Malaysia
Marching Well Together
Malaysia is a unique nation of great diversity. It is endowed with a variety of natural resources, and has long been a major producer of oil and gas, tin, palm oil, natural rubber, cocoa, and hardwood. Its population is ethnically mixed, with two prominent ethnic groups, Malay and Chinese. And its government is a parliamentary monarchy with a rotating hereditary monarch; the monarch changes every five years.
Ethnically, Malaysia is a heady mixture of people. Its population of 18 million is about 56 percent Malay, 34 percent Chinese, 8 percent Indian, and 2 percent "other." With political power in the hands of the Malays and economic power in the hands of the Chinese, Malaysia has had its share of racial friction. Malaysian business people are predominantly Chinese Malaysians. However, people of different ethnic backgrounds often work in the same organization. Women are not normally active in business in Malaysia, but there are many women in high positions in government and the professions.
Following racial disturbances in 1969, the government introduced numerous policies to enhance the status of native Malays (called Bumiputras) and promote a more equitable distribution of wealth in the country. Steps were taken to transfer some of the economic power held by Chinese Malaysians and others to Bumiputras. Some progress has been made (corporate equity in Bumiputra hands has increased from negligible amounts to about 24 percent). While these steps generated ill feelings on the part of Chinese Malaysians, economic development policies produced enough growth to satisfy the commercial appetites of all.
Malaysia's rotating monarchy is one in which the royalty of the nine sultanates share power with a strong federal government and a representative parliament. Every five years the hereditary rulers of these nine states elect one of their members to serve as the King of Malaysia for the succeeding five years. The King rules on the advice of a cabinet led by a Prime Minister. In practice, substantial power is exercised by the Prime Minister and his cabinet ministers.
Malaysia's political system is the result of an unusual national history. Peninsular Malaysia was first settled by Asiatic people from the north. (Geographically, the country is divided into two parts: Peninsular Malaysia to the west, where about 85 percent of the population lives, and East Malaysia on the island of Borneo.) In the 15th century, the rich silk and spice trade between Europe and the Far East established the port of Malacca (situated on the west coast of Peninsular Malaysia on the Straits of Malacca) as an important trading center. At first Portuguese traders controlled Malacca, then Dutch traders, and finally the British. Gradually all of Malaysia came under British influence and control. Tin mines and rubber plantations were developed with imported Chinese and Indian labor, and trade and industry steadily grew.
Except for three years of Japanese occupation during World War II, the British continued to control Malaysia (which they called Malaya) until 1957. In that year, as a result of a nationalist movement born out of the disruption of World War II, Malaysia declared its independence from Britain. A federation of 13 states was subsequently formed. (Singapore was originally one of 14 states of Malaysia, but it withdrew in 1965 to become an independent republic.) Nine of Malaysia's 13 states are sultanates, governed by the heirs of the sultans who once ruled them as kingdoms. The remaining four states are governed by appointed heads of state.
[Tip — Communications Style: Use a fairly formal style in communicating with Malaysians. Owing in part to the long British presence in Malaysia and in part to the country's collectivist traditions, Malaysians' communications style tends to be formalistic.]
Malaysia has achieved some of the highest growth rates in Asia in recent years. Exports of its abundant natural resources have long supported Malaysia's economy. More recently, however, successful promotion of foreign investment in manufacturing and various value-added activities have resulted in a manufacturing sector that now accounts for 55 percent of all exports. Malaysia's economic development promises to continue at a rapid pace. Under a planning program dubbed "Vision 2020," Malaysia expects to be "fully industrialized" by the year 2020. The current five year plan anticipates growth rates averaging 7.5 percent and emphasizes continued development of the manufacturing sector and a substantial infrastructure build-up. In addition, Malaysia is increasingly committed to free trade. Trade barriers have been steadily lowered in recent years. Moreover, the government has participated in a number of free trade initiatives as a member of the Association of Southeast Asian Nations (ASEAN) and the Asia Pacific Economic Cooperation forum (APEC). However, Malaysia is actively promoting an Asia-only trade group, called the East Asian Economic Caucus, that would exclude the United States, Canada, Australia, and New Zealand. Malaysia's reason for wanting an Asia-only group, it claims, is that Western trading styles promote governance styles that stress individual liberties over economic development.
The Malaysian government tends to be highly sensitive in international relations. Its prime minister, Dr. Mahathir bin Mohamad, was the only leader of an APEC nation who declined to attend last year's meeting of the 16-member organization, apparently in opposition to trade groups that include Western nations. When the prime minister of Australia, Paul Keating, referred to Mahathir as "recalcitrant," the Malaysian government proceeded to ban Australian-made TV shows from broadcast in Malaysia, and canceled a student exchange program for Malaysians studying in Australia.
[Tip — Government Sensitivities: Be sensitive to the political and ethnic winds of Malaysia. If you are dealing with government officials, expect them to be highly development-oriented and critical of Western trade policies. If you are dealing with Malaysian business people, anticipate that transactions involving relations with their own government can sometimes be delicate.]
The attitudes of the Malaysian government are conservative. Criticism of the government by the media and others is not tolerated; pornographic materials (even soft porn like Playboy magazine) are confiscated by customs officials; convicted drug traffickers are put to death.
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