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Transcript of CRA Malaysia
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EPGDIB - GLOBAL BUSINESS ENVIRONMENT
COUNTRY RISK ANALYSISMALAYSIA
GROUP 17
ASHISH GOSWAMI ROLL NO. 16
SARABJIT SINGH ROLL NO. 83
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MALAYSIA
Malaysia is a country in south-east asia, which in late 20th
century has experienced an economic boom and underwent
rapid development.
It borders the Strait of Malacca, an importantinternational shipping crossroad, and international
trade is integral to its economy.
Manufacturing makes up a major sector of the country's
economy.
COUNTRY RISK ANALYSISMALAYSI
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COUNTRY RISK ANALYSIS is a collection of risks
associated with investing in a foreign country.
These risks includepolitical risk
exchange rate risk
economic risk
sovereign risk
transfer risk
We will summarize our country risk analysis for
Malaysia based on above factors.
In upcoming slides we have a look on performance data
of Malaysian economy in recent past.
COUNTRY RISK ANALYSISOVERVIEW
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COUNTRY RISK ANALYSISPERFORMANCE DAT
GROSS DOMESTIC PRODUCT
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COUNTRY RISK ANALYSISPERFORMANCE DAT
EXPORTS/IMPORTS/BALANCE OF TRADE
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COUNTRY RISK ANALYSISPERFORMANCE DAT
INDEX of INDUSTRIAL PRODUCTION
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COUNTRY RISK ANALYSISPERFORMANCE DAT
INFLATION
UNEMPLOYMENT RATE
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COUNTRY RISK ANALYSISPERFORMANCE DAT
FOREIGN DIRECT INVESTMENT
FOREIGN DIRECT INVESTMENT BREAKUP YEAR 2009
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COUNTRY RISK ANALYSISRISK-POLITICA
POLITICAL RISK
Malaysia enjoys a high degree of political stability, with little
risk of political turbulence in the short to medium term.According to the World Bank, Malaysia ranks in the second top
quartile of countries for political stability, but in the second
bottom quartile for accountability.
The ruling Barisan Nasional (BN) coalition lost its long-standing
two-thirds majority, and opposition parties won elections in
five states. The new Prime Minister Najib Razak, who took
over in April 2009, has announced plans to provide stimulus
package to aid coming out of recent recession .
He will, however, face challenges both from within his party
and from an opposition alliance.
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COUNTRY RISK ANALYSISRISK-ECONOMI
ECONOMIC RISK
The Malaysian economy has an impressive economic
development record, with manufacturing, services andtourism industries successfully expanding since the 1960s to
complement the countrys competitive natural resource
industries. Malaysia is now a hub for multinational companies
and high-tech exports, as well as a major exporter of LNG and
palm oil. Growth has averaged 5.6% a year over the last 15
years, which has doubled per capita income to US$8,140 .
Meanwhile, poverty has fallen from 60% of the public in 1970
to 5% in 2002. The government has a 2020 Vision for
Malaysia to reach developed country status. For long-term
foreign currency bond risk, both Standard & Poors and Fitch
rate it A-; Moodys, A3. The economy is very open to foreign
trade and investment. At its last trade policy review in
2006, the WTO noted that Malaysia had continued efforts toliberalise its trade and investment policies.
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COUNTRY RISK ANALYSISRISK-SECURIT
SECURITY RISK
Though there are sporadic anti-government
demonstrations, these have not been directed at foreign
investors or resulted in substantial property damage.
Islamic extremism does not have a strong foothold in
Malaysian society, because of unsympathetic public attitudes
towards it and effective counterterrorism. Even so, plots
against foreigners and Chinese Malaysians have been
uncovered, and future security incidents can't be ruled out.Foreign tourists have been kidnapped in the recent past from
Malaysian resorts by the Philippines-based, al Qaida-linked
Abu Sayyaf group.
Thanks to improved security cooperation between
Malaysia, Indonesia and Singapore, pirate attacks on shippingthrough the busy Straits of Malacca have declined markedly in
recent years.
.
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COUNTRY RISK ANALYSISSUMMAR
STRENGTHS
Diversified exportsDynamic services sector
Effective education system, good infrastructure, high R&D
Support for investment via development of the financial marke
and broader access to FDI
WEAKNESSESEconomic dependence on foreign demand
Fiscal revenues heavily dependent on the performance of the
gas and oil sector
Very high stock of bank credit to the private sector
Erosion of the economys price competitiveness associated with
high labour costs. Persistent regional disparities
Key indicators 2009 2010 2011 2012 2013 2014
Real GDP
growth (%) -1.7 5.4 4.0 4.5 4.9 5.3
Consumer price
inflation (av; %) 0.6 1.7 2.4 2.6 2.5 2.7
Budget balance
(% of GDP) -7.0 -5.6 -5.2 -4.4 -4.2 -3.6
Current-
account
balance (% of
GDP) 16.2 12.7 14.1 13.5 13.1 11.9
Commercial
banks' prime
rate (av; %) 4.8 5.1 5.6 6.0 6.1 6.4
Exchange rate
M$:US$ (av) 3.52 3.37 3.31 3.27 3.19 3.13
Exchange rate
M$:100 (av) 3.76 3.70 3.67 3.73 3.70 3.68
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COUNTRY RISK ANALYSISSUMMAR
Organizations involved in manufacturing of electronic
goods are the most attractive bet to set up
business/investment in Malaysia.
Malaysia is a strong trade member country in ASEAN
region. Hence, investing here might open routes to otherASEAN partner countries.
Preferential treatment given to local Malay population
might suggest to go into tie-up with local organizations to
set-up new shop.