Malaysia amongst top ten emerging economies

 

Malaysia is amongst the top ten emerging economies, with neighbouring countries Indonesia and Thailand also making the list, according to the International Business Report (IBR), produced by Grant Thornton International. The emerging markets index produced using a weighted calculation of key indicators*, shows China and India are still occupying the top two places this year. Two of the current largest economies China and India still stand out as the emerging markets with the best opportunities, due to their massive Gross Domestic Product (GDP) and population size, growth potential and substantial external trade. Malaysia's position in ninth place comes as no surprise to Dato’ N. K. Jasani, managing partner of SJ Grant Thornton, the Malaysian member firm of Grant Thornton International. “The Malaysian economy has had steady growth over the last few years.” Further we have benefited from the higher prices and volume of production for palm oil, petroleum and natural gas.”

 

Whilst our position at number nine is respectable, we could do better. Our growth rate or GDP per head, or both, are being surpassed by China, India, Indonesia and Thailand. Singapore, Japan, Korea and Taiwan do not feature in this research as they have now entered Advanced Economy Status,” stressed Dato’ Jasani.

Spurring Malaysia’s Growth
He further elaborated that our Nation needs to spur growth in all sectors including in mining and resources, as these appear to be red tapes both at Federal and state levels.

“We also need to move ahead with the beneficial infra-structure projects so as to accelerate growth, and enhance both the GDP as well as employment. Amongst such beneficial projects are the expansion and creation of LRT system for Kuala         Lumpur and other major cities, the second Penang bridge, Iskandar Region,       developments and petroleum based projects by Petronas,” stated Dato’ Jasani.

To support the index, the Grant Thornton IBR survey also found that the number of Medium to Large Enterprises (MLEs) that export has increased from 35 per cent in 2003 to 37 per cent in 2008. However, there are regional variations in the data with EU (49 to 53 per cent) and East Asian countries (30 to 39 per cent) showing marked increases in exports, while NAFTA** countries' exports have marginally declined (31 to 30 per cent). The economic upturn in the eurozone in 2006-2007, coupled with fundamentally strong intra-EU trade have helped countries in the EU feature prominently at the top of the rankings.

Investing in emerging markets
The survey also shows that MLEs value the 'importance of market size and growth potential' more than anything else when determining their investment strategy. This factor was ranked first globally (56 per cent) as well as in all regions except Latin America where it came marginally behind 'political and economic stability'.
Political and economic stability was a particularly important factor for EU businesses and those in the United States. This suggests that businesses in mature economies are perhaps more likely to build their export strategies around general economic considerations than those in emerging markets where political factors and regulatory concerns are more in evidence.
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Further enquiries, please contact:

Hanisah Gani, Corporate Communications
T +603 2692 4022
E hanisah@gt.com.my

 

*Grant Thornton IBR emerging markets index

Countries included

• The World Bank classifies countries into four income bands. The advanced economies and rich countries (e.g. those with large oil-related incomes), are in the ‘high-income economies’ group. These 60 countries are excluded from the model.

• Having excluded the above, we then focused on the 27 largest economies ranked by PPP GDP in the World Bank’s World Development Indicators database as at 14 September 2007.

Variables in the model

• A country provides opportunities for trade and investment in proportion to its size, wealth and growth prospects. Risks (such as political instability, corruption, civil disturbance) are not included in this model.

Size is measured by
PPP GDP (weight 20 per cent)