Article written by: Kyle Jin Soon Tan
ASEAN-Korea blog correspondent, Malaysia
Not many people realized that Malaysia was once a country overly dependent on agriculture (e.g. rubber) and mining (tin). Affected by the fluctuation in commodity prices, the country suffered when the price of raw materials dropped. Such uncertainty is unhealthy for a developing nation. Hence, the need to diversify the economy was critical and a priority in the nineties. Added to its problems was the threat from the communist, making it hard to allocate monetary resources for other nation-building activities. Eventually in 1989, the Malayan Communist Party (MCP) and the Malaysian government signed the peace treaty. From then on, fueled by global economic recovery, rapid development follows.
Worker collecting palm oil fruits (Source: www.nytimes.com)
Malaysia is blessed with abundant natural resources, fertile soil and sunny all year round. In the agricultural sector, Malaysia is well known for palm oil cultivation because the soil is appropriate for such cash crop. The palm oil tree has many uses—biodiesel, cooking oil, and animal feed while the leaves can be used to generate electricity through biogas. Malaysia was the world’s top palm oil producer until 2006 (Source: US Department of Agriculture; Commodity Intelligence Report Year 2007), but since has been overtaken by Indonesia. Malaysia through its participation in the Roundtable on Sustainable Palm Oil (RSPO) remains committed to preserve the environment and follow sustainable practices.
Proton cars (Source: http://asiancorrespondent.com/74036/malaysia-proton-cars-sale/)
In the past, Malaysia imported most of its electronic appliances but not now. With increase in FDI (Foreign Direct Investment) especially in the manufacturing sector, Malaysia is enjoying the fruits of its diligent efforts in wooing foreign investors. Manufacturing is now an important component in propelling the economy. Today, Malaysia has its own automotive industry. It has the capability of manufacturing its own national car—the Proton. Proton was incorporated on May 7, 1983 (Source: Proton Website). Its first model is the Proton Saga. It was named after a saga seed (reddish seed) a native plant in Malaysia.
An offshore oil platform (Source: http://www.offshore-technology.com)
Another sector driving the Malaysian economy is the petroleum industry. Realizing that oil resources can be depleted, further exploration and diversification initiatives are pertinent for the survival of PETRONAS, a national oil company of Malaysia. PETRONAS is engaged in various petroleum activities, from the downstream to the upstream activities. In the past, extraction of oil was carried out by foreign parties but through production sharing contract, PETRONAS is able to work alongside with other oil giants to develop its own expertise. PETRONAS is a very successful company in Malaysia and it is ranked among Fortune Global 500 largest corporations in the world. In earnest, Malaysia is where it is today because of the revenue derived from oil.
Islamic Bank in Malaysia (Source: http://blogs.reuters.com)
Islamic banking is generating a wide interest not only with Muslim but globally as well. This concept in banking is consistent with the principles of Islamic laws and prohibits the charging of interest. Malaysia is among the many Muslim countries promoting this concept of banking. Currently, Malaysia is the largest issuer of Sukuk in the world. With its advanced regulatory Syariah-compliant management framework and attractive tax incentives, Malaysia is firmly set to leverage and ultimately lead the pack in this sector.
Malaysia is fortunate to have the right thinking people for the job. Although the journey to attain a developed nation status is far from over, with prudence, good governance and transparency, this vision can be transformed into reality. Every country in Southeast Asia has its own distinct advantages. It is our fervent hope that the day will come where our ASEAN neighbors can all prosper as one.