⌛ The Economic Economy: Poverty And Economic Growth In Malaysia
Retrieved 23 April However, as The Economic Economy: Poverty And Economic Growth In MalaysiaChinese Malaysians dominate the professions of accountants, architects and engineers while The Beatles Authentic Mod Clothing Research Paper Malaysians dominate the professions of veterinarians, doctors, lawyers and dentists well exceeding their respective population ratios compared to Bumiputra. Warr conducted a study on the relationship between changes in the headcount The Economic Economy: Poverty And Economic Growth In Malaysia of absolute poverty incidence The Economic Economy: Poverty And Economic Growth In Malaysia the rate of Microagressions: A Case Study growth in South Asia India The Economic Economy: Poverty And Economic Growth In Malaysia, East Asia Taipei, The Economic Economy: Poverty And Economic Growth In MalaysiaMy Papas Waltz And Those Winter Sundays Analysis four countries in Southeast Asia Indonesia, Malaysia, the Philippines and Similarities Between Tim Ferris And Carol Dweck. A constant and 'mysterious' question in development economics is whether economic growth is enough by itself to reduce The Economic Economy: Poverty And Economic Growth In Malaysia. The racial riots of occurred against the backdrop of high poverty rates among the indigenous population and was compounded by communal political tension. InProton helped Malaysia become the 11th country in The Economic Economy: Poverty And Economic Growth In Malaysia world with the capability to fully design, engineer and manufacture The Economic Economy: Poverty And Economic Growth In Malaysia from the ground up.
INSIGHT - Malaysia Poverty Trap
In the s, the predominantly mining and agricultural based Malaysian economy began a transition towards a more multi-sector economy. Since the s the industrial sector has led Malaysia's growth. High levels of investment played a significant role in this. With Japanese investment, heavy industries flourished and in a matter of years, Malaysian exports became the country's primary growth engine. In , former Prime Minister of Malaysia, Mahathir bin Mohamad outlined his ideal, Vision in which Malaysia would become a self-sufficient industrialised nation by In , the Household Income Survey undertaken by the government indicated that there were 7 million households in Malaysia, with an average of 4.
The report also says "The electronic equipment, petroleum, and liquefied natural gas producer will see a substantial increase in income per capita. Malaysian life expectancy, relatively high level of schooling, and above average fertility rate will help in its rapid expansion. Prior to the Asian financial crisis , the Malaysian ringgit was an internationalised currency, which was freely traded around the world. Just before the crisis, the Ringgit was traded RM2. Due to speculative activities, the Ringgit fell to as much as RM4. Bank Negara Malaysia , the nation's central bank, decided to impose capital controls to prevent the outflow of the Ringgit in the open market. The Ringgit became non-internationalised and a traveller had to declare to the central bank if taking out more than RM10, out of the country and the Ringgit itself was pegged at RM3.
The fixed exchange rate was abandoned in favour of the floating exchange rate in July , hours after China announced the same move. The Ringgit continued to strengthen to 3. Meanwhile, many aspects of capital control have been slowly relaxed by Bank Negara Malaysia. However, the government continues to not internationalise the Ringgit. The government stated that the Ringgit will be internationalised once it is ready. Bank Negara Malaysia for the time being, uses interest rate targeting. The Overnight Policy Rate OPR is their policy instrument, and is used to guide the short term interbank rates which will hopefully influence inflation and economic growth.
The NEP is accused of creating an oligarchy , and creating a 'subsidy mentality'. Worst of all, it keeps them poor. The move is seen as the government efforts to increase investment in the service sector of the economy. According to the premier, many more sectors of the economy will be liberalised. On 30 June , the prime minister announces further liberation moves including the dismantling of the Bumiputera equity quotas and repealing the guidelines of the Foreign Investment Committee, which was responsible to monitor foreign shareholding in Malaysian companies. However, any Malaysian companies that wishes to list in Malaysia would still need to offer 50 percent of public shareholding spread to Bumiputera investors.
The Malaysian government subsidises and controls prices on a lot of essential items to keep the prices low. Prices of items such as palm oil, cooking oil, petrol, flour, bread, rice and other essentials have been kept under market prices to keep cost of living low. Since , the government has been gradually reforming Malaysia's subsidy system, via a series of reductions in subsidies for fuel and sugar to improve government finances and to improve economic efficiency. The government owns and operates several sovereign wealth funds that invest in local companies and also foreign companies. Another fund that is owned by the Malaysian government is the Employees Provident Fund which is a retirement fund that as of 31 March , has an asset size of RM billion.
