Does electricity drive the development of manufacturing sector in Malaysia?

This paper investigates the relationship between electricity consumption, output, and price in the manufacturing sector in Malaysia. We find that electricity consumption, output, and price are cointegrated in the long run. In addition, it has been found that the relationship between electricity consumption and output is positive. In the long run, we find a unidirectional causality from manufacturing output to electricity consumption. This result indicates that the development of manufacturing sector stimulates greater demand for electricity. Government needs to make sure that the planning of electricity supply in the future is in line with the economic development planning to avoid shortage in electricity supply. In the short run, a unidirectional relationship runs from electricity consumption to output is found. A decrease of energy usage in production might reduce the output growth in short run. Hence, we suggest improving the efficiency of electricity usage and some cost-effective sources of energy

The Impact of the COVID-19 Pandemic on Malaysia’s Economy

The COVID-19 global infection has been recognised as an alarming pandemic threat in Malaysia since the second week of March 2020. The government was forced to hastily implement the Movement Control Order (MCO) to prevent the growing spread and terrifying health threat of COVID-19. The necessary lockdown measures drastically slowed down the economic growth of the country and caused an adverse impact on many industries, businesses, and households. Multiple stimulus packages have since been announced by the government towards securing and recovering the economy from the resultant effects of the pandemic. The stimulus packages were intended to provide coverage for both the welfare of consumers (demand side) as well as the producers (supply side). The objectives of this chapter are as follows: (1) To describe and discuss the impacts of the devastating COVID-19 pandemic based on selected macroeconomic indicators. (2) To review the existing economic policy on combating and mitigating the effects of the pandemic. (3) To propose some significant improvements and necessary modifications on the general economic policy. We conclude that the severe adverse impact of the pandemic on the macroeconomy is very significant and extremely “game-changing”. However, it shows some improvement with the implementation of the various stimulus packages throughout the year of 2020. We suggest that the government focuses on fine-tuning and strategising the economic policy that aims to encourage a sustainable growth in domestic spending, and consumer and producer confidence in its efforts of stimulating the economy

The Impact of the COVID-19 Pandemic on Malaysia’s Economy

The COVID-19 global infection has been recognised as an alarming pandemic threat in Malaysia since the second week of March 2020. The government was forced to hastily implement the Movement Control Order (MCO) to prevent the growing spread and terrifying health threat of COVID-19. The necessary lockdown measures drastically slowed down the economic growth of the country and caused an adverse impact on many industries, businesses, and households. Multiple stimulus packages have since been announced by the government towards securing and recovering the economy from the resultant effects of the pandemic. The stimulus packages were intended to provide coverage for both the welfare of consumers (demand side) as well as the producers (supply side). The objectives of this chapter are as follows: (1) To describe and discuss the impacts of the devastating COVID-19 pandemic based on selected macroeconomic indicators. (2) To review the existing economic policy on combating and mitigating the effects of the pandemic. (3) To propose some significant improvements and necessary modifications on the general economic policy. We conclude that the severe adverse impact of the pandemic on the macroeconomy is very significant and extremely “game-changing”. However, it shows some improvement with the implementation of the various stimulus packages throughout the year of 2020. We suggest that the government focuses on fine-tuning and strategising the economic policy that aims to encourage a sustainable growth in domestic spending, and consumer and producer confidence in its efforts of stimulating the economy

Does electricity drive the development of manufacturing sector in Malaysia?

This paper investigates the relationship between electricity consumption, output, and price in the manufacturing sector in Malaysia. We find that electricity consumption, output, and price are cointegrated in the long run. In addition, it has been found that the relationship between electricity consumption and output is positive. In the long run, we find a unidirectional causality from manufacturing output to electricity consumption. This result indicates that the development of manufacturing sector stimulates greater demand for electricity. Government needs to make sure that the planning of electricity supply in the future is in line with the economic development planning to avoid shortage in electricity supply. In the short run, a unidirectional relationship runs from electricity consumption to output is found. A decrease of energy usage in production might reduce the output growth in short run. Hence, we suggest improving the efficiency of electricity usage and some cost-effective sources of energy

Impact of Electricity Consumption on Output in Malaysian Manufacturing Sector

This paper investigates the relationship between electricity consumption, price and output in Malaysia’s manufacturing sector by using multivariate framework. This study has two objectives. The first objective is to discover the existence of long-run relationship among the variables and the second objective is to examine the short-run causality among the variables. This is a time series analysis with the sample period covers from 1978-2010. Johansen and Juselius cointegration test and Granger causality test are employed in order to achieve the objectives of the paper. We found that electricity consumption, output and price are cointegrated in long run. VECM Granger causality test indicates thatit has one unidirectional causality running from output to electricity consumption. On the other hand, only one unidirectional relationship exists in the short run which is running from electricity consumption to output. Hence, this result indicates the output is the significant determinant of electricity consumption. However, there is not enough evidence to prove that the electricity consumption significantly determine the growth in output. Keywords: Electricity consumption; Output; Granger Causality; Cointegratio

Electricity Consumption, Export and Production: Evidence from Malaysian Manufacturing Sector

