MALAYSIA

CAPITAL: Kuala Lumpur

FLAG: The national flag consists of 14 alternating horizontal stripes, of which 7 are red and 7 white; a gold 14-pointed star and crescent appear on a blue field in the upper left corner.

ANTHEM: Negara Ku (My Country).

MONETARY UNIT: The Malaysian ringgit (m$), or dollar, is divided into 100 sen, or cents. There are coins of 1, 5, 10, 20, and 50 sens and 1 ringgit, and notes of 1, 5, 10, 20, 100, 500, and 1,000 ringgits. m$1 = us$0.26455 (or us$1 = m$3.78) as of 2005.

WEIGHTS AND MEASURES: The metric system became the legal standard in 1982, but some British weights and measures and local units also are in use.

HOLIDAYS: National Day, 31 August; Christmas, 25 December. Movable holidays include Vesak Day, Birthday of His Majesty the Yang di-Pertuan Agong, Hari Raya Puasa, Hari Raya Haji, the 1st of Muharram (Muslim New Year), Milad an-Nabi, Dewali, Thaipusam, and the Chinese New Year. Individual states celebrate the birthdays of their rulers and other holidays observed by native ethnic groups.

TIME: 7 pm = noon GMT.

LOCATION, SIZE, AND EXTENT

Situated in Southeast Asia, Malaysia, with an area of 329,750 sq km (127,317 sq mi), consists of two noncontiguous areas: peninsular Malaysia (formerly West Malaysia), on the Asian mainland, and the states of Sarawak and Sabah, known together as East Malaysia, on the island of Borneo. Comparatively, the area occupied by Malaysia is slightly larger than the state of New Mexico. Peninsular Malaysia, protruding southward from the mainland of Asia, comprises an area of 131,587 sq km (50,806 sq mi), extending 748 km (465 mi) sse-nnw and 322 km (200 mi) ene-wsw. It is bordered on the n by Thailand, on the e by the South China Sea, on the s by the Strait of Johore, and on the w by the Strait of Malacca and the Andaman Sea, with a total boundary length of 2,068 km (1,285 mi).

Sarawak, covering an area of 124,449 sq km (48,050 sq mi), on the northwest coast of Borneo, extends 679 km (422 mi) nne-ssw and 254 km (158 mi) ese-wnw. It is bounded by Brunei on the n, Sabah on the ne, Indonesia on the e and S, and the South China Sea on the w. Sarawak's total boundary length is 2,621 km (1,629 mi). Situated at the northern end of Borneo, Sabah has an area of 74,398 sq km (28,725 sq mi), with a length of 412 km (256 mi) e–w and a width of 328 km (204 mi) n–s. To the n is the Balabac Strait, to the ne the Sulu Sea, to the se the Celebes Sea, to the s Indonesia, to the sw Sarawak, and to the w the South China Sea, with a total boundary length of 2,008 km (1,248 mi). the total boundary length of Malaysia is 7,344 km (4,563 mi), of which 4,675 km (2,905 mi) is coastline.

Malaysia claims several atolls of the Spratly Island group in the South China Sea. The claim, in a region where oil is suspected, is disputed by China, the Philippines, Taiwan, and Vietnam. Malaysia's capital city, Kuala Lumpur, is located in the western part of peninsular Malaysia.

TOPOGRAPHY

Four-fifths of peninsular Malaysia is covered by rain forest and swamp. The northern regions are divided by a series of mountain ranges that rise abruptly from the wide, flat coastal plains. The highest peaks, Gunong Tahan (Mt. Tahan—2,187 m/7,174 ft) and Gunong Korbu (2,183 m/7,162 ft), are in the north central region. The main watershed follows a mountain range about 80 km (50 mi) inland, roughly parallel to the west coast. the rivers flowing to the east, south, and west of this range are swift and have cut some deep gorges, but on reaching the coastal plains they become sluggish. The western coastal plain contains most of the country's population and the main seaports, George Town (on the offshore Pulau Pinang) and Kelang (formerly Port Swettenham). The eastern coastal plain is mostly jungle and lightly settled. It is subject to heavy storms from the South China Sea and lacks natural harbors.

Sarawak consists of an alluvial and swampy coastal plain, an area of rolling country interspersed with mountain ranges, and a mountainous interior. Rain forests cover the greater part of Sarawak. Many of the rivers are navigable. Sabah is split in two by the Crocker Mountains, which extend north and south some 48 km (30 mi) inland from the west coast, rising to over 4,101 m (13,455 ft) at Mt. Kinabalu, the highest point in Malaysia. Most of the interior is covered with tropical forest, while the western coastal area consists of alluvial flats making up the main rubber and rice land.

CLIMATE

The climate of peninsular Malaysia is equatorial, characterized by fairly high but uniform temperatures (23–31°c/73–88°f) throughout the year, high humidity, and copious rainfall averaging about 250 cm/100 in annually. There are seasonal variations in rainfall, with the heaviest rains from October to December or January; except for a few mountain areas, the most abundant rainfall is in the eastern coastal region, where it averages over 300 cm (120 in) per year. Elsewhere the annual average is 200–300 cm (80–120 in), the northwestern and southwestern regions having the least rainfall. The nights are usually cool because of the nearby seas. the climate of East Malaysia is relatively cool for an area so near the equator.

FLORA AND FAUNA

About 59% of Malaysia consists of tropical rain forest. In peninsular Malaysia, camphor, ebony, sandalwood, teak, and many varieties of palm trees abound. Rain forest fauna includes seladang (Malayan bison), deer, wild pigs, tree shrews, honey bears, forest cats, civets, monkeys, crocodiles, lizards, and snakes. the seladang weighs about a ton and is the largest wild ox in the world. An immense variety of insects, particularly butterflies, and some over 250 species of birds are found.

On Sabah and Sarawak, lowland forests contain some 400 species of tall dipterocarps (hardwoods) and semihardwoods; fig trees abound, attracting small mammals and birds; and groves are formed by the extensive aerial roots of warangen (a sacred tree to indigenous peoples). As altitude increases, herbaceous plants—buttercups, violets, and valerian—become more numerous, until moss-covered evergreen forests are reached at elevations of 1,520–1,830 m (5,000–6,000 ft). Butterflies, brilliantly colored birds of paradise, and a great wealth of other insect and bird species inhabit the two states.

As of 2002, there were at least 300 species of mammals and over 15,500 species of plants throughout the country.

ENVIRONMENT

The Environmental Quality Act of 1974 and other environmental laws are administered by the Division of Environment of the Ministry of Science, Technology, and Environment. Discharge of untreated sewage has contaminated the nation's water; the most heavily polluted areas are along the west coast. Malaysia's water pollution problem also extends to its rivers, of which 40% are polluted. The nation has about 580 cu km of water with 76% of annual withdrawals used for farming and 13% used for industrial activity. Discharge of oil by vessels in Malaysian waters is prohibited. Malaysia's cities have produced an average of 1.5 million tons of solid waste per year.

Clean-air legislation limiting industrial and automobile emissions was adopted in 1978. However, air pollution from both of these sources is still a problem. In the mid-1990s, Malaysia ranked among 50 nations with the world's highest industrial carbon dioxide emissions, which totaled 70.5 million metric tons per year, a per capita level of 3.74 metric tons per year. In 2000, total carbon dioxide emissions were 144 million metric tons.

Of Malaysia's total land area, 59% is tropical rain forest. Malaysia has the world's fifth-most-extensive mangrove area, which total over a half a million hectares (over 1.2 million acres). the country's forests are threatened by commercial interests. In 2003, about 5.7% of the total land area was protected, including two natural UNESCO World Heritage Sites and five Ramsar wetland sites.

According to a 2006 report issued by the International Union for Conservation of Nature and Natural Resources (IUCN), threatened species included 50 types of mammals, 40 species of birds, 21 types of reptiles, 45 species of amphibians, 34 species of fish, 17 types of mollusks, 2 species of other invertebrates, and 683 species of plants. Threatened species in Malaysia include the orangutan, tiger, Asian elephant, Malayan tapir, Sumatran rhinoceros, Singapore roundleaf horseshoe bat, four species of turtle (green sea, hawksbill, olive ridley, and leatherback), and two species of crocodile (false gavial and Siamese). At least three species have become extinct, including the double-banded argus.

POPULATION

The population of Malaysia in 2005 was estimated by the United Nations (UN) at 26,121,000, which placed it at number 44 in population among the 193 nations of the world. In 2005, approximately 5% of the population was over 65 years of age, with another 33% of the population under 15 years of age. There were 103 males for every 100 females in the country. According to the UN, the annual population rate of change for 2005–10 was expected to be 2.1%, a rate the government viewed as satisfactory. The projected population for the year 2025 was 36,058,000. The population density was 79 per sq km (205 per sq mi).

The UN estimated that 62% of the population lived in urban areas in 2005, and that urban areas were growing at an annual rate of 2.60%. The capital city, Kuala Lumpur, had a population of 1,352,000 in that year.

MIGRATION

Not until British economic enterprise first attracted foreign labor after 1800 did large-scale Chinese, Indian, and Malaysian migration (nonnative Indonesians and Borneans) take place. the early migrants were transients: in 1921, only 20.3% of the Chinese and 11.9% of the Indians were Malayan-born. However, migration data for subsequent years show a general tendency toward permanent settlement by these nonindigenous portions of the population. The percentages of the total Chinese population reporting Malaysia as their birthplace were 29.1%, 62.5%, and 74.4% for the years 1931, 1947, and 1957, respectively; the percentages of Indians reporting their birthplace as Malaysia were 21.1%, 51.4%, and 64.6% for the same respective years. By 1953, the Malays were a minority in their own territory. The government enacted legislation restricting further immigration, and by 1968 the Malays formed slightly more than 50% of the population. Regulations that took effect in 1968 concerning passports and border crossings between Malaysia and Indonesia and between Malaysia and the Philippines were also intended to restrict immigration. Between 1975 and 1996, Malaysia hosted more than 250,000 Indo-Chinese refugees and permitted the local integration of some 45,000 Filipino refugees in Sabah. Between 1975 and 1989, more than 250,000 Vietnamese refugees found asylum in Malaysia; the vast majority subsequently migrated to other countries.

In 2000 there were 1,392,000 migrants living in Malaysia, including 50,500 refugees. In 2004 persons of concern to the United Nations High Commissioner for Refugees (UNHCR) numbered 97,538. Refugees from Indonesia and Myanmar numbered 24,905, and asylum seekers, also from Indonesia and Myanmar, numbered 10,322. Others of concern numbered 63,311, including 57,197 Filipino Muslims, most residing in Sabah and Kuala Lumper.

According to Migration News, in 2005 there were about 1.5 million legal foreign workers in Malaysia, most from Indonesia, Bangladesh,India, and the Philippines, and another million unauthorized foreigners. Foreigners were about one-fourth of the total labor force of 10.5 million. Under government amnesty programs for unauthorized foreigners some 500,000 and 220,000 undocumented workers left in mid-2002 and in December 2004. In addition, between October 2004 and February 2005 another 380,000 unauthorized foreigner left or were expelled. Employers then claimed a shortage of workers on plantations and in construction. The government resumed the practice of permitting entrants on tourist visas to work if they found a job. In July 2005 the government declared that the 60,000 refugees in the country would be allowed to work.

The net migration rate in 2000–04 was an estimated zero migrants per 1,000. This rate does not reflect the unknown number of illegal immigrants, including large numbers from Indonesia and smaller numbers from the Philippines, Bangladesh, Myanmar (Burma), China, and India. The government views the immigration level as too high, but the emigration level as satisfactory.

ETHNIC GROUPS

The population of Malaysia consists of three main ethnic groups—Malays, Chinese, and peoples of the South Asian subcontinent. Collectively, indigenous groups are known as Bumiputras ("sons of the soil"). Estimates for 2004 reported the following distribution: Malays, 50.4%; Chinese, 23.7%; Bumiputras, 11%; Indians, 7.1%; and other groups, 7.8%. Malays predominate in the rural areas, while the Chinese are concentrated in urban and mining areas, where they control much of the nation's wealth; enmity between Malays and Chinese has occasionally erupted into violence. The non-Malay indigenous groups on the peninsula, collectively called the Orang Asli (aborigines), number about 147,000; they represent the poorest group of people in the country.

Non-Malay indigenous tribes constitute about half of Sarawak's residents; the largest indigenous group consists of the Sea Dayaks, or Ibans, followed by the Land Dayaks, or Bidayuh. the majority of Sabah's population consists of indigenous peoples, principally Kadazans, Bajaus, and Muruts. The balance is dominated by Chinese.

LANGUAGES

Bahasa Malaysia, or Malay, is the national language and the lingua franca of all Malaysia. The traditional Bahasa Malaysia script is Jawi, which derives from Arabic script, but Rumi, based on the Roman alphabet, is officially used in government, education, and business. English is widely employed in government and commerce and is a compulsory subject in all schools. Chinese (notably the Mandarin, Cantonese, Hokkien, Hakka, Hainan, and Foochow dialects), Tamil, Telugu, Malalalam, Punjabi, and Thai are spoken. In addition, in East Malaysia several indigenous languages are spoken, the largest of which are Iban and Kadazan. Most Malaysians are bilingual or multilingual.

RELIGIONS

In Malaysia, religious lines generally follow ethnic lines. Almost all Malays are Muslims; most Indians are Hindus, with a substantial minority of Muslims, Sikhs, and Parsees; and most Chinese are Confucian Buddhists, with a minority Muslim representation. Christianity has won some adherents among the Chinese and Indians. The indigenous peoples of Sabah and Sarawak are still largely animist, although many have become Christian. Shamanism is also practiced on East Malaysia.

According to a 2000 government census, about 60% of the population were Muslim, 19% Buddhist, 9% Christian, and 6% Hindu. About 3% practiced Confucianism, Taoism, or other traditional Chinese religions. Other faiths include animism, Sikhism, and Baha'ism.

Islam is the official religion and the head of state, the yang dipertuan agong, is also the national leader of the Islamic faith. While the constitution guarantees freedom to profess, practice, and propagate other religions, in practice religious practices of groups other than other than Sunni Muslims are restricted. Proselytizing of Muslims to non-Muslim religions is prohibited. the Malaysian Consultative Council of Buddhism, Christianity, Hinduism, and Sikhism is an interfaith organization promoting mutual understanding and peace between religions. the Malaysian Council of Churches and the Christian Federation of Malaysia serve a similar purpose. The National Human Rights Commission has also worked to promote dialogue between faiths. Certain Christian, Muslim, and Hindu holidays are recognized as national holidays.

TRANSPORTATION

In 2002, the highway system of Malaysia consisted of 64,672 km (40,187 mi) of roads, of which 40,707 km (25,295 mi) were paved, including 1,192 km (741 mi) of expressways. The major highways on peninsular Malaysia run north–south along the east and west coasts. East–west links connect George Town and Kota Baharu in the north and Kuala Lumpur and Kuantan farther south. As of 1991, (according to the Malaysian Highway Authority) the East–West Highway (Federal Route 2) crossing peninsular Malaysia, as well as the Klang Valley Expressway connecting Kuala Lumpur to Port Klang were completed. The 924-km (574-mi) North–South Highway along the west coast of peninsular Malaysia connects Thailand and Singapore. In 2003, registered vehicles included 5,590,000 automobiles and 1,142,000 commercial vehicles.

Malaysia's railway system as of 2004 consisted of 1,890 km (1,176 mi) of standard and narrow gauge railroads, of which 207 km (129 mi) was electrified. Of that total, narrow gauge lines accounted for 1,833 km (1,140 mi), of which 150 km (93 mi) were electrified. Rail lines on peninsular Malaysia are operated by the country's Malayan Railway Administration. These lines provide links to Thailand, Singapore, and the eastern parts of the peninsula. On the island of Borneo, the Sabah State Railways provides diesel service along the west coast and in the interior for 136 km (85 mi). There are no railroads in Sarawak.

There are 7,296 km (4,533 mi) of waterways in all of Malaysia: 3,209 km (1,994 mi) in peninsular Malaysia; 1,569 km (975 mi) in Sabah; and, 2,518 km (1,565 mi) in Sarawak.

The three leading ports, all located on the busy Strait of Malacca, are Kelang (the port for Kuala Lumpur), Johor Baharu, and George Town. Kuching is the main port for Sarawak, and Kota Kinabalu the main port for Sabah. The Malaysian merchant fleet in 2005 consisted of 346 ships of 1,000 GRT or more, totaling 5,389,397 GRT.

Also in 2004, there were an estimated 117 airports. As of 2005, a total of 37 had paved runways, and there was one heliport. Most international flights enter or leave Malaysia through Kuala Lumpur International Airport. Other principal airports include Kota Kinabalu, Kuching, and Penang. The Malaysian Airline System (MAS) provides domestic service to most major cities of the peninsula and to Sarawak and Sabah. In 2003, about 15.214 million passengers were carried on scheduled domestic and international flights.

