Demographics
In 2007, the population of Malaysia was estimated to be 27 173 600. Covering an area of 329 876 square kilometres, the population density is 82.0 persons per square kilometre. Malaysia is a multiracial country consisting of Malays, Chinese, Indian and other ethnic groups. In 2007, an estimated 1 907 800 non-Malaysian citizens were living in the country. Malaysia has a young population, with 8 748 600 (32.2%) below the age of 15 years, while those aged 15-64 years account for 17 238 000 (63.4 %) and those 64 years or older for about 1 186 900 (4.4 %).
Life expectancy at birth for both genders has increased over the years, rising from 56 years for males and 58 for females in 1957 to 71.9 years for males and 76.4 years for females in 2007. Over the same period, the crude death rate also fell from 12.4 per 1000 population to 5.0 in 1985 and further decreased to 4.5 in 2007. The crude birth rate in 2007 was 17.5 per 1000 population and the crude rate for natural increased was 13.2 per 1000 population.
Political situation
Malaysia practises parliamentary democracy, based on the federation system, with a constitutional monarchy and three branches of government: the legislative, judicial and administrative or executive. Under the Federal Constitution, the states of Perlis, Kedah, Pulau Pinang, Perak, Selangor, Negeri Sembilan, Melaka, Johor, Pahang, Terengganu, Kelantan, Sarawak and Sabah agreed to the concept of the formation of the country of Malaysia. The powers of state governments are limited by the Federal Constitution.
The chief of state is the Paramount Ruler (Yang Di-Pertuan Agong), who is elected from and by the hereditary rulers of nine of the states for a five-year term. The Paramount Ruler has the power to safeguard the customs and traditions of the Malay people and the administration of the Islamic religion in each state. He is also the Highest Commander of the Armed Forces. Since early 2007, the Paramount Ruler has been Sultan Mizan Zainal Abidin, the Raja of Terengganu.
The head of government is the Prime Minister, who appoints the Cabinet from among the members of Parliament with the consent of the Paramount Ruler. The current Prime Minister is Y.A.B Dato’ Seri Haji Abdullah bin Ahmad Badawi (since 8 March 2008).
Socioeconomic situation
Malaysia’s fifty years of nationhood marks another milestone in its economic development. Upon independence, the nation was highly reliant on tin and rubber and more than half of the population were living in poverty. Today, Malaysia is a broad-based and diversified economy. It is the 19th largest trading nation in the world, with trade in excess of RM 1 trillion. The country continues to enjoy political stability, with a diverse yet united population. At the same time, per capita income has increased 26 times to RM 22 345 (US$ 6725.98) and the incidence of poverty has been reduced to less than 6.0%.
The 2007 Budget was formulated as a building block towards achieving the targets set in the 9th Malaysia Plan and onwards to realise Vision 2020. Towards this end, the National Mission articulates five key development policy thrusts: to move the economy up the value chain; to raise the capacity for knowledge and innovation and nurture ‘first class mentality’to address persistent socioeconomic inequalities constructively and productively; to improve the standard and sustainability of the quality of life; and to strengthen institutional and implementation capacity. Therefore, the 2007 Budget was formulated with the theme ‘Implementing the National Mission towards Achieving the National Vision ’ to translate the National Mission into programmes and projects to sustain economic growth.
In 2007, total expenditure is expected to increase by 14.8% to RM 164 743 million
(US$ 49 574.67 million). The increased spending is based on better revenue performance from both tax and non-tax sources, which are expected to contribute RM 96 196 million
(US$ 28 945.79 million) and RM 45 593 million (US$ 13 718.97 million), respectively, to total revenue in 2007. With increased expenditure matched by higher revenue, the Government will further consolidate the fiscal deficit at 3.2% of nominal GDP. This deficit will be secured by striking a balance between long-term economic growth and fiscal sustainability.
The manufacturing sector is expected to pick up gradually and expand by 3.1%, following the anticipated recovery in global electronics demand in the second half of the year. On the demand side, growth will be driven by resilient public and private sector expenditure, following stronger consumer sentiment, business confidence and higher government spending. Nominal gross national product (GNP) is estimated to increase by 9.4% to RM 607 212 million
(US$ 182 710.20 million), with per capita income increasing by 7.2% to RM 22 345
(US$ 6725.98) (2006: 9.9%, RM 20 841 [US$ 6271.06]). In terms of purchasing power parity (PPP), per capita income is expected to increase by 13.9% to reach US$ 13 289 in 2007
(2006: 13.00%; US$ 11 663).
The total labour force in the fourth quarter of 2007 was 10 999 000 and the unemployment rate (% of the total labour force) was 3%.
The Malaysian economy is expected to register robust growth in 2008, with real GDP expanding between 6% and 6.5%. This translates to a 6.8% growth in nominal per capita income, rising from RM 22 345 in 2007 to RM 23 864 in 2008 or in PPP terms from US$ 13 289 to US$ 14 206. With an unemployment rate of 3.3%, the economy will continue to operate under full employment. In tandem with the Government’s efforts to ensure fiscal sustainability, the fiscal deficit will continue to decline to 3.1% of GDP. Malaysia’s balance of payments position is expected to remain strong with the current account recording a surplus for the eleventh consecutive year. The current account surplus, amounting to 13% of GDP, will emanate from the goods and travel account. These developments augur well for all Malaysians and keep the nation on track towards realizing Vision 2020.
Vulnerabilities and hazards
As a whole, Malaysia did not face any major catastrophes in 2007, except for a few incidences of flash flooding that affected certain parts of the country during heavy downpours.