A Short History of Southeast Asia: Malaysia


1993: Government challenges power and privileges of royal state rulers and their families

1981: Dr Mahathir elected Prime Minister and adopts "Look East" policy

1971: Tunku Abdul Razak elected Prime Minister and New Economic Policy period begins

1969: Riots between Chinese and Malays

1963: Malaysia formed with Tunku Abdul Rahman elected first Prime Minister

1957: Independence granted

1948: Federation of Malaya formed and state of emergency declared after Communist Party of Malaya attempts revolution

1941-45: Japanese occupation

1874: Pangkor Treaty with Perak sets scene for British to extend control throughout peninsular

1843-1917: "White Rajah" period in Sarawak

1824: British acquire Melaka and form Straits Settlements with Penang and Singapore

1641: Johore with assistance from the Dutch in Java oust Portuguese

1400: Melaka established by refugees from Sri Vijaya which was under siege from the Javanese kingdom of Majapahit

7th-14th centuries: Sri Vijaya imperial state encompassing Peninsular Malaysia, Sumatra, western Java and western Borneo


More than 60 ethnic or culturally differentiated groups can be found in Malaysia’s population of just under 20 million, but the most crucial population division is that between Bumiputera and non-Bumiputera people. The Bumiputeras are those with cultural affinities indigenous to Peninsular and Bornean Malaysia and the immediate region. Malays constitute the principal Bumiputera group and account for around 55 per cent of Malaysia’s population. Non-Bumiputeras are people whose cultural affinities lie outside Malaysia and its region – principally people of Chinese and Indian descent. Chinese constitute about 32 per cent of Malaysia’s population and Indians about 8 per cent.

The Malays have a long history and, since the 15th century, an Islamic culture in which they take pride. In the colonial era, however, their cultural world – extending across the Malay Peninsula and Indonesian Archipelago – was divided by Western colonial powers. In British Malaya and northern Borneo Malays were relegated to minor social roles and virtually excluded from the foreign-financed modernising economy, which utilised immigrant labour. Malaysia’s history since World War II has been primarily the story of the reassertion of Malay primacy without precipitating serious racial discord.

Malaysia’s stability has enabled vast economic growth, particularly in the 1970s and 1980s. The stability has been at the expense, however, of some elements of the democratic system with which Malaysia began as an independent nation. Malay advancement has also had an ironic political consequence – nowadays rifts and rivalries within the Malay community need as much adroit political management as the differences between Malaysia’s ethnic groups.

Early history

The early history of the territories which now form Malaysia is shadowy, a matter of cryptic archaeological clues and obscure references in Chinese and other written sources. The limited evidence suggests, however, that in the first millennium A.D. both the Malay Peninsula and the northern Borneo coast were important landfalls for merchant vessels involved in the great maritime trading networks that linked Southeast Asia with Africa, the Middle East, India and China. Port cities arose on the Peninsula and on Borneo as they did elsewhere in Southeast Asia, offering merchants safe harbourage, trans-shipment facilities and collection points for the region’s prized commodities – gold, tin and other minerals, rare woods, resins and other jungle produce, tortoiseshell, cowries and other marine produce, and – supremely – spices.

Malay history is often seen as beginning, however, in southern Sumatra. Scholars believe that between the 7th and 14th centuries the Palembang region of southern Sumatra was the focus of a major maritime empire. They called the central imperial state Sri Vijaya, though evidence about it is fragmentary and inconclusive. Close by Sri Vijaya, and at times possibly its capital, was a place called Melayu, perhaps the cradle of Malay culture. The Sri Vijayan empire at its height probably dominated the trade of most of Sumatra, the Malay Peninsula, western Java and western Borneo. It enjoyed Chinese and Indian patronage and, like most of Southeast Asia in the first millennium A.D., it borrowed and adapted Indian culture and religion. Its religion was probably a variant of Mahayana Buddhism.

Melaka and Malay culture: the 15th century

In the 14th century Sri Vijaya was suppressed by the Javanese kingdom of Majapahit, a rival for control of Archipelago trade. Refugees from Sri Vijaya moved north to the Riau-Lingga islands, then on to Singapore island and other locations before eventually founding the city of Melaka (Malacca). The Sejarah Melayu (the ‘Malay Annals’) has it that their leader, Sultan Iskandar, was out hunting one day when one of his dogs was kicked by a mousedeer, normally the most timid and tremulous of animals. He took the mousedeer’s courage as a fine omen for the new city.

Founded about 1400, Melaka would enjoy a century of greatness, both as a major trade centre and as a great cultural centre. Melakan Malay culture would be admired and adopted in many parts of the Peninsula and Archipelago, including northern Borneo. Tales of Melaka’s wealth and influence would reach even Europe, making it a prime target for conquest when Westerners sailed into the Eastern seas.

Melaka’s trading prowess was based on a number of factors. Its position was excellent, commanding the busy Strait which took its name. Its rulers established efficient and secure conditions for traders, on land and on nearby sea lanes. Potential rival ports were brought into a tributary relationship to Melaka. At the height of its power Melaka probably dominated the Peninsula as far north as Perak (in the north of what is now known as Malaysia), the Riau-Lingga Archipelago and most of Sumatra’s east coast.

At the same time Melaka took care to become a tributary of powers greater than itself – most importantly China but also Majapahit and the Thai state of Ayudhya. Sending tribute to such powers meant no loss of independence in practical terms, but did encourage such powers to send their traders to Melaka. A Chinese community quickly settled and became a feature of Melakan society, making Chinese people a part of Malaysian history effectively from its beginning.

