The economy of Malaysia is the third largest in
Southeast Asia
Southeast Asia, also spelled South East Asia and South-East Asia, and also known as Southeastern Asia, South-eastern Asia or SEA, is the geographical United Nations geoscheme for Asia#South-eastern Asia, south-eastern region of Asia, consistin ...
and the
34th largest in the world in terms of GDP. The 2018
labour productivity
Workforce productivity is the amount of goods and services that a group of workers produce in a given amount of time. It is one of several types of productivity that economists measure. Workforce productivity, often referred to as labor producti ...
of
Malaysia
Malaysia ( ; ) is a country in Southeast Asia. The federation, federal constitutional monarchy consists of States and federal territories of Malaysia, thirteen states and three federal territories, separated by the South China Sea into two r ...
was measured at
Int$55,360 per worker, the third highest in
ASEAN
ASEAN ( , ), officially the Association of Southeast Asian Nations, is a political and economic union of 10 member states in Southeast Asia, which promotes intergovernmental cooperation and facilitates economic, political, security, militar ...
. According to the
Global Competitiveness Report
The ''Global Competitiveness Report'' (GCR) is a yearly report published by the World Economic Forum. Since 2004, the ''Global Competitiveness Report'' ranks countries based on the Global Competitiveness Index, developed by Xavier Sala-i-Martin an ...
2021, the Malaysian economy is the 25th most competitive country economy in the world.
Malaysians
Malaysians are nationals and citizens who are identified with the country of Malaysia. Although citizens make up the majority of Malaysians, non-citizen residents and overseas Malaysians may also claim a Malaysian identity.
The country is h ...
enjoy a relatively affluent lifestyle compared to many of its neighbours in Southeast Asia. This is due to a fast-growing export-oriented economy, a relatively low national
income tax
An income tax is a tax imposed on individuals or entities (taxpayers) in respect of the income or profits earned by them (commonly called taxable income). Income tax generally is computed as the product of a tax rate times the taxable income. Tax ...
, highly affordable local food and transport fuel, as well as a fully subsidized
single-payer
Single-payer healthcare is a type of universal healthcare in which the costs of essential healthcare for all residents are covered by a single public system (hence "single-payer").
Single-payer systems may contract for healthcare services from ...
public healthcare system. Malaysia has a
newly industrialised market economy
A market economy is an economic system in which the decisions regarding investment, production and distribution to the consumers are guided by the price signals created by the forces of supply and demand, where all suppliers and consumers ...
, which is relatively
open
Open or OPEN may refer to:
Music
* Open (band), Australian pop/rock band
* The Open (band), English indie rock band
* ''Open'' (Blues Image album), 1969
* ''Open'' (Gotthard album), 1999
* ''Open'' (Cowboy Junkies album), 2001
* ''Open'' (YF ...
and state-oriented. The Malaysian economy is highly robust and diversified with the export value of high-tech products in 2020 standing at US$92.1 billion, the second highest in ASEAN. Malaysia
exports
An export in international trade is a good produced in one country that is sold into another country or a service provided in one country for a national or resident of another country. The seller of such goods or the service provider is an ...
the second largest volume and value of palm oil products globally, after
Indonesia
Indonesia, officially the Republic of Indonesia, is a country in Southeast Asia and Oceania between the Indian and Pacific oceans. It consists of over 17,000 islands, including Sumatra, Java, Sulawesi, and parts of Borneo and New Guine ...
.
History
As one of three countries that control the
Strait of Malacca
The Strait of Malacca is a narrow stretch of water, 500 mi (800 km) long and from 40 to 155 mi (65–250 km) wide, between the Malay Peninsula (Peninsular Malaysia) to the northeast and the Indonesian island of Sumatra to the southwest, connec ...
, international trade plays a very significant role in Malaysia's economy. At one time, it was the largest producer of
tin
Tin is a chemical element with the symbol Sn (from la, stannum) and atomic number 50. Tin is a silvery-coloured metal.
Tin is soft enough to be cut with little force and a bar of tin can be bent by hand with little effort. When bent, t ...
,
rubber
Rubber, also called India rubber, latex, Amazonian rubber, ''caucho'', or ''caoutchouc'', as initially produced, consists of polymers of the organic compound isoprene, with minor impurities of other organic compounds. Thailand, Malaysia, and ...
and
palm oil
Palm oil is an edible vegetable oil derived from the mesocarp (reddish pulp) of the fruit of the oil palms. The oil is used in food manufacturing, in beauty products, and as biofuel. Palm oil accounted for about 33% of global oils produced from ...
in the world.
Manufacturing has a large influence in the country's economy, accounting for over 40% of the GDP. Malaysia is also the world's largest
Islamic banking
Islamic banking, Islamic finance ( ar, مصرفية إسلامية), or Sharia-compliant finance is banking or financing activity that complies with Sharia (Islamic law) and its practical application through the development of Islamic economic ...
and financial centre.
In the 1970s, Malaysia began to imitate the four
Asian Tiger
The Four Asian Tigers (also known as the Four Asian Dragons or Four Little Dragons in Chinese and Korean) are the developed East Asian economies of Hong Kong, Singapore, South Korea, and Taiwan. Between the early 1960s and 1990s, they underwent r ...
economies (
South Korea
South Korea, officially the Republic of Korea (ROK), is a country in East Asia, constituting the southern part of the Korea, Korean Peninsula and sharing a Korean Demilitarized Zone, land border with North Korea. Its western border is formed ...
,
Taiwan
Taiwan, officially the Republic of China (ROC), is a country in East Asia, at the junction of the East and South China Seas in the northwestern Pacific Ocean, with the People's Republic of China (PRC) to the northwest, Japan to the nort ...
,
Hong Kong
Hong Kong ( (US) or (UK); , ), officially the Hong Kong Special Administrative Region of the People's Republic of China ( abbr. Hong Kong SAR or HKSAR), is a city and special administrative region of China on the eastern Pearl River Delt ...
and
Singapore
Singapore (), officially the Republic of Singapore, is a sovereign island country and city-state in maritime Southeast Asia. It lies about one degree of latitude () north of the equator, off the southern tip of the Malay Peninsula, borde ...
) and committed itself to a transition from being reliant on
mining
Mining is the extraction of valuable minerals or other geological materials from the Earth, usually from an ore body, lode, vein, seam, reef, or placer deposit. The exploitation of these deposits for raw material is based on the economic via ...
and
agriculture
Agriculture or farming is the practice of cultivating plants and livestock. Agriculture was the key development in the rise of sedentary human civilization, whereby farming of domesticated species created food surpluses that enabled people to ...
to an economy that depends more on manufacturing. In the 1970s, the predominantly mining and agricultural based Malaysian economy began a transition towards a more multi-sector economy. Since the 1980s the industrial sector has led Malaysia's growth. High levels of investment played a significant role in this. With Japanese investment, heavy industries flourished and in a matter of years, Malaysian exports became the country's primary growth engine. Malaysia consistently achieved more than 7% GDP growth along with low inflation in the 1980s and the 1990s.
In 1991, former Prime Minister of Malaysia,
Mahathir bin Mohamad
Mahathir bin Mohamad ( ms, محاضير بن محمد, label= Jawi, script=arab, italic=unset; ; born 10 July 1925) is a Malaysian politician, author, and physician who served as the 4th and 7th Prime Minister of Malaysia. He held the office ...
outlined his ideal,
Vision 2020 in which Malaysia would become a self-sufficient industrialised nation by 2020.
Tan Sri Nor Mohamed, a government minister, said Malaysia could attain developed country status in 2018 if the country's growth remains constant or increases.
Malaysia experienced an economic boom and underwent rapid development during the late 20th century and has GDP per capita (nominal) of US$11,062.043 in 2014, and is considered a
newly industrialised country
The category of newly industrialized country (NIC), newly industrialized economy (NIE) or middle income country is a socioeconomic classification applied to several countries around the world by political scientists and economists. They represent ...
.
In 2009, the PPP GDP was US$383.6 billion, about half the 2014 amount, and the PPP per capita GDP was US$8,100, about one third the 2014 amount.
In 2014, the Household Income Survey undertaken by the government indicated that there were 7 million households in Malaysia, with an average of 4.3 members in each household. The average household income of Malaysia increased by 18% to RM5,900 a month, compared to RM5,000 in 2012.
According to a
HSBC
HSBC Holdings plc is a British multinational universal bank and financial services holding company. It is the largest bank in Europe by total assets ahead of BNP Paribas, with US$2.953 trillion as of December 2021. In 2021, HSBC had $10.8 tri ...
report in 2012, 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." Viktor Shvets, the managing director in
Credit Suisse
Credit Suisse Group AG is a global investment bank and financial services firm founded and based in Switzerland. Headquartered in Zürich, it maintains offices in all major financial centers around the world and is one of the nine global " ...
, has said "Malaysia has all the right ingredients to become a developed nation."
In the beginning of 2020, Malaysian economy was severely afflicted by
COVID-19 pandemic
The COVID-19 pandemic, also known as the coronavirus pandemic, is an ongoing global pandemic of coronavirus disease 2019 (COVID-19) caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2). The novel virus was first identif ...
that eventually expanded to the rest of the world, and causing the economic shutdown and downturn in the country, worse since 2008. In early December 2020 during the pandemic, Fitch Ratings downgraded the country’s rating from A− to BBB+. Some, such as Hoo Ke Ping at the Kingsley Strategic Institute, suggested that this was because of a lack of communication between the new government and the ratings agency. Others, such as Carmelo Ferlito, from the Centre for Market Education, said it might require something more substantial as the recent budget lacked a strategy for the recovery as well as addressing the political tensions, and also, Shan Saeed at Juwai IQI suggested that the agency had lots its relevance as the analysis was "Behind the curve". However, COVID-19 recession in the country was ended by 1 April 2022 as COVID-19
Delta
Delta commonly refers to:
* Delta (letter) (Δ or δ), a letter of the Greek alphabet
* River delta, at a river mouth
* D (NATO phonetic alphabet: "Delta")
* Delta Air Lines, US
* Delta variant of SARS-CoV-2 that causes COVID-19
Delta may also re ...
cron
The cron command-line utility is a job scheduler on Unix-like operating systems. Users who set up and maintain software environments use cron to schedule jobs (commands or shell scripts), also known as cron jobs, to run periodically at fixed ti ...
hybrid infection rate continued to fall and ahead of the
endemic phase.
Economic policies
Monetary policy
Malaysian ringgit
The Malaysian ringgit (; plural: ringgit; symbol: RM; currency code: MYR; Malay name: ''Ringgit Malaysia''; formerly the Malaysian dollar) is the currency of Malaysia. It is divided into 100 ''sen'' (formerly ''cents''). The ringgit is issue ...
was an internationalised currency, which was freely traded around the world. Just before the crisis, the Ringgit was traded RM2.50 at the dollar. Due to speculative activities, the Ringgit fell to as much as RM4.10 to the dollar in matter of weeks.
