WRITTEN ASSIGNMENT ECO2023

COURSE NAME:

MACROECONOMIC

CODE SUBJECT:

ECO2023

LECTURER’S NAME:

MADAM HADRAH HANUM BINTI RAMLEE

NAME CLASS NUMBER ID
BMF20-07-084
DANIA IRDYNA BINTI RIDHUAN DBF3B BMF20-07-079
BMF20-07-074
ALISSA IRDINA BINTI AYOB SALLEH DBF3B BMF20-07-070

NUR ATHIRAH FATINI BINTI MOHD AZUAR DBF3B

NAZIRA ATIA BINTI BAHAROM DBF3B

DUE DATE:
16 April 2021

AKNOWLEDGMENT
In the name of Allah, the Most Gracious and the Most Merciful.
All praises to Allah and His blessing for the completion of this written assignment. I
thank God for all the opportunities and strength that have been showered on us to finish this
written assignment before the due date. We experienced so much during this process, not
only from the academic aspect but also from the aspect of personality. This assignment
teaches us more about an economy in Malaysia.
First and foremost, we would like to sincerely thank to each other because helping
together with each other such as giving guidance, understanding, patience and most
importantly we are giving our positive encouragement and a warm spirit to finish this report
together.
Our deepest gratitude goes to all our family members. It would not be possible to write
this report without the support from them.
Finally, our lecturer’s Madam Hadrah Hanum Binti Ramlee for her guidance,
understanding, patience and most importantly, she has provided positive inspiration and warm
spirit to finish this assignment. It has been a great pleasure to has her as our lecturer.

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1. Provide data on Malaysia’s trade from 2019-2020. Comment on your findings,
namely exports, imports, and trade balance.

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In 2019, Malaysia’s trade surplus continued to register double-digit growth for 3 consecutive
years, spreading by 11% to RM137.39 billion compared to RM123.78 billion in 2018. This was
the largest trade surplus since 2009, representing Malaysia’s achievement of the 22nd
consecutive year of trade surplus. In cycle with softer global demand in trade tensions and
unfavourable external economic conditions, total trade contracted by 2.5% to RM1.835 trillion.
Exports decreased marginally by 1.7% to RM986.4 billion, from the preceding year while
imports declined by 3.5% to RM849.01 billion. Lower trade was recorded with Singapore,
Hong Kong SAR, France, Thailand, and Japan. Yet, higher trade was registered with the United
States (US), the United Arab Emirates (UAE), the Philippines, Cambodia, Mexico, and the
United Kingdom (UK). Trade balance Meanwhile, Malaysia’s trade surplus in 2020 recorded
the 4th consecutive year of double-digit growth, with an expansion of 26.9% to RM184.79
billion compared to 2019. This was also the largest trade surplus thus far, representing
Malaysia’s achievement in supporting trade surplus for 23 consecutive years since 1998.
Malaysia’s exports in 2020, valued at RM980.99 billion, declined marginally by 1.4% compared
to the year 2019, in cycle with the unfavourable external environment due to the impact of
the COVID-19 pandemic. Exports rebounded in the second half of 2020, increasing by 4.8%.
This was a significant improvement from a 7.9% contraction in the first half of 2020 as the
economy progressively reopened and external demand gradually recovered. Lower exports
were recorded to Thailand, India, Bangladesh, Viet Nam and Japan while higher exports were
registered to China, the US, Singapore and Hong Kong SAR. Total trade in 2020 amounting to
RM1.777 trillion, contracted by 3.6% compared to 2019 while imports totalled RM796.19
billion, a decline of 6.3%. Malaysia’s trade performance was in tandem with countries in the
region notably Indonesia, Singapore, the ROK and Thailand.

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2. Identify Malaysia’s top four (4) trading partners and the respective trade
volume in 2020.

