Overview

  • Last updated: September 2017

    From an economy dominated by the production of raw natural resource materials, such as tin and rubber, even as recently as the 1970s, Malaysia today has a diversified economy and has become a leading exporter of electrical appliances, electronic parts and components and natural gas. After the Asian financial crisis of 1997-1998, Malaysia continued to post solid growth rates, averaging 5.5 percent per year from 2000-2008. Malaysia was hit by the Global Financial Crisis in 2009 but recovered rapidly, posting growth rates averaging 5.7 percent since 2010.

    Less than 1 percent of Malaysian households live in extreme poverty, and the government’s focus has shifted toward addressing the well-being of the poorest 40 percent of the population (“the bottom 40”). This low-income group remains particularly vulnerable to economic shocks as well as increases in the cost of living and mounting financial obligations. Income inequality in Malaysia remains high relative to other East Asian countries, but is gradually declining. For example, from 2009 to 2014 the real average household incomes of the bottom 40 grew at 11.9 percent per year, compared to 7.9 percent for the total population of Malaysia, thus narrowing income disparities. Following the removal of broad-based subsidies, the government has gradually moved toward more targeted measures to support the poor and vulnerable, mainly in the form of cash transfers to low-income households.

    Malaysia’s near-term economic outlook remains favorable, reflecting a well-diversified and open economy that has successfully weathered the impact of external shocks. Domestic demand is expected to continue to anchor economic growth, supported by continued income growth and a stable labor market, while an improving external environment would contribute positively to demand for Malaysia’s tradable goods and services. Accelerating structural reforms to enhance public sector performance and boost the productivity of public spending will be vital to sustain robust growth in a challenging external environment.

    While significant, Malaysia’s productivity growth over the past 25 years has been below those in several global and regional comparators. As factor accumulation is expected to slow, accelerating productivity growth is the main path for Malaysia to achieve convergence with high-income economies. Accelerated implementation of productivity-enhancing reforms to increase the quality of human capital and create more competition in the economy will be key for Malaysia to secure a lasting place among the ranks of high-income economies. 

  • Last updated: September 2017

    The World Bank Group’s current partnership with Malaysia is focused on knowledge-sharing. It is centered on support for Malaysia’s vision to join the ranks of high income economies by 2020 through inclusive and sustainable growth, and to share its lessons with developing countries.

    In March 2016, the World Bank Group officially launched its Global Knowledge and Research Hub in Malaysia. The new Hub is the first of its kind, serving both as a field presence in Malaysia and as a global knowledge and research hub. It focuses on sharing Malaysia’s people-centered development expertise and creating new innovative policy research on local, regional and global issues.

    This work is guided by three pillars:

    Pillar 1: Sharing the Malaysia Experience with the World. The ‘Malaysia Experience’ is relevant for developing countries in Asia and across regions that are transitioning out of poverty.

    Pillar 2: Supporting Malaysia’s Goal of Becoming a High-Income Economy. The World Bank Group’s international experience will provide Malaysia with a wide array of development solutions and expertise, customized to specific challenges.

    Pillar 3: Learning Together for Global Solutions.  The new hub carries out cutting-edge development policy research in partnership with local and international research institutions.

    Find out more about the World Bank Group Global Knowledge and Research Hub in Malaysia here.

  • Last updated: September 2017

    The World Bank publishes the semi-annual Malaysia Economic Monitor (MEM), which reviews recent economic developments and provides an independent analysis of the near- and medium-term economic outlook. It also provides in-depth analysis of a topic relevant to Malaysia's long-term development. Through the World Bank’s Development Economics Research Group (DECRG), the office conducts original studies spanning economic growth and risk management to program evaluation and the implementation of key public services. Through the Global Indicators Group (DECIG), the office will carry out primary data collection and research for the Doing Business, Enterprise Surveys and Enabling the Business of Agriculture teams.

    The Hub is forging strategic collaborations with academia, civil societies and private-sector bodies in aims of progressing further in research, capacity-building and knowledge-sharing amongst South-South countries.

    Highlights of the past year include:

    Curation and research on the Malaysia Development Experience has resulted in the publication of several reports:

    Carrying out original development policy research, primary data collection, analysis and dissemination activities

    Knowledge-sharing

    The Hub has published two issues of the Development Digest, a semi-annual publication showcasing the work arising from the Hub to share the Malaysia Development Experience and the research outputs from the Global Research team. This digest is widely disseminated to development practitioners and policy-makers in Malaysia and beyond.

    Collaboration with Malaysian institutions

    The Hub has collaborated with a number of Malaysian institutions such as Bank Negara Malaysia, Economic Planning Unit, Securities Commission Malaysia, Universiti Kebangsaan Malaysia, Malaysian Economic Association, International Centre for Education in Islamic Finance, Khazanah Research Institute, Asia School of Business, and Asia Financial Inclusion.

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Additional Resources

Country Office Contacts

Kuala Lumpur
Level 3, Sasana Kijang, No. 2, Jalan Dato’ Onn, Kuala Lumpur, Malaysia 50480
Tel: +603 2263-4900
egomez2@worldbank.org
Washington
1818 H Street NW, Washington, DC 20433
Tel: +1 202-473-4709
eastasiapacific@worldbank.org