Kuala Lumpur Economy
Kuala Lumpur and its surrounding urban areas form the most industrialized and economically, the fastest growing region in Malaysia. Despite the relocation of federal government administration to Putrajaya, certain government’s important machineries such as Bank Negara Malaysia (Central Bank of Malaysia), Companies Commission of Malaysia and Securities Commission as well as most embassies and diplomatic missions have remained in the city.
The city remains as the economic and business center of the country. In fact, the city is a center for finance, insurance, real estate, media and the arts of Malaysia. The infrastructure development in the surrounding areas such as the Kuala Lumpur International Airport at Sepang, the creation of the Multimedia Super Corridor and the expansion of Port Klang further reinforce the economic significance of the city.
Bursa Malaysia or the Malaysia Exchange is based in the city and forms one of its core economic activities. As of 20 November 2007, the market capitalisation stood at US$318.65 billion. The Gross Domestic Product (GDP) for Kuala Lumpur is estimated at RM25,968 million in 2000 with an average annual growth rate of 4.2 percent. The per capita GDP for Kuala Lumpur in year 2000 is RM30,727, an average annual growth rate of 6.1 percent. The total employment in Kuala Lumpur is estimated at around 838,400. The service sector comprising finance, insurance, real estate, business services, wholesale and retail trade, restaurants and hotels, transport, storage and communication, utilities, personal services and government services form the largest component of employment representing about 83.0 percent of the total. The remaining 17 percent comes from manufacturing and construction.
The large service sector is evident in the number of local and foreign banks and insurance companies operating in the city. Kuala Lumpur is poised to become the global Islamic Financing hub with an increasing number of financial institutions providing Islamic Financing and the strong presence of Gulf’s financial institutions such as the world’s largest Islamic bank, Al-Rajhi Bank and Kuwait Finance House. Apart from that, the Dow Jones & Company is keen to work with Bursa Malaysia to set up Islamic Exchange Trade Funds (ETFs), which would help raise Malaysia’s profile in the Gulf. The city has a large number of foreign corporations and is also host to many multi national companies’ regional offices or support centres, particularly for finance and accounting, and information technology functions. Most of the countries’ largest companies have their headquarters based here and as of December 2007 and excluding Petronas, there are 14 companies that are listed in Forbes 2000 based in Kuala Lumpur.
Other important economic activities in the city are education and health services. Kuala Lumpur also has advantages stemming from the high concentration of educational institutions located within its boundaries, providing a wide range of courses. Such public institutions include the International Islamic University Malaysia, University of Malaya, the Universiti Teknologi Malaysia, International Medical University and the Medical Faculty of the Universiti Kebangsaan Malaysia. There are also a large number of private colleges, including the Universiti Tun Abdul Razak and Tunku Abdul Rahman College, in and around Kuala Lumpur providing a wide range of courses which attract students from all over Malaysia as well as from other countries. There are numerous public and private medical specialist centres and hospitals in the city which offer general health services and a wide range of specialist surgery and treatment catering to locals and tourists.
There has been growing emphasis to expand the economic scope of the city into other service activities such as research and development which supports the rest of the economy of Malaysia. Kuala Lumpur has been home for years to important research centers such as the Rubber Research Institute of Malaysia, the Forest Research Institute Malaysia and the Institute of Medical Research and more research centers are expected to be established in the coming years.