History of Malaysia

The history of Malaysia is a relatively recent offshoot of the history of the wider Malay-Indonesian world. Culturally and linguistically, there was until recent times little to distinguish the territories which now constitute Malaysia from the lands of the Malay Archipelago. Today the Malay world is divided into six states - Malaysia, Indonesia, the Philippines, Singapore, Brunei and East Timor – largely as the result of outside influences.

Malaysia’s geographical position places it between the great civilisations. To the west are Hindu India, the Islamic Middle East and Christian Europe. To the north-east are China and Japan. The shipping routes from China to the west pass through the region, and the most direct route passes through the Strait of Malacca. This has made Malaysia a natural meeting place of trade routes and cultures, something which has brought the area great wealth, but has also made it difficult for the Malay peoples to resist foreign influence and domination.

Overview

The history of the Malaysian area can be seen as four successive phases of outside influence, followed by the final assertion of Malay independence.

• The first phase saw the domination of Hindu culture imported from India, which reached its peak in the great Srivijaya civilisation based in Sumatra, which ruled most of the Malay world from the 7th to the 14th centuries.
• The second phase began with the arrival of Islam, which began in the 10th century, and led to the conversion of most of the Malay-Indonesian world and the breakup of the Srivijayan empire into many smaller sultanates, the most prominent of which was the Melaka (Malacca). Islamic culture has had a profound influence on the Malay peoples, but has also been influenced by them.
• The third phase was the intrusion into the area of the European colonial powers: first the Portuguese, who captured Melaka in 1511, then the Dutch and finally the British, who established bases at Penang and Singapore. European domination led to the most fateful event in Malay history – the Anglo-Dutch treaty of 1824, which drew a frontier between British Malaya and the Netherlands East Indies, which became Indonesia. This arbitrary division of the Malay world has proved permanent.
• European domination also led to the fourth phase of foreign influence: the mass immigration of Chinese and Indian workers to meet the needs of the colonial economy created by the British in the Malay Peninsula and North Borneo. The Chinese and Indians posed a profound threat to the Malays, dominating economic life and the professions, and at one time threatening to make the Malays a minority in their own country.

British power in East Asia was fatally wounded by the Japanese occupation of the region in 1942-45. Although short-lived, the Japanese occupation unleashed the forces of colonial nationalism in Malaya as elsewhere. But Malay nationalism triggered a reaction from the Chinese, who feared Malay and Islamic domination and turned in large numbers to the Malayan Communist Party. It took a tough military response from the British, and concessions by both the Malay and Chinese political leaderships, to end the Communist insurgency and bring about the establishment of an independent, multi-racial Federation of Malaya in 1957.

In 1963 Malaya became Malaysia with the acquisition of the British territories in North Borneo and Singapore. The Chinese-majority Singapore and the Federation decided to part ways in 1965. Malaysia survived this crisis as well as confrontation with Indonesia, but nearly succumbed to its own internal tensions in the race riots of 1969. This crisis led to the imposition of emergency rule and a curtailment of political life and civil liberties which has never been reversed. Since 1970 the United Malays National Organisation (UMNO) has ruled Malaysia almost as a one-party state, co-opting the Chinese and Indian leaderships through the device of the “National Front coalition.”

Malaysia under UMNO rule has prospered mightily, reaching close to “first world” living standards by the 1990s. This growing prosperity has helped minimise political discontent, but has masked a decisive shift of power in favour of the Malays. Successive UMNO governments have been determined to break the Chinese domination of the economy and the Indian domination of the professions, and to create Malay business and professional classes. This has been achieved by imposing the Malay language on the education system and through systematic discrimination in favour of Malays. These measures caused great resentment, but the results have been the creation of a more genuinely integrated and multi-cultural society.

Malaya under Indian influence

The history, as opposed to the pre-history, of the Malay-speaking world begins with the advent of Indian influence, which dates back to at least the 3rd century BC. Indian traders came to the archipelago both for its extremely abundant forest and maritime products and to trade with merchants from China, who also discovered the Malay world at an early date. Both Hinduism and Buddhism were well established in the Malay Peninsula by the beginning of the 1st century AD, and from there spread across the archipelago. Chinese chronicles of the 5th century AD speak of a great port in the south called Guantoli, which was probably in the Strait of Malacca. In the 7th century, a new port called Shilifoshi is mentioned, and this is believed to be a Chinese rendering of Srivijaya.

The site of Srivijaya has never been found, but it was probably at the mouth of one of the rivers in eastern Sumatra, possibly near Palembang. For 700 years the Maharajahs of Srivijaya ruled a loose-knit maritime empire that controlled the coasts of Sumatra, Peninsular Malaya, and Borneo. Sometimes they also ruled parts of Java,but there were always rival Javanese states which resisted Srivijaya’s hegemony. Srivijaya lived by trade, welcoming annual trading fleets from China and India, and also traders from further afield, including Japanese, Iranians and Arabs. Its greatest enemies were the Siamese, who were always trying to encroach from the north. To secure a powerful ally against these enemies, the maharajahs paid tribute to the Chinese Emperors, but they were never under Chinese control.

