For the most current version of this Note, see Background Notes A-Z.

Flag of Malaysia is 14 equal horizontal stripes of red (top) alternating with white (bottom); there is a blue rectangle in the upper hoist-side corner bearing a yellow crescent and a yellow 14-pointed star.

PROFILE

OFFICIAL NAME:
Malaysia

Geography
Area: 329,749 sq. km. (127,316 sq. mi.); slightly larger than New Mexico.
Cities: Capital--Kuala Lumpur. Other cities--Penang, Ipoh, Malacca, Johor Baru, Shah Alam, Klang, Kuching, Kota Kinabalu
Terrain: Coastal plains and interior, jungle-covered mountains. The South China Sea separates peninsular Malaysia from East Malaysia on Borneo ( 370 mi.).
Climate: Tropical.

People
Nationality: Noun and adjective--Malaysian(s).
Population (2006): 26.9 million.
Annual growth rate: 1.8%.
Ethnic groups: Malay 50.2%, Chinese 24.5%, Indigenous 11.0%, Indian 7.2%, non-Malaysian citizens 5.9 %, others 1.2%.
Religions: Islam (60.4%), Buddhism (19.2%), Christianity (9.1%), Hinduism (6.3%), Confucianism (2.6%), tribal/folk (0.8%), other (0.4%), none/unknown (1.2%).
Languages: Bahasa Melayu (official), Chinese (various dialects), English, Tamil, indigenous.
Education: Years compulsory--6. Attendance--98.5% (primary), 82% (secondary). Literacy--93.5%.
Health: Infant mortality rate (2005)--5.1 /1,000. Life expectancy (2005)--female 76.2 yrs., male 71.8 yrs.
Work force (10.55 million, 2005): Services: 51%; Industry 36% (Manufacturing 28.4%, Mining and Construction 7.6%); Agriculture 13%.

Government
Type: Federal parliamentary democracy with a constitutional monarch. Independence: August 31, 1957. (Malaya, which is now peninsular Malaysia, became independent in 1957. In 1963 Malaya, Sabah, Sarawak, and Singapore formed Malaysia. Singapore became an independent country in 1965.).
Constitution: 1957.
Subdivisions: 13 states and three federal territories (Kuala Lumpur, Labuan Island, Putrajaya federal administrative territory). Each state has an assembly and government headed by a chief minister. Nine of these states have hereditary rulers, generally titled "sultans," while the remaining four have appointed governors in counterpart positions.
Branches: Executive--Yang di-Pertuan Agong (head of state and customarily referred to as the king; has ceremonial duties), prime minister (head of government), cabinet. Legislative--bicameral parliament, comprising 70-member Senate (26 elected by the 13 state assemblies, 44 appointed by the king on the prime minister's recommendation) and 219-member House of Representatives (elected from single-member districts). Judicial--Federal Court, Court of Appeals, high courts, session's courts, magistrate's courts, and juvenile courts. Sharia courts hear cases on certain matters involving Muslims only.
Political parties: Barisan Nasional (National Front)--a coalition comprising the United Malays National Organization (UMNO) and 13 other parties, most of which are ethnically based; Democratic Action Party (DAP); Parti Islam se Malaysia (PAS); Parti Keadilan Rakyat (PKR). There are more than 30 registered political parties, including the foregoing, not all of which are represented in the federal parliament.
Suffrage: Universal adult (voting age 21).

Economy (2005)
Nominal GDP: $130.8 billion.
Annual real GDP growth rate: 7.1% (2004); 5.2% (2005).
Per capita (GDP) income: $5,042.
Natural resources: petroleum, liquefied natural gas (LNG), tin, minerals. Agricultural Products: palm oil, rubber, timber, cocoa, rice, tropical fruit, fish, coconut.
Industry: Types--electronics, electrical products, chemicals, food and beverages, metal and machine products, apparel.
Trade: Merchandise exports--$145.0 billion: electronics, electrical products, palm oil, petroleum, liquid natural gas, apparel, timber and logs, plywood and veneer, natural rubber. Major markets--U.S. 18.8%, Singapore 15.0%, Japan 10.1%. Merchandise imports--$118.0 billion: machinery, chemicals, manufactured goods, fuels, and lubricants. Major suppliers--Japan 16.1%, U.S. 14.6%, Singapore 11.2%.

