Emerging Markets – Opportunities & Threats: Malaysia
by Sterling J. Scott, Marketing Communications Coordinator, MHI | @mhi_sterling
Opportunities
Malaysia’s economy has grown 6% on average since the economic crisis of 2008 while GDP per capita has grown over 4% on average. This growth has been spurred by strong construction, service, and manufacturing sector performance. The country is a major producer of computer disk drives, rubber, and timber. Malaysia is also a member of ASEAN and a part of negotiations on the Trans-Pacific Partnership both of which strive to increase economic cooperation and trade.
The country benefits from a large and wealthy Chinese community. Most of Malaysia’s population is Muslim and many analysts believe that Malaysia has not taken advantage of the economic potential of trade partnerships or product marketing that can be developed in Middle Eastern markets.
Threats
Malaysia’s economy is highly dependent on foreign trade, which makes it vulnerable as it can be greatly affected by economic performance in its trading partners, especially that of the United States, a key trading partner and key destination for Malaysia exports. Also, though Malaysia has been politically stable over time, the large wealth gap between ethnicities and religious differences may pose a threat to economic development especially in light of political instability in nearby Thailand.
Conclusion
Businesses in Malaysia’s construction and manufacturing sectors should invest in supply chain equipment and systems to benefit from the growth opportunities and remain competitive. Firms should target these sectors to capitalize on Malaysia’s strong economic growth.
More information on supply chain trends, recommended strategy, and innovations that drive supply chains are available in the 2014 MHI Annual Industry Report which can be downloaded at www.mhi.org.
