Malaysia Household Income And Expenditure Trends Economics Essay

This subdivision will discourse the background of the survey, which explained the economic activities and economic growing by sector and by employment portion, Malaysia household income and outgo tendencies. This survey besides mentioned the construct of sustainable development and growing. This survey chooses energy ingestion in order to place the factor of environment. From energy ingestion, this survey will detect the consequence of energy ingestion on environment. Next, the job statement will cover the issues and nonsubjective, important, range and restriction of the survey.

Background of the survey

Malaya is the 3rd wealthiest state in Southeast Asia after Singapore and Brunei Darussalam based on GDP at buying power para ( PPP ) per capita are shown in Table 1.1. It had a population of around 26 million people in 2007. Harmonizing to the United Nations Development Programme, the population of Malaysia is estimated to turn to 29.8 1000000s by the twelvemonth 2020. Most Malayan is active economically and independently. The start of a sustainable recovery rhythm was seen in 2002 but the activity slackened in 2005: GDP growing rate was 7.2 % in 2004 and 5.2 % in 2005 as shown in Table 1.2. Domestic demand and export dynamism are two major growing factors. Malaysia is characterized by its economic system ‘s big openness and favorable behavior towards foreign investings. During the New Economic Policy 1971 – 1990, a figure of policies could be identified to explicate the form of income. The publicity of export-oriented industrialization driven chiefly by foreign direct investing has seen a demand for labor, therefore take downing unemployment and raising family incomes. The most dynamic activity sector is electronics, given that the state is one of the universe ‘s major exporters of semi-conductors and electronic constituents in the 1990s.

Table 1.1: States of Southeast Asia sorted by their gross domestic merchandise ( GDP ) at buying power para ( PPP ) per capita in US $

Southeast Asia Country

Rank

International Monetary Fund ( 2009 ) [ + ]

World Bank ( 2008 ) [ ++ ]

CIA World Factbook [ +++ ]

Singapore

1

50,523

49,321

50,300

A Brunei

2

49,110

50,100

A Malaya

3

13,769

14,215

14,800

A Thailand

4

8,060

8,086

8,100

A Indonesia

5

4,157

3,994

4,000

A Philippines

6

3,521

3,513

3,300

A Vietnam

7

2,942

2,787

2,900

A Cambodia

8

2,015

1,951

1,900

Beginning: +Data refer to the twelvemonth 2009. World Economic Outlook Database-April 2010, International Monetary Fund. ++Data refer to the twelvemonth 2008. World Development Indicators database, World Bank.Note: Per capita values were obtained by spliting the PPP GDP informations by the Population informations. +++GDP – per capita ( PPP ) , The World Factbook 2010, Central Intelligence Agency.

The economic activity has been much reliant on electrical and electronic sector and the state must happen new growth-generating activities, particularly in the face of the surging competition between states of this part. Besides, Malaysia is classified among the universe ‘s largest manufacturers in the agribusiness sector, peculiarly of palm oil, chocolate and gum elastic.

Table 1.2: Malaya ‘s Economic Growth from 2006 to 2009

Economic Index

A

2006

2007

2008

2009 ( degree Fahrenheit )

GDP

$ million

125,051

132,988

139,159

139,174

Growth of GDP

%

6.0

6.0

5.0

-3.1

Inflation ( CPI )

%

4.0

2.0

5.0

1.1

Unemployment

%

3.0

3.0

3.7

4.5

Foreign direct investing

% of GDP

4.0

5.0

3.0

4

Export growing

%

7.0

4.0

1.5

( 16.6 )

Import growing

%

9.0

5.0

2.2

( 14.9 )

Current history balance

$ million

26,200

29,243

38,914

21,053

Beginnings: The World Bank, World Development Indexs 2010 for 2006-2008,

Economic Planning Units Forecasting for 2009.

The state is besides the taking exporter of tropical forests. The United States, Singapore and Japan are Malaysia ‘s major trade spouses. The state imports chiefly manufactured merchandises, machine tools and vehicles. Nevertheless the economic growing of Malaysia has broad deductions for structural alteration in the economic system ( from agribusiness sector to industrialization ) , growing of employment chances increase in personal income and alteration in ingestion form. It has besides effected the environment through a assortment of techniques such as pollution ; natural resources overexpolitation ; debasement and wildlife home ground disappeared, and alterations in conditions. The consequence of the larger ingestion degrees in the environmental job as proven in the worsening in the piscaries haul, increasing in threatehned and endangered vegetations and founa, destroyed of wilflife natural resources, polution and intentionally alien violent death, ( Khalid, 2007 )

Environmental policies normally take into consideration the value of natural resources in lending to procedures of biological peculiarly in commanding inundation degrees, clime alteration regulations, production of O and soaking up of C dioxide in the unfastened countries every bit good as protection of vegetations and zoology. Environmental debasement is non accurately measured by GDP because the economic growing of the state depend on natural resources but the strength of the economic system must include the status and sustainability of natural resources. This state of affairs is non go oning in Malaysia but those concerned about the protection of wildlife believe good intervention demands to be given to the eroding impact of economic growing on wildlife. Recently, environmental concerns have grown among the community and society, policy shaper and authorities through the sustainable development, despite environmental job ne’er won against the mega development undertaking, for case Bakun dike undertaking. The chief aim among the developing states is economic growing through the natural resources development.