PEOPLE
Malaysia's population comprises many ethnic groups, with the politically dominant Malays comprising a majority of just over 50%. By constitutional definition, all Malays are Muslim. About a quarter of the population is 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, Buddhists, and Christians. About 85% of the Indian community is ethnically TamilNon-Malay indigenous groups make up more than half of the Borneo state of Sarawak's population and about 66% of the Borneo state of Sabah's population. They are divided into dozens of ethnic groups, but they share some general patterns of living and culture. Until the 20th century, most practiced traditional beliefs, but many have become Christian or Muslim. Population distribution is uneven, with some 20 million residents concentrated in the lowlands of peninsular Malaysia, an area slightly smaller than the state of Michigan.

HISTORY
The early Buddhist Malay kingdom of Srivijaya, based at what is now Palembang, Sumatra, dominated much of the Malay peninsula from the 9th to the 13th centuries AD. The powerful Hindu kingdom of Majapahit, based on Java, gained control of the Malay peninsula in the 14th century. Conversion of the Malays to Islam, beginning in the early 14th century, accelerated with the rise of the state of Malacca under the rule of a Muslim prince in the 15th century. Malacca was a major regional entrepot, where Chinese, Arab, Malay, and Indian merchants traded precious goods. Drawn by this rich trade, a Portuguese fleet conquered Malacca in 1511, marking the beginning of European expansion in Southeast Asia. The Dutch ousted the Portuguese from Malacca in 1641. The British obtained the island of Penang in 1786. In 1795, the Dutch gave up Malacca to the British temporarily to prevent it from falling to the French during the Napoleonic war. It was returned to the Dutch in 1818. In 1824, through the Anglo-Dutch treaty, Malacca was given to the British in exchange for Bengkulen on the island of Sumatra, in what is today Indonesia.

In 1826, the British settlements of Malacca, Penang, and Singapore were combined to form the Colony of the Straits Settlements. From these strongholds, in the 19th and early 20th centuries the British established protectorates over the Malay sultanates on the peninsula. Four of these states were consolidated in 1895 as the Federated Malay States.

During British control, a well-ordered system of public administration was established, public services were extended, and large-scale rubber and tin production was developed. This control was interrupted by the Japanese invasion and occupation from 1941 to 1945 during World War II.

Popular sentiment for independence swelled during and after the war and, in 1957, the Federation of Malaya, established from the British-ruled territories of peninsular Malaysia in 1948, negotiated independence from the United Kingdom under the leadership of Tunku Abdul Rahman, who became the first prime minister. The British colonies of Singapore, Sarawak, and Sabah (called North Borneo) joined together with the Federation to form Malaysia on September 16, 1963.

Singapore left the Federation on August 9, 1965, and became an independent republic. Neighboring Indonesia objected to the formation of Malaysia and pursued a program of economic, political, diplomatic, and military "confrontation" against the new country, which ended only after the fall of Indonesia's President Sukarno in 1966.

Following World War II, local communists, nearly all Chinese, launched a long, bitter insurgency, prompting the imposition of a state of emergency in 1948 (lifted in 1960). Small bands of guerrillas remained in bases along the rugged border with southern Thailand, occasionally entering northern Malaysia. These guerrillas finally signed a peace accord with the Malaysian Government in December 1989. A separate, small-scale communist insurgency that began in the mid-1960s in Sarawak also ended with the signing of a peace accord in October 1990.

GOVERNMENT
Malaysia is a constitutional monarchy, nominally headed by the Yang di-Pertuan Agong , customarily referred to as the king. Kings are elected for 5-year terms from among the nine sultans of the peninsular Malaysian states. The king also is the leader of the Islamic faith in Malaysia.

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) and the House of Representatives (Dewan Rakyat). All 70 Senate members sit for 3-year terms, which are normally extended for an additional 3 years; 26 are elected by the 13 state assemblies, and 44 are appointed by the king. Representatives of the House are elected from single-member districts by universal adult suffrage. The 219 members of the House of Representatives are elected to parliamentary terms lasting up to 5 years. Legislative power is divided between federal and state legislatures.

The Malaysian legal system is based on English common law. The Federal Court reviews decisions referred from the Court of Appeal; it has original jurisdiction in constitutional matters and in disputes between states or between the federal government and a state. Peninsular Malaysia and the East Malaysian states of Sabah and Sarawak each have a high court.

The federal government has authority over external affairs, defense, internal security, justice (except civil law cases among Malays or other Muslims and other indigenous peoples, adjudicated under Islamic and traditional law), federal citizenship, finance, commerce, industry, communications, transportation, and other matters.

