MALAYSIA

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MALAYSIA
Land of Smiles The harmony of several
religions and ethnic groups
Antti Isoviita
Degree Program in International Business
Häme Polytechnic University of Applied Sciences
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MALAYSIA

• Official name Federation of Malaysia (Malaysia)
  
• Government type Constitutional monarchy (13
  states) and two federal areas
• Location Southeast Asia
• Neighbouring
• countries Brunei, Indonesia, Singapore and
  Thailand
• Federal areas Malaya peninsulas Southern
  parts, i.e. Western Malaysia (11 states) and
  Northern parts of Borneo island, i.e. East
  Malaysia (Sabah and Sarawak)

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MALAYSIA
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HIGH PERFORMING ASIAN ECONOMIES

• JAPAN 3. THE NEWLY INDUSTRIALIZING
• ECONOMIES (NIEs)
• FOUR TIGERS Indonesia
• Hong Kong Malaysia
• Singapore Thailand
• South Korea -----------------------------------
  ------
• The Republic of China ASEAN
• --------------------------------------------------
  ---
• The Peoples Republic of China,
• especially the Southern Provinces

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MALAYSIA

• Area 329 749 sq km
• 80 of tropical rainforest
• Majority of cultivated land is used in
  growing rice, rubber, and palm oil
• Coastline 4,675 km
• Climate Tropical
• Median
• temperature 26 C, percentage of moisture
  60-73
• Seasons No separable seasons

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MALAYSIA

• Capital Kuala Lumpur, 1.2 million inhabitants
• Big cities Georgetown, Ipoh, Johor Bahru and
  Malacca on the Malaysian peninsula and
  Kuching and Kota Kinabalu in East Malaysia
• Population 23.5 million (7/2004)
• Population
• growth rate 1.8 (2004)
• Ethnic groups Malays (Bumiputras) 58, Chinese
  24,
• Indian 8 and others 10 (2000)

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MALAYSIA

• Head of the State Paramount ruler Tuanku SYED
  SIRAJUDDIN ibni Almarhum Tuanku Syed
  Putra Jamalullail the Raja of Perlis (since
  12.12.2001)
• Every fifth year according to the system
  of rotation nine sultans elect the
  paramount ruler from among them
• Prime Minister Prime Minister ABDULLAH bin Ahmad
  Badawi (since 31.10.2003)

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MALAYSIA

• Leading parties The United Malaysian
• National Organisation (UMNO)
• Democratic Action Party
• The Malaysian Indian Congress
• Government Bicameral Parliament Majlis, which
  consists of the upper house Dewan
  Negara, 69 seats, out of which
  paramount ruler nominates 43 and states
  legislative bodies 26, and the lower house
  Dewan Rakyat, 193 seats, members are
  elected with referendum for five years at a
  time

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MALAYSIA

• Main languages Bahasa Malaysia,
• Chinese dialects (Cantonese, Mandarin,
  Hokkien, Hakka, Hainan, Foochow) and
  Tamili,
• English in business life
• Religions States official religion is Islam
  (34 of the population), other significant
  religions are Buddhism, Hinduism,
  Christianity, Taoism and Sikhism
• Shamanism in East Malaysia
• Natural resources
• tin, petroleum, timber, copper, iron ore,
  natural gas, bauxite

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HISTORY

• 1400 Chinese started moving to the Malaya
  peninsula
• 1500 Portuguese governed the city state of
  Melaka which locates in the Malaya peninsula
• 1600 The Dutch had control over the city state
  of Melaka and the trade for some hundred years
• 1787 British captain Francis Light arrived at
  Penang
• 1795 British East Indias trade company got
  Melaka into its possession as a consequence of
  wars waged in Europe labourers were brought
  from British plantations from India

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HISTORY

• 1800 Malay peninsula developed and became
  prosperous steadily
• under the British command until the World War
  II.
• More Chinese and Indian moved to the area.
• 1819 Sir Thomas Stamford Raffles established
  Singapore as an other British location South
  from Penang.
• 1945 Malay produced nearly 40 of the worlds
  rubber and 60 of tin. Japanese started the
  peninsulas conquest as guerrilla war started
  against them in the country resistance against
  the British started also to arise

