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During the late 18th and 19th centuries, Great Britain established colonies and protectorates in the area of current Malaysia; these were occupied by Japan from 1942 to 1945. In 1948, the British-ruled territories on the Malay Peninsula except Singapore formed the Federation of Malaya, which became independent in 1957. Malaysia was formed in 1963 when the former British colonies of Singapore, as well as Sabah and Sarawak on the northern coast of Borneo, joined the Federation. The first several years of the country's independence were marred by a communist insurgency, Indonesian confrontation with Malaysia, Philippine claims to Sabah, and Singapore's withdrawal in 1965. During the 22-year term of Prime Minister MAHATHIR bin Mohamad (1981-2003), Malaysia was successful in diversifying its economy from dependence on exports of raw materials to the development of manufacturing, services, and tourism. Prime Minister Mohamed NAJIB bin Abdul Razak (in office since April 2009) has continued these pro-business policies.

Location

Southeastern Asia, peninsula bordering Thailand and northern one-third of the island of Borneo, bordering Indonesia, Brunei, and the South China Sea, south of Vietnam

Natural Resources

tin, petroleum, timber, copper, iron ore, natural gas, bauxite

Population - distribution

a highly uneven distribution with over 80% of the population residing on the Malay Peninsula

28274729
Bahasa Malaysia (official), English, Chinese (Cantonese, Mandarin, Hokkien, Hakka, Hainan, Foochow), Tamil, Telugu, Malayalam, Panjabi, Thai
KUALA LUMPUR (capital) 6.837 million; Johor Bahru 912,000 (2015)
Conventional long form
none
Conventional short form
Malaysia
Local long form
none
Local short form
Malaysia
federal parliamentary constitutional monarchy
Name
Kuala Lumpur
Geographic coordinates
3 10 N, 101 42 E
Time difference
UTC+8 (13 hours ahead of Washington, DC, during Standard Time)
has not submitted an ICJ jurisdiction declaration; non-party state to the ICCt
Malaysia, an upper middle-income country, has transformed itself since the 1970s from a producer of raw materials into a multi-sector economy. Under current Prime Minister NAJIB, Malaysia is attempting to achieve high-income status by 2020 and to move further up the value-added production chain by attracting investments in high technology, knowledge-based industries and services. NAJIB's Economic Transformation Program is a series of projects and policy measures intended to accelerate the country's economic growth. The government has also taken steps to liberalize some services sub-sectors. Malaysia is vulnerable to a fall in world commodity prices or a general slowdown in global economic activity.
Inflation
2.128%
External debt stocks
US$ 190,951,400,000
Total tax rate (% of commercial profits)
40.0%
Real Interest Rate
2.571%
Manufacturing, value added (% of GDP)
20.108%
Current Account Balance
US$ 8,959,609,711
Labor Force, Total
14,891,692
Employment in Agriculture
12.47%
Employment in Industry
27.52%
Employment in Services
60%
Unemployment Rate
3.30%
Imports of goods and services
US$ 180,314,717,054
Exports of goods and services
US$ 199,271,437,151
Total Merchandise Trade
120.73%
FDI, net inflows
US$ 10,962,721,673
Commercial Service Exports
US$ 34,581,691,588
Peninsular Malaysia - palm oil, rubber, cocoa, rice; Sabah - palm oil, subsistence crops; rubber, timber; Sarawak - palm oil, rubber, timber; pepper
Peninsular Malaysia - rubber and oil palm processing and manufacturing, petroleum and natural gas, light manufacturing, pharmaceuticals, medical technology, electronics and semiconductors, timber processing; Sabah - logging, petroleum and natural gas production; Sarawak - agriculture processing, petroleum and natural gas production, logging
Commodities
semiconductors and electronic equipment, palm oil, petroleum and liquefied natural gas, wood and wood products, palm oil, rubber, textiles, chemicals, solar panels
Partners
Singapore 13.9%, China 13%, Japan 9.5%, US 9.4%, Thailand 5.7%, Hong Kong 4.7%, India 4.1% (2015)
Commodities
electronics, machinery, petroleum products, plastics, vehicles, iron and steel products, chemicals
Partners
China 18.8%, Singapore 12%, US 8.1%, Japan 7.8%, Thailand 6.1%, South Korea 4.5%, Indonesia 4.5% (2015)
Country Risk Rating
A4
A somewhat shaky political and economic outlook and a relatively volatile business environment can affect corporate payment behavior. Corporate default probability is still acceptable on average.
Business Climate Rating
A3
The business environment is relatively good. Although not always available, corporate financial information is usually reliable. Debt collection and the institutional framework may have some shortcomings. Intercompany transactions may run into occasional difficulties in the otherwise secure environments rated A3.
  • Diversified exports
  • Dynamic services sector
  • Good infrastructures, high level of R&D
  • Support for investment through expansion of the local financial market and increased access to FDI
  • Economy reliant on external demand
  • Budget revenues highly dependent on performance of oil and gas sector
  • Very high indebtedness of private sector
  • Deterioration of competitiveness due to rising labor costs
  • Continuing regional disparities

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