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Malaysia is well-endowed with natural resources in areas such as agriculture, forestry as well as minerals. In terms of agriculture, Malaysia is the world's primary exporter of natural rubber and palm oil, which together with saw logs and sawn timber, cocoa, pepper, pineapple and tobacco dominate the growth of the sector. Palm oil is also a major foreign exchange earner. Regarding forestry resources, it is noted that logging only began to make a substantial contribution to the economy during the nineteenth century. Today an estimated 59 percent of Malaysia remains forested. The rapid expansion of the timber industry, particularly after the 1960s, has brought about a serious erosion problem in the country's forest resources. However, in line with the Government's commitment to protect the environment and the ecological system, forestry resources are being managed on a sustainable basis and accordingly the rate of tree felling has been on the downtrend. In addition, substantial areas are being silviculturally treated and reforestation of degraded forest land is also being carried out. The Malaysian government provide plans for the enrichment of some 312.30 square kilometres (120.5 sq mi) of land with rattan under natural forest conditions and in rubber plantations as an intercrop. To further enrich forest resources, fast-growing timber species such as meranti tembaga, merawan and sesenduk are also being planted. At the same time, the cultivation of high-value trees like teak and other trees for pulp and paper are also encouraged. Rubber, once the mainstay of the Malaysian economy, has been largely replaced by oil palm as Malaysia's leading agricultural export. Tin and petroleum are the two main mineral resources that are of major significance in the Malaysian economy. Malaysia was once the world's largest producer of tin until the collapse of the tin market in the early 1980s. In the 19th and 20th Century, tin played a predominant role in the Malaysian economy. It was only in 1972 that petroleum and natural gas took over from tin as the mainstay of the mining sector. Meanwhile, the contribution by tin has declined. Petroleum and natural gas which were discovered in oilfields offshore from Sabah, Sarawak and Terengganu have contributed much to the Malaysian economy particularly in those three states. Other minerals of some importance or significance include copper, gold, bauxite, iron-ore and coal together with industrial minerals like clay, kaolin, silica, limestone, barite, phosphates and dimension stones such as granite as well as marble blocks and slabs. Small quantities of gold are produced. In 2004, Minister in the Prime Minister's Department, Datuk Mustapa Mohamed, revealed that Malaysia's oil reserves stood at 4.84 billion barrels while natural gas reserves increased to 89 trillion cubic feet (2,500 km³). This was an increase of 7.2 percent. The government predicts that at current production rates Malaysia will be able to produce oil for 18 years and gas for 35 years. In 2004 Malaysia is ranked 24th in terms of world oil reserves and 13th for gas. 56% of the oil reserves exist in the Peninsula while 19% exist in East Malaysia. The government collects oil royalties of which 5% are passed to the states and the rest retained by the federal government. |