At some time early in the 15th century Melaka’s rulers adopted Islam, and this too contributed to the city’s success, making it a favoured destination for Arab and Indian Muslim traders. Although some smaller ports in northern Sumatra preceded Melaka in turning to Islam, Melaka’s conversion triggered the Islamisation of the Peninsula and Archipelago. Over the next century, port city after port city would adopt the religion of the most powerful, prestigious and culturally dynamic of their number. Along with its religion the port cities also tended to adopt the Melakan form of government – a blend of Middle Eastern Islamic forms with Indian forms brought from Sri Vijaya – and the language of Melaka, Malay. Malay thus became the most widely understood language in the region. In the 20th century Malay would become not only the language of Malaysia and Brunei but, as the language of trade in the Archipelago for centuries, it would form the basis of the Indonesian national language.

The golden age of Melaka ended abruptly in August 1511, when after a month’s siege the city fell to the superior guns of the Portuguese. The Portuguese hoped to take command of Melaka’s trading networks, particularly its control over spices from the Moluccas. However, while the European newcomers had the power to take control of the city and the Strait it overlooked, they lacked the resources to control the entire region and compel trade to continue at Melaka. Their posture as enemies of Islam scarcely helped. The Portuguese coup probably only stimulated the Malay trading world, as other port cities vied to take the fallen city’s place, championing with new urgency Melaka’s former religion and culture.

One state exemplifying this effect was Brunei, a port city dominating Borneo’s north coast (then encompassing not only modern Brunei but also the Malaysian states of Sarawak and Sabah). Chinese records suggest that a port state, ‘P’o – ni’, existed in the region from the 5th century. About 1514, Brunei’s rulers accepted Islam, emphasised their connections with Melaka’s former ruling dynasty, and began to develop a ‘Brunei-Malay’ culture.

A threatening world: the 16th to 18th centuries

Following the loss of Melaka, its ruling elite and their followers eventually established the sultanate of Johor, commanding the southern Peninsula and Riau islands. Elsewhere on the Peninsula other states flourished, usually claiming legitimacy through connection with the former Melaka and paying tribute to Johor.

In spite of Portuguese attempts to subdue Johor it prospered in the late 16th and early 17th centuries, especially when the Dutch arrived on the scene. Basing themselves in Java, the Dutch saw Johor as a useful counterweight to the Portuguese at Melaka and developed trading arrangements with the sultanate. In 1641 Johor helped the Dutch oust the Portuguese from Melaka, which then became a minor, outlying base in a growing Dutch empire.

The Dutch had considerably greater resources than the Portuguese had been able to deploy – and also, by the 17th century, greater resources than another Western power, the Spanish, who had established themselves in the Philippine archipelago in the previous century. But Dutch resources were not enough to fulfil their intended goal of trade dominance over the region. The Malay-Muslim trading world of the Peninsula and Archipelago thus persisted with considerable vigour after the advent of the Dutch.

The Dutch did attempt, however, to monopolise the region’s most lucrative products, particularly the spices. They also took care to concentrate their naval and military resources against any state which emerged as a major threat to their monopolising strategies. Thus no Malay state could ever hope to recreate the commercial power of 15th century Melaka. Johor and other Malay states were now narrowly restricted in their trading and political potential.

One consequence was the heightened, and in the end mutually destructive, competition between states. Johor, for example, long regarded Aceh and other Sumatran trading states as more serious opponents than any Western power. In northern Borneo, Brunei, which had suffered Spanish attacks in 1578, saw as its most serious opponent the slave-trading sultanate of Sulu (located in what is today the southern Philippines). In the 17th century Sulu acquired from Brunei sovereignty over most of the area which today constitutes the Malaysian state of Sabah.

The scramble for diminishing trade share may account for the internal instability for which many Malay states would become notorious. A Malay sultan was in theory an awesome figure. Both Southeast Asia’s pre-Muslim Hindu-Buddhist traditions and Muslim thought invested him with divinely ordained power, making him temporal and spiritual supremo in his realm. Most Malay commoners existed in debt-bondage relationships with their royal and noble superiors, and trembled before their authority, but the Malay ruling classes competed vigorously amongst themselves for power and control of the material and human resources of their states.

This could mean merely that sultans were often weak, ineffectual rulers. More damagingly it could mean lengthy periods of civil strife. In one such episode Sultan Mahmud of Johor was murdered in 1699; he was the last direct descendant of the Melakan royal house. His death foreshadowed more than a century of unstable authority in the sultanate and in other Peninsular states.

The politics of the Malay states were further complicated in the 18th century by a number of regional migrations. Bugis groups originating in Sulawesi (known previously as the Celebes) established themselves in many states of the Peninsula and Archipelago. Skilled sailor-navigators, fighters and traders, the Bugis often became the dominant force in states where they settled. On the Peninsula, Selangor became effectively a Bugis state. Meanwhile Minangkabau groups from the west Sumatra highlands were also colonising Sumatra’s east coast and crossing the Melaka Strait to the Peninsula, where they established communities which ultimately would form the basis of the state of Negeri Sembilan. In northwestern Borneo the sultanate of Brunei had to come to terms with the adventurous and fearsome ‘head-hunter’ warriors who spearheaded the migrations of Dayak (Iban) communities. Rival Brunei chiefs often struck up alliances with rival Dayak groups, sharpening conflict in the sultanate. Both the Bugis and Minangkabau migrants of the 18th century would, over time, adopt Malay-Muslim custom and to all intents and purposes merge with Malay society. The Dayaks would be tamed under British colonial rule but would always retain their distinctive, non-Muslim, cultures.

