Malaysian Industrial Policy

'Malaysian Indusstrial Policy' argues that selective government promotion efforts have been successful and crucial for Malaysia's industrialization despite some disastrous consequences associated with the Mahathir government's heavy industrialization program. The authors present evidence to show that direct and indirect government interventions have induced and supported investments, accelerating the structural transformation of the Malaysian economy. The analysis indicates that investment incentives with conditions attached rather than trade or investment liberalization have been crucial to Malaysian manufacturing growth since independence. However, industrial development in Malaysia has been modest compared with that in Northeast Asia because of weaknesses in industrial policy and excessive reliance on foreign investments.