INTRODUCTION

Malaysia is a federation of 13 states and three federal territories in Southeast Asia. It consists of
two regions separated by the South China Sea and is bordered by Brunei, Indonesia, and
Thailand. Malaysia has strategic location along Strait of Malacca and southern South China Sea.
The government system is a constitutional monarchy. The chief of state is the king, and the head
of government is the prime minister. Malaysia has a mixed economic system which includes a
variety of private freedom, combined with centralized economic planning and government
regulation. Malaysia is a member of the Asia-Pacific Economic Cooperation (APEC), the
Association of Southeast Asian Nations (ASEAN), and the Trans-Pacific Partnership (TPP).
ANCIENT MALAYA
The first people to live in Malaya were Stone Age hunter-gatherers. They arrived as early as
8,000 BC. Later Stone Age farmers came to Malaya and displaced them. (The hunter-gatherers
continued to exist but they retreated into remote areas). The farmers practiced slash and burn
agriculture. They cleared an area of rain forest by burning it then grew crops. After a few years
the land would be exhausted and the farmers would clear a new area. However within a few
years the old area would become covered in vegetation and would become fertile again.
After 1,000 BC metal-using farmers came to Malaya. They made tools from bronze and iron and
they settled along the coast and along rivers. They lived partly by fishing, partly by growing
crops.

In the 2nd and 3rd centuries AD centralized states arose in Malaya. The greatest was Kedah in
the North. The Malayans became highly civilized.
SRIVIJAYA
In the 7th and 8th centuries the state of Srivijaya of Sumatra rose to dominate much of Malaya. It
was a kingdom in Sumatra with its capital at Palembang. Srivijaya controlled the coasts of Java,
the Malay Peninsula and part of Borneo. However the Srivijayans only really controlled the
coast. Their influence did not extend far inland.The prosperity of Srivijaya was based on trade
with both India and China. As a result it grew rich and powerful. Srivijaya was able to dominate
the region until the 11th century. Then its power declined and by the 13th century Srivijaya had
lost control completely.
MELAKA
Later Melaka rose to dominate Malaya. A man named Parameswara founded it at the end of the
14th century. He became the ruler of Temasik on Singapore Island. However the Thais overthrew
him. Parameswara fled with some followers and settled by a river called Bertram.
JOHOR AND THE DUTCH
In the early 16th century Johor made several unsuccessful attempts to recapture Melaka.
However Johor remained hostile to Portuguese Melaka. Then in the early 17th century they made
an alliance with the Dutch against their mutual enemy the Portuguese. The Dutch made two
unsuccessful attempts to capture Melaka in 1606 and 1608. They then turned their attention to

Java. Finally in 1641 the Dutch laid siege to Melaka again. Johor assisted them. After a terrible
siege, in which many people died, Melaka finally fell to the Dutch.

THE BUGIS
A new power arose in the 18th century. A people called the Bugis originally came from Sulawesi.
At the end of the 17th century they began to settle, peacefully, in the territory of Johor. They
were allowed to settle but they soon became very powerful.
BRITISH COLONIALISM IN MALAYA
In the late 18th century the British East India Company traded with, and partly controlled India.
At that time they began looking for a base in Malaya. In 1786 the British under Francis Light
occupied Penang and founded Georgetown. In 1800 they took Province Wellesley.
In 1819 Sir Stamford Raffles founded a British trading post at Singapore.
By the treaty of London, 1824, the British and Dutch divided the region between them. The
Dutch surrendered Melaka to the British. The Dutch were given control of Sumatra and all the
area below the Malay Peninsula.
THE TREATY OF PANGKOR 1874
In 1853 the British government stopped charging duty on imports on tin. As a result exports of
tin from Malaya to Britain boomed. Steamships and the opening of the Suez canal in 1869

further boosted exports of tin. Chinese workers flocked to work in the tin mines of Malaya and
on plantations..
Until 1874 the British restricted themselves to trade and avoided becoming involved in Malayan
politics. The treaty of Pangkor marked the beginning of British political control of Malaya.
BRITISH MALAYA
The British gradually increased their influence over Malaya. More states Selangor, Pahang,
Sungei, Ujong, Rembau, Negr Sembilan, Jelebu) were forced to accept British 'protection'. In
1895 the 'protected' states were persuaded to form a federation.
Meanwhile in 1888 Brunei, Sarawak and North Borneo became British protectorates.
In the first years of the 20th century the British extended their influence over the Northern Malay
states (Kedah, Kelantan and Trengganu) were formally absorbed into British Malaya. In 1914
Johor also came under British rule.
In the early 20th century a new industry grew up in Malaya-rubber. The Malayan rubber industry
boomed. The Malayan tin industry also prospered and an oil industry began in Singapore. During
the 1920s the Malayan economy was prosperous but in the 1930s, during the depression, exports
fell.
In the early 20th century while the economy was booming many Chinese people came to live and
work in Malaya. However after 1930 immigration was restricted to try and help unemployment.
THE JAPANESE OCCUPATION OF MALAYA

On December 8 1941 the Japanese invaded Malay Peninsula and they quickly overran it. The last
British troops withdrew across the straits into Singapore Island on 31 January 1942. The
Japanese invaded Singapore on 8 February 1942. The last British troops surrendered on 15
February 1942. This was a military disaster for the British. Meanwhile Japanese troops invaded
Borneo. They captured Kuching on 25 December 1941 and Jesselton (Kota Kinbalu) on 8
January 1942. During the Japanese occupation the Chinese were treated the most harshly. Indians
were treated less harshly.
MALAYA BECOMES INDEPENDENT
In 1944, when the Japanese faced defeat, the British government decided to join all the Malayan
states (except Singapore) into a single unified state called the Malayan Union. (Singapore would
be a separate crown colony). However there was so much opposition to this plan it was scrapped.
Instead on 1 February 1948 the Federation of Malaya was formed.
Meanwhile Malayan nationalism was growing. The first Malay organisation was the Kesatuan
Melayu Singapuru, or Singapore Malay Union, which was formed in 1926. Others quickly
followed it. In 1946 Malay organisations joined together to form the Pertuuhan Kebangsaan
Melayu Bersatu, the United Malays National Organisation.
The Malayan Communist Party (MCP) was founded in 1930. In 1948 they began to attack
European estate managers. As a result the government introduced a state of emergency. However
communist activity declined after 1949 when the British parliament promised independence. The
insurgency continued for some years but it was less of a threat. Communist activity flared up
again in the mid-1970s then died down.

In 1955 the Reid Commission was formed to prepare a constitution for Malaya. Malaya became
independent on 31 August 1957. The first prime minister of Malaya was Tunku Abdul Rahan
(1903-1976). He held office from 1957 to 1970.
In 1963 Singapore, Sarawak and Sabah joined Malaya to form the Federation of Malaysia.
However in 1965 Singapore became a separate state.
THE STATE OF EMERGENCY
During the 1960s there was tension between Malays and non-Malays. It culminated in violence
after an election in May 1969. The opposition parties gained seats while the governing party lost
seats (although they held onto power). On 13 May 1969 the supporters of the opposition parties
held celebrations in the streets of Kuala Lumpur. Supporters of the governing party held a
counter-demonstration. The two sides came to blows. After two days of violence the government
declared a state of emergency and parliament was suspended.
MODERN MALAYSIA
Slowly calm returned and parliament was reconvened in 1971. The Malaysian government then
adopted a new economic policy. It was remarkably successful. During the 1970's, 1980's and
1990's Malaysia changed from being a poor, agricultural country to a rich, industrial one. The
standard of living of the Malaysian people rose dramatically. In 1991 the new economic policy
was replaced by a new development policy. Today Malaysia is a prosperous country. The
population of Malaysia is 30 million.
Geography of Malaysia

The geography of Malaysia deals with the tropical climate of Malaysia, a country located
in Southeast Asia. There are two distinct parts to this country being Peninsular Malaysia to
the west and East Malaysia to the east.
Peninsular Malaysia is located south of Thailand, north of Singapore and east of
the Indonesian island of Sumatra. East Malaysia comprises most of the northern part
of Borneo and shares borders with Brunei and Indonesia.
Climate
Malaysia's climate is categorised as equatorial, being hot and humid throughout the year. The
average rainfall is 250 centimetres (98 in) a year and the average temperature is 27 C
(80.6 F). Climate change is likely to have a significant effect on Malaysia, increasing sea
levels and rainfall, increasing flooding risks and leading to large droughts.
Malaysia faces two monsoon winds seasons, the Southwest Monsoon from late May to
September, and the Northeast Monsoon from October to March.
Local climates are affected by the presence of mountain ranges throughout Malaysia, and
climate can be divided into that of the highlands, the lowlands, and coastal regions. The
coasts have a sunny climate, with temperatures ranging between 23 and 32 C (73.4 and
89.6 F), and rainfall ranging from 10 to 30 centimetres (4 to 12 in) a month. The lowlands
have a similar temperature, but follow a more distinctive rainfall pattern and show very high
humidity levels. The highlands are cooler and wetter, and display a greater temperature
variation. A large amount of cloud cover is present over the highlands, which have humidity
levels that do not fall below 75%.[3]

The highest temperature was recorded at Chuping, Perlis on 9 April 1998 at 40.1 C
(104.2 F). The lowest temperature (Official) was recorded at Cameron Highlands on 1
February 1978 at 7.8 C (46.0 F).

Geology
The total land area of Malaysia is 329,613 square kilometres (127,260 sq mi), the 66th largest
country in the world in terms of area.[6] It is the only country to contain land on both
mainlandAsia and the Malay archipelago.[3] Peninsular Malaysia makes up 132,090 square
kilometres (51,000 sq mi),[1] or 39.7% of the country's land area, while East Malaysia covers
198,847 square kilometres (76,780 sq mi), or 60.3%. From the total land area, 1,200 square
kilometres (460 sq mi) or 0.37% is made up of water such as lakes, rivers, or other internal
waters. Malaysia has a total coastline of 4,675 kilometres (2,905 mi), and Peninsular
Malaysia has 2,068 kilometres (1,285 mi), while East Malaysia has 2,607 kilometres
(1,620 mi) of coastline.
Malaysia has the 29th longest coastline in the world. The two distinct parts of Malaysia,
separated from each other by theSouth China Sea, share a largely similar landscape in that
both West (Peninsular) and East Malaysia feature coastal plains rising to hills and mountains.
The topography of Malaysia
Peninsular Malaysia covers the southern half of the Malay Peninsula, and extends 740
kilometres (460 mi) from north to south, and its maximum width is 322 kilometres

(200 mi).It is mountainous, with more than half of it over 150 metres (492 ft) above sea
level. About half of Peninsular Malaysia is covered by granite and other igneous rocks, a
third more is covered by stratified rocks older than the granite, and the remainder is covered
by alluvium.
East Malaysia, on the island of Borneo, has a coastline of 2,607 kilometres (1,620 mi).[6] It is
divided between coastal regions, hills and valleys, and a mountainous interior. There are only
two major cities, Kuching and Kota Kinabalu. Much of southern Sarawak is coastal
lowlands, which shifts to a series of plateaus going north, ending in the mountainous regions
of Sabah.
Mountain ranges
The highest mountain range in Malaysia is the Crocker Range in Sabah, which divides the
state in half. This range includes Mount Kinabalu, the highest mountain in the country, as
well as Mount Tambuyukon, the third highest in the country. Mount Kinabalu, at 4,095.2
metres (13,436 ft), is the tallest mountain in Malaysia and is protected as Kinabalu National
Park, a UNESCO World Heritage Site.
Mountain ranges in the East tend to follow north-south or northeast-southwest paths, and the
highest ranges form the border between Malaysia and Indonesia. The mountains contain
many jagged limestone peaks. The TrusMadi Range, also in Sabah, houses Mount TrusMadi,
the second highest peak in Malaysia. Bombalai Hill in Sabah is the only active volcanoin
Malaysia.

