Malaysia ; Malaysian pronunciation: [m?lejsi?]) is a federal constitutional monarchy located in Southeast Asia. It consists of thirteen states and three federal territories and has a total landmass of 330,803 square kilometres (127,720 sq mi) separated by the South China Sea into two similarly sized regions, Peninsular Malaysia and East Malaysia (Malaysian Borneo). Peninsular Malaysia shares a land and maritime border with Thailand and maritime borders with Singapore, Vietnam, and Indonesia. East Malaysia shares land and maritime borders with Brunei and Indonesia and a maritime border with the Philippines and Vietnam. The capital city is Kuala Lumpur, while Putrajaya is the seat of the federal government. With a population of over 30 million, Malaysia is the 44th most populous country. The southernmost point of continental Eurasia, Tanjung Piai, is in Malaysia. Located in the tropics, Malaysia is one of 17 megadiverse countries on earth, with large numbers of endemic species.
Malaysia has its origins in the Malay kingdoms present in the area which, from the 18th century, became subject to the British Empire. The first British territories were known as the Straits Settlements, whose establishment was followed by the Malay kingdoms becoming British protectorates. The territories on Peninsular Malaysia were first unified as the Malayan Union in 1946. Malaya was restructured as the Federation of Malaya in 1948, and achieved independence on 31 August 1957. Malaya united with North Borneo, Sarawak, and Singapore on 16 September 1963 to become Malaysia. Less than two years later in 1965, Singapore was expelled from the federation.
The country is multi-ethnic and multi-cultural, which plays a large role in politics. About half the population is ethnically Malay, with large minorities of Malaysian Chinese, Malaysian Indians, and indigenous peoples. The constitution declares Islam the state religion while allowing freedom of religion for non-Muslims. The government system is closely modelled on the Westminster parliamentary system and the legal system is based on common law. The head of state is the king, known as the Yang di-Pertuan Agong. He is an elected monarch chosen from the hereditary rulers of the nine Malay states every five years. The head of government is the prime minister.
Since its independence, Malaysia has had one of the best economic records in Asia, with its GDP growing at an average of 6.5% per annum for almost 50 years. The economy has traditionally been fuelled by its natural resources, but is expanding in the sectors of science, tourism, commerce and medical tourism. Today, Malaysia has a newly industrialised market economy, ranked third largest in Southeast Asia and 29th largest in the world. It is a founding member of the Association of Southeast Asian Nations, the East Asia Summit and the Organisation of Islamic Cooperation, and a member of Asia-Pacific Economic Cooperation, the Commonwealth of Nations, and the Non-Aligned Movement.
Malaysia is a relatively open state-oriented and newly industrialised market economy. The state plays a significant but declining role in guiding economic activity through macroeconomic plans. Malaysia has had one of the best economic records in Asia, with GDP growing an average 6.5 per cent annually from 1957 to 2005. Malaysia’s economy in 2014–2015 was one of the most competitive in Asia, ranking 6th in Asia and 20th in the world, higher than countries like Australia, France and South Korea. In 2014, Malaysia’s economy grew 6%, the second highest growth in ASEAN behind the Philippines’ growth of 6.1%. The economy of Malaysia in terms of gross domestic product (GDP) at purchasing power parity (PPP) in 2014 was $746.821 billion, the third largest in ASEAN behind more populous Indonesia and Thailand and the 28th largest in the world.
In 1991, former Prime Minister of Malaysia, Mahathir Mohamad outlined his ideal in Vision 2020, in which Malaysia would become a self-sufficient industrialised nation by 2020. Najib Razak has said Malaysia could attain developed country status much earlier from the actual target in 2020, adding the country has two program concept such as Government Transformation Programme and the Economic Transformation Programme. According to a HSBC report, Malaysia will become the world’s 21st largest economy by 2050, with a GDP of $1.2 trillion (Year 2000 dollars) and a GDP per capita of $29,247 (Year 2000 dollars). The report also says “The electronic equipment, petroleum, and liquefied natural gas producer will see a substantial increase in income per capita. Malaysian life expectancy, relatively high level of schooling, and above average fertility rate will help in its rapid expansion”. Viktor Shvets, the managing director of Credit Suisse, has said “Malaysia has all the right ingredients to become a developed nation”. Port Klang in Selangor, the biggest and busiest port in Malaysia.
In the 1970s, the predominantly mining and agricultural-based economy began a transition towards a more multi-sector economy. Since the 1980s, the industrial sector, with a high level of investment, has led the country’s growth. The economy recovered from the 1997 Asian Financial Crisis earlier than neighbouring countries did, and has since recovered to the levels of the pre-crisis era with a GDP per capita of $14,800. Economic inequalities exist between different ethnic groups. The Chinese make up about one-quarter of the population, but accounts for 70 per cent of the country’s market capitalisation. Chinese businesses in Malaysia are part of the larger bamboo network, a network of overseas Chinese businesses in the Southeast Asian market sharing common family and cultural ties.
International trade, facilitated by the shipping route in adjacent Strait of Malacca, and manufacturing are the key sectors. Malaysia is an exporter of natural and agricultural resources, and petroleum is a major export.Malaysia has once been the largest producer of tin, rubber and palm oil in the world. Manufacturing has a large influence in the country’s economy, although Malaysia’s economic structure has been moving away from it. Malaysia remains one of the world’s largest producers of palm oil.
The Petronas Towers house the headquarters of the national oil company Petronas and are the tallest twin-towers in the world.
In an effort to diversify the economy and make it less dependent on export goods, the government has pushed to increase tourism to Malaysia. As a result, tourism has become Malaysia’s third largest source of foreign exchange, although it is threatened by the negative effects of the growing industrial economy, with large amounts of air and water pollution along with deforestation affecting tourism. The tourism sector came under some pressure in 2014 when the national carrier Malaysia Airlines had one of its planes disappear in March, while another was brought down by a missile over Ukraine in July, resulting in the loss of a total 537 passengers and crew. The state of the airline, which had been unprofitable for 3 years, prompted the government in August 2014 to nationalise the airline by buying up the 30 per cent it did not already own. Between 2013 and 2014, Malaysia has been listed as one of the best places to retire in the world too, with the country in third position on the Global Retirement Index. This in part was the result of the Malaysia My Second Home programme to allow foreigners to live in the country on a long-stay visa for up to 10 years. In 2015, Malaysia ranked in fourth position on The World’s Best Retirement Havens while getting in the first place as the best place in Asia to retire. Warm climate with British colonial background made foreigners easy to interact with the locals.
The country has developed into a centre of Islamic banking, and is the country with the highest numbers of female workers in that industry. Knowledge-based services are also expanding.To create a self-reliant defensive ability and support national development, Malaysia privatised some of its military facilities in the 1970s. The privatisation has created defence industry, which in 1999 was brought under the Malaysia Defence Industry Council. The government continues to promote this sector and its competitiveness, actively marketing the defence industry. Science policies in Malaysia are regulated by the Ministry of Science, Technology, and Innovation. The country is one of the world’s largest exporters of semiconductor devices, electrical devices, and IT and communication products. Malaysia began developing its own space programme in 2002, and in 2006, Russia agreed to transport one Malaysian to the International Space Station as part of a multibillion-dollar purchase of 18 Russian Sukhoi Su-30MKM fighter jets by the Royal Malaysian Air Force. The government has invested in building satellites in through the RazakSAT programme.