Principal Government Officials
Prime Minister--Datuk Seri Utama Abdullah bin Ahmad Badawi
Foreign Minister--Datuk Seri Syed Hamid Albar
Ambassador to the U.S.--Datin Paduka Rajmah Hussein
Ambassador to the UN--Datuk Hamidon bin Ali

Malaysia maintains an embassy in the U.S. at 3516 International Court NW, Washington, DC 20008, tel. (202) 572-9700; a Consulate General at 550 South Hope Street, Suite 400, Los Angeles, CA 90071, tel. (213) 892-1238i; and a Consulate General at 313 East 43rd Street, New York City, NY 10017, tel. (212) 490-2722/23.

POLITICAL CONDITIONS
Malaysia's predominant political party, the United Malays National Organization (UMNO), has held power in coalition with other parties since independence in 1957. The UMNO coalition's share of the vote declined in national elections held in May 1969, after which riots broke out in Kuala Lumpur and elsewhere, mainly between Malays and ethnic Chinese. Several hundred people were killed or injured. The government declared a state of emergency and suspended all parliamentary activities.

In the years that followed, Malaysia undertook several initiatives that became integral parts of its socioeconomic model. The New Economic Plan (NEP), launched in 1971, contained a series of affirmative action policies designed to benefit Malays and certain indigenous groups (together known as bumiputera or "sons of the soil"). The Constitution was amended to limit dissent against the specially-protected and sensitive portions of the Constitution pertaining to the social contract. The government identified intercommunal harmony as one of its official goals. The previous alliance of communally based parties was replaced with a broader coalition -- the Barisan Nasional (BN) or National Front. The BN won large majorities in the 1974 federal and state elections.

Dr. Mahathir Mohamad was Prime Minister between 1981 and 2003, leading UMNO and BN to successive election victories. Mahathir emphasized economic development during his tenure, in particular the export sector, as well as large scale infrastructure projects. Mahathir attributed the success of the Asian tiger economies to the "Asian values" of its people, which he believed were superior to those of the West. Mahathir sharply criticized the International Monetary Fund (IMF), international financiers such as George Soros, and Western governments during the sharp economic and financial crisis that affected Asia in 1997-8, and denied that the downturn was due to the failures of corruption and "crony capitalism."

The end of Mahathir's tenure was marred by a falling out with his deputy and presumed successor, Anwar Ibrahim. In September 1998, Mahathir dismissed Anwar and accused him of immoral and corrupt conduct. Although Anwar was convicted on both charges in 1999 and 2000, the trials were viewed as seriously flawed. Malaysia's Federal Court eventually freed Anwar after overturning his immoral conduct conviction in September 2004.

Mahathir stepped down as prime minister in October 2003 after 22 years in power, and his successor, Deputy Prime Minister Abdullah Ahmad Badawi, was sworn into office. Abdullah called elections and won an overwhelming victory in March 2004, with Barisan Nasional taking 199 of 219 seats in the lower house of parliament. UMNO itself won 110 seats. The Islamic opposition party (PAS), which had made electoral inroads in 1999, was reduced to six seats in parliament and lost control of the state of Terengganu. The left of center Democratic Action Party (DAP), with predominately urban ethnic Chinese support, won 12 seats in parliament, and party chairman Lim Kit Siang became Leader of the Opposition in parliament.

Since taking office, Abdullah, an Islamic scholar, has promoted the concept of "Islam Hadhari" or "civilizational Islam," emphasizing the importance of education, social harmony and economic progress. Abdullah continues to place increased focus on rural development, including the agricultural sector. Unhappy with the cancellation of various development projects begun under the previous administration, Mahathir publicly criticized Abdullah on multiple occasions in 2006; however Mahathir's attacks were blunted when he failed to be elected as a delegate to the UMNO party convention in November.

ECONOMY
Since the 1970's, Malaysia has transformed itself from an economy dependent on raw materials production and with a largely poor population to a multi-sector economy with a middle-income population. The industrial sector has been the primary source of economic growth since the 1980's, particularly the manufacture of electronics for export. However, export dependence has exposed the economy to global market fluctuations and to economic changes in its top export destinations and key sources of foreign investment, such as the United States and Japan.

