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Malaysia Brunei 1997-98 COUNTRY PROFILE Malaysia Brunei Our quarterly Country Report on Malaysia and Brunei analyses current trends. This annual Country Profile provides background political and economic information. 1997-98 The Economist Intelligence Unit 15 Regent Street, London SW1Y 4LR United Kingdom The Economist Intelligence Unit The Economist Intelligence Unit is a specialist publisher serving companies establishing and managing operations across national borders. For over 50 years it has been a source of information on business developments, economic and political trends, government regulations and corporate practice worldwide. The EIU delivers its information in four ways: through subscription products ranging from newsletters to annual reference works; through specific research reports, whether for general release or for particular clients; through electronic publishing; and by organising conferences and roundtables. The firm is a member of The Economist Group. London New York Hong Kong The Economist Intelligence Unit The Economist Intelligence Unit The Economist Intelligence Unit 15 Regent Street The Economist Building 25/F, Dah Sing Financial Centre London 111 West 57th Street 108 Gloucester Road SW1Y 4LR New York Wanchai United Kingdom NY 10019, USA Hong Kong Tel: (44.171) 830 1000 Tel: (1.212) 554 0600 Tel: (852) 2802 7288 Fax: (44.171) 499 9767 Fax: (1.212) 586 1181/2 Fax: (852) 2802 7638 e-mail: [email protected] e-mail: [email protected] e-mail: [email protected] Website: http://www.eiu.com Electronic delivery EIU Electronic New York: Lou Celi or Lisa Hennessey Tel: (1.212) 554 0600 Fax: (1.212) 586 0248 London: Moya Veitch Tel: (44.171) 830 1007 Fax: (44.171) 830 1023 This publication is available on the following electronic and other media: Online databases CD-ROM Microfilm FT Profile (UK) Knight-Ridder Information World Microfilms Publications (UK) Tel: (44.171) 825 8000 Inc (USA) Tel: (44.171) 266 2202 DIALOG (USA) SilverPlatter (USA) University Microfilms Inc (USA) Tel: (1.415) 254 7000 Tel: (1.800) 521 0600 LEXIS-NEXIS (USA) Tel: (1.800) 227 4908 Copyright © 1997 The Economist Intelligence Unit Limited. All rights reserved. Neither this publication nor any part of it may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of The Economist Intelligence Unit Limited. All information in this report is verified to the best of the author’s and the publisher’s ability. However, the EIU does not accept responsibility for any loss arising from reliance on it. ISSN 0269-5588 Symbols for tables “n/a” means not available; “–” means not applicable Printed and distributed by Redhouse Press Ltd, Unit 151, Dartford Trade Park, Dartford, Kent DA1 1QB, UK 1 July 1, 1997 Contents Malaysia 3 Basic data 4 Political background 4 Historical background 8 Constitution and institutions 10 Political forces 13 International relations and defence 15 The economy 15 Economic structure 16 Economic policy 22 Economic performance 23 Regional trends 24 Resources 24 Population 26 Education 27 Health 27 Natural resources and the environment 28 Economic infrastructure 28 Transport and communications 29 Energy provision 30 Financial services 31 Other services 32 Production 32 Manufacturing 33 Mining and semi-processing 34 Agriculture, forestry and fishing 35 Construction 36 The external sector 36 Merchandise trade 38 Invisibles and the current account 39 Capital flows and foreign debt 39 Foreign reserves and the exchange rate 43 Appendices 43 Sources of information 44 Reference tables EIU Country Profile 1997-98 © The Economist Intelligence Unit Limited 1997 2 Brunei 55 Basic data 56 Political background 56 Historical background 57 Constitution and institutions 58 Political forces 59 International relations and defence 61 The economy 61 Economic structure 62 Economic policy 63 Economic performance 63 Regional trends 64 Resources 64 Population 66 Education 66 Health 67 Natural resources and the environment 67 Economic infrastructure 67 Transport and communications 69 Energy provision 70 Financial services 71 Other services 72 Production 72 Manufacturing 73 Mining and semi-processing 74 Agriculture, forestry and fishing 75 Construction 76 The external sector 76 Merchandise trade 76 Invisibles and the current account 76 Capital flows and foreign debt 77 Foreign reserves and the exchange rate 78 Appendices 78 Sources of information 79 Reference tables EIU Country Profile 1997-98 © The Economist Intelligence Unit Limited 1997 Malaysia: Basic data 3 Malaysia Basic data Total area 329,758 sq km Population 21.2 million (mid-1996 estimate) Main towns Population in ’000 (1991) Kuala Lumpur 1,145 Ipoh 383 George Town 220 Johor Baharu 328 Kuala Terengganu 228 Climate Tropical Weather in Kuala