Malaysia Economic Analysis

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Country Report
By: Zara Khurram

Economic Analysis of Malaysia
Malaysia is a multi-cultural Southeast Asian country with a federal constitutional monarchy. Malaysia originated from the Malay Kingdoms which were subject to the British Empire for a long time. Malaysia gained independence in August 1957. Today, Due to Malaysia’s natural resources, it has an average GDP growth rate of 6.5% for around 50 years.
Malaysia has a very attractive GDP growth, due to its various strengths in its economy, healthcare, abundance of natural resources and literacy. Malaysian economic strength is due to various factors including strong trading partners, controlled inflation, and positive balance of trade.
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Furthermore, there is no value added tax and the corporate tax rate is 25%. This indicate that tax burden in individuals is very low. However, the large government spending is recent years have led to a budget deficit and a public debt which is 53% of GDP. Malaysian Government has to improve its budget planning otherwise it will be in deep trouble in the future.
Additionally, although the literacy rate is high, the innovation is missing from the society. According to Charles Santiago, Malaysia needs to improve innovation, otherwise the economy would be paralyzed. Malaysia also needs to promote the export of value added products rather than primary products. Therefore, Malaysians should focus on changing the curriculum in educational institutions in order to encourage creativity and boost technological innovation.
Malaysia has a tremendous potential to grow due to its resources and the attractive and stable financial environment. However, it also has a lot of challenges to overcome before it is able to become a stable economically strong country. The government needs to control the corruption in the country by encouraging transparency; it needs to manage its spending, revise the education system of the country, and put more efforts into social welfare to reduce inequality and nepotism. Only after these efforts could Malaysia move towards prosperity.

Malaysia Highlights Its Strength in
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