chapter 6 - Malaysia Productivity Corporation ( MPC)

MALAYSIA AND INTERNATIONAL COMPETITIVENESS
Economic Performance
Economic Performance measures macro economic
evaluation of the domestic economy. Malaysia
was ranked at 7 th position in 2011. This favorable
performance was attributed by the favorable
achievement in its sub-factors namely, International
Trade (3 rd ), Prices (6 th ), International Investment
(13 th ) and Employment (19 th ). However Domestic
Economy sub-factor was ranked at 28 th position.
This was attributed to lower household and
Government consumption expenditure as well as
lower GDP per capita.
Malaysia experienced strong performance in
external trade, private investment and trade
account surplus in 2011. This was justified by a
total trade of RM1.3 trillion attributed by expansion
in both export and import by 8.7% valued at
RM694.5 billion and 8.5% valued at RM574.2 billion
respectively. Total trade of Malaysia was 1.8% above
the world trade average.
The increase in export was mainly contributed
by liquefied natural gas, palm oil, machinery,
appliances and parts, rubber products, petroleum,
chemical and chemical products, iron and steel
product as well as processed food where the major
markets were Australia, Japan, China, Indonesia and
South Korea which accounted for 71.3% of its total
export. China was the largest export destination
which recorded a growth of 13.9% amounting to
RM91.3 billion in 2011.
Malaysia’s foreign direct investments (FDI) of
RM32.9 billion in 2011 had also exceeded the
RM29.3 billion recorded in 2010. This reflected the
rising investors’ confidence to the economy. Japan
led the pack of foreign investors with investment
36
totaling RM10.1 billion, followed by South Korea
(RM5.2 billion), Singapore (RM2.5 billion) and Saudi
Arabia (RM2.2 billion).
Trade surplus rose 9.4% to RM120 billion and this
was the 14 th consecutive year of trade surplus
since 1998. Malaysia’s trade performance remained
strong despite the slow economic recovery in
the USA, debt crisis in Europe and other global
uncertainties as it managed to reduce fiscal deficit
to 5% of GDP in 2011 (2010 : 5.6%).
Countries such as, the Unites States, Qatar and
China were among the top three most competitive
nations in Economic Performance (Figure 3.3). Both
the United States and China had huge domestic
economy receiving FDI at USD345.6 billion and
USD49.3 billion respectively. The strong Economic
Performance achieved by Qatar was mainly due to
its exceptional wealth as an oil-based economy as
reflected by its GDP per capita at USD88,160 which
was among the world’s highest income per capita.
China, as the world’s largest exporter with a total
export amounting USD1,577.8 billion in 2010 was
the world’s second largest export contributor at
9.3% of total export share. As one of the fastest
growing countries, China registered high GDP
growth averaging more than 10% annually from
2001-2010. It also experienced strong domestic
economy with high domestic savings rate at 51.4%
and a surplus current account balance of 5.2% of
GDP with huge investment from abroad amounting
USD105.7 billion in 2010. Its productivity grew
more than 8.0% since 2002.
Hong Kong, a gateway to China continues to be the
largest venture capital centre in Asia. It is also the
third largest stock and foreign exchange market