1.3 Overview of Malaysia economic system

Malaya is the 1 of the developing states have transformed itself from 1970s to 1990s from natural stuffs manufacturer to the multi-sector economic system peculiarly fabrication and services sector. This transmutation was induced by positive economic system growing which about entirely driven by export of electrical and electronics constituents. Consequently, planetary economic crisis and the slack in the information engineering ( IT ) sector in 2001 and 2002 have affected Malaysia economic system. However, Malaysia economic system grew 5.7 per centum in 2003 despite at first half really hard to prolong due to external force per unit areas such as Severe Acute Respiratory Syndrome ( SARS ) and the Iraq war to be concerned among concern society. In 2004, growing peaked 7 per centum and 5 per centum in 2005-2006 and 4.6 per centum in 2009.

The economic growing thenceforth was non every bit singular as earlier, though some recovery took topographic point in 1987. This was the clip when the fabrication sector for intermediate goods started to spread out, which later drove the Malayan economic system frontward. This established a new structural alteration from simply bring forthing primary trade goods to treat fabrication and advanced fabrication, including electronic semiconducting materials and constituents of electrical merchandises. In the center of 1997, the economic system faced another economic catastrophe, the Asiatic fiscal crisis that began in Thailand and subsequently distribute to all over the ASEAN states including Malaysia. In fact the exchange rate severely affected most of the ASEAN states. ASEAN states had no other pick but to neutralize their current assets in order to countervail their losingss ensuing from the currency devaluation. Slightly more than one twelvemonth subsequently, the Malayan economic system recovered. All these events have changed the construction of the Malayan economic system to what it is today.

It has become a tradition at the morning of each decennary to foretell the way or way and magnitude of economic growing within the context of the challenges and chances for the following 10 old ages or more. The 1980s were an tremendously hard and disruptive decennary for the planetary economic system. In fact in the 1990s, though expected by some to be slightly less disruptive and hard, the battle should be rather different for Malaysia in its pursuit to go a newly-industrialised economic system. Given the diverse constructions of the economic system, it has its ain internal jobs, with its strengths and failings.

Malaysia has benefited from higher universe energy monetary values although at the clip the cost of domestic gasolene and Diesel rise and it has forced the authorities to cut down the subsidies every bit good as contributed the higher rising prices. Malaysia has reduces the hazard of fiscal crisis throughout the strong foreign exchanges reverse and a little external debt. However, Malaysia economic system is still depend on continued growing in the US, China and Japan as a top exportation states and chief beginnings of foreign investing. All these programs are stated in Ninth Malaysia Plan for its five old ages national development docket. The programs targets the development of higher value added fabrication and an enlargement of the service sector stated in Tenth Malaysia Plan.

1.3.1 Economic growing by sector and employment portion

Malaysia ‘s gross domestic merchandise ( GDP ) grew from RM10 billion in 1970 to about RM37 billion in 1980. It increased further to RM119 billion in 1990 and RM222 billion in 1995. In 2005 and 2009, it increased from RM449 billion to RM528 billion. These figures represent a GDP growing rate of 11 % between 1970 and 2009 as shown in Table 1.3. The fabrication sector expanded from 15 % of GDP the in 1970 to 19, 24, 26, 33 and 27 % in 1980, 1990, 1995, 2000 and 2009, severally and declined to 31 % in 2005, while the portion of agribusiness in the GDP declined from 28 % in 1970 to 25, 15, 13 and 10 % in 1980, 1990, 1995 and 2005 severally. The services sector declined from 42 % in 1970 to 39 in 1980. This sector increases to 46 % and 51 % in 1990 and 1995 severally but declined to 47 % in 2005, bespeaking the turning authorities function and common sweetening in the services status. All the sectors besides changed during the last two decennaries, peculiarly in agribusiness and excavation sectors. In the excavation sector, Sn production has declined later crude crude oil became the majot subscriber to the Malaysia economic system growing.

The fabrication sector transformed from agribusiness based merchandises to the manufactured of electrical and electronic constituents, crude oil merchandises and palm oil merchandises. the export was important subscriber to growing peculiarly on manufactured goods which has contributed 74.8 per centum of entire export in 2007. ( beginnings: MITI, Vol.18, day of the month 30 Otc.2008 ) . the electrical and electronic merchandises became the major export of manufactured merchandise, followed by chemical merchandises, machinery, metal, wood merchandises and scientific equipment.