Peninsular Malaysia contains numerous mountain ranges running parallel from north to south
along the peninsula. The main mountain range is the Titiwangsa Mountains, which divides
the peninsula between its east and west coasts.IthousesMountKorbu, the second highest peak
in the Peninsular. These mountains are heavily forested, and mainly composed ofgranite. The
range is the origin of some of Peninsular Malaysia's river systems. To the east of this range is
the Bintang Range. The highest peak in the Peninsular is Mount Tahan, located on the Tahan
Range.
Forests
Malaysian forests can be categorised as tropical rainforest. Approximately 58.2% of
Malaysian land is covered by forest. A large amount of lowland forest present below an
altitude of 760 metres (2,493 ft). East Malaysia, like most of Borneo, was formerly covered
with Borneo lowland rain forests with over 2000 tree species.However, much of it has been
cleared, due to the increase in logging since the 1960s and the increase of shifting cultivation.
Over 80% of Sarawak's forests have been felled, and the logging throughout East Malaysia
has polluted waterways, increased erosion, and damaged agriculture.
Malaysia's rainforest's are made of a variety of types, mainly dipterocarp, swamps,
andmangroves. The majority of the forest is dipterocarp forests. Dipterocarps species are
centred in Malaysia. There are over 1,425 square kilometres (550 sq mi) of mangroves in
Malaysia. Some areas are designated as forest reserves, state parks, or national parks. The
management of these reserves as under control of the Department of Wildlife and National
Park, the Forest Department of Sarawak, the Sabah Forestry Department, Sabah Foundation,

and Sabah Parks. As of 2000, there are two World Heritage Sites under the natural category
Kinabalu National Park and GunungMulu National Park.
Caves
Numerous caves run through the Peninsula and the East, due to the karst landscape caused by
water eroding limestone. TheMulu Caves in East Malaysia are the largest caves in the world.
They are located between the Penambo range and Brunei, and form a major tourist attraction.
At 700 metres (2,297 ft) long and 70 metres (230 ft) high the Sarawak Chamber is the largest
cave chamber in the world. Other famous caves are the 1.6 kilometres (1 mi) Deer Cave and
Lang's Cave.
Islands
Malaysia contains numerous islands, the largest of which is Labuan, which has an area of 92
square kilometres (40 sq mi). It is followed by Banggi Island in Sabah, followed by Betruit
Island in Sarawak, Langkawi in Kedah, and Penang Island in Penang. The largest island
shared with another country is Borneo, followed by Sebatik Island. In addition, Malaysia lies
within the world's coral reef distribution. The reefs can be usually found around islands such
as Sipadan Island, Swallow Reef, and RedangIsland.Sipadan Island, an underwater mountain,
is Malaysia's only oceanic island.
Bodies of water
Between Peninsular Malaysia and East Malaysia is the South China Sea, the largest body of
water around Malaysia. Facing the western coast of Peninsular Malaysia there is the Straits

of Malacca towards the south, and the Andaman Sea towards the north. The Strait of
Malacca, lying between Sumatra and Peninsular Malaysia, is arguably the most important
shipping lane in the world.These seas are marginal seas of the Indian Ocean.
Off the east coast of Peninsular Malaysia is the South China Sea, while a small part in the
north lies within the Gulf of Thailand. These form part of the marginal seas of the Pacific
Ocean. The Straits of Johor off the south of Peninsular acts as a maritime border of Malaysia
and Singapore. In East Malaysia, the western coasts of Sabah and Sarawak faces the South
China Sea. The northeast coast of Sabah faces the Sulu Sea, while the southeast coast of
Sabah faces the Celebes Sea.
Malaysia claims 12 nm (22 kilometres (14 mi)) as its territorial waters, which extend into
the Coral Triangle. It also claims 200 nm (370 kilometres (230 mi)) of exclusive economic
zone. In addition, Malaysia claims 200 metres (656 ft) in the depth of the continental shelf or
to the depth of exploration in within the area below the South China Sea known
as Sundaland. The territorial claim for the Straits of Malacca is shared between Malaysia and
Indonesia in accordance to a treaty signed in 1970 known as the Treaty Between the Republic
of Indonesia and Malaysia on Determination of boundary Lines of Territorial Waters of the
two Nations at the Strait of Malacca.
Lakes
The Bera Lake in Pahang is one of the largest lakes in Malaysia, and one of the only two
natural lakes in Malaysia with TasikChini. Pedu Lake is a 12 kilometres (7 mi) long lake

located 5 kilometres (3 mi) from the Malaysian-Thai border and Kenyir Lake is the largest
artificial lake in Southeast Asia.
Rivers
There are many systems of rivers found around Malaysia. The longest is the Rajang River in
Sarawak with a length of 760 kilometres (472 mi). The second longest is the Kinabatangan
River in Sabah with a length of 560 kilometres (348 mi). The longest river in the Peninsular
Malaysia is Pahang River with a length of 435 kilometres (270 mi).
Wildlife
Malaysia is a megadiverse country, with a high number of species and high levels of
endemism. These forests contain theRafflesia, the largest flower in the world. The clearing of
the Borneo lowland rain forests has caused wildlife to retreat into the upland rain
forests inland.
Natural disasters
Malaysia's geographical location protects the country from most major natural disasters. It is
located on a seismically stable plate that minimises direct risks of earthquakes and volcanoes,
is partially protected from tsunamis by surrounding landmasses, and is a rare target
for typhoons due its strategic location outside tropical cyclone basins. However, the country's
tropical climate opens the country to the risk of flooding, landslides and prolonged droughts.
Natural resources

Minerals and petroleum

Malaysia produces petroleum and is a net exporter.[27] Malaysia also produces liquefied
natural gas as well as various other related products, most of which are found off the coasts
of Terengganu, Sabah, and Sarawak. Natural resources:tin, petroleum, timber, copper, iron,
ore, natural gas, bauxite
Malaysia was the largest exporter of tin until the industry wide collapse in 1980s. Tin deposit
are found in Selangor, Kintavalley in Perak, Pahang and Johor. There are significant deposit
of gold in Pahang towns of Raub and Kuala Lipis and alsoKelantan's district of GuaMusang.
Coal is mostly concentrated in Sarawak town of Kapit, Mukah and Silantek.
Forestry
Timber can be found in the vast jungles in Malaysia, especially in East Malaysia.
Land use
Large areas of land are used as palm oil plantations, rubber plantations, and paddy fields.
Malaysia is the largest exporter of palm oil in the world producing 15.8 million tonnes of
crude palm oil in 2007.Malaysia is also one of the largest producers and exporters of rubber
and other rubber products.
As of 2011, the percentage arable land in Malaysia is 5.44%. Croplands consists of 17.49%
while other land uses consists of 77.07%.] As of 2009, irrigated land covers 3,800 km. Total
renewable water resource total 580 cubic km as of 2011.

Human geography
Peninsular Malaysia is more populated than East Malaysia where 79.2% of the population
lives in the Peninsular. In 2002, 59% of Malaysian population lived in urban areas, while the
rest live in rural areas.The largest city is Kuala Lumpur with a population of 1.89 million
people in the city, and about 7 million in the metropolitan area known as Klang Valley. Other
major cities include Georgetown, Johor Bahru, Ipoh, Kuching, and Kota Kinabalu.

Political geography
Malaysia is divided into thirteen states and three Federal Territories.
Eleven states and two Federal Territories are found in Peninsular Malaysia.
While two states and one Federal Territory are found in East M
alaysia. The states are further divided into administrative districts. In
Sabah and Sarawak, they are first divided into divisions, then further
divided into districts. There are separate subdivisions for electoral
districts for polling purposes.
International borders between Malaysia and Indonesia, Thailand, Singapore and Brunei are
defined mostly by geological features such as the Perlis River and Golok River between
Malaysia and Thailand; Straits of Johor between Malaysia and Singapore; and Pagalayan
Canal between Malaysia and Brunei. However, borders that extends to the seas are defined

by agreements such as Straits Settlement and Johore Territorial Waters Agreement of

1927 which defines Malaysia and Singapore water borders.
Border disputes
Malaysia's land borders are well established. The border with Thailand was established in
1909 when Siam ceded Kedah,Kelantan, Perlis and Terengganu to the British. Maritime
border disputes between Brunei and Malaysia and a Bruneian claim on Limbang,
Sarawak were resolved in an exchange of letters between the two countries on 16 March
2009 after 20 years of negotiations.
Malaysia and Indonesia have some overlapping maritime claims, notably in the area
around Sabah. An ongoing series of meetings to resolve these claims has produced 16 border
agreements (to September 2010). Malaysia and Singaporealso have disputes concerning
some maritime borders.
The Philippines has a dormant claim to the eastern part of the Malaysian state
of Sabah. Malaysia is also involved in a dispute involving Vietnam, Brunei, the People's
Republic of China, the Philippines, and the Republic of China (Taiwan), concerning
the Spratly Islands in the South China Sea.
Culture of Malaysia
Background

Peninsular Malaysia (left) is 40% of Malaysia's territory, and is predominately Islamic. The two
states of East Malaysia are mostly Christian. The capital of Malaysia is Kuala Lumpur.
Malaysia consists of two distinct geographical regions: Peninsular Malaysia and East Malaysia.
Malaysia was formed when the Federation of Malaya merged with North Borneo (today the
province of Sabah), Sarawak, and Singapore (seceded 1965) in 1963, and cultural differences
between Peninsular and East Malaysia remain. During the formation of Malaysia, executive
power was vested in the Perikatan (later the Barisan Nasional) coalition of three racially based
political parties, namely the United Malays National Organisation (UMNO), Malaysian Chinese
Association (MCA), and Malaysian Indian Congress (MIC). UMNO has dominated the coalition
from its inception. Although Islam is the official state religion, the Constitution of Malaysia
guarantees freedom of religion.
Ethnic group
Malaysia is a multiethnic, multicultural, and multilingual society, and the many ethnic groups in
Malaysia maintain separate cultural identities. The society of Malaysia has been described as
"Asia in miniature" The original culture of the area stemmed from its indigenous tribes, along
with the Malays who moved there in ancient times. Substantial influence exists from the Chinese
and Indian cultures, dating back to when trade with those countries began in the area. Other
cultures that heavily influenced that of Malaysia include Persian, Arabic, and British. The
structure of the government, along with the racial balance of power caused by the idea of a social
contract, has resulted in little incentive for the cultural assimilation of ethnic minorities in
Malaya and Malaysia. The government has historically made little distinction between "Malay
culture" and "Malaysian culture".

