Main article: History of Malaysia
The Malay Peninsula developed as a major Southeast Asian commercial centre, as trade between China and India and beyond flourished through the busy Straits of Malacca since ancient time. Ptolemy showed it on his early map with the label ‘Golden Chersonese’ with the Straits of Malacca as Sinus Sabaricus. The earliest recorded Malay kingdoms grew from coastal city-ports established in the 10th Century AD. These include Langkasuka and Lembah Bujang in Kedah, as well as Beruas and Gangga Negara in Perak and Pan Pan in Kelantan. Islam arrived in the 14th century in Terengganu. In the early part of the 15th Century, the Sultanate of Malacca was established under a local dynasty. Its prosperity attracted invaders from Portugal and the port became the centre of colonial expansion involving the Dutch and British, which successively dominated the Straits.
The British crown colony of the Straits Settlements was established in 1826 and Britain gradually increased its control over the rest of the peninsula. The Straits Settlements included Penang, Singapore and Malacca. Penang was established in 1786 by Captain Francis Light as a military as well as a commercial outpost. Its development was soon overshadowed by Singapore, established by Sir Stamford Raffles in 1819. Malacca came into British hands after the Anglo-Dutch Treaty of 1824 and two years later, the Straits Settlements were formed. These settlements were collectively ruled from the British East India Company seat of government in Calcutta until 1867 when their administration was transferred to the Colonial Office in London.
It was at about this time that many Malay states decided to elicit British's help in settling their own internal conflicts. Within ten years of the end of the transfer movement, several west coast Malay States came under British influence. The role of the merchants of the Straits Settlements saw the British government intervening into the affairs of the tin producing states in the Malay Peninsula. Coupled with Chinese Secret Society disturbances and civil war, British gunboat diplomacy was employed to bring about a peaceful resolution that favoured the merchants of the Straits Settlements. Finally, the Pangkor Treaty of 1874 paved the way for British expansion and by the turn of the 20th century, the states of Pahang, Selangor, Perak and Negeri Sembilan, known together as the Federated Malay States (not to be confused with the Federation of Malaya), were under the rule of British residents who took orders from the High Commissioner in Singapore, who was also the Governor of the Straits Settlements. This officer in turn received orders from the Colonial Office in London.
The other Peninsular states were known as the Unfederated Malay States and, while not directly under rule from London, had British advisors in the Sultans' courts. The four northern states of Perlis, Kedah, Kelantan and Terengganu were previously under Thai control. British North Borneo (currently the state of Sabah) was a British Crown Colony formerly under the rule of the Sultanate of Sulu, whilst the huge jungle territory of Sarawak was the personal fiefdom of the Brooke family. Following the Japanese occupation during World War II popular support for independence grew, coupled with a communist insurgency. Post-war British plans to form a 'Malayan Union' were scuppered by strong Malay opposition who wanted a more pro-Malay system, rejecting Singapore's inclusion and demanding only single citizenship as opposed to the dual-citizenship option which would have allowed the significant immigrant communities to have claimed citizenship in both Malaya and their country of origin. Independence was achieved for the peninsula in August 31, 1957 under the name of the Federation of Malaya, which did not include Singapore.
A new federation under the name of Malaysia was formed on September 16, 1963 through a merging of the Federation of Malaya and the British crown colonies of Singapore, North Borneo (renamed Sabah) and Sarawak, the latter two colonies being on the island of Borneo. The Sultanate of Brunei, though initially expressing interest in joining the Federation pulled out due to opposition from certain segments of the population as well as wrangling over the payment of oil royalties. The early years were marred by Indonesian efforts to control Malaysia, Singapore's eventual secession in 1965 and racial strife in 1969. The Philippines also made an active claim on Sabah on that period based upon the Sultanate of Brunei's cession of its north-east territories to the Sultanate of Sulu in 1704. The Philippine claim is still on-going.
After 1969, the controversial New Economic Policy - intended to increase the share of the economic pie owned by locals as opposed to other ethnic groups - was launched by Prime Minister Tun Abdul Razak. Malaysia has since maintained a delicate ethno-political balance, and developed a unique rule combining economic growth and a political rule that favours ethnic Malayans (known as bumiputras) and moderate Islam.
In the late 1990s, when Malaysia was shaken by the Asian financial crisis, considerable opposition to the existing system was put down by the government, including democratic opposition as well as proponents of a stricter Islamic rule.
Main article: Politics of Malaysia
The federation of Malaysia is a constitutional elective monarchy. It is nominally headed by the Paramount Ruler or Yang di-Pertuan Agong, commonly referred to as the king. Kings are selected for five-year terms from among the nine sultans of the Malay states, the other four states have titular Governors.
The system of government is closely modelled on that of Westminster, due to Malaysia's being a former British Colony. In practice however, more power is vested in the executive branch of government than the in the legislative. The general election must be held at least once every five years.
Executive power is vested in the cabinet led by the prime minister; the Malaysian constitution stipulates that the prime minister must be a member of the lower house of parliament who, in the opinion of the Yang di-Pertuan Agong, commands a majority in parliament. The cabinet is chosen from among members of both houses of parliament and is responsible to that body.
The bicameral parliament consists of the Senate (Dewan Negara, literally "National Hall") and the House of Representatives (Dewan Rakyat, literally "People's Hall"). All 69 Senators sit for 6-year terms; 26 are elected by the 13 state assemblies, and 43 are appointed by the king. The 193 members of the House of Representatives are elected from single-member districts by universal adult suffrage, for a maximum term of 5 years. Legislative power is divided between federal and state legislatures.
The state goverments are led by chief ministers (Menteri Besar) selected by the state assemblies advising their respective sultans or governors.
