final malaysia revised

8/6/2019 Final Malaysia Revised

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Deepak & Parag



Federal Capital : Kuala Lumpur

Administrative Capital: Putrajaya

Language: Malay

Religion: Islam

Currency : Ringgit

Population : 27,565,821

Ethnic groups:Malay 50.4%, Chinese 23.7%, indigenous 11%, Indian 7.1%, others 7.8%

Religions:

Muslim 60.4%, Buddhist 19.2%, Christian 9.1%,Hindu 6.3%, Confucianism, Taoism, other traditionalChinese religions 2.6%, other or unknown 1.5%, none 0.8%

Languages:Bahasa Malaysia (official), English, Chinese (Cantonese,Mandarin, Hokkien, Hakka, Hainan, Foochow, Tamil,Telugu, Malayalam, Panjabi, Thai

Administrative divisions:

13 states (negeri-negeri, singular - negeri) Johor, Kedah, Kelantan, Melaka,Negeri Sembilan, Pahang, Perak, Perlis, Pulau Pinang, Sabah, Sarawak, Selangor,

and Terengganu; and 1 federal territory (Wilayah Persekutuan) with threecomponents, city of Kuala Lumpur, Labuan, and Putrajaya



INFRASTRUCTURE PILLAR II

Kuala Lumpur International Airport won 2nd place for the Best Airport Worldwide and Best

Airport Asia Pacific in the ACI-ASQ Awards 2007. KLIA managed to beat Singapore¶s Changi Airport and Hong Kong International, airports noted for their service excellence.

Being the first country in the world to offer the seamless transfer of cargo from a seaport for carriage by air is another way Malaysia makes business fly

Transportation has a critical role to play in saving energy. As the second most energy-consuming sector in Malaysia, opportunities exist to implement energy efficient measures.

Being the 18th largest exporter in the world, Malaysia attaches great importance to the

development of an efficient and integrated transportation network Generates very large volume of trade ± totalling more than 391 million tonnes (2010) to be

transported to global markets, as well as within different regions of the country

A total sum of RM61.2 billion was spent in the RMK8 (2001-2005) and RMK9 (2006-2010) for the transportation sector comprising of roads, urban transport, rail, ports, airports and ruralroads

In Malaysia, Road transportation accounts for 96% of total passenger and goods transport in

the country

Malaysia has 98, 721 km of roadway, of which more than 80,000 km is paved



INFRASTRUCTURE PILLAR II CONTD«

Railways in Malaysia consists of monorail, light rail transit (LRT), heavy rail, and a funicular railway line.The complete network spans about 1,700 km and uses metre gauge tracks

International trade, especially seaborne trade, has traditionally been the lifeblood of Malaysia .Today 95 % of trade is carried out by sea.

Port Klang and Port Tanjung Pelapas are amongst the Asia¶s top ten best sea ports andcontainers terminal operators.

Malaysia's biggest port, Port of Tanjung Pelepas (PTP), located at the southern tip of Peninsular Malaysia is one of the very few ports in the world which is integrated with a Free

Trade Zone Besides the physical infrastructure being in place, the electronic data interchange (EDI) in

Port Klang, Penang Port and Johor Port has allowed speedy clearance of cargo with theelectronic transfer of documentation

Malaysia's biggest airport, the KLIA, surrounded by four main cities of Kuala Lumpur, Shah Alam, Seremban and Melaka has a capacity of handling 25 million passengers and up to 8million tonnes of cargo per year

The airport¶s use modern technology in management called Total Airport ManagementSystems (TAMS). TAMS contains more than 40 systems and airport functions like air trafficmanagement, baggage handling, check-in, and flight information display



M ACROECONOMIC ENVIRONMENT PILLAR III

The year 2010 saw a continuation in global economic recovery, which had begun in the secondhalf of 2009 .

After the downturn in 2009, the Malaysian economy experienced a strong resumption of growth in2010 with an expansion of 7.2%.

Growth was driven mainly by robust domestic demand, with strong expansion in private sector activity. In 2010, the Malaysian economy accelerated further to record double-digit GDP

growth of 10.1%.

