orts helped Malaysia continue to recover
from the severe 1985-86 recession. Real output grew by 8.7% in 1988 and
about 7.7% in 1989, helped by vigorous growth in manufacturing output and
further increases in foreign direct investment, particularly from
Japanese and Taiwanese firms facing higher costs at home. Malaysia has
become the world's third-largest producer of semiconductor devices
(after the US and Japan) and the world's largest exporter of semiconductor
devices. Inflation remained low as unemployment stood at about 8% of
the labor force and as the government followed prudent fiscal/monetary
policies. The country is not self-sufficient in food, and a majority
of the rural population subsists at the poverty level. Malaysia's
high export dependence (merchandise exports are 63% of GDP) leaves
it vulnerable to a recession in the OECD countries or a fall in
world commodity prices.

GDP: $37.9 billion, per capita $2,270; real growth rate 7.7% (1989 est.)

Inflation rate (consumer prices): 3.6% (1989 est.)

Unemployment rate: 7.9% (1989 est.)

Budget: revenues $8.8 billion; expenditures $11.2 billion, including
capital expenditures of $2.5 billion (1989 est.)

Exports: $24 billion (f.o.b., 1989 est.); commodities--natural
rubber, palm oil, tin, timber, petroleum, electronics, light manufactures;
partners--Singapore, Japan, USSR, EC, Australia, US

Imports: $20 billion (f.o.b., 1989 est.); commodities--food, crude
oil, consumer goods, intermediate goods, capital equipment, chemicals;
partners--Japan, Singapore, FRG, UK, Thailand, China, Australia, US

External debt: $16.3 billion (1989 est.)

Industrial production: growth rate 13.6% (1988)

Electricity: 5,600,000 kW capacity; 16,500 million kWh produced,
990 kWh per capita (1989)

Industries: Peninsular Malaysia--rubber and oil palm processing and
manufacturing, light manufacturing industry, electronics, tin mining and
smelting, logging and processing timber; Sabah--logging, petroleum production;
Sarawak--agriculture processing, petroleum production and refining, logging

Agriculture: Peninsular Malaysia--natural rubber, palm oil, rice;
Sabah--mainly subsistence; main crops--rubber, timber, coconut, rice;
Sarawak--main crops--rubber, timber, pepper; there is a deficit of rice
in all areas; fish catch of 608,000 metric tons in 1987

Aid: US commitments, including Ex-Im (FY70-84), $170 million; Western
(non-US) countries, ODA and OOF bilateral commitments (197