Bank Negara Malaysia
The Central Bank of Malaysia (BNM; ms, Bank Negara Malaysia) is the Malaysian central bank. Established on 26 January 1959 as the Central Bank of Malaya (''Bank Negara Tanah Melayu''), its main purpose is to issue currency, act as banker and ad ...
, the nation's central bank, decided to impose capital controls to prevent the outflow of the Ringgit in the open market. The Ringgit became non-internationalised and a traveller had to declare to the central bank if taking out more than RM10,000 out of the country and the Ringgit itself was pegged at RM3.80 to the US dollar.
The
fixed exchange rate
A fixed exchange rate, often called a pegged exchange rate, is a type of exchange rate regime in which a currency's value is fixed or pegged by a monetary authority against the value of another currency, a basket of other currencies, or another m ...
was abandoned in favour of the
floating exchange rate
In macroeconomics and economic policy, a floating exchange rate (also known as a fluctuating or flexible exchange rate) is a type of exchange rate regime in which a currency's value is allowed to fluctuate in response to foreign exchange mar ...
in July 2005, hours after China announced the same move. At this point, the Ringgit was still not internationalised. The Ringgit continued to strengthen to 3.18 to the dollar by March 2008 and appreciated as low as 2.94 to the dollar in May 2011. Meanwhile, many aspects of capital control have been slowly relaxed by Bank Negara Malaysia. However, the government continues to not internationalise the Ringgit. The government stated that the Ringgit will be internationalised once it is ready.
Bank Negara Malaysia for the time being, uses interest rate targeting. The
Overnight Policy Rate (OPR) is their policy instrument, and is used to guide the short term interbank rates which will hopefully influence inflation and economic growth.
Affirmative action
Tun Abdul Razak, who was then the Prime Minister, implemented the
affirmative action policy named as New Economic Policy (NEP) soon after
13 May Incident in 1969. Prior to the incident, the poverty rates among
Malays were extremely high (at 65%) as was discontent between races, particularly towards the Chinese, who controlled 74% of the economy at the time.
Through NEP, the Bumiputeras majority are given priority and special privileges in housing developments, scholarship admission and also for ownership of publicly listed companies.
The
Malaysian New Economic Policy
The New Economic Policy (NEP) ( ms, Dasar Ekonomi Baru (DEB)) was a social re-engineering and affirmative action program formulated by the National Operations Council (NOC) in the aftermath of 13 May Incident in Malaysia. This policy was adop ...
was created in 1971 with the aim of bringing Malays a 30% share of the economy of Malaysia and eradicating poverty amongst Malays, primarily through encouraging enterprise ownership by
Bumiputeras. After 40 years of the program, bumiputra equity ownership rose to 23% worth RM167.7 billion in 2010 against 2.4% in 1970.
The NEP is accused of creating an
oligarchy
Oligarchy (; ) is a conceptual form of power structure in which power rests with a small number of people. These people may or may not be distinguished by one or several characteristics, such as nobility, fame, wealth, education, or corporate, r ...
, and creating a 'subsidy mentality'. Political parties such as
Parti Keadilan Rakyat
The People's Justice Party ( ms, Parti Keadilan Rakyat , often known simply as KEADILAN or PKR) is a reformist political party in Malaysia, formed in 2003 by a merger of the National Justice Party and the older Malaysian People's Party. The ...
and
Democratic Action Party
The Democratic Action Party (abbreviation: DAP; ms, Parti Tindakan Demokratik; ; ta, ஜனநாயக செயல் கட்சி) is a Centre-left politics, centre-left social democracy, social democratic political party in Malaysia. ...
have proposed a new policy which will be equal for every Malaysian, regardless of race. When the Democratic Action Party was elected in the state of
Penang
Penang ( ms, Pulau Pinang, is a Malaysian state located on the northwest coast of Peninsular Malaysia, by the Malacca Strait. It has two parts: Penang Island, where the capital city, George Town, is located, and Seberang Perai on the Malay ...
in 2008, it announced that it will do away with the NEP, claiming that it "... breeds
nepotism
Nepotism is an advantage, privilege, or position that is granted to relatives and friends in an occupation or field. These fields may include but are not limited to, business, politics, academia, entertainment, sports, fitness, religion, an ...
, corruption and systemic inefficiency".
Wolfgang Kasper, a professor of economics at
University of New South Wales
The University of New South Wales (UNSW), also known as UNSW Sydney, is a public research university based in Sydney, New South Wales, Australia. It is one of the founding members of Group of Eight, a coalition of Australian research-intensive ...
, and once an adviser to Malaysia's Finance Ministry, criticised the NEP, saying that "NEP handouts (are) making Malays lazy, corrupt & swell-headed. Worst of all, it keeps them poor." He also criticised the Federal Government giving cash-handouts and financial aid instead of providing equal access to education to help the marginalised poor to lift their income status.
On 21 April 2009, the prime minister
Najib Tun Razak
Dato' Sri Haji Mohammad Najib bin Tun Haji Abdul Razak ( ms, محمد نجيب بن عبد الرزاق, label= Jawi, script=arab, italic=unset, ; born 23 July 1953) is a Malaysian politician who served as the 6th prime minister of Malaysi ...
has announced the liberalisation of 27 services sub-sector by abolishing the 30% bumiputera requirement. The move is seen as the government efforts to increase investment in the service sector of the economy. According to the premier, many more sectors of the economy will be liberalised.
On 30 June 2009, the prime minister announces further liberation moves including the dismantling of the Bumiputera equity quotas and repealing the guidelines of the Foreign Investment Committee, which was responsible to monitor foreign shareholding in Malaysian companies. However, any Malaysian companies that wishes to list in Malaysia would still need to offer 50 percent of public shareholding spread to Bumiputera investors.
Subsidies and price controls
The Malaysian government subsidises and controls prices on a lot of essential items to keep the prices low. Prices of items such as palm oil, cooking oil, petrol, flour, bread, rice and other essentials have been kept under market prices to keep cost of living low. As of 2009, 22 per cent of government expenditures were subsidies, with petrol subsidies alone taking up 12 per cent.
Since 2010, the government has been gradually reforming Malaysia's subsidy system, via a series of reductions in subsidies for fuel and sugar to improve government finances and to improve economic efficiency. As a result, in December 2014, the government officially ended all fuel subsidies and implemented a 'managed float' system, taking advantage of low oil prices at the time, potentially saving the government almost RM20 billion ringgit (US$5.97 billion) annually.
Sovereign wealth funds
The government owns and operates several
sovereign wealth fund
A sovereign wealth fund (SWF), sovereign investment fund, or social wealth fund is a state-owned investment fund that invests in real and financial assets such as stocks, bonds, real estate, precious metals, or in alternative investments such ...
s that invest in local companies and also foreign companies. One such fund is
Khazanah Nasional
Khazanah Nasional Berhad is the sovereign wealth fund of the Government of Malaysia, entrusted with growing the nation's long-term wealth via distinct commercial and strategic objectives. Khazanah's commercial objective is to grow financial as ...
Berhad
A public limited company (legally abbreviated to PLC or plc) is a type of public company under United Kingdom company law, some Commonwealth jurisdictions, and the Republic of Ireland. It is a limited liability company whose shares may be freel ...
which was established in 1993, and as of 31 December 2013 has US$41 billion worth of assets.
The fund invests in major companies in Malaysia such as
CIMB
CIMB Group Holdings Berhad () is a Malaysian universal bank headquartered in Kuala Lumpur and operating in high growth economies in ASEAN. CIMB Group is an indigenous ASEAN investment bank. CIMB has a wide retail branch network with 1,080 bran ...
in the banking sector,
UEM Group
UEM Group Berhad (formerly United Engineers Malaysia Berhad) or UEM Group is a Malaysian engineering-based infrastructure and services company with four key businesses namely Expressways; Township & Property Development; Engineering & Constructi ...
in the construction sector,
Telekom Malaysia
Telekom Malaysia Berhad (TM) is a Malaysian telecommunications company founded in 1984. Beginning as the national telecommunications company for fixed line, radio and television broadcasting services, it has evolved to become the country's larg ...
and
Axiata
Axiata Group Berhad, commonly known as Axiata, formerly known as TM International Berhad, is a Malaysian multinational telecommunications conglomerate with extensive operations in Asia.
The group
Axiata's primary business is in investment h ...
in the communications industry,
Malaysia Airports
Malaysia Airports Holdings Berhad () is a Malaysian airport company that manages most of the List of airports in Malaysia, airports in Malaysia. The firm was recently awarded the duty to manage airports in international destinations. It has it ...
and
Malaysia Airlines
Malaysia Airlines Berhad (MAB; ms, Penerbangan Malaysia Berhad), formerly known as Malaysian Airline System (MAS; ), and branded as Malaysia Airlines, is the flag carrier airline of Malaysia and a member of the Oneworld airline alliance. (The ...
in the aerospace industry, as well as
Tenaga Nasional
Tenaga Nasional Berhad (, abbreviated as TNB; TENAGA, ), also known as Tenaga Nasional or simply Tenaga, is the Malaysian multinational electricity company and is the only electric utility company in Peninsular Malaysia and also the largest p ...
in the energy sector
Another fund that is owned by the Malaysian government is the
Employees Provident Fund which is a retirement fund that as of 31 March 2014, has an asset size of
RM597 billion. (US$184 billion),
making it the fourth largest pension fund in Asia and seventh largest in the world. Like
Khazanah Nasional
Khazanah Nasional Berhad is the sovereign wealth fund of the Government of Malaysia, entrusted with growing the nation's long-term wealth via distinct commercial and strategic objectives. Khazanah's commercial objective is to grow financial as ...
, the EPF invests and sometimes owns several major companies in Malaysia such as
RHB Bank
RHB Bank Berhad (), formerly known as RHB Sakura Merchant Bank Berhad, is a Malaysian bank based in Kuala Lumpur and founded in 1994. It is a subsidiary of RHB Capital Berhad, which is one of the largest banks in Malaysia.
RHB Bank has over 1 ...
.
EPF investment is diversified over a number of sectors but almost 40% of their investment are in the services sector.
Permodalan Nasional Berhad
Permodalan Nasional Berhad (PNB) is one of the largest fund management companies in Malaysia. It was established on 17 March 1978 as one of the instruments of the government's New Economic Policy.
