Malaysia profile

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History

The Anglo-Dutch Treaty of 1824 divided the Malay Peninsula between England and the Netherlands to become what is now modern-day Malaysia and Indonesia. The British took control of Malay, and their colonization of Malaysia would last until 1960. While trade between Malaysia, India, and China was interlinked from the 15th century onward, it was not until the late 19th and early 20th century that Chinese, Indian, Javanese, and Sumatran migrants came to Malaya as the need for labor increased due to the high demand for tin and rubber.

When these immigrants came to Malaya, they segregated themselves which would lay the foundation of Malaysia’s multi-ethnic state. Though industry boomed with the increase production of automobiles, the Great Depression affected Malaya as one of its greatest economic partners, the United States, faced economic collapse. This had a high impact on Malayan race-relations as a steep drop in tin prices and rampant unemployment caused tension among the different factions as they flocked to the cities and tried to find jobs.

In the 1930s due to this instability, the Kuomintang (KMT) became the largest Chinese organization in Malaya along with the Malayan General Labor Union rising in power. The Malayan General Labor Union would later spur the Malayan Communist Party (MCP) and influenced the 1936 and 1937 labor strikes which rocked the country. With the arrival of World Word II, Britain feared what was going on in the Pacific in relation to its holdings and Japan’s rising power. Due to the British’s weak forces on the Malay Peninsula, the British promised the MCP recognition in exchange for their support in fighting against the Japanese. However, the British and the Malayan people were unsuccessful and Japan occupied Malaya from 1942-1945.

During this time period, life in Malaysia was one of hardship and fear as the Japanese changed every aspect of life. The Japanese executed over 40,000 Chinese Malayans and the Chinese population, if not killed, were taxed for their support of the British or KMT or were dealt with extreme violence. From 1945 till March 1946, the British organized a military government until April when a civil government was put back in place. Over the next few years, political organizations such as the United Malays Nationalist Organization (UNMO) were formed from disputes over the Malay Union which the British had wanted to form since 1945.

Headed by Dato Onn, a district officer who was known for his leadership abilities, UMNO ushered in a new era in Malayan politics. By 1947, Malaya was at a critical juncture in its economic and political future.  Violence and discord in the colony led to Britain declaring a State of Emergency in June 1948 which permitted the government rights to detain suspects without a trial and to ban political parties, particularly the MCP. By the early 1950s, Britain began to make the transition to give Malaya its independence, though stipulations were put by the British High Commissioner of Malaya, to encourage racial harmony and to control uprisings and disturbances caused by communists groups. However, these stipulations were not followed through and by the mid 1950s most radical Malay nationalists were released from prison.

On August 31, 1957 Malaya achieved independence, and by 1960 Britain stopped the State of Emergency and left Malaya. On September 16, 1963 the Federation of Malaysia was formed, consisting of Sabah Sarawak, the Malay Peninsula, and Singapore. Indonesia called for Malaysia to be crushed and to liberate people in both Sabah and Sarawak and the Philippines objected to the formation of Malaysia due to their existing claim of Sabah. On August 9, 1965, Singapore was kicked out of Malaysia as it was seen as too Chinese and could not represent Malay interests. In 1974, the National Front, consisting of the UMNO and other small parties, was registered and became the dominant party in Malay politics. From the 1974 elections until the last election in 2012, the Nation Front won every national election.

Under the leadership of Prime Minister Dr. Mahathir Mohammad in 1981, Malaysia was transformed as economic growth reached at least 7% until 1997. The New Economic Policy began in the early 1970s helped create an urban middle class as it favored Bumiputra, or the ethnic Malay, who rose through the ranks. In 1990, Mahathir made a new plan, Vision 2020, which desired for Malaysia to be a “fully developed society” by 2020 in all senses of the word. However, in 1997 the Asian Financial Crisis brought an end to Malaysia’s growth. Under the guidance of the International Monetary Fund, Deputy Prime Minister and Finance Minister Anwar Ibraham changed the financial system as he merged and consolidated banks and other financial institutions. With this reform, Ibraham and Mahathir’s relationship turned sour as each one called the other responsible for the ills of the previous economic and financial.

