Primary commodity issues and development in Malaysia

Abstract

The performance of the Malaysian economy depends primarily on the production and export of primary commodities. The growth of the economy measured in conventional terms, and its reliance on exports (contributing about 40-45% of the country's GNP) can be characterized by the 'export led growth' paradigm. Within the export sector itself, primary commodities feature prominently (although manufactured exports have exhibited a promising trend in the recent past accounting for 20% of total exports in 1979). The major commodity exports: rubber, saw logs, sawn timber, palm oil, tin and petroleum, constitute 73.6% of total exports. If the minor commodity exports (cocoa, coconut oil, copra, palm kernel oil, bauxite, pepper, canned pineapples and juice, and fish) are also taken into account, the percentage increases to 78 47. Such a heavy reliance on primary commodities within the economic structure brings forth some important issues of concern which are briefly reviewed below.