For the most current version of this Note, see Background Notes A-Z.
Malaysians of Indian descent comprise about 7% of the population and include Hindus, Muslims, Buddhists, and Christians. About 85% of the Indian community is Tamil.
Non-Malay indigenous groups make up more than half of the Borneo state of Sarawak's population and about 66% of the Borneo state of Sabah's population. They are divided into dozens of ethnic groups, but they share some general patterns of living and culture. Until the 20th century, most practiced traditional beliefs, but many have become Christian or Muslim. The "other" category includes Malaysians of, inter alia, European and Middle Eastern descent. Population distribution is uneven, with some 15 million residents concentrated in the lowlands of Peninsular Malaysia, an area slightly smaller than the State of Michigan.
The early Buddhist Malay kingdom of Srivijaya, based at what is now Palembang, Sumatra, dominated much of the Malay Peninsula from the 9th to the 13th centuries AD. The powerful Hindu kingdom of Majapahit, based on Java, gained control of the Malay Peninsula in the 14th century. Conversion of the Malays to Islam, beginning in the early 14th century, accelerated with the rise of the state of Malacca under the rule of a Muslim prince in the 15th century. Malacca was a major regional entrepot, where Chinese, Arab, Malay, and Indian merchants traded precious goods. Drawn by this rich trade, a Portuguese fleet conquered Malacca in 1511, marking the beginning of European expansion in Southeast Asia. The Dutch ousted the Portuguese from Malacca in 1641 and, in 1795, were themselves replaced by the British, who had occupied Penang in 1786.
In 1826, the British settlements of Malacca, Penang, and Singapore were combined to form the Colony of the Straits Settlements. From these strong points, in the 19th and early 20th centuries, the British established protectorates over the Malay sultanates on the peninsula. Four of these states were consolidated in 1895 as the Federated Malay States.
During British control, a well-ordered system of public administration was established, public services were extended, and largescale rubber and tin production was developed. This control was interrupted by the Japanese invasion and occupation from 1942 to 1945 during World War II.
Popular sentiment for independence swelled during and after the war and, in 1957, the Federation of Malaysia, established from the British-ruled territories of Peninsula Malaysia in 1948, negotiated independence from the United Kingdom under the leadership of Tunku Abdul Rahman, who became the first prime minister. The British colonies of Singapore, Sarawak, and Sabah (called North Borneo) joined the Federation to form Malaysia on September 16, 1963.
Singapore withdrew from the Federation on August 9, 1965, and became an independent republic. Neighboring Indonesia objected to the formation of Malaysia and pursued a program of economic, political, diplomatic, and military "confrontation" against the new country, which ended only after the fall of Indonesia's President Sukarno in 1966.
Following World War II, local communists, nearly all Chinese, launched a long, bitter insurgency, prompting the imposition of a state of emergency in 1948 (later lifted in 1960). Small bands of guerrillas remained in bases along the rugged border with southern Thailand, occasionally entering northern Malaysia. These guerrillas finally signed a peace accord with the Malaysian Government in December 1989. A separate smallscale communist insurgency that began in the mid-1960s in Sarawak also ended with the signing of a peace accord in October 1990.
Executive power is vested in the cabinet led by the prime minister; the Malaysian constitution stipulates that the prime minister must be a member of the lower house of parliament who, in the opinion of the Yang di-Pertuan Agong, commands a majority in parliament. The cabinet is chosen from among members of both houses of parliament and is responsible to that body.
The bicameral parliament consists of the Senate (Dewan Negara) and the House of Representatives (Dewan Rakyat). All 69 Senate members sit for 6-year terms; 26 are elected by the 13 state assemblies, and 43 are appointed by the king. Representatives of the House are elected from single-member districts by universal adult suffrage. The 193 members of the House of Representatives are elected to maximum terms of 5 years. Legislative power is divided between federal and state legislatures.
The Malaysian legal system is based on English common law. The Federal Court reviews decisions referred from the Court of Appeals; it has original jurisdiction in constitutional matters and in disputes between states or between the federal government and a state. Peninsular Malaysia and the East Malaysian states of Sabah and Sarawak each have a high court.
The federal government has authority over external affairs, defense, internal security, justice (except civil law cases among Malays or other Muslims and other indigenous peoples, adjudicated under Islamic and traditional law), federal citizenship, finance, commerce, industry, communications, transportation, and other matters.