In retaliation, Mahathir fired Ibraham accusing him of homosexual behavior and corruption. Anwar was put in jail for six years. Anwar Ibraham’s followers rose up and created the Reformasi movement which received much public fanfare. In November 1999 Mahathir was re-elected and because of this Anwar Ibraham’s wife, Wan Azizah Wan Ismail, created a new party, the Parti Keadilan National (PKN or National Justice Party) from which she won her husband’s seat.

In October 2003, Mahathir stepped down as prime minister. However, in July 2008 Anwar Ibraham was sentenced for a sodomy conviction.  He was later acquitted for this in 2012. In 2004 the UMNO picked Ahmed Badawi as Mahathir’s successor; however, tension between the two men escalated as Badawi’s government changed from Mahathir’s policy. Badawi’s vision consisted of furthering technological skills, allowing for foreign ownership of banks, and furthering agreements between the United States and Japan. However, Badawi furthered Mahathir’s favoritism for Bumiputra by promoting the idea of 30% of corporate equity to be owned by them. Because of this policy, Badawi lost in the 2008 elections where his party no longer held two-thirds majority or five of the twelve state legislatures and governments. Badawi stepped down in favor of his deputy prime minister Najib Abdul Razak.  In the recent 2013 elections, the National Front took even more of a loss as it lost the popular vote for the first time since 1957. Some people believe that this loss of voter turnout is because of the National Front’s choice to focus on race and religion over economic reform.

 

Economic Profile

Malaysia is considered a middle-income country and since the 1970s has transformed itself from being a being a producer of raw materials to a diversified economy. In terms of GDP, Malaysia ranked 30th in the world in 2012 with a purchasing power parity of $525 billion US dollars.

Established under Prime Minister Mahathir but furthered under PM Anwar Ibrahim and Najib Abdul Raak, Malaysia’s economic plan is to achieve high-income status by 2020 through Vision 2020. This is supposed to be accomplished by attracting investment in Islamic Finance, high technology, biotechnology, and services. Najib has also created the Economic Transformation Program (ETP) which hopes to increase the country’s current economic growth, has liberalized service sub-sectors, furthered boosting domestic demand, and hoped to reduce Malaysia’s dependence on exports.

Malaysia’s economy is mostly comprised of the service sector with 59% of Malaysia’s GDP coming from this area. However, within the industrial sector, Malaysia’s main products are rubber and oil palm processing and manufacturing, oil and gas, light manufacturing, pharmaceuticals, medical technology, electronics, and timber processing. Malaysia’s biggest exports are electronic equipment, palm oil, rubber, petroleum and liquefied natural gas, wood and its products, palm oil, textiles, chemicals, and solar panels. Its five biggest 2012 exporting partners are Singapore (13.6%), China (12.6%), Japan (11.8%), the United States (8.7%), and Thailand (5.4%). Though Malaysia has a greater number of exports than imports, it still imports products such as electronics, machinery, petroleum products, plastics, vehicles, iron and steel products, and chemicals. It imports the greatest number of products from China (15.1%), followed by Singapore (13.3%), Japan (10.3%), the United States (8.1%), and Thailand (6%).

According to the Central Bank of Malaysia, because of Malaysia’s reliance on exports, its domestic inflation is highly linked to global commodity prices. However, the government has subsidized commodities such as rice, sugar, and fuel. It was through this interplay between the government and global commodity prices that there was an increase in inflation, though often delayed.

The United States is the highest FDI contributor to Malaysia with over 30% of the total in 2013. However, the US’s investment has been scattered in the past four years with the US contributing 40.4% in 2010, 7.4% in 2011, and 1.4% in 2012. The second highest is Japan who has contributed 20.2% of this year’s FDI.

 

Government

Executive Branch

Malaysia is a constitutional monarchy consisting of a king and a bicameral Parliament. Unlike other constitutional monarchies, Malaysia elects its king for five year terms, but the position is still ceremonial in nature. Each state within Malaysia except Melaka, Palau Pinang, Sabah, and Sarawak has a sultan; these four states have governors appointed by the Malaysian government. From the nine states that do have sultans, the king is elected. However, the sultans elect their own king and are supposed to rotate among the states. As of the elections in 2011, the current king of Malaysia is King Tuanku Abdul Halim Mu’adzam Shah.

