Country Profile > Malaysia > General Information

1.1 Introduction

Malaysia was formed in 1963 through a federation of the former British colonies of Malya and Singapore, including the East Malaysian States of Sabah and Sarawak on the northern coast of Borneo. The country is divided into 13 States and 3 Federal Territories.

1.2 Geography

Malaysia is located in South East Asia with its primary peninsula bordering Thailand and Indonesia. On-third of the island Borneo which is bordered by Brunei while Indonesia occupies the remaining portion of the island of Borneo.

Figure 2

Malaysia's map

Source: Ministry of Foreign Affairs, Kingdom of Thailand

1.3 Socio-economic Profile

Demographics

Approximately 94.1% of the population according to the national Census in 2000, were Malaysian citizens of which 65.1% were Bumiputera, while Chinese and Indians comprised 26.0% and 7.7% respectively. Sarawak's predominate ethnic group comprised 30.1% Ibans while Chinese and Malays comprised 26.7% and 23.0% respectively. Sabah is predominately comprised of the ethnic group Kadazan Dusun (18.4%) followed by the Bajas and Malay groups of 17.3% and 15.3% respectively.

Religious affiliations as recorded in the 2000 census revealed that Islam was the most widely professed religion totaling 60.4% of the population while Buddhism comprised 19.2%, Christianity at 9.1%, Hinduism at 6.3% and forms of Chinese religions were 2.6%. Bahasa Melayu is the official language of the country, however English and Chinese dialects are used in business and administration. There are several indigenous languages spoken in Eastern Malaysia including Iban and Kadazan.

Population

According to the latest census held in 2000, the total population of Malaysia was 23.27 million people compared to 18.38 million in 1991 thus giving an average annual population growth rate of 2.6% over the 10 year period. The median age was 23.6 years old compared to 21.9 in the 1991 census. Over 33% of the population was below 15 years old, while only 3.9% of the population was over 65 years old. The urban population grew from 50.7% in 1991 to 62.0% as recorded in the 2000 census.

Current estimate of the population, according to the ESCAP Population Data Sheet was 25.493 million as of mid 2004. There were no readily available breakdowns on the population from the 2000 census available from the census and thus Table 1 comprises data compiled from the United States Bureau of Statistics and differs from the official reported census totals from the Department of Statistics.

Table 1

Population By Sex and Age 2000
Age Groups	Males	%	Females	%	Total	%
0 - 4	1,376,948	12.6	1,297,417	12.0	2,674,365	12.3
5 - 9	1,314,579	12.0	1,242,880	11.5	2,557,459	11.7
10 - 14	1,222,585	11.2	1,157,434	10.7	2,380,019	10.9
15 - 19	1,116,678	10.2	1,059,645	9.8	2,176,323	10.0
20 - 24	916,813	8.4	878,205	8.1	1,795,018	8.2
25 - 29	898,604	8.2	873,376	8.1	1,771,980	8.1
30 - 34	835,815	7.6	814,827	7.5	1,650,642	7.6
35 - 39	759,552	6.9	777,811	7.2	1,537,363	7.1
40 - 44	622,588	5.7	674,417	6.2	1,297,005	6.0
45 - 49	512,883	4.7	546,615	5.0	1,059,498	4.9
50 - 54	427,457	3.9	430,696	4.0	858,153	3.9
55 - 59	303,945	2.8	309,321	2.9	613,266	2.8
60 - 64	261,171	2.4	277,160	2.6	538,331	2.5
65 - 69	161,333	1.5	192,112	1.8	353,445	1.6
70 - 74	115,709	1.1	144,274	1.3	259,983	1.2
75 - 79	62,884	0.6	88,132	0.8	151,016	0.7
80 +	46,461	0.4	72,966	0.7	119,427	0.5
Total	10,956,005	100.0	10,837,288	100.0	21,793,293	100.0
Gender Mix		50.3%		49.7%

Source:: United States Bureau of Statistics
Does not include non-citizens of Malaysia

Labor Force

The total labor force aged 15 to 64 who are both employed as well as unemployed totaled 9.4 million in 2000, representing a 2.9% annual increase over the ten year period. The growth in the labor force is attributed to the increase in the working aged population as well as the rise in the participation in the labor force from 66% to 68% during the corresponding period.