Table 1.3: Malayan gross domestic merchandises by industry, 1970-2005

( RM million in 2000 monetary values )

Beginning: Economic Report, assorted issues, Ministry of Finance, Kuala Lumpur

The unemployment rate has been comparatively decline with a addition in the employment state of affairs for fabrication and services sector but lessening in agribusiness and excavation sectors. The services sector has absorbed 52 per centum in 2009 compared to 32 per centum in 1970. Figure 1.1 shows the part to the GDP by the chief sectors in Malaysia for twelvemonth 2009. The services sector became the largest subscriber to the GDP compared with the fabrication sector. This sector includes electricity, H2O, transit, sweeping, wellness, instruction, hotel and eating house.

Beginning: Economic Planning Unit, 2009

Figure 1.1: Contribution to the GDP by sector, Malaysia, 2009

In 1970, employment portion of the primary sector ( agribusiness and excavation ) accounted for 53 % of the entire employment. In 1980 and 1990, it declined to 41.4 and 26.6 % severally as shown in Table 1.4. Employment in the primary sector declined farther to 15.2 % and 12 % in 2000 and 2009, severally. On the other manus, the secondary ( fabrication and building ) sector absorbed about 35.0 % of the work force in 2009, compared with 26.2, 21.3 and 11.4 % in 1990, 1980 and 1970 severally.

Table 1.4: Gross domestic merchandise and employment portion by industry

( In 2000 monetary values )

GDP Share ( Employment Share )

1970

1980

1990

2000

2005

2009

Primary Sector

A

A

A

A

Agribusiness, forestry, farm animal and fishing

28 ( 53.5 )

25 ( 39.7 )

15 ( 26.0 )

9

( 15.2 )

10

( 12 )

7

( 12 )

Mining and quarrying

7

( 2.6 )

10 ( 1.7 )

12

( 0.6 )

11

( 0.4 )

13

( 0.4 )

8

( 0.4 )

Secondary sector

Manufacturing

15

( 8.7 )

19

( 15.7 )

24 ( 19.9 )

33 ( 27.6 )

31

( 28.6 )

26

( 28.4 )

Construction

4

( 2.7 )

4 ( 5.6 )

4

( 6.3 )

4

( 8.1 )

3

( 7.0 )

3

( 6.6 )

Servicess sector

42 ( 32.5 )

39 ( 37.3 )

46 ( 57.2 )

48 ( 48.7 )

47

( 51.0 )

56

( 52.6 )

Entire

100

100

100

100

100

100

( Unemployment ) : %

7.4

5.7

5.1

3.1

3.2

4.5

Per capita GDP ( RM )

1,932

3,038

4,426

8,899

16,497

18,838

Beginning: Economic Report, assorted issues, Economic Planning Unit

The GDP per capita increased from about RM1,932 in 1970 to about RM3,038, RM4,426 and RM18,838 in 1980, 1990 and 2009 severally. The employment portion in the primary sector decreased from 56.1 % to 12 % while that of the industrial and services sectors increased from 8.7 % and 32.5 to 28 % and 52.6 % severally over the thirty-year period from 1970 to 2009 ( shown in Table 1.4 ) . With the rise in the employment chances, the unemployment rate contracted, except for the mid-1980s, from 7.4 % in 1970 to 3.2 % in 2005 but has since so risen somewhat to 4.5 % by 2009. The labour market became so tight in the ninetiess that some sub-sectors had to fall back to imported labor from abroad. ( EADN, 2006 ) .

Since the 1970s, Malaysia has transformed itself from an economic system dependant on natural stuffs production with a mostly hapless population to a multisector economic system with a middle-income population. These alterations have affected the Malayan family through employment chances particularly when the Malayan economic system has undergone major structural alterations since 20 old ages ago effect, the quality of life improved due to the strong growing in the fabrication and services sector. The Malayan family has benefited through on addition in its income every bit good as an betterment in its criterion of life and alteration in outgo form.

1.3.2 The Malayan family income and outgo tendencies

Since Malaysia has experienced a singular alteration from an agribusiness state to an industrialised state, its GDP has grown from RM37 billion in 1980 to RM528 billion in 2009. As Sanne ( 1998 ) pointed out that there is closely relationship between outgo and income because outgo forms tend to alter when incomes addition. However, outgo or ingestion dramas an of import function in bring forthing GDP after export. Figure 1.2 shows a comparing of the GDP per capita between Malaysia, Asia and the universe. During 1991 to 2006, Malaysia ‘s GDP per capita quickly increased twice compared with Asia and World. Mean that ‘s, the income of every Malayan family has increased from clip to clip except for 1997 when Malaysia suffered from the economic crisis, but the Malayan economic system was still under control compared with other developing states.