Permodalan Nasional Berhad is another major fund manager controlled by the Malaysian Government. It offers capital guaranteed mutual funds such as Amanah Saham Bumiputera and Amanah Saham Wawasan which are open only to Malaysian and in some cases, Bumiputeras. Although the federal government promotes private enterprise and ownership in the economy, the economic direction of the country is heavily influenced by the government through five years development plans since independence. The economy is also influenced by the government through agencies such as the Economic Planning Unit and government-linked wealth funds such as Khazanah Nasional Berhad , Employees Provident Fund and Permodalan Nasional Berhad.
The government's development plans, called the Malaysian Plan, currently the Tenth Malaysia Plan , started in during the British colonial rule. Government-linked investment vehicles such as Khazanah Nasional Berhad , Employees Provident Fund and Permodalan Nasional Berhad invest in and sometimes own major companies in major sectors of the Malaysian economy. The following table shows the main economic indicators in — The only legal tender in Malaysia is the Malaysian ringgit. The ringgit has not been internationalised since September , an effect due to the Asian financial crisis in which the central bank imposed capital controls on the currency, due to speculative short-selling of the ringgit. In recent years, Bank Negara Malaysia has begun to relax certain rules to the capital controls although the currency itself is still not traded internationally yet.
According to the Bank Governor, the ringgit will be internationalised when it's ready. In September , in an interview with CNBC , Dato' Seri Najib Tun Razak , who is the then Prime Minister of Malaysia and also held the position of Finance Minister then, said that the government is open to open up the ringgit to off shore trading if the move will help the economy. He further added that before such a move can be made, it will ensure that rules and regulation will be in place so the currency will not be abused. Malaysia is well-endowed with natural resources in areas such as agriculture, forestry and minerals. It is an exporter of natural and agricultural resources, the most valuable exported resource being petroleum.
Croplands consists of Total renewable water resources make up cubic km as of Tin and petroleum are the two main mineral resources that are of major significance in the Malaysian economy. Malaysia was once the world's largest producer of tin until the collapse of the tin market in the early s. It was only in that petroleum and natural gas took over from tin as the mainstay of the mineral extraction sector. Other minerals of some importance or significance include copper, bauxite, iron-ore and coal together with industrial minerals like clay, kaolin , silica , limestone , barite , phosphates and dimension stones such as granite as well as marble blocks and slabs.
Small quantities of gold are produced. In , the country was the 11th largest world producer of manganese ;  the 11th largest world producer of tin ,  the 12th largest world producer of bauxite ,  and the 19th largest world producer of lime. Malaysia holds proven oil reserves of 4 billion barrels as of January , the fourth-highest reserves in Asia-Pacific after China, India, and Vietnam. Nearly all of Malaysia's oil comes from offshore fields. The continental shelf is divided into three producing basins: the basin offshore Eastern Peninsular Malaysia in the west and the Sarawak and Sabah basins in the east. Most of the country's oil reserves are located in the Peninsular basin and tend to be light and sweet crude.
Malaysia's benchmark crude oil, Tapis Blend , is a light and sweet crude oil, with an API gravity of Malaysia also holds 83 trillion cubic feet Tcf of proven natural gas reserves as of January , and was the third-largest natural gas reserve holder in the Asia-Pacific region after China and Indonesia. More than half of the country's natural gas reserves are located in its eastern areas, predominantly offshore Sarawak. Most of Malaysia's gas reserves are associated with oil basins, although Sarawak and Sabah have an increasing amount of non-associated gas reserves that have offset some of the declines from mature oil and gas basins offshore Peninsular Malaysia.
In , Malaysia's economy was one of the most competitive in the world, ranking 14th in the world and 5th for countries with a population of over 20 million, higher than countries like Australia , United Kingdom , South Korea and Japan. According to a June report by the World Bank , Malaysia ranks 6th in the world in the Ease of doing business index , Malaysia's strengths in the ranking includes getting credit ranked 1st , protecting investors ranked 4th and doing trade across borders ranked 5th. The study ranks countries in all aspect of doing business.
