Malaysia: Trade and Investment Profile
Sandwiched between immense stretches of the South China Sea are the twin regions of Malaysia, with one peninsula bordering Thailand and Singapore in the east, and the other half neighboring Indonesia and Brunei.
As one of Asia’s most vibrant economies, Malaysia’s 30 million population is dominated by ethnic Malays who make up 60% of the population. The Chinese, one of the wealthiest communities in the nation, comprise around 23% of the population, with Indians forming a tinier section.
As a British colony, Malaysia had nothing much to boast about except commodities such as tin, rubber, and palm oil, which only served to enrich the coffers of its imperial master. Political independence came in 1957 and along with it the freedom to explore new avenues of economic growth.
Malaysia has transformed itself from a producer of raw materials into an emerging multi-sector economy with a record of strong economic performance and poverty reduction.
It has become a leading exporter of electrical appliances, electronic parts and components and is one of the biggest exporters of semiconductors and electronic goods and devices. With about 40 semiconductor companies currently operating, the semiconductor industry contributes about 30% of Malaysia’s total manufacturing sector output. International multi-national companies have set up assembly and testing units in Malaysia.
Despite the transition to a manufacturing-based economy, Malaysia, along with Indonesia and Thailand, still account for 72% of the world’s natural rubber production. The country is also the world’s second largest exporter of palm oil.
Significant reserves of oil and gas have also been found, with current oil reserves estimated at around three million barrels. Oil production occurs near Peninsular Malaysia as well as the regions of Sabah in east Malaysia and Sarawak. Natural gas production has been steadily rising, with several companies engaged in its production.
The outlook for Malaysia’s economy remains bullish, but as an open economy reliant on international trade, Malaysia remains vulnerable to external economic shocks.
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