Beginning: Earth Trends Country Profiles, Malaysia

Figure 1.2: GDP per capita, 1991-2006

Figure 1.3 shows the Malayan average one-year family income between 1985 and 2007. Families benefited from the continued addition in disposable incomes originating from high export net incomes and positive economic growing which besides generated full-employment and income-earning chances among the Malaysians. Furthermore, the competitory recognition provided further support to more household disbursement. The growing and structural transmutation of the Malayan economic system has broad deduction on the growing of employment chances every bit good as the distribution of labour force by sectors.

Beginning: Economic Asian Development Network, Economic Reports ( Various Issues )

Table 1.3: Malayan mean yearly gross family income ( RM )

1985-2007

As income degree increased, the monthly ingestion outgo per family grew from RM731 in 1980 to RM1, 935 in 2005 ( Department of Statistic, 1980-2005 ) . With this quantitative rise in disbursement came a displacement in the type of goods and services under demand. Income grew at an mean rate 4 % during 1997 to 2007. Harmonizing to the Economic Planning Unit, household income in 2004 was around RM38,988. This suggests that the mean Malayan family was rather capable of pull offing its fundss and avoiding overspending. In 1980/82, the mean family disbursement amounted to RM732 monthly, compared with RM412 in 1973. The rise in family outgo during the period 1994 -1999 was non due to monetary value additions merely that families were devouring more, bespeaking an addition in their income and buying power, matching to the many old ages of healthy economic growing. After seting for rising prices, families recorded a 3.4 % growing in outgo, in existent footings, during the period of 1994-1999. The higher family disbursement in 1999 was accompanied by the addition in the package of goods bought by families, non merely because of higher monetary values.

1.4 Sustainable development and population

The basic issue between economic development and environment is the construct of sustainable development. The construct of sustainable development is a wide position of human well-being, a long term position about the effects of present activities and full engagement of civil society to make possible declarations. There are many predecessors ( see, for illustration, Barry, 1977 ; Page, 1977 ) , the most popular preparation given by the World Commission on Environment and Development on the topic of the sustainable development basic construct:

“ development that meets the demands of the present coevals without compromising the ability of future coevalss to run into their ain demands ” ( WCED, 1987, p43 ) .

In footings of economic, the construct of sustainable development implies the of import relationship between economic growing and environmental protection in carry oning economic activities and using natural resources to carry through human demands. In Malaysia, sustainable development can non be achieved if economic growing, societal development and environmental protection work individually. Hence, the policy on the environmental has been developed to take into consideration the incorporation of these three actions. Through the sustainable development, Malayan authorities programs at continued in heightening the economic public presentation, societal and quality of life of its people ( National policy on environment, 2002 ) .

The issue of environmental is important for policy-makers in their attempt to look “ green ” , in footings of planetary heating, devastation of the ozone bed, deforestation and population force per unit area. A figure of viing issues and possible solutions to menaces runing from air to H2O, land, noise pollution, radiation, toxic wastes, pesticides, and endangered species have been implemented ( Khalid, 2007 ) .

Most of the of import ends of sustainable development such as supplying a high quality of life for present and future coevalss were achieved but the economic and societal jobs are still exist. The economic and societal jobs faced by Malaysia were largely from the deficiency of development and deficient substructure in its early period of industrialisation. The quickly economic development through urbanisation, industrialisation and other land-use activities since 1980s subsequently gave rise to H2O, air and land pollution, which have remained as serious environmental jobs in Malaysia ( Khalid,2007 ) . This jobs related to the deficiency of development in Malaysia gave rise to environment imparts due to inadequate hygienic installations and deficiency of proper lodging peculiarly in the rural country. This is the same arise to urban colony where the unbridled sprawling growing resulted in crowded status and pollution of rivers by human being. Figure 1.4 shows that quality of life index performed better from 1992 to 2002, while environment index non performed good due to economic and societal job. Environment index grew at -4.3 per centum from 1990 to 2007 and this sturcutre should be taken into consideration. In by and large, human being is need the clean H2O and hygienic services because it is really of import to guarantee good wellness and proper life.

Beginning: Malaysia Quality of Life, 2004, Economic Planning Unit ( EPU ) , Malaysia

Figure 1.4: Malaysia quality of life index and environment index, 1990-2000

Furthermore, environmental jobs are besides closely related to industrialisation activities straight and indirectly by families. Economists ‘ position on the intent of production is to feed ingestion or family demand. Evaluation of the environmental and societal impacts of families need to account for both the direct impacts of the family, such as disposal of family wastes and the emanation originating from fuel burning in a family, and the indirect impacts which are caused during the production of the goods and the bringing of the services to the family.

In Malaysia, three factors that influence the strength of environmental pollution are population size, economic activities and production activities. From these factors, production activities are the most responsible for declining industrial pollution in Malaysia ( Khalid, 2007 ) . Some surveies suggest that population growing is one of the major factors doing CO2 emanations ( York et al. , 2003 ; Shi, 2003 ; Cole and Neumeyer, 2004 ) , but the growing of population in Malaysia can besides contributed to the deterioration of natural resources or system of biological life support. As population additions, the symptom of ecological force per unit areas and scarceness of natural resources will be occurred including deforestation, dirt eroding, overfishing and overcrowding every bit good as economic emphasis is indicated through lower end product, rising prices and unemployment, and societal jobs.

