Trade Performance

Trade Performance

INTRODUCTION...........................................................................................................................1
BACKGROUND.............................................................................................................................1
MAIN BODY..................................................................................................................................2
Section 1......................................................................................................................................3
Section 2......................................................................................................................................6
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Different states' trade performance appears to be a strong predictor of economic success,
also as-performing countries continue to post size and growth levels (Athukorala and Narayanan,
2018). Most of the developing nations entered the World Trade Organization (WTO) and took
reforms to open their markets. However, the result was not always consistently favourable with
exporting success remaining often disappointing. Main purpose of this report is to improve the
understanding regarding trade performance of specific emerging country. This report covers the
two major issues such as how globalization affects the trade relationship of particular country
and another issue is related to balance of payment. This assessment is based on the Malaysian
country and further evaluates trade performance of it.
BACKGROUND
Malaysia's economy is indeed the 3rd largest in South Asia after Indonesia and Thailand,
and it is the globe's 35th largest country (Saari, 2020). Labour demand in Malaysia is
substantially higher than in neighbouring countries such as Thailand, the Philippines,
Indonesia or Vietnam due to high number of knowledge-based industries and the deployment of
cutting-edge industrial production and digital economy technologies. The economy of Malaysia
is the 27th most populated country in the world according to Global Competitiveness Report
2019. Especially in comparison to almost every other ASEAN countries, people in Malaysia
enjoy assurance activities.
That is due to a rapidly growing export oriented economy; considerably lower national
income tax, increasingly inexpensive street produce and transportation resources, and a
completely supported single payer universal healthcare. For fact, since 2011 social security
programs with a direct money benefit payment entitled Cost of Living Assistance are now in
effect. The Malaysian market is mainly reliable and diverse with the high-tech items' export
earnings willing to stand at US $ 57.258 billion in 2015, the second largest in ASEAN after
Singapore. After Indonesia, Malaysia exports the 2nd highest amount and value of crude palm oil
worldwide.
In Malaysia, there are some main food crops which are very popular and rice is cultivated on
small farms. Given the significant gains achieved with the advent of enhanced plant variety and
industrial fertilizers and antioxidants, rice productivity decreased gradually throughout the 2nd
1

half of the twenty century (Gavrilescu, 2018). The important reasons of this downturn were
adverse environmental conditions and the reduction of farm labor to work in industrial
manufacturing. Progressively insufficient in rice production, the nation was forced into making
up with imports, mostly from Thailand, for the deficiency.
The Malaysian government took strategies to improve its self-sufficiency in rice, primarily
by introducing programs to expand willingness to take risks and raise employment levels by
community farming schemes; demand started to grow by 2000, despite the continuing shortage
of labour. Cash crops predominate in polymer and palm oil. Although rubber's share in the GDP
has dropped sharply since the mid-20th century, rubber industry plays an essential role and
tightly linked to domestic production (Gaasland, Straume and Vårdal, 2020). After the 1970s,
plantations of palm oil have propagated, even at the detriment of rubber plantations. In the 21st
century, Malaysia had developed into one of the largest palm oil producers. Other growing cash
crops involve cocoa, cinnamon, coffee, tea, coconut and various fruits.
The combined value of export goods and services exports is 132.3 per cent of
overall country's GDP. The overall tariff rate imposed is 4.0 per cent, and there are 62 non tariff
schemes in place (Gordon, 2019). International trade is officially encouraged, and efforts have
been made to draw more flows, but lack of information could discourage competitive growth in
new investment. The financial system continues to stable and contribute in the economy to grow.
The highest level income and corporate taxation for individuals are 25 per cent. Certain taxes
also provide a levy on the income gains. The gross income tax is equivalent to 13.6 per cent of
gross domestic revenue. Over the last three years, average spending of government is 22.6
percent of the total GDP and budget deficits notched up 2.9 percent of GDP. Public debt is 56.2
per cent of gross domestic product.
MAIN BODY
There are majorly two issues which affect the overall economy as well as trade performance
of the Malaysia. The discussion is based on the globalization and how it affects the Malaysian
trade relationship and the other side, it includes the discussion on balance of payments which
indicates the financial aspect of the countries.
2