From the 10th century the power of Srivijaya began to decline. Never a centralised state, it was apparently weakened by a series of wars with the Javanese, which disrupted trade. In the 11th century a rival power centre arose at Melayu, a port believed to have been located further up the Sumatran coast, possibly in what is now Jambi province. Melayu’s influence is shown by the fact that the name is the origin of the word “Malay.” The power of the Hindu Maharajahs was also undermined by the spread of Islam. Areas which were converted to Islam early, such as Aceh, broke away from Srivijaya’s control. By the late 13th century also, the Siamese kings of Sukhothai had brought most of Malaya under their rule. But the great wealth of the Srivijayan sphere, with its rich resources of aromatic timber, sea products, gold, tin, spices, wax and resins – all highly prized both in China and in the west – kept Srivijaya prosperous until it faded away in the 14th century.

Melaka and Islamic Malaya

The port of Melaka (traditionally spelled Malacca) on the west coast of the Malay Peninsula was founded around 1400 by Parameswara, a rebel prince of the Srivijaya royal line, claimed in Sejarah Melayu to be a descendant of Alexander the Great. It rapidly assumed the place previously held by Srivijaya, establishing independent relations with China, and exploiting its position dominating the Straits to control the China-India maritime trade, which became increasingly important when the Mongol conquests closed the overland route between China and the west. Within a few years of its establishment, Melaka officially adopted Islam, and the Raja became a Sultan.

The political power of the Malaccan Sultanate helped Islam’s rapid spread through the Malay world, reaching as far as the Philippines and leaving Bali as an isolated outpost of Hinduism. Islam came to the Malay Archipelago via India, and was rather different to the Islam practised in its Middle Eastern homeland. It was greatly influenced by the mystical traditions of Sufism, and also absorbed some elements of Malay’s animist and Hindu traditions. Because Islam was introduced by traders and not by military conquest, there was no imposition of the Arabic language or Arab political customs. Since most Malays could not read the Qur'an, the local version of Islam was much less rigorous than in the Arabic world. And since the indigenous Malay rulers retained their power, the Islamic clergy did not gain the political influence it enjoyed in other parts of the Islamic world.

Melaka’s reign lasted little more than a century, but it was of great importance, because it came to be seen as the golden age of Malay self-rule, and the Sultans of Melaka became the models for all subsequent Malay rulers. Melaka became a great cultural centre, creating the matrix of the modern Malay culture: a blend of indigenous Malay and imported Indian and Islamic elements. Melaka’s fashions in literature, art, music, dance and dress, and the ornate titles of its royal court, came to be seen as the standard for all Malays. The court of Melaka also gave great prestige to the Malay language, which had originally evolved in Sumatra and been brought to Melaka at the time of its foundation. In time Malay came to be the official language of all the Malay states, although local languages survived in many places.

European domination

The closing of the overland route from Asia to Europe by the Ottoman Empire and the claim towards trade monopoly with India and south-east Asia by Arab traders led the European powers to look for a maritime route. In 1498 Vasco da Gama, sent by King John II of Portugal, found the way around the Cape of Good Hope to India, and in 1511 Afonso de Albuquerque led an expedition to Malaya which seized Melaka after a month-long siege and made it the capital of Portugal’s eastern empire. This was a bitter lesson to the Malay world about the greed and ruthlessness of the Europeans, and also about their technological superiority.

The son of the last Sultan of Melaka fled to the island of Bintan off the southern tip of Malaya, where he founded a new state which eventually became the Sultanate of Johore. Freed from Melaka’s domination, the Malay world broke up into a series of quarrelsome successor states, of which the most important were Aceh, Brunei, Johore and Perak. Other states such as Banten, Yogyakarta, Kedah, Selangor, Sulu and Terengganu also emerged as independent sultanates. By the late 16th century the tin mines of northern Malaya had been discovered by European traders, and Perak grew wealthy on the proceeds of tin exports. But the European colonial powers were bent on expanding further into the region. The Portuguese gained control of the spice-rich Moluccas (Maluku), and in 1571 the Spanish captured Manila.

The Dutch arrived in the region in 1596. They hated the Portuguese both for religious reasons and as commercial rivals, and were determined to evict them from the wealthy islands they called the East Indies. Led by the Dutch East India Company (VOC), they soon overcame the weak sultanates in Java and founded Batavia (Jakarta) as their capital in 1619. From there they expanded across the archipelago, forming an alliance with Johore against their main enemies, the Portuguese at Melaka and the powerful Sultan of Aceh. In 1641, after several attempts, the VOC-Johore alliance captured Melaka, breaking Portuguese power in Malaya for good – Portugal was left with only Portuguese Timor. Backed by the Dutch, Johore established a loose hegemony over the Malay states, except Perak, which was able to play off Johore against the Siamese to the north and retain its independence.

