Polity: Dominant party
Population: 22,700,000
GNI/Capita: $8,209
Life Expectancy: 73
Religious Groups: N/A
Ethnic Groups: Malay and other indigenous (58 percent), Chinese (27 percent), Indian (8 percent), other (7 percent)
Capital: Kuala Lumpur

Political Rights Score: 5
Civil Liberties Score: 5
Status: Partly Free


With its Muslim-majority population and export-led economy, Malaysia was affected deeply in 2001 by the September terrorist attacks in the United States and the global economic slowdown. In his twentieth year in office, Prime Minister Mahathir Mohamad, seeking to regain support among moderate Malays who deserted the ruling party at the 1999 parliamentary elections, used the terror attacks to link the main opposition Pas party to Islamic extremism. For its part, Pas, which says it wants to turn Malaysia into an Islamic state, divided the opposition with its strident criticism of the U.S. military campaign in Afghanistan. Elections are not due until 2004, but speculation abounded whether Muslim Malays, who make up 60 percent of Malaysia's population, would be drawn more toward Mahathir's moderate brand of Islam or Pas's goal of imposing Islamic law and anti-American diatribes. During the year, the government also banned all political rallies and, for the first time in years, used the Draconian Internal Security Act to arrest opposition leaders.

Meanwhile, slumping demand for computer chips and other Malaysian exports helped push the economy into recession. With exports making up some 60 percent of gross domestic product, prospects for an economic recovery depend in part on how soon downturns end in two of Malaysia's main trading partners, the United States and Japan.

Malaysia was founded in 1963 through a merger of the former British colony of Malaya with the British colonies of Sarawak, Sabah, and Singapore (Singapore withdrew in 1965). The ruling National Front coalition has won at least a two-thirds majority in all general elections since 1957. The Front consists of 12 mainly race- and ethnic-based parties, led by the conservative, Malay-based United Malays National Organization (UMNO). Since becoming prime minister in 1981, Mahathir, the UMNO leader, has helped transform Malaysia from a sleepy backwater into a high-tech exporter. Arguing that economic development must come before individual liberties, he has also sharply restricted freedom of expression and other basic rights.

Malaysia's economy notched up nearly a decade of growth averaging more than eight percent annually until 1997, when the regional financial crisis caused growth to slow sharply. By then, poor banking supervision – and, many Malaysians argued, outright cronyism – had left companies saddled with huge debts. This placed many at risk of bankruptcy and threatened the health of the banking system. At the same time, the fixed rate of the ringgit made it impossible for the government to boost exports through devaluation. As the economy slid into recession in 1998, Mahathir loosened fiscal and monetary policies to stimulate growth. Rejecting this approach, Anwar Ibrahim, the deputy prime minister and Mahathir's heir apparent, said the government should adopt tight policies to restore investor confidence and staunch capital outflows. In September 1998, Mahathir sacked Anwar and had him detained on corruption and sodomy charges. Anwar was later convicted and jailed for abuse of power while covering up corruption in a trial that international and domestic observers said was politically motivated. Throughout the fall, police forcibly broke up unprecedented antigovernment demonstrations in Kuala Lumpur and several towns that drew thousands of students and middle class Malaysians calling for political reform.

Amnesty International declared Anwar a prisoner of conscience, echoing a widespread belief among Malaysians that Mahathir's real aim in prosecuting Anwar was to sideline him from politics. Mahathir's crude treatment of Anwar contributed to a large swing in the ethnic Malay vote to Pas from UMNO in the November 1999 parliamentary elections. While the National Front kept its two-thirds majority in parliament, UMNO itself lost 20 seats and Pas gained an equal number, overtaking the Chinese-based Democratic Party (DAP) as Malaysia's largest opposition party. Overall, the National Front won 148 seats, led by UMNO with 72. A new opposition Alternative Front coalition won 42 seats: Pas, 27; DAP, 10; and the National Justice Party (Keadilan), a new secular party formed by Anwar's wife, Wan Azizah Ismail, 5. Parti Bersatu Sabah, an opposition party based in Sabah state, won three seats. Turnout was 72 percent. Following the election, Mahathir said this upcoming term would be his last. The Alternative Front, meanwhile, named Pas President Fadzil Noor parliamentary opposition leader.