HISTORY

The ancestors of the Malays came down from South China and settled in the Malay Peninsula about 2000 bc. Sri Vijaya, a strong Indo-Malay empire with headquarters at Palembang in southern Sumatra, rose about ad 600 and came to dominate both sides of the Strait of Malacca, levying tribute and tolls on the ships faring between China and India. In the 14th century, however, Sri Vijaya fell, and Malaysia became part of the Majapahit Empire centered in Java. About 1400, a fugitive ruler from Temasik (now Singapore) founded a principality at Malacca and embraced Islam. It was at Malacca that the West obtained its first foothold on the peninsula. At the height of glory and power, the Malacca principality fell to Portugal in 1511. In their turn, the Portuguese were driven out by the Dutch in 1641. The British East India Company laid the groundwork for British control of Malaya in 1786 by leasing from the sultan of Kedah the island of Pinang, off the west coast of Malaya, about 800 km (500 mi) north of Singapore. Fourteen years later, it obtained from him a small area on the mainland opposite Pinang. In 1819, Sir Thomas Stamford Raffles obtained permission to establish a settlement at Singapore; in 1824, by agreement and financial settlement, the island was ceded to the British East India Company. In the following year, the Dutch settlement at Malacca was ceded to Great Britain. Pinang, Singapore, and Malacca were combined under British rule in 1829 to form the Straits Settlements. The states of Perak and Selangor in 1874 secured treaties of protection from the British. Similar treaties were subsequently made with the sultans of Negri Sembilan (1874–89) and Pahang (1888). In 1895, these four states became a federation (the Federated Malay States), with a British resident-general and a system of centralized government. In 1909, under the Bangkok Treaty, Siam (now Thailand) ceded to British control the four northern states of Kelantan, Trengganu, Perlis, and Kedah. These four, together with Johor, which in 1914 was made a British protectorate, became known as the Unfederated Malay States. Separate British control was extended to Sabah, then known as North Borneo, in 1882. Six years later, North Borneo and Sarawak each became separate British protectorates. Tin mining and rubber cultivation grew rapidly under British rule, and large numbers of Chinese and Indian laborers were imported for these industries.

Japanese forces invaded Malaya and the Borneo territories in December 1941 and occupied them throughout World War II. Within a year after the Japanese surrender in September 1945, the British formed the Malayan Union, consisting of the nine peninsular states, together with Pinang and Malacca; also in 1946, Singapore and the two Borneo protectorates became separate British crown colonies. The Malayan Union was succeeded by the Federation of Malaya on 1 February 1948. Over the next decade, the British weathered a Communist insurgency as Malaya progressed toward self-government. On 31 August 1957, the Federation of Malaya became an independent member of the Commonwealth of Nations. On 1 August 1962, Great Britain and Malaya agreed in principle on the formation of the new state of Malaysia—a political merger of Singapore and the British Borneo territories (Sarawak, Brunei, and North Borneo) with the Federation. On 1 September 1962, by a 70% plurality, Singapore voted in a referendum for incorporation in the proposed Malaysia, but an abortive revolt staged by Brunei's ultranationalist Brunei People's Party in December 1962 eliminated the sultanate from the proposed merger. On 16 September 1963, the Federation of Malaya, the State of Singapore, and the newly independent British colonies of Sarawak and Sabah merged to form the Federation of Malaysia ("Federation" was subsequently dropped from the official name). On 7 August 1965, Singapore seceded from the Federation and established an independent republic. From the outset, Indonesia's President Sukarno attempted by economic and military means to take over the young nation and incorporate in into Indonesia; cordial relations between the two countries were not established until after Sukarno's ouster in 1966. Internal disorders stemming from hostilities between Chinese and Malay communities in Kuala Lumpur disrupted the 1969 national elections and prompted the declaration of a state of emergency lasting from mid-1969 to February 1971. Successive governments managed to sustain political stability until 1987, when racial tensions between Chinese and Malay increased over a government plan to assign non-Mandarin-speaking administrators to Chinese-language schools.

Between 1978 and 1989 Malaysia provided asylum to about 230,000 Vietnamese refugees as they awaited resettlement in the West. In March 1989 Malaysia responded to the continuing influx of refugees and the Western nations' slow efforts to place them with a plan to screen refugees in order to separate economic migrants from political refugees. This policy was confirmed by the United Nations (UN).

In October 1987 the Malaysian government, under provisions of the Internal Security Act (ISA), which allows detention without trial on grounds of national security, arrested 79 political and civil leaders and closed four newspapers in an effort to stifle dissent. The government called its actions necessary to prevent racial violence, but many prominent Malaysians, including Tunku Abdul Rahman, the country's first prime minister, condemned the actions. At the same time the government clamped down on all news sources disseminating what the government considered false news, and new legislation denied licensing to news sources not conforming to Malaysian values. In 1981 Dato' Hussein bin Onn was succeeded as prime minister by Sato' Sei Dr. Mahathir Mohamad, whose leadership came under criticism from within the United Malays National Organization (UMNO) and other political parties as racial tensions increased. Part of the challenge to Mahathir's party leadership came in the form of a legal suit claiming that some of the delegates to the UMNO elections of 1987 had not been legally registered, and therefore the election should be declared null and void. The High Court ruled that, due to the irregularities, UMNO was an unlawful society and that in effect the election was invalid. Mahathir held that the ruling did not affect the legal status of the government; he was supported by the ruling head of state, Tunku Mahmood Iskandar. In 1988 Mahathir formed a new UMNO, Umno Baru, and declared that party members would have to reregister to join. (Umno Baru was thereafter referred to as UMNO.) Under provisions of the ISA four people linked to the Parti Bersatu Sabah (PBS) were detained over alleged involvement in a secessionist plot in Sabah in June 1990. In July 1990 elections, the PBS won 36 of 48 seats in the Sabah State Legislative Assembly. Prior to the general election of 1990 the PBS aligned itself with the opposition, which had formed an informal electoral alliance, People's Might (Gagasan Rakyat). the National Front (BN) won 127 of the 180 seats, thus maintaining control of the House of Representatives with the two-thirds majority necessary to amend the constitution. The opposition increased its seats from 37 to 53. In 1992 the People's Might registered as a political organization and Tengku Razaleigh was elected chairman.

In 1990 the restructuring of the portfolio of the Ministry of Trade and Industry was rationalized into two new ministries—the Ministry of International Trade and Industry (MITI) and the Ministry of Domestic Trade and Consumer Affairs (MDTCA). In an action that was widely regarded as politically motivated, Datuk Seri Joseph Pairin Kitingan, chief minister of Sabah and president of the PBS, was arrested in January 1991 and charged with corruption, then released on bail. After subsequent meetings with Mahathir it was announced that the PBS state government had proposed power sharing with United Sabah National Organization (USNO). The head of USNO, Tun Mustapha Harun, resigned from USNO and joined UMNO. This switch necessitated a byelection and in May 1991 UMNO took its first seat in Sabah. the rise of Dayak nationalism in Sarawak was considered as less of a threat after the 1991 state elections. The Sarawak Native People's Party (Parti Bansa Dayak Sarawak—PBDS) retained only 7 of the 15 seats it had won in the 1987 election. A High Court ruling in 1991 upheld a ruling by the Ministry of Home Affairs banning the public sale of party newspapers. Speculation was that by targeting limited media outlets the government was muzzling the opposition press.

In 1991 UMNO raised the issue of the alleged abuse of privilege by Malaysia's nine hereditary rulers. A resolution tabled in 1990 had demanded the rulers be restrained from interfering in politics. In November 1992 the issue of the constitutional status of the sultans again arose when it was proposed that the rulers' immunity from prosecution be removed. The cases inpiring the proposed changes to the constitution were an assault on a hockey coach by the sultan of Johore, and a 1981 incident in which the sultan of Johore (before he became sultan) was convicted of homicide but pardoned by his father, who was sultan at the time. In January 1993 these proposed amendments to the constitution were passed. Immediately after passage of the bill, royal privileges other than those sanctioned and allocations not expressly provided in the constitution were withdrawn. The nine hereditary rulers first rejected the constitutional changes; however, they eventually agreed to a compromise formula on the bill that effectively removed the blanket legal immunity granted to them. The compromise upheld the constitutional stipulation of royal assent for laws affecting the monarchy. Criticism arose over Mahathir's handling of this situation, as it emphasized the antipathy between his authoritarian style and the "Malay way." These constitutional changes also highlighted Mahathir's moves to strengthen executive power at cost of the judiciary, to consolidate UMNO's control of the legislature, and to control the press. On 17 January 1994 Sabah's chief minister, Datuk Joseph Pairin Kitingan, was found guilty of corruption. the fine imposed on him fell short of the minimum required to disqualify him from office. Although the PBS won the Sabah polls in February 1994, Pairin resigned as the PBS's leading members joined the National Front, and the Sabah wing of UMNO (with 18 of 48 seats) was about to be installed. In August 1994 the government moved to ban the radical Islamic sect, Al-Arqam.

In the general election held 25 April 1995, the ruling National Front captured 162 parliamentary seats out of a possible 192, its biggest victory ever. The coalition won 64% of the popular vote and easily retained its two-thirds parliamentary majority.

The Asian economic crisis of 1997 affected both the economy and the political landscape in Malaysia. By early 1998, the Malaysian economy had undergone its first downturn in 13 years, and tensions over the handling of the crisis erupted between Prime Minister Mahathir, an economic isolationist, and his deputy, Anwar Ibrahim, who favored open-market policies. In September 1998, Mahathir removed Anwar from his cabinet and party posts and imposed currency controls. When Anwar publicly protested these moves and attempted to rally opposition to his former mentor's policies, he was arrested and later tried for corruption and sexual misconduct (sodomy). In 1999 Anwar was sentenced to six years in prison, and his wife launched a new political party, Keadilan (Justice), to contest the upcoming national elections.

The economy began to recover by the end of 1998 and in August 1999 the government officially announced that the recession was over. Responding to an April 2000 deadline for national elections, Mahathir called a snap election in November 1999. Although the arrest of Anwar and his treatment while in custody ignited widespread criticism of Mahathir and his government, the UMNO-led coalition maintained its two-thirds majority in parliament and Mahathir remained in power. However, electoral gains by the Islamic Party of Malaysia (Parti Se-Islam Malaysia—PAS) suggested a significant challenge to the popularity of the government and made PAS the country's largest opposition party.

On 9 March 2001, a wave of intercommunal violence between Malays and ethnic Indians began on the outskirts of Kuala Lumpur, the worst in more than 30 years. Six people, including five of Indian origin, were killed and over 50 were injured. Most of the wounded were ethnic Indians. When opposition leaders claimed the casualty figures were higher, the government threatened to charge them with sedition, although charges were never brought.

In early April 2001, days before public protests were scheduled for the second anniversary of the sentencing of Anwar, 10 opposition leaders were detained under Malaysia's Internal Security Act (ISA). The ISA allows the detention of suspects for up to two years without trial. Most of the detainees were members of the opposition party Keadilan founded by Anwar's wife, Wan Aziziah. the government used a variety of laws to restrict freedom of expression, and peaceful rallies were broken up by the police. An AntiISA Movement (AIM) was formed to work for the repeal of the ISA, which as of 2006 was still in effect.

In September 2001, Malaysia and Singapore came to a series of agreements over issues that had strained relations between them for years. Largely prodded by concern over the growing influence of Islam in Malaysian politics, Singapore agreed to a Malaysian proposal that the causeway linking the two countries be demolished and replaced by a bridge and undersea tunnel after 2007. Malaysia agreed to supply water to Singapore after two water agreements expire in 2011 and 2061. Also discussed were disputes over the use of Malaysian-owned railway land in Singapore, and requests by Singapore to use Malaysian air space.

With the rise in popularity of the Islamic PAS party, Malaysia's image as a moderate Islamic state began to be questioned. In the aftermath of the 11 September 2001 terrorist attacks on the United States, countries in Southeast Asia were asked by the United States to increase their security plans and efforts to combat terrorism. However, many nations have been cautious of a broad sweeping link between Islam and terrorist activities. In May 2002, members of Association of Southeast Asian Neighbors (ASEAN) met in Kuala Lumpur to form a united antiterror front (including strengthening laws to govern the arrest, investigation, prosecution, and extradition of suspects), and pledged to set up a strong regional security framework. Alleged militants with suspected ties to Osama bin Laden's al-Qaeda organization have been arrested in Malaysia. ISA detention was used as an antiterrorism measure, as were tightened laws against money laundering and harsher criminal penalties passed in 2003. The government continued to keep "extremist" Muslim organizations under surveillance.

In June 2002, Mahathir shocked the country with the news that he would resign in October 2003. It was to be the first transfer of the prime ministerial office in over 20 years. His successor was Abdullah Ahmad Badawi, one of three UMNO vice presidents. Badawi pledged to continue Mahathir's policies, but has a far more low-key political style. After just four months as an appointed prime minister, Badawi won an overwhelming mandate in the March 2004 national election, in which his UMNO took over 90% of the parliamentary seats, soundly defeating a challenge from the PAS opposition. During the election campaign, Badawi pledged more transparency in government. He also promoted a policy of Islam Hadhari (Civilized Islam) as a moderate, open, and tolerant alternative to fundamentalist or militant Islam.

Malaysia's Federal Court overturned the sodomy conviction of Anwar Ibrahim in September 2004, and he was freed after nearly six years of imprisonment. This was seen as the real end of the Mahathir era's authoritarianism, although Anwar's eventual role in Malaysian politics remained unclear through 2006. With Badawi's UMNO landslide in the 2004 elections, the status of the opposition as personified by Anwar was much diminished.

A devastating tsunami in December 2004 caused far less damage in Malaysia than in neighboring Thailand and Indonesia; there were fewer than 100 deaths in Malaysia and the Malaysian government did not seek international tsunami relief. A health emergency was declared in August 2005 when smoke from Indonesian forest fires enveloped Kuala Lumpur. Indonesia announced plans to indict 10 companies for burning forest land for plantations; 8 of the companies were Malaysian.

The Badawi government's policies regarding illegal immigrants, mostly from strife-prone areas of Indonesia and Myanmar, seemed inconsistent, when an amnesty was followed by a crackdown in March 2005. Immigrant workers were detained, imprisoned, and deported. With a need for workers, particularly in the construction sector, Malaysia continued to attract immigrants in 2005, and government policy appeared unclear regarding the political refugees and asylum seekers among those foreign workers.

GOVERNMENT

Malaysia is a constitutional monarchy consisting of 13 states, 9 of which were formerly sultanates under British protection and 4 of which (Melaka, Pulau Pinang, Sarawak, and Sabah) were former British settlements ruled by appointed governors.

The constitution, promulgated on 31 August 1957 and subsequently amended, derives from the former Federation of Malaya, with provisions for the special interests of Sabah and Sarawak. It provides for the election of a head of state, the yang di-pertuan agong (paramount ruler), for a single term of five years by the Conference of Rulers. The constitution also provides for a deputy head of state, chosen in the same manner and for the same term.

The Conference of Rulers consists of the nine hereditary sultans. Its consent must be obtained for any law that alters state boundaries; affects the rulers' privileges, honors, or dignities; or extends any religious acts, observances, or ceremonies to the country as a whole. The conference must also be consulted on proposed changes of administrative policy affecting the special position of the Malays or the vital interests of other communities.

The yang di-pertuan agong, who must be one of the hereditary sultans, is commander in chief of the armed forces and has the power to designate judges for the Federal Court and the High Courts on the advice of the prime minister, whom he appoints. Until January 1984, the paramount ruler had the right to veto legislation by withholding his assent; this right was lost in a constitutional compromise that gave the paramount ruler the right to delay new laws for up to 60 days but also stipulated that, if passed by a two-thirds majority, a bill may become law after six months without his signature.

The yang di-pertuan agong from 1979 to 1984 was Ahmad Shah al-Musta'in Billah Ibni al-Marhum, the sultan of Pahang. the leading candidate to succeed him was Idris al-Mutawakil Allahi Shah Ibni al-Marhum, the sultan of Perak, but when Idris died of a heart attack on 31 January 1984, the Conference of Rulers selected Mahmud Iskandar Ibni al-Marhum Sultan Ismail. As crown prince of Johor he had been convicted of homicide in a shooting incident in 1977 but had been pardoned by his father and became sultan in 1981. In 1989 the sultan of Perak, Azlan Muhibuddin Shah, became the yang di-pertuan agong. He was succeeded in 1994 by Tuanku Ja'afar ibni Al-Marhum Tuanku Abdul Rahman, who was in turn succeeded in 1999 by Salehuddin Abdul Aziz Shah ibni Al-Marhum Hismuddin Alam Shah. Salehuddin died in office on 21 November 2001 and was succeeded in 2002 by Tuanku Syed Sirajuddin ibni Almarhum Tuanku Syed Putra Jamalullail, the sultan of Perlis.

Executive power rests with the cabinet, chosen by the prime minister, who is the leader of the majority party or coalition of the house of representatives (Dewan Rakyat), the lower house of parliament. The 193 members of the house of representatives must be at least 21 years old; they are elected by universal adult suffrage (at age 21). Their term is five years unless the house is dissolved earlier. The 69-member senate (Dewan Negara) consists of 26 elected members (2 from each state); 2 members appointed by the paramount ruler to represent the federal territory of Kuala Lumpur, and 1 to represent the island of Labaun; and 40 members appointed by the paramount ruler on the basis of distinguished public service or their eligibility to represent the ethnic minorities. Senators must be at least 30 years old; they hold office for six year terms.

POLITICAL PARTIES

Before World War II, there was limited political activity in Malaya, but the Japanese occupation and its aftermath brought a new political awareness. Postwar political parties sought independence, and although the Malays feared domination by the populous minorities, particularly the economically stronger Chinese, the United Malays National Organization (UMNO), the leading Malay party, and the Malaysian Chinese Association (MCA) formed the Alliance Party in 1952. This party was later joined by the Malaysian Indian Congress (MIC) and became the nation's dominant political party. The Malayan Communist Party, a powerful and well-organized group after the war, penetrated and dominated the trade unions. In 1948, after the Communists had resorted to arms, they were outlawed.