The weakness of the Malay states in this period allowed other people to migrate into the Malay homelands. The most important of these were the Bugis, seafarers from eastern Indonesia, who regularly raided the Malay coasts and finally seized control of Johore following the assassination of the last Sultan of the old Melaka royal line in 1699. Other Bugis raiders took control of Selangor. The Minangkabau peoples from Sumatra also migrated into Malaya, and eventually established their own state in Negeri Sembilan. The fall of Johore left a power vacuum on the Malay Peninsula which was partly filled by the Siamese kings of Ayutthaya, who made the five northern Malay states – Kedah, Kelantan, Patani, Perlis and Terengganu – their vassals. Johore’s eclipse also left Perak as the unrivalled leader of the Malay states.

The economic importance of Malaya to Europe grew rapidly during the 18th century. The fast-growing tea trade between China and Britain increased the demand for high-quality Malayan tin, which was used to line tea-chests. Malayan pepper also had a high reputation in Europe, while Kelantan and Pahang had gold mines. The growth of tin and gold mining and associated service industries led to the first influx of foreign settlers into the Malay world – at first Arabs and Indians, later Chinese – who colonised the towns and soon dominated economic activities. This established a pattern which characterised Malayan society for the next 200 years – a rural Malay population increasingly under the domination of wealthy urban immigrant communities, whose power the Sultans were unable to resist.

English traders had been present in Malay waters since the 17th century, but it was not until the mid 18th century that the East India Company, based in British India, developed a serious interest in Malayan affairs. The growth of the China trade in British ships increased the Company’s desire for bases in the region. Various islands were used for this purpose, but the first permanent acquisition was Penang, leased from the Sultan of Kedah in 1786. This was followed soon after by the leasing of a block of territory on the mainland opposite Penang (known as Province Wellesley). In 1795, during the Napoleonic Wars, the British occupied Dutch Melaka to forestall possible French interest in the area. When Melaka was handed back to the Dutch in 1815, the British governor, Stamford Raffles, looked for an alternative base, and in 1819 he acquired Singapore from the Sultan of Johore. The twin bases of Penang and Singapore, together with the decline of the Netherlands as a naval power, made Britain the dominant force in Malayan affairs. British influence was increased by Malayan fears of Siamese expansionism, to which Britain made a useful counterweight. During the 19th century the Malay Sultans became loyal allies of the British Empire.

British Malaya

In 1824 British hegemony in Malaya was formalised by the Anglo-Dutch Treaty, the decisive event in the formation of modern Malaysia. The Dutch evacuated Melaka and renounced all interest in Malaya, while the British recognised Dutch rule over the rest of the East Indies. This imposed an arbitrary frontier on the Malay world, one which has never been overcome. Penang, Melaka and Singapore were united as the Straits Settlements, ruled by a British Governor in Singapore. During the 19th century, the British concluded treaties with the Malay states, installing “residents” who advised the Sultans and soon came the effective rulers of their states. The wealth of Perak’s tin mines made political stability there a priority for British investors, and Perak was thus the first Malay state to agree to the supervision of a British resident. Johore alone resisted, holding out until 1914. In 1909 the weakened Siamese kingdom was compelled to cede Kedah, Kelantan, Perlis and Terengganu to the British. (Siam retained the Sultanate of Patani, leaving a Muslim minority in southern Thailand which has been a source of much trouble for successive Thai governments.)

During the late 19th century the British also gained control of the north coast of Borneo, where Dutch rule had never been established. The eastern part of this region (now Sabah) was under the nominal control of the Sultan of Sulu, a vassal of the Spanish Philippines. The rest was the territory of the feeble Sultanate of Brunei. In 1841, a British adventurer, James Brooke, leased Kuching from the Sultan and made himself the “White Rajah” of Sarawak, steadily expanding his territory at Brunei’s expense. North-eastern Borneo was colonised by British traders, and in 1881 the British North Borneo Company was granted control of the territory under the distant supervision of the governor in Singapore. The Spanish Philippines never recognised this loss of the Sultan of Sulu’s territory, laying the basis of the subsequent Filipino claim to Sabah. In 1888 what was left of Brunei was made a British protectorate, and in 1891 another Anglo-Dutch treaty formalised the border between British and Dutch Borneo. Thus the borders of modern Malaysia were formed, in complete disregard of ethnic and linguistic factors, by the colonial powers.

By 1910 the pattern of British rule in the Malay lands was established. The Straits Settlements were a Crown Colony, ruled by a governor under the supervision of the Colonial Office in London. Their population was about half Chinese, but all residents, regardless of race, were British subjects. The first four states to accept British residents, Perak, Selangor, Negeri Sembilan and Pahang, were termed the Federated Malay States: while technically independent, they were placed under a Resident-General in 1895, making them British colonies in all but name. The Unfederated Malay States (Johore, Kedah, Kelantan, Perlis and Terangganu) had a slightly larger degree of independence, although they were unable to resist the wishes of their British Residents for long. Johore, as Britain’s closest ally in Malay affairs, had the privilege of a written constitution, which gave the Sultan the right to appoint his own Cabinet, but he was generally careful to consult the British first.

