Malaysia SWOT Analysis

This SWOT analysis of Malaysia outlines the primary strengths, weaknesses, opportunities, and threats affecting the Asian country over the last few years.

Malaysia is a growing country with over 32 million inhabitants. It primarily survives as a massive exporter for palm oil, gas, and diesel, but is happily moving into more industrialized-based industries.

In this SWOT analysis of Malaysia, I’ve outlined the primary strengths, weaknesses, opportunities, and threats affecting the country over the last few years.

Malaysia's Strengths

• Geopolitical Stability: An ally to the world… and China. Kind of. Malaysia is a member of many worldwide organizations, such as the UN, ASEAN (in which Malaysia is the founder) and the Commonwealth of Nations. Malaysia also tends to be a problem yet ally to China. The two countries have disagreements over the South China Sea but have attempted to resolve issues quickly and mutually.
• A surprisingly low unemployment rate: One of Malaysia’s biggest strengths is its low unemployment rate. It’s one of the lowest in Asia. It’s just above 3% (in 2019). The mining industry is a big industry for the country’s economy, but they’re also adopting more service and knowledge-based industries too. If these industries expand, the unemployment rate could decrease further.
• Multi-cultural population: Malaysia is a multicultural country, with Malaysians, Chinese, and Indians comprising the bulk of the population. These three groups interact during school to the workplace, but most won’t date or marry out of their ethnicity. Still, the groups tend to coexist quite peacefully, despite the difference in cultures and religions.

Malaysia's Weaknesses

• Political corruption limits basic rights: Malaysia’s political system is rather stable, however, that could be because of the corruption. Political figures have forced Malaysian citizens to pay a fee for access to basic functions, such as schooling, courts, and even hospitals. This fee is called a “sweetener” and if it’s not paid, citizens may not have the medical access needed, or the option to continue their academic career.
• Unfair intervention during political debates: The media is also controlled by the government. During elections in 2007, the party in power instructed television and radio stations to not play speeches given by the oppositional party. This is a corrupt and unfair situation, which only benefits the current political parties. Even if citizens wanted to vote for a different party, it’s frowned upon.
• Exports may not be as valuable: Although exports are the bulk of Malaysia’s economy, it’s a volatile market. Gas and diesel prices are ever-changing — and with the emergence of electric vehicles, more countries are opting to use renewable energy sources. Because of this, Malaysia may find seeing exports as a weakness, as it could impede the growth of the economy.

Malaysia's Opportunities

• A shift in economic streams: Within the last 50 years, Malaysia has changed its economy. The country has multi-sector streams of income. Now, Malaysia is considered a middle-income country with the hope of rising even higher. If they focus more on building upon the service-based industries — rather than exports — the country’s economy may grow even more.
• More carers in technology: Malaysia is openly embracing technology from popular brands like Google and IBM. By accepting these technologies, it’s easier for Malaysians to segue into technology careers. The first step is using and understanding the tech, after all. Technology is a booming industry in any country, and will likely lead to more employment opportunities in the future. The government is pushing for more funding towards hi-tech industries to help with this.

Malaysia's Threats

• Regulatory Overreach in Digital Governance: One of the emerging threats to Malaysia’s strategic development is the risk of regulatory overreach in digital governance. As the government increasingly imposes regulations on digital platforms, there is a concern that these measures might inadvertently hinder innovation and discourage foreign investment. Overly stringent or unclear regulations can create a challenging environment for businesses, particularly in the tech sector, which thrives on innovation and flexibility. If not managed carefully, such regulations could slow down the growth of Malaysia’s digital economy and its broader technological adoption, making the country less competitive on the global stage. This potential overreach could also damage Malaysia’s reputation as an attractive destination for international tech companies and investors, who may seek more favorable regulatory environments elsewhere. Balancing the need for regulation with the necessity of maintaining a business-friendly climate is crucial for ensuring sustainable economic growth in Malaysia’s digital sector.
  • Example: The proposal by the Malaysian government to require social media platforms with over eight million users to apply for a license is a prime example of this threat. Major tech companies, including Google and Meta, have expressed concerns that the lack of clarity and the potentially burdensome nature of these regulations could stifle innovation and deter investment in Malaysia’s digital sector. This move could make Malaysia a less attractive destination for tech companies, who may prefer to operate in regions with more business-friendly regulatory environments. Balancing the need for regulation with the necessity of maintaining a conducive environment for digital innovation is crucial for ensuring Malaysia’s continued economic growth and competitiveness in the global market.​
• Deforestation is killing flora and fauna: Malaysia’s country is beautiful, but the flora and fauna are suffering. The ecosystems are vulnerable because of the mining industry, the need for new homes as urban areas expand, and deforestation. Palm oil is one of Malaysia’s biggest exports — which is used in a variety of products worldwide — but it’s strenuous on the environment. Additionally, many animals in Malaysia are either on the endangered list and on the verge of becoming extinct (if not already). If the government doesn’t put more effort into protecting the forests and mangroves, it won’t be long until most of it is wiped out.
• Political corruption is ruining lives: Political corruption threatens the livelihoods of Malaysians. If they don’t pay the “sweetener” fee, they can’t get aid when needed. They can’t get the education needed for knowledge-based careers. Any other political party is often silenced by the current party in power, so change is less likely to happen. Unfortunately, there’s little that Malaysians can do to overcome this threat.

SWOT Analysis of Malaysia: Bottom line

Malaysia is a fruitful country that knows it must branch out of exports to continue thriving. This means adopting more technology. But adopting new industries and expanding cities for new opportunities comes at a price. Deforestation is threatening Malaysia's environment. Many animals are either about to be extinct or already are as discussed in the PESTLE analysis of Malaysia.

That's not the only concern. The political parties in power will do what they must to remain as the head of the country. They're not afraid to silence opposition leaders or force citizens to pay a price for basic services.

But the people are strong. They come from a multicultural background. They are ready to work hard, even when obstacles are in the way.