In the elections of April 1964, the Alliance Party won a majority of 89 of the 154 House seats. The third general election since independence was held in peninsular Malaysia on 10 May 1969; in the balloting, the Alliance Party suffered a setback, winning only 66 seats. The election was followed by communal rioting, mainly between Malays and Chinese, resulting in much loss of life and damage to property. The government suspended parliament and declared a state of emergency; elections in Sarawak and Sabah were postponed until July 1970. By the time parliament was reconvened on 22 February 1971, the Alliance had achieved a two-thirds majority (required for the passage of constitutional amendments) with the addition of 10 unopposed seats from Sabah and through a coalition with the Sarawak United People's Party, which controlled 12 seats.

The elections for state assemblies resulted in a setback for the Alliance Party, which before the elections had controlled 10 of the 13 state assemblies, but after the elections only 7. In September 1970, Tunku Abdul Rahman retired as prime minister and was replaced by the deputy prime minister, Tun Abdul Razak. In 1973, the Alliance Party formed a broader coalition consisting of the UMNO, MCA, MIC, and eight minority parties. Known as the National Front and led by the UMNO, the ruling coalition was returned to power in the 1974, 1978, 1982, and 1986 elections with overwhelming majorities (148 of 177 seats in 1986). In April 1987, Mahathir narrowly overcame a challenge to his leadership of the UMNO. The principal opposition parties (which win few seats owing to a legislative apportionment scheme that heavily favors Malay voters) are the Chinese-based Democratic Action Party (DAP), founded in 1966, and the Parti sa Islam Malaysia (PAS), dedicated to establishing an Islamic state. The post-Mahathir 2004 elections made UMNO more dominant than ever, with an over 90% mandate.

As of 2003 there were more than 20 registered parties. the governing coalition is the Barisan Nasional (National Front), led by the United Malays National Organization (UMNO) and comprising 13 other parties, most ethnically based. Major opposition groups are the Muslim Unity Movement (APU), dominated by the Parti sa Islam Malaysia (PAS); the Democratic Action Party (DAP), which is predominantly Chinese and socialist; the Parti Bersatu Sabah (PBS); and Keadilan, formed by Wan Aziziah Wan Ismail, the wife of government official Anwar Ibrahim, who was jailed from 1999–2004.

In the election held 28 and 29 November 1999, the 193 seats of the lower house were distributed as follows: National Front (148 seats), DAP (10), PBS (3), PAS (27), and Keadilan (5). In the election, PAS won control of the state governments of Kelantan and Terengganu, giving it 2 of Malaysia's 13 states.

In the March 2004 general election, the UMNO-dominated Barisan Nasional (BN) coalition took 198 of 219 seats in parliament's lower house, and won control of 11 of 12 state governments contested. The opposition Parti Islam sa Malaysia (PAS) won only six seats, losing even in conservative Muslim states. the Democratic Action Party (DAP) won 12 seats, making DAP's Lim Kit Siang the opposition leader in the Malaysian parliament. the PAS and the DAP were at odds over religious policy issues and the opposition was in a particularly weakened position. The next national election was scheduled to take place by 2009.

LOCAL GOVERNMENT

Of the 11 peninsular Malaysian states, 9 are headed by sultans, who act as titular rulers and as leaders of the Islamic faith in their respective states. The other two peninsular states, Pinang and Melaka, are headed by federally appointed governors. State governments are parliamentary in form and share legislative powers with the federal parliament. Effective executive authority in each state is vested in a chief minister, selected by the majority party in the state legislature. The legislative assembly, composed of elected members, legislates in conformity with Malaysian and state constitutions, subject to the sultan's assent. In peninsular Malaysia the states are divided into districts, each of which consists of 5 to 10 subdistricts, called mukims (derah in Kelantan). Each mukim is responsible for varying numbers of kampongs (villages or compounds). The mukim may include villages or consist of large, sparsely populated tracts of land. Each one is headed by a penghulu (penggawa in Kelantan), a part-time official locally elected for five years, who serves as the principal liaison between the district and the village. The village elects a ketua (chief).

Upon incorporation into the Federation of Malaysia in 1963, both Sabah and Sarawak adopted separate constitutions for their local self-government; each is headed by a chief minister, appointed by the majority party of the elective legislature. In Sarawak, divisions and districts are the main subdivisions; in Sabah their counterparts are residencies and districts. The district officer is the most important link between the governing and the governed. His responsibilities are administrative, fiscal, and judicial. Kuala Lumpur, the national capital and former capital of Selangor State, was constituted as a separate federal territory, under the national government, on 1 February 1974. The mayor is appointed by the paramount ruler on the advice of the prime minister.

JUDICIAL SYSTEM

Malaysia has a unified judicial system, and all courts take cognizance of both federal and state laws. The legal system is founded on British common law. Most cases come before magistrates and sessions courts. Religious courts decide questions of Islamic law and custom. The use of religious law by states, and selective, inconsistent enforcement by religious officers, has become controversial. The use of the Internal Security Act (ISA) against dissidents and restrictions of the press and freedom of expression remain concerns of civil libertarians and international human rights organizations.

The Federal Court, the highest court in Malaysia, reviews decisions referred from the High Court of Peninsular Malaysia, the High Court of Sabah and Sarawak, and subordinate courts. the Federal Court, of which the yang di-pertuan agong is lord president, has original jurisdiction in disputes among states or between a state and the federal government. The Federal Court consists of the chief justice, the two chief judges from the High Courts, and seven other judges. Administrative detention is permitted in security cases, in which certain other guarantees of due process are reportedly suspended.

The judiciary has traditionally functioned with a high degree of independence. Most civil and criminal cases are fair and open. The accused must be brought before a judge within 24 hours of arrest. Defendants have the right to counsel and to bail. Strict rules of evidence apply in court and appeal is available to higher courts. Criminal defendants may also appeal for clemency to the paramount ruler or to the local state ruler. Severe penalties, including the death penalty, are imposed for drug-related offenses.

High courts have jurisdiction over all serious criminal cases and most civil cases. The sessions courts hear the cases involving landlord-tenant disputes and car accidents. Magistrates' courts hear criminal cases in which the maximum sentence does not exceed 12 months. The Court of Appeals has jurisdiction over high court and sessions court decisions.

ARMED FORCES

In 2005, Malaysia had 110,000 active personnel in its armed forces, with 51,600 reservists. The total strength of the Army was 80,000, including infantry and armored battalions, artillery regiments, and supporting air defense, signal, engineer, special forces, and administrative units. Equipment included 26 Scorpion light tanks, 418 reconnaissance vehicles, 1,020 armored personnel carriers, and 414 artillery pieces. The Navy had 15,000 active personnel including a 160-person naval aviation arm and a unit of naval commandos. Major naval units included 4 frigates, 6 corvettes, 35 patrol/coastal vessels, and 4 mine warfare ships. The naval aviation arm operated six antisubmarine warfare helicopters. the Air Force had 15,000 personnel and 63 combat capable aircraft that included 28 fighters and 16 fighter ground attack aircraft. Paramilitary forces numbered an estimated 20,100, and included aviation and marine police units. There was also the People's Volunteer Corps, which had 240,000 reservist personnel, of which around 17,500 were armed. In 2005, Malaysia provided support to 10 UN peacekeeping missions. Australia provides a small training mission. The defense budget for 2005 totaled $2.47 billion.

INTERNATIONAL COOPERATION

Malaysia became a member of the United Nations on 17 September 1957, and participates in ESCAP and several nonregional specialized agencies, such as the FAO, UNESCO, UNIDO, IFC, IAEA, the World Bank, and the WHO. It also belongs to the WTO, the Asian Development Bank, ASEAN, the Commonwealth of Nations, APEC, the Arab Bank for Economic Development in Africa, the Colombo Plan, the Organization of the Islamic Conference (OIC), and G-77.

Before the 1970s, Malaysia pursued a pro-Western policy, but it later promoted the neutralization of Southeast Asia while establishing ties with China, the Democratic People's Republic of Korea, and Cuba, and strengthening relations with the USSR and other East European states. Links with its traditional allies, including the United States, remained strong in the course of this transition. Relations with the United Kingdom were strained in the early 1980s, after the British imposed surcharges on foreign students attending universities in the United Kingdom and issued new regulations reducing opportunities for foreign takeovers of British-owned companies. Malaysia agreed to drop its "buy British last" campaign in 1983 after the United Kingdom expanded scholarship opportunities for Malaysian students.

In 1986 there was some friction with Singapore because of its improved relations with Israel. Malaysia shares the anti-Zionist ideology of the Arab League countries. The nation has offered support to UN missions and operations in Kosovo (est. 1999), Western Sahara (est. 1991), Ethiopia and Eritrea (est. 2000), Liberia (est. 2003), Sierra Leone (est. 1999), East Timor (est. 2002), and Burundi (est. 2004), among others. The country is part of the Nonaligned Movement.

In the 1990s and early 2000s Malaysia has been building better relations with its neighbors. Malaysia has cooperated with the ASEAN Regional Forum (ARF), a 23-member Asian security network, helping to reduce tensions over the disputed Spratley Islands in the South China Sea. Malaysia also seeks increased economic integration in Southeast Asia. In 1990, Prime Minister Mahathir proposed the creation of an East Asian Economic Caucus, an idea that was initially regarded with skepticism, but was subsequently taken up by the ASEAN+3 group (the ten ASEAN members plus China, Japan, and South Korea) as a way of strengthening financial and trade ties between those states.

In environmental cooperation, Malaysia is part of the Basel Convention, the Convention on Biological Diversity, Ramsar, CITES, International Tropical Timber Agreements, the Kyoto Protocol, the Montréal Protocol, MARPOL, the Nuclear Test Ban Treaty, and the UN Conventions on the Law of the Sea, Climate Change, and Desertification.

ECONOMY

Malaysia was one of the most prosperous nations in Southeast Asia before 1998, albeit with the mood swings inherent in an export-oriented economy. Until the 1970s, Malaysia's economy was based chiefly on its plantation and mining activities, with rubber and tin the principal exports. Since then, however, Malaysia has added palm oil, tropical hardwoods, petroleum, natural gas, and manufactured items, especially electronics and semiconductors, to its export list. This diversification greatly reduced the nation's dependence on overseas commodity markets. By 1980, rubber accounted for about 7.5% of the value of all exports, down from 30% in the 1970s, and tin for about 4.3%, down from about 20% in the 1970s. The worldwide recession in 1981–82 hurt the Malaysian economy. Prices of Malaysia's traditional commodity exports were depressed, growth slowed, and investment fell. Government efforts to stimulate the economy through spending on heavy industry and infrastructure projects financed by borrowing pushed foreign debt from $4 billion in 1980 to $15 billion in 1984.

In 1985, the GDP in current prices was estimated at $31 billion, up from $25 billion in 1981. Real growth rates rose to 6.9% in 1981, and 7.6% in 1984, but declined 1.0% in 1985. In 1985–86 Malaysia's period of high growth was halted abruptly as both oil and palm oil prices were halved. Recovery began in late 1986 and 1987, spurred by foreign demand for exports. Growth rates reached an average 8–9% from 1987–92, and for most of the 1990s, the economy grew annually by just under 9%.

The Asian financial crisis put an end to 13 years of uninterrupted growth with a decline in GDP of -7.4% in 1998. the government's response was to embark on a massive economic recovery program, aimed at stabilizing the currency, restoring market confidence, maintaining market stability, strengthening economic fundamentals, furthering socioeconomic goals, and reviving badly affected sectors. The program featured two fiscal stimulus packages amounting to 2.25% of GDP and the establishment of three special purpose agencies: the Danaharta—also known as the National Asset Management Co.—to acquire and dispose of nonperforming loans (NPLs); the Danamodal, charged with implementing government policy on recapitalizing financial institutions; and the Corporate Debt Restructuring Committee (CDRC), to facilitate voluntary debt restructuring between creditors and viable corporate debtors. More controversially, the government proceeded in 2000 with merger plans to consolidate Malaysia's banks into 10 "anchor" banks and to consolidate Malaysian domestic brokerage houses into 15 "universal brokers." The rationale behind the consolidations was that larger entities would be better able to compete with international counterparts. Gross domestic product growth recovered to 6.3% in 1999 and increased to 7.9% in 2000, but was reduced to 0.7% in 2001 as the global economic slowdown and the aftermath of the 11 September 2001 terrorist attacks on the United States helped produce a 10.6% reduction in exports.

In 2002, the economy continued to recover, reaching an annual growth rate of about 3.5%. Since late 2001, Malaysia has taken a leading role, with Bahrain, in seeking to institutionalize Islamic banking. In November 2001 Malaysia signed an agreement with Bahrain, Indonesia, Sudan and the Saudi-based Islamic Development Bank (IDB) to establish the International Islamic Financial Market (IIFM). This is an extension of its domestic efforts to foster Islamic banking going back to the Islamic Banking Act of 1983, under which it was the first Islamic economy to issue bonds on an Islamic basis. In June 2002 Malaysia took the lead in offering the world's first Islamic global bond issue. The Islamic bond is a problem because Islam forbids paying or receiving interest. the 144a offering (not subject to SEC disclosure regulations) in the name of the Malaysia Global Sukuk (MGS) involves MGS buying from the Malaysian government the Ministry of Finance building, two hospitals, and a civil service accommodation, and leasing them back to the government for a period of five years, during which time the government issues trust certificates to the investors with payments exactly equal to lease rental payments being made by the government to MGS. At the end of five years, in 2007, the government will buy back the properties at the face value of the bond. These arrangements were judged compliant with Islamic law. the Trust Certificates had their primary listing on the Luxembourg Stock Exchange in August 2002, and their secondary listing on Malaysia's Labuan International Financial Exchange (LFX) in September 2002. The LFX is part of Malaysia's Labuan International Offshore Financial Centre (IOFC), established in October 1990 by the government to provide a full array of financial services for multinational corporations and investors. the MSG certificates are part of an effort to provide Sharia-compliant instruments for a growing Islamic financial market, estimated in 2002 at $200 billion. The Labuan Offshore Financial Services Authority (OFSA) took credit for initiating the idea for the establishment of the IIFM in November 2001. A Malaysian heads the IIFM and the Islamic Financial Service Organization (IFSO) is headquartered in Malaysia. As host country for the IFSO, Malaysia will lead in formulating and developing standards for the regulation of Islamic financial institutions.

In 1990, Malaysia was the world's largest producer of natural rubber, accounting for one-quarter of world production. By 1993, however, production was overtaken by both Thailand and Indonesia. During the late 1990s, production of synthetic rubbers undercut the natural rubber industry. In 1990 Malaysia was the world's largest exporter of tropical hardwood, the world's fourth-largest producer of cocoa, and the source of 60% of the world's palm oil. By 2001, Malaysia exported over half of the world's fixed vegetable oils, accounting for approximately 6.7% of Malaysia's exports. In 2002, electronics accounted for two-thirds of total exports. Malaysia remains a major producer of commodities including rubber, tin, palm oil, tropical hardwoods, cocoa, and pepper. It also produces and exports oil, petroleum products, and liquefied natural gas, amounting to 5% of total exports in 1998.

Government or government-owned entities dominate a number of sectors (plantations, telecommunications, and banking). Since 1986 the government has moved toward the eventual privatization of telecommunications, ports, highways, and electricity production and distribution. In the 1990s, the government embarked on a privatization program aimed at creating a Malaysian business elite as part of its bumiputera (literally, "sons of the soil") policy. However, virtually all the major privatized companies failed in the Asian financial crisis, 1997–98 (including the carmaker Proton, Malaysian Airlines, the engineering group Renong, and the media group, Malaysian Resources) and were renationalized in the aftermath. the official unemployment rate at 2.6% in 1996 hovered around 3.6% in 2001–05. the inflation rate as measured by consumer prices, at 5.1% for 1998, fell sharply in the succeeding years to 1.6% in 2000, 1.4% in 2001, 1.8% in 2002, but had risen to 2.9% by 2005. Sarawak's basic economy is subsistence agriculture, supplemented by petroleum production and refining, the collection of forest produce, fishing, and the cultivation of cash crops, primarily rubber, timber and pepper. Sabah's economy rests primarily on logging and petroleum production.

On 1 September 1998, the government pegged the ringgit at m$3.8 = us$1. The government maintained this fixed exchange rate until 21 July 2005, when the peg was replaced by a managed floating exchange rate based on a basket of trade-weighted currencies. Real GDP was forecast to grow by an average 5.1% in 2006–07, supported by household and investment spending, which will bolster growth in the services sector. Although the trade and current-account surpluses were expected to narrow over the 2006–07 period, their nominal values were forecast to still be large compared with levels seen in the 1990s. By 2002, Malaysia was the world's dominant world producer of palm oil. Malaysia, like most countries in Southeast Asia, is dependent upon exports for its growth. In 2004, a double-digit surge in exports lifted the region's growth to 6.3%. But in remaining export-driven, the region is vulnerable to the vagaries of the world economy. Reviving domestic consumption is seen as a key to the region's successful economic future.

INCOME

The US Central Intelligence Agency (CIA) reports that in 2005 Malaysia's gross domestic product (GDP) was estimated at $248.0 billion. The CIA defines GDP as the value of all final goods and services produced within a nation in a given year and computed on the basis of purchasing power parity (PPP) rather than value as measured on the basis of the rate of exchange based on current dollars. The per capita GDP was estimated at $10,400. the annual growth rate of GDP was estimated at 5.1%. the average inflation rate in 2005 was 2.9%. It was estimated that agriculture accounted for 7.2% of GDP, industry 33.3%, and services 59.5%.

According to the World Bank, in 2003 remittances from citizens working abroad totaled $987 million or about $40 per capita and accounted for approximately 1.0% of GDP. Foreign aid receipts amounted to $109 million or about $4 per capita and accounted for approximately 0.1% of the gross national income (GNI).

