In the past 30 years, Malaysia has successfully curtailed high poverty rates and reduced income inequalities. Its goal is to attain high income status by 2020 while ensuring that growth is sustainable. Read More »
Malaysia is an upper-middle income economy with a gross national income of USD 8,770 per capita (2011). It is a highly open economy (exports comprise over 100 percent of GDP) and a leading exporter of electrical appliances, electronic parts and components, palm oil, and natural gas. Malaysia is also externally competitive, ranking 12th (out of 135 economies) in the World Bank 2013? - Doing Business survey. Malaysia's GDP growth was 5.1 percent in 2012 and projected at 5.0 percent in 2013.
Malaysia has progressed from being a producer of raw materials, such as tin and rubber, in the 1970s to being a diversified economy that grew on average 7.3 percent between 1985 and 1995. After the Asian financial crisis of 1997-1998, Malaysia has continued to post solid growth rates, averaging 5.5 percent per year from 2000 – 2008. Growth was accompanied by a dramatic reduction in poverty, from 12.3 percent in 1984 to 2.3 percent in 2009. However, pockets of poverty exist and income inequality remains high relative to the developed countries Malaysia aspires to emulate.
In 2010, Malaysia launched the New Economic Model (NEM), which aims for the country to reach high income status by 2020 while ensuring that growth is also sustainable and inclusive. The NEM envisions economic growth that is primarily driven by the private sector and which moves the Malaysian economy into higher value-added activities in both industry and services. To achieve these goals, Malaysia will need better skills, more competition, a leaner public sector, a better knowledge base, smarter cities, and greater efforts to ensure environmental sustainability.
The World Bank’s partnership with Malaysia is one of knowledge-sharing and is centered on supporting the government’s vision of bringing Malaysia among the ranks of high income economies through inclusive and sustainable growth. Malaysia has not borrowed from the Bank since 1999, and reimburses the Bank for the advisory services provided. In 2012, the government and the World Bank extended their Framework Agreement for advisory services through 2014. The World Bank and Malaysia have collaborated on a number of projects in the areas of human development and competitiveness since 2009, when the Framework Agreement was first signed.
The World Bank started publishing the Malaysia Economic Monitor (MEM) in 2009. This bi-annual publication reviews recent economic developments and provides an independent analysis of the near- and medium-term economic outlook. Each issue also features a specific theme of analytical interest – previous editions looked at growth through innovation, inclusive growth, brain drain, smart cities, modern jobs, and women’s economic participation. The launch of the MEM is accompanied by an outreach effort with participants from government agencies, the business and private sectors, think tanks, and the general public.
The Bank has provided advisory services in areas such as minimum wage policy, a Small and Medium Enterprises Master Plan, the Public Expenditure Review, and accounting and auditing standards. It is currently working with the government in conducting studies on protecting the elderly poor, HIV/AIDS prevention, and boosting growth in its services sectors.
The Bank has also co-organized seminars and workshops with government counterparts on innovation and growth, trade competitiveness, program budgeting, and social security.