Asian Pacific Business - Malaysia

Résumé du document

The world has seen the most important economic growth since the end of the Second World War in the region of East Asia. This incredible economic phenomenon had emerged more particularly in Japan during the 1950s. This trend has been followed later by what is known as the four dragons: Taiwan, South Korea, Singapore and Hong Kong. The Association of Southeast Asian Nations (ASEAN), which is composed of Thailand, Indonesia, Philippine and Malaysia also became part of its growth later. This success has impressed the world, because of the rapidity with which East Asian countries have increased their GDP, approximately 5% in each in the few last decades and also reduced their poverty and raised their standard of living. The East Asian growth has been studied in order to find if there is a method applicable to other countries. However, no common method has been found because it does not exist, but explanations of the East Asian success have been found and have divided economists. Malaysia is one of the newest countries which has been part of the Asian miracle, and is considered by Leipziger & Vinod as part of the second generation of Asian Tigers. What are the factors which has lead Malaysia to success and what difficulties did it have to face?

Extraits

[...] The period between 1966 and 1970, which represent the first Malaysia plan, has been the primary turning point for the growth of Malaysia. Malaysian government has started to create a fairly openly oriented market to support the program of industrialization based on Foreign Direct Investment (FDI) and export oriented especially in sector like electronic product or textile manufactures (Rodan et al., 2001). For this reason the Malaysian government has promoted import-substituting industrialization (ISI) through tariff protection, tax incentive, industrial credit or also infrastructures (Gomez, Jomo Rahman, 1965). [...]

[...] Both, FDI and social objectives are linked to build the success of the country. This period is significant for Malaysia, because the country has changed its economic policy and especially its management style to help the growth of the country. Which in particular allows Malaysia to have seen its GDP increase to $ billion to $ billion in 1975 (World Bank, 2010). Agricultural sectors mainly contribute to the GDP growth of the country, however manufacturing has become to be the key sector in the economy of Malaysia. [...]

[...] (1995) Why have East Asian countries led economic development?, Economic Record pp.88–104. International Monetary fund (2010) IMF Data Mapper, [online] Available at: http://www.imf.org/external/datamapper/index.php Krugman, P., (1994) the myth of Asia's miracle, foreign affairs, pp.62-78 Lall, S., (1996) Learning from the Asian Tigers: Studies in technology and industrial policy, London: Macmillan press Ltd Lall, S., Urata, S., (2003) Competitiveness, FDI and Technological activity in East Asia, Great Britain; MPG Books Ltd Leipziger, D. M., Vinod, T., (1994) Roots Asia's Success, Finance & Development p.6-10 Mahathir, B. [...]

[...] One other factor which can have lead to a success the East Asian countries is the industrial policy setting up by government. Parks (2000, p236) give a clear definition of industrial policy: “defined as all government intervention concerned with the manufacturing sector”. All East Asia countries which have tried to establish industrial policy have succeeded; except one which will be developed later given that it is Malaysia (Leipziger, Vinod, 1994). However it is important to notice the industrial policy set in place, principally by Northeast Asian countries, whereas Southeast Asian countries depended more on market forces. [...]

[...] If we make the link between the success of Malaysia and the success of East Asia we can notice that both have many factors of success in common. First of all, outward orientation with exports promotions or also foreign direct investment promotion. Secondly as other successful countries, Malaysia has established improvement in the education or infrastructure. However, every factor of success does not lead to the success, especially the case of an industrial policy which was a failure in Malaysia but a success in Japan. [...]