The Effects of Foreign Direct Investment on Economic Growth in Malaysia
CHAPTER 1: INTRODUCTION
1.0 Introduction
In this chapter, the background, problem statement, objectives and justification of the study are discussed. The general and specific objectives are listed and the scopes of the study are described.
1.1 Background of the Study
1.1.1 Malaysia Economic Growth
Malaysian economy was consistently reached a GDP growth of more than 7% followed by the low inflation rate in the 1980s and 1990s. The economy went on to an extensive diversification and continued economic growth averaging 9% per annum in the period of 1988-1997. During the year of 1996-1997, on average, the economy had grown at annual rate of 8.7% whereas inflation averaged 3.8% and the unemployment rate was low, averaging around 2.5% per annum. Manufacturing sector grew from 13.9% of GDP in 1970 to roughly about 30% in 1999, whereas agriculture and mining sectors together was 42.7% of GDP in 1970 and falls to 9.3% and 7.3%, respectively in 1999 (Marial and Ngee, 2009).
Malaysia’s economic growth is growing rapidly and is a relatively open economy. In the year of 2007, the Malaysia economy was rank 29th largest economy in the world by purchasing power parity with gross domestic product for 2007 was estimated to be approximately $357.9 billion (World Bank, 2007). It has been recorded that, Malaysia experienced a stable and consistence record of economic growth in GDP which averaging an annual rate of around 7 percent over the period between 1970 until 2005.
Due to Malaysian open economy, from the externalities, it will create a major impact as well as the oil crises of the 1970s, the decline in the electronics industry in the mid 1980s and particularly the Asian financial crisis in 1997. In terms of the economic performance, the Malaysian economy experienced sluggish growth in 2001 with 0.3 percent, but rebounded strongly in 2002 with 4.1 percent. As the time goes by, the Malaysian economy however had strongly expanded in the year of 2004 increased by 7.1 percent
1.0 Introduction
In this chapter, the background, problem statement, objectives and justification of the study are discussed. The general and specific objectives are listed and the scopes of the study are described.
1.1 Background of the Study
1.1.1 Malaysia Economic Growth
Malaysian economy was consistently reached a GDP growth of more than 7% followed by the low inflation rate in the 1980s and 1990s. The economy went on to an extensive diversification and continued economic growth averaging 9% per annum in the period of 1988-1997. During the year of 1996-1997, on average, the economy had grown at annual rate of 8.7% whereas inflation averaged 3.8% and the unemployment rate was low, averaging around 2.5% per annum. Manufacturing sector grew from 13.9% of GDP in 1970 to roughly about 30% in 1999, whereas agriculture and mining sectors together was 42.7% of GDP in 1970 and falls to 9.3% and 7.3%, respectively in 1999 (Marial and Ngee, 2009).
Malaysia’s economic growth is growing rapidly and is a relatively open economy. In the year of 2007, the Malaysia economy was rank 29th largest economy in the world by purchasing power parity with gross domestic product for 2007 was estimated to be approximately $357.9 billion (World Bank, 2007). It has been recorded that, Malaysia experienced a stable and consistence record of economic growth in GDP which averaging an annual rate of around 7 percent over the period between 1970 until 2005.
Due to Malaysian open economy, from the externalities, it will create a major impact as well as the oil crises of the 1970s, the decline in the electronics industry in the mid 1980s and particularly the Asian financial crisis in 1997. In terms of the economic performance, the Malaysian economy experienced sluggish growth in 2001 with 0.3 percent, but rebounded strongly in 2002 with 4.1 percent. As the time goes by, the Malaysian economy however had strongly expanded in the year of 2004 increased by 7.1 percent