Malaysia’s prime minister takes power with the support of the majority members in the House of Representatives, Malaysia’s lower house. Since Malaysia has become independent in 1960, the National Front (BN) has won a majority of the seats. During the October 2013 election, Mohamed Najib bin Abdul Najib Razak was sworn in again as Prime Minister; he has been the Prime Minister of Malaysia and president of UMNO since 2009.

Legislative Branch

The legislature in Malaysia is bicameral and consists of the Dewan Negara (Senate) and the Dewan Rakyat (House of Representatives). In the senate, 44 members are appointed by the king while 26 are elected for 3-year terms by the state legislatures. The House of Representatives has 222 seats and serves for five-year terms. Currently in the House of Representatives, the National Front coalition has 47.4% of the vote while the opposition parties hold 50.9%. However, as of 2013, the National Front has 133 seats while the opposition only has 89.

Judicial Branch

Malaysia has a dual judicial system that has both civil and sharia courts. The Federal Court is the highest court, and it consists of a chief justice and four judges. Justices are appointed by the monarch and serve until they are sixty-five years old.

Political Parties

The main coalition since independence has been the National Front or Barisan National. It consists of many different parties, but the most important would be the United Malays National Organization (UMNO) from which the Prime Minister Najib bin Abdul Razak was elected. Other parties include the Gerakan Rakyat Malaysia Party, Liberal Democratic Party, Malaysian Chinese Association, Malaysian Indian Congress, People’s Progressive Party, etc. The opposition to the BN is the People’s Alliance (Pakatan Rakyat) which consists of the Democratic Action Party, Islamic Party of Malaysia, People’s Justice Party, and the Sarawak National Party.

 

Domestic & International Issues

Human Trafficking

Human trafficking is one of the most prevalent problems in Malaysia due to its location as a gateway to both Southeast Asia and the South China Sea. For women and children, the primary reason that they are trafficked is for commercial sex while men are trafficked for their cheap labor. According to the Word Research Conference, most victims are from Indonesia, Thailand, the Philippines, Burma, Cambodia, and Vietnam, while some victims can come from as far away as Bangladesh, Columbia, China, Ecuador, India, Nepal, Pakistan, Russia, and Uzbekistan. These victims come to Malaysia with promises of real work, however, they soon realize that this is not so as they are forced into hard labor in sweat shops, agricultural farms, fisheries, construction, etc.

The Malaysian government in recent years has taken to task the job of reducing human trafficking. According to humantrafficking.org, in 2006, Malaysia had been listed as a Tier 3 nation, the lower category, by the US Department of State. With the urging of the United Nations and its “UN Protocol to Prevent, Punish and Suppress Trafficking in Persons, Especially Women and Children,” Malaysia passed an Anti-Trafficking in Persons Act in 2007. However, in 2009, due to not meeting the requirements of the Trafficking Victims Protection Acts (TVPA), Malaysia was put back on the 3rd tier. However, since 2010 Malaysia has brought itself back up to Tier 2 through its efforts by the government to combat human trafficking.

For example, in 2008 the Secretariat of the Council for Anti-Trafficking in Persons was created, and Malaysia now has a National Action Plan against Trafficking in Persons that will be in place from 2010-2015 (Michael 167). However, Malaysia has a long way to go before it can have any real handle on solving this issue.

Rohingya Refugee Situation:

One issue that seems to not be alleviated at all in the past few years is the status of the Rohingya Muslims in Malaysia. Rohingya Muslims are originally from an area called Rakhine which is on the border of Balngaldesh and Myanmar. Since the 1982 Burma Citizenship Act, the Rohingya have been without a country as Myanmar regards them as Bengali. According to the United Nations Commission for Refugees (UNHCR) and Médecins Sans Frontièrs (MSF), Rohingya is one of the most persecuted people in the world. Violence began in June 2012 after the government declared a state of emergency when Rakhine Budhists and Rohingya Muslims fought over an incident where three Rohingya Muslim men were accused of raping and killing a Rakhine Buddhis woman. Since then, Rohingya men, women, and children have fled in an effort to stay away from the violence. However, when these refugees reach Malaysia, they are not given the legal rights of refugees due to Malaysia’s continued dismissal of signing the 1951 United Nations Convention on Refugees. Because of this, the Rohingya can be treated like illegal migrants and can be detained. However, in 2011 report, UNHCR stated that “significant achievements” had been made by the government to reduce arrests. However, in a recent article by the New York Times, if these refugees do not have adequate money, they will be sold as cheap labor on the border of Thailand and Malaysia and never even have the chance to experience a better life.