Multi-racial Malaya

Unlike some colonial powers, the British always saw their empire as primarily an economic concern, and its colonies were expected to turn a profit for British shareholders. Malaya’s obvious attractions were its tin and gold mines, but British planters soon began to experiment with tropical plantation crops – tapioca, gambier, pepper and coffee. But in 1877 the rubber plant was introduced from Brazil, and rubber soon became Malaya’s staple export, stimulated by booming demand from European industry. Rubber was later joined by palm oil as an export earner. All these industries required a large and disciplined labour force, and the British did not regard the Malays as reliable workers. The solution was the importation of plantation workers from India, mainly Tamil-speakers from South India. The mines, mills and docks also attracted a flood of immigrant workers from southern China. Soon towns like Singapore, Penang and Ipoh were majority Chinese, as was Kuala Lumpur, founded as a tin-mining centre in 1857. By 1891, when Malaya’s first census was taken, Perak and Selangor, the main tin-mining states, had Chinese majorities.

The Chinese mostly arrived poor, but their industrious habits and tight-knit networks of mutual aid (run by secret societies or Triads) soon made many of them rich. In the 1890s Yap Ah Loy, who held the title of Kapitan China of Kuala Lumpur, was the richest man in Malaya, owning a chain of mines, plantations and shops. Malaya’s banking and insurance industries were run by the Chinese from the start, and Chinese businesses, usually in partnership with London firms, soon had a stranglehold on the economy. Since the Malay Sultans tended to spend well beyond their incomes, they were soon in debt to Chinese bankers, and this gave the Chinese political as well as economic power. At first the Chinese immigrants were nearly all men, and most intended to return home when they had made their fortunes. Many did go home, but many more stayed. At first they married Malay women, producing a community of Sino-Malayans or baba people, but soon they began importing Chinese brides, establishing permanent communities and building schools and temples.

The Indians were initially less successful, since unlike the Chinese they came mainly as indentured labourers to work in the rubber plantations, and had few of the economic opportunities that the Chinese had. They were also a less united community, since they were divided between Hindus and Muslims and along lines of language and caste. An Indian commercial and professional class emerged during the early 20th century, but the majority of Indians remained poor and uneducated in rural ghettos in the rubber-growing areas.

Traditional Malay society had great difficulty coping with both the loss of political sovereignty to the British and of economic sovereignty to the Chinese. By the early 20th century it seemed possible that the Malays would become a minority in their own country. The Sultans, who were seen as collaborators with both the British and the Chinese, lost some of their traditional prestige, particularly among the increasing number of Malays with a western education, but the mass of rural Malays continued to revere the Sultans and their prestige was thus an important prop for colonial rule. A small class of Malay nationalist intellectuals began to emerge during the early 20th century, and there was also a revival of Islam in response to the perceived threat of other imported religions, particularly Christianity. In fact few Malays converted to Christianity, although many Chinese did. The northern regions, which were less influenced by western ideas, became strongholds of Islamic conservatism, as they have remained.

The one consolation to Malay pride was that the British allowed them a virtual monopoly of positions in the police and local military units, as well as a majority of those administrative positions open to non-Europeans. While the Chinese mostly built and paid for their own schools and colleges, importing teachers from China, the colonial government fostered education for Malays, opening a Malay College in 1905 and creating the Malay Administrative Service in 1910. (The college was dubbed “Bab ud-Darajat” – the Gateway to High Rank.) A Malay Teachers College followed in 1922, and a Malay Women’s Training College in 1935. All this reflected the official British policy that Malaya belonged to the Malays, and that the other races were but temporary residents. This view was increasingly out of line with reality, and contained the seeds of much future trouble.

In the years before World War II, the British neglected constitutional development in Malaya. Following their usual policy of indirect rule, they were concerned to prop up the authority of the Sultans and to discourage any talk of Malaya as a united or self-governing country. There were no moves to give Malaya a unitary government, and in fact in 1935 the position of Resident-General of the Federated States was abolished, and its powers decentralised to the individual states. With their usual tendency to racial stereotyping, the British regarded the Malays as amiable but unsophisticated and rather lazy, incapable of self-government, although making good soldiers under British officers. They regarded the Chinese as clever but dangerous – and indeed during the 1920s and ‘30s, reflecting events in China, the Chinese Nationalist Party (the Kuomintang) and the Chinese Communist Party built rival clandestine organisations in Malaya, leading to regular disturbances in the Chinese towns. The British saw no way that Malaya’s disparate collection of states and races could become a nation, let alone an independent one.

War and Emergency

The outbreak of war in the Pacific in December 1941 found the British in Malaya completely unprepared. During the 1930s, anticipating the rising threat of Japanese naval power, they had built a great naval base at Singapore, but never anticipated an invasion of Malaya from the north. Because of the demands of the war in Europe, there was virtually no British air capacity in the Far East. The Japanese were thus able to attack from their bases in French Indo-China with impunity, and despite stubborn resistance from British, Australian and Indian forces, they overran Malaya in two months. Singapore, with no landward defences, no air cover and no water supply, was forced to surrender on February 15, 1942, doing irreparable damage to British prestige. British North Borneo and Brunei were also occupied.

