Identify and Evaluate the Economic System That Malaysia Is Adopting. Discuss the Rational of the Malaysia’s Economic System in Terms of Government Intervention and Resource Allocations in the Country.

Naturally, during an inflationary period it becomes very difficult for the government to fulfill its macroeconomic targets. Almost all targets, such as GDP growth, price inflation, bank borrowing, trade deficit, budget deficit, become difficult to achieve. This questions the credibility of the government. Costs of development project and non-development expenditure increase, due to which the government needs more funds the following year by the amount of inflation to keep economic activity at the level of the former year.

Masyarakat Cina di Malaysia merujuk kepada sekelompok manusia iaitu orang Cina yang mengamalkan budaya yang hampir seragam, termasuk adat resam, pakaian, bahasa, dan kegiatan ekonomi di negara kita. Mereka biasanya berasal dari luar negara yang menjadi warganegara atau penduduk tetap di Malaysia. Kebanyakan daripada mereka adalah pendatang dari China yang tiba di Malaysia sekitar abad ke-15 hingga pertengahan abad ke-20.

Fiscal policy will be tightened gradually during the forecast period 2011-2015 as the government strives to balance its budget by 2020. Monetary policy will be tightened in the early part of the forecast period as domestic demand strengthens. The economy is expected to return to a fairly stable growth path in 2011 -2015, following a mild recession in 2009 and a strong rebound in 2010. Real GDP growth will average 5% a year in 2011 – 2015. The annual rate of inflation is expected to average 3.4% in 2011 – 2015. Government efforts to rationalize the country’s extensive subsidy schemes will exert an upward influence on prices. Despite the relatively rapid pace of growth in merchandising imports compared with that in exports, Malaysia will continue to run substantial trade and current-account surpluses in 2011 – 2015 (Unit 2011).

Since the budget 2017-2018 will cause a deficit of $29.4 billion, which is decreased by $8.2 billion compares to the budget 2016-2017[1], the fiscal stance the government is adopting tends to be contractionary. To return to surplus within four years and create a surplus of $7.4 billion in 2020-2021, government adopts the contractionary policy to reduce the deficit and increase the surplus. And another reason for adopting contractionary policy is to raise the economic growth from 2.75% (2017-18) to 3.0% (2018-19). The federal government also starts to pay attention to globalization, small business owners and areas where technological change happens. The four main things this budget choose to focus on are: growing

Moreover, the government will be able to spend a greater portions of funds to the Malaysian citizens in particular areas especially such as education, transportation, health, facilities and etc. This will then result on the implementation of the government’s ambitious plans under the

Najib bin Tun Haji Abdul Razak, the Prime Minister of Malaysia has regressed (returned to a former or less developed state) Malaysia’s economy. Meaning Malaysia has lost more money, GDP and has not progressed and is still an LIC. There are also worrying signs of the government and Najib himslef not being above and stopping troubled ethnic and religious divisions.

After the Asian financial crisis in 1997 that brought an end to the economic miracle in Southeast Asia, Malaysia has become an exception case since it could mitigated the turmoil’s adverse effects, such as rising unemployment or the breakdown of the political regimes. With the leadership of Mahathir Mohamad, the Malaysian government refused the advices of IMF (International Monetary Fund) that included austerity and liberalization of capital mobility. Instead of implementing market reform, Mahathir employed state-owned financial institutions and enterprises, for example, Petronas, to bail out troubled businesses, imposed capital controls, and pegged Ringgit with US dollars (Khoo, 2006). As a result of

As we already knew, Malaysia has a multi-ethnic, multicultural and multilingual society. There are various types of people with different racial and religion, yet living peacefully as one

Whilst both economies seem very similar, Malaysia has less than one third the population of the Philippines (World Bank, 2016). This indicates, as illustrated by Graph 2.1, that Malaysia’s GDP per capita, GDP minus the effect of population, is significantly larger than the Philippines (Economist Intelligence Unit, 2017).

The ruling party of Malaysia, Barisan Nasional has been in power since the country’s independence in 1957. This fact has provided Malaysia a high degree of stability and the confidence of foreign investors / businesses.

After the 1998 economic crisis, Indonesia’s economy has been known to be quite resilient. It has persistent positive growth and strong fiscal and macroeconomic regimes. In the last decade, the public debt of the country has been decreasing from 100 percent in 1998 to 24.5 percent in 2012. Indonesia has also maintained its positive growth trend averaging 5.5 percent in the same period (“UU APBN”, 2016). In the last 2008 economic crisis, Indonesia kept showing its resilience by maintaining its positive growth at 4.5 percent in 2009. Unfortunately, even though positive, Indonesia’s positive economic growth is not free from problem.

This essay will be discussing on some government (mainly Singapore) policies that can be implement to achieve economic growth and the author’s opinion as to how beneficial these policies are to the economic growth of the country.

Malaysia’s GDP Annual Growth Rate since 2000 till present. Notice the sharp contraction after the 2008 Financial Crises.

Malaysia is a multi-ethnic and multi-culture country. The main ethnics in Malaysia are Malays, Chinese and Indians. The

* The Malaysia's economy expanded at a faster pace of 6.4 per cent as compared to 5.3 per cent in the preceding quarter.