Malaysia is commonly considered as one of the most successful non-western countries to have achieved a relatively smooth transition to modern economic growth over the years. Malaysia has been a key supplier of products like rubber, timber, liquefied natural gas, etc to the industrialized countries.
The Premodern Economy
Malaysia is known to be a source of tin, gold, exotics like edible birds’ nests, aromatic woods, tree resins, aromatic woods, etc. The importance of the country is boosted by its strategic location. Many European traders made way into the nation in the 16th century. The Portuguese came in 1511, while the Dutch East India Company was formed in 1602. The English East India Company (EIC) was formed in 1600. By the end of 18th century, the EIC was dominant in Malaysia, acquiring bases in Penang in 1786, Singapore in 1819, and Melaka in 1824. These served as footholds for the expansion of the British in the Malay Peninsula from 1870, and Sarawak from 1841 and North Borneo from 1882. Over this period there was an influx of Chinese migrants attracted by trade opportunities. The production in the premodern economic era was small and technologically immature. The capitalist sector was still in its early years.
Transition into Capitalist Production
World trade saw expansion in the 19th century. The impetus came from the Western Industrial Revolution that witnessed modernisation of production of manufactured goods coupled with more resourceful transportation like cars, railways, steamships, etc. The usage of telegraphs along with different means of transportation speeded up and lowered the expenditure of long distance trade. Industrialising nations required raw materials and foodstuffs in large supplies for the increasing population. Malaysia with proximity to the trade routes was well qualified to meet this demand.
Adequate supplies of capital and wage labour were missing. These shortfalls were supplied from foreign sources. Migrants from China began to arrive in huge numbers. Crops like pepper, tapioca, coffee, and sugar were produced for export to markets in Asia and then to the West after Britain came up with a policy of free trade. These crop productions were labour intensive.
Post-Independence Economy
Malaysia became independent in 1957 and was admitted to the United Nations.. In the 1960s there was an increase in the export of hardwood timber, mainly in the form of saw-logs. A big addition to the primary exports came from the discovery of large deposits of oil and natural gas in East Malaysia and off the east coast of the Peninsula in the 1970s.
The development was assisted by improving health and education sectors. The enrollments at the primary and secondary school levels increased. The Malaysian economy continued to boom for much of the 1990s.
The National Vision Policy (NVP) was launched in the new century. The NVP focuses on building a resilient and competitive nation. It uses key strategies of its previous policies, while summing up new policy dimensions. These dimensions include developing Malaysia into a knowledge-based society, generating endogenously-prodded growth.
