Phases of the industrial development<\/p>\n
Strategically located at the crossroads of East and West trade
\nroutes, Malaysia has come a long way since its independence in
\n1957 to achieve the present status of an industrializing economy.<\/p>\n
Malaysia's success in diversifying its economy from commodity-
\nbased producer\/exporter to a broad based economy today has been
\nthe result of a combination of factors, which has provided and
\ncontinues to provide a conducive environment for investors.<\/p>\n
A major exporter of primary commodities such as rubber, tin,
\npaper and tropical timber in the 1960s, Malaysia had to diversify
\nher economic base due to constant fluctuation in the prices of
\nprimary commodity exports and growing unemployment rate, the
\ngovernment then decided to embark on an export-orientated
\nindustrialization program.<\/p>\n
The 1970s witnessed the influx of investment primarily in
\nelectronics and textiles, utilizing Malaysia's labor force, free
\ntrade zones and a host of other amenities provided by the
\ngovernment. The success of the export-orientation decade was
\nexemplified by the contribution of the manufacturing sector to
\nthe gross domestic product which increased from 13.9 percent in
\n1970 to 22.1 percent in 1980. During this period, the share of
\nmanufactured exports to total exports also increased from 11.9
\npercent to 21.7 percent. By 1980, Malaysia had become among the
\nworld's largest exporters of electronic items, semiconductors and
\nair conditioners.<\/p>\n
The decade from the early 1980s witnessed the development of
\nthe resource-based industries and the development of engineering
\nand support industries, and heavy industries. This period was
\nmarked with the growth of industries utilizing Malaysia's natural
\nresources such as rubber, palm oil and timber.<\/p>\n
In the mid-1980s, Malaysia made its entry into the heavy
\nindustries sector with the establishment of the National Car
\nProject, PROTON. It was also during this period that a number of
\nmajor steel and cement plants were established throughout the
\ncountry.<\/p>\n
Malaysia's industrialization process had progressed at a rapid
\npace, particularly in the mid 1980s. This was due to the
\ngovernment's efforts in promoting the manufacturing sector, first
\nthrough a policy of import substitution, then development of
\nexport-oriented and labor-intensive industries and more recently,
\nthrough capital and technology-intensive industries. Today, the
\nmanufacturing sector has become the main engine of growth of the
\neconomy.<\/p>\n
The 1970s and 1980s resulted in an acute manpower shortage at
\nthe beginning of the 1990's. Malaysia once again had to refocus
\nher industrial strategy to deepen, broaden and modernize the
\nmanufacturing sector through the growth of technology-based,
\ncapital and skill-intensive, high value-added industries.<\/p>\n
Emphasis was shifted from input-driven growth to productivity-
\ndriven growth, which is to be derived from the optimum
\nutilization of physical and human resources, and higher levels of
\ntechnology.<\/p>\n
Malaysia has from the early years recognized the importance of
\nforeign direct investment (FDI) and its potential contribution to
\nher economic growth and development. Over the last three decades,
\nmuch of Malaysia's manufacturing output and export dynamism were
\nattributed to multinational corporations (MNCs) and their
\nsubsidiaries and affiliates.<\/p>\n
Malaysia's recipe for success was not only in attracting these
\nMNCs to invest in the early years, but also in providing the
\nnecessary environment and facilities for them to expand and
\ndiversify their operations as they increased their presence in
\nthe country.<\/p>\n
Approved investments in the manufacturing sector have grown
\nconsiderably over the years. For the period 1980 - 2000, 14,813
\nprojects were approved involving capital investments totaling RM
\n335.6 billion. Of these approvals 52.5 percent were from foreign
\nsources and 47.5 percent were from domestic sources. These
\napprovals have generated nearly 2.0 million jobs.<\/p>\n
The major sources of FDI during these period were the United
\nStates of America, Japan, Taiwan, Singapore and United Kingdom.
\nThe significant inflow of FDI into the manufacturing sector over
\nthe last three decades had contributed to the overall economic
\ndevelopment of the country. FDI has not only created employment
\nand foreign exchange earnings\/savings, but also provided capital,
\ntechnology, marketing access and managerial inputs, which were
\nvital for the industrialization of the country.<\/p>\n
Malaysia has been able to diversify its economy due to its
\nability to develop its competitive advantage by creating a
\nconducive investment environment. This includes, among others,
\nfactors such as political stability, excellent infrastructure, an
\nefficient government machinery, a package of incentives, policies
\nthat have evolved over a period of time to meet investor needs
\nand aspirations of the nation.<\/p>\n
Malaysia is currently a nation on the road toward realizing
\nits goal of a developed society under the Vision 2020. The Third
\nOutline Perspective Plan (OPP3), a 10-year plan covering the
\nperiod 2001-2010, marks the second phase toward the realization
\nof the nation's goals of Vision 2020. The policy dimensions of
\nOPP3 include:<\/p>\n
* Developing Malaysia into a knowledge-based society;<\/p>\n
* generating infernally driven growth through strengthening
\ndomestic investment;<\/p>\n
* developing indigenous capability, while continuing to
\nattract FDI in strategic areas;<\/p>\n
*greater infusion of knowledge into agriculture, manufacturing
\nand services sectors; and reorientating human resource
\ndevelopment to support a knowledge-based economy.<\/p>\n
The crux of OPP3 is to achieve sustainable growth, which among
\nothers, include promotion of FDI in high-tech sectors. Foreign
\ninvestors will also be encouraged to undertake technology
\ntransfer as well as provide expertise in management to raise
\nnational competitiveness and strengthen the country's position in
\nthe international value chain.<\/p>\n
Malaysia also launched the Eight Malaysian Plan (8MP), which
\nis a five-year development plan covering the 2001 - 2005 period.
\nAmong others, the plan emphasizes the need for Malaysia to
\nposition its industries to take advantage of globalization and
\nsustain momentum of growth by strengthening the manufacturing and
\nmanufacturing related services sectors.<\/p>\n
Malaysia is optimistic that the provisions under OPP3 and 8MP
\nwill enable it to achieve its industrial objectives.<\/p>\n
The Malaysian government will continue to pursue liberal and
\npragmatic policies to further develop the manufacturing and
\nrelated services. The industrialization drive will continue to be
\nled by the private sector. Malaysia's past track record and its
\nability to weather economic storms is a positive indicator of the
\nnation's ability to fulfill its industrial target and contribute
\nto the vision of a developed economy by the year 2020.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/phases-of-the-industrial-development-1447893297",
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"sponsor": "Okusi Associates",
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