Due to the increasing population, force per unit area builds up for increased production from land usage, therefore the consequences from these activities will raise the dirt eroding and debasement. These activities are non limited to the destroyed of land but besides a declined in the flow of rivers, increased inundation degrees and silting of reservoir and dike. ( Khalid, 2007 ) . A turning population besides leads to increase in energy ingestion particularly electricity, to run into the increased demand and to serve the new development countries. Motor vehicle ownership is besides increased with a turning population that becomes more flush, and accordingly lending to greater pollution, peculiarly in bring forthing CO2 emanations.

Beginnings: United Nation Statistic Division, IMF/2005

Figure 1.5: The entire figure of freshly registered motor vehicles and energy ingestion per capita, 1980-2004

From 1980 to 2004, a general addition in CO2 emanation was experienced by Malaysia. Merely in 1998/1999 was a diminution to approximately 17.6 % seen Figure 1.5. At this clip, there was besides a bead in the figure freshly registered private motor vehicles and energy ingestion as shown in Figure 1.5. This indicates that a decrease in the usage or ownership of motor vehicles will cut down energy ingestion ( of crude oil ) and thereby the coevals of CO2. Figure 1.6 shows the sum of CO2 emanations in Malaysia. Therefore, family outgo continues to switch off from nutrient towards transports peculiarly in fuel ingestion even though disbursement on motor vehicles fall. Fuels ingestion continues to lift with declining in public conveyance system have declined from 11 % to 6 % and it grew at -4.1 % between 1999 and 2005 ( DOS ) .

Beginnings: United Nation Statistic Division, IMF

Figure 1.6: The Carbon dioxide emanations ( CO2 ) , Malaysia

In order to cut down the CO2 emanations, many policy-makers have implemented assorted pollution control policies, for illustration by bettering the public transit system and increasing the oil monetary value. However, the best manner to cut down CO2 emanation is to cut down energy ingestion by family direct and indirectly.

1.5 Entire primary energy supply and concluding ingestion in Malaya

The rapid economic growing in Malaysia has mostly impact the energy supply and ingestion. The one-year growing rate of GDP and entire families energy primary usage are 5.7 and 7.4 severally in the 1990s as shown in Table 1.5. However, the economic growing slowed down from 1996 to 2000 due to economic crisis of 1997 in Asiatic part. The one-year mean entire primary energy supply ( TPES ) growing additions much from 1991 to 2000 due to major investings peculiarly in the transit and industrial sectors, 41.8 % and 37.7 % severally.

The tendencies in energy usage of Malaysia are comparatively same to the tendencies found in many developing states such as survey done by Park ( 2007 ) for Korea and Pachauri ( 2002 ) for India. The entire primary energy supply ( TPES ) in Malaysia increased from 5-10 Mtoe between 1991 and 2006.

Table 1.5: Income and energy supply and ingestion in Malaya

A

Annual growing rates in %

1991

2000

2008

1991-2000

2000-2008

1991-2008

GDP in Ringgit Malaysia at 2000 changeless monetary values ( Million )

205,312

356,401

476,182

5.7

2.94

8.78

Entire primary energy supply ( Ktoe )

26,335

50,710

69,846

6.8

3.25

10.25

( Per capita TPES in Ktoe )

1.39

2.17

2.59

4.6

1.77

6.41

Entire family primary energy usage ( Ktoe )

13,961

28,705

42,901

7.5

4.10

11.88

( Per capita sum family energy in Ktoe )

0.74

1.23

1.59

5.2

2.59

7.94

Direct family primary energy usage ( Ktoe )

843

1,650

2,565

6.9

4.51

11.77

( Per capita direct family energy in Ktoe )

0.04

0.07

0.10

4.7

3.10

9.04

Beginnings: Department of Statistic Malaysia and ain computation

The tremendous growing rates of Asiatic economic system give a big impact to the energy ingestion. In the 1990 ‘s, the crude oil production and ingestion increased enormously every bit good as an addition of hydroelectric and coal in bring forthing the electricity for the state. The demand and ingestion of energy increased enormously from 1991-1997 as shown in figure 1.7. A big sum of investing on electrical substructure and car has caused primary energy ingestion reached at about 27.23 million tones and electricity coevals about 6 Mtoe in 2000 and will go on to lift.

Beginning: Malaysia Energy Centre, 2000

Figure 1.7: The entire energy ingestion and GDP in Malaysia from 1991 to 2006.