The Japanese had a racial policy just as the British did. They regarded the Malays as a colonial people liberated from British imperialist rule, and fostered a limited form of Malay nationalism, which gained them some degree of collaboration from the Malay civil service and intellectuals. (Most of the Sultans also collaborated with the Japanese, although they maintained later that they had done so unwillingly.) The occupiers regarded the Chinese, however, as enemy aliens, and treated them with great harshness: during the so-called sook ching (purification through suffering), up to 40,000 Chinese in Malaya and Singapore were killed. Chinese businesses were expropriated and Chinese schools closed. Not surprisingly the Chinese, led by the Malayan Communist Party (MCP), became the backbone of the Malayan People’s Anti-Japanese Army (MPAJA), which with British assistance became the most effective resistance force in the occupied Asian countries. But the Japanese also offended Malay nationalism by allowing their ally Thailand to re-annex the four northern states they had surrendered to Britain in 1909. The loss of Malaya’s export markets soon produced mass unemployment which affected all races and made the Japanese increasingly unpopular.

The Malayans were thus on the whole glad to see the British back in 1945, but things could not be as they were before the war. Britain was bankrupt and the new Labour government was keen to withdraw its forces from the East as soon as possible. Colonial self-rule and eventual independence were now British policy. The tide of colonial nationalism sweeping through Asia soon reached Malaya. But most Malays were more concerned with defending themselves against the Chinese than with demanding independence from the British – indeed their immediate concern was that the British not leave and abandon the Malays to the armed Communists of the MPAJA, which was the largest armed force in the country. During the last year of the war there had been armed clashes between Chinese and Malays, and the returning British found a country on the brink of civil war.

In 1946 the British announced plans for a Malayan Union, which would turn the Federated and Unfederated Malay States, plus Penang and Melaka (but not Singapore), into a unitary state, with a view to independence within a few years. There would be a common Malayan citizenship regardless of race. The Malays were horrified at this recognition that the Chinese and Indians were now to be a permanent and equal part of Malaya’s future, and vowed their opposition to the plan. The Sultans, who had initially supported it, backed down and placed themselves at the head of the resistance. In 1946 the United Malays National Organisation (UMNO) was founded by Malay nationalists led by Dato Onn bin Jaafar, the Chief Minister of Johore. UMNO favoured independence for Malaya, but only if the new state was run exclusively by the Malays. Faced with implacable Malay opposition, the British dropped the plan.

Meanwhile the Communists were moving towards open insurrection. The MPAJA had been disbanded in December 1945, and the MCP organised as a legal political party, but the MPAJA’s arms were carefully stored for future use. The MCP policy was for immediate independence with full equality for all races. This meant it recruited very few Malays. The Party’s strength was in the Chinese-dominated trade unions, particularly in Singapore, and in the Chinese schools, where the teachers, mostly born in China, saw the Communist Party of China as the leader of China’s national revival. In March 1947, reflecting the international Communist movement’s “turn to left” as the Cold War set in, the MCP leader Lai Tek was purged and replaced by the veteran MPAJA guerilla leader Chin Peng, who turned the party increasingly to direct action. In July, following a string of assassinations of plantation managers, the colonial government struck back, declaring a State of Emergency, banning the MCP and arresting hundreds of its militants. The Party retreated to the jungle and formed the Malayan Peoples’ Liberation Army, with about 3,000 men under arms, almost all Chinese.

The Malayan Emergency involved six years of bitter fighting across the Malayan Peninsula. The British strategy, which proved ultimately successful, was to isolate the MCP from its support base by a combination of economic and political concessions to the Chinese and the resettlement of Chinese squatters into “New Villages” in “white areas” free of MCP influence. The effective mobilisation of the Malays against the MCP was also an important part the British strategy. From 1949 the MCP campaign lost momentum and the number of recruits fell sharply. Although the MCP succeeded in assassinating the British High Commissioner, Sir Henry Gurney, in October 1951, this turn to “terrorist” tactics alienated many moderate Chinese from the Party. The arrival of Lt-Gen Sir Gerald Templer as British commander in 1952 was the beginning of the end of the Emergency. Templer invented the techniques of counter-insurgency warfare in Malaya and applied them ruthlessly.

Towards Malaysia

Chinese reaction against the MCP was shown by the formation of the Malayan Chinese Association (MCA) in 1949 as a vehicle for moderate Chinese political opinion. Its leader, Tan Cheng Lock, favoured a policy of collaboration with UMNO to win Malayan independence on a policy of equal citizenship, but with sufficient concessions to Malay sensitivities to ease nationalist fears. Tan formed a close collaboration with Tunku (Prince) Abdul Rahman, the Chief Minister of Kedah and from 1951 successor to Datuk Onn as leader of UMNO. Since the British had announced in 1949 that Malaya would soon become independent whether the Malayans liked it or not, both leaders were determined to forge an agreement their communities could live with as a basis for a stable independent state. The UMNO-MCA Alliance (which was later joined by the Malayan Indian Congress (MIC)), won convincing victories in local and state elections in both Malay and Chinese areas between 1952 and 1955.

The introduction of elected local government was another important step in defeating the Communists. After Joseph Stalin’s death in 1953, there was a split in the MCP leadership over the wisdom of continuing the armed struggle. Many MCP militants lost heart and went home, and by the time Templer left Malaya in 1954 the Emergency was over, although Chin Peng led a diehard group that lurked in the inaccessible country along the Thai border for many years. The Emergency left a lasting legacy of bitterness between Malays and Chinese.

