Malaysia Economy

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To hit its target of becoming a high-income nation by 2020, Malaysia will need to reduce subsidy programmes, which are set to increase in cost by 27% in 2012, beyond forecast levels. However, the country has one of the highest income disparities in South-east Asia, and subsidies are critical in assisting vulnerable groups.

When the UK’s Duke and Duchess of Cambridge touched down in Kuala Lumpur in September 2012, the warm greeting they received from Malaysia’s public and politicians spoke volumes of the continuing strength of ties between the two nations. The royal couple’s visit also marked the high point of a year of British official visits to Malaysia, begun...

After dropping 83% between 2007 and 2009, foreign direct investment (FDI) into Malaysia staged an impressive comeback. By 2010 the 2007 mark was broken. The next year, FDI was up another 12.2%. What transpired has no single explanation. In part, the remarkable rebound was just a recognition that the pullback was an overreaction – to a great extent...

What has been the private sector’s response to the economic goals set out in the Economic Transformation Programme (ETP), and how is investment in the domestic economy being encouraged?

While the Association of South-east Asian Nations (ASEAN) remains the cornerstone of foreign policy, Malaysia has long been engaged in other bilateral and multilateral alliances, pacts, agreements and treaties. These now place it in a truly global web of security, economic and cultural connections.

It has been another year of good growth for Malaysia, even as the international economic climate has been uncertain. Strong domestic demand, government investment, greater diversification and regional resilience have all played their part.

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