The Malays, who account for over half the Malaysian population, play a dominant role
politically and are included in a grouping identified as bumiputra. Their native language, Bahasa
Malaysia, is the national language of the country. By definition of the Malaysian constitution, all
Malays are Muslims.
The Chinese have been settling in Malaysia for many centuries, and form the second-largest
ethnic group. These Chinese have adopted Malay traditions while maintaining elements of
Chinese culture such as their largely Buddhist and Taoist religion. The more common Chinese
varieties spoken in Peninsular Malaysia are Cantonese, Mandarin, Hokkien, Hakka, Hainanese,
and Fuzhou.
The Indian community in Malaysia is the smallest of the three main ethnic groups, accounting
for about 10 percent of the country's population. They speak a variety of South Asian languages.
[1]

Tamils, Malayalees, and Telugu people make up over 85 percent of the people of Indian origin

in the country. Indian immigrants to Malaysia brought with them the Hindu and Sikh cultures.
This included temples and Gurdwaras, cuisine, and clothing. Hindu tradition remains strong in
the Indian community of Malaysia. A community of Indians who have adopted Malay cultural
practices also exists in Malacca. Though they remain Hindu, the Chitties speak Bahasa Malaysia
and dress and act as Malays.
Policies and controversies
The Malaysian government defined Malaysian culture through the issuance of the "1971
National Culture Policy". It defines three principles as guidelines for Malaysian culture: that it is
based on the cultures of indigenous people; that if elements from other cultures are judged

suitable and reasonable they may be considered Malaysian culture; and that Islam will be an
important part of national culture.
Some cultural disputes exist between Malaysia and neighbouring Indonesia. One dispute, known
as the Pendet controversy, began when Indonesians claimed the Pendet Dance was used in an
official Malaysian tourism ad campaign, causing official protests.]This dance, from Bali in
Indonesia, was used only in a Discovery Channel ad, not an ad sponsored by the Malaysian
government Songs, such as the Rasa Sayange song, have caused similar controversies. The
Malaysian national anthem, Negaraku, was claimed to be based on a similar Indonesian song
written a year earlier. Both tunes are derived from a 19th century French song, which caused the
similarity.
Arts
Malacca Art Gallery
Traditional Malaysian art is mainly centred on the crafts of carving, weaving, and silversmithing.
[22]

Traditional art ranges from handwoven baskets from rural areas to the silverwork of the

Malay courts. Common artworks included ornamental kris and beetle nut sets. Luxurious textiles
known as Songket are made, as well as traditional patterned batik fabrics. Indigenous East
Malaysians are known for their wooden masks. Malaysian art has expanded only recently, as
before the 1950s Islamic taboos about drawing people and animals were strong. [23] Textiles such
as the batik, songket, pua kumbu, and tekat are used for decorations, often embroidered with a
painting or pattern. Traditional jewelry was made from gold and silver adorned with gems, and,
in East Malaysia, leather and beads were used to the same effect.[24]

Earthenware has been developed in many areas. The Labu Sayong is a gourd-shaped clay jar that
holds water. Perak is famous for these. Also used to store water is the angular Terenang. The
belanga is a clay bowl used to cook, with a wide base that allows heat to spread easily.
Malay art shows some North Indian influence. A form of art called mak yong, incorporating
dance and drama, remains strong in the Kelantan state.[27] However, older Malayan-Thai
performing arts such as mak yong have declined in popularity throughout the country due to their
Hindu-Buddhist origin. Since the Islamisation period, the arts and tourism ministry have focused
on newer dances of Portuguese, Middle Eastern, or Mughal origin. Malay traditional dances
include joget melayu and zapin. In recent years, dikir barat has grown in popularity, and it is
actively promoted by state governments as a cultural icon. Silat is another popular Malay martial
art and dance form, believed to increase a person's spiritual strength. Wayang kulit (shadow
puppet theatre) has been popular in Malaysia for centuries. The puppets are usually made with
cow and buffalo skin, and are carved and painted by hand. Plays done with shadow puppets are
often based on traditional stories, especially tales from the Ramayana and the Mahabharata.
Traditionally, theatrical music is performed only by men. Javanese immigrants brought Kuda
Kepang to Johor, and is a form of dance where dancers sit on mock horses and tells the tales of
Islamic wars. The Chinese communities brought traditional lion dances and dragon dances with
them, while Indians brought art forms such as Bharata Natyam and Bhangra. Colonialism also
brought other art forms, such as the Portuguese Farapeira and Branyo. There are a variety of
traditional dances, which often have very strong spiritual significance. Different tribes from west
and east Malaysia have different dances.

Architecture
Architecture in Malaysia is a combination of many styles, from Islamic and Chinese styles to
those brought by European colonists.[23] Malay architecture has changed due to these influences.
Houses in the north are similar to those in Thailand, while those in the south are similar to those
in Java. New materials, such as glasses and nails, were brought in by Europeans, changing the
architecture.[30] Houses are built for tropical conditions, raised on stilts with high roofs and large
windows, allowing air to flow through the house and cool it down. Wood has been the main
building material for much of Malaysia's history; it is used for everything from the simple
kampung to royal palaces. In Negeri Sembilan traditional houses are entirely free of nails.[24]
Besides wood, other common materials such as bamboo and leaves were used The Istana
Kenangan in Kuala Kangar was built in 1926, and it the only Malay palace with bamboo walls.
The Oral Asal of East Malaysia live in longhouses and water villages. Longhouses are elevated
and on stilts, and can house 20 to 100 families. Water villages are also built on stilts, with houses
connected with planks and most transport by boats.
The shapes and sizes of houses differ from state to state. Common elements in Peninsular
Malaysia include pitched roofs, verandahs, and high ceilings, raised on stilts for ventilation. The
woodwork in the house is often intricately carved. The floors are at different levels depending on
the function of the room. Mosques have traditionally been based on Javanese architecture. In
modern times, the government has promoted different projects, from the tallest twin buildings in
the world, the Petronas Twin Towers, to a whole garden city, Putrajaya. Malaysian firms are
developing skyscraper designs that are specifically for tropical climates.

Music
Traditional Malay music and performing arts appear to have originated in the Kelantan-Pattani
region with influences from India, China, Thailand, and Indonesia. The music is based around
percussion instruments the most important of which is the gendang (drum). There are at least 14
types of traditional drums. Drums and other traditional percussion instruments are often made
from natural materials such as shells. Other instruments include the rebab (a bowed string
instrument), the serunai (a double-reed oboe-like instrument), the seruling (flute), and trumpets.
Music is traditionally used for storytelling, celebrating life-cycle events, and at annual events
such as the harvest. Music was once used as a form of long-distance communication. Traditional
orchestra can be divided between two forms, the gamelan which plays melodies using gongs and
string instruments, and the nobat which uses wind instruments to create more solemn music.
In East Malaysia, ensembles based around gongs such as agung and kulintang are commonly
used in ceremonies such as funerals and weddings. These ensembles are also common in the
southern Philippines, Kalimantan in Indonesia, and in Brunei. Chinese and Indian Malaysians
have their own forms of music, and the indigenous tribes of Peninsula and East Malaysia have
unique traditional instruments.
Literature
The strong oral tradition that has existed since before the arrival of writing to what is now
Malaysia continues today. These early works were heavily influenced by Indian epics. Oral
literature such as folktales flourished even after printed works appeared. The Arabic Jawi script
arrived with the coming of Islam to the peninsula in the late 15th century. At this point, stories

which previously had given lessons in Hinduism and Buddhism were taken to have more
universal meanings, with their main story lines remaining intact.
In the early years of the 20th century, literature began to change to reflect the changing norms of
Malaysians. In 1971 the government took the step of defining the literature of different
languages. Literature written in Malay was called "The National Literature of Malaysia";
literature in other bumiputra languages was called "regional literature"; literature in other
languages was called "sectional literature".
The first Malay literature was in Arabic script. The earliest known Malay writing is on the
Terengganu Inscription Stone, made in 1303. One of the more famous Malay works is the
Sulalatus al-Salatin, also known as the Sejarah Melayu (meaning "The Malay Annals"). It was
originally recorded in the 15th century, although it has since been edited; the known version is
from the 16th century. The Hikaya Rajit Pasai, written in the 15th century, is another significant
literary work.
Munshi Abdullah who lived from 1797 to 1854, is regarded as the father of Malay literature.
Hikayat Abdullah, his autobiography, is about everyday life at the time when British influence
was spreading. Female Malay writers began becoming popular in the 1950s. Different ethnic and
linguistic groups have produced works in their own languages. Chinese and Indian literature
became common as the numbers of speakers increased in Malaysia, and locally produced works
based in languages from those areas began to be produced in the 19th century Beginning in the
1950s, Chinese literature expanded; homemade literature in Indian languages has failed to
emerge. English has become a common literary language.

Cuisine
Nasi Lemak, the national dish of Malaysia
Clockwise from bottom left: beef soup, ketupat (compressed rice cubes), beef rendang and sayur
lodeh
Malaysian cuisine, with strong influence from Malay, Chinese, Indian, Thai, Javanese, and
Sumatran cuisines. Much of this is due to Malaysia being a part of the ancient spice route. The
cuisine is very similar to that of Singapore and Brunei, and also bears resemblance to Filipino
cuisine. The different states of Malaysia have varied dishes, and often the food in Malaysia is
different from the original dishes. During a dinner food is not served in courses, but all at once.
Rice is popular in many Malaysian dishes. Chilli is commonly found in Malaysian dishes,
although this does not make them spicy. Noodles are common. Pork is rarely used in Malaysia,
because of the large Muslim population. Some celebrations have food associated with them, and
mooncakes are often eaten during Mooncake Festival.
Clothing
As of 2013 most Muslim Malaysian women wear the tudung, a type of hijab. This use of the
tudung was uncommon prior to the 1979 Iranian revolution, and the places that had women in
tudung tended to be rural areas. The usage of the tudung sharply increased after the 1970s. as
religious conservatism among Malay people in both Malaysia and Singapore increased.
Several members of the Kelantan ulama in the 1960s believed the hijab was not mandatory. By
2015 the Malaysian ulama believed this previous viewpoint was un-Islamic. By 2015 Malaysia

had a fashion industry related to the tudung. By 2015 Muslim Malay society had a negative
reaction to Muslim women who do not wear tudung
Public Holidays
Date

Day Holiday

State

JAN
National (except Johor, Kedah,
1 Jan

Fri

New Year
Kelantan, Perlis & Terengganu)
Yang

Di-Pertuan

14 Jan Thu

Besar
Negeri Sembilan

Negeri Sembilan's Birthday

17 Jan Sun Sultan of Kedah's Birthday

Kedah
Kuala Lumpur, Putrajaya, Johor,

24 Jan Sun Thaipusam *

Kedah, Negeri Sembilan, Perak,

Penang & Selangor
Kuala

25 Jan Mon Thaipusam *

Lumpur,

Negeri

Putrajaya,

Sembilan,

Perak,

Penang & Selangor

FEB
Kuala
1 Feb

Lumpur,

Mon Federal Territory Day

Putrajaya

8 Feb

Mon Chinese New Year

National

9 Feb

Tue Chinese New Year 2nd Day

National

Labuan

&

Date

Day Holiday

State

MAR
Anniversary
4 Mar

of

Installation

of

Fri

Terengganu

Sultan of Terengganu
23 Mar Wed Sultan of Johor's Birthday
25 Mar Fri Easter - Good Friday
APR
15 Apr Fri Declaration of Melaka as a Historical City
26 Apr Tue Sultan of Terengganu's Birthday
MAY
1 May Sun Labour Day

Johor
Sabah & Sarawak
Melaka
Terengganu

National
Kedah,

Negeri

Sembilan

5 May Thu Israk & Mikraj

7 May
17 May
21 May
30 May

Sat
Tue
Sat
Mon

& Perlis
Pahang
Perlis
National
Sabah & Labuan

Hari Hol Pahang

Raja Perlis' Birthday
Wesak Day
Harvest Festival
Harvest
Festival

31 May Tue

Sabah & Labuan

2nd Day

JUN
1 Jun
2 Jun

4 Jun
6 Jun

Wed Hari Gawai

Hari
Thu
2nd Day

Sarawak
Gawai
Sarawak

Sat Agong's Birthday

Mon Awal Ramadan *

National
Johor, Kedah & Melaka
Kelantan, Kuala Lumpur, Labuan,

22 Jun Wed Nuzul Al-Quran

Pahang, Perak, Perlis, Penang,

Putrajaya, Selangor & Terengganu

JUL
6 Jul
7 Jul

Wed Hari Raya Aidilfitri *

Hari
Raya
Thu
2nd Day *

National
Aidilfitri
National

Date

Day Holiday

State

7 Jul
9 Jul
AUG

Thu Georgetown World Heritage City Day

Sat Penang Governor's Birthday

Penang
Penang

National
31 Aug Wed

Day

/
National

Merdeka Day
SEP
10 Sep Sat Sarawak Governor's Birthday
Sarawak
12 Sep Mon Hari Raya Haji *
National
Hari
Raya
Haji Kedah,
Kelantan,
Perlis
13 Sep Tue
2nd Day *
& Terengganu
16 Sep Fri Malaysia Day
National
OCT
1 Oct Sat Sabah Governor's Birthday
Sabah
2 Oct Sun Awal Muharram *
National
14 Oct Fri Melaka Governor's Birthday
Melaka
24 Oct Mon Sultan of Pahang's Birthday
Pahang
29 Oct Sat Deepavali *
National (except Sarawak)
NOV
6 Nov Sun Hari Hol Almarhum Sultan Iskandar
Johor
11 Nov Fri Sultan of Kelantan's Birthday
Kelantan
12 Nov Sat Sultan of Kelantan's Birthday 2nd Day
Kelantan
27 Nov Sun Sultan of Perak's Birthday
Perak
DEC
11 Dec Sun Sultan of Selangor's Birthday
Selangor
12 Dec Mon Prophet Muhammad's Birthday
National
25 Dec Sun Christmas
National

