Trade Liberalization and Environment: Malaysian Development Strategy, Policy & Experience

Abstract

Malaysian trade has been traced since the period of 1947 and she experienced great instability in its export earning due to the high degree of trade dependence in that time period. However this crisis eliminated and the economic development emerged when the government decided to diversify the economy and embarked on an active policy of 'Import Substitution' in the 1970s. Following these policies Malaysian economy maintained sustained growth from 1970 to so far with the exception of the brief recession in the mid 1980s and 1997 financial crisis period and the sustained growth occurred within the framework of a liberal trade and investment regime as well as the extensive industrial policies. This paper studies the globalization process such as trade liberalization in the Malaysian economy and Malaysian environmental policies, environmental motivations toward sustainability from 1947 to 2005. Doing so, we extensively study various issues of Malaysia such as transition of Malaysian economy of pre and post industrial stage, trade liberalization policies that enhanced the trade liberalization, energy demand and air emission and Malaysian environmental policies of sustainability for 2020. Input-Output analytical model also used in this study to quantify the scenario emission estimation for 2020. In addition we also study various environmental legislations and rules, several agreements of Malaysia such as Montreal Protocol, Basel Convention, and Kyoto Protocol toward sustainable development.

Keywords: Trade, Trade Policy, Energy Demand, Environment, Malaysian Economy

JEL Classification: F10, F19, N5, N7