Malaysian Economy Essay

3428 words - 14 pages

INTRODUCTIONSIn this assignment I will analysis the performance of the Malaysian economy for the past 10 years between 1993 and 2002. The analysis will be divided into two eras, pre (from 1993 to 1996) and post (1997 to 2002) Asian Financial Crisis. I will also examine and analyse the government polices implemented during the period of review. And in the process identify whether the government's intervention had caused a positive or negative effect on the growth of economy. In other words, what are the costs and benefits of their intervention in the country's economy growth? In closing, I will conclude by stating could the Malaysian government have acted in other and better ways?DATAThis study is carried out in the context of the Malaysian economy, for the period between 1993 and 2002. The key economic data were obtained from various sources; Gross Domestic Product (GDP), National Accounts from the Central Bank (Bank Negara Malaysia), Asian Development Bank and other statistics i.e. Inflation and Unemployment rates from the Malaysian Statistics Department. The GDP figures presented are based on the 1987 constant price.In the presentation of the GDP data, I would categorise the industries into four major components; agricultural, mining, manufacturing and services and present their shares to the economic growth, as well as the industry's growth rate itself by year-on-year (yoy). The other data used in the assignment are the federal government finance and debt, inflation rate, unemployment rate, current account balances, gross domestic investments, gross domestic savings, merchandise export and import. All variables are expressed in logarithmic form. Tables and graphs are used to illustrate the data.BRIEF ECONOMY OVERVIEWThe structural transformation of Malaysia's economy since it gained independence from the British in 1957 has been pretty spectacular. Although it is fortunate because of its wealth in mineral resources and fertile soils, Malaysia still took decisive steps to strive for progress and development. Its independence on agriculture and primary commodities during 1960s shifted and it has become an export-driven economy spurred on by high technology along with knowledge-based and capital intensive industries.From being the world's largest producer of rubber and tin, Malaysia is today one of the world's leading exporters of electronic and electrical goods. Its manufacturing sector's contribution to the Malaysia's GDP grew from 26% to 32% [Table 1.1] between 1993 and 2003. This sector is today the key driver of growth in the Malaysian economy. Besides manufacturing, other principal sectors would be agriculture, mining and construction. The other sector that is being promoted intensively is the service sector.The shift in the economy driver from agriculture to manufacturing was to transform the country from a developing nation to a developed nation by 2020. The vision was the long-term plan that was launched by the Prime Minister, Dato Seri...

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