The World Bank reports that in 2003 household consumption in Malaysia totaled $45.36 billion or about $1,829 per capita based on a GDP of $103.7 billion, measured in current dollars rather than PPP. Household consumption includes expenditures of individuals, households, and nongovernmental organizations on goods and services, excluding purchases of dwellings. It was estimated that for the period 1990 to 2003 household consumption grew at an average annual rate of 4.9%. It was estimated that in 1998 about 8% of the population had incomes below the poverty line.

LABOR

In 2005, Malaysia's total labor force was estimated at 10.67 million. As of 2004, agriculture accounted for 14.8% of the workforce, 30.1% by industry, and 55.1% by the services sector. Unemployment in 2005 was estimated at 3.6%.

Workers have the right to engage in union activity, but only about 9% of the workforce were unionized in 2005 and were covered by 617 trade unions. Negotiations between unions and employers are voluntary and strikes are permitted but limited due to many restrictions. In addition, unions must be registered with the director general of trade unions, the latter of which can refuse or revoke a union's registration, thus making the union an unlawful association. If a labor dispute has been referred to an industrial court for settlement, the employees are prohibited from engaging in a strike.

As of 2005, the employment of children under the age of 14 is prohibited by law, although some exceptions—which include public entertainment, family businesses, as an approved apprentice, and work in school or a training facility for the government—are permitted. However, child labor persists in some areas of the country and protective labor legislation in Malaysia is more extensive than in most Asian countries. The workweek is set at a maximum of 48-hours, 6 days per week, 8 hours per day Actual weekly hours tend to be closer to 44 hours. There is a legal requirement of one rest day per week. There is no national minimum wage that governs all workers, the government preferring to leave wage rates to market forces. Prevailing market wages provide a decent standard of living for a worker and family, although this was not the case with all migrant workers. Occupational safety and health provisions are set by law but are erratically enforced. The provisions are more rigorously enforced in the formal economic sector and are least enforced on plantations and construction sites where immigrant workers are employed. These foreign workers have no legal protections and are prohibited from forming unions.

AGRICULTURE

Agriculture contributed 10% of GDP in 2003 (down from 38% in 1960), occupied about 16% of the employed work force, and accounted for 8.6% of export earnings in 2004. Diversification—including development of such newer crops as oil palm, cocoa, and pineapples—was promoted by the government. Much of Sabah and Sarawak is covered with dense jungle and is not conducive to farming. Peninsular Malaysia, however, is predominantly an agricultural region. Cultivation is carried out on the coastal plains, river valleys, and foothills.

Domestic rice cultivation furnishes peninsular Malaysia with about 80% of its requirements; most of the rice supply for Sabah and Sarawak, however, must be imported. Milled rice production for 2004 totaled 2,183,000 tons, of which about 70% came from peninsular Malaysia. Rubber production totaled 1,190,000 tons in 2004. The government, through the Rubber Research Institute of Malaysia, has concentrated on improving production, but many estates have switched to production of the more profitable oil palm. Although Malaysia produced 12% of the world's rubber in 2004 and typically accounts for over one-third of the world's rubber exports, rubber is no longer the country's primary source of export income. Competition from Thailand and Indonesia has diminished the Malaysian market share for rubber.

Production of palm oil and palm kernel oil totaled 13,976,200 and 3,622,000 tons respectively in 2004, more than any other country in the world. More than 90% of all rubber and palm oil is produced in peninsular Malaysia. Black and white peppers are grown on Sarawak; pepper exports amounted to $31.6 million in 2004. Output of lesser agricultural products in 2004 included coconuts, 710,000 tons; cocoa, 33,000 tons; and pineapples, 320,000 tons.

ANIMAL HUSBANDRY

Peninsular Malaysia is free of most of the infectious and contagious diseases that plague livestock in the tropical zone, but the livestock industry is of minor importance. The livestock population in 2005 included 2,150,000 hogs, 755,000 head of cattle, 225,000 goats, 119,000 sheep, and 130,000 buffalo. the swamp buffalo and indigenous breeds of cattle are used mainly as draft animals. Production of meat in 2005 included (in tons): poultry, 965,000; pork, 205,500; and beef (cattle), 21,200. Malaysia is self-sufficient in pork and poultry production and also exports to other countries in the region, particularly Singapore and Japan. Sarawak's poultry sector was growing by 7% annually in response to increased demand from neighboring Kalimantan, Indonesia, where during certain festive months there is a poultry shortage. Malaysia has been monitoring outbreaks of bird flu, with the third case reported in September 2004, believed to have been caused by poultry smuggled along the Malaysia-Thailand border. the government prohibits the importation of chicken and chicken parts in order to protect domestic producers. Hog-raising and export are handled mainly by non-Muslim Chinese. Milk production was 45,125 tons in 2005.

FISHING

Fishing was being developed both as a means of reducing unemployment and as a primary source of protein in the country's diet. The total catch in 2003 was 1,477,195 tons, as compared with 296,300 tons in 1966; the increase has been largely the result of expanded and improved marketing facilities. Exports of fisheries products were valued at $435.1 million in 2003, with imports of $365.8 million that year. A government training program in navigation and engine care was accelerating the use of powerboats. Freshwater fishing, which accounted for 2% of the total catch, occurred in paddy fields or irrigation ditches and was integrated with rice farming and hog production.

FORESTRY

Malaysia produced an estimated 21.8 million cu m (770 million cu ft) of roundwood from a forest area of 17.7 million hectares (43.7 million acres) in 2004. About 33% of the forest area is located in peninsular Malaysia, 22% in Sabah, and 45% in Sarawak.

After 40 years of large scale conversion of lowland forest areas into agricultural plantations, the pace of new land development declined in the mid-1990s. Reduced land availability and a growing need to preserve remaining forests resulted in a 60% reduction from the government's 1991–95 plan in the total acreage of land scheduled for development. Of the total natural forest area, 14.2 million hectares (35 million acres) of forested land is designated as Permanent Forest Estate, of which 78% is available for sustainable production.

Exports of timber products in 2004 amounted to $5.2 billion, or 4.1% of total exports. Exports of tropical hardwoods in 2004 included (in thousands of cubic meters) logs, 5,118; lumber, 2,761; veneer, 394; and plywood, 4,348. In keeping with the National Forestry Policy of 1978, exports of sawn logs are being progressively reduced (in fact, many states ban the export of logs) in favor of domestic development of veneer, plywood, furniture, and other wood-using industries. Only Sarawak exports tropical hardwood logs, but its state government has placed further restrictions on exporting logs in order to encourage expansion of value-added activities. As of 2004, eight states and 40 timber companies have been given permits for compliance with the government's timber certification program to provide assurance of sustainable and legal sources of forest products to buyers of Malaysian timber.

MINING

Malaysia is a producer of bauxite, coal, ilmenite, iron ore, kaolin, monazite, sand and gravel, struverite, tin, zircon, and natural gas and oil. Although the country's mining sector in 2004 accounted for 7% gross domestic product (GDP), gas and oil accounted for 95% of that sector. In addition, Malaysia's tin mining sector has been declining because of depleted high-grade reserves and lower tin resources. In 2004, Malaysia mined 2,745 metric tons of tin, down from 3,359 metric tons in 2003, and down from 6,307 metric tons in 2000. To revitalize the tin-mining industry, the Malaysian Chamber of Mines recommended that the government of Perak, one of the two main tin-mining states (Selangor being the other), change the royalty rate to a flat rate. In 2004, total exports were valued at $126.5 billion, of which mining products accounted for 11.5% of that total. However, the bulk of that figure was from oil and liquefied natural gas ($6 billion and $7.1 billion, respectively) with major mineral exports valued at only $424 million, of which tin accounted for $289 million

Subsoil resources were public property of the states, which granted prospecting licenses and mining leases. Royalties on coal and gold accrued to the states. Export duties were levied on other minerals by the government, which returned a portion to the states.

Iron ore production (by gross weight) in 2004 totaled 663,732 metric tons, up from 596,612 metric tons in 2003. Bauxite production has fallen as a result of depleted resources since 2000. In that year, bauxite output (by gross weight) totaled 123,270 metric tons, but in 2004 totaled only 2,040 metric tons. Malaysia ceased copper production in 1999. As a result, silver production, most of which was a by-product of copper mining, dropped from 9,647 kg in 1997 to 364 kg in 2004. Other metal minerals extracted included gold, columbite, and titanium dioxide (from Terangganu). Malaysia was a net exporter of all its coal, ilmenite, rare earths, and zircon concentrate, and most of its smelted tin. Industrial minerals produced in 2004 included hydraulic cement, clays and earth metals, feldspar, mica, nitrogen, silica sand, and stone. Silica sand came mainly from natural sand deposits in Sarawak (56.6 million tons of estimated reserves) and Johor and from tin-mine-tailings sand in Perak and Selangor; 85% was exported and 63% of exports went to Singapore.

ENERGY AND POWER

Malaysia's large reserves of natural gas and its exports of oil make the country a key player in the world's energy markets. the country is also a modest producer of coal.

Crude oil is now the chief mineral produced by Malaysia. As of 1 January 2005, Malaysia had proven oil reserves estimated at 3 billion barrels, down from 4.3 billion barrels in 1996. In 2004, oil production averaged an estimated 855,000 barrels per day, of which crude oil accounted for 750,000 barrels per day. Domestic demand that year was estimated at 534,000 barrels per day. Malaysia's oil is produced offshore, primarily in the peninsular region. However, of new and increasing importance are large offshore natural gas deposits, with reserves estimated at 75 trillion cu ft as of 1 January 2005. Production in 2002 totaled an estimated 1.7 trillion cu ft, with domestic consumption at an estimated 1 trillion cu ft for that same year.

Malaysia is also a major exporter of liquefied natural gas (LNG). In 2003, LNG exports totaled 0.8 trillion cu m, about 14% of the world's total. Production of oil and natural gas is controlled by the National Petroleum Co. (PETRONAS).

In 2002, Malaysia produced an estimated 900,000 short tons of coal, while demand that year was estimated at 6.9 million short tons. As a result, Malaysia imported 6 million short tons.

Malaysia's net installed electrical generating capacity, as of 1 January 2002, stood at 14 GW, of which 86% was dedicated to conventional thermal fuels and 14% was hydroelectric. Electrical energy production in 2002 was estimated at 67 billion kWh. In 2002, demand for electric power was placed at 65.038 billion kWh. the National Electricity Board, a state-owned corporation, supplied the greater part of the nation's power.

INDUSTRY

Early industrialization efforts centered on the establishment of import-substitution industries (ISI) and resulted in construction of sugar refineries and motor vehicle assembly plants. Industrialization accelerated after the mid-1960s under the provisions of the Investment Incentives Act and the formation of the Malaysian Industrial Development Authority (MIDA). Special incentives were offered for industries that were labor-intensive, export-oriented, or that utilized domestic rubber, wood, and other raw materials. In the mid-1980s the Malaysian economy changed from a commodity-based to a manufacturing-based economy. In 1986, the leading manufacturing industries included rubber processing, the manufacture of tires and other rubber products, palm oil processing, tin smelting, and the manufacture of chemicals, plywood, furniture, and steel. Other industries were textiles, food processing, and the manufacture of electronic and electrical components. Most early industries were controlled by ethnic Chinese and foreigners, but government policies in the 1990s and early 2000s called for greater participation by ethnic Malays.

In 2005 industry accounted for 33.3% of GDP. Of total exports in 2004, electronics and electrical products accounted for 67.6%; chemicals and chemical products 7.3%; petroleum and liquefied natural gas (LNG) 7.3%; palm oil 5.3%; and textiles, clothing, and footwear 2.7%. In 2001, Malaysia produced about 15% of the world's DVD players, compared with China's 54.1% and Japan's 7.7%. In peninsular Malaysia, the leading industries by value of annual output are rubber and palm oil processing and manufacturing, light manufacturing, electronics, tin mining and smelting, and logging and processing timber. In Sabah, the leading industries are logging and petroleum production, while in Sarawak, they are agricultural processing, petroleum production and refining, and logging.

Malaysia has six oil refineries, with a total capacity of 544,832 barrels per day (BPD) in 2005. Oil production from 1996 to 2002 varied between 650,000 bpd and 730,000 bpd. In 2004, crude oil production amounted to 750,000 barrels per day. Proven reserves have dropped from 4.3 billion in 1996 to 3 billion in 2005, and Malaysia's national oil and gas company, PETRONAS, has invested in oil exploration projects in Syria, Turkmenistan, Iran, Pakistan, China, Vietnam, Burma, Algeria, Libya, Tunisia, the Sudan, and Angola. Overseas operations made up one-third of PETRONAS's operations in 2002. Japan, Thailand, South Korea, and Singapore continue to be the major customers for Malaysian crude oil. Malaysia's domestic oil fields are split between the South China Sea off Borneo and those off peninsular Malaysia. All exploration is conducted under production-sharing contracts (PSCs) between PETRONAS, the national oil company, and foreign companies. In 1999, foreign oil companies involved in the production of oil and gas in Malaysia included Exxon, Shell, Sonoco, Statoil, Union Carbide, Amerada, and Lundin. Gas reserves were being developed to fuel power stations and to supply industries in peninsular Malaysia and Singapore. In 2003, Malaysia accounted for 14% of the world's exports of LNG, down from 18% in 1998.

A top industrial priority in Malaysia economic plans is the development of the "multimedia super corridor" (MSC), an ambitious project underway to transform a 15-by-40 km (9.3-by-25 mi) area south of Kuala Lumpur into Asia's version of California's Silicon Valley. It is composed of a number of projects: the tallest twin towers in the world, the 450-m (1,483-ft) Petronas Twin Towers; two of the world's first Smart Cities—Putrajaya, the $8-billion new seat of government and administrative capital of Malaysia, where the concept of electronic government will be implemented, and Cyberjaya, an intelligent city with multimedia industries, research and development centers, a multimedia university, and operational headquarters for MSC; the construction of a $3.6 billion international airport; and the installation of a fiber-optic telecommunications system linking them all.

In 1998, as part of its policy to encourage manufacturing industries, the government relaxed restrictions on foreign ownership of new manufacturing projects. Any new manufacturing project for which the Malaysian Industrial Authority (MIDA) approves a license may have up to 100% foreign ownership, regardless of its involvement in exporting.

SCIENCE AND TECHNOLOGY

Training in science, technology, and related subjects was promoted at all levels during the 1970s and 1980s. Enrollment at technical and vocational secondary schools rose from 4,510 in 1970 to 20,720 in 1985. The National University of Malaysia at Selangor, the University of Malaya at Kuala Lumpur, the University of Agriculture

at Selangor Darul Ehsan, the University of Science at Penang, the Technological University at Johor Bahru, Kolej, Damansaura Utama College at Selangor, Politeknik Kuching at Surawak, and Tunku Abdul Rahman College at Kuala Lumpur offer degrees in basic and applied sciences. In 1987–97, science and engineering students accounted for 54% of college and university enrollments. National science policy is administered by the Ministry of Science, Technology, and Environment. The Ministry of Agriculture undertakes all aspects of research for improvement of crops. the Institute of Medical Research is a branch of the Ministry of Health.

The Forest Research Institute Malaysia (FIRM), the Freshwater Fish Research Center, the Malaysian Agricultural Research and Development Institute (MARDI), the Malaysian Institute of Microelectronic Systems (MIMOS), and the Rubber Research Institute of Malaysia are all located in Kuala Lumpur.

In 2002, total expenditures on research and development (R&D) amounted to $1.5 billion or 0.69% of GDP. Of that amount, business accounted for 51.5% of R&D spending, followed by the government at 32.1%, foreign investors at 11.5%, and higher education at 4.9%. In that same year, Malaysia had 294 scientists and engineers and 57 technicians per million people, who were actively engaged in R&D. In 2002, high-tech exports were valued at $40.912 billion and accounted for 58% of manufactured exports.

DOMESTIC TRADE

Imported goods are channeled into the Malaysian market through local branches of large European mercantile firms; by local importers with buying agents abroad; through branch offices and representatives of foreign manufacturers; by local Chinese, Indian, and Arab merchants who import directly; and by commission agents. Chinese merchants occupy an important place in the marketing structure and control a large share of the direct import trade. For warehousing of imported goods, the facilities of the port of Singapore are used, while rubber for export is warehoused mainly on plantations.

The usual business hours are from 9:00 am to 5:00 pm, Monday–Friday including an hour-long lunch break, with most businesses operating for a half-day on Saturday. All public service departments and some banks close on the first and third Saturday of the month. In Kelantan, Terengganu, Johor, Perlis, and Kedah states, businesses close for a half-day on Thursday (in keeping with Islamic practice) and Friday is the day of rest. English is widely used in commerce and industry.

Newspaper and motion picture advertising is directed toward the higher-income consumer, while radio advertising, outdoor displays, and screen slides are used for the lower-income consumer who is less likely to be literate. A code of practice and ethics governing advertising is in force, with restrictions on advertising of some products, such as alcohol and tobacco. Trade fairs are supervised by the Ministry of Trade and Industry.

FOREIGN TRADE

During the 1970s, petroleum and manufactures displaced rubber and tin as Malaysia's leading exports. Malaysia now exports over one-third of the world's fixed vegetable oil and a considerable portion of the world's radio broadcast receivers, but its largest export revenues come from sales of office machines.

The primary exports in 2004 were: electronics and electrical machinery (67.6% of all exports); petroleum and liquefied natural gas (7.3%); chemicals and chemical products (7.3%); palm oil (5.3%); and textiles, clothing, and footwear (2.7%). the primary imports were: intermediate goods (75.6% of total imports); capital goods (14.6%); consumption goods (6.1%); reexports (4.5%); and dual-use goods (2.5%).