The future economic growing for any state is difficult to calculate but to bring forth an precisely appraisal, foremost must account for the physical and economic growing of the state. Malaysia projected to turn at 5.7 % % yearly and will go on at this rate for many old ages. With increasing rate of urbanisation, entire primary energy demand is set to increase by about 7 % yearly. Furthermore, political stableness and development will go on to drive the economic system frontward. The Malayan Ministry of Energy suggest that to supply for its citizen ‘s energy demands, RM 4.86 billion dollars will be required over the following 10-15 old ages: 60 % allotted to energy coevals and the balance to transmittal and distribution of energy.

Such tremendous economic growing and increasing substructure and demand will probably direct the entire energy usage to good over 100 Mtoe in the twelvemonth 2020. The growing rate of urbanisation shows that the industrial sector of the economic system, the sector remains unchanged to necessitate big parts of the entire sum of energy used in the state. The industrial sector could increase to upwards of 50 % of the state ‘s economic system in go oning competition. The switch towards public transit in urban countries will potentially do a diminution in the per centum of the economic system occupied by the transit sector. The energy usage of residential and commercial sector remains comparatively changeless busying merely 13 % -14 % of the entire energy usage.

Vision 2020 sets ends and criterions for the state ‘s hereafter as a whole. Malaysia is become a wholly developed and united state by the twelvemonth 2020. In line with to this, Malaysia marks to raise the living criterion of rural and urban peoples every bit good as cut downing poorness, eventually taking to an addition in the entire family primary energy ingestion all over the state. The one-year growing rate of entire family primary energy ingestion is 7.5 % and direct family primary energy ingestion about 6.9 % from 1996 to 2000. Since households income and ingestion outgo increased, the family energy demand increased excessively every bit shown in Figure 1.6. The entire primary energy supply of 50,710 Ktoe in 2000 was for an income of RM 356,401million economic system really high compared to 1991.

1.6 The consequence of energy ingestion on the environment

Energy usage contributes to a scope of environmental force per unit areas and is a major beginning of nursery and acid gases. The most polluting fuel, in footings of CO2, SO2, NOx and particulate emanations, is coal, followed by oil. Natural gas Burnss much more flawlessly, can be used more expeditiously in domestic boilers, and produces every bit much CO2 per unit of energy. Disposal of electronic waste such as dry batteries presents serious hazards associated with carcinogenic substances, which can be leached to dirty and groundwater over the medium and long term. Uncontrolled land make fulling besides releases contaminations, with a clip slowdown. Incineration or co-incineration of electronic equipment waste with neither anterior intervention nor sophisticated fuel gas purification poses a major hazard of bring forthing and scattering contaminations and toxic substances.

Meanwhile, the growing of family electricity used means that they are responsible for the increasing degrees of primary energy usage, but fuel shift in the power sector is besides taking to a decrease in environmental impacts. Power workss are besides switching off from coal and oil, towards gas, renewable resources. A displacement in the fuel mix can besides be expected to hold reduced environmental impacts on the family energy supply concatenation. In general, gas burning is safer and cleaner than oil or coal burning. However, the growing in atomic power coevals implies an addition in the coevals of radioactive waste. Beside that crude oil merchandise usage in motor auto direct or indirectly by family besides provided side consequence to the environment.

In more mature markets, the growing rate of motor auto ownership tends to loosen over clip as the incursion rate rises. This is similar to tends seen on most other family durable goodss as they near the impregnation point. Increased conveyance use, combined with deficient development of route systems, has caused to intolerable traffic congestions in big metropoliss such as Kuala Lumpur. This in bend has affected immense economic losingss every bit good as exacerbated environmental impairment in Malaysia. Private motor vehicles affect the environment by breathing CO2 and other GHG from fuel burning, fuel supply, vehicle industry and disposal. Motor vehicle noise besides disrupts carnal home grounds and migration paths. The most important individual subscriber to the environmental impacts of the transit sector is minibikes and autos used in Malaysia. Gotz ( 2003 ) topographic points conveyance users into four cultural bunchs, with their ain sets of values and precedences, travel behaviour forms, and environmental impacts. The first two are traditional house servants, oriented to household and security ; and foolhardy auto fans, oriented to career and achievement, and committed to their cars.A The following two are status-oriented motorists, oriented to prestige, with a strong affinity for their carsA and traditional nature-lovers, more committed to the environment, with a strong leaning to utilize non-motorised conveyance.

1.7 Problem statement of the survey

The construct of sustainable development implies the of import relationship between economic growing and environmental protection in carry oning economic activities and using natural resources to carry through human demands.

There are a figure of surveies that examine the relationship between economic growing and environmental debasement. Meadows et Al. ( 1992 ) province that far from being a jeopardy to the environment in the long term, economic growing emerges to be necessary to keep and better the environmental quality. However, there are turning concerns about the inauspicious environmental impacts of economic growing. For illustration Grove ‘s ( 1992 ) concerns have led to a rich watercourse of research on the impression of environmentally sustainable economic development. Some surveies have explored the trade-off between economic growing and environmental quality is non invariant to policies. It is possible to extenuate greatly this trade-off through appropriate policies peculiarly important for the in-between states, which plan to accomplish higher economic growing rates experience the hazard of following economic policies that different to the aim of their long-run environmental sustainability ( Antle and Heidebrink, 1995 ) , ( Grossman and Krueger, 1995 ) , and ( Shafik, 1994 ) .

