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Group 2

15A1HP095 Anurag Sarkar


15A1HP102 Nilekh Bellankimath
15A2HP442 Aishwary Sengar
15A2HP454 Toshniwal Shishir Suresh
Saroj
15A3HP612 Avani Lohiya
15A3HP642 Aayushi Pathak
15A3HP646 Manoj Kumar Upadhyay
16XIH002Julie Laschon-Auffret

Geography

Nilekh
Bellankimath

Geography- Malaysia

Malaysia is located in the southeast region of the Asian continent

Area in total:329,847 sq km

Natural resources available:tin, petroleum, timber, copper, iron ore, natural


gas, bauxite

Malaysia is one of the top exporters of natural rubber andpalm oil, timber and
timber products and tobacco

Tin and petroleum are the two main mineral resources that are of major
significance in the Malaysian economy

Energy resources: Malaysia holdsvalidated oil reservesof 4 billion barrels (as


of January 2014)

Geography- Malaysia contd

Water Resources: Between


Peninsular Malaysia and East
Malaysia is theSouth China
Sea, the largest body water
around Malaysia

Its tropical climate


encourages the production of
agricultural products,
including palm oil, rubber,
timber, pepper, and cocoa

It is among the worlds


leading exporters of
microchips, electronic
components, air conditioners,
and other high-tech
manufactured products

Polity

Aayushi Pathak

Malaysia uniquely combines Islamic laws,


Westminster system and nationalism.

About

Malaysian nation has been forged from three


major ethnic groups: indigenous Malays
(bumiputera), Chinese and Indian
immigrants.

Malaysian political parties are divided along


ethnic lines fist and ideological and
religious lines next and thus all the
political parties of Malaysia have been
formed based on the ethnicity of its
members.

Executive Branch
The political system of Malaysia is closely modeled on that of Westminster parliamentary
system, a legacy of British colonial rule.
The politics of Malaysia is based on a federal constitutional monarchy, in which the King is
head of state and the Prime Minister is the head of government
The King is selected for a term of five-years from among the nine Sultans of the Malay
states, the king also is the leader of the Islamic faith in Malaysia.
The Executive power is vested in the cabinet led by the prime minister. The members of
the cabinet are all chosen from among members of both houses of Parliament and are
responsible to that body.

Legislative Branch
Malaysia has a bicameral Parliament consisting of the Senate or Dewan Negara with 70
seats; 44 appointed by the paramount ruler, 26 appointed by the state legislatures and
the House of Representatives or Dewan Rakyat with 219 seats
The legislative power of the political system of Malaysia is divided between the federal and
the state legislatures.

Judicial Branch
The Malaysian legal system is based on English common law.
Many laws and the constitution are influenced from Indian law.
There are Federal Court, Court of Appeals, High Courts, Magistrate's Courts, Juvenile Courts
and Sessions Courts.
The judges of the Federal Court are appointed by the King on the advice of the Prime
Minister.

State Government
The state governments are ruled by Chief Ministers, which are elected by the
state assemblies and advising their respective sultans or governors.
There are 13 states and three federal territories, each of which has an
assembly and a government headed by a Chief Minister.
Nine of these states have hereditary rulers, generally titled 'sultans', while the
remaining four have appointed governors in counterpart positions.

List of major political parties

The Party in Power


The ruling party, which is also a coalition, is the Barisan Nasional
(National Front) consisting of United Malays National Organisation
(UMNO) and 13 other parties, which are ethnically based.

Dominant Party

Result: BN always had high share of


Parliamentary seats and has won 9 out of 12
state election. Thus it is the most dominated
party in Malaysia.

Strength and weakness


The index for Voice and Accountability in Malaysia captures perceptions of the extent to which the citizens
of Malaysia are able to participate in selecting their government, as well as freedom of expression,
freedom of association, and a free media. The scale ranges from -2.5 to +2.5

Results:The average value for Malaysia during that


period was -0.38 points with a minumum of -0.55
points in 2008 and a maximum of -0.06 points in
1996.

The Corruption Perceptions Index is an indicator of perceptions of public sector corruption, i.e.
administrative and political corruption. The scale ranges from 0 to 100. 100 being no corruption.

Result: The average value for Malaysia during that period was 49.13 points with a minimum of
43 points in 2011 and a maximum of 52 points in 2003.

