Monday, July 2, 2007

Notes from Kuala Lumpur

I arrived in Kuala Lumpur yesterday with 2 of my colleagues for the Citizen Media Summit. We arrived here early morning on the Kuala Lumpur International Airport. What stuck me most on arrival was the unbelievable infrastructure development. The airport is an award winning airport and is well managed. I have been to Oslo earlier but the good infrastructure in Europe is more of an assumed fact. We know that Europe IS developed. What set Malaysia apart is the it is in India's backyard, it is closer to India culturally and you never feel out of India with numerous Indians (especially the Tamils) around you. I am sure, other South Asian countries have achieved similar fete. How did Malaysia do that? I think that the reason lies in early and complete opening of the economy has done the trick. This is what Wikipedia says about Malaysian Economy -

"During the 1970s, Malaysia followed the footsteps of the original four Asian Tigers and committed itself to transition from reliance on mining and agriculture to manufacturing. With Japan’s and the West's assistance, heavy industries flourished and in a matter of years, Malaysian exports became the country's primary growth engine. Malaysia consistently achieved more than 7% GDP growth along with low inflation in the 1980s and the 1990s. Current GDP per capita grew 31% in the Sixties and an amazing 358% in the Seventies but this proved unsustainable and growth scaled back sharply to 36% in the Eighties rising again to 59% in the Nineties led primarily by export-oriented industries."

However, the thing which shows the lacuna in Malaysia's growth is the over-reliance on exports as the engine of economic growth. Implication of an export led growth in Malaysia and the South-East Asia is that the growth comes from not local consumption. Such is not a case with India, just to compare. Indian growth is more from domestic consumption.
Post a Comment