Since the election, both Mahathir, 76, and Pas have tried to woo ethnic Malay voters with appeals to Malay unity and their competing visions of the proper role of Islam in a modern nation. Long a champion of Muslim Malay interests but within a secular, tolerant society, Mahathir in 2001 tried unsuccessfully to convene a meeting of Malay parties, warned of growing Islamic radicalism in Malaysia – a thinly veiled barb at Pas – and argued that a Pas-led government, with its Islamic strictures, would be harmful to both moderate Malays and non-Muslims alike.

In conjuring up images of a Pas-led government trampling on basic rights, Mahathir seemed to be trying to shore up his support among ethnic Chinese voters. They went solidly to UMNO in 1999 and could again be a crucial swing vote in the next national elections. Pas's condemnation of Washington's response to the terror attacks appeared to be aimed at bolstering its support among Malays. It risked, however, alienating moderate Muslims and proved to be too divisive for the DAP, which in October pulled out of the Alternative Front.

In addition to waging a war of ideas, Mahathir used the Internal Security Act during the year to arrest 10 opposition activists (most of them senior Keadilan members) for allegedly planning armed antigovernment protests, and 12 Pas members or supporters, for allegedly planning an Islamic-based revolt. At year's end, 16 remained in jail.

Weakened by slumping exports and low world prices for plantation crops, palm oil, and rubber, Malaysia's economy shrank by 1.3 percent year-on-year in the third quarter of 2001, the first decline since the first quarter of 1999. Economists estimated that the economy would eke out marginal growth for the year after growing by 8.5 percent in 2000. The government predicted that unemployment would rise to 3.9 percent at the end of 2001, up from 3.1 percent in late 2000.

Political Rights and Civil Liberties

Malaysians face many hurdles to changing their government through elections as well as restrictions on many basic rights. The government gives itself an overwhelming advantage in elections through its selective allocation of state funds to supporters, use of security laws to restrict freedoms of expression and assembly, and partisan use of broadcast media. Despite these obstacles, the opposition Pas in 1999 retained control of Kelantan state and captured oil-rich Terengganu for the first time.

Malaysia's constitution vests executive power in a prime minister and cabinet. The house of representatives, which currently has 193 members, is directly elected for a five-year term. Over time, the government has concentrated power in the prime minister's hands, while parliament has become less of a forum for real debate, according to the U.S. State Department's February 2001 report on Malaysia's human rights record in 2000. The report noted, however, that opposition legislators do vigorously question government officials in parliament.

Opposition parties say the government uses its control of state funds to punish and deter support for the opposition. Pas is awaiting a ruling on its suit against the federal government and Petronas, the state energy firm, to regain control of offshore oil revenues due to Terennganu state. The federal government stopped paying the revenues, which previously made up four-fifths of Terennganu's budget, nine months after Pas won control of the state in the 1999 elections. Kuala Lumpur now disburses the revenues directly to Terengganu schools, hospitals, and communities. Elsewhere, the National Front-controlled states of Malacca and Penang withdrew some state business in 2000 from banks, contractors, and professionals suspected of supporting opposition parties.

Underscoring the difficulties facing Pas and other groups in taking on the federal government in court, observers have questioned the judiciary's independence in political cases. "Since 1988, government action, constitutional amendments, legislation restricting judicial review, and other factors steadily have eroded judicial independence and strengthened executive influence over the judiciary," according to the U.S. State Department report. Domestic and international human rights groups roundly condemned as politically motivated both Anwar's six-year prison sentence in 1999 for abuse of power and a nine-year sentence in 2000 for sodomy.

