Nevertheless, the country was still influenced in terms of consumer demands. In this order of ideas, the Malaysian economy remains highly dependent on exports. And in a context in which the global purchasing power and demand have decreased as result of the crisis, the levels of exports -- and the adjacent earnings -- have also decreased. In order to remedy the situation, the Malaysian government is striving to reduce the country's dependence on exports (Central Intelligence Agency, 2010).
The efforts seem to have generated positive results and the first half of 2010 has retrieved sustainable growths in the country's gross domestic product. The main explanation forwarded by the federal authority in Malaysia is that the country is not threatened by the crisis as it is not involved in risky borrowings. Nevertheless, the government would continue to assess the global arena and develop the country specific strategies and actions which best respond to the emergent challenges.
In order to increase Malaysia's economic strength and stability, the government is currently developing the infrastructure. It has even implemented an economic stimulus package of 67 million ringgit and, through it, the country's international competitiveness is enhanced. Additionally, efforts are being made in terms of industrial diversity and attractiveness to foreign investors (The Malaysian Insider, 2010).
5. Conclusions
Economic crisis are natural processes and stages of the economic cycle, which cannot be overcome, but their threat and intensity can be reduced. Malaysia has learnt this lesson and has developed and implemented a series of protectionist policies by which it better controlled the capitals in its economy. The protectionist measures had a twofold benefit. On the one hand, they helped Malaysia overcome the Asian financial crisis of 1997-1998. In the immediate aftermath of the crisis, the country proved able to revive its economic growth and registered positive growth rates of the gross domestic product.
Secondly, by maintaining its protectionist policies, it avoided the threat of the current economic crisis which now affects the entire global community. The simplest explanation in this sense is constituted by the fact that the Malaysian government limited speculative financing and risky borrowing, limiting as such the country's exposure to financial crisis. Nevertheless, the country is still facing the threats of the global crisis due to a limitation of the demand for the country's exports. In this order of ideas, the federal institution is now increasing its efforts to diversify the industry and reduce the dependency on exports. Finally, the means in which the government dealt with the crisis of 1997-1998 raises one additional point...
Given this standpoint, it is necessary for the country to open its boundaries to foreign investments. All the elements discussed are interesting points in the Malaysian economy, which continues to constitute an intriguing topic of research. The academic community is likely to follow the future evolution of the country.
References:
Agenor, P.R., 1999, The Asian financial crisis: causes, contagion and consequences, Cambridge University Press, ISBN 0521770807
Anwar, S., Gupta, D., 2004, Malaysian financial system and the Asian financial crisis, Global Business and Economics Review, Vol. 6, No. 2
Bloom, D., Sachs, J.D., Brainard, W.C., 1998, Brookings papers on economic activity, Brookings Institute Press, ISBN 0815711956
Charette, D.E., Malaysia in the global economy, DAI, http://www.dai.com/pdf/Malaysia_in_the_Global_Economy.pdf last accessed on October 18, 2010
Coe, D.T., Coe, S.J., 2002, Korean crisis and recovery, International Monetary Fund, ISBN 1589060687
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2010, Asian financial crisis, Investopedia, http://www.investopedia.com/terms/a/asian-financial-crisis.asp last accessed on October 18, 2010
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How the IMF helped…
References:
Agenor, P.R., 1999, The Asian financial crisis: causes, contagion and consequences, Cambridge University Press, ISBN 0521770807
Anwar, S., Gupta, D., 2004, Malaysian financial system and the Asian financial crisis, Global Business and Economics Review, Vol. 6, No. 2
Bloom, D., Sachs, J.D., Brainard, W.C., 1998, Brookings papers on economic activity, Brookings Institute Press, ISBN 0815711956
Charette, D.E., Malaysia in the global economy, DAI, http://www.dai.com/pdf/Malaysia_in_the_Global_Economy.pdf last accessed on October 18, 2010
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