PNB's two notable projects is located in Kuala ...
is another major fund manager controlled by the Malaysian Government. It offers
capital guarantee
A capital guarantee product means that when an investor buys, or "enters", this specific structured product he is guaranteed to get back at maturity a part or the totality of the money he invested on day one. Examples of capital guarantees include ...
d mutual funds such as Amanah Saham Bumiputera and Amanah Saham Wawasan 2020 which are open only to Malaysian and in some cases,
Bumiputeras.
Government influence
Although the federal government promotes private enterprise and ownership in the economy, the economic direction of the country is heavily influenced by the government through five years development plans since independence. The economy is also influenced by the government through agencies such as the Economic Planning Unit and government-linked wealth funds such as
Khazanah Nasional
Khazanah Nasional Berhad is the sovereign wealth fund of the Government of Malaysia, entrusted with growing the nation's long-term wealth via distinct commercial and strategic objectives. Khazanah's commercial objective is to grow financial as ...
Berhad
A public limited company (legally abbreviated to PLC or plc) is a type of public company under United Kingdom company law, some Commonwealth jurisdictions, and the Republic of Ireland. It is a limited liability company whose shares may be freel ...
,
Employees Provident Fund and
Permodalan Nasional Berhad
Permodalan Nasional Berhad (PNB) is one of the largest fund management companies in Malaysia. It was established on 17 March 1978 as one of the instruments of the government's New Economic Policy.
PNB's two notable projects is located in Kuala ...
.
The government's development plans, called the Malaysian Plan, currently the
Tenth Malaysia Plan, started in 1950 during the British colonial rule.
The plans were largely centred around accelerating the growth of the economy by selectively investing in selective sectors of the economy and building infrastructure to support said sectors.
For example, in the current national plan, three sectors – agriculture, manufacturing and
services
Service may refer to:
Activities
* Administrative service, a required part of the workload of university faculty
* Civil service, the body of employees of a government
* Community service, volunteer service for the benefit of a community or a pu ...
, will receive special attention to promote the transition to high value-added activities in the respective areas.
Government-linked investment vehicles such as
Khazanah Nasional
Khazanah Nasional Berhad is the sovereign wealth fund of the Government of Malaysia, entrusted with growing the nation's long-term wealth via distinct commercial and strategic objectives. Khazanah's commercial objective is to grow financial as ...
Berhad
A public limited company (legally abbreviated to PLC or plc) is a type of public company under United Kingdom company law, some Commonwealth jurisdictions, and the Republic of Ireland. It is a limited liability company whose shares may be freel ...
,
Employees Provident Fund and
Permodalan Nasional Berhad
Permodalan Nasional Berhad (PNB) is one of the largest fund management companies in Malaysia. It was established on 17 March 1978 as one of the instruments of the government's New Economic Policy.
PNB's two notable projects is located in Kuala ...
invest in and sometimes own major companies in major sectors of the Malaysian economy.
Data
The following table shows the main economic indicators in 1980–2021 (with IMF staff estimates in 2022–2027). Inflation below 5% is in green.
Currency
The only legal tender in Malaysia is the
Malaysian ringgit
The Malaysian ringgit (; plural: ringgit; symbol: RM; currency code: MYR; Malay name: ''Ringgit Malaysia''; formerly the Malaysian dollar) is the currency of Malaysia. It is divided into 100 ''sen'' (formerly ''cents''). The ringgit is issue ...
. As of 10 June 2022, the Ringgit is traded at MYR 4.39 at the US dollar.
The ringgit has not been internationalised since September 1998, an effect due to the
1997 Asian financial crisis
The Asian financial crisis was a period of financial crisis that gripped much of East Asia and Southeast Asia beginning in July 1997 and raised fears of a worldwide economic meltdown due to financial contagion. However, the recovery in 1998–1 ...
in which the central bank imposed capital controls on the currency, due to speculative short-selling of the ringgit. As a part of series of capital controls, the currency was pegged between September 1998 to 21 July 2005 at MYR 3.80 to the dollar after the value of the ringgit dropped from MYR 2.50 per USD to, at one point, MYR 4.80 per USD.
In recent years, Bank Negara Malaysia has begun to relax certain rules to the capital controls although the currency itself is still not traded internationally yet. According to the Bank Governor, the ringgit will be internationalised when it's ready.
In September 2010, in an interview with
CNBC
CNBC (formerly Consumer News and Business Channel) is an American basic cable business news channel. It provides business news programming on weekdays from 5:00 a.m. to 7:00 p.m., Eastern Time, while broadcasting talk sho ...
, Dato' Seri
Najib Tun Razak
Dato' Sri Haji Mohammad Najib bin Tun Haji Abdul Razak ( ms, محمد نجيب بن عبد الرزاق, label= Jawi, script=arab, italic=unset, ; born 23 July 1953) is a Malaysian politician who served as the 6th prime minister of Malaysi ...
, who is the then Prime Minister of Malaysia and also held the position of Finance Minister then, said that the government is open to open up the ringgit to off shore trading if the move will help the economy. He further added that before such a move can be made, it will ensure that rules and regulation will be in place so the currency will not be abused.
Natural resources
![Oilpalm malaysia](https://upload.wikimedia.org/wikipedia/commons/8/8d/Oilpalm_malaysia.jpg)
Malaysia is well-endowed with natural resources in areas such as agriculture, forestry and minerals. It is an exporter of natural and agricultural resources, the most valuable exported resource being petroleum.
In the agricultural sector, Malaysia is one of the top exporters of natural rubber and
palm oil
Palm oil is an edible vegetable oil derived from the mesocarp (reddish pulp) of the fruit of the oil palms. The oil is used in food manufacturing, in beauty products, and as biofuel. Palm oil accounted for about 33% of global oils produced from ...
, which together with timber and timber products,
cocoa
Cocoa may refer to:
Chocolate
* Chocolate
* ''Theobroma cacao'', the cocoa tree
* Cocoa bean, seed of ''Theobroma cacao''
* Chocolate liquor, or cocoa liquor, pure, liquid chocolate extracted from the cocoa bean, including both cocoa butter and ...
,
pepper
Pepper or peppers may refer to:
Food and spice
* Piperaceae or the pepper family, a large family of flowering plant
** Black pepper
* ''Capsicum'' or pepper, a genus of flowering plants in the nightshade family Solanaceae
** Bell pepper
** Chili ...
,
pineapple
The pineapple (''Ananas comosus'') is a tropical plant with an edible fruit; it is the most economically significant plant in the family Bromeliaceae. The pineapple is indigenous to South America, where it has been cultivated for many centuri ...
and tobacco dominate the growth of the sector. As of 2011, the percentage arable land in Malaysia is 5.44%. Croplands consists of 17.49% while other land uses consists of 77.07%.
As of 2009, irrigated land covers 3,800 km
2. Total renewable water resources make up 580 cubic km as of 2011.
Tin
Tin is a chemical element with the symbol Sn (from la, stannum) and atomic number 50. Tin is a silvery-coloured metal.
Tin is soft enough to be cut with little force and a bar of tin can be bent by hand with little effort. When bent, t ...
and petroleum are the two main mineral resources that are of major significance in the Malaysian economy. Malaysia was once the world's largest producer of tin until the collapse of the tin market in the early 1980s. In the 19th and 20th century, tin played a predominant role in the Malaysian economy, with Malaysia accounting for over 31% of global output. It was only in 1972 that petroleum and natural gas took over from tin as the mainstay of the mineral extraction sector. Other minerals of some importance or significance include copper, bauxite, iron-ore and coal together with industrial minerals like clay,
kaolin
Kaolinite ( ) is a clay mineral, with the chemical composition Al2 Si2 O5( OH)4. It is an important industrial mineral. It is a layered silicate mineral, with one tetrahedral sheet of silica () linked through oxygen atoms to one octahedral ...
,
silica
Silicon dioxide, also known as silica, is an oxide of silicon with the chemical formula , most commonly found in nature as quartz and in various living organisms. In many parts of the world, silica is the major constituent of sand. Silica is one ...
,
limestone
Limestone ( calcium carbonate ) is a type of carbonate sedimentary rock which is the main source of the material lime. It is composed mostly of the minerals calcite and aragonite, which are different crystal forms of . Limestone forms whe ...
,
barite
Baryte, barite or barytes ( or ) is a mineral consisting of barium sulfate ( Ba S O4). Baryte is generally white or colorless, and is the main source of the element barium. The ''baryte group'' consists of baryte, celestine (strontium sulfate), ...
,
phosphates and dimension stones such as
granite
Granite () is a coarse-grained (phaneritic) intrusive igneous rock composed mostly of quartz, alkali feldspar, and plagioclase. It forms from magma with a high content of silica and alkali metal oxides that slowly cools and solidifies undergro ...
as well as marble blocks and slabs. Small quantities of gold are produced.
In 2019, the country was the 11th largest world producer of
manganese
Manganese is a chemical element with the symbol Mn and atomic number 25. It is a hard, brittle, silvery metal, often found in minerals in combination with iron. Manganese is a transition metal with a multifaceted array of industrial alloy use ...
; the 11th largest world producer of
tin
Tin is a chemical element with the symbol Sn (from la, stannum) and atomic number 50. Tin is a silvery-coloured metal.
Tin is soft enough to be cut with little force and a bar of tin can be bent by hand with little effort. When bent, t ...
, the 12th largest world producer of
bauxite
Bauxite is a sedimentary rock with a relatively high aluminium content. It is the world's main source of aluminium and gallium. Bauxite consists mostly of the aluminium minerals gibbsite (Al(OH)3), boehmite (γ-AlO(OH)) and diaspore (α-AlO(O ...
, and the 19th largest world producer of
lime
Lime commonly refers to:
* Lime (fruit), a green citrus fruit
* Lime (material), inorganic materials containing calcium, usually calcium oxide or calcium hydroxide
* Lime (color), a color between yellow and green
Lime may also refer to:
Botany ...
.
Energy resources
Malaysia holds
proven oil reserves
Oil and gas reserves denote ''discovered'' quantities of crude oil and natural gas (oil or gas fields) that can be profitably produced/recovered from an approved development. Oil and gas reserves tied to approved operational plans filed on th ...
of 4 billion barrels as of January 2014, the fourth-highest reserves in
Asia-Pacific
Asia-Pacific (APAC) is the part of the world near the western Pacific Ocean. The Asia-Pacific region varies in area depending on context, but it generally includes East Asia, Russian Far East, South Asia, Southeast Asia, Australia and Pacific Isla ...
after China, India, and
Vietnam
Vietnam or Viet Nam ( vi, Việt Nam, ), officially the Socialist Republic of Vietnam,., group="n" is a country in Southeast Asia, at the eastern edge of mainland Southeast Asia, with an area of and population of 96 million, making i ...
