Society and Culture of Malaysia - Research Paper Example

Malaysia Introduction Malaysia is located in Southeastern Asia; it is in the peninsula which borders Thailand Indonesia, Brunei, and the South China Sea, south of Vietnam. The total land on which the country is 329,847 sq km, out of this only 1,190 sq km is water and the rest is land. The country has a diverse topography consisting of plains which rise to hills and mountains. Malaysia is rich in natural resources; the country has resources such as tin, petroleum, timber, copper, iron ore, natural gas, bauxite. The land is being used effectively, 5.46 per cent of the land in Malaysia is arable, out of which around 17 per cent is dedicated to permanent crops, while the rest is for seasonal crops. Malaysia holds a strategic location along Strait of Malacca and southern South China Sea; this gives the country an advantage. The country is prone to some natural hazards such as flooding, landslides and forest fires. The climate in general is very tropical year around and the island does experience its annual southwest (April to October) and northeast (October to February) monsoons. (CIA, Fact Book) Socioeconomic & Cultural Factors The current population of the country is 25,715,819 as of July 2009. The population growth rate is 1.723 per cent. Out of this 70 per cent of the population is urbanized and the rate of urbanization is 3 per cent. The average age per person is around 30 years and for men it is 25 years and for women it is 26 years. Most of the population, i.e. around 64 percent of the population falls between the ages of 15 – 64 years. This means that the general population is young and energetic. The population is highly literate, that is around 89 per cent of the population is literate. Literacy is defined as those people who are above the age of 15 and can read and write. The literacy rate for men is higher than that of women, for men it is 92 percent and for women it is 85.4 percent, as of the 2000 census. (CIA, Fact Book) Male Female Literacy Rate (as of 2000 census) 92% 85.4% School Life Expectancy (primary to tertiary sectors, as of 2005) 12 years 13 years The ethnic groups which exist in Malaysia are many; they consist of Malay people, i.e. 50.4 percent, the Chinese are 23.7 percent, Indians 7.1 percent, Indigenous 11 percent and some other ethnic groups which consist of 7.8 percent. These ethnic groups practice many religions including Islam, i.e. 60.4 percent; Buddhism is 19.2 percent, Christianity 9.1 percent, Hinduism 6.3 percent, Confucianism, Taoism and other traditional Chinese religions is 2.6 percent. Majority of the people are Malays and are Muslims. (CIA, Fact Book) The country is known for its multi-cultural society and can be referred to as an example. Each ethnic group has its own traditions and festivals, which is why Malaysia has come to be known as a colorful country. Any festival that is celebrated by the people of Malaysia is recognized as a holiday, whether it is celebrated by the majority or the minority. Also everybody celebrates every holiday, thus Eid which is a Muslim festival is celebrated by all the people, even the Hindus. During a festival, all the people of Malaysia open their doors for people of other ethnic backgrounds and communities. The cultural traditions are self-contained but during these festivals, anybody can visit anybody’s house and they will welcome them. This shows a the level of tolerance that exists within the whole Malaysian community and a common tradition followed by the whole community. (Geographia) The people of the country usually adorn western clothes, disregarding what ethnic group they belong to. But when it comes to special occasions and festivals, they prefer to wear their traditional dresses. In general, the country has become very modern; we can see that most of the work ethics and values are mostly those that are followed in the western world. On the other side, there are many people who still very devout, i.e. they cover their heads and their upper torsos. (expatKL) A very good example of the multiculturalism is the Malay wedding ceremony. This ceremony incorporates some traditions from the Hindu wedding ceremony, i.e. they both sit and feed each other yellow rice with henna on their hand. While at the same time, the Muslims have adapted some Chinese traditions such as giving red packets of money at their festivals. The color of the packets is different; it is green instead of red. (Geographia) The official language that is spoken is Bahasa Malaysia, but English, Chinese, Tamil, Telugu, Malayalam, Panjabi, and Thai are also spoken. Political & Legal Climate The political system which is followed by the country is a federal parliamentary monarchy, which means that the Prime Minister is the head of the country. The country follows a multi-party system. The political system incorporates all those regulations, practices and