The Political Rights ratings for Malaysia from the Freedom House evaluate three categories: electoral process, political
pluralism and participation, and the functioning of government. The index ranges from 1 (strong rights) to 7 (weak rights).

Results: The average value for Malaysia during that period was 3.82 points with a minimum
of 2 points in 1972 and a maximum of 5 points in 1989.

The index for Rule of Law in Malaysia captures perceptions of the extent to which agents in Malaysia have confidence
in and abide by the rules of society, and in particular the quality of contract enforcement, property rights, the police,
and the courts, as well as the likelihood of crime and violence. The scale ranges from -2.5 to +2.5 .(-2.5 weak; 2.5
strong

Result: The average value for Malaysia during that period was 0.51 points with a minumum of
0.31 points in 2000 and a maximum of 0.64 points in 2014.

Women in parliaments are the percentage of parliamentary seats in a single or lower chamber held by
women.

Results: The average value for Malaysia during that period was 9.59 percent with a
minimum of 5.1 percent in 1990 and a maximum of 10.8 percent in 2008.

The index of Government Effectiveness in Malaysia captures perceptions of the quality of public services, the quality
of the civil service and the degree of its independence from political pressures, the quality of policy formulation and
implementation, and the credibility of the government's commitment to such policies in Malaysia. The scale ranges
from -2.5 to +2.5.

Result: The average value for Malaysia during that period was 1.06 points with a
minimum of 0.75 points in 1996 and a maximum of 1.25 points in 2007.

The index for Control of Corruption in Malaysia captures perceptions of the extent to which public power in
Malaysia is exercised for private gain, including both petty and grand forms of corruption, as well as capture
of the state by elites and private interests.The scale ranges from -2.5 to +2.5.

Result: The average value for Malaysia during that period was 0.29 points with a minimum of
-0.03 points in 2009 and a maximum of 0.55 points in 1998.

The index of Regulatory quality in Malaysia captures perceptions of the ability of the government to
formulate and implement sound policies and regulations that permit and promote private sector
development.

Result: The average value for Malaysia during that period was 0.56 points with a minimum of
0.31 points in 2009 and a maximum of 0.84 points in 2014.

Manoj
Upadhyay

Malaysian Law
Law is mainly based on the common law legal system which was direct result of the
colonisation of Malaya, Sarawak and North Borneo by Britain in the early 19 th century
to 1960s
Laws of Malaysia can be divided into two types written laws and unwritten laws.
Written laws are enacted in the constitution or legislations.
Unwritten laws are not contained in any statutes and can be found in case decisions
are known as common law or case law.
Federal laws enacted by parliament of Malaysia apply throughout the country
State laws enacted by the state legislative assemblies applies in particular states.
The constitution provides unique dual justice system - the secular laws and sharia
laws
Islamic law referred as sharia law is a state law matter with the exception of federal
territories of Malaysia and it only applies to muslims.

Trade Performance
Malaysias total trade for 2015 grew by 1.2% to reach RM1.466 trillion
compared to RM1.448 trillion in the year 2014.
The increase was contributed by higher trade with China (RM23.09
billion), ASEAN (RM12.38 billion), USA(RM12.22 billion), EU(RM4.52
billion), Turkey (RM2.48 billion), India (RM1.59 billion), Switzerland
(RM1.46 billion), Taiwan (RM1.29 billion) and Mexico (RM1.15
billion).
Exports grew by 1.9% to reach a value of RM779.95 billion.
Imports increased by 0.4% to reach a value of RM685.65 billion.

Top 10 major countries in Exports

Top 10 major countries in Imports

Taxation
Corporate tax standard rate is 24%
For foreign companies there is no distinction between resident and non
resident companies or the subsidiaries of foreign companies for the
method of rate of taxation.
Tax rate on company profits i.e., capital gains taxation is 25%
Tax on SMEs is 20% on taxable profits up to MYR 500000, the balance
being taxed at 25%.
Country comparison for corporate Malaysia
taxation
Germany

United states

East Asia and pacific

Number of payments taxes per year

13

10.6

25.1

Time taken for administrative formalities (hours)

118

218

175

208

Total share of taxes (% of profit)

