The world has seen the most important economic growth since the end of the Second World War in the region of East Asia. This incredible economic phenomenon had emerged more particularly in Japan during the 1950s. This trend has been followed later by what is known as the four dragons: Taiwan, South Korea, Singapore and Hong Kong. The Association of Southeast Asian Nations (ASEAN), which is composed of Thailand, Indonesia, Philippine and Malaysia also became part of its growth later. This success has impressed the world, because of the rapidity with which East Asian countries have increased their GDP, approximately 5% in each in the few last decades and also reduced their poverty and raised their standard of living. The East Asian growth has been studied in order to find if there is a method applicable to other countries. However, no common method has been found because it does not exist, but explanations of the East Asian success have been found and have divided economists. Malaysia is one of the newest countries which has been part of the Asian miracle, and is considered by Leipziger & Vinod as part of the second generation of Asian Tigers. What are the factors which has lead Malaysia to success and what difficulties did it have to face?
[...] K., (2008) FDI and economic growth relationship: empirical study on Malaysia, International research Business, pp Nylan, C., Smith, W., Smyth, R., Vicziany, M., (2001) Malaysia Business in the New era, Cheltenham, UK ; Northampton, MA : Edward Elgar Pangestu, M., (2001) the social impact of globalisation in Southeast Asia, OECD development centre, n°187 Park, D., (2000) the dichotomy between Northeast Asian capitalism and Southeast Asian capitalism, Journal of the Asia Pacific Economy, pp. 234–254 Rahman, T. A., (1965) First Malaysia plan 1966-1970, Kuala Lumpur Razak, T. [...]
[...] have led Malaysia to economic success. We will also examine the negative impact these success factors have had on Malaysia. Before starting, it is relevant to notice that East Asian success is not equal in every country and that North East Asia, more especially Japan, has not used the same strategy as South East Asian countries have (Park Krugman, 1994). East Asian success has led to many interrogations by economists. Consequently, two principal ways of thinking have been pointed out. [...]
[...] Malaysia has also been attentive to improving its education system. Education improvement was concentrated on four areas: First “consolidation of the education to promote equity”, secondly to orient and expanded training program to the manpower need, thirdly to “improvement of education toward new technologies” and the last area, improvement of education in the research” (Razak pp.231-232). Infrastructures as road, railway, telecommunication which were already of good quality have been improved to attract more FDI in the country. The government has also developed poor regions of the country to establish what they called land development. [...]
[...] Hit by the Asian financial crisis in 1998, Malaysia has been able to get out of it without the rescue package of International Monetary Fund (IMF) and did not collapse as predicted (Nyland et al., 2001). Following that, the Malaysian government set up new policy changes which affected the foreign investment climate, the country was considered as stable. Consequently Malaysia has continued its promotions of “reinvestment, industrial linkages, exports and training” (Giroud p.110). Since 1999, Malaysian has known an impressive recovery of its economy with a growth which has risen to (Nyland et al., 2001). [...]
[...] Since the independence of Malaysia in 1957, the government has continued to encourage exportation of tin and rubber which has been a very good thing, given that it gave the chance to Malaysia to possess of the highest standards of living in Asia” (Gomez, Jomo p.15). The period between 1966 and 1970, which represent the first Malaysia plan, has been the primary turning point for the growth of Malaysia. Malaysian government has started to create a fairly openly oriented market to support the program of industrialization based on Foreign Direct Investment (FDI) and export oriented, especially in sector like electronic products or textile manufactures (Rodan et al., 2001). [...]
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