Cross Cultural Management

CHAPTER 1: INTRODUCTION

1.1        PROJECT OBJECTIVE 

Our aim for this project as part of our assessment for ECMB233 (Macroeconomic) are to study the investment performance in our country made by the government and private sector and the policies and strategies implemented by the government to stimulate investment by apply its into this assessment from what we have learn from the lecture class. We also can learn how it involve and the requirement that need to finish this assessment by doing some internal and external reading follow by the syllabus and guidelines that had been given. The Gross Domestic Product (GDP) is the market value of final goods and services newly produced within nation during a fixed period of time. The GDP have four component. They are Consumption, Investment, Government and Net Export (Export – Import). The GDP component that we want to discuss is Investment.

Investment is a spending for new capital goods (fixed investment) plus inventory investment or in other definition the action or process of investing money for profit or material result. There are three categories that involve in investment such as:

• Business (or non-residential) fixed investment: spending by businesses on structures and equipment and software
• Residential fixed investment: spending on the construction of houses and apartment buildings
• Inventory investment: increases in firms’ inventory holdings

The reason we want to discuss about the investment is to learn how Malaysia invest their money throughout the nation. Not only had they invested among themselves but also other countries.

1.2        BACKGROUND OF MALAYSIA

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The estimate population for 2016 are 31,325,000 with 50.1% of Malay, 22.6% of Chinese, 11.8% of Indigenous, 6.2% of Indian and 3.4% of other ethnic. Malaysia is located in Southeast Asia that consists of thirteen states and three federal territories and has a total landmass of 330,803 square kilometres that separated by the South China Sea into two similarly sized regions, Peninsular Malaysia and East Malaysia (Borneo). Malaysia’s 6th prime minister is Dato’ Sri  Haji Mohammad Najib bin Tun Haji Abdul Razak who was born on 23 July 1953.

Hari Merdeka (Independence Day'), also known as Hari Kebangsaan (National day), refers to the day when the Federation of Malaya's independence from the British Empire was officially declared. At exactly 09:30 a.m. on 31 August 1957, the declaration was read by the first Chief Minister of Malaya, Tunku Abdul Rahman at the Merdeka Stadium in the presence of thousands of people including Malay Rulers, members of the federal government, and foreign dignitaries. Since its independence, Malaysia has had one of the best economic records in Asia, with its GDP growing at an average of 6.5% per annum for almost 50 years. The economy has traditionally been fuelled by its natural resources, but is expanding in the sectors of science, tourism, commerce and medical tourism. Today, Malaysia has a newly industrialised market economy, ranked third largest in Southeast Asia and 29th largest in the world.

1.3        GDP PERFORMANCE

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This diagram show a graph of Malaysia GDP on investment from 1980 to 2015. This show that Malaysia GDP growth rate is positive. If it's growing, so will business, jobs and personal income. GDP growth rate is most important indicator of economic health. The fluctuation in the business cycle such as economic recession occur when the graph move downward phase. During recession national output may be falling or growing only very slowly in short-term economic. When the graph move upward its shown the increasing of the economic growth of the country.

CHAPTER 2: MALAYSIA INVESTMENT

1.  INVESTMENT PERFORMANCE

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∙         Produce a diagram showing the fluctuations in the country's total investment from 1980 to the latest year (preferably 2015).

∙         Discuss the fluctuations.

∙         Explain the reasons behind those fluctuations.

2.2        INVESTMENT BY CATEGORIES

There are two categories under investment that have been told in the Malaysian Investment Development Authority (MIDA), manufacturing sector and service sector.

First, service sector, the Government has drawn up the framework for the New Economic Model to propel Malaysia from a middle-income to a high-income economy based on innovation, creativity and high value sources of growth. The services sector assumes an increasing share of GDP as the economy matures, as is evident in the case of developed countries. The service sector will continue to be primary driver of the economic to developed nation. The strategies that have formulated to enhance the competitiveness and resilience of the service sector whether under government or private sector. Greater focus will be given to the modern and knowledge-intensive industries which include the halal, ecotourism and information, communications and technology (ICT) to contributed in the wholesale and retail trader and supported by strong household spending and stable labor market condition.

As for manufacturing sector, they have their own policies whereby the local company incorporated with manufacturing license application and no restriction on foreign equity ownership. Its also have free movement of funds for foreign investment in Malaysia by protect their intellectual property rights. They are responsible for trade unions and harmonious industrial relations. Their compulsory contributions are Employee Provident Fund (EPF), Social Security Organisation (SOCSO), Human Resource Development Fund (HRDF) and Investment guarantee agreements.

CHAPTER 3: POLICIES AND STRATEGIES

STRATEGY

Malaysia has made rapid strides in economic development despite the downturn caused by the Asian financial crisis eight years ago.  This recovery has been due mainly to the Government’s adoption of appropriate policies and strategies to ensure sustainability of growth.  The Government has successfully pushed for higher value-added activities in manufacturing, focusing on improving services delivery, harnessing the dynamism of the private sector, whilst increasing investment in human capital.