the structure of laws that emphasize and explain how the government is managed or run. The Constitution is divided into five parts and it was drafted in 1956 and was implemented in 1957 on the 27th of August. The five parts consist of the Executive branch, Legislative Branch, Judicial brand, the Party in Power and the State Governments. The Executive Branch consists of the King of Malaysia who is the Paramount Ruler; this person is elected for a term of five years from the nine Sultans of the Malay States, as the country is federal constitutional elective monarchy. The Executive power is held by the Cabinet which is led by the Prime Minister. The Legislative Branch consists of the Senate with seventy seats. Out of these, 44 are appointed by the Paramount Ruler, who is also a Muslim and 26 seats are appointed by the State legislatures. The members for the House of Representatives are usually elected by vote, this consists of 219 seats. The Judicial Branch follows the English Common Law, as Malaysia has remained one of the British Colonies. Some of the laws have been adapted by the Indian Law. There are the Federal Court, Court of Appeals, high courts, session's courts, magistrate's courts, and juvenile courts. The Federal government can handle external affairs, defense, internal security, justice, federal citizenship, finance, commerce, industry, communications, transportation, and other matters. The State governments are led by the Chief Ministers, which are nominated by the State assembly. Malaysia consists of 13 states with 3 federal territories, namely, Kuala Lumpur, Labuan Island and the Putrajaya federal administrative territory. (123 Independence Day) The current Head of State is Sultan Mizan Zainal Abidin, he was instated in December 2006 and is the 13th King of Malaysia. The current Prime Minister is Najib Abdul Razak who was instated in March 2009. (BBC News) In general, the country has good political stability and a major plus for Malaysia is that even though the country was hit by the financial crisis in 1997, the government stayed intact. This gives a positive message to the business world, who would consider investing in Malaysia, looking at the level of stability that the country has. (Trade Chakra) Political risk is measured from the internal strive to conflict and any unseen dangers that the country might be open to such as terrorism. The level of political risk is also low, most of the ethnic groups have learned to live together and the last major outburst took place in 1969. The governments along with the other political parties, all agree that they want a peaceful society and they have worked towards achieving this goal. (Trade Chakra) Economic Climate Previously Malaysia was a middle income economy which was a producer or raw material but today it has transformed itself and is now a multi-sector economy. During the 1970’s the Malaysian economy experienced a boom which helped it become what it is today. The basic driver of the economy is the vast export of electronics, although efforts are being undertaken to increase the domestic demand. Malaysia is an oil and gas exporter and this helps the country gain revenue especially in times when the prices are high. The major industries within the country are; in the Peninsular Malaysia - rubber and oil palm processing and manufacturing, light manufacturing, electronics, tin mining and smelting, logging, timber processing; in Sabah - logging, petroleum production; and in Sarawak - agriculture processing, petroleum production and refining, logging. The major agriculture products include: rubber, palm oil, cocoa, timber, coconuts, rice, pepper, and subsistence crops. (CIA Fact Book) The GDP of Malaysia for the year 2009 is $207.4 billion, per capita this comes around to $14,700. This is a drop from the previous two years in which the per capita GDP was $ 15400 for 2008 and $15000 for 2007. The inflation rate, for consumer prices is 0.4 percent which is a huge drop from the 5.4 percent which prevailed during 2008. The unemployment rate for the country has increased from 2008; in 2009 it was 5 percent which is an increase from 3.3 percent in 2008. The GNP of Malaysia is $371 billion in 2008. (Google) Real GDP in Malaysia has increased by an average of 6 percent over the past 5 years. The household consumption rate for the lowest 10 percent of the population is 2.6 percent while for the highest 10 percent is 28.5 percent. This shows that there is substantial income disparity within the economy. The currency that is used in Malaysia is the Ringgit; the current exchange rate for the USD is Ringgits (MYR) per US dollar - 3.55, as of 2009. The current account balance for 2009 is $27.76 billion, and the reserves of foreign exchange and gold are equivalent to $98.02 billion as of 2009. The level of foreign direct investment within Malaysia is equivalent to $86.43 billion in 2009 which is a decrease