By international standards, Malaysia has a mediumsized, but rapidly growing economy. It is self-sufficient in important natural resources, including gas and oil, and has a good environment and climate for the production of various crops. Its location, on a crossroads of major sea routes that connect the Far East to South Asia, the Middle East and Europe, provides some additional advantages for the development of its international trade.
Malaysia has a diversified and rapidly expanding manufacturing sector, which between 1989 and 1999 grew at an annual average of 10 percent. Although in many areas of manufacturing, it relies on imported technologies and foreign investments, Malaysia was able to join the world's leaders in some fields. In the 1990s, it became the world's third-largest producer of integrated circuits and one of the leading producers of domestic appliances. Some of the world's largest corporations, such as Dell and Microsoft of the United States, NEC and Mitsubishi of Japan, and others, have opened branches in Malaysia.
Agriculture is still an important export earner, although it experienced stagnation with an average annual growth of only 0.2 percent between 1989 and 1999. Malaysia is the world's largest producer of palm oil, accounting for almost half of the world's production. In the past, the country also was the world's largest producer of rubber, but in the early 1990s it was overtaken by Thailand and Indonesia. Malaysia remains the world's fourth-largest producer of cocoa. Nevertheless, the share of agriculture in the GDP declined from 29 percent in 1970 to 12 percent in 1998.
The role of the mining sector, which once played a very important role in Malaysian exports, is also declining. For a long time, Malaysia was the world's largest producer of tin, but in the early 1990s was overtaken by Brazil and neighboring Indonesia. Malaysia has relatively large reserves of gas and oil. The country is ranked 13th in terms of the world's gas reserves and 22nd in oil reserves.
Malaysia also tries to promote its service sector, which has grown steadily over the last 2 decades, becoming the second-largest sector of the Malaysian economy. However, in doing so, Malaysia has to compete with neighboring Singapore. Local trade, tourism, and other services currently make important contributions to the country's GDP, providing employment for 32 percent of the Malaysian labor force .