Emerging Markets / November 2, 2017

Agriculture and Macroeconomics in Malaysia

Malaysia is a parliamentary constitutional monarchy located in South East Asia and a member of the ten-member Association of South East Asian Nations (ASEAN). Furthermore, Malaysia is a federation formally constituted in 1963 from former British colonies and protectorates. The country consists of the southern part of the Malay Peninsula, except Singapore, and northern parts of the island of Borneo (shared with Brunei and Indonesia). It is important to mention that, between 1963 and 1965, Singapore was part of Malaysia before becoming an independent city-state. Currently, Malaysia has a total territory of almost 330.00 square kilometers, which is somewhat larger than New Mexico. The country has a tropical climate as well as plains along 4.675 kilometers of coastline and inland mountains.

Agriculture and Macroeconomics in Malaysia

Today, Malaysia has a total population of approximately 32 million citizens, of which some 76% live in an urban setting, particularly the capital city of Kuala Lumpur with close to 7 million inhabitants. Furthermore, the country’s population is predominantly young, with a median age of 28 years. The annual gross domestic product (GDP) of the country is about US$850 billion (PPP) and it has experienced positive economic growth upwards of 4.0% in recent years. The national economy is divided into 9% agriculture, 37% manufacturing, and 54% services. Likewise, it is estimated that the agricultural industry employs 11% of the national labor force, while manufacturing employs 36% and services employ another 53%. Meanwhile, the agriculture industry utilizes 23% of the national territory, while another 62% is forested. In terms of natural resources, Malaysia has tin, petroleum, timber, copper, iron ore, natural gas, and bauxite. Within manufacturing, the national industry is focused on rubber and oil palm processing, pharmaceuticals, medical technology, electronics, semiconductors, timber processing, and logging. Simultaneously, the country’s agricultural industry has as main products palm oil, rubber, cocoa, rice, rubber, timber, and pepper. Moreover, the Malayan dwarf coconut palm tree is native to the Malayan peninsula region in and around Malaysia.

In terms of trade, during 2016, Malaysia imported US$156 billion worth of goods and exported US$184 billion, resulting in a positive trade balance of US$27 billion. Furthermore, Malaysia’s main export, representing 14% or almost US$26 billion of the country’s total in 2016, were integrated circuits. On the other hand, the country’s main import that same year, representing 12% or close to US$19 billion of all international purchases, were also integrated circuits. Similarly, Malaysia’s main trading partners are China, Singapore, Japan, the United States, and other fellow ASEAN members.

Unfortunately, in Malaysia, approximately 800.000 people suffer from undernourishment. Likewise, in recent years, the average per capita protein intake of animal origin amongst the national population has been of some 44 grams daily. Simultaneously, land distribution in Malaysia has evolved throughout the last half century. Back in 1961, permanent pastures and meadows in the country covered 220.000 hectares, while arable land covered 788.500 hectares and permanent crops accounted for over 2.1 million hectares. More recently, by 2014, permanent pastures and meadows represented 285.000 hectares, while arable land had increased to 954.000 hectares and permanent crops covered 6.6 million hectares.

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