According to the Department of Statistics the rising levels of education and expanding employment opportunities, an increased number of women actively participate in the economy. The female labor participation rate was 49% in 2000 while the rate for males was 86%. Table 2 highlights the labor force by sector for the 2000 period.

Table 2

Labor Force by Sector 2000(in 000's)
Sector	Total	%
Agriculture	1,799.9	20.0
Mining	42.3	0.5
Manufacturing	2,143.9	23.9
Construction	664.4	7.4
Services	4,335.8	48.2

Total	8,986.3	100.0

Labor Force	9,364.5
Unemployed:	378.2
Unemployment Rate:	4.0%

Source: Department of Statistics

Poverty Levels:

According to the Household Income Survey held in 1989, the incidence of poverty was reported at 7.2% of the population or 373,900 people. Urban poverty was reported at 3.1% or 80,100 people and rural poverty was reported at 11.2% or 193,600 people. The largest area to report poverty was in the area of Sebah reporting a 20% incidence of poverty.

Economic Indicators

In 2003, the economy extended it recovery that began in 2002, with GDP growing at 5.2%. Consumption was the main driver of the demand growth, contributing 3.5% to the overall GDP growth. Private consumption rose by 5.1% and public consumption increased by 7.9% as the Government increased its spending. Total investment declined by 0.9% due to a drop in inventories. Industrial output rose by 7.0%, while manufacturing increased by 8.2% as the global economic recovery accelerated in the second half of 2003 increased demand for electronic goods. Electronic goods exports comprise over 50% of the countries exports. Agriculture posed a 5.5% growth rate.

Table 3

Gross Domestic Product at Current Prices
Q4 2003 (in millions)
Category	In RM	In US$	%
Agriculture, Forestry and Fishing	10,230	2,692	9.9%
Mining and Quarrying	10,447	2,749	10.1%
Manufacturing	32,385	8,522	31.2%
Electricity, Gas and Water	3,088	813	3.0%
Construction	3,784	996	3.6%
Wholesale and Retail Trade	14,123	3,717	13.6%
Transport, Storage and Communication	6,831	1,798	6.6%
Finance, Insurance	11,706	3,081	11.3%
Other Services	6,745	1,775	6.5%
Government Services	7,803	2,053	7.5%
Less : Imputed bank service charges	5,197	1,368	5.0%
Plus : import duties	1,767	465	1.7%
Total	103,712	27,293	100.0%

Source: Bank Negara Malaysia
Foreign Exchange for the period was RM3.8 to US$1

Budget

The Government's goal of reducing its budget deficit in 2003 fell short due to a weak international demand in the first half of 2003 while the government adopted a policy of aggressive social stimulus package. The package included tax incentives for investment and consumption, direct lending programs and extra public spending. The 2003 budget deficit was 5.3% of GDP.

Table 4

Federal Government Financial Position Revenue and Expenses 2002 Actual and 2003 Budget (in millions)
	2002 Actual		2003 Budget
	in RM	%	in RM	in US$	%
Revenue
Tax Revenue	67,472	80.8	73,114	19,241	81.4
Non-tax Revenue	16,078	19.2	16,679	4,389	18.6
Total Revenue	83,550	100.0	89,793	23,630	100.0
Expenditures
Emoluments	18,232	18.2	19,727	5,191	18.8
Pensions and gratuities	4,486	4.5	4,408	1,160	4.2
Debt service charges	9,710	9.7	8,868	2,334	8.5
Grants and transfers to states	2,189	2.2	2,534	667	2.4
Supplies and services	11,854	11.8	14,253	3,751	13.6
Subsidies	4,646	4.6	3,936	1,036	3.8
Others	15,589	15.5	18,010	4,739	17.2
Total Operating Expenditure	66,706	66.5	71,737	18,878	68.5
Development Expenditures
Security	3,080	3.1	3,063	806	2.9
Education	9,275	9.2	9,795	2,578	9.4
Health	1,316	1.3	1,790	471	1.7
Housing	1,882	1.9	2,150	566	2.1
Others	2,063	2.1	2,392	629	2.3
Total Social Services	14,536	14.5	16,127	4,244	15.4
Agriculture and rural development	3,040	3.0	2,886	759	2.8
Public utilities	2,587	2.6	1,785	470	1.7
Trade and Industry	5,546	5.5	2,517	662	2.4
Transport	3,631	3.6	4,892	1,287	4.7
Communications	53	0.1	193	50.78947	0.2
Others	67	0.1	420	110.5263	0.4
Total Economic Services	14,924	14.9	12,693	3,340	12.1

