Malaysia has a population of 20 million people (1995 estimate) with over 80% of them in Peninsular Malaysia. The society is multi-racial, with the main races being Malays, Chinese and Indians. The annual population growth rate in 1992 was 5.9% while the current life expectancy stands at 71 years.
According to the World Bank, Malaysia is an upper-middle income country. The total GNP in 1995 was estimated at RM 202,389 million1 while the per capita GNP at current price level was RM 10,068. The country has high and sustained rates of both GNP and GDP growth. The rates of growth of GNP and GDP were above 8% and 7% respectively from 1980 to 1995 with a record high achieved in 1990 of 11.3% and 9.7%. The growth rates were 9.3% and 9.6%, respectively in 1995.
Inflation rate in Malaysia is moderate, around 3.7% in 1994 and less than 4% in 1995. Nevertheless, inflation control remains one of the top Government's priorities. In recent years, Malaysia has been a magnet to foreign investment. In 1994, total foreign investment was about RM 22.67 billion, largely in the manufacturing sector. The United States of America (USA), Japan, Singapore and Taiwan remained the main trading partners of Malaysia.
Although Malaysia is heading towards industrialisation, its economy is still rooted in the production and export of primary commodities - crude oil, palm oil, tin and rubber still provide over 50% of export earnings. Nevertheless, the manufacturing industry is the fastest area of growth. Malaysia leads the world in the production of rubber and is one of the biggest producers of cocoa, palm oil, tropical hardwoods, pepper and tin, all of which are mostly exported in processed forms.
Of the various natural resource sectors, forestry remains one of the most important, contributing significantly to socio-economic development of the country. This is evident by the following contributions:-
i. The total export value of timber and timber products (including rattan and wooden furniture) for Malaysia recorded FOB RM 13.1 billion or 7.0% of total export receipt of the country at FOB RM 185.3 billion in 1995. For Peninsular Malaysia alone, the total export value of timber and timber products (excluding rattan and wooden furniture) amounted to FOB RM 2.3 billion, constituting 1.0% of the total gross export receipts of Peninsular Malaysia at FOB RM 175.1 billion for the same year.
ii. Revenue derived from forests in the form of royalties, premium, forest development fund, and others represent a considerable and important proportion of the State Government's total income, while at the Federal level, export levy and income tax are collected. In 1995 the total forest revenue collected by the various state governments in Malaysia amounted to almost RM 2.0 billion.
iii. The forestry sector provided direct and indirect employment for almost 250,000 persons in 1995. In Peninsular Malaysia forestry sector provided employment for at least 87,512 persons, specifically 12,940 persons in the logging industry, 20,075 persons in sawmilling, 16,259 persons in the plywood/veneer industry, 8,591 persons in the moulding sector, 18,000 persons in the furniture mills, match, pencil, wood-wool cement slabs, small scale rattan and bamboo industries, whilst the public sector employed some 5,647 persons. More than RM 500 million were paid out in salaries and wages for workers involved in the forestry sector.
iv. Total investment in the major wood-based industries in Peninsular Malaysia in 1995 was estimated to be RM 2,549 million. Of this total, RM 1,657 million or 65% were in the sawmilling industry, RM 664 million or 26% in the plywood/veneer industry and RM 228 million or 9% in the wood moulding industry.
v. Apart from its monetary value, forest also plays an important protective function such as the maintenance of environmental stability, minimization of damage to rivers and agriculture land by floods and erosion and the safeguarding of water supplies.
1 US$1.00 = RM2.46 as of June 1997.
