Malaysia - Country Overview

Overview

Country Name: Malaysia

Country Flag:

Historical Background

1400s–1500s: Early Kingdoms and the Malacca Sultanate

The Malacca Sultanate rose to prominence in the 15th century as a major maritime trading hub. Islam spread widely during this era, becoming the dominant religion in Malay society.

1511–1957: Colonial Rule

  • 1511: The Portuguese captured Malacca.
  • 1641: The Dutch took control, followed by the British in the late 1700s.
  • Malaysia (then known as Malaya) became part of British colonial rule, with key cities like Penang, Singapore, and Malacca forming the Straits Settlements.
  • The British developed rubber, tin, and palm oil industries, bringing in Chinese and Indian labour, shaping Malaysia’s multiracial identity.

1941–1945: Japanese Occupation

Japan invaded Malaya during World War II. The Japanese occupation disrupted British control and fueled local anti-colonial movements.

1957: Independence

  • On 31 August 1957, the Federation of Malaya gained independence under the leadership of Tunku Abdul Rahman.
  • 1963 Malaysia was formed with the inclusion of Sabah, Sarawak, and Singapore (which left in 1965 to become independent).

1969: Racial Riots and the New Economic Policy (NEP)

Ethnic tensions culminated in the May 13 riots, prompting the government to implement the NEP, aimed at reducing economic disparities between Malays and non-Malays.

1981–2003: Mahathir Era and Modernisation

Dr. Mahathir Mohamad served as Prime Minister for 22 years, transforming Malaysia into a newly industrialised economy with projects like the Petronas Towers and Putrajaya. His era saw both growth and political centralisation.

2018–Present: Democratic Transitions and Challenges

2018

Opposition coalition Pakatan Harapan won a historic election, ending 61 years of rule by Barisan Nasional. Mahathir returned as PM but resigned in 2020.

2020–2022

Political instability led to multiple leadership changes.

2022

Veteran reformist Anwar Ibrahim became Prime Minister after decades in opposition, forming a unity government.

Geography

Capital

Kuala Lumpur (Administrative Capital: Putrajaya)

Time Zone

Malaysia Standard Time (MST) (UTC+8)

Area

330,803 km² (127,724 sq mi)

Position in the world: 66th

Arable land: ~22.1%

Permanent crops 18.7%

Forest ~59.6%

Other ~<1%

Malaysia have very fertile land, the majority of the land mass is covered in lush rainforests and is 3.34 smaller than Ethiopia

Climate

Malaysia experiences a tropical rainforest climate throughout the year. The country has no distinct seasons, but rainfall and humidity are influenced by monsoon winds. 

West Malaysia (Peninsular):

Humid and hot all year round (25°C–35°C).

Experiences the Southwest Monsoon (May–September) and Northeast Monsoon (November–March), with the latter bringing heavier rain.

Cities like Kuala Lumpur and Penang are warm and receive frequent thunderstorms.

East Malaysia (Sabah and Sarawak, on Borneo):

Slightly cooler due to more forest cover and mountainous areas.

High annual rainfall, especially in the interior and coastal areas of Sarawak.

Cities like Kota Kinabalu and Kuching are known for consistent rainfall and high humidity.

Highland areas (e.g. Cameron Highlands, Genting):

Cooler temperatures, averaging 15°C–25°C.

Popular for agriculture and tourism due to pleasant weather.

States and Federal Territories: 

States:

  • Johor
  • Kedah
  • Kelantan
  • Malacca (Melaka)
  • Negeri Sembilan
  • Pahang
  • Penang (Pulau Pinang)
  • Perak
  • Perlis
  • Sabah
  • Sarawak
  • Selangor
  • Terengganu

Federal Territories:

  • Kuala Lumpur (national capital)
  • Putrajaya (administrative capital)
  • Labuan (offshore financial centre and duty-free island)

Minerals/Resources: 

Petroleum, natural gas, palm oil, rubber, tin, and timber.