During 1955 and 1956 UMNO, the MCA and the British hammered out a constitutional settlement for an independent Malaya. UMNO conceded the principle of equal citizenship for all races. In exchange, the MCA agreed that Malaya’s head of state would be drawn from the ranks of the Malay Sultans, that Malay would be the official language, and that Malay education and economic development would be promoted and subsidised. In effect this meant that Malaya would be run by the Malays, particularly since they continued to dominate the civil service, the army and the police, but that the Chinese and Indians would have proportionate representation in the Cabinet and the parliament, would run those states where they were the majority, and would have their economic position protected. The difficult issue of who would control the education system was deferred until after independence. This came on August 31, 1957, when Tunku Abdul Rahman became the first Prime Minister of independent Malaya.

This left the unfinished business of the other British-ruled territories in the region. After the Japanese surrender the Brooke family and the British North Borneo Company gave up their control of Sarawak and Sabah respectively, and these became British Crown Colonies. They were much less economically developed than Malaya, and their local political leaderships (who were mainly Christian) were too weak to demand independence, despite the considerable cultural differences between the two territories and Malaya. Singapore, with its large Chinese majority, achieved autonomy in 1955, and in 1959 the young socialist leader Lee Kuan Yew became Prime Minister. The Sultan of Brunei remained as a British client in his oil-rich enclave. Between 1959 and 1962 the British government orchestrated complex negotiations between these local leaders and the Malayan government, leading in 1962 to an agreement to form a federal state called Malaysia. Singapore joined only on the guarantee of certain conditions, and Brunei decided to stay out. The Federation of Malaysia was officially inaugurated in September 1963.

The most violent objections came from Malaysia’s neighbours. Indonesian President Sukarno, backed by the powerful Communist Party of Indonesia (PKI), chose to regard Malaysia as a neo-colonialist plot against his country, and backed a Communist insurgency in Sarawak, mainly involving elements of the local Chinese community. Indonesian irregular forces were infiltrated into Sarawak, where they were contained by Malaysian and British Commonwealth forces. This period of “Confrontation” lasted until 1965, when the army coup in Jakarta ended Sukarno’s rule and destroyed the PKI. Under Sukarno’s successor, Suharto, Indonesian-Malaysian relations improved. At the same time Filipino President Diosdado Macapagal revived the long-dormant Filipino claim to Sabah, once part of the Sultanate of Sulu. This claim was mostly to do with Filipino domestic politics. In 1966 the new president, Ferdinand Marcos, dropped the claim and recognized Malaysia.

Problems of independence

The Depression of the 1930s, followed by the outbreak of the Sino-Japanese War, had the effect of ending Chinese emigration to Malaya, which stabilised the demographic situation and ended the prospect of the Malays becoming a minority in their own country. At the time of independence in 1959, the Malays were 55% of the population, the Chinese 35% and the Indians 10%. Since the Malays have until recently had a higher birth rate, the proportion of Malays has increased since independence – by 2000 it was over 60 percent.

This equation was upset by the inclusion of Singapore, which increased the Chinese proportion to close to 40%. Both UMNO and the MCA were nervous about the possible appeal of Lee's People's Action Party (then seen as a radical socialist party) to voters in Malaya, and tried to organise a party in Singapore to challenge Lee's position there. Lee in turn threatened to run PAP candidates in Malaya at the 1964 federal elections, despite an earlier agreement that he would not do so (see PAP-UMNO Relations). This provoked Tunku Abdul Rahman to demand that Singapore withdraw from Malaysia, which it did on August 7, 1965.

The most vexed issues of independent Malaysia were education and the disparity of economic power among the ethnic communities. Since there was no effective opposition party, these issues were contested mainly within the coalition government, which won all but one seat in the first post-independence Malayan Parliament. The two issues were related, since the Chinese advantage in education played a large part in maintaining their control of the economy, which the UMNO leaders were determined to end. The MCA leaders were torn between the need to defend their own community’s interests and the need to maintain good relations with UMNO. This produced a crisis in the MCA in 1959, in which a more assertive leadership under Lim Chong Eu defied UMNO over the education issue, only to be forced to back down when Tunku Abdul Rahman threatened to break up the coalition.

The Education Act of 1961 put UMNO’s victory on the education issue into legislative form. Henceforward Malay and English would be the only teaching languages in secondary schools, and state primary schools would teach in Malay only. Although the Chinese and Indian communities could maintain their own Mandarin and Tamil-language primary schools, all their students were required to learn Malay, and to study an agreed “Malayan curriculum.” Most importantly, the entry exam to the University of Malaya (which moved from Singapore to Kuala Lumpur in 1963) would be conducted in Malay, even though most teaching at the university was in English until the 1970s. This had the effect of excluding many Chinese students. At the same time Malay schools were heavily subsidised, and Malays were given preferential treatment. This obvious defeat for the MCA greatly weakened its support in the Chinese community.

