ABSTRACT
Malaysia is a Southeast Asian country that achieved its independence on August 31, 1957. Because of its economic development, Malaysia has been one of the world’s economic hubs. The impact of globalization has greatly influenced the Malaysian economy. The policy of economic liberalization has boosted the entire economic structure. Since the early 1990s, it has been alert to the danger of overdependence on capitalist countries. It has tried to maintain a balance between the internal economy and external economic milieux. This study answers three basic questions. How has the market economy of Malaysia undergone economic stability? How does the Malaysian market economy survive between domestic capital and foreign capital? Should the role of the government be minimum or optimum?
The present study uses two methods: the content analysis method and the observation method. The study observes that when Malaysia started to open up its market economy, the government could not measure the interference of foreign capital and uncounted domestic capital. Malaysia suffered as a result. The role of the Malaysian government in its economy is now somewhere between minimum and optimum.