Natural Disaster Susceptibility

Floods:
The most common natural disaster. Malaysia experiences seasonal flooding, especially during the Northeast Monsoon (Nov–March). Urban areas like Kuala Lumpur and Johor Bahru often suffer from flash floods due to poor drainage and rapid urbanisation. Rural states like Kelantan and Terengganu experience riverine flooding.

Landslides:
A major risk in highland and hilly areas, especially during prolonged rainfall. States like Pahang, Perak, and the outskirts of Selangor often report landslides, particularly near roadways or construction sites.

Droughts:
Occasionally occur during extended El Niño periods, leading to water shortages and agricultural disruption, particularly in states like Kedah and Perlis.

Haze and Air Pollution:
An annual transboundary problem caused by forest fires in Indonesia, particularly on Sumatra and Kalimantan. The haze affects air quality across Malaysia and disrupts school, work, and public health.

Tsunami Risk:
Malaysia’s west coast (especially Penang and Kedah) was affected by the 2004 Indian Ocean tsunami, though generally the country is shielded by the Sumatra landmass and considered low-risk for future large tsunamis.

Earthquakes:
Malaysia is not on a major tectonic fault line and rarely experiences earthquakes. However, Sabah in East Malaysia has recorded moderate seismic activity, including a deadly quake in 2015 (Mount Kinabalu area).

Border Countries

  • Thailand (land)
  • Indonesia
  • Brunei
  • Philippines (maritime)

Maritime Claims

Malaysia, as a coastal and maritime nation, has made significant claims under UNCLOS (United Nations Convention on the Law of the Sea):

  • Territorial Waters:
    Extends 12 nautical miles from the coastline, within which Malaysia exercises full sovereignty over activities such as navigation, fisheries, and security.
  • Contiguous Zone:
    24 nautical miles from the baseline, where Malaysia can exercise limited control to prevent or punish infringements of its customs, fiscal, immigration, or sanitary laws.
  • Exclusive Economic Zone (EEZ):
    Extends up to 200 nautical miles, giving Malaysia exclusive rights to explore, exploit, conserve, and manage natural resources, including oil, gas, and marine life.
  • Continental Shelf:
    Malaysia claims a continental shelf beyond 200 nm in some regions, especially off Sabah and Sarawak, where deepwater oil and gas fields exist.
  • Disputes and Overlaps:
    Malaysia has overlapping claims with China, Vietnam, Brunei, and the Philippines in the South China Sea, particularly in areas like the Spratly Islands. It maintains a diplomatic approach to managing these tensions, while strengthening maritime patrols and cooperation with ASEAN.

Political Landscape

Power Structure:
Malaysia is a federal constitutional monarchy. The Yang di-Pertuan Agong (King) is the ceremonial head of state and is elected every five years from among the hereditary rulers of nine Malay states. The Prime Minister is the head of government and holds executive power. Malaysia’s political system is parliamentary in structure, with the Cabinet drawn from the elected legislature.

Parliamentary Structure:
Malaysia has a bicameral parliament:

Dewan Rakyat (House of Representatives): 222 elected members; holds legislative power.

Dewan Negara (Senate): 70 members, mostly appointed (some by state assemblies, some by the King).

Current Leadership:
As of 2024, the Prime Minister is Anwar Ibrahim, leading a multi-coalition unity government under Pakatan Harapan. While Malaysia is a democracy, the political scene is often dominated by ethnic-based parties, and frequent party-switching and coalition collapses have led to instability in recent years.

Political Landscape:
Malaysia allows for free elections and active political opposition, but race and religion play a central role in politics. The United Malays National Organisation (UMNO), long dominant, has declined, while coalitions like Pakatan Harapan and Perikatan Nasional compete for influence. Issues like corruption (e.g. 1MDB scandal), press freedom, and judicial independence remain key concerns, though recent elections have increased public engagement and democratic participation.

Geopolitical Landscape

Regional Power: Southeast Asia and ASEAN Leadership

Malaysia plays an active role in the Association of Southeast Asian Nations (ASEAN) and promotes regional stability, economic integration, and diplomacy. It often mediates disputes and advocates for multilateralism and non-intervention in domestic affairs.