Sports
Popular sports in Malaysia include badminton, bowling, football, squash, and field hockey.
Malaysia has small-scale traditional sports. Wau is a traditional form of kite-flying involving
kites created with intricate designs. Sepak takraw is a game in which a rattan ball is kept in the
air without using hands. A traditional game played during the rice harvest season was throwing

gasing, which are large tops weighing around 5 kilograms (11 lb), which are thrown by unfurling
a rope and scooped off the ground while spinning. They are known to be able to spin for over an
hour. Other sports are dragon dancing and dragon-boat racing. Malaysia's coastline is popular for
scuba diving, sailing, and other water sports and activities. Whitewater rafting and trekking are
also often done.] Many international sports are highly popular in Malaysia. Badminton matches
in Malaysia attract thousands of spectators, and Malaysia, along with Indonesia and China, has
consistently held the Thomas Cup since 1949. Famous players include Lee Chong Wei.The
Malaysian Lawn Bowls Federation (PLBM) was registered in 1997, and already fields a strong
international team and has made progress on the international stage. Squash was brought to
Malaysia by members of the British army, with the first competition being held in 1939. The
Squash Racquets Association of Malaysia (SRAM) was created on 25 June 1972, and has had
great success in Asian squash competitions. Football is popular in Malaysia, and Malaysia has
proposed a Southeast Asian football league. Hockey is popular in Malaysia, with the Malaysian
team ranked 14th in the world as of 2010. Malaysia hosted the third Hockey World Cup at the
Merdeka Stadium in Kuala Lumpur, before also hosting the 10th cup. Malaysia has its own
Formula One track, the Sepang International Circuit. It runs for 310.408 kilometres (193 mi), and
held its first Grand Prix in 2000. Golf is growing in popularity, with many courses being built
around the country.
The Federation of Malaya Olympic Council was formed in 1953, and received recognition by the
International Olympic Committee in 1954. It first participated in the 1956 Melbourne Olympic
Games. The council was renamed the Olympic Council of Malaysia in 1964, and has participated
in all but one Olympic games since the council was formed. The largest number of athletes sent
to the Olympics was 57, to the 1972 Munich Olympic Games. Malaysian athletes have won a

total of four Olympic medals, all of which are in badminton. Malaysia has competed at the
Commonwealth Games since 1950 as Malaya, and 1966 as Malaysia. It has been dominant in
badminton, and hosted the games in Kuala Lumpur in 1998. The 1998 Commonwealth Games
were the first time the torch relay went through more nations than just England and the host
country.

Media
Much of the Malaysian media is tied to the ruling UMNO party, with the county's main
newspaper owned by the government and political parties in the ruling coalition. Major
opposition parties also have their own newspapers. Besides Malay newspapers, there is large
circulation of English, Chinese, and Tamil dailies. The media has been blamed for increasing
tension between Indonesia and Malaysia, and giving Malaysians a bad image of Indonesians.
There is a divide between the media in the two halves of Malaysia. Peninsular-based media gives
low priority to news from East Malaysia, and often treats it as a colony of the Peninsular. Internet
access is rare outside the main urban centres, and those of the lower classes have less access to
non-government news sources.
The regulated freedom of the press has been criticised, and it has been claimed that the
government threatens journalists with reduced employment opportunities and denial of family
admittance to universities. The Malaysian government has previously tried to crack down on
opposition papers before elections when the ruling party was unsure of its political situation. In

2007, a government agency issued a directive to all private television and radio stations to refrain
from broadcasting speeches made by opposition leaders, a move condemned by politicians from
the opposition Democratic Action Party. Sabah, where only one tabloid is not independent of
government control, has the freest press in Malaysia. Legislation such as the Printing Presses and
Publications Act has been cited as curtailing freedom of expression. The Malaysian government
has large control over the media due to this Act, which stipulates that a media organisation must
have the government's permission to operate. However, the "Bill of Guarantee of No Internet
Censorship" passed in the 1990s means that internet news is uncensored.

demographic rates

Population growth rate^: 1.542% (2012 data)

Age Structure^:

014 years: 29.6% (male 4,118,086/female 3,884,403)

1564 years: 65.4% (male 7,838,166/female 7,785,833)

65 years and over: 5% (male 526,967/female 667,831) (2011 est.)

Net migration rate: -0.37 migrant(s)/1,000 population (2012 est.)

note: does not reflect net flow of an unknown number of illegal immigrants from
other countries in the region

Human sex ratio:

at birth: 1.07 male(s)/female

under 15 years: 1.06 male(s)/female

1564 years: 1.03 male(s)/female

65 years and over: 0.89 male(s)/female

total population: 1.03 male(s)/female (2012 est.)

Infant mortality rate:^ 14.57 deaths/1,000 live births (2012 data)

Life expectancy at birth:

total population: 74.04 years (at 1:1 male-to-female ratio)

male: ^ 71.28 years (2012 data)

female: ^ 76.99 yea2qrs (2012 data)

Total fertility rate:

2.64 children born/woman (2012 est.)

In 1987, Malays had a TFR of 4.51, Chinese had TFR of 2.25 and Indians had TFR of
2.77. The corresponding figures in Singapore was 2.16, 1.48 and 1.95
Data for (^) obtained from Department of Statistics releases. See notes. All key rates
sampled per 1000 of population.

Vital statistics
UN estimates
Live

Natur
Deat

birt
Peri

al
hs

hs
od

CB

CD

TF

IM

R1

R1

C1

R1

R1

42.7

14.0

6.23

96.4

6.23

79.5

6.23

64.3

5.21

51.0

4.56

40.4

chang
per

per

e per
year

year

year

1950
280

92

188

25.

000

000

000

318

89

229

28.

000

000

000

361

86

275

1955

1955
-

41.9

11.7
9

1960

1960
-

29.
40.8

000

000

000

351

82

268

9.7
9

1965

1965
-

28.
34.2

000

000

000

365

82

283

8.0
1

1970

1970

31.4

7.1

25.

000

000

000

385

83

302

21.

000

000

000

436

86

350

1975

1975
-

29.4

6.3

3.93

31.9

3.73

25.3

3.59

19.9

3.42

15.7

3.18

12.4

2.96

9.8

1980

1980
-

26.
29.5

5.8

000

000

000

488

91

397

26.

000

000

000

535

97

438

1985

1985
-

28.7

5.3
9

1990

1990
-

22.
27.5

000

000

000

559

104

454

5.0
8

1995

1995
-

19.
25.3

000

000

000

2000

572

114

458

000

000

000

4.7
8

2000

23.1

4.6

18.
2

2005

2005
571

127

443

000

000

000

14.

20.9

4.7

2.72

7.7

2010
1

CBR = crude birth rate (per 1000); CDR = crude death rate (per 1000); NC = natural

change (per 1000); TFR = total fertility rate (number of children per woman); IMR = infant
mortality rate per 1000 births
Registered births and deaths
Cru

Cru
Natu

de

de

Total
ral

Averag

Liv

Natu

birt

dea

fertil
chan

Dea

ral

th

ity
ge

popula

birt

ths

chan

rate

rate

rate
(per

tion

hs

ge

(per

(per

(TF
1000

100

100

0)

0)

R)
)

20

496

130

366

09

313

135

178

2,32
17.7

4.6

13.0
9

20

491

130

360

28 334

2,13
17.2

10

239

978

261

20

511

135

376

594

463

131

508

136

371

12.6
6

2,17
17.6

11

4.6

4.7

12.9
4

20
12

2,11
17.2

774

836

938

503

142

361

4.6

12.6
8

(p)

20
13

914

202

712

511

145

366

865

648

217

16.7

4.7

12.0

2,0

16.7

4.8

11.9

2,0

20
14
(p)
Total fertility rate by ethnic group
Malays

Chinese

Indians

Total

2010

2.694

1.517

1.733

2.136

2011

2.694

1.557

1.663

2.174

2012

2.743

1.719

1.579

2.188

2013

2.640

1.384

1.474

2.022

2014 (p)

2.653

1.414

1.384

2.018

Economy of Malaysia
Malaysia has a newly industrialised market economy, which is relatively open and state-oriented.
The economy of Malaysia is the third largest in Southeast Asia, after the much more
populous Indonesia and Thailand, and 35th largest in the world. Malaysia is also the third richest
in Southeast

Asia by

GDP

per

capita

values,

after

the city-

states ofSingapore and Brunei. Malaysia's economy is one of the most competitive in the world,
ranking 14th in 2015.
Background
Malaysia experienced an economic boom and underwent rapid development during the late 20th
century and has GDP per capita (nominal) of US$11,062.043 in 2014, and is considered a newly
industrialisedcountry.In 2009, the PPP GDP was US$383.6 billion, about half the 2014 amount,
and the PPP per capita GDP was US$8,100, about one third the 2014 amount.
As one of three countries that control the Strait of Malacca, international trade plays a large role
in Malaysia's economy.[21] At one time, it was the largest producer of tin, rubber and palm oil in
the world.[22] Manufacturing has a large influence in the country's economy, accounting for over
40% of the GDP.[23] Malaysia is also the world's largest Islamic banking and financial centre.
In 1991, former Prime Minister of Malaysia, Mahathir bin Mohamad outlined his ideal,Vision
2020 in which Malaysia would become a self-sufficient industrialised nation by 2020. [24] Tan Sri

Nor Mohamed, a government minister, said Malaysia could attain developed country status in
2018 if the country's growth remains constant or increases.[25]
According to a report of HSBC, Malaysia will become the world's 21st largest economy by 2050,
with a GDP of $1.2 trillion (Year 2000 dollars) and a GDP per capita of $29,247 (Year 2000
dollars). The report also says "The electronic equipment, petroleum, and liquefied natural gas
producer will see a substantial increase in income per capita. Malaysian life expectancy,
relatively high level of schooling, and above average fertility rate will help in its rapid
expansion." Viktor Shvets, the managing director in Credit Suisse, has said "Malaysia has all the
right ingredients to become a developed nation.
Currency
The only legal tender in Malaysia is the Malaysian ringgit. As of 18 November 2014, the Ringgit
is traded at MYR 3.35 at the US dollar.
The ringgit has not been internationalised since September 1998, an effect due to the 1997 Asian
financial crisis in which the central bank imposed capital controls on the currency, due to
speculative short-selling of the ringgit. As a part of series of capital controls, the currency was
pegged between September 1998 to 21 July 2005 at MYR 3.80 to the dollar after the value of the
ringgit dropped from MYR 2.50 per USD to, at one point, MYR 4.80 per USD.

