The region now known as Malaysia was first mentioned in Chinese and Sanskrit records of the seventh and eighth centuries. In subsequent centuries the area was under the influence and loose control of various Thai and Indonesian empires, including the great Sumatra-based civilization of Sri Vijaya. This was followed in the 14th century by the Majapahit empire based in Java. Sri Vijaya and Majapahit, Bhuddist and Hindu respectively, both left a mark on the peninsula. But even by the 14th century, Islam – already well established in parts of India – was steadily spreading eastwards through
the substantial trade between India and Malaya. The first Muslim empire in Malaya, based on the trading port of Malacca on the western side of the peninsula, was formed under the rule of King Parameswara in the first quarter of the 15th century. Early in the 16th century, the Portuguese moved in and, after capturing Malacca, established a number of fortified bases in the region. Sultan Mahmud, the ruler of Malacca at the time, was unable to recapture it immediately. However, his successors - who had moved to Johore on the southern tip of the Malay Peninsula - noted the arrival of the Dutch in the region at the end of the century and formed an alliance with them to expel the Portuguese in 1641.
Over the next century and a half, the Dutch steadily expanded throughout the region until the Dutch East Indies became the heart of a most prosperous colonial trading operation. Coming at the end of the 18th century, the British were relatively late arrivals to the region, but they were to play a key role following the European wars of the 1790s and, in particular, the defeat of The Netherlands by France in 1795. Rather than hand them over to the French, the Dutch passed control of some of their most valuable resources to the British in what became a series of exchanges. Gradually, during the 19th century, the British took control of the peninsula using economic pressure (particularly their monopoly of the tin trade) rather than outright military force: local rulers were permitted substantial internal autonomy provided that they posed no threat to British interests. The Federated Malay States were created as an entity in 1895, and remained under British colonial control until the Japanese invasion of 1942. After the defeat of Japan in 1945, the 11 states were once again incorporated as British Protectorates and, in 1948, became the Federation of Malaya.
In the same year, communist guerrillas – the bulk of whom were ethnic Chinese – launched an armed struggle aimed at establishing an independent socialist state. ‘The Emergency’, as the colonial authorities dubbed it, lasted formally until 1960. However, the serious fighting was over by the mid-1950s and, in 1957, Britain proceeded with its plan to grant independence to the Federation of Malaya.
In 1963, the Federation of Malaya merged with Singapore and the former British colonies of Sarawak and Sabah (North Borneo) to form Malaysia. Singapore seceded to become an independent state in its own right in 1965, leaving Malaysia in its present form. Tunku Abdul Rahman, who had taken over as premier of the federation in 1957, remained as Prime Minister of the newly expanded republic. He remained in office until 1970, when he was replaced by Tunku Abdul Razak. The dominant political organization was the United Malay National Organization (UMNO), which allied itself with several smaller formations to create the Barisan Nasional (NF, National Front). In 1982, the NF won the general election scheduled for that year under the new leadership of Mahathir Mohammed.
Mahathir’s style was characterized by maverick policy-making, an acerbic tongue, strident nationalism, acute political antennae and a ferocious intolerance of opposition from any quarter. In his two decades in power, he stamped his authority on Malaysian politics. His ruthlessness was exemplified after falling out with his former deputy and heir apparent, Anwar Ibrahim, over Malaysia’s handling in the 1997 Asian financial crisis. Anwar was framed for alleged homosexuality (which is illegal in Malaysia) and corruption; after a show trial he was then imprisoned for fifteen years.
At first, Anwar and his wife became a focus of opposition to Mahathir. Although the NF had comfortably won every poll in the 1980s and ’90s, many people, including influential figures within UMNO, believed that Mahathir had finally overreached himself. The acid test came at the general election of November 1999. In the event, Mahathir ran a well-judged campaign which returned the NF to office with, once again, a substantial majority. Both the democratic opposition, organized around residual supporters of Anwar, and the Islamist opposition centered on the Pan-Malaysian Islamic Party (PAS) were comfortably dealt with. In particular, Mahathir made effective use of the ‘9/11’ attacks in the US to demonise his Islamist opponents.
With his political position now all but unassailable, Mahathir’s announcement in June 2002 of his intention to resign the following year was a huge surprise. The shock was followed by skepticism, and then by a further surprise in October 2003 when Mahathir did indeed stand down. The main political task for his chosen successor, Abdullah Ahmad Badawi – formerly a senior civil servant – is to prevent any further progress by the Islamist PAS. The General Election on 21 March 2004 resulted in a landslide win by the Barisan Nasional.
Mahathir’s truculence applied equally to his foreign policy. On occasion he has cut off relations with both Britain and Australia because of uncomplimentary media coverage. Though strongly anti-communist, he established diplomatic relations with Vietnam and Malaysia’s other communist neighbors in 1989 in the face of strong objections from Washington. A strong proponent of Asian regional solidarity, he firmly believed that East Asia should develop political clout to match its economic power. Malaysia is also an active member of the Commonwealth.
On December 26 2004, an earthquake in southeast Asia triggered a huge tsunami that caused widespread devastation. Despite Malaysia's close proximity to the epicenter of the earthquake, much of the coastline was spared devastation since the effects of the tsunami were blunted by Sumatra. However, near the northern island of Penang, many people were swept out to sea by the tsunami and 68 people have been confirmed dead.
Government Malaysia has a complex federal political system, with extensive local power still in the hands of nine hereditary sultans, who elect the head of state (entitled HM the Yang di-Pertuan Agong) every five years from among their number. There are 13 states plus two ‘Federal Territories’ (Kuala Lumpur and the island of Labuan). Legislative power is in the hands of the bicameral parliament, comprising the Dewan Rakyat (House of Representatives) with 192 members directly elected for a five-year term, and the 70-strong Dewan Negara (Senate), of which 40 members are appointed by the Head of State and 30 members elected by the country’s 13 regional assemblies. Executive power is held by the Prime Minister, who is formally appointed by the head of state but in practice by the leader of the largest party in the Dewan Rakpat. The Prime Minister governs with the assistance of an appointed ministerial cabinet.
Economy A fully-fledged ‘tiger' economy, from the 1970s onwards Malaysia's GDP grew rapidly at around 10% annually. However, in 1997 the Asian financial crisis brought this process to a shuddering halt. Malaysia has recovered reasonably well since then, although the headlong pre-1997 expansion has been replaced by a more measured pace of growth of around 4 to 5.5% each year, reaching 6.3% in 2007. Inflation was around 3% in 2007.
Healthy foreign exchange reserves, low inflation and a small external debt are all strengths that make it unlikely that a financial crisis similar to 1997 will re-occur. The Ringgit/US Dollar peg was abolished in July 2005. This has not resulted in any major change to the exchange rate.
Malaysia is a member of the Pacific Rim organization APEC (Asia-Pacific Economic Forum), which is assuming an increasingly important role in the regional economy.