from $83.35 billion in 2008. (CIA Fact Book) The country has a number of ports and around 38 airports with paved runways and a total of 80 airports with unpaved runways. Malaysia also has 2 heliports, 306 merchant marines. Also Malaysia is a member of ASEAN, Commonwealth, and APEC. (Economy Watch) Analysis Malaysia is known for its multiculturalism. It is a country where people show tolerance for one another and lookout for each other. When Malaysia was evaluated on the Country Risk Tier on three factors; economic, political and financial, it scored moderate on economic risk and political risk and low on financial system risk. Even in times of recession the country is expected to grow at a moderate rate of 1.5 percent till 2010. This shows that the government has played its part in making Malaysia risk free. The country is politically stable, thus if a business is to invest in the country, the risk of policies and the government changing on a regular basis is minimal. The judicial and the political system are intact and almost al the parties agree on the policies that are being implemented within the country. Tourism in Malaysia is also increasing. With the Malaysia – Truly Asia campaign awareness of the country and its tourist destinations is increasing. Tourism is an important sector of the economy and contributes a percentage to the GDP. Most of the travel bookings were done via the internet, thus the internet helps keep the tourism industry up and going. In 2009, there were 23.6 million people who arrived in Malaysia on business or pleasure. These figures have been rising continuously since 1999, when it was only 7.9 million people. (Tourism Malaysia) The country has its share of infrastructure development and is highly urbanized. Most of the population is literate thus skilled labor is not hard to find. When starting a business it only takes 24 days and the number of procedures that need to be completed is only 9. It is relatively easy to start a business. Also the Central Bank has a very strict regulatory regime due to which Malaysia exposure to risky financial instruments is limited. This helped curtail the impact of the global financial crisis on the Malaysian economy. (Theodora) On the Investor Protection Index, Malaysia scores an 8.7 with 10 being the highest. This shows that any investor in Malaysia will be protected well. Also, availability of finance within Malaysia is easy. Also the three rating agencies, Fitch and S&P give Malaysia an A-, while Moody’s gives it an A3 on the risk assessment. (Pri-Center) The government in general encourages foreign investment but still holds some control, in the form of approval, for individual investors. It especially controls the transfer of technology and foreign equity. Also, many initiatives have been undertaken which allow for more transparency in public contracts, less price controls, fewer subsidies and in general less government involvement in the economic sector. (AMBest) References 123 Independence Day, “Political System of Malaysia” Date Accessed April 14, 2010, http://www.123independenceday.com/malaysia/political-system.html AMBest, “Malaysia – Country Risk Report” Date Accessed April 14, 2010, http://www3.ambest.com/ratings/cr/reports/Malaysia.pdf BBC News, “Malaysia – Country profile” Date Accessed April 14, 2010, http://news.bbc.co.uk/2/hi/asia-pacific/country_profiles/1304569.stm CIA Fact Book, “The World Fact Book – Malaysia” Date Accessed April 14, 2010, https://www.cia.gov/library/publications/the-world-factbook/geos/my.html Economy Watch, “Trading Blocks and Country Groups” Date Accessed April 14, 2010, http://www.economywatch.com/country-grouping/ expatKL, “Society and Culture” Date Accessed April 14, 2010, http://www.expatkl.com/society_culture.php Geographia, “Who are Malaysians” Date Accessed April 14, 2010, http://www.geographia.com/malaysia/cultures.html Google, “Gross National Income in PPP dollars” Date Accessed April 14, 2010, http://www.google.com/publicdata?ds=wb-wdi&met=ny_gnp_mktp_pp_cd&idim=country:MYS&dl=en&hl=en&q=GNP+of+malaysia Malaysia – Truly Asia, “Political Stability” Date Accessed April 14, 2010 http://www.malaysia-trulyasia.com/tourism/political_stability.htm Pri-Center, “Malaysia” Date Accessed April 14, 2010, http://www.pri-center.com/country/country_specific.cfm?countrynum=125 Theodora, “Malaysia Economy 2010” Date Accessed April 14, 2010, http://www.theodora.com/wfbcurrent/malaysia/malaysia_economy.html Tourism Malaysia, “Tourist Arrivals & Receipts” Date Accessed April 14, 2010, http://www.tourism.gov.my/corporate/research.asp?page=facts_figures Trade Chakra, “Political Risk in Malaysia” Date Accessed April 14, 2010, http://www.tradechakra.com/economy/malaysia/political-risk-in-malaysia-162.php Trading Economies, “Malaysia GDP Growth Rate” Date Accessed April 15, 2010, http://www.tradingeconomics.com/Economics/GDP-Growth.aspx?Symbol=MYR Read More