Edited by Anis Chowdhury and Iyanatul Islam
Chapter 6: Malaysia
Ahmad Zubaidi Baharumshah A short political and economic history Malaya came into existence after gaining political independence from the British rule in August 1957. It consisted then of 11 states in Peninsular Malaya. As Great Britain was divesting the last remnants of its empire in the region in the early 1960s, Malaya was transformed into Malaysia with the addition of the states of Sabah, Sarawak and Singapore in the confederation. In 1965, Singapore left the federation and became an independent country. The process of integrating Sabah and Sarawak with the peninsular economy has been a continuing political and economic challenge. Yet much has been achieved in this direction in the past decade. Malaysia’s historical march towards economic growth started with rubber in the early twentieth century, after some decades in the late nineteenth century of trying one plantation crop after another without much success. By 1929, British Malaya had attained the highest per capita GDP of any country (or territory) in Asia (Drabble, 2000). The development of the automobile industry in industrial countries, especially in the United States, created an almost insatiable demand for natural rubber for the production of tyres. Although dependence on primary export products often creates a boom and bust cycle, the rubber industry, combined with the expansion of the tin mining industry, made Malaya one of the most prosperous economies in the colonial world. The tax revenue from rubber and tin during the colonial years allowed the country to make social progress in spite of many...
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