Growth and Resilience in an Uncertain Global Economy
Edited by Hal Hill and Maria Socorro Gochoco-Bautista
Chapter 8: Malaysia
As a small and open economy rich in natural resources, Malaysia has grown rapidly since independence in 1957, as shown by the growth in gross national per capita income from $380 in 1970 to $6,760 in 2009. This growth was achieved along with a reduction in both poverty and income inequality, as well as improvements in the quality of life. Malaysia also aspires to be a developed country by 2020, based on the Vision 2020 goals that were launched by the former Prime Minister Mahathir bin Mohamad in 1991. In 2010, Prime Minister Datuk Seri Najib Tun Razak, after a review of economic performance, announced the need to accelerate growth over the next 10 years in an effort to achieve a high- income economy with a per capita income of $17,000. Setting this target poses a great challenge to Malaysia as growth has almost halved since the 1997 Asian financial crisis (AFC). Externally, Malaysia is also facing increasing competitive pressures, especially from other developing countries that have sizeable domestic consumer markets such as the People’s Republic of China (PRC), India, and Viet Nam. Internally, the country is at a crossroads politically, economically and socially. Other challenges include faltering private investment and outflows of human and financial capital.
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