Malaysia is behind Singapore, Hong Kong and New Zealand in investor protection category of the survey. The edition of the World Bank's 'Ease of doing business' report ranks Malaysia at 18 in the world, and the second in SE Asia - behind Singapore, but ahead of other regional powerhouses such as Thailand 49th in the world and Indonesia th in the world. The government is moving towards a more business friendly environment by setting up a special task force to facilitate business called PEMUDAH, which means "simplifier" in Malay. PEMUDAH has been largely successful at facilitating a more business friendly environment, as reflected by the rank of Malaysia in the Ease of doing business index.
Malaysia was ranked 33rd in the Global Innovation Index in , up from 35th in The Malaysian government also imposes government taxes such as the Sales and Services tax and real estate taxes. Malaysia's largest trading partner is China. They also agreed to upgrade economic and financial co-operation, especially in the production of halal food, water processing and railway construction. Malaysia's third largest trading partner is Japan, amounting RM Out of this, exports totalled RM He said Malaysia's main imports from Japan were electrical and electronics, machines and equipment as well as spare parts and accessories for vehicles and cars.
Malaysia is an important trading partner for the United States. Malaysia was the United States' 10th-largest trading partner and its 12th-largest export market. Agriculture is now a minor sector of the Malaysian economy, accounting for 7. The crops grown by the agricultural sector has also significantly shifted from food crops like paddy and coconut to industrial crops like palm oil and rubber , which in contributed to Despite its minor contribution to Malaysia's GDP , Malaysia has a significant foothold in the world's agricultural sector, being the world's second largest producer of palm oil in  producing In March , the European Commission concluded that palm oil cultivation results in excessive deforestation and its use in transport fuel should be phased out by In response, Mahathir Mohamad alleged that the European Union is at risk of starting a trade war with Malaysia regarding its "grossly unfair" policies geared towards decreasing the use of palm oil, which Mahathir stated was "unfair" and an example of "rich people The country is one of the world's largest exporters of semiconductor devices, electrical devices, and IT and communication products.
Malaysia's industrial sector accounts for The industrial sector mostly contributed by the electronics industry , automotive industry and construction industry. Malaysia benefits from the global demand in the usage of mobile devices smartphones, tablets , storage devices cloud computing, data centres , optoelectronics photonics, fibre optics, LEDs and embedded technology integrated circuits , PCBs , LEDs.
Exports of semiconductor devices were RM To date, there are more than 50 companies, largely MNCs producing semiconductors devices in Malaysia. In , Malaysia's total production capacity for solar wafers , solar cells and solar panels totalled 4, MW. Many international companies have the majority of production capacity located in Malaysia , such as the American company First Solar which has over 2, MW of production capacity located in Kulim and only MW located in Ohio ,  and formerly German-based Hanwha Q Cells which produces 1, MW worth of solar cells in Cyberjaya while producing only MW worth of solar cells in Germany. SunPower 's largest manufacturing facility with a capacity of 1, MW is also located in Malacca.
The automotive industry in Malaysia consists of 27 vehicle producers and over component manufacturers. The Malaysian automotive industry is Southeast Asia's sole pioneer of indigenous car companies, namely Proton and Perodua. In , Proton helped Malaysia become the 11th country in the world with the capability to fully design, engineer and manufacture cars from the ground up. Malaysia has a large construction industry of over RM The highest percentage share was contributed by construction of non-residential buildings which recorded This was followed by civil engineering sub-sector Selangor recorded the highest value of construction work done at The contribution of these five states accounted for Malaysia has a relatively new defence industry that was created after the government created the Malaysia Defence Industry Council to encourage local companies to participate in the country's defence sector in The company focuses on manufacturing armoured vehicles and specialised logistics vehicles.
The sea sector of the defence industry is dominated by Boustead Heavy Industries , who builds warships for the Royal Malaysian Navy RMN through transfer of technology with foreign companies. Kuala Lumpur has a large financial sector, and is ranked the 22nd in the world in the Global Financial Centres Index. Commercial banks are the largest and most significant providers of funds in the banking system. Malaysia is currently also the world's largest centre of Islamic Finance. The Malaysian government is planning to transform the country's capital Kuala Lumpur into a major financial centre in a bid to raise its profile and spark greater international trade and investment through the construction of the Tun Razak Exchange TRX.