Other factors would also increase instability in the 18th century Malay world. The growing power of the British in India reoriented the trading patterns of the sub-continent. British traders in Southeast Asia were often welcomed as potential allies against other Western or local powers, but their cargoes, featuring opium and firearms, were deadly. Meanwhile, Chinese doing business in the region tended increasingly to favour linkages with Westerners rather than local governments. They were thus heralding the ‘middle men’ roles which Chinese would hold between the indigenous peoples and the Western colonial regimes of the 19th and 20th centuries.

On the Peninsula the Thais also became a major intrusive force in the later 18th century. The Thai kingdom of Ayudhya had claimed sovereignty on the Peninsula since the 14th century, and often exacted tribute from the more northerly states. In 1767 the city of Ayudhya was destroyed by the Burmese, but from 1782 a new Thai dynasty arose – the Chakri (still Thailand’s royal house) – with a new capital, Bangkok. The early Chakri monarchs were determined to assert Thai royal authority more firmly than ever before. In the late 18th and early 19th centuries the northern Malay states of Patani, Kelantan, Kedah, Perak and to a lesser extent Trengganu all experienced Thai pressures.

Patani effectively lost its independence and was absorbed within the Thai administrative sphere, thus creating a permanent Malay-Muslim minority in Buddhist Thailand. The other states continued as tributaries, running their own affairs, but Bangkok’s enforcement of tribute payments and other decrees could be brutal and destructive.

In 1786 the ruler of Kedah, hoping to win an ally against the Thais, ceded Penang island to the (British) East India Company, which was looking for a safe harbour and trading base in the region. In 1800 a strip of territory on the mainland opposite the island was also ceded. The Kedah rulers merely acquired an annual pension for the ceded territory; to their chagrin the Company firmly refused to become involved in their struggles with the Thais. However the first step had been taken towards British occupation of the Peninsula.

The British advance: the 19th century

In 1819 the East India Company acquired Singapore island from Johor. In 1824 an Anglo–Dutch treaty delivered Melaka into British hands too, as part of a delineation by the two European powers of their respective spheres of influence in maritime Southeast Asia. Making the Melaka Straits a frontier, the British took the Peninsula as their preserve, while the Dutch took Sumatra and all islands to the south of Singapore. Northern Borneo was not mentioned, though British interests would claim later, in the face of Dutch protests, that the terms of the 1824 treaty made that area a British sphere of influence too.

The 1824 treaty effectively determined the future boundaries of the British and Dutch colonial possessions in the region, and also of the nation states which would emerge from the colonial era, Malaysia and Indonesia. In the 1820s, however, the British had no intention of entangling themselves in the Peninsula. They were satisfied with the Straits Settlements, as Singapore, Melaka and Penang became known from 1826. (The Straits Settlements remained under the East India Company until 1858, when the government of British India took over. In 1867 they were transferred to the control of the British Colonial Office.)

The Straits Settlements boomed, and inevitably business interests there, Western and Chinese, became interested in exploiting the Peninsular states. The question arose of whether the states’ traditional administrative structures would be able to cope with the pressures arising from the new economic ventures. The rulers of Johor, closest to Singapore, proved fully equal to a major expansion of Chinese commercial agriculture in their state, principally in pepper and gambier. Kedah was also well governed and able to cope with spill-over pressures from Penang. The ruling groups of other states proved less adroit.

Pahang experienced civil war between 1858 and 1863, partly over the spoils arising from expanding ventures in mining and jungle produce. More seriously, endemic feuding developed within the ruling classes of the western Peninsular states of Perak, Selangor and Negeri Sembilan over the control of vast tin deposits, which began to be worked in the 1840s. The tin was mined by Chinese labourers controlled by secret societies. Rival Malay chiefs aligned themselves and their followers with the forces of rival secret societies. Rival business houses in the Straits Settlements backed one side or the other with money and guns. By the 1860s these states were in anarchy. Demands for official British intervention grew.

In 1874, one of the leading Malay disputants in Perak and the Governor of the Straits Settlements put their names to the Pangkor Treaty. The treaty recognised the former as Sultan, but insisted, crucially, that he should accept a British Resident in his state, whose advice ‘must be asked and acted upon on all questions other than those touching Malay religion and custom’. The British interpreted broadly which matters were unrelated to ‘Malay religion and custom’, so taking effective control of most financial and administrative matters.

The Pangkor Treaty thus pioneered the formula by which the British would achieve authority in the Peninsular states. Constitutionally the states would be ‘protected’ sovereign states, retaining their rulers. Practically the Resident (or in some cases ‘Adviser’) could extend his control as far as the British wished. By the 1880s not only Perak but Selangor, Negeri Sembilan and Pahang were under such a system. In 1896 these states became the ‘FMS’ (Federated Malay States) with their federal administrative centre at Kuala Lumpur, a young city growing out of a tin-mining camp.

