Nature, a source of wealth
Malaysia's success is based on its natural resources, which include oil, water, timber and iron. The discovery of oil off Borneo in the early 20th century relieved the country of its energy supply worries. It is also a source of foreign currency. The Petronas oil group announced net sales of 12.2 billion euros in 2018. This places it 158th on Fortune magazine's list of the world's biggest companies. The country exports nearly 350,000 barrels a day, primarily to China. The Middle Kingdom, voracious for raw materials, doubled its demand for crude oil in 2018 to over 1.3 million tonnes per month. The country's vast water resources - rivers flow everywhere - allow it to diversify its energy supply. Hydroelectric dams are being built all over the country, making Malaysia the leading electricity exporter in Southeast Asia. A program to build 12 dams in the state of Sarawak alone was launched in 2012, opening the door to numerous controversies. The first of these being the destruction of the habitat of indigenous populations in remote areas of primary forest. The indigenous people of central Borneo are currently actively mobilizing to defeat the Baram dam project. The vast forests, particularly on the island of Borneo, are heavily exploited to extract timber, prized for its hardness. The timber industry exported 5 billion euros worth of timber in 2018, 60% of which in processed products (pellets, chips, slats, etc.). The cleared forests are then replanted with palm oil. It's not uncommon to drive for hours on end on roads lined with Guinea eleis, whose fruit is refined on site. The oil is then sold to the food industry. Environmental preservation barely seems to reach the edge of the woods. In 2018, the Malaysian Timber Industry Committee pledged to replant 140,000 hectares of the 10 million hectares already logged. The industry is also looking into the possibility of adding value to rubber trees and the trunks of Guinea eleis in order to limit the harvesting of natural forests. At present, only a few forests are exploited sustainably, with the coveted species selected and extracted. The subsoil is no exception to the rule of overexploitation. Rich in iron, it is extracted on a massive scale to supply the iron-hungry new technology industry. This need has given rise to a new market that the country has seized upon: the production of semiconductor circuits and printed circuits. These are then exported to China and Korea, where they are used in the assembly of telephones, computers, machine tools..
The services in reinforcement
While primary industry still underpins a large part of the country's economy, you have to look to the service economy to find the most profitable companies. Six of Malaysia's top 10 companies operate in the banking and finance sector. They generated over 5.4 billion euros in net profits in 2018. They reflect the overall health of the Malaysian economy, which is growing at an annual rate of almost 5%. Tourism is the country's other bet for economic development. Malaysia highlights its exceptional wildlife and the beauty of its islands to attract tourists. The country hopes to break into the top 10 most-visited countries, but there's still a long way to go. It welcomed 25.8 million tourists in 2018, recording a slight decline on the previous year. It currently ranks 15th according to the World Tourism Organization (UNWTO). The country is investing heavily to facilitate arrivals. Numerous regional air links provide direct access to key destinations on the peninsula and in Borneo. Chinese and Koreans top the list of visitors. Geographical proximity, flora and fauna, gastronomy and the relatively low value of the ringgit are just some of the strong arguments that attract visitors from the China Sea. Malaysia's promotional campaigns are also recurrent. The latest of these, "Visit Malaysia, Truly Asia", was launched in 2020. It highlights the country's cultural and community diversity. After all, tourism seems to be the only vector that values the diversity of Malaysia's peoples and turns it into an asset.
The community malaise
This is the challenge that still awaits Malaysia: uniting its people so that each inhabitant feels fully a citizen. Ethnic origins, but also religious affiliation, are the dividing factors that keep the different communities apart. Put simply, the Malays blame the Chinese for monopolizing wealth and holding the keys to the economy. The Chinese criticize the Malays for excluding them from the political and social game and relegating them to the status of second-class citizens. Political decision-makers are struggling to grasp the scale of the problem. Former Prime Minister Najib Razak launched a vast development program called "1 Malaysia", designed to bring communities closer together. It was the source of the biggest embezzlement scandal in the country's history. As a result, in the 2018 general elections, the winning candidate, Mahathir Bin Mohamad, campaigned on the need to restore economic vigor to a Malaysia losing growth. Aged 92, he was elected on a promise to turn the country around in 2 years and resign afterwards. He also promised to abolish the goods and services tax that had sent the population into a tailspin in 2016. At the end of 2019, the tax was still in force. And the growth rate was estimated at over 4.5%, which would make France's Minister of the Economy green with envy. Yet the need for closer ties between the two communities is very real. The percentage of Chinese in the Malaysian population has fallen from 38% at independence to 23% in 2016. More than 2 million people left the country during this period. The government has launched an expatriate return program, based on tax reductions. It registered 398 applicants for 2016. The issue is often addressed on an individual level - as you will no doubt find. But it seems to remain taboo at the political level.
