Malaysia has been in the centre of the world trade for centuries. Today it is also strategically located on the major trade routes between China, India and Arab countries. This fact had an impact not only on the economy of Malaysia, but also on its ethnic diversity. After the riots in the 1960s, Malaysian government realized that the income differential between urban Chinese and rural Malay population was too significant. Therefore, social policies were implemented in order to deal with ethnic conflicts and population dissatisfaction. Today Malaysia managed to reconcile different ethnic groups and to exploit its geographic location to become one of the fastest growing country in South-East Asia. Malaysian economic policy focuses on long-term development, with the strong orientation for cyber technology.
Singapore is the smallest country in South-East Asia and it lacks natural resource. However, it is currently one of the richest countries in the world. This fact is largely connected to Singapore strategic geographical position, which offers access to both Indian and Pacific Oceans. Its location on tip of the Indonesian Peninsula and on the Strait of Malacca, puts Singapore on the way of all the major trade routes between Asia, Europe and the United States. However, Singapore is not only centrally located, but it also possesses modern infrastructure, which allow fast and efficient logistics operations. Natural deep harbour of Singapore significantly facilitates port activity. Moreover, Singapore airport is located in a close proximity to the port, which allows multimodal cargo transportation. Furthermore, British colonial heritage and highly qualified workforce make Singapore very attractive for international companies, which choose it as a site for their headquarters. Singapore is also very closely located to Indonesia and Malaysia, where low-cost production facilities are often built. Therefore, many companies prefer to have their bases in Singapore and use the country for reexports to the world markets.
Therefore, both Malaysia and Singapore exploited their central geographic position for economic development and growth. However, Singapore managed to maximize the gains from its central location and reap the benefits of the globalization in a better way. Today the level of living there is one of the highest in the world, indicating impressive economic development over the past decades. In Malaysia the current level of development is much below the one of Singapore, especially in the rural areas. However Malaysian development prospects are very optimistic and it puts significant pressure on the Singapore logistics leadership. Therefore, Singapore is trying to differentiate and to become a world hub not only for cargo, but also telecommunications.
"Global Interaction - Singapore and Australia." Learner.org. Annenberg Foundation, 2011.
Web. 29 Oct 2011.