PESTLE analysis comprises of political, economical, social, technological, legal and environmental factors. We’ll discuss how some of these abovementioned factors are helpful for Malaysia, and others are not. Before jumping into the discussion, we should know a little about Malaysia.
Malaysia is a Southeast Asian country; it gained her independence in 1957. Kuala Lumpur is the capital of the country. The neighboring countries of hers are; the Philippines, Indonesia, Vietnam, Singapore, Brunei, and Thailand. Over 32 million people inhabit this land. The country has 13 states, out of which 3 are federal states, and the system of the country is a constitutional monarchy where the head of the state is king. Malay is the official language of the country, but people can also speak English as a second language.
Pestle analysis of Malaysia, here it follows;
Political Factors Affecting Malaysia
Some of the political factors that are in favor of and affecting Malaysia are as follows;
The constitutional monarchy system, local administration, and bureaucracy are in complete collaboration with one another, therefore, the cohesiveness of all the departments combined to make the Malaysian government a very stable management.
The stability of the government is under a great threat by the ‘sweetener,’ it’s the term they use for the bribery. What it means that whether you want justice, quality education, or access to health facilities, then you have to pay more as a sweetener to get it done. Otherwise, you just have to sit and wait in the lines.
According to the corruption ranking of transparency international, Malaysia was at 61 positions out of 180 countries in 2018. If you compare it with other neighboring countries, then Malaysia is doing much better and far behind in corruption. But it doesn’t justify the existing bribery ‘sweetener’ issue.
Allies with the World Organization
Malaysia is not only a member of international platforms, world-leading organizations like the United Nations and the Commonwealth of Nations. But she has also founded organizations like OIC (organization of Islamic cooperation) and ASEAN.
Complicated Relationship with China
The stability of the government and also in the political environment is only possible when you have peaceful relations with neighboring countries. China and Malaysia have a serious conflict over the Chinese ocean, but both countries have decided to work together to resolve their differences and conflicts.
It doesn’t suit a well political and financially stable country like Malaysia to control media; where government critics and opposition leaders don’t get coverage during their election campaign. The active government only portrays one side of the picture. The same thing happened in the election of 2007, where the government asked TV and media not to publish and provide coverage to anything that opposing the existing management.
Economic Factors Affecting Malaysia
Some pros and cons of the Malaysian economy are following;
Moving from Middle-Income to Higher
The estimated nominal GDP (gross domestic production) of the country in 2020 is 381.523 billion US dollars, which ranks 33rd position in the whole world. The approximate nominal per capita of the country is 11,484 US dollars, and it ranks 62nd position worldwide.
These figures tell us that the economy of the country is making progress and moving up. Ranking is also getting better, if the country keeps moving up at the same pace, then soon it’ll be included in the high income developed countries.
The Malaysian economy is heavily relying on the exports, whereas there should be a balance between local domestic consumption of the products and services and foreign exports. Exports are good, but you can’t always rely on them. The local domestic market should also consume some portion of homemade products.
Malaysian exports include oil, gas and petroleum products. Their rate depends on the international market. However, if the international market is good, then you’d get good rates, otherwise not.
Nowadays, the world is also moving from oil and gas to eco-friendly resources of energy, which doesn’t involve the emission of carbon dioxide into the atmosphere which causes global warming. Therefore, the future of such export is volatile and unsustainable in the long term.
Lower Unemployment ratio
The good thing about exports and the financial stability of the government is the lower unemployment rate. To be more precise, it’s roundabout 3.2% in 2019. The other reason for the lower unemployment rate is because the government has multiple sources of earning.
Imports and Exports
Some of the major exporting products are office machines, integrated circuits, palm oil, gas, and refined petroleum. Her imports comprise of refined and crude petroleum, office machines and broadcasting equipment, and integrated circuits. In 2019, the FDI (foreign direct investment) of the country was 21.7 billion RM.
Social Factors Affecting Malaysia
Malaysian population comprises of indigenous Malay people, Indian and Chinese ethnicities. Islam is the majority religion in the country. The country celebrates many festivals of different cultures. Somehow these people of different ethnicities managed to live together in one country.
However, they don’t wed cross ethnicities which tell the rigidness of these cultures. Even they prefer social within their ethnic social group.
Social Status and Artifacts
There are different definitions of social status in Malaysia like rich families send their kids to foreign countries, they’ve got a lot of money and their English must be really good. You can judge the social class by their shopping style like; luxury clothes, costly jewelry, and the latest model of mobile phone. Having the latest model of car or a vehicle is more important for maintaining a social status than owning a house.
Malaysian people live a rich and luxurious life if you compare it with other upper-class middle-income countries. It’s because of many reasons like lower income taxes, health, education, and justice is almost free. When you have fewer expenses, then you have a lot of money to spend. Therefore, people live a luxurious lifestyle.
Technological Factors Affecting Malaysia
Angkasa (Malaysian national space agency) started developing space education and experimentation program back in 2002; that resulted in the form of a satellite by the name of ‘RazakSAT.’ The country has been producing a great resource for the installer programs. International space agency chose 3 Malaysian astronauts for the spaceflight program.
Embracing Hi-tech Companies
People have access to the data network and internet connection. Tech companies like Intel, Amazon, IBM, and Google have great popularity among the public, and people prefer the products of these brands. When it comes to used different social media platforms, Malaysians have an old classic taste and they use Facebook, Instagram, and YouTube.
Adopting Tech Culture
The country is working to bring investment in the tech sector by the end of 2025. When world-leading brands open up their offices in the country, then it would not only create job opportunities. But it would also help to develop a tech culture in the country.
Legal Factors Affecting Malaysia
Dual Legal & Justice System
The country follows two laws; British common law for secular and non-Muslims, and Sharia law for Muslims. Malaysian parliament implements federal laws throughout the whole country. Constitution of Malaysia is the supreme law of the land which provides the basic framework and right of its citizens.
Environment Factors Affecting Malaysia
Extinction of Wildlife
Deforestation results in form of extinction of wildlife, many species of birds and animals are on the verge of extinction because of it. Those species of birds and insects are a part of our eco-system. We may not realize their direct impact, but their extinctions affect us indirectly.
Urbanization is leading to deforestation. As we forest not only home to wildlife, birds, and insects, but they also clean our atmosphere. When you chop off trees, then it means in less oxygen and more carbon dioxide, which results in global warming.
Conclusion: Pestle Analysis of Malaysia
Malaysia is a beautiful country with colorful jungles and beaches, she must stop deforestation. The government is financially stable, but it doesn’t justify political corruption. If the country wants to move forward, then it must stick with its space program and tech culture.