40

48.8

43.9

34.3

Consumption taxes
The standard rate for goods and service tax is 6%
GST is charged on value or selling price of the products.
Items exempted from GST include residential buildings, life insurance,
private health services, private educational services, financial services,
land for agricultural and public use, public mass transportation and
highway tolls.
Other consumption taxes such as excise duties are levied on tobacco,
beer and liquor, motor vehicles, playing cards and mah-jong tiles

Individual taxes
A non-resident is subject to income tax in Malaysia for his income which
only comes from Malaysian
sources, at a uniform rate of 28%.
Tax rate
Individual income tax

Progressive rates from 0% to 26%

Up to MYR
MYR 2501- 5000

0%
1%

MYR 5001 20000

3%

MYR 20001 35000

7%

MYR 35000 50000

12%

MYR 50000 70000

19%

MYR 70000 100000

24%

MYR 100000 and over

26%

Special expatriate tax regime


Expatriates posted to an operational headquarters or a represented
office are only taxed on the part of their income attributable to the days
they spend in Malaysia.
Capital gains are not taxed except for gains derived from the disposal of
real property or on the alienation of shares in a real property.

Economy

Shishir Toshniwal

ECONOMY SNAP SHOT


Malaysia is a highly open and upper middle income economy
Suffered during the 1997-98 crisis
It is a production dominated economy
Low poverty rate along with unemployment benefits
GST was introduced in 2015
Growth rate of 7% for 25 years

ECONOMIC ANALYSIS
GDP
INFLATION
TRADE SURPLUS
EXCHANGE RATE
10 YEAR BOND RATE
STOCK MARKET INDEX
EXTERNAL DEBT TO GDP RATIO

ECONOMIC DATA

2011
GDP (USD Billion)

2012

2013

2014

2015

AVERAGE

299

316

324

340

298

315.4

10282

10883

10785

10737

10222

10581.8

5.3

5.5

4.7

5.3

Exchange rate (vs USD)

3.17

3.06

3.28

3.5

4.29

3.46

Exports (USD Billion)

228

228

229

234

230

229.8

Imports (USD Billion)

187

197

206

209

176

195

External Debt (% of GDP)

56.7

62.3

65.6

62.9

65.1

62.52

3.2

1.7

2.1

3.1

2.1

2.44

3.3

3.06

4.11

3.57

3.52

4.25

3.81

3.8516

1494

1678

1862

1758

1660

1690.4

GDP per Capita (USD)


Economic Growth (%)

Inflation rate
Unemployment (%)
10 Year Bond Rate (%)
Stock Market Index(KLCI)

GRAPHICAL REPRESENTATION

GROSS DOMESTIC PRODUCT


USD Billion

10 YEAR BOND
Rate %
2011

2012

340

2013

2014

2015

YEAR

324
316
299

2011

298

2012

2013
YEAR

2014

2015

3.5
3
2.5
2
% 1.5
1
0.5
0

In flatio n

2011

2012

2013
YEAR

2014

2015

GRAPHICAL REPRESENTATION

BALANCE OF PAYMENT
250
200
150
USD Billion 100
50
0

2011 2012 2013 2014 2015

YEARS

ECONOMIC GROWT H
6.5
6
5.5
% 5
4.5
4
3.5
2011

2012

2013
YEARS

Exports (USD Billion)

Imports (USD Billion)

2014

2015

News

Avani Lohiya

NEWS
Deposits into Malaysian Prime Minister
Najib Razaks bank accounts ran to
hundreds of millions of dollars more
than previously identified by probes into
state fund 1Malaysia Development
Berhad (1MDB).
He has denied any wrong doing, saying
the funds were a legal political donation
and he did not take any money for
personal gain.
A private equity firm Primus Pacific
Partners is suing Goldman Sachs,
accusing it in court documents filed on
Tuesday of improperly trying to carry
forward with the scandal-plagued prime
minister of Malaysia.