In 1909, Thailand relinquished its imperial claims to the northern Malay states of Kedah, Perlis, Kelantan and Trengganu, and Britain moved to install Advisers in these states. In 1914 Johor was also obliged to accept an Adviser, despite its long record of satisfactory administration. Johor and the northern states were not brought under federal administration and became the ‘UMS’ (Unfederated Malay States). Even so, by the second decade of the 20th century the British had begun to talk about ‘Malaya’ – that term disguising a constitutional hotch-potch of Crown colony (the Straits Settlements) and nine protected sovereign states, four of them federated and five not.

In northern Borneo, meanwhile, two unique – indeed eccentric – expressions of British colonialism had emerged at the expense of the sultanate of Brunei. Brunei was impoverished in the 19th century and further weakened by bitter factionalism within its ruling class. In 1840 a British adventurer, James Brooke, was recruited to quell a revolt in the Sarawak river region, at the sultanate’s western extremity. Between 1841 and 1843 Brooke acquired full possession of the region and made the town of Kuching (meaning cat in the Malay language) his base. From there he and his nephew and successor as ‘White Raja’ Charles Brooke (ruler 1868 – 1917) expanded their territory eastward, establishing Sarawak’s final borders shortly after the turn of the century. Brunei would be left as two small enclaves within Sarawak.

Several factors propelled Brooke expansionism, the most important being Brunei’s poverty and the dispersal of power in the sultanate, which made the piecemeal acquisition of territory for small sums relatively easy. In addition, in the 1840s the British navy saw James Brooke as an ally in its efforts to stamp out piracy in Southeast Asian waters. Brooke was backed on several occasions by intimidating displays of British naval power when dealing with Brunei. From the 1850s British support was withheld from the Brookes, for fear that such private imperial ventures might embarrass Britain, but this made no difference. The Brookes had their own source of intimidating power – large contingents of Dayak warriors. They also had an idealistic rationale for their advance, believing that they were developing a unique experiment in efficient and benevolent government for native peoples.

Competition would add further urgency to Charles’ expansionism from the 1870s. In 1877–78 a British business consortium acquired the rights to most of the territory of Sabah, to Brunei’s east, from Brunei and from the sultanate of Sulu in what is now the southern Philippines. (Here was the origin of a dormant but still unresolved dispute over Sabah between the Philippines and Malaysia. The Philippines, as successor state to Sulu, claims that Sulu merely ‘leased’ rather than ‘ceded’ its rights in Sabah.) By 1881 the business consortium had persuaded the British government to charter a company, financed by shares, to administer the Sabahan territories, hopefully at a profit. Thus Sabah became ‘British North Borneo’, governed by the British North Borneo Chartered Company.

Charles Brooke was outraged. During the 1880s and 1890s there was fierce competition between him and the Chartered Company over the Brunei territories that remained unceded. In 1888 Britain moved to guarantee that at least the core lands of the sultanate should survive, making Brunei a British protectorate. In 1906 Brunei received a British Adviser, with powers similar to those of Residents in the Peninsular states. By then Brunei had new-found economic significance; large oil deposits had been located in Brunei Bay.

The colonial era

On the Peninsula the extension of British control met with some opposition but it was soon quelled. The British now set about creating an environment for economic expansion. The tin industry which had boomed in the 1840s continued to grow, moving from Chinese to Western control in the 20th century when capital-intensive mechanisation of the industry arrived. In the first decade of the 20th century rubber cultivation boomed. By 1930 two thirds of the cultivated land on the Peninsula would be under rubber.

Malayan tin and Malayan rubber would dominate their respective world markets, and, despite their price instability, would make the Peninsula one of Britain’s most valued imperial possessions. The success of these commodities meant that economic diversification was limited. Crops such as pepper, sugar and coffee were largely swept aside by rubber after 1900. Some limited progress was made with palm oil, pineapples and timber in the more cautious 1920s and 1930s. No significant industrialisation occurred. However the road and rail networks which the British established formed the basis for a good communications infrastructure. Chinese activity in such areas as finance, transportation, construction, small scale industry and retail trading was also establishing a strong base for the area’s economic future.

Chinese immigration swelled in the colonial era, pulled by the economic opportunities opening up and pushed by the dire conditions in China. The British left Chinese immigration uncontrolled until 1930, when the Great Depression ended any demand for additional labour. Meanwhile the British had also recruited Indian labour. The Chinese and Indians had always been regarded as transients, but by the 1930s significant numbers had either decided to settle or lacked the ability to return to their homelands. The 1931 census revealed that Malays no longer formed the majority in the total population of the Malay States and Straits Settlements. This was despite another aspect of immigration to the Peninsula in this era – the arrival in substantial numbers of Malay-Muslim people from various parts of the Archipelago.

Divisions between Malays, Chinese and Indians, already culturally profound, were deepened by British perceptions and policies. Racial stereotyping meant that the Malays were effectively excluded from the modernising economy. Their upper class was encouraged to think about an English public school-style education and a career within the branch of government which administered the Malays. Ordinary Malays were envisaged as rice farmers and fisherfolk, and their vernacular education was tailored to such humble goals.

The growing towns and cities of colonial Malaya, predominantly populated by Chinese, became alien places to most Malays. Meanwhile the Chinese were subject to a separate branch of government and managed their own education systems, in Chinese languages or English. Most Indians were effectively subjects of the rubber estates on which they laboured; their children received Indian language education.

