Economic Investigation : Malaysia

Prepared by: Neo Liwanag and Regina Jacinto

BRIEF BACKGROUND OF MALAYSIA

Malaysia is a country that shares the border with Thailand on the Southeast Asia peninsula. The
country is full of coastal plains and mountains. The climate is very hot and humid. Malaysia has
about 32,000,000 people. The official languages are Bahasa Malay, English, and Chinese. The
major religions in Malaysia is Islam (60%), Buddhism (19%), Christianity (9%), Hinduism (6%),
and Chinese religions (3%). The capital is located in Kuala Lumpur. The current prime minister
of Malaysia is Mahathir Mohamad since May 10, 2018 Malaysia’s economy is very prosperous.
The GDP is $397.5 BILLION. The average worker makes $15,700 per year. The economy has
been helped by Malaysia’s high literacy rate. The literacy rate is 88% in Malaysia.

ECONOMIC SYSTEM OF MALAYSIA

 Malaysia is a relatively open state-oriented and newly industrialised market economy.

 The state plays a significant but declining role in guiding economic activity through
macroeconomic plans. Malaysia has had one of the best economic records in Asia, with
GDP growing an average 6.5 per cent annually from 1957 to 2005 Malaysia's economy in
2014–2015 was one of the most competitive in Asia, ranking 6th in Asia and 20th in the
world, higher than countries like Australia, France and South Korea. In 2014, Malaysia's
economy grew 6%, the second highest growth in ASEAN behind the Philippines' growth
of 6.1%. The economy of Malaysia in terms of gross domestic product (GDP) at
purchasing power parity (PPP) in 2014 was $746.821 billion, the third largest in ASEAN
behind more populous Indonesia and Thailand and the 28th largest in the world.

PROBLEMS OF MALAYSIA

 POPULATION
- The current population of Malaysia is 32,063,628 as of Sunday, July 22, 2018, based
on the latest United Nations estimates. Malaysia population is equivalent to 0.42% of
the total world population. Malaysia ranks number 45 in the list of countries (and
dependencies) by population. The population density in Malaysia is 98 per Km2 (253
people per mi2). The total land area is 328,550 Km2 (126,854 sq. miles). 76.5 % of
the population is urban (24,509,005 people in 2018). The median age in Malaysia is
28.1 years.
 PROBLEM: Aging Population - Malaysia needs to prepare now to address the
ageing society problem which is expected to account for 15% of the population by
2035, failing which, it could bring about massive impact to the country's economic
health. The entire structure of the economy and ideology needs to be changed,
because in future, when we have less workers, it means we are going to collect less
tax which will translate to lower capability for expenditure.

SOLUTION:

- Healthy ageing depends on health promotion and disease and injury prevention. Good
health maintenance in early life and later years via a healthy lifestyle, avoidance of
smoking and alcohol, prudent diet and regular exercise can help the elderly, including
fewer doctor visits and fewer medications taken.
- Health education and counseling must be provided at all opportunities that ageing is
not a disease and that early intervention treatment can prevent disability.
- Nutrition education should be carried out regularly as it is important to prevent
nutritional problems.
- Secondary prevention is concerned with slowing down the disease process once it has
begun and to prevent the occurrence of other problems, complications or
deterioration.
- Active case detection is necessary through regular and frequent periodic medical
examination to detect conditions that lead to chronic conditions so that early
treatment is effective.
 ENVIRONMENT

PROBLEM: Waste Disposal - In recent years, a disposable culture has evolved.

Malaysians now produce about 30,000 tons of waste every day, only 5 percent of which
is recycled. The amount of trash Malaysians produce is rising extremely fast – the
average was 22,000 tons per day in 2012 – and the system can’t handle it. Landfills are
overflowing and garbage is sometimes dumped right into rivers or over hillsides.

SOLUTION:
- Many educational programs and initiatives encouraging sustainable values have
been launched by the government, but they have by and large been trampled flat
by the pace and culture of life in Malaysia. This is because Malaysia’s adult
society has developed with the ideas that natural resources are plentiful, that no
one can make a difference for the environment, and that the main thing to worry
about is providing for oneself and one’s family in whatever way possible.
PROBLEM: Endangered Species - The IUCN Red List gives 2890 native endangered species.

SOLUTION:

- Protect, manage, and/or restore essential habitats, as well as provide connectivity

and corridors between habitats.
- Reduce local and global threats
- Stimulate and strengthen national, regional, and international policy and funding
for species conservation, that is integrated with biome approaches as well as
development and poverty reduction
- Empower local communities to conserve species and achieve long-term
sustainable management of natural resources.

URBAN PLANNING

PROBLEM: Urban Planning - The growth of economy as a result of industrialization

has influenced population migration and caused significant settlement in the urban
areas. Urban area refers to an area “which at least has a population of 10,000 with at least
60 % of population (aged 15 years and above) were involved in non-agricultural
activities" (Department of Statistic Malaysia, 2015). Further, “the increasing number of
people that migrate from rural-to-urban areas” leads to the process of urbanization
(United Nation, 2008).

SOLUTION:
- In partnership with other nonprofits and private organizations, the
government may go beyond housing assistance to match clients with
transportation providers, social service agencies, and community health
care access.

