Hugely ambitious government and economic transformation programmes are currently under way in Malaysia, plans that are intended to bring a neartripling of gross national income and turn the country into a fully fledged member of the developed world by 2020. Inevitably, there are going to be challenges along the path to achieving high-income status, but the old saying stands true nowhere if not in Malaysia: where there is a will, there is a way.
The comprehensive manuscript outlining the Economic Transformation Programme (ETP), a thorough study documenting spending down to the last cent, was launched in October 2010. The plan relies heavily on private sector participation, which is expected to fund 92% of the RM1.4trn ($448bn) investment.
The programme is testament to the sincerity and the genuine will of the government to create the right conditions to help facilitate and attract foreign direct investment to all sectors of the economy. The country has no time to lose in its aspirations to become a knowledge- and innovation-driven nation.
DEMOGRAPHICS: Official statistics put Malaysia’s population at just under 29m, with 9.6m of these under the age of 18 and only 5% above the age of 65. Nearly 80% of the country’s inhabitants live in one-third of its landmass, particularly in Klang Valley, on the peninsula. Around 5m live in the states of Sabah and Sarawak on the island of Borneo, the two largest states in the federation.
Traders and settlers from India and China arrived in the first century AD, establishing trading ports and towns. Successive immigration waves from across Asia over the centuries has given rise to a vibrant mix of languages and cultures at this, the crossroads of South-east Asia. The population grew significantly in the late 19th and early 20th centuries during the height of mining and rubber cultivation.
The most important Malaysian demographic feature is its multiethnic society. There is a mixture of Malay (60%), Chinese (25%), Indian (10%) and Eurasian cultures, along with the cultures of the indigenous groups of the peninsula and Sarawak and Sabah. A unified Malaysian culture is being supported by the government’s 1Malaysia initiative.
GEOGRAPHY & CLIMATE: Malaysia is physically split into two parts by the South China Sea. These two parts, which cover a total land area of 329,847 sq km, were united into one country in 1963. Peninsular Malaysia is on the southern tip of the Malay Peninsula, and stretches from the Thai border to the island of Singapore. Non-peninsular Malaysia includes the territories of Sabah and Sarawak on the northern end of Borneo, with Brunei Darussalam nestled in between. Peninsular Malaysia is divided into west and east by a mountain range called the Banjaran Titiwangsa. Most large cities, heavy industry and population are concentrated on the west coast; the east coast is less populated, more agrarian and demographically more Malay. The federal capital is in the old tin mining centre of Kuala Lumpur.
The climate is tropical, and the country is hot and humid throughout the year. Alternating south-westerly and north-easterly monsoon winds blow from April-September and November-February, respectively, bringing abundant rains and sometimes flooding. The landscape varies from coastal plains to hills to mountains, each covered to various degrees with oil palm and rubber plantations, rainforest, secondary jungle and flat paddy lands. The most rugged mountains are located in the Sabah region.
RELIGION, LANGUAGE & CULTURE: Islam is both the majority and official religion of Malaysia, though people are free to practice other religions. Among the population are Buddhists, Taoists, Hindus, Christians and Sikhs, as well as animist religions still practised by a portion of the indigenous tribes. Despite the multitude of practices at play, Malaysia remains moderate in religious matters.
The country’s diversity has given it one of the most exquisite cuisines in the world, with elements of Malay, Chinese and Indian cooking both remaining distinct and blending together. Rice and noodles are common, while spicy dishes are also favourites. Tropical fruits grow in abundance – a local favourite is the durian, which is recognisable by its spiked shell and fermented flesh, the pungent aroma and taste of which often divides locals from foreigners.
Bahasa Malaysia became the country’s sole national language in 1967 and has been institutionalised with a modest degree of success. English is also widely used as it was the administrative language of the British colonisers. There is significant linguistic richness in the country, with 137 living languages still in use. Among these, Chinese Malaysians speak a combination of Cantonese, Hokkien and/or Mandarin, while most Indian Malaysians speak Tamil. The government acknowledges this multilingualism through television news broadcasts in Malay, English, Mandarin and Tamil. Rapid industrialisation has sustained the importance of English and solidified it as the language of business.
ETIQUETTE: Malaysian society is remarkable in its openness to diversity. The blunders of an outsider are tolerated, a dividend of the country’s cosmopolitan heritage. Paying compliments with sincerity is appreciated. Showing respect for the elderly and avoiding smoking around them is also advised. When invited to someone’s home, one is expected to bring a small gift for the hostess, such as fruits, sweets, perfumes or crafts from your home country.
EDUCATION: Education is a vital part of Malaysian life. With the government’s New Economic Model focusing on innovation, creativity and added-value activities, education and human capital have become greater priorities. The government allocates just over 25% of its total spending on the sector. The current drive is towards increasing the number of postgraduate degree holders, especially in science and technology fields, as the country seeks to create a knowledge-intensive workforce. This drive will also see more international benchmarking to increase the quality of universities and intensify research.
NATURAL RESOURCES: Malaysia’s wealth of natural resources has long been a driver of the economy. Tin mining first attracted Western attention to the Malay states, while colonial British planters transformed its arable land into rubber and oil palm plantations. Although Malaysia remains a primary exporter of both rubber and palm oil, tin mining is no longer a significant industry. The country produces more than half of the world’s palm oil, and its increasing popularity for use in food and fuel bode well for the industry. Though arable land is restricted as a result of environmental concerns, Malaysian plantations also cultivate cocoa, timber, pepper, pineapple and sugar cane. Rice paddies dot the northern reaches of Peninsular Malaysia. According to the national oil company, Petronas, Malaysia’s hydrocarbons reserves stand at 20.2bn barrels of oil equivalent (boe), with average production at 1.66m boe per day. Its reserves are located almost entirely offshore, mostly off Sabah and Sarawak, and it is hoped that the ongoing investment in enhanced oil recovery techniques and deepwater exploration will extend the life of the country’s reserves.
HISTORY: Indigenous Malays are believed to have begun arriving from south-western China around 10,000 BC. The shipping trade heavily influenced the settlement of the Malay Archipelago, flourishing as early as the first century AD.
Traders from India brought Hindu and Buddhist practices to the peninsula, and Islam was introduced via Muslim traders travelling through the Straits of Melaka. The area’s position and wealth led the Portuguese to invade in 1511, and in 1641 the Dutch ousted them and ruled until 1824. The British established a presence in Penang in 1786 and expanded their foothold in Malaysia throughout the 19th century. The last area to remain independent, Johor, submitted to British dominion in 1916.
Japan invaded in 1942, during the Second World War, but British rule was restored in 1945. Retaining control was difficult, with communist guerillas leading an insurgency. The UK withdrew in 1957, handing power to the non-communist independence movement led by Abdul Rahman, Malaysia’s first prime minister. Upon its establishment in 1963, Malaysia comprised 13 states and two federal territories, including Singapore, which withdrew in 1965. The king is the official head of state, but the role is largely ceremonial, with real power resting with the prime minister and the cabinet.
Mahathir Mohamad became prime minister in 1981, and the economy expanded through the 1980s and 1990s, with a brief stutter due to the Asian financial crisis in 1997-98. In 2004 Abdullah Ahmad Badawi became the prime minister after winning elections by the largest margin in Malaysian history. Most recently, Najib Abdul Razak was appointed the sixth prime minister on April 3, 2009. Najib is the eldest son of Malaysia’s second prime minister.