NATURAL RESOURCES AND AGRICULTURE
Natural resources and agriculture have played a major role in the development of Malaysia. The sectors have contributed to GDP, export earnings, employment and have provided raw materials to the industrial sector. Before manufacturing gained momentum in the 1970s, Malaysia was largely an agriculture-based economy. At its high point in 1955, the natural resources and agricultural sectors (which include rubber, oil palm, and petroleum; activities related to food, fishing and livestock; and mining) contributed as much as 53.2 per cent of GDP and 61 per cent of employment.
Malaysia has gained international prominence in natural resources and agriculture in a number of ways, notably as the world’s largest exporter—at various points in time—of natural rubber, tin, palm oil and pepper. Where oil palm and natural rubber are concerned. Malaysia leads in the research and development of cutting-edge agricultural technologies. Although the sectors contributed only 14.9 per cent of GDP and 13.3 per cent of employment in 2005, Malaysia remains a leading producer and exporter of natural resources and agricultural produce including palm oil, natural rubber, cocoa, pepper, oil and gas, timber and tin.
Challenges facing the natural resources and agricultural sectors have been numerous. Competition has come not only from other low-cost producers, but also from the invention of synthetic substitutes. Meanwhile, as the nation has continued to undergo a structural shift from an agriculture-based economy to one based on manufacturing and services, competition for labour resources and foreign direct investment among these sectors intensifies. As a result, Malaysian plantation companies have resorted to diversifying their interests and investing in neighbouring countries, where labour and suitable land are more readily available.
To address the challenges faced by these sectors, government policies have been introduced to modernize and increase efficiency in production through greater use of automation and information and communication technology (ICT), to upgrade the quality of products, expand the range of end uses, encourage vertical integration between upstream production and downstream manufacturing and to step up global marketing.
Under the Ninth Malaysia Plan (2006–10), RM11.43 billion has been allocated to the agricultural sector, which will be revitalized to become one of the main engines of economic growth. The emphasis will be on large-scale commercial production, the wider application of modern technology and ICT, the production of high-quality and value- added products, harnessing the potential of biotechnology, and increasing the participation of entrepreneurial farmers and a skilled workforce.
