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Country profile - Malaysia


Malaysia is, geographically at least, a divided nation: the western part of the country lies on the Malay Peninsula to the south of Thailand; the eastern part consists of two states, Sabah and Sarawak, which lie on the northern side of the island of Borneo. The landscape in both east and west is similar, characterised by high mountains and fast rivers flowing down to coastal plains. Nearly 60% of the country is still covered with natural rainforest, the only clear areas being along rivers, including some larger alluvial plains in the west of the peninsula, and where land has been developed for urban settlement or agriculture. Much of this agricultural land is devoted to cash crop plantations, particularly oil palm and rubber, with tree crops occupying 17% of Malaysia's land area. These are ideally suited to Malaysia's hot, wet, and humid climate.

Malaysia has one of the highest standards of living in South East Asia, largely earned by its expanding manufacturing sector. However income distribution is very uneven, particularly in rural areas, and poverty is widespread. Despite government efforts, wealth is distributed primarily along ethnic lines. While Malays are the biggest group, in economic terms they are dominated by ethnic Chinese, who lead economic activity in both urban and rural areas. Not surprisingly this gives rise to social tensions which dominate Malaysian politics and present the most significant threat to stability. In terms of agricultural employment, Chinese and Indians tend to manage estates, while most native Malays work as labourers on estate farms, cultivate small quantities of cash crops, such as pineapples, cocoa and tobacco, or practice subsistence farming. Rice is the dominant food crop, commonly grown in the hilly areas, with domestic production meeting roughly 80% of demand. Fish is the main source of protein.

Although the contribution of agriculture within the economy has been declining for some years, it continues to be a strong sector. This is of great credit to Malaysian farmers who have managed to overcome the problems of thin soils and frequent flooding. Palm oil has been one of the biggest success stories; Malaysia's plantations, which are found mostly on the Malay Peninsula, produce more than ten million tonnes of oil per year, over half of the world's supply. In the last thirty years palm oil has grown to be the second biggest vegetable oil behind soybean, and the increasing demand for vegetable oils, particularly in Asia, will soon put it in first place. The productivity of the Malaysian industry has been steadily improved at all levels, including the quality of planting material, cultural practices, processing methods and marketing strategies. Estates can now yield up to 5 tonnes of oil per hectare every year, which is more than double the yield of any other oil crop under intensive cultivation. Malaysia is also the world's leading supplier of natural rubber, 80% of which is produced by smallholders in both eastern and western parts of the country. However, prices and export volume for rubber have both fallen in recent years owing to huge stocks in the region and slower demand from consumers. Hence government support for the smallholder sector with grants for planting materials, fertilizers and pesticides. Smallholders have been able to use their grant to replant with more rewarding crops.

The fishing industry is also hugely important, employing, either directly or in processing plants, up to 100,000 people, providing roughly half the country's animal protein consumption, and bringing in foreign exchange, particularly to rural communities. Fishing of the inshore waters - up to 30 nautical miles from the coast - accounts for 80% of production and of human labour in the industry, with the bulk of the catch taken by trawlers, and the rest by tens of thousands of smaller operators. Fish stocks along the coasts have been severely depleted, such that the government has stopped issuing new licences for fishing craft and created a series of zones within the inshore waters to control the types of vessels and equipment used. Reducing the number of inshore fishers is a priority, and they are being encouraged to move to aquaculture, fish processing, or deep-sea fishing in offshore waters. Aquaculture on mudflats (for cockle farming), and fresh and brackish water, ponds (for carp, tilapia, and barramundi), currently provides about 10% of domestic fish consumption, but the sector is being aggressively promoted, and is expected to be a significant supplier of Malaysia's growing demand for fish in the future.

Durian trees in Penang, Malaysia
Durian trees in Penang, Malaysia

80% of Malaysia's population and the majority of its industry are concentrated in one third of its land area, the Malay peninsula. In eastern Malaysia the population is 75% rural, and indigenous tribes form a much larger part - 15% in Sabah, and 40% in Sarawak. Some still practice shifting, slash-and-burn cultivation in the forest areas, but state authorities are keen to reduce this, and to exploit the agricultural potential through large scale land development for commercial farming. This has involved consolidating fragmented farm holdings, particularly in 'Native Customary Lands', to form mini-estates. In this way, bodies like the Sarawak Land Development Board have developed 'under-utilised' land for oil palm, rubber, cocoa and tea. Smallholders in Sarawak also produce roughly 20,000 tonnes of pepper per year, most of which is exported.

Malaysia is the major world exporter of tropical wood, with more than 80% coming from Sarawak and Sabah. In 1999 it was estimated that out of the previous 305,000 sq km of tropical forests, only 157,000 sq km were left. To control the exploitation of Malaysia's forest resources, the government has designated 69% of the remaining forest area as Permanent Forest Estate. Within this there are strict rules governing how many trees can be cut per hectare, and the size of trees that may be felled. In addition, 12% of the forests are designated as Totally Protected Areas; these form the country's national parks and forest reserves and permit no felling or harvesting of forest products. The remaining areas are open to greater commercial exploitation. However, in order to maintain revenues while reducing the number of trees being cut, the government has encouraged greater downstream processing of logs, for example into sawn timber and furniture. Plantations have also been established to reduce the demands on natural forests, for example teak plantations in the north of the peninsula, and fast growing exotics in the peninsula and Sarawak.

Statistical information
  • Country: Malaysia
  • Capital: Kuala Lumpur
  • Area: 329,750 sq km
  • Population: 22,229,040 (July 2001 est.)
  • Population growth: 1.96% (2001 est.)
  • Language: Bahasa Melayu (official), English, Chinese dialects, Tamil, Telugu, Malayalam, Panjabi, Thai and several indigenous dialects including Iban and Kadazan
  • Ethnic groups: Malay and other indigenous 58%, Chinese 27%, Indian 8%, others 7% (2000)
  • Labour force: local trade and tourism 28%, manufacturing 27%, agriculture, forestry, and fisheries 16%, services 10%, government 10%, construction 9% (2000 est.)
  • GDP: $223.7 billion (2000 est.)
  • GDP per capita: $10,300 (2000 est.)
  • GDP composition by sector: agriculture 14%; industry 44%; services 42% (2000)
  • Urbanisation: 54%
  • Major industries: food and beverages, tobacco, chemicals, iron and steel, petroleum, mining, textiles, clothing, motor vehicles, consumer durables, tourism
  • Land use: arable land 3%; permanent crops 12%; permanent pastures 0%; forests and woodland 68%; other 17% (1993 est.)
  • Natural resources: tin, petroleum, timber, copper, iron ore, natural gas, bauxite
  • Agricultural products: palm oil, rubber, cocoa, rice, coconuts, fruit, pepper; tobacco, pineapple, fish
  • Export commodities: electronic equipment, petroleum and liquefied natural gas, chemicals, palm oil, wood and wood products, rubber, textiles, canned fruit, cocoa and cocoa products
  • Major Export Partners: US 21%, Singapore 18%, Japan 13%, Hong Kong 5%, Netherlands 4%, Taiwan 4%, Thailand 3% (2000 est.)

Date published: July 2002


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Sorry but the comment about rice being commonly grown in hil... (posted by: Prof R D Hill)


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