Malaysia is emerging from one of theworst export slumps in its economic history as manufacturingand exports have started growing again. With East Asialeading the recovery and advanced economies showingprogressive improvement, the Malaysian economy is projectedto grow at 4.1 percent in 2010, following a contraction of2.3 percent in 2009. The medium-term outlook remainspromising with growth reaching 5.6 and 5.9 percent in 2011and 2012, respectively, though that will depend on sustainedglobal recovery from the crisis. The overriding medium-termchallenge is for the Malaysian economy to join the selectgroup of high-income countries. Malaysia has experiencedsolid growth over the last decades, but has relied on aneconomic model predominantly based on capital accumulation,although private investment rates never recovered from their20 percentage point fall after the Asian 1997/98 crisis andare now among the lowest in the region. For Malaysia toclimb the next step up the income ladder, it needs to focuson improving the investment climate to raise investmentrates and focus on productivity growth. Against thisbackdrop, the authorities are developing a 'neweconomic model,' which will be squarely centered onboosting productivity. Promising reforms have already beenannounced in the areas of services and foreign directinvestment, which will help revitalize private investment.
PDF
download
878987797
028-85220240