The government believes the project will allow Malaysia to compete with regional financial superpowers such as Singapore and Hong Kong, by leveraging on the country's established strength in the rapidly growing Islamic financial marketplace. Tourism is a huge sector of the Malaysian economy, with over Total international tourist receipts increased by 3. Malaysia is rich with diverse natural attractions which become an asset to the country's tourism industry. Malaysia is reputed as one of the most preferred medical tourism destinations with modern private healthcare facilities and highly efficient medical professionals. The Malaysian government targets to hit RM 9. Malaysia has a vibrant oil and gas industry.
The national oil company, Petronas is ranked the 69th biggest company in the world in the Fortune list in , with a revenue of over US Petronas is also the custodian of oil and gas reserves for Malaysia. Hence, all oil and gas activities are regulated by Petronas. Malaysia encourages foreign oil company participation through production sharing contracts, in which significant amount of oil will be given away to the foreign oil company until it reaches a production milestone.
The infrastructure of Malaysia is one of the most developed in Asia. During the colonial period, development was mainly concentrated in economically powerful cities and in areas forming security concerns. Although rural areas have been the focus of great development, they still lag behind areas such as the West Coast of Peninsular Malaysia. Malaysia's energy infrastructure sector is largely dominated by Tenaga Nasional , the largest electric utility company in Southeast Asia , with over RM Customers are connected to electricity through the National Grid , with more than transmission substations in the Peninsular linked together by approximately 11, km  of transmission lines operating at , and kilovolts.
In , Malaysia's total power generation capacity was over 29, megawatts. Total electricity generation was , Energy production in Malaysia is largely based on oil and natural gas, owing to Malaysia's oil reserves and natural gas reserves, which is the fourth largest in Asia-Pacific after China, India and Vietnam. Malaysia has also significant renewable energy resources and has high potential for the development of large-scale solar power and it has one of most advanced legal frameworks in the ASEAN region for promoting renewables. Malaysia's road network is one of the most comprehensive in Asia and covers a total of , kilometres 89, mi. The main national road network is the Malaysian Federal Roads System , which span over 49, km 31, mi.
Most of the federal roads in Malaysia are 2-lane roads. In town areas, federal roads may become 4-lane roads to increase traffic capacity. Nearly all federal roads are paved with tarmac except parts of the Skudai—Pontian Highway which is paved with concrete , while parts of the Federal Highway linking Klang to Kuala Lumpur, is paved with asphalt. Malaysia has over 1, kilometres 1, mi of highways and the longest highway, the North—South Expressway , extends over kilometres mi on the West Coast of Peninsular Malaysia , connecting major urban centres like Kuala Lumpur and Johor Bahru. There are currently 1, kilometres 1, mi of railways in Malaysia, km mi are double tracked and electrified. Heavy rail is mostly used for intercity passenger and freight transport as well as some urban public transport, while LRTs are used for intra-city urban public transport.
The sole monorail line in the country is also used for public transport in Kuala Lumpur, while the only funicular railway line is in Penang. The railway network covers most of the 11 states in Peninsular Malaysia. In East Malaysia, only the state of Sabah has railways. Malaysia has airports, of which 38 are paved. The national airline is Malaysia Airlines , providing international and domestic air services.
Kuala Lumpur International Airport is the main and busiest airport of Malaysia. In , it was the world's 13th busiest airport by international passenger traffic , recording over It was also the world's 20th busiest airport by passenger traffic , recording over Other major airports include Kota Kinabalu International Airport , which is also Malaysia's second busiest airport and busiest airport in East Malaysia with over 6. Malaysia is strategically located on the Strait of Malacca , one of the most important shipping lanes in the world.
Malaysia has two ports that are listed in the top 20 busiest ports in the world, Port Klang and Port of Tanjung Pelepas , which are respectively the 2nd and 3rd busiest ports in Southeast Asia after the Port of Singapore. Port Klang is Malaysia's busiest port, and the 13th busiest port in the world in , handling over Port of Tanjung Pelepas is Malaysia's second busiest port, and the 19th busiest port in the world in , handling over 7. Malaysia's total accumulated investments in was RM According to A. Kearney , a global management consulting firm, Malaysia was ranked 15th in the Foreign Direct Investment Confidence Index, 9th in , 16th in and 21st in The index assesses the impact of political, economic and regulatory changes on the FDI intentions and preferences of the leaders of top companies around the world.
