The Multiparty System: Country Studies — Malaysia

Malaysia Country Study

Rankings in Freedom in the World 2016: Status: Partly Free. Freedom Ranking: 4; Political Rights: 4; Civil Liberties 4.



The Federation of Malaysia is a constitutional monarchy with a parliamentary system of government. The titular head of state, called the paramount ruler, is elected on a rotating basis from among 9 hereditary chiefs of Malaysia’s 13 states. The parliament is bicameral, with an elected lower house and a largely appointed upper house. The governing coalition, the National Front, has ruled Malaysia since its initial independence in 1957 — the world’s longest ruling coalition. In elections in 2008 and again in May 2013, the BN’s parliamentary majority was substantially reduced by the success of a coalition of three opposition parties, which also won control of five states. More recently, government leaders have been the subject of financial and political scandals. Malaysia is not considered an electoral democracy by Freedom House — which categorizes the country as “partly free” — due to the political dominance of the National Front, the government’s control over the election process, and its repression of opposition.

The Federation of Malaysia is made up of two main territories separated by the South China Sea in Southeast Asia. East Malaysia is located on the northern quarter of the large Borneo island; West Malaysia, where most of the population resides, forms the southern portion of the Malay Peninsula, south of Thailand. The western part, then known as the Federation of Malaya, gained independence from the United Kingdom in 1957. It absorbed the eastern states on Borneo island in 1963 to become Malaysia. Singapore, at the southern tip of the Malay peninsula, also joined the Federation of Malaysia in 1963 but then withdrew two years later to become an independent state (see Singapore Country Study). Malaysia has 31 million people with a mixed population of ethnic Malays (50.4 percent), Chinese (24 percent), Indians (8 percent), and indigenous groups (11 percent). It is also home to a large number of migrant workers.

Since independence and especially since 1980, Malaysia has recorded impressive economic growth, generally through foreign investment in the export manufacturing sector. According to the International Monetary Fund (IMF), Malaysia ranked 35th in the world in 2014 in nominal GDP ($338 billion in total output). In nominal per capita GDP, Malaysia ranked 62nd in 2015 (at $10,073 per annum). It was 55th out of 176 countries in the world in Transparency International’s 2015 Corruption Survey index.


Early History

Malaysia's first human habitants date back 40,000 years. Its indigenous population was originally called Negrito; later it was called Malay. Indian and Chinese traders began traveling to the region roughly 2,000 years ago, by which time political entities described as sultanates emerged. The Indian and Chinese traders strongly influenced the population, with Hinduism and Buddhism becoming the dominant religions. Starting in the second century AD, a number of small Malay states arose that relied on maritime commerce. Between the seventh and fourteenth centuries, much of the area now known as Malaysia was controlled mostly by the Srivijaya Empire, based on the island of Sumatra (now part of Indonesia). War with neighboring kingdoms led to the Srivijaya Empire’s decline, which strengthened competition over the lucrative trade route through the key access to East Asia, the Strait of Malacca.

Islamic Influence, European Dominance

Around the 14th century, greater trade with the Arab world and Indian Muslims helped to spread Islam in the region, adding to the existing blend of indigenous, Hindu, and Buddhist beliefs. The state of Malacca, founded around AD 1400 by a local ruler and serving as a leading commercial center, adopted Islam as the official religion. The Portuguese commander Alfonso de Albuquerque, whose predecessors had explored the coast of Africa, rounded the Cape of Good Hope into the Indian Ocean and conquered Malacca in 1511. This led to conflict with new Muslim sultanates on Sumatra and the Malay Peninsula and a decline in Malacca's importance as a trading port. The Netherlands, which was expanding its empire on territories that later formed Indonesia, captured the city in 1641. The British became active on the Malay Peninsula in the late 18th century and occupied Dutch possessions during the Napoleonic wars. It established a base also in Singapore in 1819 (see Country Studies of Indonesia and Singapore).

British Malaya

An 1824 treaty between the British and Dutch divided the region roughly along the borders of modern Malaysia and Indonesia, with Britain controlling the Malaysia territories. Great Britain gradually established a network of protectorates and colonies that left the existing sultanates with varying degrees of autonomy. Meanwhile, the British compelled Siam (Thailand) to give up control of some Malay states in 1909, setting the current northern border on the Malay Peninsula. The British encouraged the migration of Chinese and Indian workers, who arrived in the country in large number during the 19th and early 20th centuries and played distinct roles in the economy and society. The Chinese formed mining communities to extract tin and gold and settled in towns to engage in commerce. Many Indians were imported as administrators and laborers for agricultural plantations producing cash crops like rubber. The ethnic Malay population largely remained in rural villages but also continued to dominate the state structures of the sultanates.

