The Changing Phases Of Malaysian Economy

Abstract Purpose: This book investigates the changing phases of the Malaysian economy since independence in 1957. Agriculture was the main source of growth in the early phase of development. In the 1960s and 1970s, import-substitution and export-oriented industrialisation propelled economic growth. In the 1980s, investment and the growing service sector was the engine of growth. In the 1990s and the next millennium, the economy has been sustained through productivity gains and industrial repositioning. Method: Various time series and cross section data were used to analyse the various cyclical downturns, as well as the speculative aspect of the economy. Analysing of macroeconomic policies in East Malaysian development particularly the approach to inflation, employment, banking and small and medium businesses was carried out. Result: The arduous tasks and achievements of four decades were almost brought to a virtual standstill in mid-1997 due to the Asian financial Crisis. However, the Malaysian economy benefited much from the government's policy of the selective capital controls, despite oppositions. Besides breaking the vicious downward spiral that the exchange rate instability had set in motion, capital control and monetary measures were also used to minimise the negative impact of large short-term capital flows into and out of Malaysia