Tael Wear

LEARNING OUTCOMES
After reading this chapter, you should be able to:

Describe the concepts of economic growth and
economic development
Relate the importance of economic growth to
economic development
Describe the concepts of economic growth and
economic development from the Islamic perspective
Explain Malaysia’s economic structure before and
after its independence
MALAYSIAN ECONOMY Unlocking Growth, Sustaining Equity All Rights Reserved

© Oxford Fajar Sdn. Bhd. (008974-T), 2018 1–2
ECONOMIC GROWTH
 Economic growth is defined as an increase in a

country’s real national income or output, or per
capita income, or the increase in the amount of
goods and services produced by an economy from
one period to another.
 Economic growth can be measured by the

percentage rate of increase in a country’s gross
domestic product (GDP) or gross national product
(GNP).
Determinants of Economic
Growth

Determinants of Economic
Growth (cont.)

Economic Development
 Economic development is a broader and more

comprehensive concept.
 It has quantitative and qualitative dimensions as

it encompasses economic growth and positive
changes that bring about improvement to
quality of life.

Economic Development (cont.)

 Socio-economic changes:
– (a) Development of human capital
– (b) Development of critical infrastructure
– (c) Regional competitiveness
– (d) Environmental sustainability
– (e) Reduction of poverty
– (f) Distribution of income
– (g) Enhanced healthcare
– (h) Improved safety
– (i) Development of literacy (including equal opportunities
for residents to obtain education)
 Indicators:
– (a) Increase in the standard of living or improvement
in the quality of life by changing the social and
economic condition, improvement in employment
opportunities, education, a rise in productivity, and
acquisition of knowledge
– (b) Rise in per capita gross domestic product (GDP)
– (c) Rise in literacy rate
– (d) Improved healthcare services and increased life
expectancy

 In Malaysia, the economic development

indicators include:
– (a) Improvement in the distribution of income,
reduction in the incidence of poverty, more
balanced development between Peninsular
Malaysia and Sabah and Sarawak, as well as
sustainable development.

– (b) Sustainable development refers to

environmental conservation and protection of
resources for future generations to ensure their
long-term quality and abundance for use by future
generations.

Measuring Economic
Development
 Economic development is usually indicated by an
increase in citizens’ quality of life.
 Quality of life is often measured by using the Human

Development Index (HDI).
 The HDI is an economic development model which

includes intrinsic personal factors, e.g. literacy rates,
life expectancy and poverty rates. HDI generally
implies a higher per capita income that is not
considered in economic growth.
Measuring Economic
Development (cont.)
 Dimesions in HDI:
– (a) Longevity: it shows life expectancy, implied by
a choice to live long and healthy life.
– (b) Knowledge acquisition: it is a choice to
acquire literacy, education, information, etc.
Knowledge is measured by the literate
percentage in ratio with the total population. The
literacy rate may be compared at the primary,
secondary and tertiary levels.

Measuring Economic
Development (cont.)
– (c) Decent standard of life: depends upon the

people’s purchasing power and per capita
income, etc.
 In 2015, Malaysia was classified in the ‘high

human development’ category and ranked 59
out of 188 countries, with an HDI value of 0.789
(Human Development Report 2016).

Factors Contributing to
Malaysia’s Economic Growth
 Abundant and diverse types of natural

resources Malaysia has a vast variety of natural
resources even before independence, such as
petroleum and natural gas, tin, coal and copper,
as well as renewable natural resources, such as
rubber, oil palm, timber and pepper.
 Newly-industrialized and diverse market

economy.

Factors Contributing to
Malaysia’s Economic Growth
(cont.)
 Young, educated and skilful labour force.
 Political stability and maturity.
 Growth in the agriculture, manufacturing and

services sectors.

Islamic Economic Growth
 The concept of Islamic economic growth can be

explained using the principles of social and
economic justice, the concepts of halal
(permissible) and haram (forbidden), the role of
the state and the responsibilities of individuals,
in order to achieve the use and best allocation
of resources to bring about economic growth
and prosperity to the society.

Islamic Economic Growth (cont.)
 Determinants:
– Human resources
– Investible resources
– Entrepreneurship
– Technological changes

Islamic Economic Development
 The concept of economic development from

the Islamic perspective is broader than
conventional economics; it covers spiritual,
moral, environmental, social and technological
dimensions.

MALAYSIA’S ECONOMIC
STRUCTURE

STRUCTURE (cont.)

STRUCTURE (cont.)


Tael Wear

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Tael Wear

Uploaded by

Copyright:

Available Formats

LEARNING OUTCOMES

After reading this chapter, you should be able to:

MALAYSIAN ECONOMY Unlocking Growth, Sustaining Equity All Rights Reserved

 Economic growth is defined as an increase in a

 Economic growth can be measured by the

MALAYSIAN ECONOMY Unlocking Growth, Sustaining Equity All Rights Reserved

MALAYSIAN ECONOMY Unlocking Growth, Sustaining Equity All Rights Reserved

 Economic development is a broader and more

 It has quantitative and qualitative dimensions as

MALAYSIAN ECONOMY Unlocking Growth, Sustaining Equity All Rights Reserved

MALAYSIAN ECONOMY Unlocking Growth, Sustaining Equity All Rights Reserved

MALAYSIAN ECONOMY Unlocking Growth, Sustaining Equity All Rights Reserved

 In Malaysia, the economic development

MALAYSIAN ECONOMY Unlocking Growth, Sustaining Equity All Rights Reserved

– (b) Sustainable development refers to

MALAYSIAN ECONOMY Unlocking Growth, Sustaining Equity All Rights Reserved

 Quality of life is often measured by using the Human

 The HDI is an economic development model which

MALAYSIAN ECONOMY Unlocking Growth, Sustaining Equity All Rights Reserved

– (c) Decent standard of life: depends upon the

 In 2015, Malaysia was classified in the ‘high

MALAYSIAN ECONOMY Unlocking Growth, Sustaining Equity All Rights Reserved

 Abundant and diverse types of natural

 Newly-industrialized and diverse market

MALAYSIAN ECONOMY Unlocking Growth, Sustaining Equity All Rights Reserved

 Political stability and maturity.

 Growth in the agriculture, manufacturing and

MALAYSIAN ECONOMY Unlocking Growth, Sustaining Equity All Rights Reserved

 The concept of Islamic economic growth can be

MALAYSIAN ECONOMY Unlocking Growth, Sustaining Equity All Rights Reserved

MALAYSIAN ECONOMY Unlocking Growth, Sustaining Equity All Rights Reserved

 The concept of economic development from

MALAYSIAN ECONOMY Unlocking Growth, Sustaining Equity All Rights Reserved

MALAYSIAN ECONOMY Unlocking Growth, Sustaining Equity All Rights Reserved

MALAYSIAN ECONOMY Unlocking Growth, Sustaining Equity All Rights Reserved

MALAYSIAN ECONOMY Unlocking Growth, Sustaining Equity All Rights Reserved

You might also like