Partners are important for one country, so they ensure that our country retains jobs. Malaysia
exported US$234 billion in exports to the rest of the world in 2016. In 2016, the dollar volume
increased by 18.6 percent, but it decreased by -3.7 percent from 2019 to 2020. In addition,
the amount reflects a 23.2% percent increase in 2019 to 2020 but a -1.8 percent decline. Top
Malaysia trading partners, countries that imported the most Malaysia shipments of dollar value
during 2020. In Malaysia we have four top trading partners and the respective trade volume
in 2020. In 2020, the top Malaysia trade partners are the countries that imported the most
Malaysia shipments in terms of dollar value. Malaysia has four top trading partners, with the
following exchange volumes in 2020. According to the Malaysia Trade Statistic Analysis
(MTSR), China is Malaysia's largest trading partner for the 11th straight year in 2019, with
trade estimated at RM316.6 billion. China purchased $37.8 billion in Malaysian exports,
accounting for 16.1 percent of total Malaysian exports. Singapore is up next. Singapore
purchased $33.9 billion in Malaysian exports, accounting for 14.5 percent of overall Malaysian
exports. Aside from that, Singapore is a major export destination for Malaysia. Furthermore,
Singapore has posted a significant amount of export, which is an improvement of 13.7 percent
year on year compared to nearly a flat reading in the previous month, primarily due to strong
sales of E & E (Electrical and electronics) commodities, which increased 50.2 percent year on

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year and accounted for more than half of Malaysia's overall export to the region, according to
MIDF Research. Besides, the United States. The United States bought $26 billion worth of
Malaysian exports, accounting for 11.1% of global exports. Machinery and transport
equipment (53.9% of total exports) and miscellaneous produced products account for the
majority of Malaysia's exports to the United States (31.9 %). From 2019 to 2020, the United
States will be one of Malaysia's main export customers. Finally, Hong Kong purchased $16.2
billion in Malaysian exports, accounting for 6.9% of total Malaysian exports. Hong Kong is at
the top of the surplus list, having spent $12.9 billion. Malaysia posts a $44.2 billion surplus on
goods traded in 2020, up 33.3% from $33.2 billion.

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3. Identify and provide data on top four (4) sectors that contribute for Malaysia’s
exports in 2020.

Exports are defined goods and services that are produced in one country and sold it to
someone which are consumers in another nation. Exports, along with imports make up
international trade. Total exports in Malaysia during 2020 as much RM980.98 billion compared
to 2019 which is RM995.07 billion. Latest data that available in country specific shows that
78.4% of products export from Malaysia were bought by importers in China, Singapore, United
States, Hong Kong, Japan, Thailand, South Korea, Taiwan, Vietnam, India, Indonesia, and
Germany. Not only that, Malaysia also exports 71.5% by value were delivered to Asian
countries while 12.4% were sold to American importers. Goods to Europe Malaysia had
shipped 10.3%. Malaysia as well exports minor percentage to Australia, New Zealand and
lastly America without Mexico. Now we are discussing the top four sectors that contribute for
Malaysia’s exports in 2020. Firstly, is rubber. When 2020, rubber whatever including items
made from latex was the fastest grower among the top export’s categories 2019 till 2020.
This is because during 2020 has a pandemic COVID-19 and through this pandemic Malaysia
exports latex goods for using medical devices such as gloves and catheters. In 2020, the total
rubber products up to 90% exports and it recorded rise of 81% during 2019. During pandemic
the rubber was rise and required by medical and health sectors word wild to spread the
COVID-19. Malaysian Rubber Council which is chief executive officer Brandon Chan said that
Malaysian has been providing more than 60% of the world demand of rubber. Next sectors
are electrical, machinery and equipment which percentage is 37% total exports US$86.6
billion. For example, are CS Cone Casher, Hammer Casher and so on. This sector is top when
2020. This cashflows show Malaysia’s strong competitive benefits under equipment besides
electricity machinery product category. Not only that, the third top sector have 11.3% $26.5
billion which is mineral flues including oil. Mineral exports were decrease in 2020 because of
pandemic. People choose rubber more than anything. Lastly are optical and scientific
equipment which is RM41.55 billion compare to 2019 which is RM39.91 billion 4.0%.

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4. Identify and provide data on top four (4) sectors that contribute for Malaysia’s

imports in 2020.

