Business Potential for Agricultural Biotechnology - Asian Productivity ...

Business Potential for Agricultural Biotechnology Products
and the Genomic and Molecular Biology Institute is situated at existing facilities in the National
University Malaysia, in Bangi. Bionexus will link these institutes with industries throughout the
country. With this foundation, Malaysia hopes not only to witness the maturing of dedicated biotechnology
companies but also to establish industries that can spearhead economic growth in
biobusiness in general.
COUNTRY PROFILE
Malaysia covers an area of about 329,758 sq kilometers made up of peninsular Malaysia,
Sarawak, and Sabah. Its climate is tropical; the average daily temperature varies between 21°C
and 32°C, with high humidity. Malaysia is known for its biodiversity. It is famous for its tropical
rain forests, characteristically evergreen and species-rich. Its multiracial population of around
25.6 million is comprised of Malay and indigenous people (64%), Chinese (26%), Indians (8%),
and people of other ethnicities (2%).
After 1957, in the early days of independence from Britain, Malaysia was known as an
agricultural nation, exporting primary products such as tin, rubber, timber, and spices. As early
as the late 1960s, Malaysia started to diversify its agricultural base and venture into industrialization,
making the country one of the fastest-growing economies in the Asia–Pacific region.
Currently Malaysia’s main exports are electrical and electronics products, manufactured goods,
and crude petroleum and petroleum-based products. Agricultural produce such as palm oil and
palm oil-based products, rubber, timber, and other agricultural products remain important,
though their contribution and overall growth have declined.
THE AGRICULTURAL SECTOR IN MALAYSIA
The agricultural sector was historically the backbone of and primary contributor to the
economy, the source of food for the Malaysian people. Over the past five decades, however, it
has been overtaken in importance by the manufacturing and service sectors. The agricultural
sector’s contribution to the economy has declined from 18.7% (1990) to 13.5% (1995) and further
to 8.7% (2003); it remained at 8.5% in 2004. Its value, however, increased from MYR16.23
billion (1995) to MYR18.85 billion (2000) and MYR20.693 in 2004. The contributions of the
various sectors to GDP is shown in Table 1.
Table 1. Contributions to the Economy: Agriculture, Manufacturing, and Services, Malaysia
MYR (million) Average annual Share of GDP
Sectors
growth rate
1995 2000 2004 1996– 2001– 1995 2000 2004
2000 2004
Agriculture 16,230 18,542 21,137 2.6 2.5 13.5 10.5 8.5
Manufacturing 39,825 66,323 78,558 10.7 8.3 33.1 37.5 31.6
Services 53,303 81,117 142,849 8.8 8.9 44.3 45.8 57.4
Source: Malaysia’s Economic Report 2005/2006
The main challenges faced by agriculture are a shortage of land suitable for agriculture, low
productivity, high production costs, and a shortage of labor. These supply-side factors have
severely constrained food production. As a result, Malaysia currently imports more than MYR13
billion of food, compared to MYR7.5 billion in exports. Most of the food imported consists of
temperate fruits and grains (soy beans, corn, and milk-based products).
Following the Asian financial crisis of 1997–98, the government put more emphasis on
agricultural development. Malaysia aims to transform the agricultural sector into a dynamic,
modern, highly commercial sector with high returns. It is hoped that the agricultural sector will
contribute significantly to the economy through new agrobiotechnology-based agricultural prac-
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