Malaysia's leading markets in 2004 were: the United States (18.8% of all exports); Singapore (15%); Japan (10.1%); China (6.7%); and Hong Kong (6%). Leading suppliers in 2004 were: Japan (15.9% of all imports); the United States (14.5%); Singapore (11.1%); China (9.8%); and Thailand (5.5%).

BALANCE OF PAYMENTS

Malaysia sustained a favorable trade balance throughout the 1960s and 1970s, recording its first trade deficits in 1981 and 1982, as world prices for tin, crude oil, rubber, and palm oil, the major exports, weakened simultaneously. Malaysia's balance of payments, like that of many other producers of primary products, was adversely affected in 1981–82 by the prolonged recession in the world's industrial nations. From 1983 to 1986, however, Malaysia registered trade surpluses. In the 1990s, a significant growth in exports and a decrease in imports led to trade surpluses, along with a fairly large services deficit. In the early 2000s, however, exports declined, but so did imports of intermediate components used in the manufacture of the country's electronics exports; this contributed to continuing strong trade surpluses.

The current-account recorded a surplus of $14.8 billion in 2004, lifted by a large merchandise trade surplus. The services and income balances remained in deficit. In 2005, the current-account surplus amounted to $15.35 billion. Exports totaled an estimated $147.1 billion in 2005, and imports were estimated at $118.7 billion. Although the trade and current-account surpluses were expected to narrow over the 2006–07 period, their nominal values

were projected to be large compared with levels seen in the 1990s. In 2002, Malaysia's total exports of goods and services were equivalent to 114% of nominal GDP, a high figure by international standards.

BANKING AND SECURITIES

In 1958, the Bank Negara Tanah Melayu (renamed the Bank Negara Malaysia in 1963) was created as the central banking institution. Bank Negara requires banks to maintain a minimum risk-weighted capital ration (RWCR) of 8%. At the end of 2002, Malaysia had 31 licensed commercial banks, 19 finance companies, 12 merchant banks, 2 Islamic banks, and 7 discount houses. A total of 36 foreign banks have offices in Malaysia, but their banking privileges are restricted. Specialized credit institutions include the Federal Land Development Authority (FELDA), the Agricultural Bank of Malaysia (Bank Pertanian Malaysia), and Bank Rakyat, serving rural credit cooperative societies. International trade is financed mainly by the commercial banks. Total banking system assets were $179.1 billion in 2000. There were 51 offshore banks operating on the island of Lauban in 1997.

Malaysia offers Islamic banking, which is based on the concept of profit sharing as opposed to the use of interest in the conventional banking system. One such Islamic bank is Bank Islam Malaysia Berhad. The central bank has embarked on a plan to develop Malaysia as a regional Islamic financial center. Toward this end, the central bank formed a consultative committee on Islamic banking in January 1996 to serve as a think-tank group to develop strategies and proposals to map out the future direction of Islamic banking. Although Islamic operations were only a small proportion of total business, Malaysia has achieved more than most other Islamic countries in this respect and its developments are regarded as models by them.

The International Monetary Fund reported that in 2001, currency and demand deposits—an aggregate commonly known as M1—were equal to $22.1 billion. In that same year, M2—an aggregate equal to M1 plus savings deposits, small time deposits, and money market mutual funds—was $93.9 billion. the money market rate, the rate at which financial institutions lend to one another in the short term, was 2.79%.

The principal market for securities is the Kuala Lumpur Stock Exchange (KLSE), which separated from the joint Stock Exchange of Malaysia and Singapore in 1973. A second, smaller exchange has operated since 1970 to serve indigenous Malay interests. In October 1991 the KLSE completely severed its links with the Singapore Stock Exchange. As of 2001, the KLSE was capitalized at approximately $120 billion. Foreign investors are permitted to buy and sell on the stock market, subject only to compliance with regulatory requirements. In June 1995, a wide range of measures liberalizing the Malaysian capital market were introduced. these included the lowering of commission rates on the KLSE, the easing of controls on loans secured against shares, and less stringent conditions for overseas fund managers. Overseas funds can now set up 100% subsidiaries for conducting non-Malaysian business and rules on work permits for expatriate staff have been relaxed. By the end of 1997, the Kuala Lumpur Stock Exchange Composite Index (KLCI) capitalization had declined 53% from its high that year of 1271.57. The KLCI hit a low of 262.70 in September 1998, but had climbed back up to 696.1 by the end of 2001. In 2004, the KLCI rose14.3% from the previous year to 907.4. As of 2004, a total of 962 companies were listed on the Bursa Malaysia and had a market capitalization of $190.011 billion.

INSURANCE

In Malaysia, third-party automobile liability, workers' compensation, and social security are compulsory insurances. The law requires insurance firms to maintain a minimum of 80% of their assets in authorized Malaysian holdings, including (by an amendment passed in 1978) 24% in government securities. Foreign insurance companies may operate by obtaining a license. the government's insurance branch, the Malaysian National Reinsurance Berhad, covers 25% of all fire and personal accident, 10% of aviation and automobile, and 20% of all other classes of insurance. In 2003, the value of all direct insurance premiums written totaled $5.609 billion, of which life insurance premiums accounted for $3.455 billion. Malaysia's top nonlife insurer in 2003 was Kurnia, which had gross written nonlife premiums of $252.4 million. In 2002, the country's leading life insurer was Great Eastern, which had gross written life insurance premiums of $802.8 million.

PUBLIC FINANCE

Malaysia's economy, heavily industrial and heavily dependent on export revenues, experienced a bump in the road when the US economy began to slow down at the end of 2000. The United States is a key trading partner for Malaysia, so as exports to the United States fell, so did Malaysia's economy. The government introduced two fiscal stimulus packages in 2001, but neither did the job; at the time, analysts suspected that GDP would grow less than 1% on the year.

The US Central Intelligence Agency (CIA) estimated that in 2005 Malaysia's central government took in revenues of approximately $30.5 billion and had expenditures of $34.6 billion. Revenues minus expenditures totaled approximately -$4 billion. Public debt in 2005 amounted to 48.3% of GDP. Total external debt was $56.72 billion.

The International Monetary Fund (IMF) reported that in 2003, the most recent year for which it had data, central government revenues were m$93,610 million and expenditures were m$110,571 million. The value of revenues was us$24,634 million, based on an official exchange rate for 2003 of us$1 = m$3.8 as reported by the IMF.

TAXATION

Income tax is levied on all individual and corporate income accrued in Malaysia during the previous year. As of 2005, income of resident individuals was progressively taxed, with a top rate of 28%. Nonresidents are taxed at a flat rate of 28%. Resident and nonresident companies are charged a flat rate of 28%. A 38% income tax is levied on petroleum corporations. Royalties and technical fees are subject to a 10% withholding tax, while the withholding rate for interest is 15%. Dividends are treated as income and are not subject to a withholding tax, if the appropriate amount of tax has already been paid on the company's income. Otherwise, the dividends are subject to a flat 28% rate.

Incentives are available for pioneer industries and for certain capital investments. Capital gains taxes are levied on the sale of real estate. Indirect taxes include a general 10% sales tax (5% for essential items, 20% for liquor and 25% for cigarettes) and a 5% services tax.

CUSTOMS AND DUTIES

Import tariffs on textiles and other items already produced in Malaysia are applied in order to protect domestic industries. Rates vary from 0–300% and imports are also subject to a 10% sales tax and excise taxes. However, the average duty rate is less than 8.1%. In 2000, the government reduced duties on 136 categories of food products from 5–20% to 2–12%. Imported luxury goods have the highest rates. Items imported for industrial development, including machinery and raw materials imported for processing and reexport, are usually duty-free. Exports are generally free of control, except that licenses and export duties apply to exports of petroleum (25%), rubber, tin, palm oil, timber, and pepper.

As a member of the ASEAN free trade area, Malaysia is a part of the Common Effective Preferential Tariff Scheme (CEPT), which aims to liberalize trade in the region. As of 2003, all tariffs on manufactured goods were reduced to 0–5% between member countries, including Singapore, Brunei, Thailand, Philippines, and Indonesia. Vietnam, Laos, Myanmar, and Cambodia were scheduled to join the CEPT by 2008. Malaysia has bilateral trade agreements with 59 countries as well. There are several free zones and a free port at Port Klang.

FOREIGN INVESTMENT

The government encourages foreign investors with a tax holiday of up to 10 years for investments in new industries and assurance of convertibility and repatriation of capital and profits. In 1975, the Industrial Coordination Act established new equity participation guidelines that required a substantial majority of Malaysian ownership of new import-substitution industries catering to the domestic market and using local technology; 70% Malaysian ownership was stipulated for export industries. Export industries using imported raw materials could be 100% foreign owned. Some of

these restrictions were eased under the fifth Malaysia plan (1986–90). The Promotion of Investment Act of 1986 allowed 100% foreign ownership if a company exported at least 50% of its product and did not compete with local industry, or if it exported at least 80% of its product regardless of competition. In 1998, 100% foreign ownership was granted to projects exporting at least 80% of output, 79% foreign ownership for exports of at least 51% of output, up to 50% foreign ownership for exporting at least 20% of output, and a maximum foreign ownership of 30% for projects exporting less than 20%, regardless of the origin of raw materials. Also, for new manufacturing projects, 100% foreign ownership is permitted in any project approved by the Malaysian Industrial Development Authority (MIDA). The MIDA screened all proposals for manufacturing projects to determine if they are compatible with the Second Industrial Master Plan (1996–2005), and government strategic and social policies.

In October 1990 the government established on the Federal Territory of Labuan as an International Offshore Financial Center (IOFC) to provide offshore banking and insurance, trust fund management, offshore investment holding and licensing companies, and other financial services for multinational companies. In the period following the 11 September 2001 terrorist attacks on the United States, Malaysia took the lead in seeking to institutionalize Islamic banking and attract Islamic investment. In November 2001 Malaysia was a founding member of the International Islamic Financial Market (IIFM), along with Bahrain, Indonesia, Sudan, and the Islamic Development Bank (IDB) based in Saudi Arabia. In June 2002 the Malaysian government took the lead in putting together the world's first global Islamic bond issue. the Labuan Offshore Financial Services Authority (OFSA) takes credit for initiating the idea of the establishment of the IIFM, and the Islamic Financial Service Organization (IFSO), which is taking the lead in formulating and developing standards for the regulation of Islamic financial institutions, is headquartered in Malaysia. More conventionally, as of 2006 14 free-trade zones (FTZs) were established in Malaysia. (FTZs are specially designated geographic areas with regulations, including minimum customs controls and formalities when importing raw materials, parts, machinery, and equipment, specifically designed to serve export-oriented industries.) there are specially designated FTZs for businesses engaged in commercial activities including trading, breaking bulk, grading, repacking, relabeling, and transit. Within an FTZ, goods are allowed to be imported without being subject to customs procedures, provided the goods are ultimately exported after processing.

Assets attracting foreign investors to Malaysia are location, cultural ties with Singapore and Taiwan, economic and political stability, an increasingly competent labor force, and good infrastructure. The main barriers have been restrictions put on foreign investment and ownership as a part of the government's bumiputera policy, which sought particularly to insure Malay dominance of domestic markets. Nevertheless, before the sharp reduction in 2001, Malaysia was regularly listed among the top 25 best destinations for foreign investments.

Annual average foreign direct investment (FDI) in Malaysia 1985–1995 was close to $3 billion, amounting to an average 14.5% of the country's annual gross fixed capital formation. In 1996, annual FDI rose above $7 billion. A strong first half in 1997 brought the year's total to $6.3 billion before falling over 57% to $2.7 billion in 1998, reflecting the rapid disinvestments that precipitated the Asian financial crisis. Recovery was sharp, if incomplete, however; FDI reached $3.89 billion in 1999, 22.2% of the gross fixed capital formation (GFCF), and $3.8 billion (16.5% of GFCF) in 2000. However, in 2001, in the context of a worldwide contraction in foreign investment of almost 50%, FDI to Malaysia fell a precipitous 85.4% to $554 million. Total stocks of FDI in Malaysia grew 83.6% in period 1995 to 2000, from $28.7 billion to $52.7 billion, and from 32.3% to 58.8% as a percent of GDP. In 2001, the total FDI stock increased only 1% as the total reached $53.3 billion. The largest investment sources were the United States, Japan, Germany, Taiwan, Singapore, and Korea.

By 2006, cumulative US foreign direct investment in Malaysia had reached an estimated $30 billion. In 2004, FDI inflows amounted to some $3.5 billion, led by Germany with $1.243 billion invested. Singapore ($399 million), the United States ($279 million), and Japan ($266 million) followed. The majority of FDI went to the electronics sector ($1.796 billion), followed by the paper and print sector ($358 million); and petroleum sector ($214 million). In 2004, Malaysia invested $7.448 billion abroad, with $666 million going to Singapore, $296 million to Hong Kong, $252 million to Chad, $203 million to the United States, and $181 million to Thailand.

In 1996 the government announced a list of 31 major infrastructure projects to be built between 1995 and 2020 at a cost of m$163 billion. The Second Industrial Master Plan (1996–2005) outlined investment opportunities. These have drawn a huge influx of foreign investment. They include the Bukun hydroelectric dam in Sarawak (Southeast Asia's largest), and the projects involved in the development of the Multimedia Super Corridor (MSC): the Petronas Twin Towers, the world's tallest twin towers; one of the region's most modern airports; and Putrajaya, the new capital city and administrative center for electronic government, and Cyberjaya, Malaysia's center for computer technology.

Most foreign investment is concentrated in the production of electronic components, consumer electronics, and electrical goods (dominated by US and Japanese firms), petroleum production and distribution, textiles, vehicle assembly, steel, cement, rubber products, and electrical machinery.

Malaysian outward investments 1985–95 amounted to less than a quarter of inward investments, with an annual average of $677 million. However, in 2001–02, this ratio had more than doubled to about 50%. A significant source of outward investments is Petroliam Nasional Berhad (PETRONAS), the state oil company incorporated in 1974. In 2002, domestic petroleum reserves had fallen to about 3 billion barrels of oil and 2.34 trillion cu m (82.5 trillion cu ft) of gas. Overseas investments in the upstream sectors (exploration, development and production) of the petroleum industries in 20 countries had, as of 2002, yielded an additional 3.25 billion barrels of oil equivalent. In international investments involving downstream operations (refining, distribution, marketing), PETRONAS's acquisition of the entire share holding of Engen Ltd., a South African oil company, increased its net refining capacity by almost 40%, to 361,500 barrels per day. The state company's other downstream activities include liquefied petroleum gas (LPG) terminalizing, bottling, and distribution in China, Vietnam, and the Philippines, and refining and retailing in Cambodia and Thailand.

ECONOMIC DEVELOPMENT

Malaysia's economy has been transformed from a protected low-income supplier of raw materials to a middle-income emerging multisector market economy driven by manufactured exports, particularly electronics and semiconductors, which constitute about 90% of exports. Since 1970 and the institution of the New Economic Policy (NEP) following deadly riots in 1969 against economically dominant ethnic Chinese, the government's commitment to the free market has been hedged by its bumiputera (literally, "sons of the soil") policies aimed at providing "constructive protection" for Islamic Malays against economic competition from other ethnic groups and foreign investors, particularly in the domestic market. In the Asian financial crisis of 1997, most of the major companies that the government had privatized and reserved for bumiputera leadership (including Proton, the national car company, Malaysian Airlines, the Renong engineering group, and the Malaysian Resources media group) had to be renationalized to prevent their collapse. A vigorous recovery program mounted by the government that was showing positive results in 1999 and 2000 ran abruptly into the wall of the 2001 global economic slowdown. Worldwide, foreign direct investment dropped almost 50%, and in Malaysia the decline was an even more precipitous 85%. Gross domestic product growth dropped to 0.7% for 2001, from its usual 7–9%.

Business in Malaysia remains dominated by non-Malays. In 1970, a government holding company, Perbadanan Nasional (PERNAS), was created to encourage Malay-controlled businesses; in 1975, the government attempted, through PERNAS, to strengthen Malaysian interests in the tin-mining sector. Also in 1974, the government established the National Oil Co. (PETRONAS), with the overall aim of acquiring majority control of the country's petroleum operations. The Industrial Coordination Act of 1975 attempted to accelerate indigenous Malay participation in the economy by setting limits on foreign participation in the processing, domestic distribution, and export of local raw materials. In 1971, the New Economic Policy (NEP) was adopted, with the aim of channeling a greater share of future economic growth into Malay hands. It specifically called for raising the level of corporate ownership by Malays to 30% by 1990, reducing corporate ownership by other Malaysians (i.e., Chinese and Indians) to 40%, and restricting foreigners to ownership of no more than 30%. Short-term investment strategies are set forth in a series of economic plans. The fourth Malaysia plan (1981–85) proposed a level of development spending of m$42.8 billion and called for acceleration of the NEP goals for bumiputera economic participation. Major industrial and infrastructural development projects included a m$900-million bridge between Pulau Pinang and the mainland and a m$600-million automobile-manufacturing plant, both of which opened in 1985. Economic planning stressed a "look East" policy, with Malaysia attempting to emulate the economic successes of Japan and the Republic of Korea by importing technology from those countries. In response to deteriorating prices for oil and other exports, the fifth Malaysia plan (1986–90) moved away from the goals of the NEP, aiming instead at promoting foreign investment, particularly in export industries.

The year 1990 marked the culmination of several economic development plans: the fifth Malaysia plan (FMP), 1986–90; the conclusion of the first outline perspective plan (OPP1) 1971–1990; and the completion of the new economic policy (NEP) 1971–1990. The FMP emphasized industrialization. Specific targets were formulated to ensure that the distribution of ownership and participation in the commercial and industrial sector would be characterized by ethnic group participation, 30% bumiputera (Malays and other indigenous peoples), 40% other Malaysians (Chinese and Indian descent), and 30% foreign. The government provided funds to purchase foreign-owned shareholding on behalf of the bumiputera population, increasing their equity to 20% by 1990. These policies are part of the new national development policy, although specific targets and timetables have been dropped.

