POL 205Asian PoliticsDr. LairsonMalaysia

Malaysia is Singapore lite

500 years Malaysia has been collection of sultanates with areas like Penang, Malacca, and other pieces controlled by foreign states.

19th century – tin and rubber

Profits lead British to establish much greater direct rule

Depression and war undermine British rule

Postwar environment is greatly changed

Malaysian communist party insurrection based in Chinese

Independence in 1957 with sultans and democracy

United Malay National Organization (UMNO) - that allied with the Malaysian Chinese Association (MCA) organized by Chinese businessmen and the Malaysian Indian Congress (MIC) to establish a winning political coalition based on conservative political preferences

Natural resources abound in Malaysia

Very fertile landTinRubberPalm oilOil

Very different ethnic adaptation to commercial lifeBumiputera (sons of the soil)ChineseIndians

Native Malays have been historically disadvantaged in participating in the modern economy. They have suffered from cultural resistance to saving, accumulation and investment and from British policies that discouraged anything other than farming. By contrast, ethnic Chinese were much more deeply involved in trade and tin mining and by independence were as a group much wealthier than Bumiputera. In 1970, ethnic Chinese had control of about one-quarter of Malaysian firms whereas ethnic Malays controlled less than 2%.

Much resentment and ethnic conflict

1969 Bumiputera riots

Malaysian state and economic development

Bumiputera education and modernization were low

Foreign firm domination of primary product firms

Weak efforts to promote industrialization

1969 riots lead to major affirmative action efforts and tighter control of the government

Cronyism and patronage networks undercut economic developmentPenang leads the way toward emulating Singapore – build SEZ/FTZ

Electronics and semiconductor

Table IV.10The Role of FTZs in Malaysian Manufactured Exports, 1972-1982

Year FTZ Exports % Non-FTZ Exports % Total Man. Exports $Mal.1972 1.0 99.0 7231976 46.6 53.4 2,4851979 74.5 25.5 48601982 52,3 47.7 7516 Source: Rajah Rasiah, “Free Trade Zones and Industrial Development in Malaysia,” in Jomo K.S. (ed.) Industrialising Malaysia: Policy, Performance, Prospects, London: Routledge, 1993, 137.

By the 1980s overflow investment from Singapore – HDD industry

Recent developments:

6% economic growth

1997-98 Asian financial crisis

Split in UMNO – Anwar Ibrahim

Relationship to Guangdong by Malacca – New Silk Road Xiamen University in Selangor