The Malaysian Economy Malaysia has had a tumultuous economy. The economic development of the economy has had a direct impact current financial position of the county. With a GDP $186.5 billion with a purchasing parity of $361.2 billion in 2007 Malaysia is a middle income county (CIA, 2008). There was also growth in the economy, 2007 saw a growth of 6.3% and with an unemployment rate of only 3.2% the indicators are that the economy is in good condition (CIA, 2008). However, these indicators do not give the entire picture and when the financial situation of a company is assessed on annual figures there is a great potential for fast change. The economy many appear to be doing well, but the development of the economy over the last few decades is indicative of the underlying instability that is present within Malaysia. During the 1970s Malaysia was a developing country, mainly a producer of raw materials and an emerging economy (CIA, 2008). Under Prime Minister Mahathir bin Mohamad, who was in power between 1981 and 2003, economic policy were implemented in order to expand the economy; successfully diversifying into the manufacturing sector, as well as tourism and services. During this time the country faced a number of financial difficulties, following a successful 1980s Malaysia suffered from the Asian currency crisis during the 1990s. There were changes in the structure of the capital controls in the country this time; financial deregulation was pursued as a way of encouraging foreign direct investment and economic growth. However, increased foreign presence may also increase the risk exposure