Business and Market Overview of Malaysia

ECONOMY. Malaysia is a middle-income economy and has the third highest GDP per capita (US$4,625) among the Southeast Asian countries after Singapore and Brunei. The country was primarily a producer of raw materials but transformed its economy from the 1970s to the 1990s into a multi-sector economy. Malaysia's economic growth is export driven mainly from exports of electrical and electronic products.

Malaysia's economy is relatively stable with healthy foreign exchange reserves and a GDP of US$118.3 billion in 2004. From 2000 to 2004, Malaysia's real GDP grew by an annual average of 5.7% while inflation remained below 2.0% and unemployment below 4.0%. The Asian economic crisis of 1997 adversely affected Malaysia's economy during the period. It is unlikely that the country will experience an economic crisis similar to 1997 with current healthy foreign exchange reserves, low inflation and small foreign debt.

The manufacturing sector accounted for 48.5% of Malaysia's GDP in 2004, services accounted for 42.4% and the agriculture sector accounted for 9.1%. Major industries include electronic & electrical products, textiles, clothing & footwear, chemicals, petroleum, wood and metal products. Major agriculture industries include palm oil, rubber, cocoa, rice, poultry and timber.

Business and Market Overview of Vietnam

ECONOMY. In 1986, the Vietnamese government abandoned its Marxist economic policy and implemented "doi moi" (renovation) involving economic structural reforms. These reforms included modernising and liberalising the economy and developing more export driven industries. Vietnam joined the Association of Southeast Asian Nation (ASEAN) and became a signatory of the ASEAN Free Trade Agreement (AFTA). The US-Vietnam Bilateral Trade Agreement in 2001 has brought major changes to Vietnam's economy and hopes to become a member of the WTO in 2006.

Vietnam's GDP grew at an average of 7.3% annually in 2000-2004 and reached US$44.5 billion by 2004 and unemployment declined from 6.4% in 2000 to 5.6% in 2004. However, inflation steadily increased reaching 7.8% by 2004 and prompted Vietnam's government to implement monetary and fiscal controls to manage inflationary pressures.

The manufacturing sector contributed towards 40.1% of Vietnam's GDP in 2004 while the service sector contributed 38.2%. The agriculture sector contributed towards 38.7% of the country's GDP in 1990 but declined to 21.8% by 2004. Major industries include processed foods, garments and shoes, mining (coal and steel) cement, fertilisers, glass, tyres, paper and petroleum. Major agriculture products include rice, coffee, rubber, cotton, tea, pepper, soybean, cashew nuts, peanuts, sugar cane, peanuts, bananas, poultry and seafood.