At the time of independence Malaya had great economic advantages. It was among the world’s leading producers of three valuable commodities, rubber, tin and palm oil, and also a significant iron ore producer. These export industries gave the Malayan government a healthy surplus to invest in industrial development and infrastructure projects. Like other developing nations in the 1950s and ‘60s, Malaya (and later Malaysia) placed great stress on state planning, although UMNO was never a socialist party. The First and Second Malayan Plans (1956-60 and 1961-65 respectively) stimulated economic growth through state investment in industry and repairing infrastructure such as roads and ports, which had been damaged and neglected during the war and the Emergency. The government was keen to reduce Malaya’s dependence on commodity exports, which put the country at the mercy of fluctuating prices. The government was also aware that demand for natural rubber was bound to fall as the production and use of synthetic rubber expanded. Since a third of the Malay workforce worked in the rubber industry it was important to develop alternative sources of employment. Competition for Malaya’s rubber markets meant that the profitability of the rubber industry increasingly depended on keeping wages low, which perpetuated rural Malay poverty.

As in education, the UMNO government’s unspoken agenda in the field of economic development was to shift economic power away from the Chinese and towards the Malays. The two Malayan Plans, and the First Malaysian Plan (1966-70), directed resources heavily into developments which would benefit the rural Malay community, such as village schools, rural roads, clinics and irrigation projects. Several agencies were set up to enable Malay smallholders to upgrade their production and increase their incomes. The Federal Land Development Authority (FELDA) helped many Malays buy farms or upgrade ones they already owned. The state also provided a range of incentives and low-interest loans to help Malays start businesses, and government tendering systematically favoured Malay companies, leading many Chinese-owned businesses to “Malayanise” their management. All this certainly tended to reduce to gap between Chinese and Malay standards of living, although some argued that this would have happened anyway as Malaysia’s trade and general prosperity increased.

The crisis of 1969

The collaboration of the MCA and the MIC in these policies weakened their hold on the Chinese and Indian electorates. At the same time, the effects of the government’s affirmative action policies of the 1950s and ‘60s had been to create a discontented class of educated but underemployed Malays. This was a dangerous combination, and led to the formation of a new party, the Malaysian People’s Movement (Gerakan Rakyat Malaysia) in 1968. Gerakan was a deliberately non-communal party, bringing in Malay trade unionists and intellectuals as well as Chinese and Indian leaders. At the same time, an Islamist party, the Islamic Party of Malaysia (PAS) and a Chinese socialist party, the Democratic Action Party (DAP), gained increasing support, at the expense of UMNO and the MCA respectively.

At the May 1969 federal elections, the UMNO-MCA-MIC Alliance polled only 48 percent of the vote, although it retained a majority in the legislature. The MCA lost most of the Chinese-majority seats to Gerakan or DAP candidates. The result was anti-government demonstrations by Chinese in Kuala Lumpur, provoking a Malay backlash and leading rapidly to riots and inter-communal violence in which about 6,000 Chinese homes and businesses were burned and hundreds of people killed. The government declared a state of emergency, and a National Operations Council, headed by the Deputy Prime Minister, Tun Abdul Razak, took power from the government of Tunku Abdul Rahman, who in September 1970 was forced to retire in favour of Abdul Razak. Using the Emergency-era Internal Security Act (ISA), the new government suspended Parliament and political parties, imposed press censorship and placed severe restrictions on political activity. The ISA gave the government power to intern any person for indefinitely without trial. These powers were widely used to silence the government’s critics, and have never been repealed. The Constitution was changed to make illegal any criticism, even in Parliament, of the Malaysian monarchy, the special position of Malays in the country, or the status of Malay as the national language.

In 1971 Parliament reconvened, and a new government coalition, the National Front (Barisan Nasional), took office. This included UMNO, the MCA, the MIC, the much weakened Gerakan, and regional parties in Sabah and Sarawak. The DAP was left outside as the only significant opposition party. The PAS also joined the Front but was expelled in 1977. Abdul Razak held office until his death in 1976. He was succeeded by Datuk Hussein Onn, the son of UMNO’s founder Onn Jaafar, and then by Tun Dr Mahathir bin Mohamad, who had been Education Minister since 1971, and who held power for 22 years. During these years policies were put in place which led to the rapid transformation of Malaysia’s economy and society.

Modern Malaysia

In 1970 75 percent of Malaysians living below the poverty line were Malays, the majority of Malays were still rural workers, and Malays were still largely excluded from the modern economy. The government’s response was the New Economic Policy of 1971, which was to implemented through a series of four five-year plans from 1971 to 1990. The plan had two objectives: the elimination of poverty, particularly rural poverty, and the elimination of the identification between race and economic function. This latter policy was understood to mean a decisive shift in economic power from the Chinese to the Malays.