Lumpur Hottest months, April and May, 23-33°C (average daily minimum and maxi- (altitude 39 metres) mum); coldest month, December, 22-32°C; driest month, July, 99 mm average rainfall; wettest month, April, 292 mm average rainfall Languages Malay, Chinese, English, Tamil, Itan Dusan, Bajau and others Measures Metric system with gradual conversion from UK (imperial) system. Local meas- ures include: 1 pikul=25 gantang=60.48 kg 1 koyan=40 pikul=2.419 tons Currency Malaysian dollar or ringgit (M$ or RM)=100 sen (cents). Average exchange rates in 1996: M$2.52:US$1; M$3.93:£1 (cross rate). Exchange rate in late June 1997: M$2.51:US$1. Time Peninsula: 7 hours ahead of GMT; Sabah and Sarawak: 8 hours ahead of GMT Public holidays (1997) February 7-9 (Chinese New Year); February 9 (Hari Raya Puasa, end of Ramadan); April 29 (Vesak Day); May 1 (Labour Day); April 18 (Hari Raya Haji); June 3 (King’s birthday); July 18 (Prophet Muhammed’s birthday); August 31 (National Day); November (Deepavali); December 25 (Christmas Day) EIU Country Profile 1997-98 © The Economist Intelligence Unit Limited 1997 4 Malaysia: Historical background Political background Historical background British colonial rule The Sultanate of Malacca played a pivotal role in east-west trade from its foundation in the early 15th century, and for this reason was seized by the Portuguese in 1511. The Portuguese did not attempt to extend their influence into the Malay peninsula, nor did the Dutch who replaced them in Malacca in the 17th century. British influence in the area began when the East India Company obtained the island of Penang as a trading settlement in the late 18th century, after assisting the sultan of Kedah repel incursions from Siam (Thailand). Malacca and Singapore, obtained later, were ruled directly with Penang as the Straits Settlements. Influence was extended to the nine Malay sultanates on the peninsula, but internal government remained largely under the control of the traditional rulers, particularly in the four so-called Unfederated Malay States. The colonial administration encouraged (and sponsored) immigrants from southern China and southern India, whose employment in the tin mines and on the plantations speeded the transition from a trading outpost to a commodity producer. Small-scale workshops supporting primary industries introduced the first stages of industrialisation. The Japanese, who occupied the country from 1941 to 1945, sought the cooper- ation of the Malay rulers. They regarded the ethnic Chinese as representatives of the enemy they had been fighting on the mainland of China since the mid-1930s, not least because the guerrilla resistance to the Japanese—although assisted by British forces—was mainly Chinese-led. After the war, members of the Malayan Communist Party (MCP) among the guerrillas started an insurrec- tion against the newly restored British colonial system. At the same time Malay nationalists campaigned for independence by peaceful means. Rapid progress to full independence for the 11 peninsular states was an integral part of the anti-insurgency strategy. Power was handed over in 1957. The guerrilla war, referred to officially as “The Emergency”, continued for some time after, and with it the powers of indefinite detention without trial assumed by the colonial authorities under the Internal Security Act (ISA). The govern- ment has retained these powers although the last groups of communist insur- gents along the border with Thailand laid down their arms in 1989. The Malays’ political Malays account for around 55% of the population, and have dominated the ascendancy— political system since independence. Their ascendancy has been assured by effective political structures formed around the Malay sultanates; the electoral system still makes support in the Malay-dominated rural areas crucial for polit- ical success at the national level. In Sabah and Sarawak indigenous minorities retain similar traditional political links. —and the economic power The ethnic Chinese, who constitute some 25% of the population, enjoy greater of the ethnic Chinese economic power than the Malays, but have not matched their ethnic solidar- ity. They have long been urbanised, and form a higher proportion of the population in Malaysia than in other South-east Asian countries (apart from EIU Country Profile 1997-98 © The Economist Intelligence Unit Limited 1997 Malaysia: Historical background 5 the special case of Singapore). As a result, Malaysian Chinese have constituted the urban proletariat and been not only shopkeepers, traders and successful entrepreneurs, but also artisans. While favouring Chinese candidates, Chinese voters have tended to divide on the class lines familiar in industrialised
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