Such separation of the communities made the emergence of nationalism, in the sense of a pan-ethnic movement, unlikely. Prior to World War II the British in Malaya were virtually unbothered by the sort of anti-colonial sentiment disturbing other Western colonies in Asia. Divisions within Malaya’s communities furthered this state of affairs. Most Malays still tended to be loyal to their particular state and sultan. The Chinese were divided by differences of clan and dialect, and by the battle between Kuomintang and Communists in China.

However, education in various forms was beginning to produce people within each of the ethnic communities who were not content to leave the future entirely to the British. Amongst Malays, pan-Malay and pan-Muslim attitudes were stirring in the 1930s, heralding strong Malay political organisation later. A few Malay radicals believed that the Peninsula should become part of the Indonesia envisaged by the nationalists of the Netherlands East Indies. The Communist Party of Malaya, founded in 1930, was mainly Chinese in membership and in the 1930s mainly interested in events in China, but it had begun to analyse the potential for revolution in Malaya. Many Indians were gaining political confidence from news about the struggle against the British in the sub-continent. Soon, war would accelerate dramatically the significance of these political awakenings.

Meanwhile Sarawak and British North Borneo were quiet backwaters of the colonial world. Both had experienced major rebellions against the imposition of white authority, but resistance had been largely put down by 1900. Thereafter, change was slow. Neither territory attracted more than minor economic development, and the Brooke government (from 1917 under the third raja, Vyner Brooke) and the Chartered Company always survived on tight budgets. The Brookes made a virtue of that fact by arguing that they were deliberately protecting their subjects from the evils of modernisation. The provision of education was extremely limited in both territories, much of it being left to Christian missions.

In one regard – that of racial stereotyping – the theory of administration in Sarawak conformed closely to British theory in the Peninsular states. In Brooke eyes Sarawak’s Malay-Muslims would provide native administrators, the immigrant Chinese (over 30 per cent of the population by the early 20th century) would drive the commercial economy, while the Dayaks (Ibans) would remain within their traditional culture, except in the matter of head-hunting, for which the administration substituted police and military work. The Chartered Company, by contrast, was relatively relaxed in its dealings with its ethnically diverse population. It welcomed administrative and commercial talent from any group, and allowed complex intercommunal relationships to flourish. The communal rigidities of Sarawak and the Peninsular states did not therefore develop to the same degree in Sabah.

Japanese occupation

Japanese forces attacked British Malaya on 8 December 1941. Singapore, the supreme symbol of British power in Southeast Asia, fell on 15 February 1942. Sarawak and British North Borneo were occupied without a shot. Over three and a half years of Japanese occupation would follow, until British military administrators would return in August/September 1945. The principal results of these years were devastation of the pre-war economy, a much more politicised populace than before, and also a much more divided populace.

The Japanese presented themselves to Malay-Muslims as their patron, respectful of Islam and of Malay culture. They fostered pan-Malay consciousness and gave Malays new opportunities in administration. They also encouraged those young Malay radicals hoping for links with the Indonesian nationalists, though few Peninsular Malays supported them and the idea would not get far. Japanese regard for the Malays was thrown into question in 1943, however, when they handed over the four northern Malay states to Thailand. (These states would be returned to British control in 1945.)

The Chinese were treated by the Japanese as war enemies, often with appalling brutality. Not surprisingly, Chinese formed the majority of the underground resistance forces which developed in the Peninsula and in the Borneo-territories. The Peninsular forces were known as the MPAJA (Malayan Peoples’ Anti-Japanese Army), and were to a large degree controlled by members of the CPM (Communist Party of Malaya).

The Indians of Malaya, by contrast, were encouraged by the Japanese to focus their political thoughts on India. Many young Malayan Indians were recruited for service in the Japanese-sponsored but ill-fated INA (Indian National Army).

The post-war period

When the British returned in 1945 they quickly subdued the open inter-communal hostilities which had flared at the war’s end. They were aware, however, that there could be no going back to the complacency of pre-war days. Alongside the massive reconstruction of the economy they also set about fundamental administrative reform. In 1946 Sarawak and British North Borneo – the latter particularly badly damaged by war – were acquired from their former owners and finally became the full responsibility of Britain.

On the Peninsula the British introduced a plan for ‘Malayan Union’, uniting administratively the Malay States, Penang and Melaka (though not Singapore) and giving all residents equal rights of citizenship.

Malays from all states were galvanized by the blithe disregard for states’ rights and Malay pre-eminence over the immigrant peoples. UMNO (United Malays National Organisation) was swiftly formed in protest, and the British were forced to abandon the idea of union. In subsequent talks UMNO agreed, however, to a federal administrative structure, and to citizenship for non-Malays who filled certain strict criteria. The Federation of Malaya was launched in 1948.

In the same year the CPM attempted revolution, using guerrilla warfare tactics and drawing on the experience and organisation gained during the war in the MPAJA. The British declared a state of emergency (the event became known as ‘the Emergency’) and developed counter-insurgency policies which, crucially, won the support of the majority of the population.

By the early 1950s CPM terrorism had been reduced to a minor problem, though emergency regulations were not lifted until 1960. One permanent result of the Emergency was a highly centralised federation, the states having relinquished most of their sovereign powers so that the crisis could be handled efficiently.

Alliance government and Independence

During the Emergency the British promised self-government for Malaya, though at the time it was not clear how this could be achieved in a way acceptable to all communities. Attempts to establish multi-racial political parties met with little success. The largest and best organised party in Malaya, UMNO, was exclusively for Malays. The peril of politicised ethnic rivalry loomed large.