Natural resources
Malaysia is well-endowed with natural resources in areas such as agriculture, forestry and
minerals. It is an exporter of natural and agricultural resources, the most valuable exported
resource being petroleum.In the agricultural sector, Malaysia is one of the top exporters of
natural

rubber

and palm

oil,

which

together

with

timber

and

timber

products, cocoa, pepper,pineapple and tobacco dominate the growth of the sector. As of 2011, the
percentage arable land in Malaysia is 5.44%. Croplands consists of 17.49% while other land uses
consists of 77.07%.] As of 2009, irrigated land covers 3,800 km. Total renewable water resource
total 580 cubic km as of 2011.
Energy resources
Malaysia holds proven oil reserves of 4 billion barrels as of January 2014, the fourth-highest
reserves in Asia-Pacific after China, India, and Vietnam. Nearly all of Malaysia's oil comes from
offshore fields. The continental shelf is divided into three producing basins: the basin offshore
Eastern Peninsular Malaysia in the west and the Sarawak and Sabah basins in the east. Most of
the country's oil reserves are located in the Peninsular basin and tend to be light and sweet crude.
Malaysia's benchmark crude oil, Tapis Blend, is a light and sweet crude oil, with an API
gravity of 42.7 and a sulphur content of 0.04% by weight.
Malaysia also holds 83 trillion cubic feet of proven natural gas reserves as of January 2014, and
was the third-largest natural gas reserve holder in the Asia-Pacific region after China
and Indonesia More than half of the country's natural gas reserves are located in its eastern areas,
predominantly offshore Sarawak.
Business environment

In 2015, Malaysia's economy was one of the most competitive in the world, ranking 14th in the
world and 5th for countries with a population of over 20 million, higher than countries
like Australia, United Kingdom, South Korea and Japan.
According to a June 2013 report by the World Bank, Malaysia ranks 6th in the world in the Ease
of doing business index, Malaysia's strengths in the ranking includes getting credit (ranked 1st),
protecting investors (ranked 4th) and doing trade across borders (ranked 5th). Weaknesses
include dealing with construction permits (ranked 43rd). The study ranks 189 countries in all
aspect of doing business.[63] In the investor protection category of the survey, Malaysia had
scored a perfect 10 for the extent of disclosure, nine for director liability and seven for
shareholder suits. Malaysia is behind Singapore, Hong Kong and New Zealand in investor
protection category of the survey.[64]
In 2015, Malaysia was the 6th most attractive country for foreign investors, ranked in the
Baseline Profitability Index (BPI) published by Foreign Policy Magazine.
The government is moving towards a more business friendly environment by setting up a special
task force to facilitate business called PEMUDAH, which means "simplifier" in Malay
Highlights includes easing restrictions and requirement to hire expatriates, shorten time to do
land transfers and increasing the limit of sugar storage (a controlled item in Malaysia) for
companies.
External trade
In 2013, Malaysia's total external trade totalled US$424 billion, made up of US$230.7 billion of
exports and US$192.9 billion of imports, making Malaysia the world's 21st largest exporterand
the world's 25th largest importer.

Malaysia's largest trading partner is China. Malaysia has been China's top trading partner
within ASEAN for five years in a row since 2008. The two-way trade volume between China and
Malaysia in 2013 reached $106 billion, making Malaysia China's third-largest trade partner in
Asia, just behind Japan and South Korea and eighth largest overall. [68] On 31 May 2014,
during NajibRazak's visit to China where he was welcomed by China's Premier Li Keqiang,
China and Malaysia pledged to increase bilateral trade to US$160 billion by 2017. They also
agreed to upgrade economic and financial co-operation, especially in the production of halal
food, water processing and railway construction.[69]
Malaysia's second largest trading partner is Singapore and Malaysia is Singapore's biggest
trading partner, with bilateral trade totalling roughly $91 billion US dollars in 2012, accounting
for over a fifth of total trade within ASEAN.[70][71]
Malaysia's third largest trading partner is Japan, amounting RM137.45 billion (US$42 billion) of
trade in 2014, an increase of 1.4% compared with to 2013. Out of this, exports totalled RM82.71
billion (US$25.6 billion), a growth of 4.4% cent while imports contracted 2.9% to RM54.75
billion (US$16.74 billion). Malaysian Ambassador to Japan Datuk Ahmad IzlanIdris said the
main exports from Malaysia to Japan were liquefied natural gas (LNG), electrical and electronics
as well as chemical-based products. He said Malaysia's main imports from Japan were electrical
and electronics, machines and equipment as well as spare parts and accessories for vehicles and
cars.[72]
Malaysia is an important trading partner for the United States. In 1999, two-way bilateral trade
between the US and Malaysia totalled US$30.5 billion, with US exports to Malaysia totalling
US$9.1 billion and US imports from Malaysia increasing to US$21.4 billion. Malaysia was the
United States' 10th-largest trading partner and its 12th-largest export market. During the first half

of 2000, US exports totalled US$5 billion, while US imports from Malaysia reached US$11.6
billion.
Agriculture sector
Agriculture is now a minor sector of the Malaysian economy, accounting for 7.1% of Malaysia's
GDP in 2014 and employing 11.1% of Malaysia's labour force, contrasting with the 1960s when
agriculture accounted for 37% of Malaysia's GDP and employed 66.2% of the labour force. The
crops grown by the agricultural sector has also significantly shifted from food crops
like paddy and coconut to industrial crops like palm oil and rubber, which in 2005 contributed to
83.7% of total agricultural land use, compared to 68.5% in 1960.
Despite its minor contribution to Malaysia's GDP, Malaysia has a significant foothold in the
world's agricultural sector, being the world's second largest producer of palm oil in
2012producing 18.79 million tonnes of crude palm oil on roughly 5,000,000 hectares
(19,000 sq mi) of land.[75][76] Though Indonesia produces more palm oil, Malaysia is the world's
largest exporter of palm oil having exported 18 million tonnes of palm oil products in 2011.
Industry sector
Malaysia's industrial sector accounts for 36.8%, over a third of the country's GDP in 2014, and
employs 36% of the labour force in 2012. The industrial sector mostly contributed by
the Electronics industry, Automotive industry and Construction industry.
Electrical and electronics
The electrical & electronics (E&E) industry is the leading sector in Malaysia's manufacturing
sector, contributing significantly to the country's exports (32.8 per cent) and employment (27.2

per cent) in 2013. Malaysia benefits from the global demand in the usage of mobile
devices (smartphones,

tablets), storage

devices (cloud

computing,

data

centres), optoelectronics (photonics, fibre optics, LEDs) and embedded technology (integrated
circuits, PCBs, LEDs).
Electronic components
Products/activities which fall under this sub-sector include semiconductor devices, passive
components, printed circuits and other components such as media, substrates and connectors.
Within the electronic components sub-sector, the semiconductor devices is the leading
contributor of exports for the E&E industry. Exports of semiconductor devices were RM111.19
billion or 47% of the total E&E products exported in 2013.
Malaysia is a major hub for electrical component manufacturing, with factories of international
companies like Intel, AMD,Freescale Semiconductor, ASE, Infineon, STMicroelectronics, Texas
Instruments, Fairchild Semiconductor, Renesas , X-FAB and major Malaysian-owned companies
such as Green Packet, Silterra, Globetronics, Unisem and Inari which have contributed to the
steady growth of the semiconductor industry in Malaysia. To date, there are more than 50
companies, largely MNCs producing semiconductors devices in Malaysia.
Photovoltaics
In 2014, Malaysia was the world's third largest manufacturer of photovoltaics equipment,
behind China and the European Union
In 2013, Malaysia's total production capacity for solar wafers, solar cells and solar panelstotalled
4,042 MW.

Malaysia is a major hub for solar equipment manufacturing, with factories of companies likeFirst
Solar, Panasonic,

TS

Solartech,

Jinko

Solar,

JA

Solar, SunPower, Hanwha

Cells,andSunEdison in locations like Kulim, Penang, Malacca, Cyberjaya and Ipoh.

Many international companies have the majority of production capacity located in Malaysia,
such as the American companyFirst Solar which has over 2000 MW of production capacity
located in Kulim and only 280 MW located in Ohio,[82] and formerly German-based Hanwha Q
Cells which produces 1,100 MW worth of solar cells in Cyberjaya while producing only
200 MWworth of solar cells in Germany. SunPower's largest manufacturing facility with a
capacity of 1400 MW is also located inMalacca.
Automotive
In 2014, Malaysia's automotive industry produced 545,122 passenger cars and 51,296
commercial vehicles for a total of 596,418 vehicles, [84] making Malaysia the 22nd
largestautomotive manufacturer in the world.
The automotive sector is dominated by DRB-HICOM, who other than assembles cars for Tata
Motors, Honda, Isuzu, Suzuki, Mercedes-Benz,[85] Volkswagen,[86][87] Higer, JAC andBeiBen, also
owns Malaysia's indigenous automobile company, Proton.
Other companies with a significant foothold in the automotive industry include Perodua,
Malaysia's second indigenous car company and Naza, who is the franchise holder
for Ferrari, Maserati, Koenigsegg, Kia
Motors, Peugeot, Chevrolet, Citron, Brabus, Ducati, Harley-Davidson, Piaggio, Vespa, Aprilia,
Gilera and Indian Motorcyclebrands in Malaysia
Construction

Malaysia has a large construction industry of over RM102.2 (US$32 billion). The highest
percentage share was contributed by construction of non-residential buildings which recorded
34.6 per cent. This was followed by civil engineering sub-sector (30.6%), residential
buildings(29.7%), and special trades (5.1%).[89]
Selangor recorded the highest value of construction work done at 24.5% among the states,
followed by Johor at 16.5%, Kuala Lumpur at 15.8%, Sarawak at 8.6% and Penang at 6.4%. The
contribution of these five states accounted for 71.8% of the total value of construction work in
Malaysia.
The expansion of the construction industry has been catalysed by major capital expenditure
projects, and a key factor has been the governments Economic Transformation Programme
(ETP)

and

public-private

partnership

(PPP)

mega-projects

likeTunRazak

Exchange, KVMRT and Iskandar Malaysia

Defence
Malaysia has a relatively new defence industry that was created after the government created
the Malaysia Defence Industry Council to encourage local companies to participate in the
country's defence sector in 1999.
The land sector of the defence industry is dominated by DefTech, a subsidiary of Malaysia's
largest

automotive

manufacturer, DRB-HICOM.

The

company

focuses

on

manufacturingarmoured vehicles and specialised logistics vehicles. The company has

supplied ACV-15infantry fighting vehicles to the Malaysian Army in the past and is currently
supplying theDefTech AV8 amphibious multirole armoured vehicle to the Malaysian Army.

The sea sector of the defence industry is dominated by Boustead Heavy Industries, who builds
warships for the Royal Malaysian Navy (RMN) through transfer of technology with foreign
companies. The company has built 4 Kedah-class offshore patrol vessels for the RMN in the past
and is currently undertaking a project to build 6 moreSecond Generation Patrol Vessels for the
RMN.
Services sector
Finance and banking
Kuala Lumpur has a large financial sector, and is ranked the 22nd in the world in the Global
Financial Centres Index.[90] There are currently 27 commercial banks (8 domestic and 19
foreign), 16 Islamic banks (10 domestic and 6 foreign), 15 investment banks (all domestic) and 2
other financial institutions (both domestic) operating in Malaysia.
Commercial banks are the largest and most significant providers of funds in the banking system.
The biggest banks in Malaysia's finance sector are Maybank, CIMB, Public Bank Berhad, RHB
Bank and AmBank.
Malaysia is currently also the world's largest centre of Islamic Finance. Malaysia has 16 fullyfledged Islamic banks including five foreign ones, with total Islamic bank assets of US$168.4
billion, which accounts for 25% of the Malaysia's total banking assets. [91] This in turn accounts
for over 10% of the worlds total Islamic banking assets. In comparison, Malaysia's main
rival UAE, has US$95 billion of assets.
Malaysia is the global leader in terms of the sukuk (Islamic bond) market, issuing RM62 billion
(US$17.74 billion) worth of sukuk in 2014 - over 66.7% of the global total of US$26.6

billion Malaysia also accounts for around two-thirds of the global outstanding sukuk market,
controlling $178 billion of $290 billion, the global total
The Malaysian government is planning to transform the countrys capital Kuala Lumpur into a
major financial centre in a bid to raise its profile and spark greater international trade and
investment through the construction of the TunRazakExchange(TRX). The government believes
the project will allow Malaysia to compete with regional financial superpowers such
asSingapore and Hong Kong, by leveraging on the countrys established strength in the rapidly
growing Islamic financial marketplace
Tourism
Tourism is a huge sector of the Malaysian economy, with over 57.1 million domestic tourists
generating RM37.4 billion (US$11 billion) in tourist receipts in 2014 and attracting 27,437,315
international tourist arrivalsa growth of 6.7% compared to 2013. Total international tourist
receipts increased by 3.9% to RM60.6 billion (US$19 billion) in 2014.
United Nations World Tourism Organisation (UNWTO) listed Malaysia as the 10th most visited
country in 2012.
Malaysia is rich with diverse natural attractions which become an asset to the country's tourism
industry. This was recognised by the World Travel & Tourism Council (WTTC), who declared
Malaysia as "a destination full of unrealized potential"with the main strength as the availability
of a vast range of diverse attractions to suit alltastes relatively affordable prices and; largely
unspoilt destination