NEWS
Malaysias attorney general
said on Tuesday that $681m
transferred into prime minister
Najib Razaks personal bank
account was a gift from the
royal family in Saudi Arabia,
and there were no criminal
offences or corruption involved.
The involvement of the Saudi
royal family is an unexpected
twist in a scandal over the
mysterious funds transfer and
the troubles of indebted state
fund 1Malaysia Development
Berhad (1MDB), whose advisory
board Najib chairs

NEWS
Malaysias Prime Minister Najib Razak is to get sweeping security powers
amid planned protests.
The new National Security Council act allows Najib to designate any area as a
security area, where he can deploy forces to search any individual, vehicle
or premise without a warrant.
It also allows investigators to dispense with formal inquests into killings by
the police or armed forces in those areas.
Najibs ruling coalition promoted the law as a means to counter threats to
security in predominantly Muslim Malaysia, which has long dealt with a fringe
element of radical Islamists.
But critics say the laws expansive powers threaten human rights and
democracy in the emerging nation and could now be used to silence critics of
the One Malaysia Development Berhad (1MDB) fund scandal.

NEWS
The Road Transport Department
(RTD) is conducting a campaign to
get 1.2 Malaysians without a
driving licence to apply for them.
Its director-general, Datuk Nadzri
Siron said they wanted to know the
reasons why these people do not
possess a driving licence despite
being eligible for a licence.
"The RTD wants to know whether
they do not want to drive, do not
have a vehicle or dependent on
public transport. Of the total
number of cases, some 62 percent
involved motorcycles.

NEWS
Malaysia has been in news recently for being a Racist country. Its
current citizens who have shifted or migrated to different countries, say
they feel love other countries that theyve never felt in the own home
country.
Nine Australians arrested for stripping off at the Malaysian Formula One
Grand Prix have walked free from a court.
The men were detained after posing in swimwear decorated with the
Malaysian flag to celebrate Australian Daniel Riccardos win in Sunday's
race.

NEWS
Footage of a TV programme by Trans Media which had gone viral,
showing how Indonesia's illegal immigrants entered Tawau.
The 11-minute video claimed that it was easy for Indonesians to enter
Tawau illegally, only by giving a bribe of around RM50 to RM100 to the
Malaysian authorities who monitor the waters and take care of the
ports.
The police will take action against dishonest personnel found guilty of
allowing illegal immigrants to enter the country's waters.
Tawau police chief ACP Fadil Marsus said if any personnel from the
General Operations Force (GOF), Marine Operations Force (MOF) or any
other police unit was caught indulging in immoral activities, strict action
will be taken against them.

NEWS
Two foreign shareholders of large stakes in leading Malaysian
telecommunications companies (telcos) are exploring the possibility of
divesting their stakes, indicating that the industry could be maturing
here.
Reports also indicated that these parties might be keener on investing
in higher-growth markets such as Indonesia and Vietnam.
In other parts of Asia, investments by foreign cellular companies
(telcos) into Asian telcos had dried up.
Over the past few days, reports had emerged that Norwegian Telco,
Telenor ASA, might be considering a sale of its stake in Digi.Com Bhd,
and Saudi Telecom Co was said to be exploring options to dispose of its
indirect stake in Maxis Bhd.

Sector Analysis- Rubber

Anurag Sarkar

Introduction
Malaysia is the third biggest producer if rubber in the world.
Malaysia had an ideal climate, soil for rubber and plenty of land.
Production increased dramatically after the 1890s when there was a
huge surge in demand for rubber. For many years tin and rubber were
Malaysias primary exports.
It has slowly become the backbone of Malaysian Economy. It is one of
the important components of the agricultural sector which
contributes largely to the nation's prosperity and gross domestic
product (GDP).
Besides that, Malaysia also remains the world's largest exporter of
natural rubber (NR) in the form of latex derived products like medical
gloves, catheters and latex thread.

World Rubber Demand and Supply


The Rubber prices have been falling since 2013.
The factors which are largely attributed to the fall in price are due to:
Supply Surplus
Increase in demand for synthetic rubber due to lower price.
Thailand, Indonesia and Malaysia account for about 70 percent of
global supply of rubber, with Malaysia now a distant third behind
Indonesia and Thailand.
Crude oil is used to produce synthetic rubber, and natural rubber
prices are linked to the cost of its synthetic counterpart.

