Malaysia Energy and Security

Malaysia Energy and Security

MALAYSIA. – It is the generic name with which the area inhabited today mainly by Malaysian peoples is embraced; therefore it includes both the Malacca Peninsula (about 237,000 sq. km.) and the vast island world (over 2 million sq. km. overall) which stretches between SE Asia. and Australia and which is also known as the Malay Archipelago, Australasia, Insulindia, Indonesia. However, the region is only partially inhabited by people who belong to the Malay type. See the Malaysian entry, and for the geographical description and the history of exploration the general Malacca entries ; Dutch Indies (for the adjacent seas also the Australasian Mediterranean entry); also the items relating to the major islands and insular groups (borneo ; celebes: java ; moluccas ; sumatra ; etc.).

Economy and energy

Between 2000 and 2008, the Malaysian economy recorded significant growth, with an average annual increase in GDP exceeding 5%. The 1.7% contraction, which occurred in 2009 as a consequence of the international crisis, was already followed by signs of recovery in 2010. The credit goes above all to the new economic model, launched by the government with the aim of bringing the country closer to the status of an advanced economy by 2020. The national GDP continues to keep growing, driven above all by strong domestic demand.

On the commercial level, the increase in exports was curbed in 2013, due to the crisis that hit the European economies. According to forecasts, imports, which have also decreased, resume growth at a faster rate than the export sector. The main export products are electrical material, oil, gas and palm oil, which allow Malaysia to have a highly profitable trade balance. The free trade agreement with the ASEAN countries, which entered into force on January 1, 2010, and the Economic Community being created with the same countries should promote a further increase in trade with the countries of Southeast Asia. Foreign direct investments (ide) incoming mainly concern the electronics, chemicals, financial services and insurance and mining industries. The ide mainly from countries in East Asia and Southeast Asia, such as China, Japan, Taiwan and Singapore. The main destination of Malaysian investments abroad is represented by the Bahamas, followed by Indonesia and Singapore.

According to indexdotcom, the tertiary sector is also showing strong growth, driven above all by tourism and financial services; in fact, Malaysia represents one of the major centers for Islamic finance. Finally, Kuala Lumpur is the second largest oil and natural gas producer in Southeast Asia, as well as the second largest world exporter of liquefied natural gas (LNG) after Qatar.

Defense and security

Between 2010 and 2014, Malaysia imported nearly $ 700 million worth of weapons. The main suppliers are Germany, France and Italy, while Washington, despite the strong commercial exchange, has received orders for just 25 million dollars in the last nine years. The net increase in arms spending, which also involves several other states in Southeast Asia and above all Singapore and Indonesia make the South China Sea an increasingly hot strategic context, especially due to the competition on hydrocarbon resources in the depths of the Spratly Islands, which seems destined to deepen. Kuala Lumpur continues to be part of the Five Powers Pact, signed in 1971 with the United Kingdom, Australia, New Zealand and Singapore, and aimed at encouraging coordinated intervention between member countries in the event of an attack. Malaysia is one of 32 countries belonging to the UN that does not recognize the state of Israel, openly siding in favor of the state of Palestine.

Malacca: a vital strait for Malaysia and for the world

The Strait of Malacca, the shortest passage between the Indian and Pacific Oceans, is a hub of primary importance for the traffic of goods that pass through it every day: about a quarter of the world trade in goods. The exploitation of these 805 kilometers, managed by Malaysia and Indonesia, brings significant economic benefits. In particular, 13.6 million barrels of oil per day pass through the strait, of which 80% is made up of crude oil that China imports. Overall, the growth in Asian production has resulted in an increase in the shift from 40,000 ships in the 1990s to more than 60,000 today, and further increases are expected. The problem of piracy was successfully addressed by the states managing the strait with the ‘Cooperation Mechanism for the Strait of Malacca and Singapore’ in 2007 Asean to eradicate the problem.

Malaysia Energy