Medical tourism
Medical tourism is a significant sector of Malaysia's economy, with an estimated 1 million
travelling to Malaysia specifically for medical treatments alone in 2014, contributing around
US$200 million (about RM697 mil) in revenue to the economy.
Malaysia is reputed as one of the most preferred medical tourism destinations with modern
private healthcare facilities and highly efficient medical professionals. In 2014, Malaysia was
ranked the world's best destination for medical tourism by the Nomad Capitalist.Malaysia was
also included in the top 10 medical tourism destinations list by CNBC.
In 2014, Prince Court Medical Centre, a Malaysian hospital, was ranked the world's best hospital
for medical tourists by MTQUA.
The Malaysian government targets to hit RM 9.6 billion (US$3.2 billion) in revenue from 1.9
million foreign patients by 2020
Oil and gas
Malaysia has a vibrant oil and gas industry. The national oil company, Petronas is ranked the
69th biggest company in the world in the Fortune 500 list in 2014, with a revenue of over
US100.7 billion and total assets of over US$169 billion. Petronas provides around 30% of the
Malaysian government's revenue, although the government has been actively cutting down on its
reliance of petroleum, with a target of 20%.
Petronas is also the custodian of oil and gas reserves for Malaysia. Hence, all oil and gas
activities are regulated by Petronas. Malaysia encourages foreign oil company participation
through production sharing contracts, in which significant amount of oil will be given away to
the foreign oil company until it reaches a production milestone. Currently, many major oil

companies such as ExxonMobil, Royal Dutch Shell, Nippon Oil, and Murphy Oil are involved in
such contracts. As a result, 40% of oil fields in Malaysia are developed.
There are over 3,500 oil and gas (O&G) businesses in Malaysia comprising international oil
companies, independents, services and manufacturig companies that support the needs of the
O&G value chain both domestically and regionally. Many major global machinery & equipment
(M&E) manufacturers have set up bases in Malaysia to complement home-grown M&E
companies, while other Malaysian oil and gas companies are focused on key strategic segments
such as marine, drilling, engineering, fabrication, offshore installation and operations and
maintenance (O&M).

Infrastructure

The

infrastructure

of

Malaysia

is

one

of

the

most

developed

in

Asia.Its telecommunications network is second only to Singapore's in Southeast Asia, with

4.7 million fixed-line subscribers and more than 30 million cellular subscribers. The country has
seven international ports, the major one being the Port Klang. There are 200 industrial
parks along with specialised parks such as Technology Park Malaysia and Kulim Hi-Tech
Park.Fresh water is available to over 95 per cent of the population. During the colonial period,
development was mainly concentrated in economically powerful cities and in areas forming
security concerns. Although rural areas have been the focus of great development, they still lag
behind areas such as the West Coast of Peninsular Malaysia. The telecommunication network,
although strong in urban areas, is less available to the rural population.

Energy
Malaysia's energy infrastructure sector is largely dominated by TenagaNasional, the
largestelectric utility company in Southeast Asia, with over RM99.03 billion of assets. Customers
are connected to electricity through the National Grid, with more than 420 transmission
substations in the Peninsular linked together by approximately 11,000 km of transmission lines
operating at 132, 275 and 500 kilovolts.
In 2013, Malaysia's total power generation capacity was over 29,728 megawatts. Total electricity
generation was 140,985.01 GWh and total electricity consumption was 116,087.51 GWh.
Energy production in Malaysia is largely based on oil and natural gas, owing to Malaysia's oil
reserves and natural gas reserves, which is the fourth largest in Asia-Pacific after China, India
and Vietnam.
Transport network
Road network
Malaysia's road network is one of the most comprehensive in Asia and covers a total of 144,403
kilometres (89,728 mi).
The main national road network is the Malaysian Federal Roads System, which span over
49,935 km (31,028 mi). Most of the federal roads in Malaysia are 2-lane roads. In town areas,
federal roads may become 4-lane roads to increase traffic capacity. Nearly all federal roads are
paved with tarmac except parts of the SkudaiPontian Highway which is paved withconcrete,
while parts of the Federal Highway linking Klang to Kuala Lumpur, is paved withasphalt.
Malaysia has over 1,798 kilometres (1,117 mi) of highways and the longest highway, theNorth
South Expressway, extends over 800 kilometres (497 mi) on the West Coast of Peninsular

Malaysia, connecting major urban centres like Kuala Lumpur and Johor Bahru. In 2015, the
government announced a RM27 billion (US$8.23 billion) Pan-Borneo Highway project to
upgrade all trunk roads to dual carriage expressways, bringing the standard of East
Malaysianhighways to the same level of quality of Peninsular highways.
Rail network[
Rail transport in Malaysia comprises heavy rail (KTM), light rapid transit and monorail (Rapid
Rail), and a funicular railway line (Penang Hill Railway). Heavy rail is mostly used for intercity
passenger and freight transport as well as some urban public transport, while LRTs are used for
intra-city urban public transport. There two commuter rail services linking Kuala Lumpurwith
the Kuala Lumpur International Airport. The sole monorail line in the country is also used for
public transport in Kuala Lumpur, while the only funicular railway line is in Penang. A rapid
transit project, the KVMRT, is currently under construction to improve Kuala Lumpur's public
transport system.
The railway network covers most of the 11 states in Peninsular Malaysia. In East Malaysia, only
the

state

of Sabah has

railways.

The

network

is

also

connected

to

the Thai

railway 1,000 mm (3 ft 3 38 in) network in the north. If the Burma Railway is rebuilt, services to
Myanmar, India, and China could be initiated.
Air network
Malaysia has 118 airports, of which 38 are paved. The national airline is Malaysia Airlines,
providing international and domestic air services. Major international routes and domestic routes
crossing

between West

Malaysia and East

Malaysia are

served

by Malaysia

Airlines,AirAsia and Malindo Air while smaller domestic routes are supplemented by smaller

airlines

like MASwings, Firefly and Berjaya

Air.

Major

cargo

airlines

include MASkargo and Transmile Air Services.

Kuala Lumpur International Airport is the main and busiest airport of Malaysia. In 2014, it was
the world's 13th busiest airport by international passenger traffic, recording over 25.4 million
international passenger traffic. It was also the world's 20th busiest airport by passenger traffic,
recording over 48.9 million passengers.
Other major airports include Kota Kinabalu International Airport, which is also Malaysia's
second busiest airport and busiest airport in East Malaysia with over 6.9 million passengers in
2013, and Penang International Airport, with over 5.4 million passengers in 2013.
Sea network
Malaysia is strategically located on the Strait of Malacca, one of the most important shipping
lanes in the world.
Malaysia has two ports that are listed in the top 20 busiest ports in the world, Port Klang andPort
of TanjungPelepas, which are respectively the 2nd and 3rd busiest ports in Southeast Asia after
the Port of Singapore.
Port Klang is Malaysia's busiest port, and the 13th busiest port in the world in 2013, handling
over 10.3 million TEUs. Port of TanjungPelepas is Malaysia's second busiest port, and the 19th
busiest port in the world in 2013, handling over 7.6 million TEUs.
Free trade efforts

MalaysiaJapan

MalaysiaPakistan

MalaysiaNew Zealand

MalaysiaIndia

MalaysiaChile

MalaysiaAustralia

ASEANChina

ASEANJapan

ASEANKorea

ASEANIndia

ASEANAustralia and New Zealand

Free trade agreements under negotiation

MalaysiaTurkey

MalaysiaEuropean Union Free Trade Agreement (MEUFTA)

Trans-Pacific Partnership Agreement (TPP)

Trade Prefential System-Organisation of Islamic Conference (TPS-OIC)

Developing Eight (D-8) Preferential Tariff Agreement (PTA)

Investments
Malaysia's total accumulated investments in 2014 was RM235.9 billion, with 72.6 per cent
(RM171.3 billion) being contributed by domestic sources and 27.4 per cent (RM64.6 billion)
coming from foreign sources.
According to A.T. Kearney, a global management consulting firm, Malaysia was ranked 15th in
the 2014 Foreign Direct Investment Confidence Index, 9th in 2012, 16th in 2007 and 21st in
2010. The index assesses the impact of political, economic and regulatory changes on the FDI
intentions and preferences of the leaders of top companies around the world.

Rank

Rank

Rank

Rank

FDI
Country

2007

2010

2012

2014

Index

United States

2.16

China

1.95

20

Canada

1.93

10

United Kingdom

1.91

Brazil

1.91

10

Germany

1.84

Confidence

Rank

Rank

Rank

Rank

FDI
Country

2007

2010

2012

2014

Index

India

1.81

11

Australia

1.76

24

Singapore

1.75

13

17

10

France

1.74

20

11

15

11

United Arab Emirates

1.74

19

12

Mexico

1.72

18

11

13

South Africa

1.70

22

14

Switzerland

1.68

16

21

10

15

Malaysia

1.65

16

Sweden

1.64

17

Chile

1.64

24

18

Spain

1.63

21

19

Japan

1.62

Confidence

Rank

Rank

Rank

Rank

FDI

Confidence

Country
2007

2010

2012

2014

Index

20

Italy

1.61

12

16

21

Belgium

1.61

23

22

Netherlands

1.61

18

23

Denmark

1.61

13

19

24

Turkey

1.60

18

23

13

25

Indonesia

1.60

Largest public Malaysian companies

Malaysia has 17 companies that rank in the Forbes Global 2000 ranking for 2014.

Mark
Reven

Profit

Asset

ue

(billion

(billio

(billio

$)

n $)

n $)

Worl
d

et
Company

Industry

Value

Rank

(billio
n $)

326

Maybank

Banking

9.7

2.1

171.1

26.3

Mark
Reven

Profit

Asset

ue

(billion

(billio

(billio

$)

n $)

n $)

Worl
d

et
Company

Industry

Value

Rank

(billio
n $)

443

TenagaNasional

Utilities

12

1.6

31.3

20.7

Banking

6.8

1.4

113.2

18.1

Banking

4.6

1.3

93.3

20.6

Conglomerates

14.4

1.1

15.2

17.1

5.8

0.8

13.3

17.7

& 5.6

0.6

21.8

11.4

3.0

0.6

58.3

6.6

8.5

16.7

CIMB Group
460
Holdings

Public

Bank

585
Berhad

598

Sime Darby

Telecommunicatio
861

Axiata Group
ns Services

Hotels,
915

Genting

Restaurants
Leisure

1052

RHB Capital

Banking

1062

Petronas Chemic Oil

&

Gas 4.8

Mark
Reven

Profit

Asset

ue

(billion

(billio

(billio

$)

n $)

n $)

Worl
d

et
Company

Industry

Value

Rank

(billio
n $)

al

Operations

AMMB
1121

Banking

2.6

0.5

40

6.6

Banking

2.5

0.5

56

5.1

Transportation

2.8

0.7

12.3

9.4

1.2

0.7

14.7

6.3

0.5

18.5

4.9

2.9

0.6

5.3

16

0.3

3.1

9.3

Holdings

Hong
1246

Leong Financial
Group

1276

MISC Berhad

Oil
1308

&

Gas

Petronas Gas
Operations

1333

YTL

1344

Maxis

Utilities

Telecommunicatio
ns Services

1481

Petronas Dagang Oil

&

Gas 10.3

Mark
Reven

Profit

Asset

ue

(billion

(billio

(billio

$)

n $)

n $)

Worl
d

et
Company

Industry

Value

Rank

(billio
n $)

an

Operations

Food,
1567

Drink

&

IOI Group

3.9

0.5

7.8

9.3

Tobacco

Malaysia Economy Data

2011

2012

2013

2014

2015

Population (million)

29.1

29.5

29.9

30.3

30.8

GDP per capita (USD)

10,282

10,883

10,78

10,737

10,222

5
GDP (USD bn)

299

316

324

340

298

Economic Growth (GDP,

5.3

5.5

4.7

6.0

5.0

6.9

8.4

7.3

7.0

6.0

annual variation in %)
Consumption

(annual

2011

2012

2013

2014

2015

(annual

6.4

19.0

8.2

4.8

3.7

Production

2.4

4.2

3.4

5.1

4.5

3.0

3.0

3.0

3.0

3.3

-4.7

-4.4

-3.8

-3.4

Public Debt (% of GDP)