An import is a product or service purchased from one country and sent to another. Imports
are closely tied to national wages. Aside from that, importing is one of the components of
foreign trade, which relates to trading practises conducted with other countries. As an
example, consider expenditure and development. Manufacturing is one of the top sectors in
Malaysia that will add to Malaysia's imports in 2020. As an example, consider cardboard and
plastic paper. 7.8 billion dollars (4.1 percent). Malaysian purchases of self-adhesive plastic in
rolls increased by more than 0.3 percent from 2019 to 2020. Malaysia has ten plastic
subcategories, indicating that various types of imported plastics are in high demand for
Malaysian businesses and consumers. Since whole countries afflicted by the covid-19 virus
need more rubber gloves as one of the protective equipment for the frontline of treating
patients, the rate of increase in the manufacturing sector, especially plastics, is increasing.
Then there's the ICT market. For instance, machinery including computers ($17.9 billion)
(9.4%). From 2019 to 2020, Malaysia saw a decrease in purchases of miscellaneous machinery
of less than-4.8%, computers like optical readers of less than-8.3%, and centrifuges, filters,
and purifiers of less than-8.7%, when most people had to change their way of life due to
pandemic covid-19. This has a big impact on students and workers. That will make them buy
something that is necessary to facilitate daily life, such as computers. Furthermore, the oil
and gas industry are one of the top four industries contributing to Malaysia's imports in 2020.
All in Malaysia are aware that Malaysia is one of the countries that is pursuing oil and gas.
Malaysia is the world's second-largest oil and natural gas producer. Over the last two decades,
Malaysia's strength has been largely supported by the country's role as Southeast Asia's
largest producer of oil and gas. Over the last two decades, Malaysia's economic strength has
been mainly supported by the oil and gas industry, which accounts for roughly 20% of total
GDP. Finally, there is the electrical machinery market. Malaysians bought more than 19.9%
of TV, radio, and radar equipment parts, 18.7% of printed circuits, and 16.1% of unrecorded
sound media.

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5. Identify the sectors in Malaysia that are worst affected by Covid-19? Why?

The implementation of conditional MCO has had a negative impact on the three affected
sectors during the covid-19 season. Examples are the tourism sector, the sector and business
retail sector.

• Tourism sector

Following the loss of 80 per cent of income and savings are increasing day by day. the
Malaysian hotel association found that 90 hotels had ceased operations since the
implementation of the control order. Over 12,000 workers were laid off and the rest had their
salaries cut or asked to take unpaid leave due to MCO. Moreover, the hotel industry is expected
to suffer a loss of 300 million. There are a lot of people who are depends on their work
because that is the only way to generate income for their families. Furthermore, the tourism
sector is considered an important economic sector in Malaysia.

• Business sector

Entrepreneurs also incur a huge loss for not getting profit due to not getting operate as usual.
As we know that Malaysia entrepreneurs get a high statistic in each year because they do not
have a proper job. So, they do business by selling goods. But due to MCO, they had to close
their operations. Doing business is the only income they get. In addition, the entrepreneurs
also must pay monthly rent of their shop or stall. That will increase on their loss too. The
worst part of losses are entrepreneurs who are not used to digital can get a huge loss than
the other who are used to it. Because we be living in digital era that mostly use the digital to
generate their income.

• Logistic sector

the logistics sector faces severe global supply chain challenges at a time of movement control
orders. Early in MCO, goods and food demand are increasing even when movement control
orders are affected because the reduction in the entry of goods is limited due to Covid-19.
Besides, not all essential goods companies are state approved. Most of the companies should
close their operation including current import and export production. In addition, container
vessel inflows are also less operational from port to another port. Therefore, covid-19 affects
income reduction.

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6. Refer to question 5, identify and explain the incentives provided by the
government of Malaysia in helping these sectors.

• Tourism sector
SMEs hoped that hotel operators and travel agents would seek further support from the
government to help the industry. Therefore, MATTA president said the tourism sector was the
worst affected by covid-19. Therefore, it needs financial assistance to recover. Moreover, the
government provided national caring assistance to the tourism sector in the process of
recovery. initiatives in tax cuts by the government, by providing citizens with domestic travel
in order to increase the rate of domestic tourism, reducing working hours can also restore the
rate of increase in tourism and can eradicate covid-19 from entering the country.