Postwar Insurgency

After the Allies freed the Malay territories from a brutal Japanese occupation during World War II, ethnic Malaysian leaders and local rulers feared a breakdown of political order and welcomed the return of British administration. British colonial power, however, had been greatly weakened by the war and Malaysia’s different ethnic and political groups had conflicting visions for the postwar order. When the British sought to create a Malayan Union that merged the various peninsular states and provided equal citizenship for all ethnic groups, the United Malays National Organization (UMNO) emerged to oppose the plan and preserve the political privileges of ethnic Malays. As a result, the British created the Federation of Malaya in 1948 and left the various sultanates intact within the larger structure. The ethnic Chinese-dominated Communist Party of Malaya, which had fought the Japanese and supported the initial union plan, began a decade-long insurgency, backed by Communist China. As the British put down the rebellion (often with considerable brutality), the colonial authorities brokered a compromise among non-Communist, ethnic-based political parties. These included UMNO, the Malayan Chinese Association (MCA), and the Malayan Indian Congress (MIC). The three groups formed a governing coalition known as the People’s Alliance (later called Barisan Nasional), which ever since has dominated Malaysia's modern politics.


By the time of the Federation of Malaya's formal declaration of independence in 1957, the People’s Alliance had agreed that the more prosperous non-Malay ethnic groups, which played dominant roles in the merchant economy, would enjoy citizenship and cultural autonomy while bumiputera — literally meaning “sons of the soil” and referring to ethnic Malays and other indigenous groups — retained special privileges, especially in education and the economy. Singapore and the northern Borneo states of Sarawak and Sabah, governed until then by the British, were united with the Federation to create Malaysia in 1963. But Singapore, whose dominant ethnic Chinese population and leaders threatened the Malays' political position in the federation, withdrew in 1965 to become a separate city-state (see Country Study of Singapore). Within the new structure, Western or peninsular Malaysia has 11 states and 2 federal territories forming the Federation of Malaysia; Eastern Malaysia has two large states and one federal territory.

Multiparty System

[T]he 1960 Internal Security Act (ISA) . . . and other laws affecting political activity were originally adopted to deal with the Communist insurgency but since 1969 have been used by post-independence governments to effectively restrict political dissent and criticism of the government.  

The head of Malaysia's constitutional monarchy, known as the paramount ruler and commonly called king, is elected for a five-year term by the hereditary rulers of the nine states with monarchies, with the tradition that the office rotates among the nine states. (Four states with titular leaders do not participate in the monarchical selection.) The powers of the king are largely ceremonial. He nominates the head of the leading party or coalition in the lower house of parliament as prime minister and, at the prime minister’s recommendation, other lawmakers as cabinet members. Also at the prime minister’s recommendation, the king appoints 44 of the 70 members of the Senate, the upper house of Parliament, who may serve two three-year terms. The 13 state legislatures elect the Senate’s remaining 26 members.

The lower house (Dewan Rakyat), which has dominant law-making powers, consists of 222 members elected from single-member districts for five-year terms in a “first past the post” electoral system. Elections are by universal suffrage. Since the independence of the Federation of Malaya in 1957, elections have been dominated by the People’s Alliance and its successor coalition, the Barisan Nasional (BN), or National Front. The BN is dominated by the United Malays National Organization (UMNO) and includes also the United Traditional Bumiputera Party from the Sarawak region; junior coalition partners representing ethnic Chinese and Indian communities; as well as 10 smaller parties.

The electoral system and the Electoral Commission are skewed in favor of the ruling coalition (see below). The rule of law is also seriously compromised by the government’s influence. Opposition politicians are frequently subject to criminal proceedings and defamation law suits. Many of the laws date from British colonial rule and, even when they have been amended, highly restrict freedom of association, assembly, media, and speech.

There is a guarantee of religious freedom in the constitution, but that guarantee is routinely violated in both law and practice. All ethnic Malays are registered as Muslim and are required to practice Sunni Islam. The Shi’a denomination is banned. Sharia (Islamic law) courts have jurisdiction in all cases involving Islam; civil (non-religious) courts have ruled that individual Malays cannot renounce Islam and must submit to the religious courts. Hinduism, Buddhism, and other faiths are practiced by Malaysia’s Indian and Chinese minorities, but they face discrimination, government restrictions, and sometimes violence.

The 1969 Race Riots and Positive Discrimination

UMNO's leadership was seriously challenged in the 1969 elections, when the ruling coalition lost ground to the opposition Democratic Action Party and other groups, which drew much of its support from the ethnic Chinese community seeking an end to special privileges for bumiputera. The election results sparked riots in which thousands of Chinese homes and businesses were destroyed. Dozens of people were killed. The government invoked emergency powers under the 1960 Internal Security Act (ISA) and suspended Parliament for nearly two years. This law and others affecting political activity were originally adopted by the British to deal with the Communist insurgency, but since 1969 have been used by post-independence governments to effectively restrict political dissent and criticism of the government.

