Economy of Malaysia

Malaysia is a growing and relatively open state-oriented market economy.^[1] The state plays a significant but declining role in guiding economic activity through macroeconomic plans. In 2007, the economy of Malaysia was the 29th largest economy in the world bypurchasing power parity with gross domestic product for 2007 was estimated to be $357.9 billion with a growth rate of 5% to 7% since 2007^[2] The Southeast Asian nation experienced an economic boom and underwent rapid development during the late 20th century and has a GDP per capita of $14,400, being considered a newly industrialized country.^[3][4] On the income distribution, there are 5.8 million households in 2007. Of that, 8.6% have an monthly income below RM1,000, 29.4% had between RM1,000 and RM2,000, while 19.8% earned between RM2,001 and RM3,000; 12.9% of the households earned between RM3,001 and RM4,000 and 8.6% between RM4,001 and RM5,000. Finally, around 15.8% of the households have an income of between RM5,001 and RM10,000 and 4.9% have an income of RM10,000 and above.^[5]

Background

[edit]Early and colonial history

The Malay Peninsula and indeed Southeast Asia has been a center for trade for centuries. Various items such as porcelain and spice were actively traded even beforeMalacca and Singapore rose to prominence. The Malacca Sultanate controlled the Straits of Malacca from its founding in 1402 to the 1511 invasion by Portugal. All the trade in the Straits, and especially the spices from the Celebes and the Moluccas, moved under its protection and through its markets.^[9]

In the 17th century, large deposits of tin were found in several Malay states. Later, as theBritish started to take over as administrators of Malaya, rubber and palm oil trees were introduced for commercial purposes. Over time, Malaya became the world’s largest producer of tin, rubber, and palm oil. These three commodities along with other raw materials firmly set Malaysia's economic tempo well into the mid-20th century.