• Business sector
the government should allow anyone to trade online in order to generate household income.
Thus, buying online can reduce the unemployment rate too. moreover, cut in half from the
regular tax for those reviving the business sector. Besides, offers budget packages throughout
Malaysia. In the meantime, a lot of couples want to do wedding ceremony. So, the government
offers hall rentals for weddings in a limited number of attendees due to the SOP covid-19.

• Logistic sector
the government exempts permit and fees when MCO. Moreover, extending additional storage
periods free of charge to cargo and containers for aims to reduce costs incurred by port users.
phased entry of ships to revive the logistics sector. Lastly, f it used to operate manually, now
it operates digitally with the help of the government.

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7. Give suggestions on how Malaysians can help improve the country’s overall
Gross Domestic Product (GDP)?

Gross Domestic Product is defined the total money value of the all-final goods and services
produced within a country in each period. First suggestion is held the Malaysia holiday
campaign which is provide the promotion to the place that are interesting. With that people
will be interested to visit that place. The manager of organization can advertise to other
countries to that they can know and come to the Malaysia holiday campaign. It will increase
the Gross Domestic Product because people will spend more money in Malaysia during this
campaign. When people have a lot of money the central bank can increase the tax so there
can gain more money from that. It will help Malaysian Gross Domestic Product increase. Not
only that, the government also can make more faster public transportation which connects
the state to state. It is because some people want to avoid the traffic jam and take alternative
to use the public transportation but want to which quickly get to destination especially when
people go last minute. It will increase the Gross Domestic Product because many of people
want to use it. Next is, produced more honey in Malaysia and exports it to other countries
using the many of platform. Put the price which is affordable so that people want to buy it.
They can also put the honey in another supermarket at another countries. Besides that,
Malaysia must work for human capital development, female labour force contribution and
productivity. For human capital, the quality and quantity for education run the boost economic
growth in long term run. If Malaysia stays at current level of educational value and health it
can help the Gross Domestic Product. Next Malaysian must support what government done to
increase the money in country which is pay the tax, help the people who needed the money
during COVID-19 so that people have money to buy something and it can increase the money
value in Malaysia. The contractor also can make a house can afford to belong so that people
do not quartered in the street. Not only that, people can get income by work at the house
that to build so they have income and they can pay the tax or so on. Malaysia can also take
the foreign workers so that can increase the Gross Domestic Product because their income
will include in Gross Domestic Product.

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8. Provide data on Malaysia's Trade Performance in January 2021? Comment
on Malaysia’s performance.

Malaysia’s exports in January 2021 maintained its positive growth for five consecutive months,
registering an increase of 6.6% to RM89.63 billion compared to January 2020. This also clear
that the highest export value for the month of January thus far. The expansion was supported
by increase in global demand notably for electrical and electronic (E&E) and rubber products
as well as front-loading activities prior to the festive season. Higher exports were seen to
China, the United States (US), Viet Nam, Singapore and Hong Kong SAR. Imports in January
2021 extended by 1.3% year on year to RM73.02 billion. Total trade representation by 4.1%
to RM162.65 billion, the highest value registered for the month of January. Trade surplus
surged by 38% to RM16.6 billion, sustaining a double-digit growth for eight consecutive
months. Compared to December 2020, total trade, exports, imports, and trade surplus
decreased by 4.8%, 6.4%, 2.7% and 19.8%, respectively.

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9. What do you expect the prospect Malaysia’s international trade in 2021?