Beginning in 1952, however, a formula for potentially stable self-government was worked out. This was the Alliance, a coalition of three communal based parties. UMNO represented the Malays. The Chinese were represented by the new and politically conservative MCA (Malayan – later Malaysian – Chinese Association). The Malayan – later Malaysian – Indian Congress (MIC) represented the Indian community. The Alliance testified to the pragmatic good sense, diplomatic skills and political generosity of its founders, supremely Tunku Abdul Rahman, UMNO leader and first Prime Minister until 1970. Hugely successful at national elections in 1955, the Alliance achieved merdeka (independence) for the Federation of Malaya in 1957. The new nation’s democratic parliamentary system and its legal system were broadly derived from British models.

The Alliance was not without its flaws, leaving unresolved many issues which Malaysia is still working out. It was a pact, or bargain, between three communal √©lites which gave the economically weak Malays access to political and administrative power while assuring the other communities of respect for their interests. The Malays were offered a degree of ‘positive discrimination’ but Alliance government basically left the socio-economic imbalances between communities to be worked out by laissez faire forces. In addition, questions of national cultural integration were left largely unresolved. Malay pre-eminence was acknowledged in adopting Islam as the national religion, in the form of monarchy devised (the nine hereditary state rulers would elect a king from their number every five years), and in making Malay the national language, but the application of the national religion and language to the daily lives of non-Malays was extremely circumscribed. It was believed that inter-ethnic suspicions were running too high for such issues to be determined at once.

The creation of Malaysia

Ethnic issues dominated the formation of the Federation of Malaysia. First mooted in 1961, Malaysia was envisaged as a merger of Malaya with Singapore, Sarawak, Sabah (still then British North Borneo) and, perhaps, the sultanate of Brunei. In the event Brunei remained apart, but after cautious negotiation the other territories established Malaysia on 16 September 1963.

The new nation was a delicate exercise in ethnic arithmetic. The non-Chinese majorities of the Borneo states helped balance the inclusion of the predominantly Chinese Singapore, but Singapore entered Malaysia with many constitutional, political and administrative issues left unresolved. Tensions escalated and in August 1965 Tunku Abdul Rahman and Lee Kuan Yew signed a separation agreement.

The 1969 crisis

The 1960s saw Malaysian democracy at its most open, and a number of parties engaging in vigorous criticism of the Alliance. The most notable opposition parties were PAS (Parti Islam Se-Malaysia, originally PMIP, Pan-Malayan Islamic Party), and DAP (Democratic Action Party). PAS was dedicated to building an Islamic state in Malaysia and appealed to Malay voters who saw UMNO as compromised by Western and non-Islamic influences and too ready to bargain with the non-Malays. The DAP picked up support mainly from Chinese voters unhappy with the conservative and Malay-dominated Alliance.

Political passions ran high during the general election campaign of May 1969. The results appeared to diminish the absolute control over government which the Alliance had previously enjoyed. Violent clashes erupted in Kuala Lumpur between perturbed Malays and celebratory Chinese. The riots lasted four days and caused several hundred deaths and heavy destruction of property. A state of emergency was declared and government placed effectively in the hands of a body coordinating military and police action, the National Operations Council (NOC). Some observers feared that Malaysian democracy was dead. This did not prove to be the outcome, but the rage and trauma did lead to substantial political changes.

UMNO and Barisan National government

Government by NOC ended in 1971 and government by federal cabinet, based on parliamentary voting strength, was restored, but the level of political freedom allowed to critics of government policy in the 1960s did not return. Conciliation and consensus-building were to remain a key feature of the Malaysian political scene, but now non-Malays were left in no doubt that their bargaining position was weaker than it may have seemed before May 1969. Malaysian government now adopted much more frankly the character of a primarily Malay government of a primarily Malay nation. Malay interests became paramount in the formulation of government goals and policies. UMNO became unapologetically the dominant political party in Malaysia, and was to increase its power further over the next two decades.

Under Tun Abdul Razak, Prime Minister until his death in 1976, the Alliance was superseded by a broader coalition of parties, Barisan Nasional (popularly ‘Barisan’). MCA and MIC remained within this coalition but with their influence diluted. The leading pre–1969 opposition parties, however, refused to be subsumed within the UMNO-dominated coalition. DAP has always remained outside Barisan. Pas joined briefly but soon departed. At the present time Pas controls the state government of Kelantan but has never been able to win many federal seats.

Barisan was to prove a device for strong UMNO-led government. The composition of the coalition has fluctuated during the 1970s and 1980s, as has the extent of its winning margins at elections, but following the 1990 general election the Barisan, comprised of nine parties, held 127 of the 180 seats in the federal lower house. Of the 127 Barisan seats UMNO held 71; no other component party held more than 18. DAP, with 20 seats, led the five opposition parties.

NEP and economic growth

Even more important for the direction of Malaysian politics was the establishment in 1971 of the New Economic Policy (NEP). Tun Razak and the ‘second generation’ of Malay politicians saw the need to tackle vigorously the economic and social disparities which fuelled racial antagonism. The NEP set two basic goals with a 1990 target date – to reduce and eventually eradicate poverty, and to reduce and eventually eradicate identification of economic function with race. These goals were to be achieved in the context of high economic growth rates over the next two decades; while NEP would be socially redistributive there would be no absolute ‘losers’.

