Malaysia's Integration to Global Economy

[pic 1]

International Integration

&

Economic Environment

(Final Report)

Module Lecturer : Dr. He Shuquan

Student : Cheong Tzong Perng

Table of Contents

1. Globalization
2. 4

1.1 The Globalization Controversy4

2.0 Malaysia’s Global Economy Integration4

2.1 Human Capital Investment towards Economic Globalization4

2.2 Financial Liberalization and Integration with the World6

2.3 Trade Integration – Openness and Expansion of Trade8

2.4 Industrial Development in Malaysia8

2.4.1 Early Industrialization - The Agriculture Phase8

2.4.2 Mid-Industrialization – Labor Intensive Phase9

2.4.3 Late Industrialization – Knowledge Based Economy10

3.0 Implications of Globalization on Malaysia 11

3.1 Economy Boost 11

3.2 Access to Foreign Culture12

3.3 Increased Opportunities for Education 12

3.4 Improved Health Status and Longevity12

4.0 Implications of Globalization on Malaysia13

4.1 Economy Crisis in 1997-98 13

4.2 Spread of Infectious Diseases13

4.3 Brain Drain through Migration 14

4.4 Environmental Degradation14

5.0 Better Steps towards Globalization14

5.1 Shift to Meritocracy Education Policy15

5.2 Revive Malaysia-US Free Trade Agreement15

5.0 Better Steps towards Globalization15

6.0 Conclusion15

7.0 List of References16

Figure

Figure 1 : Malaysia Educational Expenditure to Government Expenditure in % 5

Figure 2 : Malaysia Literacy Rate (Population 15+ years old) from 1980 to 2015 5

Figure 3 : Human Capital Index World Map6

Figure 4 : Economic freedom, overall index (0-100) 20197

Figure 5 : Foreign Direct Investment flows into Malaysia for the (1970−2015) period 8

Figure 6 : 2017 Malaysia Export by Country8

Figure 7 : Malaysia GDP Share of Agriculture9

Figure 8 : Rubber Price Index from 1900 to 20009

Figure 9 : World Competitiveness Ranking10

Figure 10 : Malaysia GDP (Nominal, $USD) and GDP Change % (1995 – 2015)11

Figure 11 : Malaysia’s Unemployment Rate (%) from 1986 – 201811

Figure 12 : Poverty Rate at National Poverty Line12

Figure 13 : Malaysia’s Life Expectancy at Birth, total years (1960 – 2017)13

Figure 14 : Malaysia GDP in $mil vs Environmental Performance Index Ranking14

1. Globalization

    With today’s technological capabilities, people, data, goods and services can be seamlessly and easily transferred around the world.  Globalization is a growing interdependence of the world’s economy, cultures and populations driven by cross border trade in goods and services, technology and flows of investment, people and information (Czaika & Haas, 2014).  Globalization can be measured as the share of foreign trade, foreign direct investment and financial transactions in the gross domestic products of region or country as share of the world (Schirm, 2007).

    The process of globalization has been delayed severely during World War II and Great Depression and later improved with the participation of General Agreement of Tariffs and Trade (GATT) and later developed into today’s World Trade Organization (WTO) (Hickman & Olney, 2011).  GATT has led to the move of dismantling import licensing, foreign exchange controls and decreased tariffs to make ease to goods transportation and services.  Furthermore, trade liberalization has an active role to spur the production movement and capital flow.  A typical example to defining feature of globalization – international industrialization and financial business structure.

    Technology has been other principal driver of globalization that has dramatically transformed economic life.  The advancement in telecommunication, microprocessors, internet and transportation provide valuable tools for identifying and pursuing economic opportunities, including faster and more informed analysis of global economic trends, easy transfer of assets and collaboration with distant partners (Schirm, 2007).

1.1 The Globalization Controversy

    On the flipside, globalization is perceived as a creation of an unregulated international free market that has benefited multinational corporations in the Western world at the expenses of local enterprise, local culture and common people (Held & McGrew, 2007).

    Critic argue that globalization is detrimental to environment as corporations move productions to countries where environmental regulations are not exist or are not properly enforced (Held & McGrew, 2007).

    Globalization embodies a process of relative de-terrorization as social, political and economic activities are increasingly stretched across the globe where it is no longer organized solely according to strictly territorial logic.  National governments are becoming increasingly less important in economic power due to interdependent global economy towards supranational organizations like Word Trade Organization and the United Nations (Veltmeyer, 2008).

    Resistance to globalization has therefore taken shape both at a popular and at a governmental level as people and governments try to manage the flow of capital, labor, goods, and ideas that constitute the current wave of globalization (Veltmeyer, 2008).  It is pivotal for all nations to understand and juggle the cost-benefits of globalization by opting right policy choices.

2.0 Malaysia’s Global Economy Integration

    Malaysia is a country in Southeast Asia where it is strategically located on a sea lane that exposes to global trade and foreign culture.  A natural resource rich, such as rubber, tin and palm oil, and multi-ethnic country that gained independence from United Kingdom in 1957.  Since independence, Malaysia aims to be a global economy key player with a series of transformational policies.