Edited by Léo-Paul Dana, Mary Han, Vanessa Ratten and Isabell M. Welpe
Nnamdi Madichie and Christopher Seow Introduction to Malaysia Malaysia consists of 13 states – Johor, Kedah, Kelantan, Melaka, Negeri Sembilan, Pahang, Perak, Perlis, Pulau Pinang, Sabah, Sarawak, Selangor, Terengganu – and one Federal Territory (wilayah persekutuan) with three components, the city of Kuala Lumpur, Labuan, and Putrajaya. A middle-income country, Malaysia has transformed itself from an agrarian society into an emerging multi-sector economy with growth exclusively driven by electronics exports, manufacturing, services and tourism. The economy grew at 4.9 percent in 2003, over 7 percent in 2004 and 5 percent in 2005–06. In 2005, its currency the Ringgit (RM) was ‘unpegged’ relative to the US dollar – thus enabling it to appreciate by 6 percent against the US dollar in 2006. Currently the economy remains dependent on continued growth in the US, China, and Japan. In the Ninth Malaysia Plan (or 9MP) the government presented a comprehensive blueprint for the allocation of the national budget from 2006 to the year 2010 – targeting the development of value-added manufacturing and an expansion of the services sector. However, the small to medium enterprises (SME) sector in Malaysia is neither very well reported in the academic literature nor adequately recognized by practitioners. This chapter therefore (1) highlights the contribution of the SME sector to the economic development of Malaysia; (2) discusses the level of government assistance to the sector; (3) provides some insight into the social and economic environment facing Malaysia’s SMEs; and (4) highlights the challenges of globalization and the growing need for internationalization of...
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