However, in accomplishing higher economic growing, in-between income states have agitated the environment such as air and H2O pollution resulted from human activities such as industrialisation, transit, agribusiness, touristry and export activities. Malaysia besides experience assorted environmental issues such as uncontrolled deforestation, haze from Indonesian wood combustion that penetrate Malayan ambiance and other natural jeopardies such as implosion therapy and landslides. Smoking wont can besides impact an environment since the coffin nails contains over 4000 chemicals which are exhaled and released into the air.

The rapid economic growing in Malaysia has mostly impact the environment peculiarly through the new industrial country and rise in transit usage. One of the environmental jobs is air pollution due to burning of fuel that releases the CO2, CO and SO2. In footings of wellbeing and wellness, this risky C and sulfur might harm workss and animate beings and it could alter the universe conditions forms, doing drouth, and an addition in detrimental storms. Global warming due to increasing in CO2 emanations could run adequate polar ice to raise the sea degree. In certain parts of the universe, human disease could distribute such as malaria and dandy fever, and harvest outputs could worsen. Longer-lasting and more intense heat moving ridges could do more deceases and unwellnesss every bit good as addition hungriness and malnutrition. Harmonizing to IPCC, the nursery gas that received the most attending is CO2 emanation because CO2 has contributed the most to the planetary heating since pre-industrial times ( IPCC, 2001 ) . Among Asean states, Malaysia CO2 emanation in 2009 is the 3rd highest after Indonesia and Thailand about 0.7 % of the planetary CO2 emanation per centum. Even though, this figure is comparatively little compared to those of China and USA, it is sufficient to alter the Malaysia conditions from hot and humid to hot and dry. The temperature in some parts of Malaysia has about achieved 40ocelcius. Recently, most of state in the universe more concern on CO2 emanation and battle in implementing assorted scheme in order to cut down the CO2 emanation including Malaysia. Malaysia become the 26th among the states in the universe in term of CO2 emanation per capita and is encouraged to cut down CO2 emanation straight or indirectly through domestic and export activities. Malaysia besides is a party to some international environmental understandings and has signed but did non sign the Kyoto Protocol.

In Malaysia, most of CO2 emanation generated from energy ingestion by family and production sector through electricity, gas, crude oil merchandises, coals and rough oil. These energies are besides of concern to environment due to its consequence in lifting nursery gas emanation and on clime alterations. In Malaysia, production sector is the major consumer of energy peculiarly used by transit and industrial sector and so followed by family sector as a minor consumer. The growing rate of entire energy demand has increased about 6.2 % straight and indirectly from 1991 to 2007 peculiarly on coal, electricity, gas and crude oil merchandises.

In 2007, based on family position, family and production sector consumed merely 6 % and 94 % of the entire energy demand severally. Energy ingestion by family is defined as direct ingestion while production sector as indirect energy ingestion by production side to bring forth non-energy trade goods demanded by family through transit, industrial, commercial, agriculture and non-energy sector. This energy ingestion has contributed about 2.6 % and 97.4 % of CO2 emanation from family and production side, severally. The transit sector contributes the largest of CO2 emanation about 56.8 % , followed by fabricating approximately 28.6 % and 12 % represent commercial and agribusiness. However, the menace posed by the coevals of CO2 emanation was non appreciated so but has grown until today where it now appears as serious planetary heating every bit good as clime alterations ( IPCC,2001 ) .

Family activities are one of the major subscribers to the coevals of CO2 emanation through the usage of electricity from electrical contraptions every bit good as gas and oil for cookery at place which have resulted in harmful stuffs and fouling emanations being released into the air. In 2005, Malayan families spend about 31 % of their monthly outgo on nutrient whether from eating house or place cookery followed by lodging and transit about 18 % and 17 % severally. Other family activities are the combustion of fossil fuels in the private motor vehicle. In recent old ages, the figure of private motor vehicles on Malayan roads has steadily increased thereby increasing the ingestion of fossil fuels.

Modern families are extremely dependent on motorised transit such as autos, minibikes and lorries. In 2006, about 1 million of private motor vehicles were registered in Malaysia. Harmonizing to Jabatan Pengangkutan Jalan ( JPJ ) , the figure will increase in the following few old ages, with higher disposable incomes, rural-urban migration and inefficient public conveyance systems. The growing of private motor vehicles will deteriorate the environment with the combustion of motor gasoline and Diesel. The more Malaysians consume energy such as motor gasoline and Diesel, the more will be the CO2 and CO emanation coevals.

