Malaysia Gdp - Financial Crisis

Since the Asian financial crisis on 1997, Malaysia's annual GDP growth is just around 5% annually and could not come anything close to the era of ‘Tiger Economy', in which Gross National Product (GDP) grew 9% to 10% annually. These all may diminish our national Vision 2020 which was established by former Prime Minister, Tun Dr.Mahathir, in 1991 which required a balance growth of GPD by at least 7% annually. (EastAsiaForum, 2012)

The global financial crisis begun in the year 2007 July when US investors lost confidence by in the value of sub-prime mortgages caused a liquidity crisis. The US federal had injected large capital to the financial market but it failed. Stock markets around the globe became worse, crashed and became highly volatile. In the global crisis from 2007 to 2008, Malaysia seemed relatively unaffected. But the economy become worsened in the second half of 2008 and first quarter of 2009. The real GDP grew only 0.1% in the year end of 2008 and eventually it fell by 6.2% in the first quarter of 2009. This decline was caused by drastic contraction in export value of 27.9%. In 2009 January, the fall in export affected the economic growth terribly.

The diagram above show the exports of Malaysia. It clearly shows the drastic fall in exports during the end of 2008 and the beginning of 2009.

Country 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Malaysia

5 8.6 0.3 4.2 5.2 7.1 5.2 5.9 6.3 4.6 -1.7 7.2 5.1

The graph above shows the GDP of Malaysia from the year 1999 to year 2011. This graph clearly shows that the GDP was the worse in the year 2009.

There are many strategies and programmes taken by the Malaysian Government to revive the economies both on the monetary and fiscal side. Lets first look at the fiscal side of the actions taken. On March 2010, the current Prime Minister, Dato' Seri Najib Tun Razak, unveiled an economic plan which is the ‘New Economic Model' (NEM) which intent to double the per capita income of Malaysian by 2020. The main goal of NEM is to transform the Malaysian economy to become one with high incomes and quality growth by 2020. The NEM also enhance the private sector in order to reduce fiscal disparity between the wealthiest and poorest of Malaysians. This was done by giving out capital to new entrepreneur to start up their own business. (berhad, 2010)

The other programme introduced is called the Economic Transformation Programme (ETP). It is also one of the programmes that are taken up to turn Malaysia into a high-income nation by 2020. This programme intend to increase Malaysia gross national income to USD523 billion by 2020, and raise per capita income from USD6700