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HISTORY

• 1948 Malay communist party started a guerrilla
  war against the British colonial power that
  lasted 12 years
• 1957 Malay (today the area of West Malaysia) got
  independent 31.8.1957 and Tunku Abdul Rahman
  became the leader of the nation and the creator
  of prosperity until 1970
• 1963 Federation of Malaysia (todays West
  Malaysia,
• East Malaysia and Singapore) was formed
  9.7.1963
• Brunei stayed outside (oil)
• 1965 Singapore left the Federation and formed
  independent city state in 9.8.1965 under the
  leadership of Lee Kuan Yew

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HISTORY

• 1981 Datuk Seri Dr. Mahathir bin Mohamad
  became a Prime Minister
• Vision 2020
• Malaysia is by the year 2020 Southeast
  Asias most prosperous and significant
  industrial nation - also politically,
  socially, spiritually and culturally developed
  nation (8-folding of GDP 1990-2020 7 / year)
  
• Our ideology is to make money to our
  country.

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ECONOMY

• GDP 208 billion (PPP/2004)
• GDP per capita 9,000 (PPP/2004)
• Indonesia 759 billion / 3,200
• Singapore 109,4 billion / 23,700
• Thailand 477.5 billion / 7,400
• (compare Finland 142,2 billion / 27,400
• Estonia 17,35 billion / 12,300)
• GDP growth rate 5.2 (2004)
• GDP composition services 59, industry 34,
• agriculture 7 (2004)
• Inflation 1.1 (2004)
• Foreign debt 48.84 billion (2004)
• Currency Ringgit (MYR), 1 EUR 4.9 MYR
  (11.1.05)

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ECONOMY

• Agricultural products rubber, palm oil, cocoa,
  rice, grain, coconuts and timber
  
  
• Industrial sectors semiconductors and
  electronics radio and tv equipment
  oil refining (East
  Malaysia)
  refrigerating engineering, air
  conditioning plywood,
  hardboard
  motor vehicles (Proton and Perodua)
  iron and steel
  rubber and
  latex industrial gas (worlds 17th
  biggest gas resources) plastic
  products

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ECONOMY

• Export products electronical equipment,
  petroleum and liquefied natural gas, wood and
  wood products, palm oil, rubber, textiles,
  chemicals
• Import products electronics, machinery,
  petroleum products, plastics, vehicles, iron
  and steel products, chemicals
• Exports 98,4 billion (2004)
• Imports 74,4 billion (2003)

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ECONOMY

• The most important trade partners
• Exports USA (19.6), Singapore (15.7), Japan
  (10.7), China (6.5), Hong Kong (6.5),
• Thailand (4.4) (2003)
• Imports Japan (17.3), USA (15.5), Singapore
  (11.9), China (8.8), South Korea (5.5),
  Taiwan (5), Germany (4.7), Thailand (4.6)
  (2003)

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DEVELOPED INFRASTRUCTURE

• Among others motorway (869 km) from North to
  Southern Johor Bahru
• Kuala Lumpurs LRT-project (Light Rail Transit)
• Eastern and Oriental Express (Singapore Kuala
  Lumpur Bangkok railway
• MAS and 5 international airports newest in
  Sepang
• KL Tower, 421 m
• Petronas Twin Towers, 508 m
• Putrajaya new modern governmental city
• Multimedia Super Corridor (MSC)

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BUSINESS ENVIRONMENT IN MALAYSIA

• PUBLIC SECTOR
• slow and bureaucratic
• long preparation times for projects
• decisions concerning offers are sometimes made in
  advance

• PRIVATE SECTOR
• fast and dynamic
• controlled by the Chinese
• (family company)
• minimum capital investments
• projects are carried out quickly

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THE 5 PS IN MALAYSIAN TRADE

• PATIENCE
• Preparations should be made for 2 to 3 years
  market entry
• PREPARATION
• Homework should be done
• PRODUCT
• Product has to be customized for the market
• PROTOCOL
• Malaysian business culture and contacts are well
  known
• PRESENCE
• Representative or the company itself must be seen
  in the markets

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SPECIAL CHARACTERISTICS OF BUSINESS CULTURE

• Different religious and ethnic groups
• Bumiputras vs. Chinese
• Hand shaking (NB. Muslims)
• Business cards (2 languages and hands)
• Business negotiations take lots of time
• Avoid No word
• Eating (ao. satay skewers and nasi goreng)
• Golf
• Discussion topics
• Business gifts
• Dress code
• Tipping
• Womans position

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