50.0

51.7

53.0

52.7

Money (annual variation in

14.7

9.7

7.7

7.5

2.9

3.0

1.3

3.2

2.7

2.7

3.2

1.7

2.1

3.1

2.1

8.4

0.1

-1.7

1.4

-4.8

3.00

3.00

3.00

3.25

3.25

variation in %)
Investment
variation in %)
Industrial

(annual variation in %)
Unemployment Rate
Fiscal

Balance

(%

of

GDP)

%)
Inflation Rate (CPI, annual
variation in %, eop)
Inflation Rate (CPI, annual
variation in %)
Inflation

(PPI,

annual

variation in %)
Policy Interest Rate (%)

2011

2012

2013

2014

2015

20.7

0.1

7.0

10.8

-1.3

Exchange Rate (vs USD)

3.17

3.06

3.28

3.50

4.29

Exchange Rate (vs USD,

3.06

3.09

3.15

3.27

3.91

10.9

5.2

3.4

4.3

2.9

32.6

16.4

11.2

14.5

8.8

40.5

31.1

22.4

25.1

24.0

Exports (USD billion)

228

228

229

234

200

Imports (USD billion)

187

197

206

209

176

Exports (annual variation

14.4

0.0

0.4

2.4

-14.6

13.5

5.0

4.9

1.4

-15.8

Stock

Market

(annual

variation in %)

aop)
Current Account (% of
GDP)
Current Account Balance
(USD bn)
Trade

Balance

(USD

billion)

in %)
Imports (annual variation
in %)

2011

2012

2013

2014

2015

Reserves

134

140

135

116

95.3

External Debt (% of GDP)

56.7

62.3

65.6

62.9

65.1

International
(USD)

LITERATURE REVIEW
tourism
Factor affecting international tourist can be explained from supply side as well as
demand side. Khadaroo and Seetanah (2007), Martin et. al (2008), Aslan et. Al (2009) are
such studies that have been focus on supply side. However, demand factors are important in
explaining international tourist such as Croach (1994a), Lim (1997), Zhang and Jensen
(2007),Halicioglu (2004) and Vietze (2008). Lizzi and Flckiger (2003) indicates that
tourism is not really an industry, but rather a collection of activities in which foreigner
partake, and which are also available for consumption by local residents.Frechtling (1996)
classified that there are pull and push factors in estimating tourism demand. Pull factors is
factors in destination that attract tourist to a destination. Push factors is emissive factors,
which encourage tourists to travel away. Income and price are the most explanatory
variable

by researcher. Munz and Amaral (2000) indicated economic demand theory

suggest
as countrys income increases, more of its residents can afford to visit other countries,
and therefore tourist arrivals are a Siti Shuhada Ahmad Kosnan, Normaz Wana Ismail,
Shivee Ranjanee Kaniappan positive function of income. Vanegas and Croes (2005)

found price is negatively related with international demand tourism, that is, the lower
living cost in the destination country relative to the source country, the greater the
tourism demand.Tourism demand in destination can be influenced by changes in the
exchange rates. Changes in exchange rate will affect the currency value of the origin country.
Any change in exchange rate will lead to an appreciation or depreciation of tourist currency.
Transportation cost, has been widely review in tourism literature. Researchers often included
the distance of travel as a proxy such as Khadaroo and Seetanah (2007); the transportation
cost variables is measured by the distance in kilometers between the capital cities of the
source and destination country. Goh and Law (2011) had reviewed 155 studies of
tourism demand and classified it into the groups of method and technique adopted.
Such as an econometric-based approach, time series techniques, and artificial intelligence
(AI)-based methods. It appears that the more advanced methods such as integration, error
correction model, time varying parameter model, and their combinations with systems
of equations produce better results in terms of forecasting accuracy. For instance,
Muchapondwa and Pimhidzai (2011) estimate the coefficients of the determinants of
international tourism demand for Zimbabwe for the period 1998 to 2005. By employing
bound testing cointegration procedure, the results show that taste formation, transport costs,
changes in global income and certain specific events have a significant impact on
international tourism demand. However, the long-run price elasticity of 0.145 in model 2 is
insignificant makes tourism price in Zimbabwe is not luxury tourism.However, recently in
tourism demand studies, Gravity model hasattracted researchers attention for them to
employ it into tourism demand model. For example, Hanafiah and Harun (2010) studied
tourism demand in Malaysia based on the key economic factors like income, price,

exchange rate, consumer price index, distance, population and economic crisis using a
modified Gravity model. The result indicates that there is strong relationship between the
key economic factors and decision to travel among the tourists. Income is the most
important factor that affecting tourism flows. Exchange rate is negatively related with
tourism demand as tourist from higher purchasing power prefers to visit Malaysia. Consumer
Price Index (CPI) reduce number of tourist to travel. The increasing number of tourist
arrivals was influenced by population growth and distance may reduce tourism demand.

Research on tourism in Malaysia

Traditionally, economic prosperity has been linked to growth in the agricultural and
manufacturing sectors as well as the inux of foreign capital. Whilst, the role of tourism
in economic growth has often been downplayed and regarded as a non-growth oriented
sector, hence attracting little attention of both economists and policymakers
(Papatheodorou, 1999). Today, tourism has become one of the rapidly growing services
sectors of the world. This has prompted the Malaysian government to set tourism as a
key sector for invigorating Malaysia's long-term economic growth. Specif- ically, the
10th Malaysia Plan (2011e2015) has identied the tourism sector as one of the National
Key Economic Areas (NKEAs) for transforming Malaysia into a high income nation by
2020.
Nevertheless, as globalisation gathers momentum, views also exist that tourism may in
actual fact not signicantly stimulate long-term economic growth as many informal
agents bring inillegal workers to Malaysia using tourism as a channel. It may be hard

to differentiate between genuine tourists and those who actually arrive in search for jobs
(Kassim, 1997). In 1995, only 600 thousand foreign workers in Malaysia were illegal.
The number subsequently increased to 2.1 million as observed during the
implementation of the Illegal Immigrant Comprehensive Settle- ment Programme
(Augustin & Lee, 2012). In view of these coun- terfactual data, doubts have arisen
regarding the appropriateness of emphasising on tourism as a key sector for driving
long-term economic growth in order to attain the high income status by 2020. As not
all tourist arrivals involve genuine tourists, higher rates of arrivals do not necessarily
mean higher rates of tourism earnings. In fact, UNWTO (2012) noted that Malaysia's
ranking in terms of tourism earnings was much lower than the ranking by tourist arrivals.
In view of these reservations, there is an urgent need for a more accurate empirical
assessment of the actual impact of tourism on Malaysia's economic growth.From our
reading of earlier studies on the relationship between tourism and economic growth, we
nd that this topic has attracted a lot of interest amongst researchers, particularly after
the study of Balaguer and Cantavella-Jor rida, Cortes-Jimenez and Pulina (2014),
Castro-Nun~ o,

Molina-Toucedo,

and Pablo-Romero (2013), and Pablo-Romero and

Molina (2013) have published three comprehensive surveys on the relationship between tourism and economic growth. To conserve space, we would only review some
selected studies and those related to Malaysia.For example, Narayan and Prasad (2003),
Dritsakis (2004), Brida, Carrera, and Risso (2008), Katirciogvlu (2009, 2011), Tang and
Abosedra (2014a, 2014b), Hye and Khan (2013), Al-mulali, Fer-eidouni, Lee, and
Mohammed (2014), Bouzahzah and El Menyari (2013), and Jalil, Mahmood, and Idrees
(2013) discovered that tourism affects economic growth. Therefore, they concluded that

the tourism-led growth hypothesis is valid. However, Oh (2005), Payne and Mervar
(2010), and Lee (2012) argued that it is economic growth that affects tourism rather
than the other way round. Hence, these studies instead support the growth-led tourism
hypothesis.As far as Malaysia is concerned, several studies have been con- ducted to
analyse the role of tourism in economic growth as summarised in Table 1. Generally, the
table shows that the causal relationship between tourism and economic growth in
Malaysia remains a controversial subject. For example, Nanthakumar, Ibrahim, and
Harun (2008), Kadir, Nayan, and Abdullah (2010) and Tang (2011a) found that tourism
expansion is less likely to promote economic growth. Whilst, Lau, Oh, and Hu (2009),
Lean and Tang (2010), Othman and Salleh (2010), Kadir and Karim (2012), Othman,
Salleh, and Sarmidi (2012), Cheam, Mahmood, Abdullah, and Ong (2013), and Tang
(2013) discovered that tourism expansion could play an important role in stimulating
Malaysia's economic growth. All these studies however have weaknesses that this study
aims to address. They mainly involved the use of bi-variate models and/or ad-hoc
model specications which are not based upon any theoretical model. 1 Although
esti- mation via ad-hoc model specication is relatively easy and simple, it is hard to
interpret the results if they are not based upon any economic theory. Apart from these,
none of these studies has considered the possible impact of structural breaks in unit root
testing. According to Perron (1989), standard unit root tests may have low power when
data series contain structural break(s). Therefore, the results of these past Malaysian
studies are highly questionable and may be inaccurate.Motivated by the aforementioned
shortcomings, the goal of this paper is to re-investigate the impact of tourism expansion
on Malaysia's economic growth in a multivariate framework. Unlike the earlier studies,

we contribute to the literature by analysing the role of tourism in Malaysia's economic

growth based upon the neoclassical growth model. Various econometric approaches are
employed in this study. First, apart from the standard augmented Dickey-Fuller (ADF)
unit root test, we also employ the endogenous break unit root test developed by Zivot
and Andrews (1992) to determine the order of integration of each series. Second, the
system-wide cointegration technique proposed by Johansen (1988) and Johansen and
Juselius (1990) is used to determine the presence of long-run equilibrium relationships
amongst economic growth, tourism and other determinants. Gonzalo (1994) revealed
that this technique performs better than the other cointegration techniques even when the
disturbance term is non-spherically distributed and the lag structure is mis-specied. In
addition, Tang (2011b) noted that the Johansen-Juselius cointegration test is not sensitive
to the choice of the dependent variable because it treats all variables as endogenous.
Lastly, the causal relationship between tourism and economic growth in Malaysia will be
ascertained by the Granger causality test.
Tourism in Malaysia
Malaysia is ranked 10th in the world and 2nd in Southeast Asia for tourist arrivals.
In an effort to diversify the economy and make Malaysias economy less dependent on exports,
the government pushed to increase tourism in Malaysia. As a result, tourism has become
Malaysias third largest source of foreign exchange income. and accounted for 7% of Malaysia's
economy as of 2005.

