Abstract

In recent years, the Arab Gulf Countries in particular Gulf Cooperation Council (GCC) has been an attractive market destination for the Asian businesses. China, India, Japan and other Asian countries have huge interest in developing close relationships with the six nations. As an emerging economy in the West EasternAsia, the GCC offer huge interest in doing businesses and become a gate for the Middle Eastern markets. Malaysia, besides the religious affinity that it shares with the Arab Gulf Countries, is also highly interested in expanding its trade relations with the Arab Gulf Economies. Therefore, in this article, an investigation on the countries’ trade compositions and followed by a study on Exports competitiveness were conducted. Finding from the analysis of exports competitiveness of Malaysian products will then be compared to the major Asian exporters in the GCC market. By doing this, it will identify Malaysia’s niche product that could potentially expanded in this market. This will shed a light on the Malaysia’s willingness to enhance market penetration to this economic bloc. Key words: Malaysia, Gulf Cooperation Council (GCC) countries, international trade, economic relations.

Highlights

  • Economic relationship between Malaysia and Arab Gulf economies has been growing in recent years

  • In terms of the primary sector, results from the analysis suggest that Malaysia holds a comparative advantage in raw materials with respect to the Chinese market

  • It certainly shows that palm oil products remain the strongest sector in Malaysian exports in both the global and the Gulf Cooperation Council (GCC) market in the last 10 years

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Summary

Introduction

Economic relationship between Malaysia and Arab Gulf economies has been growing in recent years. Malaysia recently has implemented a new approach to its international trade strategies by shifting from dependency on traditional exports markets (US, Japan and EU) to Asian and Middle East orientation (BNM, 2010, NEAC, 2010). Middle East markets especially Arab Gulf Countries are seen as potential emerging market for the Malaysian economy to be tap. Since the Arab Gulf countries are members of Organization of Islamic Cooperation (OIC), it is believed that this new strategy in enhancing economic activities will strengthen the ties between the Muslim worlds. Huge potential in Islamic Banking and Finance sectors that both Malaysia and United Arab Emirates (UAE) claim to be world Islamic Financial-Hub may be an important factor that can strengthen economic cooperation between Malaysia and the Arab Gulf Region

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