Financial Development And Economic Growth In Malaysia

This book is concerned with the role of financial intermediation in economic development and growth in the context of Malaysia. Using an analytical framework, the author investigates the Malaysian economy from 1960 onwards to examine how far financial development has progressed in the course of economic development, and whether it has been instrumental in promoting economic growth. A significant improvement in the Malaysian financial system, coupled with rapid economic growth and a rich history of financial sector reforms, makes Malaysia an interesting case study for this subject. The author shows that some government interventions seem to have impacted negatively on economic growth, whereas repressionist financial policies such as interest rate controls, high reserve requirements and directed credit programmes seem to have contributed positively to financial development. The analysis concludes that financial development leads to higher output growth via promoting private saving and private investment. Shedding light on the evolutionary role of financial system and the interacting mechanisms between financial development and economic growth, this book will be of interest to those interested in economic and financial development, financial liberalization, saving behaviour and investment analysis and Asian Studies.

This book sheds new light on the evolutionary role of financial system and the interacting mechanisms between financial development and economic growth in the context of Malaysia.

This collection brings together a collection of theoretical and empirical findings on aspects of financial development and economic growth in developing countries. The book is divided into two parts: the first identifies and analyses the major theoretical issues using examples from developing countries to illustrate how these work in practice; the second part looks at the implications for financial policy in developing countries.

Focusing on Malaysia's shifting economic profile and position, this book offers new insights and perspectives to scholars and researchers on a range of new developments impacting on growth, such as the effects of the digital economy on job creation and the threats of environmental degradation and trade protectionism.

Current inquiries into the political economy of financial policymaking in Malaysia tend to focus on the high-level drama of crisis politics or simply point to the limited impact of post-crisis financial reforms, given that politico-business relations have remained close. In so doing, pundits ignore a number of intriguing questions: what is the relationship between financial development and financialisation and how has it played out in the Malaysian context? And more generally: how can a country like Malaysia become significantly more financially developed, yet fail to emancipate the financial system from political control; a core element of the financial development discourse? To unravel the complexities of this puzzle, this book subjects the history and contemporary practices of financial policymaking in Malaysia to scrutiny. It argues that to understand financial development in Malaysia, its progress and reversals, it is important to conceptualise it as a political, rather than a merely technical process. In so doing, the book echoes a more profound concern in the political economy literature, namely the evolving relationship between states and markets, and the supposed retreat or reassertion of the state at a time of increasing (financial) globalisation. The book can generate further insights into the evolving role of the state with regard to broader processes of development and marketisation, as they relate specifically to finance.

Malaysia has grown and changed a great deal since it was formed on 16 September 1963. It was then seen as an unlikely nation hastily put together as a federation of British controlled territories in the region. Brunei's refusal to join at the eleventh hour and Singapore's secession before its second birthday only seemed to confirm such doubts. Yet, it has not only survived, but even thrived, often cited as a developing country worthy of emulation. Ruled by the same ruling coalition since the mid-1950s, it has been tempting to emphasize continuities, and there certainly have been many. Looking back at its last half century, this volume first considers changes in development policy in response to national as well as international developments. The remaining three parts consider how public policy has been influenced by and has, in turn, influenced economic distribution, public finance and economic federalism. Besides the familiar focus on ethnic disparities, regional and other distribution issues are considered. The discussion of government taxation as well as spending also focuses on distribution implications. Although constitutionally a federation, Malaysia has been more centralized than most federal states. The way forward requires greater sensitivity to the complex political economy of Malaysia's unlikely, but nonetheless resilient federation and ruling coalition. This book is published and distributed worldwide by World Scientific Publishing Co Pte Ltd except Malaysia. Contents: Development Stages:The Alliance Era (1957–1969)The First Decade of the New Economic Policy (1970–1980)Mahathir's Three RegimesMahathir Regime 1: New Roles for the State (1981–1985)Mahathir Regime 2: Inducing Private Investments (1986–1997)Mahathir Regime 3: Crisis Management (1997–2003)After 1997After MahathirPolicy LessonsDistribution:Income DistributionPopulation and LabourEmployment StatusEducation and EmploymentWealth Ownership DisparitiesGender DisparitiesRegional DisparitiesPublic Finance:TaxationDirect TaxesIndirect TaxesGovernment ExpenditurePrivatizationFederalism:Formation of MalaysiaFederal and State Government JurisdictionsFederal-State Financial RelationsPublic AccountsExternal TradeLessons?:Development StagesDistributional StrugglesPublic FinancesMalaysian FederalismConcluding Remarks Readership: Academics, researchers, professionals, policy makers interested in economic development of Malaysia. Key Features:First book to focus on how public policy has evolved in response to economic development and distributional challenges in MalaysiaSpecial focus on the changing role of public finances and federal-state relations in the countryKeywords:Economic Development;Distribution;Disparities;Public Finance;Federalism;Malaysia

This book examines the various economic, political and developmental policy challenges that Malaysia faces in her shift from a middle income to high-income economy. This issue is of great interest to academics, policy makers and development practitioners in the developing world, particularly in middle-income economies where there is a widespread concern about the challenges of managing such a transition. Malaysia is one of the developing world's greatest success stories. The book argues that as one of the developing world's most open economies, with a reputation for prudent macroeconomic management, Malaysia has achieved consistent growth since independence. It has moved from a largely resource-based economy to a multinational-led, export-oriented, industrial economy. Despite this success, Malaysia, like other developing countries, is currently at a crossroads in its development strategy; it is in danger of being unable to graduate to the level of more advanced economies - such as Korea, Taiwan and Singapore - but with the basis of its success at risk from competition from efficient, lower-wage countries - such as China, India and Vietnam. Moreover, there are new threats to the political stability and affirmative action programmes which have successfully held together a very racially diverse population.