The overall aggregate domestic demand expanded strongly by 6.3% against (2009: -0.5%).Private consumption expanded at a faster rate of 6.6% against (2009: 0.7%),

Private investment rebounded strongly to register a double-digit growth of 13.8% in 2010 against(2009: -17.2%)

The services sector expanded by 6.8% against (2009: 2.6%) and was the largest contributor togrowth, contributing 3.9 percentage points to the overall GDP growth

The unemployment rate declined to 3.2% of the labour force (2009: 3.7%), following stronger

growth in employment (1.8%; 2009: 0.4%), compared to the growth in the labour force (1.3%;2009: 0.8%) .

Inflation increased during the year driven by supply factors arising from higher food and commodityprices and adjustments to administered prices . However, overall inflation remained low.

Headline inflation, as measured by the annual percentage change in the Consumer Price Index(CPI), averaged 1.7% in 2010 (2009: 0.6%). Meanwhile, core inflation, an indicator of the demand-driven pressures on prices, moderated to 1.5% in 2010 (2009: 2.7%).



M ACROECONOMIC ENVIRONMENT

PILLAR III CONTD«. Malaysia¶s external position remained resilient in 2010, underpinned by a sizeable current account

surplus and lower net outflows in the financial account .

Gross exports expanded by 15.6% in 2010 (2009: -16.5%) with a slower growth in manufacturedexports, namely exports of electronics and electrical products (E&E). Commodity exports, on theother hand, remained resilient throughout the year and expanded by 26.9% (2009: -28.2%),supported by robust regional demand and high commodity prices.

Gross imports grew by 21.7% (2009: -16.3%), with expansion across all major import categories,reflecting the pick-up in manufacturing activity and robust domestic demand.

The financial account recorded a smaller net outflow of RM21.9 billion (2009: -RM80.2

billion).

Malaysia·s external debt declined to RM226.3 billion or equivalent to 30.2% of GNI at the end

of 2010. This reflected the decline in the medium- and long-term debt due to the net

repayment of external loans by the private sector

A s at 28 February 2011, the reserves level amounted to RM338.6 billion (equivalent to

USD109.8 billion), which is adequate to finance 8.1 months of retained imports and is 4.3

times the short-term external debt

The ringgit appreciated during the year, driven by the current account surplus and net

portfolio inflows . A part from common factors that attracted portfolio inflows to the region,

The announcement of several key initiatives to transform the Malaysian economy and the

further liberalization measures were among these factors .



GOODS M ARKET EFFICIENCY PILLAR VI

Goods market efficiency ensures the production of the right mix of products and services givensupply-and-demand conditions, and the effective trade of these goods

Malaysia·s current population of 27.5 million is growing steadily at an annual rate of about

1.95%. The country has seen a steady increase in the standard of living and with it,its

purchasing power (per capita income exceeds RM19,739 or US$5681).

Malaysia is blessed with fertile soil, abundant rainfall and suitable climate for food

production. It is still a net food importer and has never achieved a food trade balance

surplus. The government is focusing to develop the local agro food industry in tandem with

the growth of the primary commodities.

Biotechnology has been recognized as one of the new high technologies that will bring about

desired changes in the agricultural sector. Malaysia officially launched its National

Biotechnology Policy only 4 years ago in 2005.

In the livestock sub-sector, Malaysia is the third largest producer of poultry meat in the

A sia Pacific region. Malaysia is self sufficient in poultry, pork and eggs, but imports about

80% of its beef requirements.

Currently, Malaysia is the largest cocoa processor in A sia and ranks fifth in the world.

However, meanwhile output of cocoa is declining due to a significant reduction incultivation

area in Sabah, as well as intensive replanting activities. Consequently, most of the cocoa

beans are imported. Malaysia is also one of the world major producers of spices.

In the fruits sub-sector, besides mangos, star fruits and papayas, the cultivation of pittaya

(dragon fruit) is gaining interest among farmers. Vegetables are mainly grown on a small

scale for fresh consumption, and are exported mainly to Singapore. The major locations for

the cultivation of vegetables are in Johor, Pahang, K elantan and Perak.



GOODS M ARKET EFFICIENCY PILLAR VI

CONTD« The development of the agro-food sector will help the country to reduce the Import Bill

and increase its Self Sufficient Levels for these food produce. Malaysia has initiated five high impact projects namely: The Permanent Food Production

Park (TPKM), Aquaculture Industry Zone, The National Feed Corporation, ContractFarming and Developing Agripreneurs for meeting self sufficiency level .



