Services industries as source of economic growth

Abstract

The Malaysian economy has come a long way since the recession in 1985 - 87. With timely and decisive action on structural adjustments, development in the past eight years have ben remarkable, with the economy growing at about 9 per cent per Consequently, the Malaysian economy has transformed from one dependent on primary commodities towards an industrial led economy whereby the manufacturing sector constitutes 33 per cent of GDP and 80 per cent of export earnings by 1995. Although the economy has become more resilient, the adjustment process is by no means over. As part of the overall plan to structurally transform the Malaysian economy, the services sector is expected to be the next leading sector of the economy. The services sector in Malaysia has generally tended to expand at the same pace of growth as the overall economy, providing for related services in support of the growth of the industrial and agricultural sectors. However, the expansion of the services sector can no longer be allowed to be just a consequence of growth, but rather it will have to feature more prominently in generating economic activities to sustain the high growth of the country.