Malaysia has 17 companies that rank in the Forbes Global ranking for From Wikipedia, the free encyclopedia. National economy. Kuala Lumpur , national capital of Malaysia, and its largest city. Fiscal year. Inflation CPI. Population below poverty line. Gini coefficient. Human Development Index. Ease-of-doing-business rank. FDI stock. Current account. Gross external debt. Public debt. Budget balance. Credit rating. Main article: Economic history of Malaysia. Main article: Malaysian New Economic Policy. Main article: Malaysian ringgit. See also: Malaysia and the World Bank. Main article: Agriculture in Malaysia. See also: Photovoltaics manufacturing in Malaysia. See also: Automotive industry in Malaysia. Main article: Tourism in Malaysia. See also: Medical tourism in Malaysia.
See also: Transport in Malaysia. See also: Rail transport in Malaysia. This section needs additional citations for verification. Please help improve this article by adding citations to reliable sources. Unsourced material may be challenged and removed. March Learn how and when to remove this template message. See also: List of largest companies in Malaysia. International Monetary Fund. Retrieved 29 September World Bank. Retrieved 3 October Retrieved 17 October The modified TY approach in the bivariate format is as follows:.
Moreover, u and v are error terms and are assumed as white noise. Lag length k is initially selected based on AIC. However, the length of lag k is later added with more lags depending on the probable integration level d for the variable series y t and x t. The significance test is carried out on variables in the VAR system only up until lag k , not including the additional d lag in determining the causal relationship between y t and x t in the VAR system. Figure shows that both variable trends tend to move in opposite directions over time from to Poverty rate and real GDP. Nevertheless, this traditional regression comes up against certain problems associated with stationarity issues. A unit root test should therefore be conducted first to ensure the stationarity of the series variables.
KPSS statistics under the null hypothesis of stationarity also confirm that all variables tend to be stationary at first difference if only constants are taken into account, while for constant and trend, only the RGDP showed stationarity at first difference. POV on the other hand is not stationary either at level or first difference. The results using MZ a and MZ t tend to support stationarity for all variables at first difference constant and trend , except for RGDP, which is stationary under the assumption of constant with no trend only.
The existence of a long-run cointegration relationship is tested using the ARDL bounds testing. As in Table 2, the result shows that both of the variable series could cointegrate and tend to move together towards equilibrium in the long run Table 2. This empirical decision proposes that both of the variables could be cointegrated in long-term periods. The estimated coefficient for RGDP, which is?? Meanwhile, the error correction coefficient is also significant at the 5 per cent level, showing that RGDP and POV are responsive to the discrepancy in error correction from long-run equilibrium Table 4. The negative sign of the adjustment coefficient speed is in accordance with convergence toward the long-run equilibrium.
The negative error correction coefficient value shows that RGDP will decrease by 0. Finally, diagnostic tests to assess the model adequacy were performed to determine whether the residuals of each model approximate white noise. The diagnostic test results confirmed the adequacy of the model Table 2, Table 4 and Table 5. Economists believe that economic growth benefits nearly all citizens of a country and therefore reduces poverty. However, if the growth occurs without a reduction in poverty, income distribution could become unequal. It is possible that rapid growth could take place without any reduction in poverty, but this is unlikely, as many studies show. Indeed, it is also possible for income distribution to worsen somewhat while the income of the poor increases.
There is also the opinion that countries with higher rates of economic growth over the last 30 years have achieved greater reductions in poverty. Another view suggests that if someone wants to reduce poverty, special attention should be paid to economic growth. Is this true? But then it might not be the faster strategy to reduce the poverty rate. In the last decade, the former group insisted that growth in itself would eventually lead to rising income, including among the poor.
But the latter side disagreed somewhat and emphasised the pattern of growth instead. For example, the Harvard Economist Dani Rodrik claimed in that growth is not only good for the poor, but also for economic growth. A constant and 'mysterious' question in development economics is whether economic growth is enough by itself to reduce poverty. The fact that so many of the world's poor now live in middle income countries which, by definition, have experienced a reasonable amount of economic growth suggests that growth by itself is not enough to reduce poverty.