After the 1969 riots, the government adopted the New Economic Policy (NEP) aimed at boosting development and eradicating economic disparities among ethnic groups. Affirmative action and quota policies were established to promote bumiputera in education, business, and employment. While causing resentment among minority groups, the policies have apparently succeeded in raising bumiputera ownership in the private sector. A 2006 study found that ethnic Malay ownership had already significantly surpassed the 30 percent target for Malays and other indigenous groups. But the government, seeking to keep the policy in place, disputed the accuracy of the study. Prominent opposition politicians like Anwar Ibrahim have argued that the affirmative action policies have left the bumiputera population dependent on artificial supports without substantially improving their economic or social position.

Anwar Ibrahim

UNMO’s Dominance

The 1969 riots impelled UMNO to rename the governing coalition from the People’s Alliance to National Front, or Barisan Nasional (BN), and to expand its cooperation with other ethnic and regional parties. From that time, BN secured sweeping electoral victories and until 2008 enjoyed greater than two-thirds parliamentary majorities. In this period, UMNO’s Mahathir bin Mohamad was Malaysia’s dominant political figure and became a leading international exponent of “Asian exceptionalism” — the theory that Asians prefer authoritarianism to democracy. As prime minister from 1981 until his retirement in 2003, Mahathir governed without significant opposition. The opposition Democratic Action Party (DAP) and Islamic Party of Malaysia (PAS) competed under highly restrictive conditions and gained small numbers of seats in the Lower House.

From 1999 to 2008: Emergence of an Opposition

In 1998, an opposition movement arose after the popular deputy prime minister, Anwar Ibrahim, was dismissed by Mahathir for criticizing government policies. The party that emerged from this movement, the National Justice Party (later renamed the People's Justice Party, or PKR), formed a united opposition front with the DAP and PAS to contest the 1999 elections. While UMNO and its allies in the Barisan Nasional remained firmly in control of Parliament, the coalition lost some 20 percent of its seats to the opposition parties. The government responded to this election rebuff by charging and subsequently convicting Anwar Ibrahim on dubious charges of sodomy and corruption, which had been brought before the elections to weaken the opposition movement. The 1999 conviction for sodomy was overturned on appeal and, having served five years on the separate corruption charge, which was upheld, he was released in 2004.

One provision [of the election law] prohibited candidates from promoting ‘feelings of ill-will, discontent, or hostility’;  the vague wording was used to stifle criticism of the governing coalition.

Under Abdullah Ahmad Badawi, Mahathir's successor as prime minister, the Barisan Nasional (BN) assumed its previous supremacy, claiming more than 90 percent of the seats in the Lower House in 2004 elections. Opposition parties captured just 20 of the 222 seats and a similar low proportion of the seats in state-level elections. The large election margin was achieved by the government’s gerrymandering of district boundaries and imposing unfair conditions for the elections. Among other things, the campaign period was limited to seven days, the media favored the ruling party, and the electoral law prevented most opposition campaigning. One provision prohibited candidates from promoting “feelings of ill-will, discontent, or hostility"; the vague wording was used to stifle criticism of the governing coalition.

Although electoral conditions remained similarly unfair in 2008 elections, discontent with the ruling party allowed a renamed opposition coalition, now called the People’s Alliance (Pakatan Rakyat), to achieve a stunning result. For the first time since independence, the ruling BN coalition lost its two-thirds majority in the lower house, winning just 140 of 222 seats (63 percent), and thus its ability to alter the constitution at will. The People’s Alliance also won five state legislatures. Anwar Ibrahim himself won a seat from a rural district in a later by-election.

The Campaign Against Anwar Ibrahim

The BN’s poor electoral performance forced Prime Minister Badawi to step down and he was succeeded by his deputy prime minister, Najib Razak. The government responded to the election “loss” by immediately charging opposition leader Anwar Ibrahim with a new count of sodomy. The victim, however, turned out to be a paid agent of the government who had a personal relationship with the prosecuting attorney. In slow-moving proceedings, Anwar was acquitted on appeal in January 2012. The government used other means to try to marginalize Anwar and other opposition leaders. In 2010, Anwar was suspended from parliament for allegedly insulting the prime minister. In September 2011, Mohamad Sabu, the deputy president of the Islamic Party of Malaysia (PAS), was charged with defaming police officers and soldiers after he criticized government actions in combatting communist guerillas in the 1950s. A number of other opposition politicians were charged under the Sedition Act.