 

China & Malaysian Interactions

In recent years, the relationship between China and Malaysia has been quite strong. The partnership began in 1974 when Malaysia became the first ASEAN country to create diplomatic ties with China. Among ASEAN members Malaysia is China’s largest trading partner with bilateral trade worth $106 billion in 2013 and is China’s third largest trading partner behind Japan and South Korea in all of Asia. Malaysia and China have also helped one another in crisis such as when Malaysia aided China during its Wenchuan earthquake in 2008 which has increased the ties between the two countries. Furthermore, total trade volume between the two countries increased 12.1% last year and was a quarter of the total trade between China and ASEAN. However, with the missing Malaysia Airline Flight 370, tensions between the two nations have escalated in the past month.

 Malaysia Airlines Flight 370 Scandal

Since Malaysia Airline’s Flight 370 went missing after it left Kaula Lumpur on March 8th of this year, Malaysia has faced intense scrutiny as 239 passengers, many Chinese, have vanished off the face of the earth. While the black box might have been found in the bottom of the Indian Ocean (Perry 1), there is still a mystery as to why the plane crashed. Though this may never be answered, what is not a mystery is the strained relationship between Malaysia and China over this incident. While in October 2013, Chinese President Xi Jinping talked about a “maritime Silk Road” and making a “comprehensive strategic partnership” with Malaysia, China lashed out at Malaysia in its efforts to find the missing plane. Since then, relations between the two countries has not been much better and according to Ernest Z. Bower, a Southeast Asia expert at the Center for Strategic and International Studies in Washington relations between the two countries could take years to repair.

 

US-Malaysia Relations

Relations between the United States and modern-day Malaysia first began in the 1800s; the US recognized Malaysia in 1957 when it became a modern state and no longer under the control of the British. There are many programs between the United States and Malaysia such as the U.S. Fulbright English Teaching Assistant program, agricultural fellows, and since 2001, the Ambassadors Fund for Cultural Preservation (AFCP) has supported Malaysia’s cultural heritage. On a security level, the United States helps Malaysia in counter-terrorism by training Malaysian law enforcement to secure and monitor Malaysia’s border.

 

Malaysia and the United States are both partners n the Trans-Pacific Partnership (TPP) and have had many bilateral trade and investment talks on issues such as how to approach APEC. Malaysia is the 24th largest trading partner to the US and the second-largest among ASEAN members. The United States has given the most foreign direct investment and has invested in Malaysia’s manufacturing, banking, and oil and gas sectors.

 

Basic country profile prepared by Hannah Keefer, April 2014

Bibliography

“”40 Years of Sino-Malaysian Diplomatic Relations”” ChinaDaily.com.cn. ChinaDaily, 17 Dec. 2013. Web. 11 Apr. 2014.

Denyar, SImon. “China Tries to Repair Malaysia Ties Damaged by Criticism of Flight 370 Probe.” Washingtonpost.com. The Washington Post, 08 Apr. 2014. Web. 11 Apr. 2014.

“Economic Developments in 2011.” Central Bank of Malaysia. Http://www.bnm.gov.my/. Rep. Bank Negara Malaysia, 2012. Web. 11 Apr. 2014

Economic Planning Unit. Malaysian Economy in Figures 2013. Rep. Malaysian Prime Minister’s Department, 2013. Web. 11 Apr. 2014.

Hooker, Virginia Matheson. A Short History of Malaysia: Linking East and West. Chiang Mai, Thailand: Silkworm, 2003. Print.

Kurlantzick, Joshua. “Obama’s Upcoming Trip to Malaysia: Going to Be Prickly and Tough.”The Diplomat. The Diplomat, 29 Mar. 2014. Web. 11 Apr. 2014.

“Malaysia.” HumanTrafficking.org. HumanTrafficking.org. Web. 11 Apr. 2014.

“Malaysia- The World Factbook.” Central Intelligence Agency. Central Intelligence Agency. Web. 11 Apr. 2014.

Michael, Sheila Devi. “Human Trafficking in Malaysia: Trends and Challenges.”Worldresearchconference.com. Proc. of Global Conference on Business, Economics and Social Sciences, Kuala Lumpur. World Research Conference. Web. 11 Apr. 2014.

 

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