South China Sea Disputes

Malaysia is one of the claimant states in the South China Sea, with interests overlapping with China, Vietnam, and the Philippines. While Malaysia takes a cautious and diplomatic approach, it has increased its naval presence and formed closer security ties with other maritime democracies.

Key Strategic Allies and Partners

  • United States: Strong defense and economic ties. Cooperates on security, trade, and counterterrorism, though relations fluctuate depending on human rights concerns.
  • China: Malaysia’s largest trading partner. Chinese investment in rail, ports, and infrastructure is significant, though Malaysia remains wary of overreliance.
  • Japan and South Korea: Major economic partners, especially in the automotive, electronics, and manufacturing sectors.
  • India: Ties have grown through trade and cultural diplomacy, though past diplomatic tensions have flared over religious issues.
  • Middle East: Strong religious and economic ties, particularly with Saudi Arabia and UAE in the areas of Islamic finance and oil.

Security and Counterterrorism

Malaysia actively combats Islamist extremism, monitors domestic radicalisation, and cooperates with international partners on cybersecurity and counter-terror efforts.
The government is also investing in coast guard capabilities and improving maritime domain awareness, especially in the Straits of Malacca, one of the world’s busiest trade routes.

Government

Government Type

Federal Constitutional Monarchy.

Monarch 

King Sultan Ibrahim (as of 2024)


Prime Minister

Anwar Ibrahim (as of 2024)

Top 3 Political Parties and Their Ideological Influence:

  • United Malays National Organization (UMNO) 

Ideology: Nationalist, center-right.

  • Democratic Action Party (DAP)

Ideology: Social democratic, center-left.

  • Malaysian Islamic Party (PAS)

Ideology: Islamist, conservative.

Elections

General elections occur every five years. The last election was in 2022.

Upcoming Elections

Expected in 2027

Foreign Policies

Malaysia’s foreign policy is built on principles of neutrality, non-alignment, and multilateralism:

  • ASEAN First:
    Malaysia supports ASEAN unity, neutrality in global rivalries, and peaceful conflict resolution.
  • Non-Alignment:
    Malaysia avoids military alliances, promoting balanced diplomacy between major powers like the U.S., China, and the EU.
  • South-South Cooperation:
    Strong advocate for cooperation among developing nations. Malaysia supports Palestinian statehood, engages with African and Latin American countries, and promotes Islamic solidarity through the Organisation of Islamic Cooperation (OIC).
  • Trade and Economic Diplomacy:
    Focuses on attracting foreign investment and expanding exports. Actively involved in trade agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and RCEP.
  • Environmental and Global Engagement:
    Committed to climate action, sustainable palm oil, and forest preservation. Participates in UN peacekeeping missions and upholds the rules-based international order.

Economic Landscape

Size in World:  35th largest economy (by nominal GDP)

GDP: 97.1 USD billion (2024 Q4)

GDP Per Capita: 2 848 USD (2024 Q4)

Currency: Malaysian Ringgit (MYR).

Dominant Economic Sector: Services

Market Type: Mixed eEconomy

FDI by Country

Inbound

  • China
  • US
  • Japan
  • Singapore
  • Netherlands

Outbound

  • Indonesia
  • Vietnam
  • Thailand
  • US
  • India

Some Major Trading Partners

Imports

  • China
  • Singapore
  • Japan
  • US
  • Thailand

Exports

  • China
  • Singapore
  • US
  • Hong Kong
  • Japan

Social Landscape

Population: 34.2 million (2024).

Class Distribution

Upper Class: 5-10%

Middle Class: 40-50%

Lower Class/Poverty: 30-40%

Gini Coefficient:  40.4 (2022).

Language

  • Official Language: Malay (Bahasa Malaysia).
  • Other Languages: English, Mandarin, Tamil, and indigenous languages.

Religion

  • Dominant Religion: Islam (official religion, approx. 63%).
  • Other Religions: Buddhism, Christianity, Hinduism, and traditional Chinese religions.