Malaysia :: Economy
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Manufacturing constitutes the largest single component of Malaysia's economy. Tourism and primary commodities such as petroleum, palm oil, natural rubber and timber are other major contributors to the economy. Agriculture Peninsular Malaysia: rubber, palm oil, cocoa, rice; Sabah: subsistence crops, rubber, timber, coconuts, rice; Sarawak: rubber, pepper, timber Malaysia is the world's leading producer of natural rubber and of palm oil. It produces over half of the world’s palm oil. Natural rubber has long been the most significant commercial crop produced mainly from large-scale plantations. Timber from the forests of East Malaysia is a valuable resource. However, deforestation threatens wildlife and leads to flooding.Industries Peninsular Malaysia: rubber and oil palm processing and manufacturing, light manufacturing, electronics, tin mining and smelting, logging, timber processing; Sabah: logging, petroleum production; Sarawak: agriculture processing, petroleum production and refining, logging Exports: electronic equipment, petroleum and liquefied natural gas, wood and wood products, palm oil, rubber, textiles, chemicals Malaysia is the world's leading tin producer, accounting for 30% of world supplies but tin mining has declined. Pewter (made from tin and lead) is still a valuable export. The country currently exports petroleum and natural gas but the oil reserves are not large and is exploring biomass fuel from palm oil.Imports: electronics, machinery, petroleum products, plastics, vehicles, iron and steel products, chemicals Currency: ringgit (RM) Exchange rates: ringgits per US dollar - 3.6683 (2006) Overview: Malaysia, a middle-income country, transformed itself from 1971 through the late 1990s from a producer of raw materials into an emerging multi-sector economy. Growth was almost exclusively driven by exports - particularly of electronics. As a result, Malaysia was hard hit by the global economic downturn and the slump in the information technology (IT) sector in 2001 and 2002. The economy grew 4.9% in 2003, notwithstanding a difficult first half, when external pressures from Severe Acute Respiratory Syndrome (SARS) and the Iraq War led to caution in the business community. Growth topped 7% in 2004 and 5% per year in 2005-06. As an oil and gas exporter, Malaysia has profited from higher world energy prices, although the rising cost of domestic gasoline and diesel fuel forced Kuala Lumpur to reduce government subsidies, contributing to higher inflation. Malaysia "unpegged" the ringgit from the US dollar in 2005 and the currency appreciated 6% against the dollar in 2006. Healthy foreign exchange reserves and a small external debt greatly reduce the risk that Malaysia will experience a financial crisis over the near term similar to the one in 1997. The economy remains dependent on continued growth in the US, China, and Japan - top export destinations and key sources of foreign investment. The government presented its five-year national development agenda in April 2006 through the Ninth Malaysia Plan, a comprehensive blueprint for the allocation of the national budget from 2006-10. The plan targets the development of higher value-added manufacturing and an expansion of the services sector. Source: World Factbook, updated August 2007
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