Principal Government Officials
Malaysia maintains an embassy in the U.S. at 2401 Massachusetts Ave. NW, Washington, DC 20008, tel. (202) 328-2700; a Consulate General in the Los Angeles World Trade Center, 350 South Figueroa Street, Los Angeles, CA, tel. (213) 621-2991; and a Consulate General at 140 E. 45th Street, New York, NY 10017, tel. (212) 490-2722.
Anwar said his ouster actually owed to political differences and led a series of demonstrations advocating political reforms. Later in September, Anwar was arrested, beaten while in prison, and charged with corruption and sodomy. In April 1999, he was convicted of four counts of corruption and sentenced to 6 years in prison. In August 2000, Anwar was convicted of one count of sodomy and sentenced to 9 years to run consecutively after his earlier 6-year sentence.
Both trials were viewed by domestic and international observers as politically motivated. In the November 1999 general election, the Barisan Nasional was returned to power with three-fourths of the parliamentary seats, but UMNO's seats dropped from 94 to 72. The opposition Barisan Alternatif coalition, led by the Islamic Party of Malaysia (PAS), increased its seats to 42. PAS retained control of the state of Kelantan and won the additional state of Terengganu.
Malaysia remains an important trading partner for the United States. In 2000, bilateral trade between the U.S. and Malaysia totaled U.S.$36.6 billion. U.S. exports to Malaysia were $11 billion, and U.S. imports from Malaysia were $25.6 billion in that year. Malaysia was the United States' 11th-largest trading partner and its 17th-largest export market. During the first half of 2001, U.S. exports to Malaysia totaled $4.9 billion while the United States imported $11 billion from Malaysia.
Malaysia successfully developed from a commodity-based economy to one focused on manufacturing. Today the Government of Malaysia seeks to make the leap to a knowledge-based economy. At independence, Malaysia inherited an economy dominated by two commodities--rubber and tin. In the 40 years thereafter, Malaysia's economic record had been one of Asia's best. From the early 1980s through the mid-1990s, the economy experienced a period of broad diversification and sustained rapid growth averaging almost 8% annually. New foreign and domestic investment played a significant role in the transformation of Malaysia's economy. Manufacturing grew from 13.9% of GDP in 1970 to 33% in 2000, while agriculture and mining, which together had accounted for 42.7% of GDP in 1970, dropped to 8.4% and 6.9%, respectively, in 1999. Malaysia is one of the world's largest exporters of semiconductor devices--electrical goods, and appliances, and the government has ambitious plans to make Malaysia a leading producer, and developer, of high-tech products, including software.
The Malaysian Government encourages Foreign Direct Investment (FDI), and the United States continues to be the largest investor in Malaysia. In 2000, the Malaysian Government approved U.S.$1.97 billion in new manufacturing investment by U.S. companies, with the bulk n the electronics and electrical sectors. The cumulative value of U.S. private investment in Malaysia exceeds $10 billion, 60% of which is in the oil and gas and petrochemical sectors with the rest in manufacturing, especially semiconductors and other electronic products.
The Government of Malaysia has taken an active role in guiding the nation's economic development. Malaysia's New Economic Policy (NEP), first established in 1971, sought to eradicate poverty and end the identification of economic function with ethnicity. In particular, it was designed to enhance the economic standing of ethnic Malays and other indigenous peoples (collectively known as "bumiputeras" in Bahasa Malaysia). Rapid growth through the mid-1990s made it possible to expand the share of the economy for bumiputeras without reducing the economic attainment of other groups. One controversial NEP goal was to alter the pattern of ownership of corporate equity in Malaysia, with the government providing funds to purchase foreign-owned shareholdings on behalf of the bumiputera population. In June 1991, after the NEP expired, the government unveiled its National Development Policy, which contained many of the NEP's goals, although without specific equity targets and timetables. In April 2001, the government released a new plan, the "National Vision Policy," to guide development over the period 2001-10. The National Vision Policy targets education for budget increases and seeks to refocus the economy toward higher-technology production.
Cultural and educational exchanges have been another fruitful area of cooperation. Malaysians studying in the U.S., now numbering about 9,000, represent one of the largest foreign student groups enrolled in American colleges and universities.
Trade and Investment
Principal U.S. Embassy Officials
The U.S. Embassy in Malaysia is located at 376 Jalan Tun Razak, 50400 Kuala Lumpur (tel. 60-3-2168-5000, fax 60-3-2142-2207).