INTRODUCTION Malaysia’s economic structure has undergone notable changes since 1957, the year the
country attained political independence. From an economy that was heavily dependent on income from mining and agricultural activities in the 1960s and early 1970s, Malaysia has seen rapid development in manufacturing, the main engine of growth in the last two to three decades. The services sector traditionally played a supporting role to primary and secondary industry. However, services sector activities have grown in importance. This is evident from the increase of services sector’s 37 per cent share of GDP in 1960 to 44.9 per cent in 1997 (excluding construction services). Services are no longer regarded as supplementary activities but are recognised as significant contributors to the economy in their own right. If construction services are included, the services sector accounted for 52.2 per cent of GDP in 1998 (Economic Report 1998/99).