Malaysia, a sunny Southeast Asian country with idyllic sandy beaches, alluring islands and unspoiled tropical rainforests, is not only a business-friendly nation, but also one of the world’s preferred tourist destinations and a retirement heaven for foreigners who choose to make Malaysia their ”second home.” Business Insider ranked Malaysia seventh in the world as the best retirement destination in its Annual Global Retirement Index.
Malaysia has many ethnic groups with diverse cultural and religious beliefs. In 2019, its total population was estimated at 32.6 million, making it the 42nd most populated country in the world.
Over the years, the country has enjoyed strong economic growth, largely attributed to its industrial development, political stability, low inflation and effective monetary policy. The gross domestic product (GDP) in 2018 was US$358.58 billion, with growth driven by private consumption and government spending.
Malaysian politics underwent historic change in May 2018 when the opposition defeated the ruling party of 61 years (since independence in 1957) at the 14th geneelections. Tun Mahathir, 92, became the seventh prime minister, but resigned Feb. 24, 2020. While waiting for his successfor, Tan Sri Muhyiddin Yassin to be sworn in on March 1, the country was run by the interim PM, supported by the 1.6 million civil servants, headed by the Datuk Seri Mohd Zuki Ali, chief secretary to the government. This has proven that Malaysia has the administrative institutions and agile government machinery to support a system of good governance.
Agriculture and mining were the dominant sectors in Malaysia’s early history. But the country has risen from an agricultural-based economy to a trading nation due to its strategic location bridging the Strait of Malacca and the South China Sea. These sea channels of communication are vital to stability in the region and are a lifeline to several East Asian economies.
Rubber, palm oil and cacao are the backbone of Malaysia’s agricultural sector. These commodities account for 12 per cent of GDP and provide 16 per cent of employment in the country. Malaysia’s annual production of rubber is estimated at 996,673 metric tonnes, making it the third-largest producer and representing 8.8 per cent of global production. As a leading exporter of medical gloves, Malaysian latex is exported to 190 countries, with Germany, Japan and the United States being the top importers.
Malaysia takes centre stage in Asia and Oceania as the largest cacao processor, though it ranks fifth worldwide among producers. In 2016, Malaysia was the fifth-largest exporter of cacao, topping US$274 million. As for palm oil, the country has been responsible for the systematic replanting of the trees to circumvent deforestation and to further develop sustainability for a better environment and yield. Besides being vegetable oil, palm oil is used for bio-fuel, cosmetics, soap, pet food and detergents.
Malaysia’s transformation from commodity-based economy to one that is manufacturing- and services-oriented has contributed significantly to the economy. In 2018, trade expanded by 5.9 per cent to US$460 billion and recorded its largest surplus since 2012. On the World Bank’s Ease of Doing Business survey, Malaysia secured 12th place among 190 trading economies. This progressive figure was attributed to the supportive environment, significant link between business entities, practical business regulations and trade facilitation in doing business. Manufacturing has propelled export growth.
As a nation that advocates innovation, the country welcomes foreign investors and smart partnerships. Budget 2019 defined the country’s commitment to ensuring a conducive business environment for domestic and foreign investors. Malaysia has the ingredients for extending incentives and tax mechanisms through the establishment of the i-Incentives Portal by the Malaysian Investment Development Authority (MIDA). The portal serves as a one-stop centre that features relevant information on incentives that are available in the country.
Trade relations between Malaysia and Canada in various sectors could intensify. In 2018, Malaysia’s exports to Canada totalled $880 million, while Canada’s exports to Malaysia were worth $810 million. Malaysia sent mainly electrical and electronic products, rubber products, wood products, palm oil-based manufactured products and iron and steel products. Canada sent chemicals and chemical products, agricultural products, electrical and electronic products, machinery, equipment and parts as well as vegetable oil. To intensify bilateral trade, Malaysia has taken initiatives to diversify the production of global products to meet Canada’s demand as well as international standards and requirements.
Travel and tourism remain a highly important part of Malaysia’s economy and 2020 is “Visit Malaysia Year.“ However, following the outbreak of coronavirus, the Malaysian government cancelled the 2020 initiative in adherence with social distancing, containment and isolation, so as to mitigate the spread of the pandemic to other people.
Nor’Aini Abd Hamid is the high commissioner of Malaysia to Canada. Reach her by e-mail at mwottawa@kln.gov.my or by calling (613) 241-5182.
