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3.4. Asian OICs
3.4.1. General Conditions
Economic growth in Asia has now acquired legendary status with average growth rates of between 6%-
8% over the last decade helping Asian economies to take pole position in the global economic race. China
has led the way with even higher levels of growth sustained throughout the last ten years. The second
largest player, India (a distant second to China) has experienced fluctuating growth rates which have
compromised its economic development. Both countries have had a considerable influence on trade in the
region and indeed across the world. The OIC countries of, for example, Malaysia, Indonesia, Pakistan,
Bangladesh, have kept pace with accelerating growth in the region with impressive growth rates of around
6% , some of which has been driven by global factors and others by the more pronounced developments
in the BRICS, especially China. Of equal importance are some of the interventionist policies which have
sought to reduce bureaucratic hurdles, ease credit flows and offer a range of support services from
training to access to relevant information.
Malaysia
The Malaysian economy recorded an average growth of 5.5% for the period 2005-2008. Real gross
domestic product (GDP) growth which was 5.3% in 2005, increased to 5.8% in 2006 and 6.2% in 2007
before slowing down to 4.6% in 2008. The private sector remains the main driver of economic growth.
Private investments for the period 2005-2008 grew by 6.3% per annum and increased capital spending
was recorded particularly in the manufacturing and services sectors. The average growth rate of net
foreign direct investment (FDI) inflows from 2005 to 2008 was 11.5%.
The manufacturing sector grew by 4.1% contributed by production of both export and domestic-oriented
products for the period 2005-2008. Growth in export-oriented industries was mainly supported by higher
production in electrical and electronics (E&E), petroleum products, rubber products and machinery and
equipment. For domestic-oriented industries, growth emanated from expansion in the production of
chemicals and chemical products, construction-related materials and transport equipment. Malaysia's
trade continued to record a surplus since November 1997. Exports registered an average of 8.5% growth
for the period 2005-2008. In 2007, exports expanded, albeit at a lower rate of 2.7% due to decline in
demand for manufactured goods. However, the surge in commodity prices helped to push export value up
by 9.6% in 2008. The US, Japan, China and ASEAN member countries continued to be Malaysia's major
trading partners with a combined average share of 60.0% of total exports from 2005-2008.
Comparing imports with exports, Figure 3.7 shows that in 2012, Malaysia’s exports of electrical and
electronic equipment, aluminium goods, and organic chemicals have driven its growth alongside the
traditional rubber industry products. Food products also fare well, although together with electrical
equipment these sectors are winners in declining sectors.