Poverty was tackled through an agricultural policy which resettled 250,000 Malays on newly cleared farmland, more investment in rural infrastructure, and the creation of free trade zones in rural areas to create new manufacturing jobs. During the 1970s and ‘80s rural poverty did decline, particularly in the Malayan Peninsula, but critics of the government’s policy contend that this was mainly due to the growth of overall national prosperity (due in large part to the discovery of important oil and gas reserves) and migration of rural people to the cities rather than to state intervention. Little was done to improve the living standards of the low-paid workers in plantation agriculture, although this group steadily declined as a proportion of the workforce. By 1990 the poorest parts of Malaysia were rural Sabah and Sarawak, which lagged significantly behind the rest of the country. These years saw rapid growth in Malaysian cities, particularly Kuala Lumpur, which became a magnet for immigration both from rural Malaya and from poorer neighbours such as Indonesia, Bangladesh, Thailand and the Philippines. Urban poverty became a problem for the first time, with shanty towns growing up around the cities.

The second arm of government policy, driven mainly by Mahathir first as Education Minister and then as Prime Minister, was the transfer of economic power to the Malays. Mahathir greatly expanded the number of secondary schools and universities throughout the country, and enforced the policy of teaching in Malay rather than English. This had the effect of creating a large new Malay professional class. It also created an unofficial barrier against Chinese access to higher education, since few Chinese are sufficiently fluent in Malay to study at Malay-language universities. Chinese families therefore sent their children to universities in Singapore, Australia, Britain or the United States – by 2000, for example, 60,000 Malaysians held degrees from Australian universities. This had the unintended consequence of exposing large numbers of Malaysians to life in Western countries, creating a new source of discontent. Mahathir also greatly expanded educational opportunities for Malay women – by 2000 half of all university students were women.

To find jobs for all these new Malay graduates, the government created several agencies for intervention in the economy. The most important of these were PERNAS (National Corporation Ltd), PETRONAS (National Petroleum Ltd), and HICOM (Heavy Industry Corporation of Malaysia), which not only directly employed many Malays but also invested in growing areas of the economy to create new technical and administrative jobs which were preferentially allocated to Malays. As a result, the share of Malay equity in the economy rose from 1.5 percent in 1969 to 20.3 percent in 1990, the percentage of businesses of all kinds owned by Malays rose from 39 percent to 68 percent. This latter figure was deceptive because many businesses that appeared to be Malay-owned were still indirectly controlled by Chinese, but there is no doubt that the Malay share of the economy has considerably increased. The Chinese remain disproportionately powerful in Malaysian economic life, but by 2000 the distinction between Chinese and Malay business was fading as many new corporations, particularly in growth sectors such as information technology, were owned and managed by people from both ethnic groups.

Malaysia’s rapid economic progress since 1970, which was only temporarily disrupted by the Asian financial crisis of 1997, has not been matched by change in Malaysian politics. The repressive measures passed in 1970 remain in place. Malaysia has had regular elections since 1974, and although campaigning is reasonably free at election time, it is in effect a one-party state, with the UMNO-controlled National Front usually winning nearly all the seats, while the DAP wins some Chinese urban seats and the PAS some rural Malay ones. Since the DAP and the PAS have diametrically opposed policies, they have been unable to form an effective opposition coalition. There is almost no criticism of the government in the media and public protest remains severely restricted. The ISA continues to be used to silence dissidents, and the members of the UMNO youth movement are deployed to physically intimidate opponents.

Under Mahathir’s long Prime Ministership (1981-2003), Malaysia’s political culture became increasingly authoritarian, culminating in the dismissal and imprisonment on trumped-up charges of the Deputy Prime Minister, Anwar Ibrahim, in 1997 after an internal dispute within the government. The complicity of the judiciary in this piece of persecution was seen as a particularly clear sign of the decline of Malaysian democracy. The Anwar affair led to the formation of a new party, the People's Justice Party , or Keadilan, led by Anwar’s wife, Dr Wan Azizah Wan Ismail. At the 1999 elections Keadilan formed a coalition with the DAP and the PAS known as the Alternative Front (Barisan Alternatif). The result of this was that the PAS won a number of Malay seats from UMNO, but many Chinese voters disapproved of this unnatural alliance with the Islamist PAS, causing the DAP to lose many of its seats to the MCA, including that if its veteran leader, Lim Kit Siang. Wan Aziza won her husband’s former constituency but otherwise Keadilan made little impact.

Mahathir retired in 2003, and his successor, Dato Seri Abdullah Ahmad Badawi, released Anwar and allowed him to go abroad, which was seen as a portent of a mild liberalisation. At the 2004 election, the National Front led by Abdullah has a massive victory, virtually wiping out the PAS and Keadilan, although the DAP recovered the seats it had lost in 1999. This victory was seen as the result mainly of Abdullah’s personal popularity and the strong recovery of Malaysia’s economy, which has lifted the living standards of most Malaysians to almost “first world” standards. Malaysia’s objective is now to become a fully developed country by 2020, and this seems quite achievable. It leaves unanswered, however, the question of when and how Malaysia will acquire a first world political system (a multi-party democracy, a free press, an independent judiciary and the restoration of civil and political liberties) to go with its new economic maturity.

References

• A History of Malaysia by Barbara W Andaya and Leonard Y Andaya, published by Palgrave (2001 edition)
• Encyclopaedia Britannica
• Colliers Encyclopedia.de:Geschichte Malaysias

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