FINANCIAL M ARKET DEVELOPMENT

PILLAR VIII

The regulatory setup of the Capital market in Malaysia has witnessed major changes inthe last decade, including streamlining, deregulation, proper re-regulation and increasedregulatory and enforcement capacity, with the objective of having an efficient capitalmarket and encouraging market innovation.

With the realization to have a single streamlined regulatory body to govern and

monitor the capital markets, the Securities Commission A ct 1993, established the

Securities Commission in 1993.The Securities Commission·s responsibility was to act

as a single regulatory body to encourage the development of the capital market

With the recovery becoming more entrenched, the focus of monetary policy during the2010 was on the need to normalise the extraordinary monetary stimulus undertaken in2009 .

It was recognised that leaving the Overnight Policy Rate (OPR) at a low level for a

sustained period could give rise to financial imbalances and create distorted

incentives for economic agents, leading to the mispricing of risks, financial

disintermediation and excessive credit growth. The OPR was, thus, gradually raised

by 25 basis points each time in March, May and July 2010



FINANCIAL M ARKET DEVELOPMENT

PILLAR VIII CONTD«.

The domestic equity market rose steadily in early 2010 but underwent a correction in

May following developments in Europe . For the year as a whole, the FBM KLCI rose

by 19.3% (2009 :45.2%).

Liquidity conditions in the banking system were ample throughout 2010. Private

sector liquidity expanded at a measured pace, in line with real economic recovery

and the resumption of foreign inflows.

Net financing raised by the private sector through the banking system and the

capital market expanded by 11.3% (2009: 8.4%) with strong demand from both the

business and household sectors.



TECHNOLOGICAL REA DINESS PILLAR IX

As Malaysia moves towards Knowledge based economy, accessibility of reliable

information on science, technology and innovation is critical. The government of Malaysia has responded positively with a threefold research funding

in the 9th Malaysia Plan (2006 ± 2010) as compared to the 8th Malaysia Plan (2000 ±2005). In the 9MP, 1.45% of GDP was allocated for research fund compared to only 0.5%in the 8MP.

Market Overview Malaysian IT spending is expected to grow to U$5.2bn in 2011, fromUS$4.8bn in 2010, when the market stablized following the impact of a difficult economicand political situation.

In 2010 Internet penetration was 64.6% . As of the end of 2010, it was reported that the

government had distributed more than 100,000 netbooks and broadband subscriptions tostudents under the 1Malaysia National Broadband Initiative

To encourage faster broadband penetration, the government awarded WiMAX licences toa number of service providers, including ISP Jaring. Telekom Malaysia was awarded aMYR11.31bn contract to roll out a high-speed broadband network

Malaysia named cloud computing as the most important of its top 10 strategic technologypriorities .

Technological readiness is highly contributing towards attracting FDI .Malaysia is ranked

the 20th most attractive FDI destination in the world in AT Kearney¶s 2010 FDIConfidence Index. Japan, Singapore, South Korea, Thailand and Taiwan were notamongst the top 20 in the Index



L A BOR M ARKET EFFICIENCY PILLAR VII

Malaysia¶s labour market efficiency is area that needs to be enhanced. This is reflected inthe following criteria which include female participation in the labour force as apercentage of male participation at 0.58 is ranked 111th (GCR2009-2010: 0.57,ranked107th), redundancy costs in weeks of wages at 75 weeks is ranked at 100th (GCR2009-2010: 75 weeks, ranked 96th).

In addition, hiring and firing practices in Malaysia is perceived to be impeded byrestrictive regulations at a rank of 50th (GCR2009-2010:46th). However, areas in labour market efficiency that recorded improvement are flexibility of wage determination at44th(GCR2009-2010: 54th), pay and productivity at 6th (GCR2009-2010



BIBLIOGRA PH Y

www.apamalaysia.com

www.statistics.gov.my

www.mot.gov.my

www.cia.gov

www.malaysiatrulybusiness.com

www.malaysia.gov.my

Global competitiveness report

final malaysia revised

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