In my opinion, year 2021 is expected to be better as World Bank and International Monetary
Fund (IMF) forecasted that global growth will rebound by 4% and 5.5%, respectively. For
world merchandise trade volume, the World Trade Organization (WTO) projected 7.2%
growth in 2021. In cycle with improvement in global growth & international trade, Malaysia’s
Gross Domestic Product (GDP) is expected to rebound by 6.5% to 7.5%, higher than the
forecasted growth for ASEAN-5, which is 5.2%. Malaysia’s exports had been showing symbols
of recovery since September 2020 with positive year on year growth. Malaysia’s external trade
is expected to remain modest with exports projected to rebound by 2.7% in 2021 as detailed
in the Economic Outlook 2021. Higher demand for semiconductors and commodity-based
products is anticipated to drive exports as global economic activities recover. Even though the
world is facing the Pandemic COVID-19, I expect that our government can arrange the
economy activities very well so that we can improve a lot in international trade especially in
exports. Government should figure out how can Malaysia trade can be improving in exports,
import and total trade. Business company should invest more for helping our Malaysia
international trade to be increase. In January 2021, total export showing positively increase
by expanding 6.6% to RM89.6 billion and achieve the higher valued thus far in January 2021.
The total import also increases of 1.3% to RM73 billion. I do expect that export and import
value will be increasing by 8% and 4% respectively.

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Reference.

1. https://www.miti.gov.my/miti/resources/Media%20Release/Media_Statement_-
_Malaysia_External_Trade_Statistics.pdf

2. https://www.miti.gov.my/miti/resources/Media%20Release/Malaysia_External_Trade
_Statistics_-_Trade_Performance_For_2019_And_December_2019.pdf

3. https://www.matrade.gov.my/en/malaysian-exporters/services-for-exporters/trade-
market-information/trade-statistics/28-malaysian-exporters/trade-statistics/5082-top-
10-major-export-products-2020

4. https://www.worldstopexports.com/malaysias-top-10-exports/
5. https://www.dosm.gov.my/v1/index.php?r=column/cone&menu_id=dUtRR1JYWjk2T

EJha1BrZml0REY4UT09
6. http://www.worldstopexports.com/malaysias-top-import-partners/
7. https://www.matrade.gov.my/en/for-foreign-buyers/industry-capabilities/trade-

statistics/28-malaysian-exporters/trade-statistics/5081-top-10-major-import-
products-2020
8. https://www.matrade.gov.my/en/for-foreign-buyers/industry-capabilities/trade-
statistics/28-malaysian-exporters/trade-statistics/5081-top-10-major-import-
products-2020
9. http://www.worldstopexports.com/malaysias-top-10-imports/
10. https://www.dosm.gov.my/v1/index.php?r=column/cthemeByCat&cat=139&bul_id=
bXF1OFR3YW1XNXRuMlMyNGNlSUthZz09&menu_id=azJjRWpYL0VBYU90TVhpclByWj
dMQT09#:~:text=Imports%20by%20Country%20of%20Origin,when%20compared
%20to%20April%202019.
11. https://ustr.gov/countries-regions/southeast-asia-pacific/malaysia
12. https://www.dosm.gov.my/v1/index.php?r=column/cthemeByCat&cat=139&bul_id=
bXF1OFR3YW1XNXRuMlMyNGNlSUthZz09&menu_id=azJjRWpYL0VBYU90TVhpclByWj
dMQT09
13. https://www.investopedia.com/terms/i/import.asp
14. http://www.xinhuanet.com/english/2021-
01/30/c_139709468.htm#:~:text=%22As%20Malaysia's%20largest%20trading%20
partner,year%20ago%2C%22%20it%20said.
15. https://themalaysianreserve.com/2020/12/31/china-remains-malaysias-largest-
trading-partner-for-11th-year/
16. https://www.thestar.com.my/business/business-news/2020/10/29/a-sweet-
september-for-the-economy

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17. https://www.thestar.com.my/business/business-news/2020/05/01/impact-of-us-
economic-contraction-on-malaysia

18. https://www.aseanbriefing.com/news/china-plus-one-series-understanding-
malaysias-appeal-foreign-investors/

19. https://www.bharian.com.my/rencana/komentar/2020/06/703917/inisiatif-bersama-
pulihkan-sektor-pelancongan

20. https://www.sinarharian.com.my/article/91492/BERITA/Nasional/Tujuh-inisiatif-
pulihkan-sektor-logistik-perkapalan

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