World rubber supply


After 2009 the supply growth rate has remained somewhat stable and is
at a 4 year average of 1.4%
World Rubber Production
30,000
25,000
20,000

Rubber Prod. ('000 Tonnes)

15,000
10,000
5,000
0
1998

2000

2002

2004

2006

2008

2010

Year
Natural Rubber

Synthetic Rubber

Total Rubber

2012

2014

2016

2018

World rubber demand


After 2009 the demand for rubber has grown steadily showing the
lowest growth in 2015 on a year on year basis.
World Rubber Consumption
30,000
25,000
20,000
15,000
10,000
5,000
0
1998

2000

2002

2004

2006

Natural Rubber

2008
Synthetic Rubber

2010

2012
Total Rubber

2014

2016

2018

Malaysian Rubber Production


The production of rubber has been declining since its peak in 2006 and
some investors have even labelled rubber industry as a sunset industry.
Malaysian Natural Rubber Production
1,400,000

1,400,000

1,200,000

1,200,000

1,000,000

1,000,000

800,000

800,000

600,000

600,000

400,000

400,000

200,000

200,000

2000

2001

2002

2003

2004

2005

2006

2007
Dry

2008

2009

Latex

2010
Total

2011

2012

2013

2014

2015

2016

Malaysian Rubber Production contd


It is still early to predict the future of Malaysia rubber industry.
Currently the rubber industry is showing a positive trend from 2014
to 2015.
The government is looking for ways to increase yields and
commercialize new rubber products to rejuvenate a sector that
accounted for about 6 percent of exports in the previous years,
according to rubber board data.
Production of rubber in Malaysia declined from over a million tons in
the 1990s to 17,938 tons in 2000 and 18,194 tons in 2002.
The Malaysian rubber industry was one of the major source of income
of the country in past decades.

Malaysias Rubber Consumption


The domestic consumption of rubber has been on a rising trend and
reached a decade peak in 2015.
Malaysia's Natural Rubber consumption
500000.00
450000.00
400000.00
350000.00
300000.00
250000.00
200000.00
150000.00
100000.00
50000.00
0.00
1998

2000

2002

2004

2006
Dry

2008
Latex

2010
Total

2012

2014

2016

2018

Malaysias Rubber Consumption


Malaysia's Rubber Consumption by Products
contd
The natural rubber
consuming industries for
2015 were latex products
(82.87%), tyres (10.14%),
general rubber products
(5.06%), industrial rubber
products (2.47%) and
others (0.09%).

1,000,000
900,000
800,000
700,000
600,000
500,000
400,000
300,000
200,000
100,000
0

The rapid growth of the


industry has enabled
Malaysia to become the
world's largest consumer of
natural rubber latex.

Tyre
GRG**

Footwear
IRG***

Latex Products
Industry Total

Malaysias Natural rubber imports

Declining prices and competition


has forced many farmers to
abandon rubber, and rubber tapers
are becoming a dying breed.

Malaysian Natural Rubber Import


1200000.00

1000000.00

800000.00

Between 1999 and 2004, 300,000


hectares of the 1.4 million hectares
of planted rubber were abandoned,
in many cases in favour of oil
palms which are more lucrative.
So many farmers have given up on
rubber that some Malaysian rubber
manufacturers have to import
rubber and Malaysia has become
one of the worlds largest importers
of rubber.

600000.00

400000.00

200000.00

0.00

Dry

Latex

Total

Malaysias Natural rubber imports


contd
Malaysia's Import of natural Rubber 2015

1% 1% 1% 0% 2%
3% 2%
7%
11%

Malaysia's Import of natural Rubber 2016

0% 0% 3%
3% 2% 0% 0%
6%
14%

53%
61%
11%

20%

Thailand
Philippines
Ghana
Indonesia

Viet Nam
Myanmar
South Africa
Others

Cote D'Ivoire
Cambodia
Papua New Guinea

Thailand
Philippines
Ghana
Indonesia

Viet Nam
Myanmar
South Africa
Others

Cote D'Ivoire
Cambodia
Papua New Guinea

Malaysian Rubber Exports


Malaysian Natural Rubber Export

The Malaysian rubber products


industry is made up of more than
500 manufacturers producing
latex products; tyres and tyrerelated products; and industrial
and general rubber products.
The industry contributed 33.3
billion to the country's export
earnings in 2015. Rubber
products accounted for 4.27
percent of Malaysia's total
exports for manufacturing
products.

