Political Factors

Economical Factors

Some of Malaysia’s key trading partners are already struggling economically. The crisis rocking the euro zone has received a considerable amount of analysis, but the economic situation in other countries also merits attention.

The performance of the US economy is a concern for Malaysia. US GDP, which saw growth of 3 per cent in the fourth quarter of 2011, decreased to 1.9 per cent growth in the first quarter of 2012. Growth in the US hardly recovered, but whatever recovery it had achieved now appears shaky. Analysts put the forecast for US growth at 1–1.5 per cent for 2012. Some have raised the probability of a recession to 50 per cent. The unemployment rate has not budged from 8.2 per cent, as the increase in employment opportunities has not kept pace with population growth.

All this leads to a continuing trail of uncertainty. One can only hope that any ensuing instability, political or economic, does not have unduly disturbing consequences.

Economic Growth

Land factors
Natural resource endowments – if a country has diamonds or oil etc, it helps! But the land factor is not enough to give growth on its own, and it is the least important of the growth factors.

Labour factors
*Labour skills and abilities = education and training. The more of these, the better for growth but it should be of the right kind. India, for example, has been accused of training far too many lawyers and not enough agricultural specialists.