STRUCTURAL CHANGES OF THE MALAYSIAN ECONOMY AND ITS SPATIAL INCIDENCE ON REGIONAL ECONOMIC GROWTH
Keywords:
Structural Transformation, Import Substitution, Export orientation, Direct Foreign Investment (DFI), Gross Domestic Product (GDP), Theil Index, Free Trade Zone (FTZ)Abstract
The economy of Malaysia has undergone changes from its agricultural base to import-substitution during the 1960s and finally to export-orientation after 1968, associated with an influx of significant amount of direct foreign investment (DFI). These changes of the production base of the country led to concomitant changes in the structure of employment from agriculture to rnanufacturing and finally to services. Studies so far undertaken mostly concentrate on the macro aspect of this transformation process. No attempt has been made to study the structural changes of the national economy through analyzing the production/employment structure of the regions/states of Malaysia. In spite of adopting and implementing a number regional development policies and strategies from 2MP, it is anticipated that the structural transformation has not been uniform across the different regions of the country. Therefore, this paper provides a spatial analysis of the structural changes in the structure of production and employment that has occurred across fourteen states of Malaysia. The study found that the economic growth process has been unequal across the 14 states of Malaysia, accentuating the regional disparities in income and employment growth. Both federal govenunent development expenditure and private investments in different states of Malaysia have not been proportionate to their shares of national population and this partially explains the reason for the interregional differences of economic growth in the country.References
Ariff, M.? 1991. The Malaysian Economy: Pacific Connections. Singapore: Oxford University Press.
Aiken, S. R., Leigh C.H., Leinbach T. R. and Moss M. R., 1982. Development and Environment in Peninsular Malaysia. Singapore: McGraw-Hill International Book Co.
Armstrong, H. and Taylor J., 2004. Regional Economics and Policy. Oxford: Blackwell Publishing.
Armstrong, H. and Taylor J., 2002. European Union Regional Policy: Reconciling the Convergence and Evaluation Evidence, in J.R. Cuadrado-Roura and M. Parellada (eds.) Regional Convergence in the European Union. Advances in Spatial Science, Springer. Armstrong, H.W., 1995. Convergence Among Regions of the EU, 1950-90. Papers in Regional Science, 74:143-151.
Athukorala, Prem-chandra, 2001. The Macroeconomy up to 1997, in Barlow, Colin (ed.), 2001. Modern Malaysia in the Global Economy - Political and Social Changes into the 21st Century. Cheltenham, UK: Edward Elgar Publishing Ltd, pp. 13-27.
Barro, R.J. and Sala-i-Martin X., 1995. Economic Growth. Boston: MacGraw-Hill.
Barro, R.J. and Sala-i-Martin X., 1992. Convergence. Journal of Political Economy, 100:289-97.
Blair, J.P., 1991. Urban and Regional Economics. Boston, USA: Richard D. Irwin Inc.
Choguill, C.L., 1979. Regional development in the Third World: a search for an integrated theory. TRP 18. UK: University of Sheffield.
EPU (Economic Planning Unit) (2006). Ninth Malaysia Plan 2006-2010. Putrajaya: Prime Minister’s Department.
EPU (Economic Planning Unit), 2001. Eighth Malaysia Plan 2001-2005.
Putrajaya: Prime Minister’s Department.
EPU (Economic Planning Unit) (1996). Seventh Malaysia Plan 1996-2000. Kuala Lumpur: Prime Minister’s Department.
EPU (Economic Planning Unit) (1991). Sixth Malaysia Plan 1991-1995.
Kuala Lumpur: Prime Minister’s Department.
EPU (Economic Planning Unit) (1986). Fifth Malaysia Plan 1986-1990.
Kuala Lumpur: Prime Minister’s Department.
EPU (Economic Planning Unit) (1981). Fourth Malaysia Plan 1981-1985. Kuala Lumpur: Prime Minister’s Department.
EPU (Economic Planning Unit) (1976). Third Malaysia Plan 1976-1980.
Kuala Lumpur: Prime Minister’s Department.
EPU (Economic Planning Unit) (1971). Second Malaysia Plan 1971-1975. Kuala Lumpur: Prime Minister’s Department.
Fisch, O., 1984. Regional income inequality and economic development.
Regional Science and Urban Economics, 14:89-111.
Ghaffar, F., 1987. Regional Inequalities and Development in Peninsular Malaysia, Malaysian Journal of Tropical Geography, Vol.16, pp.23-36.
