MALAYSIA
Contents
1. Abstract 3
2. Introduction 3
3. The positive impact of “APEC” on the Malaysian economy 4
4. The negative impact of “APEC” on the Malaysian economy
5. Conclusion 7
6. References 8
Malaysia
1. Abstract
The paper focuses on the APEC which is an organization that is formed with an ai8m to create a larger trade organization that encompassed all or nearly most of the countries in the region. The paper mostly focuses on the impact of the APEC in Malaysia. The benefits that have been accrued to the APEC have far outdone the effects of the disadvantage of the same regional organization. Though the financial crisis really did bring the company to its knees, even the efforts that were put in place did not really bring much fruits and tend to almost neutralize the positive effects it gained.
The APEC can more so be attributed to the benefits and thriving economy the country is currently enjoying; the increased employment, high per capita income and equitability in gap between the rich and the poor among others.
2. Introduction
The Asian-Pacific Economic Cooperation (APEC) came into being as reaction to the advancing interdependence that is among the Asia-Pacific economies. It is aimed at facilitating the growth of the economy, trade, cooperation and investment among the countries in the Asian-Pacific area (Downing, 2003). In present light it is composed of 21 members with approximately 3 billion people. Its presence has led to its advancement more so with the yearly meetings held.
APEC’s gross domestic product is well above 19 trillion US dollars, which it is approximately 47 % of the world trading. It helps to create a regional body that promotes trading functions, cooperation as well as investment. APEC’s targets are founded on the basis of liberating trade and investment, facilitating business transaction and the economic and technical organization. Its accomplishments have led to the reduction of tariffs as well as hindrances posed on trading activities. The transit of goods and services in the region has also been assured safety and efficiency.
3. The positive impact of “APEC” on the Malaysian economy
The positive impact of the APEC on the Malaysian economy can be attributed to so many things. In respect to the telecommunication industry, there is an observed market development as well as cost effects. APEC was able to minimize the barriers placed on the markets, the markets were not free and the free flow of goods and services was a major setback to establishment of a thriving economic sector (Jovanic, 2011). With the coming into place of the APEC, the market barriers that were placed and block free market movement were removed and now goods and services were able to able to find their way into the Malaysian market. This gave way for a competitive market to be established, the Malaysian market was now able to receive goods and services from a foreign market hence giving way for surplus goods and services supply.
The economic market thrived and the foreign equitability market share increased in the consecutive years as a result of this market free flow. In respect to the telecommunication industry, the British Telecommunication took possession of 33% in Binariang. On the other hand the Nokia Telecommunication industry came into a merger with the Malaysian Sapura Holdings to create software that was able to provide a digital switching (Mahmood, 2000). The APEC leaders were able to put in place trading liberalization which was made available due to the developed states in the year 2010 as well as the well advancing economies.
It also due to the APEC that the trading costs was reduced in the eastern Asia. This went concurrently with the high regionalism of the Eastern Asian market trade as well as the increasing advantage posed to the RVCs, where there is an observed reduction in the trading cost, this was in the earlier 1990s and the beginning of the 21st Century. APEC had made an agreement to minimize its trading costs by a5 percent margin in a five year period.
Malaysia has an experienced an increased growth in the economic sector in the recent periods. From 8% in 1970-1980 to 8.7% in 1990-1997, the high economic growth can be attributed to the decline in inflation where goods and services were acquired at relatively cheaper price. The level of unemployment in the region went to a dramatic decline as jobs were now readily available to the citizens in Malaysia (Jürgen Rüland, 2002). It is similarly with the presence of the APEC as well as the increased level of employment that the level of poverty went to a massive decline.
The citizens in the Malaysian economy had similarly achieved an equitable or approximately similar income earning; this meant the gap between the rich and the poor was no that large as it was in the initial state. It is similarly that it is due to the APEC that the per capita income of the country had an increase. The per capita income had gone from 380 US dollars in the year 1970 to 370 in the year 1996; this registered a growth of approximately 7 percent (World Bank, 1999a). The manufacturing industry was a bigger market in play and contributed significantly to the employments and exports. Its rate of growth, which is very high, can be attributed to the establishment of the APEC trading aspects. The manufacturing involves; mining, building; electricity, water as well as gas.
4. The negative impact of “APEC” on the Malaysian economy
The cost effect on the Malaysian economy had suffered market set back in the time of the financial crisis. The Malaysian market in respect to the currencies, suffered a sharp fall. This went similarly to the surrounding markets in the APEC. The APEC market suffered from divestment, this is as observed in the Swisscom, whereby it divested 30 % of its equitability share holdings to DiGi Swisscom Berhand that had its relocation in Malaysian. Swisscom made its intentions to invest in other European market.
The response made by the APEC to act on the financial crisis was not one of the best as it received criticism from all sources. This however in is disputed by several observers who see that the blame placed on APEC is not fair. The crisis has had an effect on all of the countries in the region; this led to a meeting of all the leaders in the region which was held in Manila. There however were adverse problems that the APEC did face in Vancouver (Yamazawa, 2000). There were efforts that were being made to offer liberalization in trade; this however created a venue for controversy with Japan as well as other countries that did not go with the ideas proposed. The idea proposed was about the involvement of a sectoral liberalization in several regions.
APEC also made attempt to avoid competition from the other enterprises or companies available. This was however a contrast to cookie cutter method applied by the IMF which was attempt to curb the financial crisis.
5. Conclusion
The Malaysian economy has experienced a dramatic improvement in the economic sector, which went hand in hand with the structural changes in the manufacturing industry which led to a visible change (Sharma, 2002). The exports that were related to the manufacturing industry, the employment and exports in relation to the agricultural sector were higher.
The level of competitiveness witnessed by the Malaysian economy in the bigger picture can be attributed to the political stability, the investment as well as the infrastructure of the country. The country went further to benefit with deregulation, efficient leadership as well as the privatization of several companies.
The decline in the tariffs and the barriers were meant to offer competitiveness which did finally pay off. The level of competition in the big industries is quite important to offer increased growth in the world stage.
6. References
Downing, S. L. (2003). Asia Pacific Economic Cooperation (APEC): current issues and background. Hauppauge, New York: Nova Publishers.
Jovanic, M. N. (2011). International Handbook on the Economies of Integration: General Issues and Regional Groups. Northampton, Massachusstees: Edward Elgar Publishing.
Jürgen Rüland, E. M. (2002). Asia-Pacific Economic Cooperation (APEC): the first decade. Madison, New York: Routledge.
Mahmud, D. A. (2000, October 26-27). Export Specialization and Competitiveness of the Malaysian Manufacturing: Trends, Challenges and Prospects. Retrieved May 14, 2011, from http://www.apec.org.au/docs/mahmood.pdf
Sharma, S. D. (2002). Beyond ASEAN and APEC: Towards a New Asia-Pacific Economic Regionalism. Retrieved May 14, 2011, from http://www.ieas.or.kr/vol14_3/14_3_3.pdf
World Bank (1999a). World Development Report, New York: Oxford University Press
Yamazawa, I. (2000). Asia Pacific Economic Cooperation (APEC): challenges and tasks for the twenty-first century. Madison, New York: Routledge.