In the production activities, transporting the merchandises over long distances involves the heavy motor vehicles such as lorries, ships and aeroplanes. This sector usage about 40 % of entire energy ingestion. About 41 % energy ingestion used by fabricating activities such as manufactured of chemical, nutrient, oil and fats, wireless and telecastings and wood merchandise. Commercial sector consumes about 8 % of entire energy ingestion peculiarly in concern services, sweeping and trade, existent estate, and communicating. The non energy and agribusiness sector consume merely 5 % . Harmonizing to National Energy Balance, the tendency of energy ingestion and production will continues to lift in the few old ages. In that instance, the deficit of energy will happen in the hereafter if the consumers use energy inefficiency and the tendency of CO2 emanation besides raises. It is expected that the coevals of CO2 will increase in the hereafter if the tendency of direct and indirect energy ingestion by family continues to lift.

A figure of writers maintain that cardinal solutions to many environmental jobs should be considered in combination with current energy ingestion forms ( e.g. Duchin and Lange, 1994 ; Duchin, 1996 ; 1997 ; 1998 ) . Unfortunately, there is small research done on the impact of family energy ingestion and outgo form on the environment in Malaysia peculiarly using Input Output analysis. Jafar et Al. ( 2008 ) applied an Input Output analysis in their survey on electricity coevals and it impact to the environment in Malaysia. However, given that lifting ingestion demands the uninterrupted enlargement of production, more systematic attending is needed on the direct and indirect energy ingestion and outgo forms to the coevals of CO2.

Specifically, this survey examines the undermentioned inquiries: What is the form of energy ingestion and outgo during the period 1980-2005? ” Which sector and ingestion by the Malaysian family and which state imports more Malaysia merchandise will impact the coevals of CO2? ” Which class in the family outgo cause direct or indirect CO2 emanation? ”

1.8 Aims of the survey

The chief intent of this survey is to analyse the consequence of family energy ingestion and outgo on CO2 emanation. This survey aims to turn to a figure of specific aims as follows:

To analyze the form of energy ingestion and family outgo ;

To analyse CO2 emanation by class of ingestion, authorities, investing and export ; and

To carry on Structural Decomposition Analysis ( SDA ) from 1991 to 2000 in placing alterations in factor such as input mix, energy mix and fuel mix.

1.9 Significance of the survey

This survey covers ingestion and export that has less been focused by old surveies specifically for Malaysia. This survey non focuses on other concluding demand such as investing and authorities because this component contributed less on GDP and less contributed on coevals of CO2, eventhough this survey still cipher the CO2 generated by authorities and investing for verification and confirmation. Most of the old surveies focus on concluding demand ( e.g. Kim, 2000 ; Pachauri and Spreng, 2002 ; Park and Hi-chun, 2007 ) . This survey is besides to complement Jafar et Al. ( 2008 ) that use concluding demand in order to gauge the pollution emanation in instance of Malaysia.

By and large, from this survey we can detect CO2 emanation generated by factors of energy ingestion, outgo form and export by utilizing Hybrid Input Output analysis ( HIO ) . Hybrid Input Output analyses have been used by many old surveies for coincident energy and environmental analysis for case Park ( 2007 ) and Lenzen ( 1998 ) . Choi and Lee ( 2004 ) analyzed the energy ingestion of 28 non energy sectors and constructed a intercrossed input end product tabular array of CO2 emanation and determined the sum of CO2 emitted by Korea ‘s good export sector. This technique has late been utilised due to its advantages. The advantages of utilizing HIO are that it helps to cut down the consequence of monetary value deformation on the consequences and makes analyses of the consequence easier. Most significantly, from HIO, we can find to what extent each sector consumes energy.

This survey besides use the Structural Decomposition analysis ( SDA ) to analyse which factors contributed in which sectors to alterations in the emanation of CO2 by separating between direct and indirect CO2 emanation over the period 1991 to 2000, nevertheless this survey tries to include the 2005 analysis but we have to halt in making so due to unavailable informations and clip restraints. SDA enables us to gauge the comparative parts of alterations in trade good mix and sectoral energy strength to alterations over clip in the energy and/or environmental index being decomposed. It besides allows the computation of the entire CO2 emanation effects throughout the economic system.

End product of this survey can be utilized in energy/environmental policy analysis and future energy demand. For case, alterations in sectoral energy strength can be influenced through a assortment of energy policy steps. By making so, industrial activity can indirectly be controlled to turn to environmental issues towards sustainable development.

1.10 Scope and restriction of the survey

The range of this survey covers private ingestion and export while authorities and investing are excluded. This is due to their less part on GDP compared to ingestion and export every bit good as less to emission indirectly through ingestion of goods and services. The information covered in this survey is limited to the twelvemonth 1991 to 2000 because Malaysia merely constructs one input end product tabular array in 10 old ages and the latest input end product tabular array is for 2005 was merely published.