General Administration	2,802	2.8	3,079	810	2.9
Less: loan recoveries	-1,700	-1.7	-2,000	-526	-1.9
Net Development Expenditure	33,642	33.5	32,963	8,674	31.5

Total Expenditures	100,348	100.0	104,700	27,553	100.0
Overall Budget Deficit	-16,798	-	-14,907	-3,923	-

Source: Bumiputra Commerce, Economic Research Services
Foreign Exchange: RM3.8 to US$1

Imports

Imports of manufactured products in the third quarter of 2003 increased by 4.2% to RM65.89 billion, compared with the second quarter of 2003. Increases were mainly due to higher imports of machinery, appliances and parts, manufactures of metal, iron and steel and transport equipment.

Table 5

Major Import Products January - September 2003 (in millions)
Products	In RM	IN US$	%
Electrical and electronic products	107,164.4	28,201.2	48.8
Machinery, appliances and parts	17,841.7	4,695.2	8.1
Chemicals and chemical products	16,545.2	4,354.0	7.5
Manufactures of metal	8,000.5	2,105.4	3.6
Iron and steel products	7,703.4	2,027.2	3.5
Transport equipment	6,912.4	1,819.1	3.1
Optical and scientific equipment	6,691.6	1,760.9	3.0
Processed food	3,951.2	1,039.8	1.8
Textiles and clothing	3,053.8	803.6	1.4
Paper and pulp products	2,539.5	668.3	1.2
Non-metallic mineral products	1,715.5	451.4	0.8
Rubber products	1,025.4	269.8	0.5
Petroleum products	959.5	252.5	0.4
Beverages and tobacco	588.5	154.9	0.3
Wood products	414.7	109.1	0.2
Other	5,338.5	1,404.9	2.4
Total Manufactured Products	190,445.8	50,117.3	86.7

Refined petroleum products	6,646.9	1,749.2	3.0
Crude petroleum	4,624.0	1,216.8	2.1
Crude fertilizers and crude minerals	471.8	124.2	0.2
Metalliferous ores and metal scrap	504.9	132.9	0.2
Liquefied natural gas	371.4	97.7	0.2
Tin	83.8	22.1	0.0
Other	495.3	130.3	0.2
Total Mining Goods	13,198.1	3,473.2	6.0

Cereal	1,460.8	384.4	0.7
Other vegetable oil	374.7	98.6	0.2
Saw logs and sawn timber	429.6	113.1	0.2
Palm oil	554.8	146.0	0.3
Other	5,710.3	1,502.7	2.6
Total Agricultural Goods	8,530.2	2,244.8	3.9
Other	7,426.8	1,954.4	3.4
Total Imports	219,600.9	57,789.7	100.0

Source: Department of Statistics
Foreign Exchange: RM3.8 to US$1

Exports

In the third quarter of 2003, exports of manufactured products increased by 1.6% to RM74.45 billion compared with RM73.24 billion in the second quarter of 2003. Higher export of manufactured products was mainly due to the increased exports of major products, namely, electrical and electronic products, wood products, textiles and clothing, processed food and rubber products.

Table 6

Major Export Products January - September 2003 (in millions)
Products	In RM	In US$	%
Electrical and electronic products	139,417.6	36,688.8	50.5
Chemicals and chemical products	14,892.7	3,919.1	5.4
Machinery, appliances and parts	9,164.8	2,411.8	3.3
Wood products	8,106.6	2,133.3	2.9
Optical and scientific equipment	6,739.8	1,773.6	2.4
Textiles and clothing	6,332.1	1,666.3	2.3
Manufactures of metal	5,240.5	1,379.1	1.9
Processed food	4,008.2	1,054.8	1.5
Rubber products	3,837.8	1,009.9	1.4
Iron and steel products	3,472.7	913.9	1.3
Transport equipment	2,374.3	624.8	0.9
Non-metallic mineral products	2,039.0	536.6	0.7
Paper and pulp products	1,093.0	287.6	0.4
Beverages and tobacco	1,060.9	279.2	0.4
Petroleum products	593.0	156.1	0.2
Other	7,922.9	2,085.0	2.9
Total Manufactured Products	216,295.9	56,920.0	78.3