The government agency in charge of promoting tourism in Malaysia is Tourism Malaysia or the
Malaysia Tourism Promotion Board (MTPB). On 20 May 1987, the Ministry of Culture, Arts and
Tourism (MOCAT) was established and TDC moved to this new ministry. TDC existed from
1972 to 1992, when it became the Malaysia Tourism Promotion Board (MTPB), through the
Malaysia Tourism Promotion Board Act, 1992.
In 1999, Malaysia launched a worldwide marketing campaign called "Malaysia, Truly Asia"
which was largely successful and brought in over 7.4 million tourists. The extra revenue
generated by tourism helped the countrys economy during the economic crisis of 2008.
Medical tourism
Medical tourism is popular in Malaysia, with the Malaysia Healthcare Travel Council reporting
an arrival of 641,000 foreign patients in 2011, 728,800 in 2012, 881,000 in 2013 and 882,000 in
2014. Malaysia Healthcare Travel Council, a government agency with the aim of promoting
medical tourism, was launched in 2009 as an initiative by the Ministry of Health.
Tourist arrivals
Tourist arrivals in 2014
In 2014, Malaysia recorded 27,437,315 tourist arrivals, a growth of 6.7% compared to 2013.
Total tourist receipts increased by 7.99%, generating MYR 65.44 billion. United Nations World
Tourism Organisation (UNWTO) listed Malaysia as the 10th most visited country in 2012.
Rank
1
2

Country
Singapore
Indonesia

Visitors
13,932,967
2,827,533

Total of Tourist Arrivals(%)

51.99
9.52

Rank
3
4
5
6
7
8
9
10

Country
China
Thailand
Brunei
India
Philippines
Australia
Japan
United Kingdom

Visitors
1,613,355
1,299,298
1,213,110
770,108
618,538
571,328
553,106
445,789

Total of Tourist Arrivals(%)

6.23
5.05
5.03
2.76
2.03
2.03
1.88
1.61

Top 15 arrivals by nationality

Rank
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15

Country
Singapore
Indonesia
China
Thailand
Brunei
India
Philippines
Australia
Japan
United Kingdom
South Korea
United States
Vietnam
Taiwan
Bangladesh

2014
13,932,967
2,827,533
1,613,355
1,299,298
1,213,110
770,108
618,538
571,328
553,106
445,789
385,769
262,106
285,716
274,665
204,418

2013
13,178,774
2,548,021
1,791,423
1,156,452
1,238,871
650,989
557,147
526,342
513,076
413,472
274,622
246,936
235,700
286,266
134,663

2012
13,014,268
2,382,606
1,558,785
1,263,024
1,258,070
691,271
508,744
507,948
470,008
402,207
283,977
240,134
211,008
242,519
86,465

Destinations and attractions

Gurney Drive a popular seafront promenade, filled with condominiums and hotels. It is
one of the busiest streets in Penang.

Ipoh capital of Perak, famous for its Chinese food, tin mines and limestone mountains
and caves.

Alor Star capital of Kedah, the state of the Paddy fields.

Johor Bahru capital of Johor, and gateway to Singapore.

Kangar capital of Perlis, and gateway to Thailand.

Kota Kinabalu capital of Sabah.

Kota Bharu capital of Kelantan.

Kuala Terengganu capital of Terengganu, famous for the turtles and beaches.

Kuantan capital of Pahang, noted for its many beaches.

Kuching capital of Sarawak, the Cat City of Malaysia.

Malacca City a historical city in Malaysia. This is the other cultural World Heritage Site
in Malaysia.

Miri the resort city of Sarawak is the gateway to the UNESCO World Heritage Site of
the Mulu caves and numerous national parks like Niah caves, Lambir Hills National Park
and Loagan Bunut National Park. Noted for its prstine coral reefs and ecotourism
attractions too.

Seremban the capital of Negeri Sembilan, and the nearest cities to Port Dickson.

Putrajaya the administrative centre of Malaysia, known for its lavish buildings, bridges
and man-made lakes.

Petaling Jaya a satellite city located in the state of Selangor, and is in the proximity of
Kuala Lumpur. It has the most commercial complexes in Malaysia.

Beside the main cities, there other town and places in Malaysia offer some special tourist
attraction. Such as in Taiping, Perak for their landscape and local attraction. Teluk Intan for their
Leaning tower. Genting Highlands, Cameron Highlands and Bukit Tinggi in Pahang for a cool
climate. Muar in Johor is famous for its food. Miri is the official tourism-city and resort city of
Sarawak and Sibu in Sarawak is famous for its landscape and parks.
Islands and beaches
Sapi Island from one of Kota Kinabalu numerous beaches. Sapi Island is included in the Tunku
Abdul Rahman National Park.
Malaysia has several tropical islands, some of which have been voted the most beautiful in the
world. Some of the islands in Malaysia are:

Labuan

Langkawi

Pangkor

Penang Island, the western half of Penang, which is heavily industrialised

Redang Island

Tenggol Island

Tunku Abdul Rahman National Park

Perhentian Islands

Kapas Island

Lang Tengah Island

Rantau Abang Beach

Mabul

Tioman Island

Sipadan

Rawa Island

National parks and nature reserves

Kubah National Park, (Sarawak)

Bako National Park, Sarawak famed for its wildlife, especially Bornean bearded pigs
and proboscis monkeys

Batang Ai National Park, Sarawak

Gunung Mulu National Park, Sarawak

Gunung Gading National Park, Sarawak

Lambir Hills National Park, Sarawak

Niah Caves National Park, Sarawak

Loagan Bunut National Park, Sarawak

Kinabalu National Park, Sabah home of 4100 metre peak Mount Kinabalu.

Taman Negara National Park the self-proclaimed World's Oldest Rainforest, spanning
Kelantan, Pahang and Terengganu

Endau Rompin National Park, Johor

Other places of interest

A' Famosa Resort, Malacca

Aquaria KLCC, at KLCC tower, KL

Batu Caves, KL

Berjaya Hills Resort. French-themed village

Berjaya Times Square KL, KL

Bukit Bintangwalk, KL

Cruise Tasik Putrajaya (CTP) Lake cruises, boat rides, Putrajaya

Cameron Highlands

Central Market, KL

Crystal Mosque, Kuala Terengganu

Dong Zen Temple

Eye on Malaysia, Malacca

Forest Research Institute Malaysia (FRIM), KL

Fraser's Hill

Genting Highlands

Iskandar waterfall Kota Tinggiwaterfalls

Kuala Gandah Elephant Sanctuary

][12]

Kuala Lumpur Bird Park, KL

Kuala Lumpur Butterfly Park, KL

Kuala Lumpur Hop-On Hop-Off, Double-decker city tour bus, KL

Kuala Lumpur Look out point, KL

Kuala Lumpur Tower, Menara Kuala Lumpur, KL

Malaysian Handicraft Craft Complex, KL

Masjid Negara

Merdeka Square

Mines Resort City, KL

Monorail train at KL

Muzium Negara, KL

The National Monument Tugu Negara, KL

Petronas Twin Towers (KLCC), KL

Sri Mahamariamman Temple

Sultan Salahuddin Abdul Aziz Mosque, KL

Sunway Lagoon, KL

Thean Hou Temple, KL

Underwater world, Langkawi

National Zoo of Malaysia (Zoo Negara), KL

Top 10 Hotels & Resorts in Malaysia

Malaysia is a world-class destination with white-sand beaches, Borneo jungles and a
culture-rich capital with ritzy high rises. A country that features an intriguing brew of
Malay, Chinese, Indian and European cultures, Malaysia is one of Southeast Asias bestknown destinations. This tropical paradise teems with luxury sanctuaries offering
impeccable service that rivals the best luxury establishments in the world as well as
midrange ventures with unique style. You can often get great deals for five-star resorts
outside the peak season, especially online, so weve put together a list of the best
beachfront and city hotels and resorts in Malaysia. These properties are super popular and

ultimately successful due to their exceptional service and facilities.

1.Hatten Hotel Melaka Malacca
Presenting a new experience in Melaka where contemporary design meets comfort. The
newly built hotel sited above Hatten Square is a 22 tower high Business Class Hotel
conveniently located right in the heart of the city and the UNESCO Historical and

Heritage sites along with shopping and major businesses all within close proximity.
2.PARKROYAL Penang Resort Penangfrom MYR
The PARKROYAL Penang is a fascinating destination in the Pearl of the Orient. Set in
Batu Ferringhi, the island's finest stretch of beach, PARKROYAL Penang exudes a

unique "East meets West" charm. It is your private hideaway abundant with a

kaleidoscope of facilities for the young and old.

3.Pangkor Laut Resort Pangkor Laut
Featuring the 2008 Best Spa in Malaysia according to SpaFinder USA, Pangkor Laut
Resort is an luxurious venture set on 300 acres of beautifully landscaped gardens.
Noteworthy as one of Malaysias most exclusive tourist developments, the resort is
located on the tiny private island of Pangkor Laut. The resort is dotted with hillside and
seafront wooden villas furnished with all the designer amenities expected of a five-star
property including king-sized beds. It also features two swimming pools, a jet pool, three

tennis courts, a gymnasium, several restaurants, a squash court and a spa village.
4.Berjaya Langkawi Resort Langkawi
The Berjaya Langkawi Resort presents guests the opportunity to savour a mythical
experience of the island of Langkawi, famed for its beauty and splendour. Langkawi,
made up of approximately 100 islands, is the perfect getaway for families who seek

tranquillity and the beauties of nature.

5.Copthorne Cameron Highlands Brinchang
Copthorne Hotel Cameron Highlands is nestled atop a hill at 1,628 metres above sea
level. This lofty position accords the resort a magnificent view of lush green valleys,
terraced and thriving farms, rolling hills and majestic mountains. Besides the splendid
view, the altitude provides refreshingly cool and invigorating air, ensuring a pleasant
spring-like climate throughout the year. Complimentary High Speed Internet Access
(HSIA) is available in the Tower Block which includes all hotel rooms. The Apartment

Block including all apartments do not offer Wifi access.

from MYR
6.KSL Hotel & Resort Johor Bahru
Featuring over 868 guest rooms within its premise, KSL Resort Johor Bahru is the perfect
choice for either business or leisure getaways. Situated only 20 minutes from Asias only

Legoland, the hotel is also close to the downtown area, giving guests easy access to
exciting dining and shopping spots available in the city. Rooms are modern and
accommodating, with modern facilities such as air conditioning, IDD telephone, LCD TV
with cable channels and complimentary wireless internet access, to ensure comfort at all

times.
7.Thistle Port Dickson Port Dicksonfrom MYR
Only an hour away from Kuala Lumpur International Airport (KLIA), Thistle Port
Dickson is the perfect place for a romantic getaway or a quick vacation from the city.
With private white sandy beach, a fitness centre, a spa and a dedicated team building
facility, the hotel is aimed to make your stay a pleasant one. All of its 251 guestrooms are
modern and comfortable, with in-room facilities such as air conditioning, LCD TV with
DVD player, Jacuzzi bath, snug bedding, high speed wireless broadband internet access

and complimentary daily newspapers, magazines and bottled water.

8.Hard Rock Hotel Penang Penang
Hard Rock Hotel Penang offers 250 rooms, available in all rooms are standard in-room
amenities, an interactive 32-inch plasma TV with cable, YouTube channels and ondemand movies, an iPod docking station, DVD player and free Wi-Fi keep you plugged
into the 21st century. Beyond the French doors of each hotel room is a private balcony
with views of either palm trees and white sand beaches or the hillside but we love the
ground floor Lagoon Deluxe Rooms which offer direct access to the pool. Standard entry
level 29sqm Hillview Deluxe rooms are just as cool as the 185sqm split-level Kings
Suite, but if you are staying with kids, try out the 53sqm Lil Rock Suite with Courtyard
which comes with a private garden and extra in-room amenities like a PS3 console to

keep kids occupied.

9.Hard Rock Hotel Penang Penang
from MYR

The sprawling 800-acre Sunway Resort Hotel & Spa has 1,234 guestrooms throughout its
numerous and appealing accommodation options. The establishment is comprised of the
Pyramid Tower business hotel, the sumptuous Duplex offers 12 townhouses and the
Villas offers 17 Asian-style residences. The flagship five-star Sunway Resort Hotel & Spa
boasts 441 rooms with high-standard comforts including flat-screen TVs and broadband
internet access. Facilities consist of a swimming pool with a manmade waterfall, rooftop
tennis courts, six F&B outlets, an on-site spa, and numerous conference and convention

facilities including over 50 indoor function rooms.

10.Hard Rock Hotel Penang Penang
Walk On In. The Four Points by Sheraton Sandakan is right on a scenic waterfront
pedestrian promenade overlooking the Sulu Sea. We are part of the Sandakan Harbour
Square development, which offers an indoor marketplace and retail shopping mall within
the new Sandakan CBD.

Cheap Hotels in Malaysia

Simms Boutique Hotel (Kuala Lumpur)

Arung Hayat Sea Adventures (Pulau Mabul)
Bliss Boutique Hotel (Johor Bahru)
Hotel Asia Langkawi (Kuah)
Hotel Titiwangsa (Brinchang)
My Hotel at Sentral (Kuala Lumpur)
V Garden Hotel (Kuala Lumpur)
Cititel Penang (George Town)
The Cabin Langkawi (Langkawi)
Capitol Hotel (Kuala Lumpur)

Hotel Summer View (Kuala Lumpur)

Tubotel(Langkawi)