Essay on MALAYSIAN ECONOMIC POLICY AND FDI

English_Master May 17, 2016 No Comments
MALAYSIAN ECONOMIC POLICY AND FDI Background And Country Attractiveness. Malaysia is the second fastest growing economy in the South East Asian region with an average Gross National Prod­uct (GNP) growth of eight-plus percent per year in the last seven years. Since independence in 1957, Malaysia has moved from an agriculturally based economy to a more diversified and export oriented one. The Malaysian market is fairly openly oriented, with tariffs only averaging approximately fifteen percent and almost non-existent non-tariff barriers and for­eign exchange controls. The open trade based economy is supported by the fact that the total two way trade almost amounts to 120 percent of the GNP (1994). Together with a stable political environment, increasing per capita income, and the potential for regional integration throughout the As­sociation of South East Asian Nations (ASEAN), Malaysia is an attractive prospect for FDI. Until 1993, foreign investment contributed 60% of all investment in Malaysia. FDI grew strongly in the late 1980s to reach a peak of RM17.7 billion in 1992. This was followed by a sharp drop to RM6 billion in 1993 due to the world rececession, but rose again to RM15.2 billion in 1994. Ma­laysia is among the top five recipients of foreign direct in­vestment in the world and while in...
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