Palm oil	17,239.6	4,536.7	6.2
Saw logs and sawn timber	3,768.8	991.8	1.4
Other vegetable oils	687.7	181.0	0.2
Cereals	9.5	2.5	0.0
Other	4,845.0	1,275.0	1.8
Total Agricultural Goods	26,550.6	6,987.0	9.6

Crude Petroleum	11,393.6	2,998.3	4.1
Liquefied natural gas	11,063.6	2,911.5	4.0
Refined petroleum products	6,134.4	1,614.3	2.2
Tin	194.6	51.2	0.1
Crude fertilizers and minerals	160.9	42.3	0.1
Metalliferous ores and metal scrap	141.7	37.3	0.1
Other	0.7	0.2	0.0
Mining Goods	29,089.5	7,655.1	10.5
Other	4,212.6	1,108.6	1.5

Total Exports	276,148.6	72,670.7	100.0

Source : Department of Statistics
Foreign Exchange rate RM3.8 to US$1

1.4 Government

The Government of Malaysia is headed by the Paramount Ruler and a bicameral Parliament consisting of a non-elected upper house and an elected lower house. Four States do not maintain monarchy rulers, however maintain Governors, which are appointed by the Government. The Paramount Ruler is Tuanku Syed Sirajuddin ibni Almarhum Tuanku Syed Putra Jamalullail, the Raja of Perlis since December 2001. The head of Government is the Prime Minister, which is Abdullah bin Ahmad Badawi since October 2003. The Cabinet is appointed by the Prime Minister from members of Parliament with consent of the Paramount Ruler.

A bi-cameral Parliament consists of a Senate of which 43 seats are appointed by the Paramount Ruler and 26 are appointed by the State legislatures. The House of Representatives hold 193 seats and members are elected by popular vote weighted toward the rural Malay population to serve five-year terms.

1.5 National Social Welfare System

Provident and Pension Funds are a group of financial schemes designed to provide members and their dependents with a measure of social security in the form of retirement, medical, death or disability benefits. The major funds in Malaysia comprise the Employees Provident Fund, the Social Security Organisation (SOCSO), the Armed Forces Fund and the Teachers Provident Funds. The funds serve as long term savings in the economy for rechanelling into both the public and private sectors to finance long-term investment. The PPFs are the second largest group of financial institutions in the country in terms of aggregate assets, next to banking institutions.

The Social Security Organisation (or PERKESO) was formed in 1971 with the objective of providing comprehensive social security protection for Malaysians and to ensure the timely and adequate provision of benefits in a socially just manner. SOCSO also monitors and promotes occupational health and safety within the work environment.

The principle of Social Insurance:

To provide speedy, quality and efficient services using the most cost-effective methods while utilising advanced technology and ensuring human resource development.
To review the benefit structure periodically as well as the benefit disbursement system.
As far as possible without increasing the contribution rate to secure and strengthen SOCSO's funds through prudent financial and investment management.
To promote and encourage work safety and health of workers and employers alike.

In Malaysia, employers and employees both contribute a monthly submission to SOCSO as their obligations to fulfill their coverage under this social security scheme and the employer makes this payment every month on behalf of the employee.

1.6 Education Profile

Education system:

Education is a priority concern the Malaysian Government, and annually, the biggest amount of the national budget is allocated for education purposes.

Primary and secondary school education is free for students between the ages of 7 to 17 (a total of 11 years of universal education). The admission age to the first year of primary school is usually seven and the graduating age for a first bachelor degree is about 22 years old. According to the Ministry of Education, over 97% of seven year old children are enrolled in the public school system.

The Malaysia education system conducts education from pre-school to higher education, as grouped below:

Pre-school education from age 5 (for 2 to 3 years)
Primary education from age 7 (for 5 to 7 years)
Lower secondary education from age 13 (for 3 years)
Upper secondary education from age 16 (for 2 years)
Post-secondary education or Sixth Form from age 18 (for 1 to 1.5 years)
Higher education
undergraduate studies from age 20 (for 3 to 5 years)
postgraduate studies (for 1 to 5 years)

Both public and private funded educational institutions exist in the national education system. Most primary and secondary school education for Malaysian children are provided by the Government public schools. The private sector plays a significant role in tertiary education but contributes minimum at primary and secondary levels.