At the same time, courts ruled against Kuala Lumpur in at least two sensitive cases in 2001. A lower court in May ordered the release of two opposition activists detained under the Internal Security Act (ISA), while the high court in June overturned a ruling coalition candidate's victory in a 1999 state election in Sabah after finding that the election roll included nonexistent voters. In another development, the Malaysian Bar Council denounced in March the more than 70 multimillion-dollar libel suits brought since 1994 against journalists and other media defendants. The group said the litigation had a "chilling" effect on free expression.

Malaysia's police have in recent years killed dozens of criminal suspects. Press reports suggest that some of the police killings may have been appropriate under the circumstances. Authorities have prosecuted officers in some death cases. Police also at times torture, beat, or otherwise abuse ordinary prisoners and detainees, according to Amnesty International. Following its first public inquiry, Malaysia's official Human Rights Commission ruled in August that police used excessive force in breaking up a November 2000 Keadilan rally just outside Kuala Lumpur. The commission, however, lacks enforcement powers and can only recommend government action.

Despite recent improvements in food and water rations, conditions in detention centers for illegal aliens still "pose a threat to life and health" because of reportedly inadequate food, health care, and sanitation, the U.S. State Department report said. Ordinary prisons are poorly maintained and overcrowded.

Domestic and international human rights groups criticized the government's use of the ISA in 2001 to jail several political opponents. Overall, the government detains hundreds of suspects each year under the ISA and two other acts that also permit long-term detention without judicial review or formal charges – the 1969 Emergency Ordinance and the 1985 Dangerous Drugs Act (DDA). Both the ISA and the Emergency Ordinance allow authorities to detain suspects for up to two years. The DDA allows the government to detain suspected drug traffickers for successive two-year intervals, with periodic review by an advisory panel.

Enacted in 1960 to mop up the remnants of a Communist insurgency, the ISA has in recent years been used for long-term detention of suspected Communist activists, ordinary criminal suspects, and members of "deviant" Muslim sects. Officials also occasionally detain mainstream opposition politicians for under 60 days. Deputy Home Minister Zainal Abidin said in July that authorities were holding some 69 people under the ISA. At year's end, five of the ten opposition politicians and activists arrested under the ISA in April remained in jail under two-year detention orders. They included Keadilan deputy leader Tian Chua, its youth chief, Mohamad Ezam Noor, and social activist and media columnist Hishamuddin Rais. At least 11 Pas members or supporters arrested later in the year under the ISA for violating a ban on political rallies also remained in jail. Two student leaders arrested under the ISA in July were released within the month.

The government also continues to prosecute political opponents under laws that, unlike the ISA, do require trials. At year's end, courts continued to hear the cases of two opposition leaders charged in 2000 under the Sedition Act and a third who was charged that year under the Official Secrets Act. In addition, social activist Irene Fernandez began an unprecedented sixth year on trial in 2001 over a 1995 report by her watchdog group, Tenaganita (Women's Force), that detailed alleged abuse and torture of migrant workers at detention camps. Fernandez faces up to three years in prison if convicted of violating the Printing Presses and Publications Act (PPPA) ban on publishing "malicious" news. Lim Guan Eng, the DAP deputy leader, spent 12 months in jail in the late 1990s for publicly criticizing the government's handling of statutory rape allegations against a former state chief minister. Lim was convicted under the PPPA and the Sedition Act, which restricts public discussion of sensitive issues such as race and religion.

Political news coverage and editorials in Malaysia's main private newspapers strongly support the government line. Most major papers are owned by businessmen and companies close to the ruling National Front. Among smaller papers, many Chinese-language publications offer fairly balanced coverage and several Malay-language papers are pro-opposition. Responding to antigovernment criticism in the Malay press, authorities in 2000 refused to renew the permits of several opposition political weeklies. They also restricted Harakah, the Pas newspaper, to two editions per month from twice-weekly. Officials used provisions in the PPPA that permit the government to ban or restrict allegedly "subversive" publications and require newspapers to renew their licenses annually.

State-run Radio Television Malaysia and the two private television stations generally offer flattering coverage of the government and rarely air opposition views. Federal authorities have sat on a long standing request for a radio license by the opposition government in Kelantan. Every other state has its own station.