Study on the impact of energy on economic development becomes the new interest in the economy since the industrial revolution where greater amount of energy have been used in industrial production with high scale. Numeral studies have been done at the micro and macro levels to discover the role of energy and its impact on economic growth. However, little have been done to explore the essence of energy in a particular sector especially the energy based sector like manufacturing sector. This paper investigates the relationship between electricity consumption, export and production in Malaysia’s manufacturing sector in a multivariate framework. This study has two objectives. The first objective is to discover the existence of long-run relationship among the variables and the second objective is to examine the short-run causality among the variables. This is a time series analysis with the sample period covers from 1980-2010. Johansen and Juselius cointegration test is employed to discover the long-run relationship while Vector Error Correction Model (VECM) Granger causality test will be used to find out the causal relationship. We found that GDP of manufacturing sector, electricity consumption of the manufacturing sector, export of manufacturing sector, labor of the manufacturing sector and capital of the manufacturing sector are cointegrated in the long run. The VECM results show unidirectional causality running from electricity consumption of manufacturing sector to GDP of the manufacturing sector and from electricity consumption of manufacturing sector to labor of the manufacturing sector. Hence, these results indicate electricity is essential in the manufacturing sector. Keywords: Electricity consumption, output, Granger causality, cointegratio

The Nexus Between Electricity Consumption And Output In Malaysia: Evidence From Panel Data Analysis

This paper examines the relationship between electricity and output in Malaysia. We employ panel data analysis to seek concrete evidence in exploring the relationship between electricity consumption and output. We use panel data for 3 economic divisions in Malaysia, namely Peninsular Malaysia, Sabah and Sarawak for the period 2000-2013. We found that the bidirectional relationship between electricity consumption and output exists. In addition, electricity consumption and output have positive relationships. According to ceteris paribus assumption, we can say that at 1% increase of electricity consumption, it will cause a 0.71% increase of output growth. On the other hand, for every 1% increases of output growth, it causes a 1.41% increase of electricity consumption. Comparatively, the output growth causes much impact to the electricity consumption rather than the electricity consumption causes the output growth. In sum, we can say that electricity consumption is not driving much to output growth. However, an additional output produced requires much electricity in input production. Thus, our empirical result suggests that the efficiency of electricity usage needs to be improved to ensure an increase of electricity consumption is able to translate rapid output growth in Malaysia

The renewable energy–environment nexus

Environmental degradation has been among the most concerning global issues in the 21st century. The aggravation of environmental issues is becoming increasingly more worrisome to the world as it affects multidimensional aspects of a nation in terms of economics, social, and environment. As the global economy continues to develop, reaching an equipoise between economic progression and environmental sustainability is a critical challenge to the world. In light of that, the role of renewable energy (RE) in the environmental sustainability has raised significant concern. The application of RE technologies has advanced to serve a critical role in mitigating the environmental degradation issue. Unlike conventional fossil fuels, REs are sustainable energy sources, and most importantly, they are not as detrimental to the environment as non-REs. As continuous efforts are put into the advancement of RE technologies, it is important to comprehend the principles of the RE–environment nexus. In this chapter, the impacts of RE on environmental degradation, theoretical and literature reviews of the interconnection between RE and environmental degradation, existing policies about RE in the world, case study analysis on the nexus between the two variables, and some policy recommendations alongside the insights of future studies are explored

Informal agricultural trade and trans-border farmers between Malaysia and Indonesia

Agricultural products are important commodities in the informal trade between countries in developing areas. However, previous studies on this issue tended to concentrate on countries in Africa and trade through official border posts. For years, Indonesian farmers have been selling vegetables to Malaysia via unofficial border posts. The Indonesians tend to view selling products in Malaysia as profitable because of the higher price of the product compared to that in Indonesia. The picture is not entirely true since the farmers are only price takers. Three objectives are proposed in this study. The first objective is to explore the supply, demand and price of vegetables in Cross-Border Informal Trade (CBIT), followed by an estimate of the value of CBIT as the second objective. The last objective is to examine the effect on the vegetable supply of price, number of days trading across the border and the experience as a cross-border trader. The study was conducted at Serikin village, Bau District, Sarawak Malaysia, which shares a common border with Jagoi village, Bengkayang district, West Kalimantan Indonesia. The primary data were obtained by survey using a structured questionnaire while qualitative data were gathered through in-depth interviews and observation. A total of 62 trans-border farmers were successfully interviewed using a structured questionnaire. The first and second objectives are answered by exploring data obtained from the structured questionnaires, in-depth interviews and observation. The third objective is met based on data obtained through a structured questionnaire, which was analyzed by employing multiple regression. The study shows the weak bargaining position of the Indonesian trans-border farmers in Sarawak and an oversupply of vegetables depressing the price of the vegetables. At least 30 types of vegetable are imported informally from West Kalimantan to Sarawak, weighing a total of 18 ton, and with a total value of MYR 42,000 per day. The number of day trades across the border per week influences the vegetable supply positively and significantly. Close location, lack of accessibility to the domestic market and high profit seem to be the most important factors in motivating the Indonesian farmers to trade informally in Sarawak, rather than the price of the vegetables and experience as cross-border informal traders. The Indonesian authorities may reduce the vegetable supply to Sarawak by extending the internal market and developing an agro-tourism industry in West Kalimantan. The Malaysian and Indonesian authorities may formalize the status of the Jagoi-Serikin border post enabling them to monitor the cross-border trade between the two countries