To meet NEP goals, however, NEP would inevitably mean government favour for the Malays, by far the largest component of Malaysia’s Bumiputera peoples. In the early 1970s Bumiputeras were still predominantly rural-based and involved in agriculture. Around half of Bumiputera households existed below the poverty line. Bumiputeras owned a mere 1.5 per cent of the share capital of companies operating in Malaysia, and accounted for only 4.9 per cent of the country’s registered professionals.

NEP necessitated a dramatic increase in governmental intervention in Malaysian business and in Malaysian society in general. NEP’s ‘big government’ strategies vastly increased UMNO’s power and influence. Under NEP the volumes of public investment and public consumption expenditure increased substantially. In order to increase the Bumiputera stake in the economy, major public enterprises were established to take up share capital ‘in trust’ for Bumiputeras until they were in a position to purchase share capital privately. Some of these enterprises developed elaborate conglomerate business interests.

Government promoted the education and training of Bumiputeras, and access for them at all levels of the public and private sectors. Government also promoted the modernisation of the rural economy, with its predominantly Bumiputera workforce, and of rural life in general, while also supervising the balanced expansion of urban areas. In general, NEP saw the creation of significant Bumiputera commercial, industrial and professional communities. The percentage of Bumiputera households in Peninsular Malaysia deemed in poverty dropped by 1987 to 17.3 per cent in rural areas and about 8 per cent in urban areas.

Simultaneously with the implementation of NEP the Malaysian economy experienced dramatic growth. In the years 1971–1990 the country’s annual average growth in GNP was 6.8 per cent. Per capita GDP moved from $380 to $2,200 (in current US$). Once the purveyor of just two important commodities, rubber and tin, Malaysia now also became a major exporter of oil/LNG, palm oil, timber and manufactures. Growth in manufacturing was particularly spectacular.

By the late 1980s manufactures dominated Malaysia’s exports. Major manufactures included electrical and electronic products, chemicals, processed foods, textiles and processed timber and rubber products. Steel and automobile industries had also been established. The opening of new economic opportunities and the solid rise in prosperity helped mollify those non-Bumiputeras who had feared NEP and who still disliked many of its features, notably the level of government control over business and the favouritism shown towards Malays in areas such as education and employment.

Critics of NEP also argued that its implementation had paid insufficient attention to the non-Malay Bumiputera communities of Sarawak and Sabah, which are now the states with the worst figures on poverty in Malaysia. In 1987 the percentage of Bumiputera households deemed in poverty in Sarawak was 33 per cent; the percentage for Sabah was almost 42 per cent. The critics also argued that the Chinese and Indian poor had been ignored, and that even within the Malay community NEP benefits had tended to be spread to UMNO’s political advantage rather than on the basis of equity.

Eventually economic pressures compelled modification of NEP’s ‘big government’ strategies. In the mid 1980s a drastic fall in commodity prices, virtually across the board, threatened a serious balance of payments crisis. Datuk Seri Dr Mahathir Mohamad, Prime Minister since 1981, and his then Finance Minister Daim Zainuddin pegged back government spending and instituted a policy of privatisation of public enterprises.

Mahathir, a strident champion of Malay advancement, was also motivated to modify NEP strategies by his fear that Malay ‘feather bedding’ would prove self-defeating. NEP has now been replaced by NDP (New Development Policy) which, though retaining NEP’s broad goals, aims in Dr Mahathir’s words to ‘strike an optimum balance between the goals of economic growth and equity’. It is claimed that NDP strategies will concentrate on the more glaring pockets of poverty and disadvantage still existing in a now relatively prosperous Malaysia.

Mahathir and the centralisation of power

Dr Mahathir has been a controversial figure. Before achieving the Prime Ministership in 1981 he was often viewed as a Malay radical who might exacerbate Malaysia’s ethnic tensions. In power, however, he has proved a more complex political personality.

Mahathir has championed the Malays yet he lambasts the dependent attitudes which he thinks NEP fostered. He has promoted Islam in Malaysia, yet reined in its more doctrinaire elements and sharply rebuked Islamic ‘fanaticism’. He has insisted on the political overlordship of UMNO more forcefully than any previous administration, yet made it clear that non-Malays may work within the Barisan system securely and profitably. Mahathir will go to the brink in pursuit of his political goals, yet he has never actually plunged Malaysia into any of the impasses, ethnic or cultural, of which it could be capable.

Even so, there is a clear theme to Mahathir’s Prime Ministership – the centralisation of all significant power in the hands of the person who jointly heads UMNO and, as Prime Minister, the national government. Mahathir would argue that such concentration of power is necessary for social stability and economic development. Critics argue that he has unnecessarily diminished the democratic freedoms which Malaysia – unusually in its region – enjoyed. They also claim that the growth of government power has led to the abuse of power. Barisan government is continually dogged with rumours of corruption, though the rumours remain unproven.

Ironically, Mahathir’s major battles for control have concerned divisions within the Malay community, not inter-communal divisions. The opposition party DAP now commands a majority of Chinese votes but politically it is impotent except as a persistent but cautiously phrased critic of government. Mahathir’s biggest political challenge occurred in 1986–87 when elements of his own party UMNO rebelled against his leadership. Partly this was a matter of personalities and of discontent with Mahathir’s dominating style, but the revolt also signalled Malay alarm at the administration’s retreat from NEP’s ‘big government’ strategies. Mahathir retained the UMNO presidency by a mere 43 vote margin over his rival Tunku Razaleigh Hamzah (the voting was 761–718). After his victory Mahathir purged his cabinet. Razaleigh subsequently established a rival party for Malays, Semangat 46.

