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Malaysia: Industrial success and the role of the government

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  • Sanjaya Lall

Abstract

The Malaysian economy has been one of the best performers in the developing world over the past twenty-five years. Malaysian GDP grew at an annual rate of 6.7 per cent during 1971–90, led by a manufacturing sector that expanded at 10.3 per cent. Performance was even stronger in the early part of the 1990s, when the economy grew at 8.1 per cent per annum and the manufacturing sector at 12.3 per cent, the highest rate of industrial growth in Asia with the exception of China. This industrial performance led to a massive structural transformation of the economy, with the share of manufacturing in GDP rising from 14 per cent in 1971 to 30 per cent in 1993, and that of traditional sectors (agriculture and mining) declining from 43 to 24 per cent.1 This impressive performance has two quite distinct segments — the export of manufactured products and production for the domestic market.
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Suggested Citation

  • Sanjaya Lall, 1995. "Malaysia: Industrial success and the role of the government," Journal of International Development, John Wiley & Sons, Ltd., vol. 7(5), pages 759-773, September.
    • Handle: RePEc:wly:jintdv:v:7:y:1995:i:5:p:759-773
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    Cited by:

    1. Bethuel Kinyanjui Kinuthia, 2016. "Technology spillovers: Kenya and Malaysia compared," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 25(4), pages 536-569, June.
    2. Prema-Chandra Athukorala & Jayant Menon, 1997. "Export-led Industrialisation, Employment and Equity: The Malaysian Case," Agenda - A Journal of Policy Analysis and Reform, Australian National University, College of Business and Economics, School of Economics, vol. 4(1), pages 63-76.
    3. Wong, Chan-Yuan, 2011. "Rent-seeking, industrial policies and national innovation systems in Southeast Asian economies," Technology in Society, Elsevier, vol. 33(3), pages 231-243.
    4. Ahmed, Elsadig Musa, 2012. "Are the FDI inflow spillover effects on Malaysia's economic growth input driven?," Economic Modelling, Elsevier, vol. 29(4), pages 1498-1504.
    5. Bilge Erten, 2010. "Industrial Upgrading and Export Diversification: A Comparative Analysis of Economic Policies in Turkey and Malaysia," Working Papers id:2778, eSocialSciences.
    6. Menon, Jayant, 2009. "Macroeconomic management amid ethnic diversity: Fifty years of Malaysian experience," Journal of Asian Economics, Elsevier, vol. 20(1), pages 25-33, January.
    7. Kozo Otsuka & Kaoru Natsuda, 2016. "The Determinants Of Total Factor Productivity In The Malaysian Automotive Industry: Are Government Policies Upgrading Technological Capacity?," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 61(04), pages 1-18, September.
    8. Ha-Joon Chang & Kiryl Zach, 2018. "Industrial development in Asia: Trends in industrialization and industrial policy experiences of developing Asia," WIDER Working Paper Series wp-2018-120, World Institute for Development Economic Research (UNU-WIDER).
    9. Booth, Anne, 1999. "Initial Conditions and Miraculous Growth: Why is South East Asia Different From Taiwan and South Korea?," World Development, Elsevier, vol. 27(2), pages 301-321, February.
    10. Bethuel Kinyanjui Kinuthia, 2009. "Industrialization in Malaysia: Changing role of Government and Foreign Firms," DEGIT Conference Papers c014_049, DEGIT, Dynamics, Economic Growth, and International Trade.

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