The persistent problem of poverty in the developing world has led many to question the efficacy of economic growth and development as a means of poverty alleviation. Sound macroeconomic policies and openness to the world economy may be important in reducing poverty. In the late s, the prevalent strategy was to reduce poverty by targeting basic social services. Development interventions were scrutinised for measurable evidence of direct impact on the poor.
This seemed sensible: after all, what was the point of growth and how could it last if poverty remained entrenched? If economic growth is said to be good for the poor or to reduce the poverty rate, why is there still the problem of poverty in every country around the world? Even highly developed countries with advanced economies such as the US, the UK, Japan and so forth still experience the poverty problem. Poverty is still rampant, and the evidence based on the previous studies on which policy emphasis works is mixed. Though economic growth based on theories and past literature reviews can undoubtedly reduce poverty rates, the evidence in this study shows that reducing the poverty rate could also increase economic growth and not the other way round. As in Lustig et al.
The pro-growth actions and those directly targeted at improving the lives of the poor are very often mutually reinforcing. Therefore, the more complementarity is tapped, the more effective economic growth can be in reducing poverty. To obtain better results, further research is needed to better understand the evident diversity in the impacts of growth on poverty and the role that policies have played.
While good policy?? This diversity also provides potentially important clues as to what else needs to be done by governments to promote poverty reduction, on top of promoting economic growth. To conclude, this study proposes that if a policy's objective is focused on poverty alleviation, poverty reduction as well as economic growth at the same time should be taken into account as the final target. Agrawal, P. Economic growth and poverty reduction: Evidence from Kazakhstan. Asian Development Review 24 2 , Akbar, M. Is poverty rising in Pakistan. Banerjee, A. Error-correction mechanism tests for cointegration in single-equation framework.
Journal of Time Series Analysis 19, Bhagwati, J. Growth, poverty and reforms. Economic and Political Weekly 36 10 , Bigsten, A. Growth and poverty reduction in Ethiopia: Evidence from household panel surveys. World Development 31 1 , Datt, G. Is India's economic growth leaving the poor behind? Journal of Economic Perspectives 16 3 , Deaton, A. Trade, growth and poverty. Finance and Development 38, Dickey, D. Distribution of the estimation for autoregressive time series with a unit root.
Journal of the American Association 74, Dollar, D. Growth is good for the poor. World Bank, Washington, D. Journal of Economic Growth 7 3 , Fields, G. Changes in poverty and inequality in developing countries. World Bank Research Observer 4 2 , Government of Malaysia, Malaysia Economic Statistics-Time Series. Department of Statistics, Malaysia. Government of Malaysia, Central Bank of Malaysia [online]. Kwiatkowski, D. Testing the null hypothesis of stationarity against the alternative of a unit root. Journal of Econometrics 54, Lustig, N. Poverty reduction and economic growth: A two-way causality. Ng, S. Lag length selection and the construction of unit root tests with good size and power.
Econometrica 69, Pesaran, M. Bound testing approaches to the analysis of level relationships. Journal of Applied Econometrics 16, Phillips, P. Testing for a unit root in times series regression. Biometrica 75, Ravallion, M. Growth and poverty: Evidence for developing countries in the s. Economic Letters 48, Can high-inequality developing countries escape absolute poverty? Economic Letters 56, 51?? How important to India's poor is the sectoral composition of economic growth? World Bank Economic Review 10 1 , When is growth pro?? Evidence from the diverse experiences of India's states. Rodrik, D.World Bank. For instance, a Ugandan parent states that there is no availability of The Economic Economy: Poverty And Economic Growth In Malaysia institutions within their regional vicinity that will opt to train girls after they have completed their primary The Economic Economy: Poverty And Economic Growth In Malaysia lower secondary education. He The Economic Economy: Poverty And Economic Growth In Malaysia that with the wealthy The Economic Economy: Poverty And Economic Growth In Malaysia their power to pay low taxes, shape monopolies, and obtain favorable treatment by the government it is not only causing inequality, but causing a divide between the the wealthy and the rest of the nation. The best way to cut poverty in America is to raise the minimum wage, create The Economic Economy: Poverty And Economic Growth In Malaysia jobs, and expand Medicaid. By that time, rubber and tin Fist Of Fury Analysis the Fracking Criticism source of income for the Federation and it was one of the The Economic Economy: Poverty And Economic Growth In Malaysia prosperous economies in the region.