Opposition groups faced a new stumbling block to reaching supporters after the government in July banned all political rallies, stating they posed threats to national security. Following the ban, police denied permits for Pas to hold political meetings, broke up several unauthorized gatherings, and used the ISA to arrest at least a dozen Pas members or supporters. They included Nik Adli Nik Aziz, the son of a leading PAS official. The government claimed the men belonged to a subversive movement that officials referred to as the Malaysian Mojahedin Group.

Prior to the ban, police had forcibly broken up many of the dozens of antigovernment demonstrations held since Anwar's 1998 jailing and arrested hundreds of protesters, including many opposition leaders. Courts acquitted many of those arrested, but sentenced some to jail terms of one to three months. Many were accused of violating the 1967 Police Act, which requires permits for all public gatherings except for workers on picket lines. Antigovernment speeches and demonstrations were rare in Malaysia prior to Anwar's arrest and sentencing.

Malaysia has thousands of active nongovernmental organizations (NGO), but authorities have refused to register some groups. The 1966 Societies Act requires any NGO with more than six members, including political parties, to register with the government. University students are legally barred from being active without their school's permission in any political party, NGO, or trade union. The Universities and University Colleges Act also bans political rallies and meetings on campus.

Islam is Malaysia's official religion, but Buddhists, Christians, Hindus, Sikhs, and other religious minorities worship freely in this secular country. The government restricts the rights of Muslims to practice teachings other than Sunni Islam by monitoring the Shia minority and periodically detaining under the ISA members of "deviant" sects. Partly to prevent the opposition Pas from spreading its political message through mosques, authorities keep close tabs on sermons in state-affiliated mosques.

Sharia (Islamic law) courts run by each of Malaysia's 13 states have authority among Muslims over family and property matters. The interpretations of Islamic law in many states favor males in inheritance matters, and many NGOs say the Islamic courts discriminate against women, particularly in divorce matters, according to the U.S. State Department report. Pas-controlled administrations in Kelantan and Terengganu have imposed on Muslims some religious-based dress, dietary, and cultural restrictions.

Despite continued gains, women are still underrepresented in the professions, civil service, and politics. The government has in recent years introduced programs to promote women's equality in education and employment, adopted a law against domestic violence, and created programs to help victims of spousal abuse and rape. Some convicted rapists receive heavy punishments, including caning, but women's groups say many others receive sentences that are too light.

Some ethnic Chinese and Indians as well as many Malays criticized the government's April decision to extend by ten years a long standing policy that aims to boost the economic status of ethnic Malays and indigenous people through favored treatment in many areas. These include property ownership, higher education, civil service jobs, and business affairs. Critics say the system should be based on need rather than race. The government says the quotas have improved racial harmony. They were established in 1971 in response to anti-Chinese riots in 1969 that killed nearly 200 people. Despite some gains in wealth and professional achievement, Malays remain poorer on average than ethnic Chinese.

Indigenous people in peninsular Malaysia and the Borneo states generally have little input into government and business decisions affecting them. Indigenous people in Sarawak state on Borneo Island allege that land they consider theirs under customary rights is being encroached on by state and private logging and plantation companies. State governments in peninsular Malaysia are moving slowly in carrying out federal orders to transfer individual land titles to many of the roughly 100,000 indigenous Orang Asli people there, according to the U.S. State Department report.

Most Malaysian workers can join trade unions, with the exception of police and defense officials and small numbers of "confidential" and "managerial and executive" workers. The law permits a union to represent only workers in single, or similar, trades or industries. This prevents the formation of broad-based unions spanning multiple industries. In the export-oriented electronics industry, the government discourages national unions in favor of factory-level unions. Labor laws restrict strikes by allowing the government to refer labor disputes to the Industrial Court and prohibiting strikes while disputes are before that court. In practice, workers rarely strike. Unions, however, bargain collectively in many industries. Less than ten percent of Malaysian workers are unionized.

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