The export-led economy is steadily diversifying, selling more to India and the Middle East in order to reduce dependence on the slowing economy of China, Malaysia’s biggest export market.
According to a UN Conference on Trade and Development report in 2015, Malaysia is the world’s fifth largest recipient of foreign direct investment.
An International Monetary Fund statement early in 2016 complimented Malaysia on its economic performance. “Malaysia’s recent strong growth, high investment and improvements in business environment scorecards are impressive,” it said.
“Implementation of reforms envisaged in the 11th Malaysia Plan and commitment to freer trade policies, ASEAN Economic Community and the proposed Regional Comprehensive Economic Partnership, should all help anchor structural reforms and raise Malaysia’s potential growth over the medium term,” the statement continued. “Further raising the skills of Malaysia’s labour force will be critical in the drive to become a high income nation.”
Global corporations from more than 40 countries have invested in over 5,000 companies in Malaysia’s manufacturing, construction and oil and gas industries.
The federal government is eager to maintain this momentum and has introduced an Economic Transformation Programme (ETP) that prioritises Malaysia’s aim of becoming a developed nation by 2020, boosting per capita income from US$9,600 in 2011 to US$15,500 by the end of the decade.
A number of game changing projects under the Economic Transformation Plan have already mobilized.
These include the RM70bn (US$17bn) Mass Rail Transit system in Kuala Lumpur, the Petronas Refinery and Petrochemical Integrated Development (RAPID) project in Johor Bahru, which will attract over RM120bn (US$30bn) of local and international investment, and the Tun Razak Exchange, a 70-acre development expected to generate a gross development value of RM26bn (US$6.5bn).
With its healthy economy, pro-business policies and attractive tax breaks and investment incentives, Malaysia is attracting an increasing number of global organisations to re-think their long-term strategies and choose Malaysia as the base for their Asian operations.