Main article: States of Malaysia
Malaysia is divided into fourteen political divisions: thirteen states (negeri) and three federal territories (wilayah persekutuan) that collectively has the status of a state.
Main article: Geography of Malaysia
The two distinct parts of Malaysia, separated from each other by the South China Sea, share a largely similar landscape in that both West- and East Malaysia feature coastal plains rising to often densely forested hills and mountains, the highest of which is Mount Kinabalu at 4,101 m on the island of Borneo. The local climate is equatorial and characterised by the annual southwest (April to October) and northeast (October to February) monsoons.
Putrajaya is the newly created administrative capital for the federal government of Malaysia, aimed in part to ease growing congestion within Malaysia's largest city, Kuala Lumpur. The prime minister's office moved in 1999 and the move is expected to be completed in 2005. Kuala Lumpur remains the seat of parliament, as well as the commercial and financial capital of the country. Other major cities include George Town, Ipoh and Johor Bahru. See also List of cities in Malaysia.
Main article: Economy of Malaysia
Malaysia, a middle income country, transformed itself from 1971 through the late 1990s from a producer of raw materials into an emerging multi-sector economy via the controversial New Economic Policy (NEP). Growth is almost exclusively driven by exports - particularly of electronics - and, as a result, Malaysia was hard hit by the global economic downturn and the slump in the information technology (IT) sector in 2001. GDP in 2001 grew only 0.3% due to an estimated 11% contraction in exports, but a substantial fiscal stimulus package has mitigated the worst of the recession.
Kuala Lumpur's stable macroeconomic environment, in which both inflation and unemployment stand at 3% or less, coupled with its healthy foreign exchange reserves and relatively small external debt make it unlikely that Malaysia will experience a crisis similar to the Asian financial crisis of 1997, but its long-term prospects are somewhat clouded by the lack of reforms in the corporate sector, particularly those dealing with competitiveness and high corporate debt.
The major stock exchanges are Bursa Malaysia and the MASDAQ.
Main article: Demographics of Malaysia
Malaysia's population is comprised of many ethnic groups, with the politically dominant Malays making up the majority. By constitutional definition, all Malays are Muslim. About a quarter of the population are Chinese, who have historically played an important role in trade and business. Malaysians of Indian descent comprise about 7% of the population and include Hindus, Muslims, Sikhs, Christians, and Buddhists. About 85% of the Indian community is Tamil, but various other groups are represented, including Malayalis, Punjabis, and Chettiars.
Non-Malay indigenous groups make up more than half of the state of Sarawak's population, constitute about 66% of Sabah's population, and also exist in much smaller numbers on the Peninsula, where they are collectively called Orang Asli. The non-Malay indigenous population is divided into dozens of ethnic groups, but they share some general cultural similarities. Until the 20th century, most practiced traditional beliefs, but many have converted to Islam or Christianity. Other Malaysians also include those of, inter alia, European, Middle Eastern, Cambodian, and Vietnamese descent. Europeans and Eurasians include British who colonized and settled Malaysia and some Portuguese, and most Middle Easterners are mostly Arabs who first brought Islam to Malaysia. A small number of Kampucheans and Vietnamese settled in Malaysia as Vietnam War refugees. Population distribution is uneven, with some 20 million residents concentrated on the Malay Peninsula.
May 13, 1969 saw an incident of civil unrest which was then thought to be largely due to the socio-economic imbalance of the country along racial lines. This incident led to the adoption of the New Economic Policy as a two-pronged approach to address racial and economic inequality and to eradicate poverty in the country.
Main article: Culture of Malaysia
Malaysia is a multicultural society, with Malays, Chinese and Indians living side by side. The Malays are the largest community, numbering 60% of the population. They are Muslims, speak Malay (Bahasa Melayu) and are largely responsible for the political fortunes of the country. The Chinese comprise of about a quarter of the population. They are mostly Buddhists (of Mahayana sect), Taoists or Christian, and speak the Hokkien, Cantonese, Hakka and Teochew dialects, and have been historically dominant in the business community. The Indians account for about 10% of the population. They are mainly Hindu Tamils from southern India, speaking Tamil, Malayalam, and some Hindi, and live mainly in the larger towns on the west coast of the peninsula. There is also a sizeable Sikh community. Eurasians, Kampucheans, Vietnamese, and indigenous tribes make up the remaining population. Most Eurasians are Christians. Eurasians, of mixed Portuguese and Malay descent, speak a Portuguese creole, called Papia Kristang. Cambodians and Vietnamese are mostly Buddhists (Cambodians of Theravada sect and Vietnamese, Mahayana sect). Malay is the official language of the country but English is widely spoken.
The largest indigenous tribe in terms of numbers is the Iban of Sarawak, who number over 600,000. The Iban who still live in traditional jungle villages live in longhouse along the Rajang and Lupar rivers and their tributaries. The Bidayuh (170,000) are concentrated in the south-western part of Sarawak. The largest indigenous tribe in Sabah is the Kadazan. They are largely Christian subsistence farmers. The Orang Asli (140,000), or aboriginal peoples, comprise a number of different ethnic communities live in Peninsular Malaysia. Traditionally nomadic hunter-gatherers and agriculturists, many have been sedentarised and partially absorbed into modern Malaysia. However, they remain the poorest group in the country. Malaysian traditional music is heavily influenced by Chinese and Islamic forms. The music is based largely around the gendang (drum), but includes percussion instruments (some made of shells); the rebab, a bowed string instrument; the serunai, a double-reed oboe-like instrument; flutes; and trumpets. The country has a strong tradition of dance and dance dramas, some of Thai, Indian and Portuguese origin. Other artistic forms include wayang kulit (shadow-puppets), silat (a stylised martial art) and crafts such as batik, weaving and silver and brasswork.