. Nearly all of Malaysia's oil comes from offshore fields. The continental shelf is divided into three producing basins: the basin offshore Eastern
Peninsular Malaysia
Peninsular Malaysia ( ms, Semenanjung Malaysia; Jawi: سمننجڠ مليسيا), or the States of Malaya ( ms, Negeri-negeri Tanah Melayu; Jawi: نڬري-نڬري تانه ملايو), also known as West Malaysia or the Malaysian Peninsula, ...
in the west and the
Sarawak
Sarawak (; ) is a States and federal territories of Malaysia, state of Malaysia. The largest among the 13 states, with an area almost equal to that of Peninsular Malaysia, Sarawak is located in northwest Borneo Island, and is bordered by the M ...
and
Sabah
Sabah () is a States and federal territories of Malaysia, state of Malaysia located in northern Borneo, in the region of East Malaysia. Sabah borders the Malaysian state of Sarawak to the southwest and the North Kalimantan province of Indone ...
basins in the east. Most of the country's oil reserves are located in the Peninsular basin and tend to be light and sweet crude. Malaysia's benchmark crude oil,
Tapis Blend, is a light and sweet crude oil, with an
API gravity
The American Petroleum Institute gravity, or API gravity, is a measure of how heavy or light a petroleum liquid is compared to water: if its API gravity is greater than 10, it is lighter and floats on water; if less than 10, it is heavier and sinks ...
of 42.7° and a sulphur content of 0.04% by weight.
Malaysia also holds 83 trillion cubic feet (Tcf) of
proven natural gas reserves as of January 2014, and was the third-largest natural gas reserve holder in the Asia-Pacific region after China and
Indonesia
Indonesia, officially the Republic of Indonesia, is a country in Southeast Asia and Oceania between the Indian and Pacific oceans. It consists of over 17,000 islands, including Sumatra, Java, Sulawesi, and parts of Borneo and New Guine ...
. More than half of the country's natural gas reserves are located in its eastern areas, predominantly offshore Sarawak. Most of Malaysia's gas reserves are associated with oil basins, although Sarawak and Sabah have an increasing amount of non-associated gas reserves that have offset some of the declines from mature oil and gas basins offshore Peninsular Malaysia.
Business environment
In 2015, Malaysia's economy was one of the most competitive in the world, ranking 14th in the world and 5th for countries with a population of over 20 million, higher than countries like
Australia
Australia, officially the Commonwealth of Australia, is a Sovereign state, sovereign country comprising the mainland of the Australia (continent), Australian continent, the island of Tasmania, and numerous List of islands of Australia, sma ...
,
United Kingdom
The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Europe, off the north-western coast of the continental mainland. It comprises England, Scotland, Wales and North ...
,
South Korea
South Korea, officially the Republic of Korea (ROK), is a country in East Asia, constituting the southern part of the Korea, Korean Peninsula and sharing a Korean Demilitarized Zone, land border with North Korea. Its western border is formed ...
and
Japan
Japan ( ja, 日本, or , and formally , ''Nihonkoku'') is an island country in East Asia. It is situated in the northwest Pacific Ocean, and is bordered on the west by the Sea of Japan, while extending from the Sea of Okhotsk in the north ...
.
In 2015, Malaysia was the 6th most attractive country for foreign investors, ranked in the Baseline Profitability Index (BPI) published by Foreign Policy Magazine.
The government is moving towards a more business friendly environment by setting up a special task force to facilitate business called PEMUDAH, which means "simplifier" in Malay. Highlights includes easing restrictions and requirement to hire expatriates, shorten time to do land transfers and increasing the limit of sugar storage (a controlled item in Malaysia) for companies.
Malaysia was ranked 33rd in the
Global Innovation Index
The Global Innovation Index is an annual ranking of countries by their capacity for, and success in, innovation, published by the World Intellectual Property Organization. It was started in 2007 by INSEAD and ''World Business'', a British maga ...
in 2020, up from 35th in 2019.
Taxation
In 2016, the Inland Revenue Board of Malaysia lowered the effective tax rate to 24% for businesses with capital exceeding 2.5 million ringgit. For the smaller companies, the rate is 19%.
The Malaysian government also imposes government taxes such as the Sales and Services tax and real estate taxes. The current rate of SST is at 6% while disposal of property is subject to a schedule of period holding the property.
External trade
![2014 Malaysia Countries Export Treemap](https://upload.wikimedia.org/wikipedia/commons/c/c5/2014_Malaysia_Countries_Export_Treemap.png)
In 2021, Malaysia's total
external trade
International trade is the exchange of capital, goods, and services across international borders or territories because there is a need or want of goods or services. (see: World economy)
In most countries, such trade represents a significant ...
totaled RM2,227 billion (approximately US$530 billion), made up of RM1,239 (approximately US$295 billion) of exports and RM987 billion (approximately US$235 billion) of imports, making Malaysia the world's
21st largest exporter and the world's
25th largest importer.
Malaysia's largest trading partner is China. Malaysia has been China's top trading partner within
ASEAN
ASEAN ( , ), officially the Association of Southeast Asian Nations, is a political and economic union of 10 member states in Southeast Asia, which promotes intergovernmental cooperation and facilitates economic, political, security, militar ...
for five years in a row since 2008. The two-way trade volume between China and Malaysia in 2013 reached $106 billion, making Malaysia China's third-largest trade partner in Asia, just behind Japan and South Korea and eighth largest overall. On 31 May 2014, during
Najib Razak
Dato' Sri Haji Mohammad Najib bin Tun Haji Abdul Razak ( ms, محمد نجيب بن عبد الرزاق, label= Jawi, script=arab, italic=unset, ; born 23 July 1953) is a Malaysian politician who served as the 6th prime minister of Malaysi ...
's visit to China where he was welcomed by China's
Premier
Premier is a title for the head of government in central governments, state governments and local governments of some countries. A second in command to a premier is designated as a deputy premier.
A premier will normally be a head of governm ...
Li Keqiang
Li Keqiang (born 1 July 1955) is a Chinese politician who is the outgoing premier of China. An economist by profession, Li is head of China's executive branch as well as one of the leading figures behind China's Financial and Economic Affai ...
, China and Malaysia pledged to increase bilateral trade to US$160 billion by 2017. They also agreed to upgrade economic and financial co-operation, especially in the production of halal food, water processing and railway construction.
Malaysia's second largest trading partner is
Singapore
Singapore (), officially the Republic of Singapore, is a sovereign island country and city-state in maritime Southeast Asia. It lies about one degree of latitude () north of the equator, off the southern tip of the Malay Peninsula, borde ...
and Malaysia is Singapore's biggest trading partner, with bilateral trade totalling roughly US$91 billion in 2012, accounting for over a fifth of total trade within
ASEAN
ASEAN ( , ), officially the Association of Southeast Asian Nations, is a political and economic union of 10 member states in Southeast Asia, which promotes intergovernmental cooperation and facilitates economic, political, security, militar ...
.
Malaysia's third largest trading partner is Japan, amounting RM137.45 billion (US$42 billion) of trade in 2014, an increase of 1.4% compared with to 2013. Out of this, exports totalled RM82.71 billion (US$25.6 billion), a growth of 4.4% cent while imports contracted 2.9% to RM54.75 billion (US$16.74 billion). Malaysian Ambassador to Japan Datuk Ahmad Izlan Idris said the main exports from Malaysia to Japan were
liquefied natural gas (LNG), electrical and electronics as well as chemical-based products. He said Malaysia's main imports from Japan were electrical and electronics, machines and equipment as well as spare parts and accessories for vehicles and cars.
Malaysia is an important trading partner for the United States. In 1999, two-way bilateral trade between the US and Malaysia totalled US$30.5 billion, with US exports to Malaysia totalling US$9.1 billion and US imports from Malaysia increasing to US$21.4 billion. Malaysia was the United States' 10th-largest trading partner and its 12th-largest export market. During the first half of 2000, US exports totalled US$5 billion, while US imports from Malaysia reached US$11.6 billion.
Agriculture sector
![Rubbertrees malaysia](https://upload.wikimedia.org/wikipedia/commons/9/98/Rubbertrees_malaysia.jpg)
Agriculture is now a minor sector of the Malaysian economy, accounting for 7.1% of Malaysia's GDP in 2014 and employing 11.1% of Malaysia's labour force, contrasting with the 1960s when agriculture accounted for 37% of Malaysia's GDP and employed 66.2% of the labour force. The crops grown by the agricultural sector has also significantly shifted from food crops like
paddy
Paddy may refer to:
People
*Paddy (given name), a list of people with the given name or nickname
*An List of ethnic slurs#P, ethnic slur for an Irishman
Birds
*Paddy (pigeon), a Second World War carrier pigeon
*Snowy sheathbill or paddy, a bird ...
and
coconut
The coconut tree (''Cocos nucifera'') is a member of the palm tree family ( Arecaceae) and the only living species of the genus ''Cocos''. The term "coconut" (or the archaic "cocoanut") can refer to the whole coconut palm, the seed, or the ...
to industrial crops like
palm oil
Palm oil is an edible vegetable oil derived from the mesocarp (reddish pulp) of the fruit of the oil palms. The oil is used in food manufacturing, in beauty products, and as biofuel. Palm oil accounted for about 33% of global oils produced from ...
and
rubber
Rubber, also called India rubber, latex, Amazonian rubber, ''caucho'', or ''caoutchouc'', as initially produced, consists of polymers of the organic compound isoprene, with minor impurities of other organic compounds. Thailand, Malaysia, and ...
, which in 2005 contributed to 83.7% of total agricultural land use, compared to 68.5% in 1960.
Palm Oil Industry
Despite its minor contribution to Malaysia's
GDP, Malaysia has a significant foothold in the world's agricultural sector, being the world's second largest producer of palm oil in 2012
producing 18.79 million tonnes of crude palm oil on roughly of land.
Though
Indonesia
Indonesia, officially the Republic of Indonesia, is a country in Southeast Asia and Oceania between the Indian and Pacific oceans. It consists of over 17,000 islands, including Sumatra, Java, Sulawesi, and parts of Borneo and New Guine ...
produces more palm oil, Malaysia is the world's largest exporter of palm oil having exported 18 million tonnes of palm oil products in 2011.