1600000
1400000
1200000
1000000
800000
600000
400000
200000
0

Year
CR to China

10 11 12 13 14 15 16 17

Dry
Total

Latex

Malaysian Rubber Exports contd


Malaysian Export of Rubber Product by Sector
20000.00
18000.00
16000.00
14000.00
12000.00
10000.00
8000.00
6000.00
4000.00
2000.00
0.00

2000

2001

2002
Tyres

2003

2004

Inner Tubes

2005

2006

Footwear

2007

2008

Latex Products

2009
IRGs*

2010
GRGs**

2011

2012

2013

Total Rubber Export

2014

2015

2016

Malaysian Rubber Exports contd


The latex products sub-sector is the largest sub-sector within the rubber
products industry and comprises 125 manufacturers producing gloves,
condom, catheters, latex thread and others.
This sub-sector accounted for 81 percent of the rubber total value of
exports, largely contributed by gloves, catheters and latex threads.
Malaysia continued to maintain its position as the world's leading
producer and exporter of catheters, latex threads and natural rubber
medical gloves.
There are currently 120 companies in the tyres and tyre-related
products sub-sector comprising nine tyre producers while the remaining
companies produce retreads, tyre treads for retreading, valves and
other accessories.

Malaysian Rubber Exports contd


The industrial and general rubber products (IRG & GRG) sub-sector
comprises 185 companies producing a wide range of rubber products
such as mountings, beltings, hoses, tubings, seals, and sheetings for
the automotive, electrical & electronics, machinery & equipment and
construction industries, largely for the domestic market.
Fear of HIV-AIDS caused demand to spike for latex gloves. When
demand peaked in the 1990s there were around 300 companies in
Malaysia that produced rubber gloves. By the early 2000s there were
only 80. Surgical gloves can also be made from vinyl and Nitrile but
people in the rubber industry say they are less comfortable and more
likely to leak.

Malaysian Rubber Exports contd


Malysia's Export of Natural Rubber 2015

Malysia's Export of Natural Rubber 2016


1%
1%

1% 1% 0% 0% 0% 0% 4%
1% 1% 1%
1%
1%
1%
3%
1% 4%
8%
1%

1% 0% 5%
1% 1% 1% 1%
1%
1%
1%2%

1%
4%
2%
1%
2%
3%
10%

62%

68%

1%
2%

China
Finland
India
Russia
Others

Germany
Turkey
France
U.K

Iran
South Korea
Mexico
South Africa

USA
Portugal
Egypt
Netherlands

Brazil
Taiwan
Italy
Lithuania

China
Finland
India
Russia
Others

Germany
Turkey
France
U.K

Iran
South Korea
Mexico
South Africa

USA
Portugal
Egypt
Netherlands

Brazil
Taiwan
Italy
Lithuania

Malaysian Rubber Exports contd


Rubber Industry Contribution to Malaysia's Exports
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
2000

2001

2002

2003

Natural Rubber

2004

2005

2006

Rubber Products

2007

2008

Other Rubber**

2009

2010

Heveawood Products

2011

2012

Industry Total

2013

0%
2014

Total Exports

2015

2016

Planted Hectarage
Natural rubber has been eclipsed by palm oil in Malaysia after a global
crash in prices in the late 1990s prompted many planters to abandon
the commodity.
As well as increasing production, some Southeast Asian neighbours
have the advantage of lower labour costs, according to the International
Rubber Study Group.
The government is looking for ways to increase yields and
commercialize new rubber products to rejuvenate a sector that
accounted for about 6 percent of exports last year, according to rubber
board data.
Majority of Malaysias rubber production came from smallholders rather
than from estates and plantations.

Planted Hectarage contd


Malaysia's Planted Hectarage
1600
1400
1200
1000
800
600
400
200
0

2000

2001

2002

2003

2004

2005

2006

Estate

2007

2008

Smallholding

2009

2010

Malaysia

2011

2012

2013

2014

2015

Critical Success factors for the Rubber


Industry in Malaysia
Huge Domestic and international demand
Ideal Climatic conditions for growing rubber trees
Major Government Support
The Tyre industry in Malaysia is not well penetrated.
There are currently 120 companies in the tyres and tyre-related
products sub-sector comprising of only nine tyre producers while the
remaining companies produce retreads, tyre treads for retreading,
valves and other accessories.
There are three major tyre producers producing passenger car tyres,
commercial vehicle tyres and earthmover tyres, and another nine
manufacturing other types of tyres.