national income in Malaysia

1. National Income of Malaysia
The National Income accounts provide a summary of all transactions in an economy. Seen
from the income side, the production process creates incomes for the owners of the inputs
used in production including labor and capital.
Every day there are many transactions taking place in the Malaysian economy. There is
buying and selling of products and services, the collection of taxes and the payment of
subsidies, the payment to workers and the return to capital on its investment. The National
Income accounts provide a summary of all these transactions in an economy over a period of
time, usually a quarter or a year.
Malaysia has over a period of time evolved from a low to medium income economy. After
independence, the economy was to a large extent dependent on primary commodities, namely
rubber and tin. During the period 1957 to 1960, agriculture was the largest sector, employing
about 58% of the labor and accounting for 47% of total output. Rubber by itself accounted for
over 25% of National Income, nearly 30% of employment and about 60% of exports. At the
same period, the mining sector, dominated by tin, employed 3% of the labor force and
accounted for 25% of exports. With rubber and tin accounting for 85% of total exports
between them, the entirely economy was vulnerable to fluctuations in commodity prices.
The Government then released the necessity to diversify the economy and reduce the
dependence on rubber and tin. The Government then laid emphasis on developing other
suitable agricultural crops and embarked on downstream manufacturing activities. This
heralded the phase of industrialization in Malaysia since the early 1970s.The Government
provided special assistance and incentives for setting up and for expanding industrial
establishments. The Government came up with the First Industrial Master Plan (IMP, 1986-
1995), Malaysia’s first industrial blueprint.
Due to the impetus given to the manufacturing sector, by 1988 for the first time, the
manufacturing sector became the leading growth sector when its share of gross domestic
product rose to 21.1% surpassing that of agriculture at 18.6%.This signaled a structural shift
from agriculture to a manufacturing based economy.
The Second IMP (1996-2005) was introduced to bring about a change from assembly
intensive manufacturing to an integrated, industry wide approach consisting of both
manufacturing and related services. To further boost manufacturing and modern services the
Third IMP(2006-2020) was introduced in 2006.At the end of the period, Malaysia emerged as
one of the most dynamic and vibrant economies of the world. Between 1971 and 2008,
Malaysia was among the fastest growing countries in the Asean region.