 EDUCATIONAL SYSTEM

EDUCATION SYSTEM

- Education in Malaysia is overseen by the Ministry of Education (Kementerian

Pendidikan). Although education is the responsibility of the Federal Government, each state
and federal territory has an Education Department to co-ordinate educational matters in its
territory. The main legislation governing education is the Education Act 1996.
 PROBLEM: Language - The issue of language and schools is a key issue for many political
groups in Malaysia. UMNO champions the cause of using Malay as the medium of
instruction in all schools. However, under the Razak Report, primary schools using the
Chinese and Tamil language as medium of instruction are retained. Up until 1981 in
Peninsular Malaysia (and some years later in Sarawak), there were English-medium schools,
set up by the former colonial government and Christian missionaries.

SOLUTION:

- In 2002, the government announced that from 2003 onwards, the teaching
of Science and Mathematics would be done in English, to ensure that
Malaysia would not be left behind in a world that was rapidly becoming
globalised. This paved the way for the establishment of mixed-medium
education. However, the policy was heavily criticised by Malay linguists
and activists, fearing that the policy might erode the usage of Malay
language in science and mathematics, which led to a massive rally in Kuala
Lumpur on 7 March 2009. Chinese education groups opposed the policy as
well, fearing that it might erode the usage of Chinese as the medium of
instruction in Chinese schools. The government announced in 2009 that
this policy will be reversed in 2012: the teaching of both subjects would
revert to Malay.

PROBLEM: Gender Equality - In 2004 the UNDP (United Nations Development

Programme) representative Dr. Richard Leete stated that Malaysia's ranking in the UNDP gender
index was not "as high as it should be". Former Higher Education Minister Datuk Dr Shafie
Salleh replied that it was not unique to Malaysia. His quoted statistics revealed that there was a
2:1 ratio of boys to girls in polytechnics and at public higher learning institutions.

SOLUTION:

- A recent study showed that female teachers have substantial impact on

gender based education; there has been evidence indicating the fallout of
girls in schools due to inadequate women teachers. Those nations which
have a similar ratio of male and female teachers have equal parity between
the girls and boys at school. There are many reasons that support this fact.
Talking about some more conservative nations (such as Pakistan,
Bangladesh, and Afghanistan), male teachers are not allowed to teach girls.
Also in some lenient cultures, parents feel uncomfortable in allowing their
girls to be taught by male teachers, rather than a female one.
  POVERTY
POVERTY - Malaysia is a nation in southeast Asia with a rich history and a population
of over 30 million. The nation has been one historically plagued with deep poverty;
however, in recent decades, the conditions for a large swathe of its people have greatly
improved. The government has undertaken a monumental effort to attempt to eradicate the
causes of poverty in Malaysia and has been largely successful. Nevertheless, the country
still suffers from the ills of impoverishment and plenty of work still needs to be done.

 PROBLEM: Income Disparity - According to the UNDP 1997 Human Development

Report, and the 2004 United Nations Human Development (UNHDP) report. Malaysia
has the highest income disparity between the rich and poor in Southeast Asia, greater than
that of Philippines, Thailand, Singapore, Vietnam and Indonesia.

SOLUTION:

- Increase the level of education among the poor. Through education,

children in poor communities will have a better chance to get a high-paying
job or start a business.
- Strengthen social safety nets, enhance collaboration with NGOs and
corporations and provide empowerment programs.
- Ensure income is redistributed to uplift those in poverty for the bottom 40
percent.
- Institutionalize appropriate policies which promote economic development.
- If the Malaysian government continues on the path they have been on so far
and successfully addresses these goals in their plan of action, poverty and
the ills it brings could be effectively eradicated in the nation once and for
all.

HOW DOES THE ECONOMIC SYSTEM OF THE COUNTRY ( MALAYSIA ) AFFECT

THE PROBLEMS THEY ARE FACING?

Answer: Through government intervention, the country of Malaysia is able to somehow,

lessen or resolve the problems they are facing, although it is arguable that some of their
problems were also caused by previous government policies which were ineffective or which
have adverse effects. For example, their over aging population is probably caused by
governments effort to resolve its over population problem.
WHAT ARE THE GOOD THINGS ABOUT THE COUNTRY ( MALAYSIA ) THAT YOU
THINK CAN BE BENEFICIAL TO OUR COUNTRY?

 Answer: BARRIERS OF ENTRY

 Barriers of entry can be described as a government implemented rules and regulations

which in need to be fulfilled in order to enter a market or establish a business in the
respective government country.

 IMPOSE OF TAXES ON GOODS OR SERVICES

 The government controls over the price of goods and inputs by taxing or subsidizing
goods or services or even by directly controlling the price of the market.

 THE CONTROL OF PRICES

 In Malaysia, government intervention also exists in control of prices on goods and

services. The government would prefer to retain the price mechanism either above or
below the equilibrium price although there will be no shortage or surplus at the
equilibrium price. If the government sets a minimum price above the equilibrium, a price
floor, there will be a surplus.

 PROVIDING GOVERNMENT OWNED SERVICES FOR FREE OR LOW PRICE

 In every country the government do subsidize certain goods and services which are high
in price and not affordable by the poor community, this is to avoid the concept of rich
becoming richer and poor becoming poorer not being able to live a standard live with
certain needed daily basic things.