In March 2019, the
European Commission
The European Commission (EC) is the executive of the European Union (EU). It operates as a cabinet government, with 27 members of the Commission (informally known as "Commissioners") headed by a President. It includes an administrative body o ...
concluded that palm oil
cultivation results in excessive
deforestation
Deforestation or forest clearance is the removal of a forest or stand of trees from land that is then converted to non-forest use. Deforestation can involve conversion of forest land to farms, ranches, or urban use. The most concentrated d ...
and its use in transport fuel should be phased out by 2030. In response,
Mahathir Mohamad
Mahathir bin Mohamad ( ms, محاضير بن محمد, label= Jawi, script=arab, italic=unset; ; born 10 July 1925) is a Malaysian politician, author, and physician who served as the 4th and 7th Prime Minister of Malaysia. He held the office ...
alleged that the
European Union
The European Union (EU) is a supranational political and economic union of member states that are located primarily in Europe. The union has a total area of and an estimated total population of about 447million. The EU has often been des ...
is at risk of starting a
trade war
A trade war is an economic conflict often resulting from extreme protectionism in which states raise or create tariffs or other trade barriers against each other in response to trade barriers created by the other party. If tariffs are the exclus ...
with Malaysia regarding its "grossly unfair" policies geared towards decreasing the use of palm oil, which Mahathir stated was "unfair" and an example of "rich people...
ryingto impoverish poor people".
Industry sector
Science policies in Malaysia are regulated by the Ministry of Science, Technology, and Innovation. The country is one of the world's largest exporters of semiconductor devices, electrical devices, and IT and communication products.
Malaysia's industrial sector accounts for 36.8%, over a third of the country's GDP in 2014, and employs 36% of the labour force in 2012. The industrial sector mostly contributed by the
electronics industry
The electronics industry is the economic sector that produces electronic devices. It emerged in the 20th century and is today one of the largest global industries. Contemporary society uses a vast array of electronic devices built-in automated or ...
,
automotive industry
The automotive industry comprises a wide range of company, companies and organizations involved in the design, Business development, development, manufacturing, marketing, and selling of motor vehicles. It is one of the world's largest industry ...
and
construction industry
Construction is a general term meaning the art and science to form objects, systems, or organizations,"Construction" def. 1.a. 1.b. and 1.c. ''Oxford English Dictionary'' Second Edition on CD-ROM (v. 4.0) Oxford University Press 2009 and come ...
.
Electrical and electronics
The electrical & electronics (E&E) industry is the leading sector in Malaysia's manufacturing sector, contributing significantly to the country's exports (32.8 per cent) and employment (27.2 per cent) in 2013. Malaysia benefits from the global demand in the usage of
mobile device
A mobile device (or handheld computer) is a computer small enough to hold and operate in the hand. Mobile devices typically have a flat LCD or OLED screen, a touchscreen interface, and digital or physical buttons. They may also have a physical ...
s (smartphones, tablets),
storage devices (cloud computing, data centres),
optoelectronics (photonics, fibre optics, LEDs) and embedded technology (
integrated circuits
An integrated circuit or monolithic integrated circuit (also referred to as an IC, a chip, or a microchip) is a set of electronic circuits on one small flat piece (or "chip") of semiconductor material, usually silicon. Large numbers of tiny ...
,
PCBs,
LED
A light-emitting diode (LED) is a semiconductor Electronics, device that Light#Light sources, emits light when Electric current, current flows through it. Electrons in the semiconductor recombine with electron holes, releasing energy i ...
s).
Electronic components
Products/activities which fall under this sub-sector include
semiconductor devices,
passive components
Passivity is a property of engineering systems, most commonly encountered in analog electronics and control systems. Typically, analog designers use ''passivity'' to refer to incrementally passive components and systems, which are incapable of p ...
,
printed circuits and other components such as media, substrates and connectors.
Within the electronic components sub-sector, the semiconductor devices is the leading contributor of exports for the E&E industry. Exports of semiconductor devices were RM111.19 billion or 47% of the total E&E products exported in 2013.
Malaysia is a major hub for electrical component manufacturing, with factories of international companies like
Intel
Intel Corporation is an American multinational corporation and technology company headquartered in Santa Clara, California. It is the world's largest semiconductor chip manufacturer by revenue, and is one of the developers of the x86 seri ...
,
AMD
Advanced Micro Devices, Inc. (AMD) is an American multinational semiconductor company based in Santa Clara, California, that develops computer processors and related technologies for business and consumer markets. While it initially manufactur ...
,
Freescale Semiconductor
Freescale Semiconductor, Inc. was an American semiconductor manufacturer. It was created by the divestiture of the Semiconductor Products Sector of Motorola in 2004. Freescale focused their integrated circuit products on the automotive, embed ...
,
ASE
Ase may refer to:
* Ase, Nigeria, a town in Delta State, Nigeria
* -ase, a suffix used for the names of enzymes
* Aṣẹ, a West African philosophical concept
* American Sign Language (ISO 639-3 code: ase)
See also
* Åse (disambiguation) Å ...
,
Infineon,
STMicroelectronics
STMicroelectronics N.V. commonly referred as ST or STMicro is a Dutch multinational corporation and technology company of French-Italian origin headquartered in Plan-les-Ouates near Geneva, Switzerland and listed on the French stock market. ST ...
,
Texas Instruments
Texas Instruments Incorporated (TI) is an American technology company headquartered in Dallas, Texas, that designs and manufactures semiconductors and various integrated circuits, which it sells to electronics designers and manufacturers globall ...
,
Fairchild Semiconductor
Fairchild Semiconductor International, Inc. was an American semiconductor company based in San Jose, California. Founded in 1957 as a division of Fairchild Camera and Instrument, it became a pioneer in the manufacturing of transistors and of int ...
,
Renesas,
X-Fab
The X-FAB Silicon Foundries is a group of semiconductor foundries. The group specializes in the fabrication of analog and mixed-signal integrated circuits for fabless semiconductor companies, as well as MEMS and solutions for high voltage applica ...
and major Malaysian-owned companies such as
Green Packet, Silterra, Globetronics, Unisem and Inari which have contributed to the steady growth of the semiconductor industry in Malaysia. To date, there are more than 50 companies, largely MNCs producing semiconductors devices in Malaysia.
Photovoltaics
Malaysia is a major hub for solar equipment manufacturing, with factories of companies like
First Solar,
Panasonic, TS Solartech,
Jinko Solar
JinkoSolar Holding Co., Ltd. () is a solar panel manufacturer headquartered in Shanghai, China. The company started out as a wafer manufacturer in 2006 and went public on the New York Stock Exchange in 2010. JinkoSolar distributes its solar produc ...
, JA Solar,
SunPower,
Hanwha Q Cells, and
SunEdison
SunEdison, Inc. (formerly MEMC Electronic Materials) is a renewable energy company headquartered in the U.S. In addition to developing, building, owning, and operating solar power plants and wind energy plants, it also manufactures high purity po ...
in locations like
Kulim,
Penang
Penang ( ms, Pulau Pinang, is a Malaysian state located on the northwest coast of Peninsular Malaysia, by the Malacca Strait. It has two parts: Penang Island, where the capital city, George Town, is located, and Seberang Perai on the Malay ...
,
Malacca
Malacca ( ms, Melaka) is a state in Malaysia located in the southern region of the Malay Peninsula, next to the Strait of Malacca. Its capital is Malacca City, dubbed the Historic City, which has been listed as a UNESCO World Heritage Site si ...
,
Cyberjaya and
Ipoh
, image_map =
, map_caption = Location of Ipoh in Perak
, pushpin_map = #Malaysia#Asia#Earth
, pushpin_mapsize = 275px
, pushpin_map_caption = Ipoh in Malaysia
, coordinates ...
.
In 2013, Malaysia's total production capacity for
solar wafer
In electronics, a wafer (also called a slice or substrate) is a thin slice of semiconductor, such as a crystalline silicon (c-Si), used for the fabrication of integrated circuits and, in photovoltaics, to manufacture solar cells. The wafer serv ...
s,
solar cells
A solar cell, or photovoltaic cell, is an electronic device that converts the energy of light directly into electricity by the photovoltaic effect, which is a physics, physical and Chemical substance, chemical phenomenon.[solar panel
A solar cell panel, solar electric panel, photo-voltaic (PV) module, PV panel or solar panel is an assembly of photovoltaic solar cells mounted in a (usually rectangular) frame, and a neatly organised collection of PV panels is called a photo ...]
s totalled 4,042
MW. By 2014, Malaysia was the world's third largest manufacturer of
photovoltaics
Photovoltaics (PV) is the conversion of light into electricity using semiconducting materials that exhibit the photovoltaic effect, a phenomenon studied in physics, photochemistry, and electrochemistry. The photovoltaic effect is commercially us ...
equipment, behind
China
China, officially the People's Republic of China (PRC), is a country in East Asia. It is the world's most populous country, with a population exceeding 1.4 billion, slightly ahead of India. China spans the equivalent of five time zones and ...
and the
European Union
The European Union (EU) is a supranational political and economic union of member states that are located primarily in Europe. The union has a total area of and an estimated total population of about 447million. The EU has often been des ...
.
Many international companies have the majority of production capacity located in
Malaysia
Malaysia ( ; ) is a country in Southeast Asia. The federation, federal constitutional monarchy consists of States and federal territories of Malaysia, thirteen states and three federal territories, separated by the South China Sea into two r ...
, such as the American company
First Solar which has over 2,000
MW of production capacity located in
Kulim and only 280
MW located in
Ohio
Ohio () is a state in the Midwestern region of the United States. Of the fifty U.S. states, it is the 34th-largest by area, and with a population of nearly 11.8 million, is the seventh-most populous and tenth-most densely populated. The sta ...
, and formerly German-based
Hanwha Q Cells which produces 1,100
MW worth of solar cells in
Cyberjaya while producing only 200
MW worth of solar cells in
Germany
Germany,, officially the Federal Republic of Germany, is a country in Central Europe. It is the second most populous country in Europe after Russia, and the most populous member state of the European Union. Germany is situated betwe ...
.
SunPower's largest manufacturing facility with a capacity of 1,400
MW is also located in
Malacca
Malacca ( ms, Melaka) is a state in Malaysia located in the southern region of the Malay Peninsula, next to the Strait of Malacca. Its capital is Malacca City, dubbed the Historic City, which has been listed as a UNESCO World Heritage Site si ...
.
Automotive
The automotive industry in Malaysia consists of 27 vehicle producers and over 640 component manufacturers.
The Malaysian automotive industry is the third largest in
Southeast Asia
Southeast Asia, also spelled South East Asia and South-East Asia, and also known as Southeastern Asia, South-eastern Asia or SEA, is the geographical United Nations geoscheme for Asia#South-eastern Asia, south-eastern region of Asia, consistin ...
, and the
23rd largest in the world, with an annual production output of over 500,000 vehicles. The automotive industry contributes 4% or RM 40 billion to Malaysia's
GDP, and employs a workforce of over 700,000 throughout a nationwide ecosystem.
The Malaysian automotive industry is Southeast Asia's sole pioneer of indigenous car companies, namely
Proton
A proton is a stable subatomic particle, symbol , H+, or 1H+ with a positive electric charge of +1 ''e'' elementary charge. Its mass is slightly less than that of a neutron and 1,836 times the mass of an electron (the proton–electron mass ...
and
Perodua
The (''Second Automobile Manufacturer Private Limited''), usually abbreviated to Perodua (), is Malaysia's largest car manufacturer,
followed by PROTON Holdings, Proton.
