Economy of Malaysia

Malaysia is a relatively open state-oriented and newly industrialised market economy. The state plays a significant but declining role in guiding economic activity through macroeconomic plans. Malaysia has had one of the best economic records in Asia, with GDP growing an average 6.5 per cent annually from 1957 to 2005. In 2010 the GDP (PPP) was $414,400 billion, the 3rd largest economy in ASEAN and 29th largest in the world.

In the 1970s, the predominantly mining and agricultural-based economy began a transition towards a more multi-sector economy. Since the 1980s the industrial sector has led Malaysia's growth. High levels of investment played a significant role in this. The economy recovered from the 1997 Asian Financial Crisis sooner than neighbouring countries, and has since recovered to the levels of the pre-crisis era with a GDP per capita of $14,800. Inequalities exist between different ethnic groups. The Chinese make up about one-third of the population but accounts for 70 per cent of the country's market capitalisation.

International trade, facilitated by the adjacent Strait of Malacca shipping route, and manufacturing are key sectors of the country's economy. Malaysia is an exporter of natural and agricultural resources, the most valuable exported resource being petroleum. At one time, it was the largest producer of tin, rubber and palm oil in the world. Manufacturing has a large influence in the country's economy, although Malaysia’s economic structure has been moving away from it. Malaysia remains one of the world's largest producers of palm oil.

In an effort to diversify the economy and make it less dependent on exported goods, the government has pushed to increase tourism to Malaysia. As a result, tourism has become Malaysia’s third largest source of income from foreign exchange, although it is threatened by the negative effects of the growing industrial economy, with large amounts of air and water pollution along with