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Malaysia

Economy

Malaysia has one of the highest standards of living in SE Asia, largely because of its expanding industrial sector, which propelled the country to an 8%–9% yearly growth rate from 1987 to 1997. Growth contracted during the 1997–98 Asian financial crisis, and the government was forced to cut spending and defer several large infrastructure projects. Unemployment and interest rates rose, and thousands of foreign workers, many of them from Indonesia, were forced to leave the country. The economy began recovering in 1999, and growth continued into the early 21st cent. Despite long-term efforts of the government to improve the economic status of Malays through preferences, the Chinese have generally continued their long-standing dominance of the economy. The economic status of Malays, however, has significantly improved, leading to resentment among South Asians who, though largely poor, are not eligible for the opportunities open to Malays.

Malaysia is a large producer of rubber and tin; palm oil, crude petroleum and petroleum products, electronics, textiles, and timber are also important. Since the late 1980s, the government has moved to privatize large industries that had been under state control, and foreign investment in manufacturing has increased significantly. Pinang city is the chief port. Subsistence agriculture remains the basis of livelihood for about 13% of Malaysians and agriculture provides about 8% of GDP. Rice is the staple food, while fish supply most of the protein. Cocoa, coconuts, and pepper are also important agricultural products. Industry is largely concentrated in West Malaysia. The major cities on the Malay Peninsula are connected by railroads with Singapore, and an extensive road network covers the west coast. Malaysia's exports include electronic equipment, petroleum and liquefied natural gas, wood and wood products, palm oil, rubber, chemicals, and textiles. The main imports are electronics, machinery, petroleum products, plastics, vehicles, iron and steel, and chemicals. The major trading partners are the United States, Singapore, Japan, and China.

The Columbia Electronic Encyclopedia, 6th ed. Copyright © 2012, Columbia University Press. All rights reserved.

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