Amanda Siddharta
Research expert covering Malaysia
Malaysia - Statistics & Facts
Well known for its rich cultural heritage and lush tropical landscape juxtaposed with modern bustling cities, Malaysia is an economic powerhouse in Southeast Asia. The country is divided into two non-contiguous regions, Peninsular Malaysia and East Malaysia, separated by the South China Sea. Peninsular Malaysia shares a land border with Thailand, while East Malaysia borders Indonesia and Brunei Darussalam.
The country is facing an aging population. The share of the population older than 65 years old in Malaysia was at 7.2 percent in 2022, which surpassed the United Nations’ threshold of seven percent for an aging country. Meanwhile, Malaysia’s birth rate has continued to decrease over the past decade. This means that there could be a potential labor shortage in the future and a significant increase in healthcare and pension expenditures.
The country’s economy has also relied on its electrical and electronics (E&E) manufacturing industry. The E&E industry contributed nearly five percent to Malaysia’s gross domestic product in 2023. Moreover, with an increase in demand for semiconductors worldwide, the export value of E&E products from Malaysia rose by around 100 billion Malaysian ringgit in 2022.
Nevertheless, with the country’s aging population, there might be a scarcity of manpower in the future. Moreover, there are concerns of brain drain, due to skilled workers leaving Malaysia for a higher salary in other countries. Malaysia will have to address this issue to remain as one of the driving forces among the Tiger Cub Economies in ASEAN.
Ethnic diversity and Malaysia’s aging population
Malaysia has a total population of approximately 33 million people. The population is comprised of three major ethnic groups, with 70 percent belonging to the Bumiputera or the ethnic Malay. The Malaysian government issued the Bumiputera policy in 1971, which granted benefits and privileges to the Malay population to quell ethnic tension and appease the Malay majority. Nevertheless, the policy is considered discriminatory against Chinese and Indian Malaysians.The country is facing an aging population. The share of the population older than 65 years old in Malaysia was at 7.2 percent in 2022, which surpassed the United Nations’ threshold of seven percent for an aging country. Meanwhile, Malaysia’s birth rate has continued to decrease over the past decade. This means that there could be a potential labor shortage in the future and a significant increase in healthcare and pension expenditures.
Local car brands and the thriving E&E industry
No other country in Southeast Asia has a local car brand, let alone two. The Malaysian automotive market is dominated by the national car manufacturers, Perodua and Proton. Since the late 1980s, the automotive industry has been geared to foster the growth of these local brands, with protectionist policies and hefty tariffs on foreign cars.The country’s economy has also relied on its electrical and electronics (E&E) manufacturing industry. The E&E industry contributed nearly five percent to Malaysia’s gross domestic product in 2023. Moreover, with an increase in demand for semiconductors worldwide, the export value of E&E products from Malaysia rose by around 100 billion Malaysian ringgit in 2022.
Malaysia’s budding digital economy
To keep up with the modern world, Malaysia is adapting to rapid digitalization. The Malaysian government launched the digital economy blueprint in 2021 to serve as a 10-year roadmap for improving the country’s digital economy and providing 500,000 job opportunities. As of 2023, the gross merchandise value (GMV) of the digital economy in Malaysia reached 23 billion U.S. dollars, and was projected to exceed 45 billion U.S. dollars by 2030.Nevertheless, with the country’s aging population, there might be a scarcity of manpower in the future. Moreover, there are concerns of brain drain, due to skilled workers leaving Malaysia for a higher salary in other countries. Malaysia will have to address this issue to remain as one of the driving forces among the Tiger Cub Economies in ASEAN.
