Malaysia

The government of Malaysia recently agreed to allow an Australian company to build a new rare earths processing plant in the country – the first such plant to be constructed outside of China in decades.

With work set to begin on Kuala Lumpur’s Mass Rapid Transit (MRT) network this summer, its supporters hope that the 150-km rail system will ease transportation congestion in the capital and boost economic growth. However, some sceptics are doubtful that the project can deliver on all of its promises and think the money would be better spent on improving the existing system.

As it negotiates a new phase in exploration and production, Malaysia’s hydrocarbons industry received heartening news recently. Indeed, a large discovery mid-February off the shores of eastern Sarawak should help to temporarily halt the nation’s slow declining oil and gas output, dovetailing nicely with moves to boost exploration and production from marginal and deep-water prospects.

Malaysia’s central bank is considering raising the statutory reserve requirement (SRR) to slow the influx of hot money into the economy, but some in the sector fear that the move could impact loan activity and result in economic slowdown.

Record-breaking sales in 2010 have seen Malaysia’s automotive industry racing along in recent times. Moderation in demand and government policies, however, may see growth shift down a gear in 2011.

In a year when Asia was home to the fastest-growing economies in the world, Malaysia made financial sector watchers stand up and take notice on several occasions.