A post-1990 NEP defined Malaysian economic strategy for full development by 2020. Three ten-year outline perspective plans, which included a new development plan and six five-year plans, made up the NEP. A second outline perspective plan (OPP2) 1991–2000 aimed to sustain growth momentum and to achieve a more balanced development of the economy. The sixth Malaysia plan called for an average annual growth rate of 7.5%, and expenditures on infrastructure were included to ensure prospects for further development. Development trends are toward privatization, encouraging the spread of industry throughout the country, increasing manufacturing in the free trade zones, and providing financing for industry through the establishment of specialized financing institutions.

A five-year development plan announced in 1996 forecasted average growth of 8% per year for 1996–2000. In 1997–98, low productivity, a skills shortage, and a gaping current-account deficit along with a global financial crisis based in Asia, combined to cause an economic downturn. Massive capital and infrastructure projects have attracted foreign investment and international respect.

The Ninth Malaysia Plan was announced in 2006 to focus on improving supply-side issues, such as the promotion of new sources of value-added economic growth, the liberalization of the financial sector, and further measures to strengthen small- and medium-sized firms. Reducing the deficit was a policy priority, as fiscal stimulus had increased the budget deficit in the early 2000s. The government—as with those in other Southeast Asian countries—was committed to finding ways to revive domestic consumption instead of relying primarily upon exports for economic growth, which would help insulate Malaysia from the vagaries of the global economy.

SOCIAL DEVELOPMENT

A provident fund provides lump-sum benefits for old age, disability, and death. Pensions are funded by 11% contributions of earnings by workers, and 12% of payroll by employers. Domestic servants, foreign workers, and the self-employed are not covered by the system. The retirement age is 55. Work injury insurance and disability pensions to low-income workers are available, with a special system for public employees.

The government has taken active measures to improve the rights and standing of women. The Islamic Family Law was revised to strengthen the inheritance rights of Muslim women and to increase their access to divorce. The government passed a domestic violence bill that allows the courts to protect victims of spousal abuse. However, this law falls short of making domestic violence a criminal act, and women's groups called for amendments in 2004. Most Muslim women play subordinate roles in public and private life in spite of their growing legal rights. Although women make up more than half of university students, they represent only 15% of key posts in public sector jobs. Custom favors men in matters of inheritance.

Human rights abuses, include arbitrary arrest and detention, torture, and other types of prisoner abuse, exist. Caning is still used for some crimes. The government restricts the freedom of press, religion, association, and assembly.

HEALTH

Malaysia enjoys a comparatively high standard of health, the result of long-established health and medical services. there are three main hospitals in Malaysia, all located in the capital, Kuala Lumpur: Subang Jaya Hospital, General Hospital, and Penang Adventist Hospital. Approximately 80% of the population had access to health care. As of 2004, there were an estimated 70 physicians, 135 nurses, 9 dentists, and 33 midwives per 100,000 people. In the same year, total health care expenditure was estimated at 2.5 % of GDP. As of 2002, the crude birth rate and overall mortality rate were estimated at, respectively, 24.22 and 5.2 per 1,000 people. Approximately 51% of married women (ages 15–49) used contraception. Life expectancy was 72.24 years in 2005. It is estimated that 90% of the population had access to safe water, and 94% had adequate sanitation.

Under the tuberculosis-control campaign begun in 1961, the number of annual deaths from tuberculosis declined to 971 in 1970, to 672 in 1983; in 1999, there were 111 reported cases per 100,000 population.

As a result of the yaws-elimination campaign, begun in 1954, the disease was virtually eliminated in the late 1960s. A malaria-eradication program, begun in 1967, resulted in a drop in the number of hospital admissions for malaria from 25,400 in 1970 to 8,274 in 1984, although malaria remains a common disease in Malaysia.

It was estimated that 23% of children under five years of age were considered malnourished. Immunization rates for children up to one year old were quite high: tuberculosis, 99%; diphtheria, pertussis, and tetanus, 93%; polio, 90%; and measles, 88%.

Among the main ethnic groups in Malaysia, those of Indian origins have the highest mortality rates compared to the Chinese and Malay. Similar trends exist for diabetes mortality. the HIV/AIDS prevalence was 0.40 per 100 adults in 2003. As of 2004, there were approximately 52,000 people living with HIV/AIDS in the country. There were an estimated 2,000 deaths from AIDS in 2003. the total fertility rate has dropped from 4.2 in 1980 to 3 in 2000. Infant mortality in 2005 was 8 per 1,000 live births. the maternal mortality rate was 39 per 100,000 live births.

HOUSING

With about 61% of the population living in urban areas, the need for urban housing is acute. It has been estimated that over 20% of Kuala Lumpur's population consists of squatters living in overcrowded shantytowns with few urban amenities. the government has planned to build rental units in urban areas to assist low-income residents unable to purchase their own homes. In 2000, the housing stock was reported at about 5.7 million units. A total of 744,000 new housing units were built during 1970–80, and an estimated 923,300 units—43% public and 57% private—were part of the 1981–85 development plan.

EDUCATION

Six years of free primary education are followed by three years of general lower secondary education. Two further years of education at the upper secondary level, in either a vocational or an academic program, are offered. Technical schools also offer secondary program, but students must have a strong math and science background in order to attend. A selective one-year pre-university course prepares students for admission to the universities. Malay is the medium of instruction in primary and secondary schools, with english as a compulsory second language. Muslim religious instruction is compulsory for all Muslim children while private Christian schools offer religious training to their students. the academic year runs from July to March.

In 2001, about 88% of all five-year-olds were enrolled in some type of preschool program. Primary school enrollment in 2003 was estimated at about 93% of age-eligible students. the same year, secondary school enrollment was about 70% of age-eligible students (66% for boys and 74% for girls). It was estimated that about 92% of all students complete their primary education. the student-to-teacher ratio for primary school was at about 19:1 in 2003; the ratio for secondary school was about 18:1.

The primary institutions of higher education include the Universiti Kebangsaan Malaysia (the National University of Malaysia), the University of Malaya, and the Technological University of Malaysia, all in or near Kuala Lumpur, and the University of Science Malaysia (formerly the University of Pinang). the MARA Institute of Technology is the largest postsecondary institute in the country. In 2003, about 29% of the tertiary age population were enrolled in some type of higher education program; 26% for men and 33% for women. The adult literacy rate for 2004 was estimated at about 88.7%, with 92% for men and 85.4% for women.

As of 2003, public expenditure on education was estimated at 8.1% of GDP, or 20.3% of total government expenditures.

LIBRARIES AND MUSEUMS

The National Library of Malaysia, with more than 1.3 million volumes, was established in 1971 and has been charged with wide responsibilities under the National Library Act. Both the National Library and the National Archives are in Kuala Lumpur. the National University of Malaysia (Universiti Kebangsaan Malaysia) in Bargi has 945,000 volumes. Other important libraries are those at the universities; the Sabah (380,000) and Sarawak (500,000) state libraries; Tun Abdul Razak Library at the MARA University of Technology (569,000); and the library of the Malaysian Rubber Board (120,000). The largest public libraries are in Denang, Malacca, and Selangor.

The National Museum of Malaysia in Kuala Lumpur, constructed on the site of the former Selangor Museum (destroyed in World War II), houses extensive collections of Malayan archaeology, ethnography, and zoology. The Perak Museum in Taiping, founded in 1883, has a varied collection exhibiting antiquities, ethnographic, and zoological materials. Also in Kuala Lumpur are the Museum of Asian Art (1974), the Postal Museum, the Air Force Museum, and the National Art Gallery (1958). Sabah and Sarawak maintain anthropological and archaeological collections pertinent to East Malaysia. There is an Aboriginal Affairs Museum in Gombak.

MEDIA

The government owns and operates a well-developed and well equipped telecommunications system. Automatic dialing for the majority of exchanges is provided by a VHF radio circuit. In 2003, there were an estimated 182 mainline telephones for every 1,000 people; about 49,000 people were on a waiting list for telephone service installation. Also in 2003, there were approximately 442 mobile phones in use for every 1,000 people. Telegraph and radiotelephone connections link peninsular Malaysia with most foreign countries.

Radio-Television Malaysia (RTM) operates radio and television stations in Kuala Lumpur, Sabah, and Kuching, and there is a commercial station, Sistem TV-3 Berhad, in Kuala Lumpur as well. Broadcasts are in English, Malay, five Chinese dialects, Tamil, and numerous local languages and dialects. As of 2001 Malaysia had 35 AM and 391 FM radio stations and 1 television station. In 2000, there were 420 radios and 168 televisions sets for every 1,000 people. In 2001, there were 4.1 million Internet subscribers served by 7 service providers.

There are about 80 English, Malay, Chinese, and Tamil daily and weekly newspapers. The Malay-language press is the largest segment, followed by English, Chinese, Tamil, Punjabi, and Kadazan. In Kuala Lumpur, there are two major dailies published in Chinese, China Press, with a 2002 circulation of 210,000, and Nanyang Siang Pau, with a 2002 circulation of 183,800. there are also two major dailies published in Malay, Berita Harian (circulation 350,000 in 2002) and Utusan Malaysia (240,000). the New Straits Times is an English-language paper that had a daily circulation of 190,000 in 2002. Malaysian Nanban is a Tamil-language daily.

In Petaling Jaya leading newspapers include two Chinese publications, New Life Post (every other week, circulation 231,000 in 2002) and Sin Chew Jit Poh (daily, 227,070). the Star is published in English and had a 2002 circulation of 220,490 daily.

Though the constitution provides for freedom of speech and a free press, in practice the government is said to restrict the flow of information deemed "sensitive," including issues regarding citizenship of non-Malays and the special position of Malays in society. Under the Printing Presses and Publications Act, every publisher must obtain a license, to be renewed annually by the government. The government has the right to restrict or ban such publications if their content is considered to contain malicious or distorted views of the government. As such, the media generally practices self-censorship, providing laudatory, noncritical coverage of government activities.

ORGANIZATIONS

The Malaysian government promotes thrift, credit, processing, marketing, farming, consumer, and housing cooperatives. the cooperative movement was introduced in Malaya in 1922. the Chinese are organized along clan, common dialect, or occupational lines into rural credit associations. These local associations set up and maintain schools, build temples, and provide burial, relief, and employment services. In the larger cities, chambers of commerce, organized along ethnic lines, promote the economic welfare of the group represented. Specialized trade and industry associations include the Pepper Marketing Board, Malaysian Pineapple Industry Board, and the Malaysia Cocoa Board. The National Chamber of Commerce and Industry of Malaysia is in Kuala Lumpur. Professional associations are available for a wide variety of occupations.

Cultural organizations include the multinational Royal Asiatic Society and the International Institute of Islamic Thought and Civilization. Educational and research organizations include the Malaysian Medical Association and the Malaysian Scientific Association. There are several other associations dedicated to research and education for specific fields of medicine and particular diseases and conditions, such as the National Heart Association of Malaysia.

Youth organizations include the Federation of Malay Student Unions, Girl Guides Association of Malaysia, Malaysia Council of Churches Youth Division, Muslim Youth Movement of Malaysia, Junior Chamber, National Union of Malaysian Muslim Students, and the United Malaysian Youth Movement. YMCA/YWCA chapters are also active. There are several sports associations in the nation, including the regional Asean Football Federation. there are active branches of the Special Olympics.

Kiwanis and Lion's clubs have programs in the country. there are national chapters of the Red Crescent Society, Habitat for Humanity, UNICEF, and Amnesty International.

TOURISM, TRAVEL, AND RECREATION

Most large hotels are in the major cities of Kuala Lumpur and George Town. The best-known hill resort areas are Cameron Highlands, Raub, and Pinang Hill. Island resorts off the coast of the peninsula are Langkawi and Pangkor. Horse racing, football (soccer), rugby, cricket, and sepak raga (a form of badminton) are popular spectator sports. Kite fighting and top spinning are traditional pastimes for children and adults, and silat (a Malay martial art) is popular in rural areas.

Passports are required of all entrants. Citizens of most countries, including the United States, Australia, and China, are required to have visas. Precautions against yellow fever, typhoid, and malaria are recommended before travel to Malaysia.

There were 10,576,915 foreign visitors who arrived in Malaysia in 2003. Tourist receipts totaled $6.7 billion. Hotel rooms numbered 144,380 with an occupancy rate of 53%.

In 2004, the US Department of State estimated the daily cost of staying in Kuala Lumpur at $129; and other areas, $121.

FAMOUS MALAYSIANS

Among the foremost Malaysian leaders of the past was Sultan Mahmud, 16th-century ruler of Malacca. A great figure in Malay culture was 'Abdallah bin 'Abd al-Kabir (surnamed Munshi', 1796–1854), sometimes called the greatest innovator in Malay letters. The best-known figure in the political life of modern Malaysia is Tunku Abdul Rahman Putra bin Abdul Hamid Halimshah (1903–1990), first prime minister of the Federation of Malaysia. Other political leaders are Tun Abdul Razak (1922–76), the nation's second prime minister (1970–76); Datuk Seri Mahathir bin Mohamed (b.1925), prime minister 1981–2003, succeeding Dato Onn bin Ja'afar (1895–1962), a founder of the United Malays National Organization; and Sir Cheng-lock Tan (1883–1960), leader of the Malaysian Chinese Association. Abdullah bin Haji Ahmad Badawi (b.1939) succeeded Mahathir bin Mohamed as prime minister in 2003.

DEPENDENCIES

Malaysia has no territories or colonies.

BIBLIOGRAPHY

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Stewart, Ian. The Mahathir Legacy: A Nation Divided, A Region at Risk. London, Eng.: Orion, 2003.

MALAYSIA

COUNTRY OVERVIEW

LOCATION AND SIZE.

Malaysia is situated in Southeast Asia, bordered by Thailand in the north, Indonesia in the south, and the Philippines in the east. The country has an area of 329,758 square kilometers (127,320 square miles). Comparatively, the territory of Malaysia is slightly greater than that of the state of New Mexico, the fourth-largest state in the United States. The Federation of Malaysia consists of 13 states, and is divided into 2 parts: 11 states are located in Peninsular Malaysia (also called West Malaysia) and 2 comprise East Malaysia, which is situated on the island of Borneo (see map). Peninsular and East Malaysia are separated by 640 kilometers (400 miles) of the South China Sea. Malaysia's capital city, Kuala Lumpur, is located in southeast Peninsular Malaysia, just 300 kilometers (187 miles) from Singapore. However, a new capital, Putrajaya, is being developed outside the overcrowded metropolitan area as the new administrative center. The strategic importance of Malaysia is in its location along the Strait of Malacca, which is a major sea-route connecting the Far East to Asia, Europe, and the Middle East.

POPULATION.

The population of Malaysia was estimated at 21,793,000 in July 2000. It has almost doubled since the 1960s due to improved health, medical facilities, and longer life expectancy. In 2000, the birth rate stood at 25.3 per 1,000, while the death rate stood at 5.25 per 1,000. The estimated population growth rate is 2.01 percent and if the current trend remains unchanged, the population could reach 31 million by 2020. The population is very unevenly distributed, with almost 81 percent, or 17.5 million, living in Peninsular Malaysia, and 19 percent, or 4.2 million, living in East Malaysia. The population density is about 129 people per square kilometer (334 people per square mile) in Peninsular Malaysia and about 20 people per square kilometer (52 people per square mile) in East Malaysia.

Malaysia is a multinational and multicultural country with a very diverse population. Malays and several indigenous groups make up 58 percent of the population. Ethnic Chinese, the second-largest ethnic group, make up 26 percent of the population; Indian descendants make up 7 percent, and various other groups together account for the remaining 9 percent. The current ethnic structure was formed during the colonial era in the 19th and 20th centuries, when the British administration encouraged migration from India and especially from China. The Malaysian population is very young, with 35 percent below age 14 and just 4 percent of the population older than 65. Urbanization came to Malaysia relatively late. In 1970, just over 28.8 percent of Malaysians lived in urban areas. In 1999 over half of Malaysians—57 percent—were living in urban areas. It is expected that within the next 10 to 15 years more than 70 percent of the population will live in urban areas, mainly in the Peninsular Malaysia.

Religion plays a very important role in the country. Islam is the official national religion and nearly all Malays are Muslims. Most ethnic Chinese are Buddhist. The majority of Indians (comprising the descendants of migrants from what became India, Pakistan, and Bangladesh) are Hindu, although there are many Muslims among members of this community. The largest proportion of the Chinese community has traditionally lived in the urban areas, while Malays have often lived in the country's rural regions.

In 1960, the Malaysian population was about 8 million, and the country at one time had one of the highest birth rates in Asia. The population doubled between 1960 and 1990, although population growth began to decline in the 1990s. The decline in population rates could be linked to the socio-economic changes in the economy that tightened the labor market and increased the number of women in the workforce, and the better education of women. Malaysia experienced an inflow of foreign workers employed mainly in the low-skill and low-wage construction and services sectors and in agricultural plantations. The Malaysian government would like to regulate the inflow of illegal migrants, who arrive mainly from neighboring Indonesia, as well as from Bangladesh and Burma, attracted by the geographical proximity and higher wages.

