Inflation. In 1975-1978, due to ott shortage and pol ltlcel disturbances In the world, there was a sharp Increase In oil prices and by the mid-1970's there was a slowdown In the rate of growth of Industrialised countries. The price of oil Increased further during 1979-1980. By the end of the decade, curbing Inflation became a crucial Issue of economic policies as the world economy continued to suffer from the effects of Inflation and Increasing oil prices. In Malaysia, throughout the 70's and 80's• the econo•y attained a high rate of growth mainly due to the discovery and production of petroleum off the east coast of Peninsular Malaysia and Sabah and also due to the high price of palm oil which has become one of the main agricultural crops In the country. In the 1970's• the relatively abundant resources enabled the government to play a larger and more vital role In the promotion of Industry and commerce, as wei I as to continue providing the necessary Infra­ structure and services for scientific and technological advance­ ment. In the 1960's• however, due to prolonged recession In the advanced lndustrlellsed countries, there wes a sharp decline of commodity prices, resulting In diminishing returns for Malaysia. The combined adverse effects of recession and Inflation had profoundly affected Malaysia's economy In the 1980's. Slnce·more than half of the national Income Is derived from external sources whl le Investments are Increasingly financed from abroad, not only are the prices of primary commodities affected but there was a dec I lne In the actual volume of some commodities traded. The Increasing high rate of Imports In rei .tlon to weakening exports had caused the balance of payments to swing from a traditional surplus to a deficit. The period witnessed a deceleration on the. 
**Analysis**
The text primarily discusses the economic situation of Malaysia, including the effects of inflation, oil price shocks, and fluctuations in commodity prices on the country's economy. It also touches on the country's reliance on external sources of income and the impact of imports and exports on the balance of payments. While the text does mention natural resources, such as petroleum and palm oil, the primary focus is on the economic aspects rather than environmental or agricultural concerns.

**Category**
Economic development, International trade