The Shaping of Malaysia

It is four decades since Malaya achieved independence and thirty-three years since Malaysia was formed. The country has been transformed economically, socially, culturally and politically during this period. Notwithstanding the current economic crunch in Malaysia, how should we explain Malaysia’s transformation in recent times? Economic theories provide one answer, but economic growth also depends on the relationship between the state and capitalist markets; the country’s natural resource endowments; and its cultural and political preconditions. In this book an analysis of these factors is developed under three main themes: the nature of Malaysia’s natural and human resource endowments; the relationship between society and the economy; and the interactions between a corporate culture and the culture of society at large.

Malaysia has had a very long and complex geological history. In order to understand the geological origin and evolution of Malaysia, we must consider this in the context of the overall evolution of East and Southeast Asia and within a framework of global tectonics.

Malaysia is regarded as one of the most progressive countries in the world as far as management of its natural resources is concerned. Nevertheless, it remains to be seen if the ever-present contest between ecological and economic needs can be kept in balance. There are now very few people in the world in positions of responsibility who still do not recognise the overwhelming need for nature conservation and biological sustainability. The forest is a treasure house of various useful products of which timber is but one.^1,2,3

Malaysia forms part of the equatorial belt of tropical rainforest. The world’s tropical rainforests occur in three great areas, the largest being in and around the Amazon basin, the next in Southeast Asia extending throughout the islands of the Malay Archipelago and the third being the forests of Central West Africa. There are also smaller areas of rainforest in Sri Lanka, the north east coast of Australia and Hawaii. These rainforests, particularly those in the three great areas, are of paramount importance to the world’s climate. They are ecological zones with the richest variety of plant and animal species of all environments on this planet. Although they occupy only about ten per cent of the land area of the world, they contain around seventy per cent of the world’s species of both flora and fauna.

It is almost obligatory to begin a chapter on Malaysia’s peoples and cultures with a statement that Malaysia is a multiethnic and multicultural nation. Such a statement is made occasionally by Malay leaders, frequently by Malaysian Chinese and Indian cultural associations, and almost unfailingly by Malaysia’s cultural tourism promoters. Malaysia’s population now stands at around 20 million, divided along ethnic lines as 61.9 per cent bumiputra (mostly Malays), 29.5 per cent Chinese and 8.6 per cent Indians. Kadazans and Dayaks form the main indigenous groups of Sabah and Sarawak respectively. Several national leaders, including the Deputy Prime Minister at the time of writing, Anwar Ibrahim, have recently referred to Malaysia as an ‘Asia in microcosm’.¹

In the mid 1990s, Malaysia was well on the way to approaching Newly-Industrialised Country (NIC) status. In 1990, for example, nearly 27 per cent of GDP came from manufacturing industry. Nothwithstanding this, it is evident though that the level of industrialisation varies between East and Peninsular Malaysia, with the process being much more advanced in the latter. Moreover, the emergence of an integrated national economy was a slow process, arising from differing geographical locations, resource endowments and the cultural and ethnic backgrounds. The key to understanding uneven economic development in the Malaysian federation lies also in its historical and recent past and it is the aim of this chapter to examine and compare the pace of economic and social change in Peninsular and East Malaysia, taking a long-term view of their economic growth. The chapter concentrates on economic development prior to the Second World War, but also links the pre- and post- World War II periods. The chapter is structured in three parts. The first and major part focusses on economic and social change from about 1850 to 1940. It is argued that the foundations of an export-oriented economy and plural society were laid during this period. The second part analyses economic change from about 1946 to 1963 when colonial policies in Sabah and Sarawak brought these states closer to Malaya so that by the time of federation in 1963, the foundations of an integrated Malaysian economy had emerged.

This chapter examines Malaysia’s impressive economic record over the past decade and focusses on the timber industry and ecotourism as two incompatible economic activities in East Malaysia. These activities, introduced into culturally and ecologically fragile areas, raise broad questions about sustainable tourism and sustainable ecology.

In economic terms the principal world-trend over the last two centuries or so has been the transformation of predominantly agrarian societies into industrialised ones. This process occurred first in northwest Europe, with Britain the pioneer from the late eighteenth century, spreading to North America, Russia and Japan before World War II and in recent decades to much of the Asian region, and parts of Latin America and Africa. In many of the latter areas, however, progress to date has been very patchy. A major contrast can be seen in the patterns of change. Whereas a majority of the pre-World War II pioneers developed manufacturing industries comparatively quickly, serving both domestic and overseas markets, many post-1945 entrants, especially those with relatively small domestic markets, have had varying degrees of difficulty in embarking successfully on a similar transition.