OVERVIEW OF ECONOMY

At present, Malaysia's industrial and service sectors are the 2 major pillars of the national economy. However, agriculture and mining were the 2 dominant sectors during its early history. Britain had slowly but steadily advanced into the region in the 18th and 19th centuries, establishing control over the territory of what would become present-day Malaysia. The British were attracted by the rich natural resources of this region and its convenient location along the Strait of Malacca, which was the main sea route connecting the Far East with British India and Europe. The British established large-scale plantations and introduced new commercial crops (rubber in 1876, palm oil in 1917, and cocoa in the 1950s). They also developed a large mining sector and encouraged migration of Chinese and Indian workers to these plantations and mines.

In August 1957, the Federation of Malaya was granted independence within the Commonwealth of Nations. In 1963, the Malaysian Federation was founded, comprising the Federation of Malaya, Sabah, Sarawak, and the State of Singapore. Singapore, however, left in 1965.

Since achieving independence, the Federation of Malaysia faced a need to develop and to diversify its economy, having a rapidly growing population. The country abandoned reliance on the export of primary natural resources and agricultural products and established itself as a rapidly industrializing country with a diversified export base. By the beginning of the 21st century Malaysia had become one of the fastest growing economies in Southeast Asia and third-richest state (after Brunei and Singapore) in the regional grouping known as the Association of South East Asian Nations (ASEAN).

The Malaysian government promoted the free market with limited state intervention and export-oriented industrialization. Its exports to the international market were used to promote efficient use of the country's resources and generate hard currency , which was necessary for catching up and further developing into areas of technological and industrial innovation. In the mid-1960s, Malaysia established 5-year planning, targeting certain areas of economic growth and social changes, and allocating public resources for priority sectors of the economy and for infrastructure development. Despite these efforts, the government was reluctant to institute centralized control over the state's economy. The 5-year plans became a basis for official development strategies. For example, the recently completed "Seventh Plan" (1996-2000) targeted productivity growth and moved the country towards capital-intensive, high-technology industries. The political and inter-communal violence that had undermined the country's stability and security in the 1960s and 1970s gave way to a period of remarkable stability. This has attracted international investors and greatly contributed to the rapid economic growth of the 1980s and 1990s, especially in the manufacturing and service sectors of the Malaysian economy. Unlike the government of neighboring Indonesia, the Malaysian government has managed to keep its external debt at a relatively moderate level. In 1998, external debt stood at US$42 billion, or 59 percent of GDP with debt service payments of about US$6.0 billion. Estimates for the year 2000 estimated that Malaysian official reserves stood at US$29.6 billion. However, the repatriation of the profits by foreign investors may cause a problem for the Malaysian economy in the future.

The structure of the Malaysian economy has changed during the last 2 decades. According to the World Bank, the proportion of manufactured production grew from roughly 20 percent of GDP in the early 1980s to 31.5 percent of GDP in the late 1990s. Manufactured products accounted for around 85 percent of gross export earnings in 1999, with electronic goods becoming one of the most important products. The role of mining has steadily declined during the last few decades (Malaysia was one of the world's largest exporters of tin in the 1970s), now contributing just 7 percent of GDP. Malaysia continues, however, to export tin, gold, bauxite, ilmenite (a titanium ore), oil, and gas. Meanwhile, the role of agriculture in the country's economy has also been declining, although it provides employment to large numbers of Malaysians. Nevertheless, Malaysia remains one of the world's leading exporters of rubber and timber and produces almost half the world's palm oil. Tourism is another important and rapidly growing sector of the economy, with about 7.5 million tourists visiting the country in 1999 and contributing RM10 billion to the national economy.

Malaysia has a very diverse economy. The manufacturing sector is dominated by large multinational corporations , with a heavy Japanese presence among the largest companies. Meanwhile, the agricultural sector is dominated by medium and small firms. In East Malaysia, Sabah, and Sarawak, and in some northern states, many farmers are still engaged in subsistence agriculture. In the service sector, especially in retail trade, large international superstores such as Marks and Spencer, SOGO, and Yaohan are complemented by a number of medium and small enterprises.

Rapid economic growth and stability brought economic prosperity to a large proportion of the population, especially in urban areas. It also helped to keep unemployment at a very low 3 percent (for comparison, unemployment in the United States was 4.2 percent in 1999). In some sectors, Malaysia has begun to experience a shortage of labor. In the late 1990s, there was an inflow of large numbers of foreign workers through legal and illegal channels from neighboring Indonesia, with whom Malaysia shares some linguistic and cultural similarities, and from Bangladesh, the Philippines, and Burma (Myanmar). This inflow is sometimes blamed for existing criminal activities and black market operations.

Drugs are another important issue; Malaysia is situated very close to the so-called "Golden Triangle" (an area between Burma, Laos, and Thailand) that is the world's largest producer of illicit drugs such as opium. Malaysia is among the few countries in the world to have adopted the death penalty for possession and sale of drugs. However, neither organized crime nor the black market have had a significant impact on the national economy.

Due to the tremendous economic growth and its ability to preserve stability and promote its multicultural environment, Malaysia has become an increasingly popular destination for tourists from Europe, Japan, and North America. Malaysian tropical forests and beaches, colorful festivals in major cities, and luxurious hotels provide a vibrant environment for the development of hospitality businesses.

POLITICS, GOVERNMENT, AND TAXATION

Malaysia is a federal constitutional monarchy with a parliamentary democracy largely influenced by the British parliamentary system. The country consists of 13 states and 2 federal territories. The heads of 9 of the states are hereditary rulers, and the heads of the remaining 4 states are governors appointed by the sovereign, on the advice of the federal parliament. One of the unique features of the political system in Malaysia is that the sovereign (Paramount Ruler or Yang di-Pertuan Agang in Malay) is elected every 5 years by and from the 9 hereditary rulers of 9 states of Peninsular Malaysia. The sovereign is the supreme head of Malaysia and supreme commander of the armed forces, but his power significantly diminished in the 1990s due to the constitutional changes initiated by the parliament; at present he plays a visible but mostly ceremonial role in the political process in the country. The prime minister, who has considerable executive power, must be a member of the 192-seat House of Representatives, and he chooses the cabinet with approval from the sovereign.

There are a number of political organizations in Malaysia. Most prominent of them are the Barisan Nasional (National Front); the governing coalition of 14 parties that forms the United Malays National Organization (UMNO); the Malaysian Chinese Association (MCA); and the Malaysian Indian Congress (MIC). Of the opposition parties, the most influential is the Barisan Alter-natif (Alternative Front), which brings together the Parti Islam sa-Malaysia (Islamic Party of Malaysia), the Democratic Action Party, and some others. The governing coalition of the UMNO, MCA, and MIC was formed on the eve of independence, on a platform of achieving independence by peaceful means. It was transformed into the National Front after bloody inter-communal riots between Malays and Chinese in 1969. The Malayan Communist Party (MCP), which had gained much of its influence through its leading role in the resistance to Japanese occupation during World War II, ran a militant campaign for independence that did not get mass support and led to the Malayan Emergency (1948-1960), a period of social and political unrest. The MCP was banned and has never played an active political role in independent Malaysia.

Since Malaysia achieved independence, preservation of the balance between the main ethnic groups, political stability, and equal access to the national wealth were the major issues that shaped political debate and fueled conflict in the state. The coalition between the 3 main political parties and later the National Front, which represent the biggest ethnic communities in Malaysia, came to power on a platform of national consolidation and state paternalism (where the state makes decisions in social and economic affairs that in other countries would have been left to individuals and the market). This coalition was able to overcome deep divisions in Malaysian society and implement a successful policy of economic reforms, and it has remained in power ever since. In economic areas, the government has taken a very active role in the development and industrialization of the national economy. This has included significant investment in the state sector, a close alliance between government and private businesses, and the gradual privatization of state enterprises under a major privatization program launched in 1986.

In response to growing discontent between ethnic communities and the resultant rising social polarization, in 1970 the Malaysian government introduced a 20-year program called the New Economic Policy (NEP). The program was intended to encourage rapid economic growth in all sectors of the national economy, promote private entrepreneurship—especially among representatives of poor communities—and support small and medium-sized businesses. It was also intended to attract foreign investments, especially in modern technologies, by offering cheap and well-trained labor. At the same time, however, the government made major efforts to redistribute wealth. The NEP recognized the need for radical social changes and aimed to improve living conditions, economic power, and access to education and social benefits for Malays and indigenous people. These groups, who were called Bumiputera (sons of the soil), received privileged access to public services, were granted land rights and preferences in education and training, and benefited from job quotas in the public sector . This program was successful, and Malaysia achieved impressive economic growth, especially during the late 1970s, and throughout the 1980s. Between 1979 and 1989, the average annual GDP growth rate was around 5.2 percent, with manufacturing growing at an annual average of 8.2 percent and exports of goods and services at an annual average of 9.3 percent. In 1990, the NEP was replaced by the National Development Policy (NDP), which continued to promote economic growth, but relaxed some of the social requirements and privileges institutionalized under the NEP. Between 1989 and 1999, the average annual growth of GDP was around 7.6 percent, with manufacturing growing at an even more impressive 10.2 percent.

However, in 1997 Malaysia was affected heavily by the Asian financial crisis that started with the currency collapse in neighboring Thailand. Unlike Indonesia and Thailand, Malaysia became the only country in Southeast Asia to reject the International Monetary Fund's package of conditions and financial assistance, blaming international speculators for creating the crisis. The government, led by Prime Minister Dr. Mahathir bin Muhammad, opted for direct state intervention, imposing temporary restrictions on the currency exchange market and introducing various other measures, while his deputy called for further liberalization and economic restructuring . Against the recommendations of the International Monetary Fund (IMF), the Malaysian government temporarily established tough capital-control measures to contain capital outflow . The Malaysian currency, the Malaysian ringgit, was pegged to the U.S. dollar at a fixed rate of RM3.8 per U.S. dollar (according to the IMF, out of 16 larger emerging market economies, only China and Malaysia have fixed pegs). Although the IMF initially criticized the Malaysian government's imposition of capital control and other restrictive measures, it later recognized their effectiveness.

Allegedly, disagreement over the handling of the crisis led to the dismissal of Anwar Ibrahim, finance minister and deputy prime minister, who was also expelled from the UMNO, effectively ending his career. In 1998, Anwar was arrested on charges of corruption and homosexual activity and allegedly beaten while in custody. The trial consolidated Anwar's supporters and sparked protests across Malaysia in 1998 and 1999. Nevertheless, he was convicted on controversial charges of obstruction of justice. This trial undermined Mahathir's popularity at home and his standing internationally. The irregularities during the trial and police actions against demonstrations were condemned by human rights activists around the world.

The major proportion of government revenue comes from taxes, totaling 76 percent of revenue in 1999 (46 percent from direct taxes and 30 percent from indirect taxes ). In 1999, the income tax rate was 28 percent for both resident and non-resident companies; however, companies resident in Malaysia have tax exemption on income brought in from abroad. The Malaysian government has introduced a number of initiatives for manufacturing activities, tourism, the agricultural sector, transportation, and communication.

INFRASTRUCTURE, POWER, AND COMMUNICATIONS

From the colonial era, Malaysia inherited relatively well-developed but unevenly distributed infrastructure and transportation networks. After achieving independence, the Malaysian government made considerable efforts and large investments in expanding its highways, railroads, seaports, and airports. More recently, the government played an active role in encouraging development of modern modes of communications such as satellite telecommunications and the Internet. In the late 1990s, the government launched a privatization program in the transportation and communication sector, which brought private investments, allowed more flexibility, and provided initiatives for managers to increase profitability and production efficiency.

Malaysia is served by a network of 94,500 kilometers (58,721 miles) of primary and secondary roads, 70,970 kilometers (44,100 miles) of which are paved. This includes 580 kilometers (360 miles) of superior quality expressways, which connect Kuala Lumpur with Singapore and with major seaports and other destinations. However, the road transportation system is still underdeveloped in East Malaysia (Sabah and Sarawak), with most of the roads in Peninsular Malaysia. In the 1990s, with the rapidly growing number of privately-owned cars (840,000 new registrations in 1997 alone), the roads in the capital and other major cities became highly congested. This also brought air pollution in Kuala Lumpur to a very high level, which combined with pollution from forest fires in the Indonesian part of Borneo to create hazardous smog in 1997 and 1998. In 1996, there was a total of almost 7 million motor vehicles registered in Malaysia, including 2.8 million passenger cars, 3.4 million motorcycles and mopeds, 37,000 buses and coaches, and 400,000 trucks and vans. In response to the growing number of cars on the national roads, the government invested in development of the public transport system, including modernization of the country's railways and the construction of a light rapid-transit system in Kuala Lumpur.

Malaysia has a railway system of about 1,800 kilometers (1,120 miles), part of which was planned for privatization in 1998-99. In 2000, only 148 kilometers (92 miles) of railways were electrified. The major tracks run from Singapore to Kuala Lumpur, and further to Pinang and Bangkok (Thailand). However, the railways are unevenly distributed. There is only 1 railway track of about 134 kilometers (83 miles) in East Malaysia (in Sabah). Malaysia intends to invest heavily in development of a monorail system in Kuala Lumpur and into building new railways. The biggest project is the US$632 million (RM2.4 billion) Express Rail Link (ERL), which will connect Kuala Lumpur Central (the main railway station in the Kuala Lumpur City) with Kuala Lumpur International Airport (KLIA). In 1996-97, the 8.6-kilometer Kuala Lumpur People Rapid Transit (monorail) was built at a cost of US$300 million (RM1.14 billion). The U.S.-based Parsons Transportation Group provided design and engineering services to the local Malaysian firm building

Kuala Lumpur's light rail transit systems. Several other multi-multimillion dollar railway projects have been initiated, but some were put on hold due to the difficulties caused by the Asian financial crisis.

Malaysia's seaports were established during the colonial era and served as merchant ports as well as British naval bases. The major ports are Kelang, George Town, Pinang, and Kuantan on the Peninsula, and Kota Kinabalu and Kuching in East Malaysia. During the last few decades, these ports were expanded to serve rapidly-growing Malaysian exports and imports. The West Port of Port Kelang has seen RM2.2 billion worth of combined (private and government) investments, while there has been RM2.8 billion worth of investment in the Tan-jung Pelepas Port. Competition has grown between Malaysia and Singapore for servicing international ships and handling containers, although 40 percent of Malaysia's international trade was handled through Singapore until recently. In 1998 Malaysia's seaports handled 83 million metric tons of cargo. In late 2000, there was an announcement that the world's largest container line, Maersk-Sealand, intends to move its regional trans-shipment operations from Singapore to the Malaysian port in Johor.

Malaysia has also promoted development of aviation in order to serve growing tourism and business needs. The country has 32 airports with paved runways, and 83 airports with unpaved runways. The largest of them, the US$3.2 billion state-of-the-art Kuala Lumpur International Airport, was opened in 1998. It is capable of handling 25 million passengers and 1.2 million tons of cargo annually. U.S. firms, including Harris, FMC, Adtranz, and Honeywell, have been awarded contracts to supply passenger trams, jetways, and information systems for this new airport. Malaysia transformed its national partly-privatized air carrier, Malaysian Airlines, into a world-class company, operating a fleet of about 100 aircraft.

In Peninsular Malaysia, electrical power is supplied by the predominantly state-controlled Tenaga Nasional company. Due to the rapid industrial development and growing demand for electricity, considerable efforts were made to privatize the national utility company and develop private initiatives to build and operate new power generating plants. To this end, a private consortium, the Independent Power Providers (IPPs), was established. Malaysia has sufficient reserves of oil, gas, and coal to meet its energy needs. Additionally, in East Malaysia there is huge potential for building hydroelectric power plants, but their development will require considerable investments. In the mid-1990s, the Malaysian government considered building the Bakun Hydro-electric Dam, which would have been one of the world's largest dams, in Sarawak; the controversial plan was abandoned, however, due to financial difficulties. In 1998, Malaysia produced 57.45 billion kilowatt hours (kWh), 94 percent of which was produced using fossil fuel and 5.22 percent by hydroelectric power plants.

Telecommunications services in Malaysia are provided by several competing companies. The largest is Telecom Malaysia, which formerly had a state monopoly in the sector. The quality of telecommunication services is up to international standards, thanks to an inflow of private investments and the government's initiatives in developing this sector. In 1998, the country had 4.4 million telephone lines and 2.17 million mobile phones. In 1999 there were 8 major Internet service providers (including Telecom Malaysia, MIMOS Ltd., and Maxis Ltd.), with a number of new companies announcing their intention to enter the market. In 1998, the Malaysian government announced the development of the multi-billion-dollar Multimedia Super Corridor (MSC). This ambitious project, 15 kilometers wide and 50 kilometers long, and stretching from Kuala Lumpur to the new international airport, is planned to become a Malaysian "Silicon Valley." The MSC will include 2 "smart cities," employing a high-technology environment, high-capacity telecommunications, sophisticated infrastructure, and even "electronic government."

ECONOMIC SECTORS

By international standards, Malaysia has a mediumsized, but rapidly growing economy. It is self-sufficient in important natural resources, including gas and oil, and has a good environment and climate for the production of various crops. Its location, on a crossroads of major sea routes that connect the Far East to South Asia, the Middle East and Europe, provides some additional advantages for the development of its international trade.

Malaysia has a diversified and rapidly expanding manufacturing sector, which between 1989 and 1999 grew at an annual average of 10 percent. Although in many areas of manufacturing, it relies on imported technologies and foreign investments, Malaysia was able to join the world's leaders in some fields. In the 1990s, it became the world's third-largest producer of integrated circuits and one of the leading producers of domestic appliances. Some of the world's largest corporations, such as Dell and Microsoft of the United States, NEC and Mitsubishi of Japan, and others, have opened branches in Malaysia.

