PESTLE Analysis of Malaysia

Political Landscape
Malaysia has advanced unfamiliar relations through reciprocal arrangements and exchange deals. It
imparts heartfelt connections to Asia-Pacific countries like Australia and has solid respective binds
with Japan and India. Under the ongoing initiative of the Head of the state, Malaysia will keep on
advancing a forward-looking and even minded international strategy that works with exchange,
draws in unfamiliar direct venture as well as tasks Malaysia as a steady and quiet country. In Walk
2022, Malaysia is keen on upgrading exchange attaches with Pakistan as it will assist with working on
the economies of the two nations and give Malaysian commodities admittance to the Pakistani
market.

A friend and enemy to China.

Although the country has had disputes about the South China Sea, Malaysia still has close
ties with China. To manage these disputes, the two countries have worked together to sign
various energy and defense agreements.

Stable but corrupt political system.

Overall, Malaysia is politically stable but corrupt. Citizens are expected to pay a fee (called a
“sweetener”) to access hospitals, schools, and courts. Some political figures have recently
arrested big-name people who are connected to politics, which has brought Malaysia’s
corruption to the spotlight.

The media — including print and television— isn’t safe from governmental control either.
Back in 2007, the government agency instructed radio and television stations to not
broadcast speeches from oppositional leaders. It was a tough break for said oppositional
leaders.

Economic Landscape
The Malaysian government has announced that income tax relief on savings in private retirement
schemes will be extended until 2025. To support investment growth, the government has
announced many measures, including relaxation of taxes and the creation of a High Technology Fund
to support high technology firms and investments. The number of unemployed declined in Malaysia
resulting in the improvement of the labor force situation. The Malaysian government will leverage
on escalating prices of crude palm oil to increase the country’s market share of palm oil in the global
market.

A middle-income country with hopes for more.

Since Malaysia spent the last fifty years changing into a multi-sector economy, the country is
considered middle-income.
The Prime Minister is focusing on bringing Malaysia’s income higher, which will bring more
interest from investors in the pharmaceutical, technology, and med technology industries.

Incredibly low unemployment rate.

The unemployment rate is low — 3.2% in 2019, to be exact. The current economy is active
and healthy, thanks to the more diversified income streams into knowledge and
industrialized-based industries. The country does still benefit largely from exports — besides
gas and diesel, palm oil, office machine parts, and integrated circuits are primary products
— to China, Japan, Singapore, and the USA.

Social Landscape
Malaysia has a very young workforce. Owing to the country’s well-structured educational system,
the workforce is highly educated as compared to other Latin American nations. Malaysia Healthcare
recently showcased the quality and experience the nation has to offer as a safe and trusted
destination for healthcare in week 14 of Dubai Expo 2020.

A multi-diverse country.

You’ll find many cultures in Malaysia — besides Malaysians, there are Indian and Chinese
people living in the country too. Each group has retained their respective religions and way
of life.

Part of this is because, despite these groups sharing the same schools and workspaces, the
majority will marry within their ethnicity rather than outside of it. This is likely because each
group socializes within their own ethnic groups for their entire lives. 

If you own the latest car model, you’re an elite in Malaysia.

There can be quite a difference in social class with Malaysians. The highest of status goes
overseas for schooling, has an abundance of familial money, and commands the English
language. You can also tell someone is elite by their shopping habits. How and what they
buy is often followed in the image of the Malay royalty — they purchase luxury clothes,
expensive jewelry, and have a mobile phone. For your social status in Malaysia, it’s more
important to have the latest car than a home. 

Technological Landscape
Despite being a cash-dominated country, Malaysia has made significant developments in non-cash
payments. The high adoption of card payments was mainly supported by the increasing banked
population and rising merchant acceptance. The Malaysian government wants to increase its
contribution to its digital economy and aims to reduce its dependency on foreign technology by
increasing R&D, expanding support facilities, providing funding infusions to SMEs, strengthening ICT
governance, intensifying capacity development, building competitive start-ups, and developing
technology-focused sectors. The growth of ICT in the manufacturing sector has been aided by
government policies such as Industry4WRD, a national policy that aims to transform the
manufacturing sector and related services during the period 2018–2025.

Embracing technology by big brands.

The majority of Malaysians have access to the internet, although it’s mostly via mobile
networks. Because of the location, large companies like IBM, Google, and Intel, are
embraced within Malaysia. You can find many of their products and brands within. As for
social media, Malaysians tend to use the most common ones, including Facebook, Youtube,
and Instagram.

Moving into technology industries.

The government is focusing on new initiatives to make Malaysia the preferred spot for hi-
tech investments within the next five years. It could lead to new jobs, but it could also mean
local workers may struggle to embrace the new technology industries.

Legal Landscape
Malaysia continues to permit child marriage under both civil and Islamic law, in violation of its
obligations under international law. In February 2022, the Government of Malaysia, along with the
Ministry of Health, introduced a new law to ban smoking and possession of tobacco products,
including electronic vaporizers, for people born after 2005. Banning tobacco products will also lead
to a gradual fall in cancer deaths in the country in the coming years.

Environmental Landscape
The Environmental Quality Act in Malaysia provides the main regulatory framework for its
environmental legislation and includes several regulations and rules that deal with specific problems,
such as vehicular emissions, waste treatment, and marine pollution. The act also provides details of
approvals and licenses required by manufacturing units to ensure adherence to environmental
norms. As of March 2022, the Government of Malaysia is working on a framework to develop its
policies to achieve net-zero emissions by 2050. The framework includes exploring the introduction of
a voluntary carbon market and carbon pricing mechanism such as carbon tax as well as the
expansion of green technology tax incentives.

A massive land of flora, fauna, and mangroves.

Malaysia has a wide range of flora and fauna. Between 50-70% of the country is made up of
tropical rainforests. In fact, Malaysia is in the top five for the largest mangrove area in the
world.
But one of Malaysia’s biggest exports is palm oil, which has lead to mass deforestation and
forest conversion. Mining too has affected the land — it’s polluted the rivers and colonized
the land for new roads and means of transportation.

Deforestation is impacting the land, animals, and citizens

However, like with many developing countries, the ecological landscape is suffering. The
deforestation of forests, fauna, and other ecosystems in the country is threatened by
urbanization. In fact, the deforestation rate in Malaysia is at the highest compared to other
tropical nations. The land is used to develop new buildings, which is encroaching on the
homes for animals and infecting the natural rivers with pollution. Malaysia has seen an
uptick in flooding and landslides because of the deforestation of the land.