At independence, Malaysia inherited an economy dominated by two commodities--rubber and tin. In the 40 years thereafter, Malaysia's economic record was one of Asia's best. From the early 1980s through the mid-1990s, the economy experienced a period of broad diversification and sustained rapid growth averaging almost 8% annually. New foreign and domestic investment played a significant role in the transformation of Malaysia's economy. Manufacturing grew from 13.9% of GDP in 1970 to 30.9 % in 2003, while agriculture and mining, which together had accounted for 42.7% of GDP in 1970, dropped to 8.7% and 7.2 %, respectively, in 2003. Malaysia is one of the world's largest exporters of semiconductor devices, electrical goods, and appliances, and the government has ambitious plans to make Malaysia a leading producer and developer of high-tech products, including software. The Government of Malaysia has taken an active role in guiding the nation's economic development. Malaysia's New Economic Policy (NEP), first established in 1971, sought to eradicate poverty and end the identification of economic function with ethnicity. In particular, it was designed to enhance the economic standing of ethnic Malays and other indigenous peoples (collectively known as "bumiputeras" ). Rapid growth through the mid-1990s made it possible to expand the share of the economy for bumiputeras without reducing the economic attainment of other groups. One controversial NEP goal was to alter the pattern of ownership of corporate equity in Malaysia, with the government providing funds to purchase foreign-owned shareholdings on behalf of the bumiputera population. In June 1991, after the NEP expired, the government unveiled its National Development Policy, which contained many of the NEP's goals, although without specific equity targets and timetables. In April 2001, the government released a new plan, the "National Vision Policy," to guide development over the period 2001-10. The National Vision Policy targets education for budget increases and seeks to refocus the economy toward higher-technology production. The goal is for Malaysia to be a fully-developed economy by 2020.

In July 2005, the government removed the 7-year old peg linking the ringgit's value to the U.S. dollar (at an exchange rate of RM 3.8/U.S.$1.0), replacing it with a managed float against an undisclosed basket of currencies. This move aims to keep the ringgit stable to support the country's export-based economy.

FOREIGN RELATIONS
Malaysia views regional cooperation as the cornerstone of its foreign policy. It was a founding member of the Association of Southeast Asian Nations (ASEAN) and served as the group's chair most recently in 2005-6. It hosted the ASEAN Summit and East Asia Summit in December 2005, as well as the ASEAN Ministerial and the ASEAN Regional Forum in July 2006.

Malaysia is an active member of the Asia Pacific Economic Cooperation (APEC), the Organization of the Islamic Conference (OIC), the Non-Aligned Movement (NAM), and the United Nations. It is the current chair of the OIC and has also chaired the NAM. Malaysia hosted the APEC Leaders' Meeting in 1998.

Malaysia is a frequent contributor to UN and other peacekeeping missions, including recent deployments to East Timor, Indonesia, Pakistan, Sierra Leone, Kosovo and Lebanon.

U.S.-MALAYSIAN RELATIONS
The United States and Malaysia share a diverse and expanding partnership. Economic ties are robust. The United States is Malaysia's largest trading partner and Malaysia is the tenth-largest trading partner of the U.S. Annual two-way trade amounts to $45 billion. The United States is the largest foreign investor in Malaysia. American companies are particularly active in the energy, electronics and manufacturing sectors. The cumulative value of U.S. private investment in Malaysia exceeds $20 billion.

The United States and Malaysia launched negotiations for a bilateral free trade agreement (FTA) in June 2006. If the on-going negotiations are successful and the agreement is approved by Congress, Malaysia will become the largest U.S. trading partner with an FTA except for the NAFTA countries.

The United States and Malaysia enjoy strong security cooperation. Malaysia hosts the Southeast Asia Regional Center for Counterterrorism (SEARCCT), where over 1,100 officials from multiple countries have received training. The United States is the largest foreign provider of training courses at the center. The U.S. and Malaysia share a strong military-to-military relationship with numerous exchanges, training, joint exercises and visits.

Principal U.S. Embassy Officials
Ambassador--Christopher J. LaFleur
Deputy Chief of Mission--David B. Shear
Political Counselor--Mark D. Clark
Economic Counselor--Colin S. Helmer
Commercial Counselor--Joseph B. Kaesshaefer
Public Affairs Officer--Phillip Hoffmann
Agricultural Counselor--Jonathan P. Gressel
Consul--Andrew T. Miller

The U.S. Embassy in Malaysia is located at 376 Jalan Tun Razak, 50400 Kuala Lumpur (tel. 60-3-2168-5000, fax 60-3-2142-2207).

[This is a mobile copy of Malaysia (12/06)]