources: IMF World Economic Outlook database, Department of Statistics Malaysia (via World Trade
Atlas), Oanda Currency Converter
Itc:

A powerful illustration of corporate strategy linking business purpose to larger societal purpose,
e-Choupal leverages the Internet to empower small and marginal farmers – who constitute a
majority of the 75% of the population below the poverty line.

By providing them with farming know-how and services, timely and relevant weather
information, transparent price discovery and access to wider markets, e-Choupal enabled
economic capacity to proliferate at the base of the rural economy.

Today 4 million farmers use e-Choupal to advantage – bargaining as virtual buyers’ co-
operatives, adopting best practices, matching up to food safety norms. Being linked to futures
markets is helping small farmers to better manage risk. e-Choupal has been specially cited in the
Government of India’s Economic Survey of 2006-07, for its transformational impact on rural
lives.

ITC’s strategic intent is to develop e-Choupal as a significant two-way multidimensional

delivery channel, efficiently carrying goods and services out of and into rural India. By
progressively linking the digital infrastructure to a physical network of rural business hubs and
agro-extension services, ITC is transforming the way farmers do business, and the way rural
markets work.

Pest analsis of malayasia:

Political Factors

• Controls on immigration.

• A fairly new country formed in 1957 (Malaysia) and 1963 (Malay, Sabah, Sarawak, and
Singapore).

• Parliament and hereditary rulers.

Economic Factors

• Recovering from a very severe recession.

• High government spending.

• Very low inflation and unemployment.

• Favorable prediction for growth in the economy.

• Lack of corporate reform (high corporate debt and competition)

Socio-cultural Factors

• Mixture of Chinese, Indian, and Malaysian.

• Variety of religions.

• Low rates of literacy among women.

Technological

• Good national and international lines.

• A variety of TV and radio stations.

• ISPs and airports available.