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| Malaysia |
| Economic
Overview |
| Key
Economic Indicators |
| GNP |
(1996) |
MR 235,349
million (US$ 93,544 million) |
| GNP per capita |
(1996) |
MR 11,101 (US$ 4,412) |
| GDP |
(1996) |
MR 246,825
million (US$ 98,106 million) |
| GDP per capita |
(1996) |
MR 11,643 (US$ 4,628) |
| GDP growth rate (real) |
(1996) |
8.2% |
| |
(1995) |
9.5% |
|
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| Sector
shares as percentage of GDP (1996) |
| Manufacturing |
34.5% |
| Agriculture |
12.6% |
| Trade |
12.4% |
| Finance |
11.0% |
| Transport and Communication |
7.6% |
| Construction |
7.8% |
| Mining |
7.2% |
| Balance of payments |
(1996) |
US$ 2,483 million
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(1995) |
US$ 1,756 million |
| Exchange rate in August |
(1997) |
1 US$ = 2.96
MR |
| Interest rates |
|
7.1% |
| Inflation |
(1995) |
5.3% |
| Total external debt |
(End 1995) |
US$ 34,352 million |
| Debt service ratio |
(1995) |
7.8% |
| Employment |
Total workforce |
(1995) 8.0 mn |
| Agriculture |
Unemployment rate |
(1995) 2.8% |
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Economic Affairs
Major agricultural sectors: Rubber, Palm Oil, Palm Kernel, Coconuts |
| Major industry sectors |
Electrical
and electronic products, automobiles, personal computers, petro-chemicals,
iron and steel, textile, agricultural products, natural gas
and crude oil.
Trade (1996): MR 16,185 million
Main commodities: Natural rubber,
oil and gas, palm oil, lumber and tin
Tourism
Malaysia has a rapidly growing tourist industry and the cultures
of the many ethnic groups in the country provide particular
attraction. Tourism makes a significant contribution to the
economy. Tourist arrivals in 1994 were 7.2 million, with earnings
of US$ 3,600 million. Tourist arrivals in 1995 were 6.59 million.
Investment Policy
Malaysia actively seeks foreign investment especially in industrial
ventures that produce import substitutes and have significant
export potential. Joint ventures with local majority ownership
are the official norm. Exceptions are frequent and for highly
desired new export oriented industries, up to 100% foreign ownership
may be permitted.
Special encouragement is given to industries that are labour
intensive, industries utilizing domestic raw materials, those
providing further processing of the country's primary commodities
and industries that manufacture capital or intermediate goods
as well as those that are export-oriented.
Foreign investment comes under the Malaysian Industrial Development
Authority (MIDA). Foreign investment is guaranteed against nationalization
and political risks. In general, there is no restriction on
repatriation of investment tax credit, export allowances and
payroll tax relief. Accelerated depreciation allowances are
also available on a case-by-case basis.
All state governments have established development corporations
directed toward helping investors find suitable sites and facilities
in specially created free trade zones and industrial estates.
Individual states also offer special incentives, in some cases,
to attract industries they desire.
Investment
In 1996 Malaysia's manufacturing sector received over 17 billion
Ringgit in foreign direct investment (allowance base, paid-up
capital plus loans), a startling 86.5% increase over a year
ago due largely to the authorization of several large-scale
projects in the electrical equipment, electronics and chemical
fields.
The share of total foreign direct investment taken by the electronic
industry had risen from 5.4% to 54.2% between 1992 and 1996.
This is a direct result of firms shifting production facilities
from Hong Kong and Singapore to Malaysia, in response to higher
production cost at home.
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| Direct
Investment in Malaysia by Country (1996) |
| Country |
Cases |
Value (MR.mn) |
| Singapore |
148 |
4,766 |
| Japan |
163 |
4,607 |
| USA |
52 |
2,893 |
| Switzerland |
9 |
1,888 |
| Republic of Korea |
18 |
644 |
| Taiwan |
79 |
776 |
| UK |
28 |
381 |
| Finland |
3 |
164 |
| Germany |
18 |
148 |
| Australia |
17 |
137 |
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Bi-lateral, Multi-lateral, Regional Agreements and Arrangements
Malaysia is a founder member of the Association of South East Nations
(ASEAN), under the Framework Agreement on Enhancing ASEAN Economic
Co-operation signed at the 4th ASEAN Submit in Singapore in January
1992. Malaysia joined with the other members of the ASEAN to set up
the ASEN Free Trade Area (AFTA) within 15 years. By this agreement
the member states including Malaysia, agreed to a regional tariff
arrangement known as the Common Effective Preferential Tariff (CEPT)
whereby tariff rates vary by country and there are no plans to reduce
them to a single uniform rate.
Under an agreement at the 5th ASEAN Summit in Bangkok, Malaysia also
became a signatory to the ASEAN Industrial Co-operation Scheme (AICO).
It is an advance form of selective tariff liberalization within the
ASEAN, whereby low tariffs are applied before 2003 to the manufactures
of firms that have received authorization from trading countries within
ASEAN. The aim is to thereby promote intra-regional trade, expand
the horizontal division of labour and attract foreign investments.
Malaysia is also a member of the Asian Development Bank (ADB) the
Colombo Plan and the Asia-Pacific Economic Co-operation (APEC).
Major Development Programmes that provide opportunity
for Sri Lanka
As a result of the growth in the construction industry in Malaysia
in recent years, Sri Lanka has opportunities for construction industry
based products, such as ceramic material e.g. ceramic floor tiles,
wall tiles and sanitary ware.Due to the prevailing financial crisis,
prospects may not be quite good in the near term but the financial
situation is expected to improve gradually. |
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