The Campaign for Fair Elections

Meanwhile, 62 non-governmental organizations created a coalition called the Coalition for Clean and Fair Elections (Bersih) to put pressure on the government to change the ruling party’s automatic dominance in future elections and to create conditions for a free election contest. It organized a wide range of activities, including three large demonstrations in July 2011, April 2012, and July 2012, all of which were violently dispersed by riot police, with 1,700 people arrested in the April 2012 rally. Anwar Ibrahim was arrested after the April 2012 rally and charged with inciting riots (the charges were later dropped). The government has also encouraged attacks on the home of one of Bersih’s leader, an Indian.

In response to the 2008 election results and Bersih’s campaign, Prime Minister Najib Razak proposed a number of reforms. In 2012, the Security Offences (Special Measures) Act, or SOMSA, replaced the notorious 1960 Internal Security Act (ISA). Other new laws and amendments to existing laws were submitted supposedly to limit the government’s repressive apparatus. But Human Rights Watch wrote that overall the new laws actually “tightened restrictions or banned outright activities already under constraint, added limits to previously unrestricted activities, and broadened police apprehension and surveillance powers in new and innovative ways.”

Current Issues

The latest elections were held on May 5, 2013 after a brief formal one-month election campaign. The run-up to the campaign included frequent state media and official attacks on the opposition parties and candidates, including the release of fake videos of Anwar Ibrahim in supposedly compromising sexual situations. Nevertheless, the opposition carved out even more space for its formal campaign than in 2008 and hoped to defeat the BN for the first time since independence. Turnout was an unprecedented 85 percent of the country’s 13.3 million voters.

The announced election results showed 51 percent of the overall vote went to Ibrahim’s Pakatan Rakyat (People’s Alliance) and 47 percent to Barisan Nasional (BN). Even so, the ruling coalition retained a 60 percent majority of seats in the federal parliament (133 seats to 89 for opposition parties). As previously, gerrymandering and weighted districts favored UMNO-dominated rural areas. Voter intimidation and electoral fraud prevented further opposition victories. Despite public testimony confirming electoral manipulation by the government, the People’s Alliance lost all court challenges filed in 31 districts. Najib Razak, whose popularity in opinion polls at the time was greater than UNMO, retained his post as prime minister and UNMO party chairman.

Since the elections, the government ordered new large economic development projects benefitting bumiputera while at the same time ordering multiple arrests of opposition leaders. At the government’s request, the Court of Appeal in March 2014 reversed its earlier ruling overturning the conviction of Anwar Ibrahim and affirmed the original 2008 conviction for sodomy. Anwar appealed the new ruling, which barred him from his current seat in parliament and prevented him from running for other office. (The ruling came one week before Anwar was to be nominated as a candidate for a by-election to an assembly seat in Selangor; his likely victory could have propelled him to the governorship of Malaysia’s richest federal state.) In addition, Anwar’s lawyer was convicted on charges of violating the 1950 Sedition Act, another remnant of British colonial law. The lawyer was issued a large fine and forced to step down from his seat in parliament. Eight other opposition members, including the deputy chairman of the People’s Alliance faced charges under the Sedition Act. In March 2014, Mohammed Sabu, the former PAS deputy chairman now leading a new opposition party, lost a defamation suit brought by the head of the Election Commission for articles Sabu wrote implicating the commissioner with election fraud in Sabak.

The government, however, has faced numerous challenges. The prolonged and botched investigation of the March 2014 disappearance of Malaysian Airlines Flight 370 and its 239 passengers and crew increased public doubts about the government’s competence. The subsequent downing of Malaysian Airlines Flight 17 by a Russian missile in July 2014 raised further questions as to the state airline’s judgment in allowing a flight pattern over war-torn territory controlled by separatists fighting the Ukraine government. The crash resulted in the loss of 283 lives.

More recently, corruption scandals involving the prime minister and other officials have dominated the news. In January 2016, Attorney General Mohamed Apandi Ali announced that he had closed his investigation into a $681 million dollar transfer into Prime Minister Rajak’s private bank accounts. He determined that the sum had been a private donation from the Saudi government and that Rajak had returned $621 of it as unused. Saudi officials stated that it was a private investment of a Saudi prince for a building development, but the attorney general’s statement left it unclear as to what the donation had been for and how the unreturned $61 million was used. The Malaysia Anti-Corruption Commission (MACC) has appealed the attorney general’s determination, while former Prime Minister Mahathir has publicly called for Rajak’s resignation. It is widely suspected that the money went to the campaigns of UNMO politicians in the 2013 election campaign. Around the same time, the Swiss attorney general’s office announced it had found evidence that $4 billion intended for state-owned companies had been misappropriated from Malaysia’s sovereign wealth fund, an account controlled by the prime minister.