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% 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%.
The government estimates 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.
Malaysia has extensive roads that connect all major cities and towns on the western coast of Peninsular Malaysia. The total length of the Malaysian expressway network is 1,192 kilometres (740 miles). The network connects all major cities and conurbations such as Klang Valley, Johor Bahru and Penang to each other. The major expressway, the North-South Expressway spans from the northern and the southern tips of Peninsular Malaysia at Bukit Kayu Hitam and Johor Baru respectively. It is a part of the Asian Highway Network, which also connects into Thailand and Singapore.
Roads in the East Malaysia and the eastern coast of Peninsular Malaysia are still relatively undeveloped. Those are highly curved roads passing through mountainous regions and many are still unsealed, gravel roads. This has resulted in the continued use of rivers as the main mode of transportation for interior residents.
Train service in West Malaysia is operated by the Keretapi Tanah Melayu (Malayan Railways) and has extensive railroads that connect all major cities and towns on the peninsular, including Singapore. There is also a short railway in Sabah operated by North Borneo Railway that mainly carries freight.
There are sea ports in Tanjong Kidurong, Kota Kinabalu, Kuching, Kuantan, Pasir Gudang, Tanjung Pelepas, Penang, Port Klang, Sandakan and Tawau.
There are also world class airports, such as Kuala Lumpur International Airport in Sepang, Bayan Lepas International Airport in Penang, Kuching International Airport and Langkawi International Airport that provide international and domestic destinations as well as small domestic airstrips in rural Sabah and Sarawak. Malaysia is the home of the first low-cost carrier in the region, Air Asia. It has Kuala Lumpur as its hub and maintains flights around Southeast Asia and China as well.
The intercity telecommunication service is provided on Peninsular Malaysia mainly by microwave radio relay. International telecommunications are provided through submarine cables and satellite. One of the largest and most significant telecommunication companies in Malaysia is Telekom Malaysia Berhad (TM), providing products and services from fixed line, mobile as well as dial-up and broadband Internet access service. It has the near-monopoly of fixed line phone service in the country.
In December 2004, Energy, Water and Communications Minister Datuk Seri Dr Lim Keng Yaik reported that only 0.85% or 218,004 people in Malaysia used broadband services. However these values are based on subscriber number, whilst household percentage can reflect the situation more accurately. This represented an increase from 0.45% in three quarters. He also stated that the government targeted usage of 5% by 2006 and doubling to 10% by 2008. Lim Keng Yaik had urged local telecommunication companies and service provider to open up the last mile and lower prices to benefit the users.