Gezici, F. And G.D. Hewings, 2004. Regional Convergence and the Economic Performance of Peripheral Areas in Turkey, Review of Urban and Regional Development Studies, 16(2): pp. 113-132. Gezici, F. And G.D. Hewings, 2002. Spatial Analysis of Regional Inequalities in Turkey, Discussion Paper 02-T-ll, Regional Economics Applications Laboratoiy. Urbana: University of Illinois. Gilbert, A. and Goodman D.E., 1976. Regional income disparities and economic development: a critique, in A. Gilbert (ed.). Development Planning and Spatial Structure. London: John Wiley and Sons. Hamzah Jusoh, 1992. The application of Williamson’s hypothesis to regional development in Malaysia, in Mohd Yaakob Hj Johari (ed.). Regional Development in Malaysia: Issues and Challenges. Kota Kinabalu, Malaysia: Institute for Development Studies, pp.21 -53.
Hansen, N.M., 1981. Development from above: the centre-down development paradigm, in W.B.Stohr and D.F.R. Taylor (eds.). Development from Above or Below?. NY: John Wiley and Sons. Hirschman, A.O., 1958. The Strategy of Economic Development. New Haven: Yale Univ. Press.
JPBD (2006). National Urbanization Policy. Kuala Lumpur: Federal Department of Town and Country Planning (JPBD).
JPBD (2005). National Physical Plan. Kuala Lumpur: Federal Department of Town and Country Planning (JPBD).
Kamal Salih, et. ah,2000. Malaysia's Long Range Economic Outlook 1991-2000. Kuala Lumpur: MIER.
Lall, S. And Yilmaz S., 2001. Regional economic Convergence: Do policy instruments make difference? Annals of Regional Science, 35:153-166.
Mohd Yusof Kasim, 1992. Regional development in Malaysia: a review of past and present policies, in Mohd Yaakob Hj Johari (ed.). Regional Development in Malaysia: Issues and Challenges. Kota Kinabalu, Malaysia: Institute for Development Studies, pp.55-92. Mera, K., 1973. On the urban agglomeration and economic efficiency.
Economic Development and Cultural Change, 22:467-75.
Myrdal, G., 1957. Economic Theoiy and Under-developed Regions. London: Duckworth.
Nichols, V., 1969. Growth poles: an evaluation of their propulsive effect.
Environment andPlanning, l:pp. 193-208.
Okposin, S.B., Abdul Halim Abdul Hamid & Ong Hway Boon, 1999. The Changing Phases of Malaysian Economy. London: ASEAN Academic Press.
Onn, F. C., 1986. New Economic Dynamo — Structures and Investment Opportunities in the Malaysian Economy. Sydney, Australia: Allen & Unwin.
Sala-i-Martin, 1996. The classical approach to convergence analysis, Economic Journal, 106:1019-36.
Salleh, G., 2000. Urbanisation & Regional Development in Malaysia.
Kuala Lumpur: Utusan Publications & Distributions Sdn Bhd.
Tan, C. E. and Mohamed Ariff, 2001. Structural Change in the Malaysian Manufacturing Industry, in Barlow, C.(ed.) Modern Malaysia in the Global Economy — Political and Social Changes into the 21st Century. UK: Edward Elgar, pp.59-73.
Tabuchi, T., 1988. Interregional income differentials and migration: their relationships. Regional Studies, 22: pp. 1-10.
Terasi, M., 2000. Regional Convergence in Italy and Spain: A Comparative Perspective, in Shaw, David, P. Roberts & J. Walsh (eds) (2000). Regional Planning and Development in Europe. Aldershot: Ashgate Publishing Ltd.
Theil, H., 1967. Economics and Information Theory. Amsterdam: North-Holland.
Walsh, J.A. & O’Kelly, M.E., 1979. An Information Theoretic Approach to Measurement of Spatial Inequality. Economic and Social Development, 4: pp. 267-286.
Williamson, J.G., 1965. Regional Inequality and the Process of National Development: A Description of the Patterns, Economic
Development & Cultural Change, 13: pp. 3-84.
Downloads
Published
How to Cite
Issue
Section
License
Copyright & Creative Commons Licence
eISSN: 0128-0945 © Year. The Authors. Published for Malaysia institute of planner. This is an open-access article under the CC BY-NC-ND license.
The authors hold the copyright without restrictions and also retain publishing rights without restrictions.