History
It was established in 1992 and launched its first car, the Pe ...
. In 2002, Proton helped Malaysia become the 11th country in the world with the capability to fully design, engineer and manufacture cars from the ground up.
The Malaysian automotive industry also hosts several domestic-foreign joint venture companies, which assemble a large variety of vehicles from imported complete knock down (CKD) kits.
Malaysia's first tech unicorn startup, automotive e-commerce platform Carsome, raised $290 million in a Series E funding round to expand its product, technology and infrastructure in Malaysia, Indonesia and Thailand. This latest funding round values the used-car online marketplace at $1.7 billion.
Construction
![Penang Bridge in extension](https://upload.wikimedia.org/wikipedia/commons/b/b4/Penang_Bridge_in_extension.jpg)
Malaysia has a large construction industry of over RM102.2 billion (US$32 billion). The highest percentage share was contributed by construction of non-residential buildings which recorded 34.6 per cent. This was followed by
civil engineering
Civil engineering is a professional engineering discipline that deals with the design, construction, and maintenance of the physical and naturally built environment, including public works such as roads, bridges, canals, dams, airports, sewage ...
sub-sector (30.6%),
residential buildings
A residential area is a land used in which housing predominates, as opposed to industrial and commercial areas.
Housing may vary significantly between, and through, residential areas. These include single-family housing, multi-family residen ...
(29.7%), and special trades (5.1%).
Selangor
Selangor (; ), also known by its Arabic language, Arabic honorific Darul Ehsan, or "Abode of Sincerity", is one of the 13 Malaysian states. It is on the west coast of Peninsular Malaysia and is bordered by Perak to the north, Pahang to the east ...
recorded the highest value of construction work done at 24.5% among the states, followed by
Johor
Johor (; ), also spelled as Johore, is a States and federal territories of Malaysia, state of Malaysia in the south of the Malay Peninsula. Johor has land borders with the Malaysian states of Pahang to the north and Malacca and Negeri Sembilan ...
at 16.5%,
Kuala Lumpur
, anthem = '' Maju dan Sejahtera''
, image_map =
, map_caption =
, pushpin_map = Malaysia#Southeast Asia#Asia
, pushpin_map_caption =
, coordinates =
, su ...
at 15.8%,
Sarawak
Sarawak (; ) is a States and federal territories of Malaysia, state of Malaysia. The largest among the 13 states, with an area almost equal to that of Peninsular Malaysia, Sarawak is located in northwest Borneo Island, and is bordered by the M ...
at 8.6% and
Penang
Penang ( ms, Pulau Pinang, is a Malaysian state located on the northwest coast of Peninsular Malaysia, by the Malacca Strait. It has two parts: Penang Island, where the capital city, George Town, is located, and Seberang Perai on the Malay ...
at 6.4%. The contribution of these five states accounted for 71.8% of the total value of construction work in Malaysia.
The expansion of the construction industry has been catalysed by major capital expenditure projects, and a key factor has been the government's Economic Transformation Programme (ETP) and public-private partnership (PPP) mega-projects like
Tun Razak Exchange,
KVMRT and
Iskandar Malaysia.
Defence
![Perak F173](https://upload.wikimedia.org/wikipedia/commons/0/05/Perak_F173.jpg)
Malaysia has a relatively new
defence industry that was created after the government created the
Malaysia Defence Industry Council to encourage local companies to participate in the country's defence sector in 1999.
The land sector of the defence industry is dominated by
DefTech, a subsidiary of Malaysia's largest automotive manufacturer,
DRB-HICOM. The company focuses on manufacturing
armoured vehicles and specialised logistics vehicles. The company has supplied
ACV-15 infantry fighting vehicles to the Malaysian Army in the past and is currently supplying the
DefTech AV8
The DefTech AV8 ''Gempita'' (Thunder) is an amphibious multirole armoured vehicle developed by Malaysian defence company DefTech with the assistance of Turkey defence company FNSS. The ''Gempita'' resembles some of the Turkey FNSS Pars desi ...
amphibious multirole armoured vehicle to the
Malaysian Army
The Malaysian Army ( ms, Tentera Darat Malaysia; Jawi: تنترا دارت مليسيا) is the land component of the Malaysian Armed Forces. Steeped in British Army traditions, the Malaysian Army does not carry the title ‘royal’ () as do th ...
.
The sea sector of the defence industry is dominated by
Boustead Heavy Industries, who builds warships for the
Royal Malaysian Navy
The Royal Malaysian Navy (RMN, ms, Tentera Laut Diraja Malaysia; TLDM; Jawi: ) is the naval arm of the Malaysian Armed Forces. RMN is the main agency responsible for the country's maritime surveillance and defense operations. RMN's area of o ...
(RMN) through
transfer of technology
Technology transfer (TT), also called transfer of technology (TOT), is the process of transferring (disseminating) technology from the person or organization that owns or holds it to another person or organization, in an attempt to transform invent ...
with foreign companies. The company has built 4
Kedah-class offshore patrol vessel
The ''Kedah''-class offshore patrol vessels of the Royal Malaysian Navy (RMN) are six ships based on the MEKO 100 design by Blohm + Voss. Originally, a total of 27 ships were planned, but due to programme delays and overruns, only six were event ...
s for the RMN in the past and is currently undertaking a project to build 6 more
Second Generation Patrol Vessels for the RMN.
Services sector
Finance and banking
![Maybank Tower Kuala Lumpur](https://upload.wikimedia.org/wikipedia/commons/6/69/Maybank_Tower_Kuala_Lumpur.jpg)
Kuala Lumpur has a large financial sector, and is ranked the 22nd in the world in the Global Financial Centres Index.
There are currently 27
commercial bank
A commercial bank is a financial institution which accepts deposits from the public and gives loans for the purposes of consumption and investment to make profit.
It can also refer to a bank, or a division of a large bank, which deals with cor ...
s (8 domestic and 19 foreign), 16
Islamic bank
Islamic banking, Islamic finance ( ar, مصرفية إسلامية), or Sharia-compliant finance is banking or financing activity that complies with Sharia (Islamic law) and its practical application through the development of Islamic economics ...
s (10 domestic and 6 foreign), 15 investment banks (all domestic) and 2 other financial institutions (both domestic) operating in Malaysia.
Commercial banks are the largest and most significant providers of funds in the banking system. The biggest banks in Malaysia's finance sector are
Maybank
Malayan Banking Berhad (doing business as Maybank) is a Malaysian universal bank, with key operating "home markets" of Malaysia, Singapore, and Indonesia. According to the 2020 Brand Finance report, Maybank is Malaysia's most valuable bank b ...
,
CIMB
CIMB Group Holdings Berhad () is a Malaysian universal bank headquartered in Kuala Lumpur and operating in high growth economies in ASEAN. CIMB Group is an indigenous ASEAN investment bank. CIMB has a wide retail branch network with 1,080 bran ...
,
Public Bank Berhad
Public Bank Berhad () is a bank based in Kuala Lumpur, Malaysia, offering financial services in Malaysia as well as the Asia-Pacific region.
The bank was founded in 1966 by Teh Hong Piow, the then general manager of Malayan Banking. The bank ...
,
RHB Bank
RHB Bank Berhad (), formerly known as RHB Sakura Merchant Bank Berhad, is a Malaysian bank based in Kuala Lumpur and founded in 1994. It is a subsidiary of RHB Capital Berhad, which is one of the largest banks in Malaysia.
RHB Bank has over 1 ...
and
AmBank
AmBank Group comprises AMMB Holdings Berhad (AMBANK 1015) is one of the largest banking groups in Malaysia whose core businesses are retail banking, wholesale banking, Islamic banking, and life and general insurance.
The Group trades under a ...
.
Malaysia is currently also the world's largest
centre of Islamic Finance. Malaysia has 16 fully-fledged Islamic banks including five foreign ones, with total Islamic bank assets of US$168.4 billion, which accounts for 25% of the Malaysia's total banking assets.
This in turn accounts for over 10% of the world's total Islamic banking assets. In comparison, Malaysia's main rival
UAE
The United Arab Emirates (UAE; ar, اَلْإِمَارَات الْعَرَبِيَة الْمُتَحِدَة ), or simply the Emirates ( ar, الِْإمَارَات ), is a country in Western Asia (The Middle East). It is located at th ...
, has US$95 billion of assets.
Malaysia is the global leader in terms of the
sukuk (Islamic bond) market, issuing RM62 billion (US$17.74 billion) worth of sukuk in 2014 - over 66.7% of the global total of US$26.6 billion
Malaysia also accounts for around two-thirds of the global outstanding sukuk market, controlling $178 billion of $290 billion, the global total.
The Malaysian government is planning to transform the country's capital Kuala Lumpur into a major financial centre in a bid to raise its profile and spark greater international trade and investment through the construction of the
Tun Razak Exchange (TRX). The government believes the project will allow Malaysia to compete with regional financial superpowers such as
Singapore
Singapore (), officially the Republic of Singapore, is a sovereign island country and city-state in maritime Southeast Asia. It lies about one degree of latitude () north of the equator, off the southern tip of the Malay Peninsula, borde ...
and Hong Kong, by leveraging on the country's established strength in the rapidly growing Islamic financial marketplace.
Based in Kuala Lumpur,
Bursa Malaysia
Bursa Malaysia is the stock exchange of Malaysia. It is one of the largest bourses in ASEAN. It is based in Kuala Lumpur and was previously known as the Kuala Lumpur Stock Exchange (KLSE). It provides a full integration of transactions, offeri ...
serves as the country's sole national stock exchange. Trading of shares started in 1960 and it is today one of the largest bourses in Southeast Asia.
Tourism
![SouthBeach Curve](https://upload.wikimedia.org/wikipedia/commons/5/57/SouthBeach_Curve.JPG)
Tourism is a huge sector of the Malaysian economy, with over 57.1 million domestic tourists generating RM37.4 billion (US$11 billion) in tourist receipts in 2014, and attracting 27,437,315 international tourist arrivals, a growth of 6.7% compared to 2013. Total international tourist receipts increased by 3.9% to RM60.6 billion (US$19 billion) in 2014.
United Nations World Tourism Organisation (UNWTO) listed Malaysia as the 10th most visited country in 2012.
Malaysia is rich with diverse natural attractions which become an asset to the country's tourism industry. This was recognised by the World Travel & Tourism Council (WTTC), who declared Malaysia as "a destination full of unrealized potential" with the main strength as the availability of a vast range of diverse attractions to suit all tastes relatively affordable prices and; largely unspoilt destination.