The national curricular at primary and secondary levels prepare students for the common public examinations at the end of primary, lower secondary and upper secondary levels. Bahasa Malayu (the Malaysian official language) and English are compulsory subjects in the schools. However, to meet the needs of the multi-ethnic nature of the population, the ethnic schools (known as national-type schools) are allowed to establish and use Mandarin or Tamil as the medium of instruction.

The national public examinations at primary and secondary levels include:

The Ujian Penilaian Sekolah Rendah (UPSR), or the primary school assessment examination, at the end of sixth year of primary education
The Penilaian Menengah Rendah (PMR), or lower secondary assessment, at the end of the third year in the lower secondary level
The Sijil Pelajaran Malaysia (SPM), or Malaysian Certificate of Education, for students at the end of the second year of upper secondary level or their Form 5 studies (usually 17 years of age)

Students who perform well will graduate to post-secondary level, which begins with Form 6 for 2 more years, or they can qualify for the Matriculation courses run by Matriculation Department of Ministry of Education. Form 6 comprises two years of study in post-secondary schools, at the end of which the students take the Sijil Tinggi Pelajaran Malaysia (STPM), or Malaysian Certificate of Higher Education. The STPM or Matriculation certificates are necessary qualifications to enter Malaysian public universities for a first bachelor degree course.

For students who do not qualify for Form 6 or Matriculation, or choose not to take these routes, students can choose to enter private colleges or private universities for pre-university programs and thereafter advance into the bachelor degree program or other professional or semi-professional courses of their choice. Malaysia's private higher educational institutions have played a major role in providing education to students, and have an enrolment of more than 270,900 students, including 15,000 international students.

Enrolment Ratios:

According to United Nations Children's Fund (UNICEF), net primary school enrolment for the period of 1997 - 2000 was 98% for males and 99% for females. Gross secondary school enrolment was 67% for males and 74% for females during the same period.

Public Expenditure on Education

The 2003 budget included 9.4% of the total budget toward education which comprised 30% of the overall budgeted development expenditures. The amount of expenditures for education in the 2003 budget was RM9.8 billion (US$2.6 billion).

According to the 2004 budgetary speech, the Government will continue to give priority to the education sector with an allocation of RM20.2 billion (US$5.3 billion) or a quarter of the operating expenditures in 2004. Among the educational institutions, which are expected to commence operations are 44 primary, 43 secondary and 3 technical schools as well as 59 hostels.

Under the Development Expenditures budgeted in 2004, a sum of RM3.7 billion (US$980 million) is provided, including RM1.8 billion for primary and secondary schools, hostels and teachers' quarters. In line with the Government's objective to provide compulsory basic education for all children, a Trust Fund for Poor Students was launched on 23 July 2003. An amount of RM200 million is allocated to the Fund to assist poor students to continue with their education.

Literacy Rates

According to the 2000 Population and Housing Census, the literacy rate among Malaysian citizens aged 10 - 64 years increased from 88.6% in 1991 to 93.5% in 2000. According to the Department of Statistics, literacy rates at the state level increased in all states with the largest being in the state of Sabah, where literacy increased from 79.3% to 86.5%. Kuala Lumpur experienced the highest literacy rate of 94.1% in 1991 and 97.5% in 2000.

1.7 Health Profile

According to the World Health Organization (WHO), life expectancy of males as of 2000 was 69.6 years old, while females life expectancy was 74.7 years old. Infant mortality (per 1,000) was 10 for males and 8 for females. Based on information from the Department of Statistics, there were 12,300 registered doctors and 39,300 nurses in 2000.

According to the WHO, the first AIDS case in Malaysia was reported in December 1986 and the number of HIV infections reported to the Ministry of Health has continued to rise. Data on HIV/AIDS have been collected through various surveillance activities such as routine surveillance, HIV sentinel surveillance (HSS), and special or ad hoc studies.

A 2001 consensus workshop on HIV/AIDS estimated the HIV prevalence of 42,000 in 2000. Based on this estimate, the annual number of AIDS deaths is anticipated to be close to 2,400 in 2000 and is projected to increase to over 6,000 by 2005. It is anticipated that the vast majority of these deaths will be in young (25-39 year-old) males.

1.8 Information Communication Technology

According to the United States Central Intelligence Agency, as of 2000, there were a total of 4.6 million main telephone lines in use with over 5 million mobile phone subscriptions. There are were a reported 7 internet service providers in 2000 with an estimated 5.7 million internet users in 2002. The internet code for Malaysia is .my.

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