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MALAYSIAN ECONOMY: An Overview
INFRASTRUCTURE AND ECONOMIC DEVELOPMENT IN MALAYSIA
Woo Lai Yan & Yap Fei Fuong; August 2007


Infrastructures are the basic structures and facilities necessary for a country or an organization to function efficiently. For example, this includes buildings, transport, water, energy resources and administrative systems. This is why every country is in need of a developed infrastructure. Countries of the region therefore need to focus on upgrading their infrastructure, as this can yield great dividends in terms of growth, competitiveness and poverty reduction, as well as improving the quality of life of their citizens.

Today, Malaysia can boast of having one of the most well-developed infrastructure among the newly industrializing countries of Asia. One of the infrastructures provided is transportation. Mobility is essential to Malaysia's growing population and economy. A landmark event was the completion of Malaysia's newest and biggest airport, the Kuala Lumpur International Airport (KLIA), which opened for business in 1998. The airport is a catchment area and offers opportunities for a hive of business activities. Within a short span of two years since its opening, the KLIA was ranked number one for overall business passenger satisfaction in an International Air Transport Association (AITA) survey (Malaysian Industrial Development Authority, 2007).

In addition, recently launched this year (2007) is Kuala Lumpur Sentral, a transportation hub integrating all major rail transport networks, including the Express Rail Link to the KLIA and Putrajaya, the government's new administrative centre making mobility more convenient. Malaysia also provides Light Rail Transit (LRT) to enhance transportation system. This will significantly reduce traffic obstructions and prevent pollution to the environment too. Moreover, Malaysia's government has strengthened the transportation infrastructure for commerce in this country at ports, international border crossings, and along principal commercial routes. Peninsular Malaysia's network of well-maintained highways is a boon to industries. The total length of the road network in Malaysia is 98,721 km. This includes the length of the paved of 80,280 km (includes 1,821 km of expressways) and unpaved of 18,441 km portions (The World Factbook, 2007).

These highways link major growth centers to seaports and airports throughout the peninsula and provide an efficient means of transportation for goods. To complement these highways, a Kuala Lumpur-Bangkok-Kuala Lumpur containerized service known as the Asean Rail Express (ARX) has been initiated with the aim of expanding it to become the Trans-Asia Rail Link that will include Singapore, Vietnam, Cambodia, Laos and Myanmar before ending up in Kunming, China. These ports of entry and highways are important not just in Kuala Lumpur, but also to the national economy. Furthermore, Malaysia has efficient seaports for international trade, especially seaborne trade. Today, 95% of the country's trade is by sea via Malaysia's seven international ports. They are Penang Port, Port Klang, Johor Port, Port of Tanjung Pelepas, Kuantan Port and Kemaman Port in Peninsular Malaysia and Bintulu Port in Sarawak. Hong Kong-based Cargonews Asia placed Port Klang and Port of Tanjung Pelepas among Asia's top ten best seaports and top ten best container terminal operators (Malaysian Industrial Development Authority, 2007).

Port Klang's central location and the government's emphasis on making the port a national and regional hub has resulted in an increasing volume of cargo. Another reason for Malaysian to be proud of its infrastructure is that Port Klang is recorded 4.5 million twenty-foot equivalent units (TEUs) for 2002, which ranks it the top 11th in the world (Malaysian Industrial Development Authority, 2007). Port Klang's Westport has excellent deep-water facilities, which allow the world's largest ships to dock without any difficulty.

Putting transportation aside, Malaysia also provides facilities such as developed industrial parks. Industries in Malaysia are mainly located in over 200 industrial estates or parks and 14 Free Industrial Zones (FIZs) developed throughout the country. These industrial sites are fully-equipped with the basic infrastructural facilities such as roads, electricity and water supplies, and telecommunications and are also continuously being developed by state governments as well as private developers to meet demand. FIZs are areas specifically established for manufacturing companies that produce or assemble products mainly for export. They enable these export-oriented companies to enjoy minimal customs formalities and duty free import of raw materials, component parts, machinery and equipment required directly in the manufacturing process as well as minimal formalities in exporting their finished products. The FIZs are located in Bayan Lepas, Prai, Prai Wharf, Batu Berendam, Tanjung Kling, Sungai Way, Ampang Hulu Klang, Telok Panglima Garang, Johor Port, Jelapang, Kinta Phases I & II, Tanjung Gelang and Sama Jaya. Additionally, specialised parks have been developed in Malaysia to cater to the needs of specific industries. Examples of these parks are the Technology Park Malaysia in Bukit Jalil, Kuala Lumpur and the Kulim Hi-Tech Park in the northern state of Kedah which cater to technology-intensive industries and Research and Development (R&D) activities. Besides providing one of the best infrastructures there is for high technology manufacturing and R&D, the Park's Masterplan also emphasizes on the quality of life within a self-contained township. Amenities incorporated in the plan include a shopping centre, a hospital, educational institutions and recreational facilities.

Malaysia is also linked to the rest of the world through various fibre optics and satellite consortia such as FLAG, SE-MA-WE, APCN, China-US, Japanese-US, Measat and Intelsat. This brings Malaysia closer to the other parts of the world that would ease trade and make the speed of communication and transaction faster, more effective and efficient.

Last but not least, Malaysia's telecommunications network has seen impressive expansion and upgrading during the past decade following the successful privatisation of its Telecommunications Department. The latest digital and fibre optics technology is being used to provide high quality telecommunication services at competitive prices. Realizing the important role of information technology (IT) as a catalyst for national development, in 1999, the Government has initiated the construction of the Multimedia Super Corridor (MSC). This 15-by-50-kilometre zone extends south from Kuala Lumpur, embracing Cyberjaya, a dedicated "intelligent" city for multimedia companies, and Putrajaya, the new national capital, to the KLIA at Sepang. This MSC became a reality, complete with a multimedia university to provide a pool of knowledge workers for industries. When knowledgeable workers are developed, we do not need to rely so much on foreign countries' expertise, skills and technology because now we have the skills to make our own production which will contribute to economic growth.

In conclusion, Malaysia's developed infrastructure definitely contribute to economic achievement because it can bring capital inflow into our country, encourage more local and foreign investments and to realize the Vision 2020 of Malaysia in transforming it from a developing to a fully-developed country not just in economic sense but also politically, socially, spiritually, culturally, and psychologically.


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Har Wai Mun @ 2007