Malaysia's top tourist destinations are the
Mulu Caves
The Gunung Mulu National Park is a national park in Miri Division, Sarawak, Malaysia. It is a UNESCO World Heritage Site that encompasses caves and karst formations in a mountainous equatorial rainforest setting. The park is famous for its ca ...
,
Perhentian Islands
The Perhentian Islands (Malay: ''Kepulauan Perhentian'') are islands in Besut District, Terengganu, Malaysia.
The two main islands are Perhentian Besar ("Greater Perhentian") and Perhentian Kecil ("Lesser Perhentian"). The small, uninhabited is ...
,
Langkawi,
Petronas Towers and
Mount Kinabalu
Mount Kinabalu ( ms, Gunung Kinabalu, Dusun language, Dusun: ''Gayo Ngaran or Nulu Nabalu'') is the highest mountain in Borneo and Malaysia. With an elevation of , it is List of islands by highest point, third-highest peak of an island on Eart ...
.
Medical tourism
![Tuaran Sabah Malaysia Tuaran-Hospital-06](https://upload.wikimedia.org/wikipedia/commons/c/cc/Tuaran_Sabah_Malaysia_Tuaran-Hospital-06.jpg)
Medical tourism is a significant sector of Malaysia's economy, with an estimated 1 million travelling to Malaysia specifically for medical treatments alone in 2014, contributing around US$200 million (about RM697 mil) in revenue to the economy.
Malaysia is reputed as one of the most preferred medical tourism destinations with modern private healthcare facilities and highly efficient medical professionals.
In 2014, Malaysia was ranked the world's best destination for medical tourism by the
Nomad Capitalist. Malaysia was also included in the top 10 medical tourism destinations list by CNBC.
In 2014, Prince Court Medical Centre, a Malaysian hospital, was ranked the world's best hospital for medical tourists by MTQUA.
The Malaysian government targets to hit RM 9.6 billion (US$3.2 billion) in revenue from 1.9 million foreign patients by 2020.
Oil and gas
![E8664-Pattaya-Sukhumvit-Road](https://upload.wikimedia.org/wikipedia/commons/b/b7/E8664-Pattaya-Sukhumvit-Road.jpg)
Malaysia has a vibrant
oil and gas industry
The petroleum industry, also known as the oil industry or the oil patch, includes the global processes of exploration, extraction, refining, transportation (often by oil tankers and pipelines), and marketing of petroleum products. The largest ...
. The national oil company,
Petronas
Petroliam Nasional Berhad (National Petroleum Limited), commonly known as Petronas, is a Malaysian oil and gas company. Established in 1974 and wholly owned by the Government of Malaysia, the corporation is vested with all oil and gas reso ...
is ranked the 69th biggest company in the world in the
Fortune 500
The ''Fortune'' 500 is an annual list compiled and published by ''Fortune'' magazine that ranks 500 of the largest United States corporations by total revenue for their respective fiscal years. The list includes publicly held companies, along ...
list in 2014, with a revenue of over US100.7 billion and total assets of over US$169 billion. Petronas provides around 30% of the Malaysian government's revenue, although the government has been actively cutting down on its reliance of petroleum, with a target of 20%.
Petronas is also the custodian of oil and gas reserves for Malaysia. Hence, all oil and gas activities are regulated by Petronas. Malaysia encourages foreign oil company participation through production sharing contracts, in which significant amount of oil will be given away to the foreign oil company until it reaches a production milestone. Currently, many major oil companies such as
ExxonMobil
ExxonMobil Corporation (commonly shortened to Exxon) is an American multinational oil and gas corporation headquartered in Irving, Texas. It is the largest direct descendant of John D. Rockefeller's Standard Oil, and was formed on November 30, ...
,
Royal Dutch Shell
Shell plc is a British multinational oil and gas company headquartered in London, England. Shell is a public limited company with a primary listing on the London Stock Exchange (LSE) and secondary listings on Euronext Amsterdam and the New Yo ...
,
Nippon Oil
, formerly , or NOC or ''Shin-Nisseki'' (新日石) is a Japanese petroleum company. Its businesses include exploration, importation, and refining of crude oil; the manufacture and sale of petroleum products, including fuels and lubricants; and ...
, and
Murphy Oil are involved in such contracts. As a result, 40% of oil fields in Malaysia are developed.
There are over 3,500 oil and gas (O&G) businesses in Malaysia comprising international oil companies, independents, services and manufacturing companies that support the needs of the O&G value chain both domestically and regionally. Many major global machinery & equipment (M&E) manufacturers have set up bases in Malaysia to complement home-grown M&E companies, while other Malaysian oil and gas companies are focused on key strategic segments such as marine, drilling, engineering, fabrication, offshore installation and operations and maintenance (O&M).
Infrastructure
The infrastructure of Malaysia is one of the most developed in Asia.
Its
telecommunication
Telecommunication is the transmission of information by various types of technologies over wire, radio, optical, or other electromagnetic systems. It has its origin in the desire of humans for communication over a distance greater than that fe ...
s network is second only to Singapore's in Southeast Asia, with 4.7 million fixed-line subscribers and more than 30 million cellular subscribers.(2011)
The country has seven international ports, the major one being the
Port Klang
Port Klang ( ms, Pelabuhan Klang) is a town and the main gateway by sea into Malaysia. Known during colonial times as Port Swettenham ( ms, Pelabuhan Swettenham) but renamed Port Klang in July 1972, it is the largest port in the country. It is l ...
. There are 200
industrial park
An industrial park (also known as industrial estate, trading estate) is an area zoned and planned for the purpose of industrial development. An industrial park can be thought of as a more "heavyweight" version of a business park or office park, ...
s along with specialised parks such as
Technology Park Malaysia
Technology Park Malaysia (TPM) is a science park located in Bukit Jalil, Kuala Lumpur, Malaysia for research and development of knowledge-based industries. Its total land area of , comprises 13 buildings each with specific functions. It is in phase ...
and
Kulim Hi-Tech Park
The Kulim Hi-Tech Park (KHTP; ms, Taman Teknologi Tinggi Kulim) is an industrial park for high technology enterprises located in Kulim District, Kedah, Malaysia. It was opened in 1996 and is Malaysia's first high-tech industrial park. The park, ...
.
Fresh water is available to over 95 per cent of the population. During the colonial period, development was mainly concentrated in economically powerful cities and in areas forming security concerns. Although rural areas have been the focus of great development, they still lag behind areas such as the West Coast of Peninsular Malaysia. The telecommunication network, although strong in urban areas, is less available to the rural population.
Energy
![BakunDam](https://upload.wikimedia.org/wikipedia/commons/b/b7/BakunDam.jpg)
Malaysia's energy infrastructure sector is largely dominated by
Tenaga Nasional
Tenaga Nasional Berhad (, abbreviated as TNB; TENAGA, ), also known as Tenaga Nasional or simply Tenaga, is the Malaysian multinational electricity company and is the only electric utility company in Peninsular Malaysia and also the largest p ...
, the largest
electric utility
An electric utility is a company in the electric power industry (often a public utility) that engages in electricity generation and distribution of electricity for sale generally in a regulated market. The electrical utility industry is a major pr ...
company in
Southeast Asia
Southeast Asia, also spelled South East Asia and South-East Asia, and also known as Southeastern Asia, South-eastern Asia or SEA, is the geographical United Nations geoscheme for Asia#South-eastern Asia, south-eastern region of Asia, consistin ...
, with over RM99.03 billion of assets. Customers are connected to electricity through the
National Grid, with more than 420
transmission substations in the Peninsular linked together by approximately 11,000 km of transmission lines operating at 132, 275 and 500
kilovolts
The volt (symbol: V) is the unit of electric potential, electric potential difference (voltage), and electromotive force in the International System of Units (SI). It is named after the Italian physicist Alessandro Volta (1745–1827).
Defi ...
.
In 2013, Malaysia's total power generation capacity was over 29,728
megawatts. Total electricity generation was 140,985.01
GWh
A kilowatt-hour (unit symbol: kW⋅h or kW h; commonly written as kWh) is a unit of energy: one kilowatt of power for one hour. In terms of SI derived units with special names, it equals 3.6 megajoules (MJ). Kilowatt-hours are a common bil ...
and total electricity consumption was 116,087.51 GWh.
Energy production in Malaysia is largely based on oil and natural gas, owing to Malaysia's oil reserves and natural gas reserves, which is the fourth largest in
Asia-Pacific
Asia-Pacific (APAC) is the part of the world near the western Pacific Ocean. The Asia-Pacific region varies in area depending on context, but it generally includes East Asia, Russian Far East, South Asia, Southeast Asia, Australia and Pacific Isla ...
after China, India and
Vietnam
Vietnam or Viet Nam ( vi, Việt Nam, ), officially the Socialist Republic of Vietnam,., group="n" is a country in Southeast Asia, at the eastern edge of mainland Southeast Asia, with an area of and population of 96 million, making i ...
.
Malaysia has also significant renewable energy resources and has high potential for the development of large-scale solar power and it has one of most advanced legal frameworks in the ASEAN region for promoting renewables.
The country set a 20% target of renewable energy in its energy mix by 2025 and to achieve this the government will need to improve its renewable energy governance, investment policy and market entry for foreign investors as well to develop a framework for easier grid connection and use.
As of 2021, Malaysia is one of the major producers of solar panels for the international market, but paradoxically it has yet to fully capitalize on this for domestic electricity generation.
Transport network
Road network
![NorthSouth-Expressway](https://upload.wikimedia.org/wikipedia/commons/c/ca/NorthSouth-Expressway.jpg)
Malaysia's road network is one of the most comprehensive in Asia and covers a total of .
The main national road network is the
Malaysian Federal Roads System, which span over . Most of the federal roads in Malaysia are 2-lane roads. In town areas, federal roads may become 4-lane roads to increase traffic capacity. Nearly all federal roads are paved with
tarmac Tarmac may refer to:
Engineered surfaces
* Tarmacadam, a mainly historical tar-based material for macadamising road surfaces, patented in 1902
* Asphalt concrete, a macadamising material using asphalt instead of tar which has largely superseded ta ...
except parts of the
Skudai–Pontian Highway which is paved with
concrete
Concrete is a composite material composed of fine and coarse aggregate bonded together with a fluid cement (cement paste) that hardens (cures) over time. Concrete is the second-most-used substance in the world after water, and is the most wi ...
, while parts of the
Federal Highway linking Klang to Kuala Lumpur, is paved with
asphalt
Asphalt, also known as bitumen (, ), is a sticky, black, highly viscous liquid or semi-solid form of petroleum. It may be found in natural deposits or may be a refined product, and is classed as a pitch. Before the 20th century, the term a ...
.