Political tension persisted and in October 1987 Mahathir clamped down, detaining 106 people including leading opposition personalities. Three newspapers were closed including the Star which carried a column by the first Prime Minister Tunku Abdul Rahman (who has since died) often critical of Mahathir government. Most of the detainees were released within weeks, Mahathir’s drastic action having subdued much of the political agitation.

Elements of the judiciary questioned the legal extent of the government’s powers of detention without trial. The detentions had been ordered under the ISA (Internal Security Act), a measure created by the British in Emergency days and originally intended for use against communists. In recent years the ISA has been used frequently to muffle debate when political feelings run high.

In response to the judiciary’s concerns many feel Mahathir arranged the suspension of the head of the judiciary, Mohamed Salleh Abbas, and subsequently the suspension of five of the Supreme Court judges listed to hear Salleh’s appeal against his suspension. Ever since, the Malaysian Bar Council has maintained a ‘boycott’ against the succeeding judiciary head, in protest at the perceived subordination of the law to the executive.

At the 1990 general election the breakaway Semangat 46 established links with DAP, PAS and other opposition parties, claiming that they were offering voters a credible alternative coalition government. In broad terms, however, the voters stayed with the status quo, doubting the opposition parties’ capacity to maintain stability. The opposition parties also suffered in the face of Barisan’s vastly superior financial resources and near monopoly of media information. Since his 1990 victory Mahathir has reigned securely, and political analysts expect him to carry elections for the foreseeable future. Other areas in which Mahathir has insisted on imposing his power include the promotion of Islam in Malaysia, the powers of Malaysian royalty, centre-state relationships, and UMNO’s choice of a potential successor.

From the 1960s Malaysian government has had to deal with increased levels of Muslim political assertiveness. The traditionally quiet religious culture of the Malays has been shaken by the dakwah (mission) movement and by the claims of the opposition party PAS that UMNO is insufficiently concerned with religious matters. The dual thrust of the dakwah movement has been to foster personal devoutness and to pressure Malaysian government to support a more Islamic society. The movement has been particularly identified with young, educated and politically aware Malays.

In response, Barisan government has demonstrated strong support for Islam in a range of ways. With government patronage Malaysia today is a much more insistently Islamic society than it was. But government activity in this area has also had a restraining dimension, aiming to bring Islamic enthusiasms under government oversight and regulation. During the 1980s several legislative measures tightened government powers over religious organisations and their teaching. On occasion the government has resorted to its tough detention and censorship powers to silence persons considered a threat to social order on religious grounds. As well, government has used all its political skills and media control to diminish the credibility of PAS in Malay eyes. However PAS survives strongly in the northeastern Peninsular states of Kelantan and Trengganu and can score around 20 per cent of the vote in national elections.

The government has also removed the powers of the Malaysian king to veto legislation, and minimised royal power to delay legislation. He has also cut the powers and privileges of the country’s nine royal state rulers, following an orchestrated media campaign in 1993 which alleged the contempt of some rulers for the law, their questionable business dealings and extravagant lifestyles. Once held up as the symbols of historic Malay culture the rulers were pilloried as ‘feudal relics’, at odds with the contemporary business and technology-oriented Malay. The Malaysian Bar Council’s view was that the executive’s reduction of the rulers’ powers was a further attack on constitutional democracy in Malaysia.

Mahathir has always given frank expression to his hostility towards Malaysian states which defy Barisan government and elect opposition state governments. Kelantan is currently the object of his displeasure for its Pas-controlled government. In March 1994 Mahathir scored a victory, however, when Barisan dislodged from government in Sabah the opposition United Sabah Party (PBS).

In contrast to Sarawak, which since the 1960s has experienced Alliance/Barisan government under Malay leadership, Sabah has had difficulty in conforming to national political norms. Multiracial Sabah has tended to reject attempts to divide it politically along communal lines, and also resented federal domination of its affairs. PBS is led and basically supported by the mainly Christian Kadazan-Dusun peoples of Sabah (around 40 per cent of the state’s population) but has appealed to many voters from other communities. In 1991 UMNO established a branch in Sabah and set about organising a Barisan-style coalition of parties opposed to PBS. In the March 1994 election PBS won a two-seat majority, but was subsequently forced to give up its claim to government when several PBS members were induced to defect to Barisan. Once again UMNO’s financial resources and political clout carried the day.

Mahathir will only turn 70 in 1995, and looks set to establish a record term for a Malaysian prime minister. UMNO has been considering the succession nevertheless, precipitating sharp competition between possible candidates, but at party elections in late 1993 Mahathir’s preferred choice of heir, Finance Minister Datuk Seri Anwar Ibrahim, easily carried the day.

Copyright © Asean Focus Group Pty Limited. All rights reserved.

About this edition:

This is the complete text of the 2nd edition of the book. Short History of South East AsiaThe first edition of "Focus on Southeast Asia" was published in 1997 and the second edition, which was renamed "A Short History of South East Asia", was published in 1999. With so much change taking place in South East Asia over the last few years we recently decided to update the book and a fifth edition was published by John Wiley and Sons (www.wiley.com) in 2009. The cover set out is of the fifth edition.

The 5th edition of "A Short History of South East Asia" is available to purchase from Amazon, as both an e-book and a paperback, and via its publisher, Wiley.


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