Malaysia Exports

In economics, an export is any good or commodity, transported from one country to another country in a legitimate fashion, typically for use in trade. Export goods or services are provided to foreign consumers by domestic producers. Export is an important part of international trade. Export of commercial quantities of goods normally requires involvement of the customs authorities in both the country of export and the country of import.

During the early stages of economic development, Malaysia’s economic structure was heavily dependent on commodities exports, but it has diversified since then over a period of time. In 1958, Malaysia’s main export items were rubber, contributing almost 60 percent to the total export value, and tin, contributing about 12 percent. After independence, the Malaysian government made a strong effort to diversify not only the agricultural sector but it branched out and made great inroads into manufacturing.

 

Rubber’s dominance at Independence has at present been reduced to about one percent of Malaysia’s total export value. The main agricultural export item now is palm oil, which contributes about five percent to its export value. Furthermore, Malaysia has reduced its dependence on agricultural exports to obtain foreign earnings. Manufacturing products seem to have overtaken agricultural products as the main foreign exchange earner. For example, Malaysia has become one of the largest producers of semiconductor devices in the world. 

 

The changeover initially was driven by a policy of import substitution, wherein imports of consumer goods were reduced and natural resource processing was increased. Subsequently, in the early 1970s, policy shifted to a growth-with-equity export orientation, which was unique to Malaysia’s own socioeconomic and political circumstances. Trade policies were promoted with fiscal incentives, export-processing and free-trade zones were created to attract foreign investment in particular.

 

Foreign Direct Investment (FDI) has played a vital role in Malaysia’s changeover as an export driven economy. Some of the earliest FDI investment was in the Electrical and Electronics industries. Major International Brands like Matsushita, Sanyo, Toshiba and Philips set base in Malaysia. There business activities in turn is driving exports.