Malaysia has over of highways and the longest highway, the
North–South Expressway, extends over on the West Coast of
Peninsular Malaysia
Peninsular Malaysia ( ms, Semenanjung Malaysia; Jawi: سمننجڠ مليسيا), or the States of Malaya ( ms, Negeri-negeri Tanah Melayu; Jawi: نڬري-نڬري تانه ملايو), also known as West Malaysia or the Malaysian Peninsula, ...
, connecting major urban centres like
Kuala Lumpur
, anthem = '' Maju dan Sejahtera''
, image_map =
, map_caption =
, pushpin_map = Malaysia#Southeast Asia#Asia
, pushpin_map_caption =
, coordinates =
, su ...
and
Johor Bahru
Johor Bahru (), colloquially referred to as JB, is the capital city of the state of Johor, Malaysia. It is located at the southern end of Peninsular Malaysia,along the north bank of the Straits of Johor, opposite of the city-state Singapore. T ...
. In 2015, the government announced a RM27 billion (US$8.23 billion)
Pan-Borneo Highway project to upgrade all
trunk roads to
dual carriage expressways, bringing the standard of
East Malaysian highways to the same level of quality of Peninsular highways.
Rail network
There are currently of railways in Malaysia, are
double track
A double-track railway usually involves running one track in each direction, compared to a single-track railway where trains in both directions share the same track.
Overview
In the earliest days of railways in the United Kingdom, most lin ...
ed and
electrified.
Rail transport in Malaysia comprises
heavy rail
Various terms are used for passenger railway lines and equipment; the usage of these terms differs substantially between areas:
Rapid transit
A rapid transit system is an electric railway characterized by high speed (~) and rapid accelerati ...
(
KTM
KTM AG (Kraftfahrzeug Trunkenpolz Mattighofen, formerly KTM Sportmotorcycle AG) is an Austrian motorcycle, bicycle and sports car manufacturer owned by Pierer Mobility AG and the Indian manufacturer Bajaj Auto. It was formed in 1992 but traces ...
),
light rapid transit and
monorail
A monorail (from "mono", meaning "one", and "rail") is a railway in which the track consists of a single rail or a beam.
Colloquially, the term "monorail" is often used to describe any form of elevated rail or people mover. More accurately, ...
(
Rapid Rail), and a
funicular
A funicular (, , ) is a type of cable railway system that connects points along a railway track laid on a steep slope. The system is characterized by two counterbalanced carriages (also called cars or trains) permanently attached to opposite en ...
railway line (
Penang Hill Railway
The Penang Hill Railway is a one-section funicular railway which climbs the Penang Hill from Air Itam, on the outskirts of the city of George Town in the Malaysian state of Penang. The railway first opened in 1923 as a two-section railway, and th ...
). Heavy rail is mostly used for intercity passenger and freight transport as well as some urban public transport, while LRTs are used for intra-city urban public transport. There two
commuter rail
Commuter rail, or suburban rail, is a passenger rail transport service that primarily operates within a metropolitan area, connecting commuters to a central city from adjacent suburbs or commuter towns. Generally commuter rail systems are con ...
services linking
Kuala Lumpur
, anthem = '' Maju dan Sejahtera''
, image_map =
, map_caption =
, pushpin_map = Malaysia#Southeast Asia#Asia
, pushpin_map_caption =
, coordinates =
, su ...
with the
Kuala Lumpur International Airport
Kuala Lumpur International Airport (KLIA) is Malaysia's main international airport. It is located in the Sepang District of Selangor, approximately south of Kuala Lumpur and serves the city's greater conurbation.
KLIA is the largest and b ...
. The sole
monorail
A monorail (from "mono", meaning "one", and "rail") is a railway in which the track consists of a single rail or a beam.
Colloquially, the term "monorail" is often used to describe any form of elevated rail or people mover. More accurately, ...
line in the country is also used for public transport in Kuala Lumpur, while the only funicular railway line is in
Penang
Penang ( ms, Pulau Pinang, is a Malaysian state located on the northwest coast of Peninsular Malaysia, by the Malacca Strait. It has two parts: Penang Island, where the capital city, George Town, is located, and Seberang Perai on the Malay ...
. A
rapid transit
Rapid transit or mass rapid transit (MRT), also known as heavy rail or metro, is a type of high-capacity public transport generally found in urban areas. A rapid transit system that primarily or traditionally runs below the surface may be c ...
project, the
KVMRT, is currently under construction to improve Kuala Lumpur's public transport system.
The railway network covers most of the 11 states in
Peninsular Malaysia
Peninsular Malaysia ( ms, Semenanjung Malaysia; Jawi: سمننجڠ مليسيا), or the States of Malaya ( ms, Negeri-negeri Tanah Melayu; Jawi: نڬري-نڬري تانه ملايو), also known as West Malaysia or the Malaysian Peninsula, ...
. In East Malaysia, only the state of
Sabah
Sabah () is a States and federal territories of Malaysia, state of Malaysia located in northern Borneo, in the region of East Malaysia. Sabah borders the Malaysian state of Sarawak to the southwest and the North Kalimantan province of Indone ...
has railways. The network is also connected to the
Thai railway
The State Railway of Thailand (SRT) ( th, การรถไฟแห่งประเทศไทย, abbrev. รฟท., ) is the state-owned rail operator under the jurisdiction of the Ministry of Transport in Thailand.
History
The SRT was ...
network in the north. If the Burma Railway is rebuilt, services to Myanmar, India, and China could be initiated.
Air network
![KLIA MTB&Tower](https://upload.wikimedia.org/wikipedia/commons/2/24/KLIA_MTB%26Tower.jpg)
Malaysia has 118 airports, of which 38 are paved. The flag carrier, national airline is
Malaysia Airlines
Malaysia Airlines Berhad (MAB; ms, Penerbangan Malaysia Berhad), formerly known as Malaysian Airline System (MAS; ), and branded as Malaysia Airlines, is the flag carrier airline of Malaysia and a member of the Oneworld airline alliance. (The ...
, providing international and domestic air services. Major international routes and domestic routes crossing between West Malaysia and
East Malaysia are served by
Malaysia Airlines
Malaysia Airlines Berhad (MAB; ms, Penerbangan Malaysia Berhad), formerly known as Malaysian Airline System (MAS; ), and branded as Malaysia Airlines, is the flag carrier airline of Malaysia and a member of the Oneworld airline alliance. (The ...
, AirAsia and Malindo Air while smaller domestic routes are supplemented by smaller airlines like MASwings, Firefly (airline), Firefly and Berjaya Air. Major cargo airlines include MASkargo and Transmile Air Services.
Kuala Lumpur International Airport
Kuala Lumpur International Airport (KLIA) is Malaysia's main international airport. It is located in the Sepang District of Selangor, approximately south of Kuala Lumpur and serves the city's greater conurbation.
KLIA is the largest and b ...
is the main and busiest airport of Malaysia. In 2014, it was the world's List of the world's busiest airports by international passenger traffic, 13th busiest airport by international passenger traffic, recording over 25.4 million international passenger traffic. It was also the world's List of the world's busiest airports by passenger traffic, 20th busiest airport by passenger traffic, recording over 48.9 million passengers.
Other major airports include Kota Kinabalu International Airport, which is also Malaysia's second busiest airport and busiest airport in
East Malaysia with over 6.9 million passengers in 2013, and Penang International Airport, with over 5.4 million passengers in 2013.
Sea network
![Northport Malaysia Wharve](https://upload.wikimedia.org/wikipedia/commons/8/81/Northport_Malaysia_Wharve.JPG)
Malaysia is strategically located on the
Strait of Malacca
The Strait of Malacca is a narrow stretch of water, 500 mi (800 km) long and from 40 to 155 mi (65–250 km) wide, between the Malay Peninsula (Peninsular Malaysia) to the northeast and the Indonesian island of Sumatra to the southwest, connec ...
, one of the most important shipping lanes in the world.
Malaysia has two ports that are listed in the top 20 busiest ports in the world,
Port Klang
Port Klang ( ms, Pelabuhan Klang) is a town and the main gateway by sea into Malaysia. Known during colonial times as Port Swettenham ( ms, Pelabuhan Swettenham) but renamed Port Klang in July 1972, it is the largest port in the country. It is l ...
and Port of Tanjung Pelepas, which are respectively the 2nd and 3rd busiest ports in Southeast Asia after the Port of Singapore.
Port Klang
Port Klang ( ms, Pelabuhan Klang) is a town and the main gateway by sea into Malaysia. Known during colonial times as Port Swettenham ( ms, Pelabuhan Swettenham) but renamed Port Klang in July 1972, it is the largest port in the country. It is l ...
is Malaysia's busiest port, and the List of world's busiest container ports, 13th busiest port in the world in 2013, handling over 10.3 million Twenty-foot equivalent unit, TEUs. Port of Tanjung Pelepas is Malaysia's second busiest port, and the List of world's busiest container ports, 19th busiest port in the world in 2013, handling over 7.6 million TEUs.
Free trade efforts
International trade agreements
Trade agreements under negotiation
* Malaysia-EFTA Economic Partnership Agreement since 2012
* Malaysia–European Union Free Trade Agreement (MEUFTA)
* Trans-Pacific Partnership, Trans-Pacific Partnership Agreement (TPP)
* COMCEC#The Trade Preferential System (TPS-OIC), Trade Prefential System-Organisation of Islamic Conference (TPS-OIC)
* Developing Eight (D-8) Preferential Tariff Agreement (PTA)
Investments
Malaysia's total accumulated investments in 2014 was RM235.9 billion, with 72.6 per cent (RM171.3 billion) being contributed by domestic sources and 27.4 per cent (RM64.6 billion) coming from foreign sources.
According to A.T. Kearney, a global management consulting firm, Malaysia was ranked 15th in the 2014 Foreign Direct Investment Confidence Index, 9th in 2012, 16th in 2007 and 21st in 2010. The index assesses the impact of political, economic and regulatory changes on the FDI intentions and preferences of the leaders of top companies around the world.
Largest public Malaysian companies
Malaysia has 8 companies that rank in the Forbes Global 2000 ranking for 2022.
See also
* List of Malaysian states by GDP
* Bamboo network
Notes
References
*
Further reading
*
External links
Mahathir bin Mohamad's interview with the PBS series "Commanding Heights" on the subject of East Asian economic development.Key Statistics for MalaysiaEconomic Outlook by Economist Intelligence Unit
Banking in MalaysiaKhazanah Nasional Berhad SWF ProfileWorld Bank Summary Trade Statistics Malaysia* Tariffs applied by Malaysia as provided by ITC'
ITC Market Access Map an online database of customs tariffs and market requirements
{{DEFAULTSORT:Economy Of Malaysia
Economy of Malaysia,
World Trade Organization member economies, Malaysia