Agriculture is still an important export earner, although it experienced stagnation with an average annual growth of only 0.2 percent between 1989 and 1999. Malaysia is the world's largest producer of palm oil, accounting for almost half of the world's production. In the past, the country also was the world's largest producer of rubber, but in the early 1990s it was overtaken by Thailand and Indonesia. Malaysia remains the world's fourth-largest producer of cocoa. Nevertheless, the share of agriculture in the GDP declined from 29 percent in 1970 to 12 percent in 1998.

The role of the mining sector, which once played a very important role in Malaysian exports, is also declining. For a long time, Malaysia was the world's largest producer of tin, but in the early 1990s was overtaken by Brazil and neighboring Indonesia. Malaysia has relatively large reserves of gas and oil. The country is ranked 13th in terms of the world's gas reserves and 22nd in oil reserves.

Malaysia also tries to promote its service sector, which has grown steadily over the last 2 decades, becoming the second-largest sector of the Malaysian economy. However, in doing so, Malaysia has to compete with neighboring Singapore. Local trade, tourism, and other services currently make important contributions to the country's GDP, providing employment for 32 percent of the Malaysian labor force .

AGRICULTURE

Agriculture remains an important sector of Malaysia's economy, contributing 12 percent to the national GDP and providing employment for 16 percent of the population. The British established large-scale plantations and introduced new commercial crops (rubber in 1876, palm oil in 1917, and cocoa in the 1950s). The 3 main crops—rubber, palm oil, and cocoa—have dominated agricultural exports ever since, although the Malaysian share of the world's production of these crops declined steadily during the last 2 decades. In addition to these products, Malaysian farmers produce a number of fruits and vegetables for the domestic market, including bananas, coconuts, durian, pineapples, rice, rambutan (a red, oval fruit grown on a tree of the same name in Southeast Asia), and others. The Malaysian tropical climate is very favorable for the production of various exotic fruits and vegetables, especially since Peninsular Malaysia seldom experiences hurricanes or droughts.

As rice is a staple foodstuff in the everyday diet of Malaysians and is a symbol of traditional Malay culture, the production of rice, which stood at 1.94 million metric tons in 1998, plays an important part in the country's agriculture. However, the overall production of rice does not satisfy the country's needs, and Malaysia imports rice from neighboring Thailand and Vietnam.

In 1999, Malaysia produced 10.55 million metric tons of palm oil, remaining one of the world's largest producers. Almost 85 percent or 8.8 million metric tons of this was exported to international market. Malaysia is one of the world's leading suppliers of rubber, producing 767,000 metric tons of rubber in 1999. However, in the 1990s, large plantation companies began to turn to the more profitable palm oil production. Malaysia also is the world's fourth-largest producer of cocoa, producing 84,000 metric tons in 1999.

Logging in the tropical rainforest is an important export revenue earner in East Malaysia and in the northern states of Peninsular Malaysia. In 2000, Malaysia produced 21.94 million cubic meters of sawed logs, earning RM1.7 billion (US$450 million) from exports. Malaysia sells more tropical logs and sawed tropical timber abroad than any other country, and is one of the biggest exporters of hardwood. Despite attempts at administrative control and strict requirements regarding reforestation in the early 1990s, logging companies often damage the fragile tropical environment. Sharp criticism from local and international environmentalist groups gradually led to bans on the direct export of timber from almost all states, except Sarawak and Sabah. In December 2000, the government and representatives of indigenous and environ-mentalist groups agreed that there is a need to adopt standards set by the international Forest Stewardship Council (FSC), which certifies that timber comes from well-managed forests and logging companies have to be responsible for reforestation.

INDUSTRY

MINING.

Tin, oil, and gas are the major natural resources of export significance produced by the mining sector in Malaysia. The mining of tin was introduced during the colonial era and until the 1980s the country was the world's largest producer of tin, being overtaken in the early 1990s by Brazil and neighboring Indonesia. The major mines are situated in Peninsular Malaysia, making it easy to transport their products to the nearest seaports. Malaysia's exports of tin declined from 36,812 metric tons in 1994 to 22,376 metric tons in 1998, affected by fluctuations in the world market.

During recent decades, Malaysia has increased production of crude petroleum and natural gas. In 1999, it produced 693,000 barrels of crude oil per day and 3.8 billion cubic feet of liquefied natural gas (LNG). The high-quality oil is extracted mainly from offshore platforms in the states of Terengganu, Sabah, and Sarawak, with a total of about 40 oilfields in operation (1999). There are 5 oil refineries situated in Malaysia. The production of gas increased steadily in the 1990s to meet the rising demand in the domestic and international markets, with exports mainly going to Taiwan, South Korea, and Singapore. Malaysia was ranked thirteenth in the world in terms of gas reserves and twenty-second in oil reserves in 1999. The state-controlled petroleum corporation, Petronas, has been seeking a greater role in the international market, investing in promising new projects in the Middle East and Southeast Asia.

Overall, mining plays a declining role in the national economy of the country, contributing just under 7.3 percent of GDP and providing employment for 39,000 people or under 1 percent of the labor force (1998). However, there is great potential for development of this sector, since Malaysia has various relatively under-exploited mineral resources in East Malaysia (Sabah and Sarawak), including bauxite, iron ore, copper, ilmenite, and gold. Additionally, there are large offshore reserves of high-quality oil and gas.

MANUFACTURING.

Malaysia has established a diverse and quickly-growing manufacturing sector that plays an increasing role in the Malaysian economy. Manufacturing contributes about 29 percent of the GDP, providing employment to 2.3 million people or 27 percent of the workforce (1999). From the late 1970s, the proportion of GDP provided by the manufacturing sector in Malaysia grew from 20.2 percent in 1979 to around 29 percent in 1999. The United States continues to be the single largest foreign investor in Malaysia's manufacturing sector, with approved new manufacturing investments totaling US$1.37 billion (RM5.2 billion) in 1999. The major investment projects were in the chemical, electronics, and electrical industries.

Malaysia built up its manufacturing sector mainly in the 1970s and 1980s, utilizing its long-established industrial centers on the island of Pinang and the Kelang Valley, its well-developed transportation infrastructure (including seaports and railways), and the entrepreneurial skills of its small and medium-sized businesses. The industrial sector initially consisted of oil refining, machinery assembly, and light industries (including foodstuff processing and textile manufacturing). However, as in neighboring Singapore, the Malaysian manufacturing sector was boosted in the 1970s and 1980s by the extensive growth of the electric assembly and electronics sectors. Malaysia became an important producer of radios, television sets, stereo equipment, and other related products. In the 1980s, the Malaysian government launched its national automobile project, the locally produced Proton car (in cooperation with Mitsubishi of Japan), and in the late 1980s, it started exporting the Proton to the international market. In the 1990s, there was further growth in the manufacturing sector, especially in export-oriented electronics production, including semiconductors, silicon wafers, and other items. Malaysia has become the world's third-largest producer, and one of the world's largest exporters, of semiconductors.

As in neighboring Singapore, the Malaysian government has played an active role in industrialization and economic development. In this regard, the Malaysian Industrial Development Agency (MIDA) has been instrumental in promoting the rapid development of targeted sectors of industries (especially knowledge-and technology-intensive sectors), since all industrial projects that involve foreign direct investments (FDIs) must be approved by the MIDA. The government also used direct investments and encouraged the inflow of FDIs, establishing special export-processing zones where investors were given access to well-developed infrastructure and enjoyed tax breaks and other privileges. Since the 1980s, the government has actively promoted the electronics, information technology, and multimedia sectors, and has encouraged the relocation of labor-intensive industries to Indonesia and Thailand.

Most of Malaysia's electrical and electronic products are produced for export to the United States, Europe, and other markets. This makes its manufacturing economy vulnerable to downturns in the regional and international market. Despite some restrictive measures and financial initiatives, Malaysia was negatively affected by the 1997 Asian financial crisis. In 1997 and 1998, its manufacturing sector experienced serious contraction; dozens of plants were closed and thousands of workers lost their jobs. In 1998 alone, the sector was reduced by about 10.9 percent across the board. However, in 1999 and 2000, Malaysia managed to reverse the recession in manufacturing, and this sector experienced an impressive growth of 12 percent per annum.

Malaysia is one of ASEAN's leading exporters of furniture, with total exports reaching about US$1.02 billion (RM3.9 billion) in 1999. Access to cheap local wood makes Malaysian furniture manufactures very competitive in the international market. In 1999, the United States was the largest single market for Malaysian wooden furniture (37 percent), followed by Japan (14 percent), Singapore (9 percent), and the United Kingdom (9 percent). If the rapid growth in this sector remains unchanged, by 2005 Malaysia could become one of the top ten furniture exporters in the world.

SERVICES

TOURISM.

Tourism is becoming an increasingly important sector of Malaysia economy. Together with the retail sector, it provides employment for almost 1.57 million people, or around 17 percent of the labor force. Roughly 7.5 million tourists visited the country in 1999, contributing RM10 billion to the national economy. This makes tourism one of Malaysia's top foreign exchange earners. According to the national authorities, the country has 1,426 hotels, the total room capacity of which almost doubled during the 1990s to about 110,000 in 2000. Most visitors have been from Singapore, Thailand, Indonesia, Japan, China, the United Kingdom, and Australia.

In order to develop tourism, Malaysia has promoted its diverse cultural environment, hosting a number of cultural festivals and performances. It has also publicized its rich natural heritage, which includes tropical forests, coral reefs, unspoiled mountain ranges, rivers, and national parks. The country offers tax-free bargain shopping and excellent service, with top-class hotels such as Sheraton, Hilton, Intercontinental, and other well-established international chains opening branches. It offers a wide variety of activities, from eco-friendly and adventure tourism to scuba diving and relaxed family holidays on the numerous Malaysian islands and beaches. Additionally, Malaysia has signed visa-free regimes with most countries in Asia, the Americas, and Europe, enabling international tourists to travel to Malaysia without obtaining entry visas. In 1997, however, tourism suffered from the regional financial crisis and by the smog caused by several months of forest fires in Indonesia. The number of tourist arrivals declined significantly in 1997 and 1998; however, there was a strong recovery in arrivals in 1999 and 2000.

FINANCIAL SERVICES.

The financial service industry is another rapidly growing sector of Malaysia's economy. In terms of employment, it almost doubled from 230,900 people in 1988 to 447,200 people in 1998. Traditionally, this sector was built around the banking system, investments, insurance, and some other activities. For more than a decade until 1997, the financial service sector experienced rapid expansion fuelled by the inflow of Foreign Direct Investments (FDIs), reasonably cheap credits, and overall rapid economic growth in all sectors of the economy. Malaysia developed a sophisticated computerized banking payment system, encouraging development of electronic payment systems and electronic banking. The U.S.-based Motorola and Unisys have taken part in these projects as members of consortia that included local companies. Malaysia's government considered developing Kuala Lumpur into a regional financial center, competing with Singapore for this role, although it was slow to allow foreign brokers to operate at the Kuala Lumpur Stock Exchange (KLSE).

The 1997 regional financial crisis started with the collapse of the Thai currency (the Baht), which severely affected the Malaysian financial sector. Share and property prices declined significantly, provoking panic among local and international investors. Within a short time, the Malaysian ringgit had depreciated against major international currencies, especially the U.S. dollar. This inflicted considerable damage on local businesses, as a significant number of credits were in U.S. dollars and local companies faced extreme difficulties repaying those credits. The Kuala Lumpur Stock Exchange (KLSE) lost more than half its value, plunging from RM807 billion in the middle of 1996 to RM376 billion in the middle of 1997. In response to this crisis, the Malaysian government imposed currency and capital controls, locked in foreign investors' share holdings for 1 year, and initiated a share-buying scheme with the government-controlled funds. In 1999 and 2000, financial services began their recovery, and the government slowly eased various restrictions and state control in this sector.

RETAIL.

Traditionally, in Malaysia many small and medium-sized businesses were built around the retail sector and were often associated with small shops and cafés run by Chinese merchants. The retail sector grew, in terms of its size and quality of service, due to a general rise in income among the population and an increase in tourism arrivals. In the 1990s, major international retail chains such as Yaohan and SOGO of Japan, Marks and Spencer of the United Kingdom, MAKRO of France and fast-food franchises such as McDonald's, Kentucky Fried Chicken (KFC), and others opened outlets in Malaysia. However, there are still a number of small family-run traditional shops and cafés, selling both imported and locally-made products.

Tourists can also buy pirated products, including footwear, optical disks (CDs), and computer software. According to one study, piracy may have accounted for losses of US$84.2 million (RM320 million) in market value in 1999. In April 2000, the United States Trade Representative (USTR) placed Malaysia on the special Priority Watch List for its failure to reduce pirated optical disc production and export. In response to this, the Malaysian police regularly launch crackdowns on unlicensed software businesses.

INTERNATIONAL TRADE

Malaysia's international trade experienced tremendous growth throughout the last 3 decades. The Malaysian government welcomed export-oriented industries, created a very positive investment environment in the country, and fostered close relations between government and private businesses. The government established a few barriers on the importation of goods and services, although it often opted for selective intervention and for protecting some sectors of the national economy. Over 5 years, Malaysia more than doubled its exports from US$29.416 billion in 1990 to US$74.037 billion in 1995. After the 1997 regional financial turmoil, Malaysia experienced economic recession, although this recession was much smaller and less destructive than that in South Korea or in Indonesia. Due to tough economic measures, Malaysia's exports recovered and reached US$83.5 billion in 1999.

Historically, the United States has long been one of Malaysia's largest trading partners, its exports to the United States reaching 21.9 percent in 1999, a year in which it was the United States' 12th largest trading partner. Trade between these 2 countries consisted mainly of assembled electrical goods and manufactured electronic

products. Neighboring Singapore is traditionally the second-largest export market, with the proportion of goods to Singapore reaching 16.5 percent and dominated by electrical and electronic equipment, machinery, metals, and mineral fuels. Japan is in third place at 11.6 percent, and, once again, exports are dominated by electrical and electronic equipment, machinery and mineral fuels. Other export destinations are the Netherlands, Taiwan, and Hong Kong.

Japan, the United States, and Singapore are also the 3 largest sources of imports. Most Malaysian imports originate from Japan, with the Japanese share of imported products reaching 20.8 percent in 1999, and consisting mainly of electrical and electronic equipment and machinery. The second most important source of imports is the United States, totaling 17.4 percent and dominated by electrical and electronic equipment and transportation equipment. Malaysia was the United States' 17th largest export market in 1999. Malaysia's third most important source of imports is Singapore, totaling 14.0 percent.

During the last 3 decades, Malaysian exports shifted from the sale of agricultural products, raw and processed natural resources, and labor-intensive manufactured goods (including clothing, footwear, and textiles) to the sale of skill-intensive products, including electrical and electronic equipment and parts, and services. The proportion of exported electrical machinery, appliances, and parts—including semiconductors, electronic equipment, and electrical appliances—reached almost 56 percent in 1998. The other important export products were commodities, chemicals and chemical products, manufactured metal products, and textiles, clothing, and footwear.

Malaysia has managed to maintain a positive trade balance, exporting more goods than it imports. Even during the recession of 1997 and 1998, the country had a large trade surplus of US$4.0 billion in 1997 and US$17.7 billion in 1998.

In the mid-1990s Malaysia faced growing competition from neighboring Indonesia, the Philippines, and Thailand, which could offer cheaper labor and larger and growing domestic markets. However, recent political and economic uncertainty in the region, especially military conflicts and terrorist activities in Indonesia and the Philippines has undermined the attractiveness of those markets. This has given an advantage to politically and economically stable Malaysia, although its government has often been criticized for the undemocratic measures used to maintain stability and political balance within the country.

Although Malaysia's industrialization and economic growth is highly dependent on international trade, the Malaysian government was less supportive of full economic liberalization than neighboring Singapore.

Malaysia's leadership was quite reluctant to support free trade within the Asia Pacific Economic Co-operation (APEC) region, arguing that developing countries need more time to prepare for lifting all trade barriers. Additionally, the Malaysian prime minister, Dr. Mahathir, suggested setting up a new regional body, the East Asian Economic Caucus (EAEC), in order to strengthen the negotiating power of East-Asian countries with regard to the North American Free-Trade Agreement (NAFTA) and the European Union.

MONEY

During the last 2 decades the value of Malaysian currency has shown remarkable stability, mainly due to the country's steady economic growth and regular state intervention into the currency exchange rate . The Malaysian dollar was floated in 1973, and in that year its exchange rate stood at around RM2.45 per US$1. At the same time, the Malaysian dollar became the sole unit of legal tender, as Singapore and Brunei currencies were excluded from free circulation in the country. The government periodically revised its exchange control regulations, introducing further liberalization of the controls. In 1985, the Malaysian ringgit was valued at RM2.48 per US$1, and this exchange rate remained practically unchanged until the 1997 Asian financial crisis.

During the period between 1973 and 1997, inflationary pressure was relatively small, with a peak inflation rate of around 17 percent in 1974. Remarkable stability was supported by a very high rate of savings. Malaysia has one of the highest savings rates in the world, at a level of around 40 percent of GDP. However, Malaysians also borrow rampantly, with a large proportion of investments directed to the booming property market and stock market. Outstanding loans were equivalent to 170 percent of GDP by the end of 1997, one of the highest such ratios in the world.

The Malaysian banking system is well established, with 38 commercial banks operating in the country in 1996, including 14 foreign banks and 12 merchant banks.

The foreign banks were represented by the biggest names, such as ABN AMRO Bank of the Netherlands, Mitsubishi and Tokyo banks of Japan, Citibank of the United States, Standard Chartered Bank of the United Kingdom, and others. However, the fundamental problem of the banking system in Malaysia, as in other emerging markets in Asia, was its exposure to bad loans , allegedly made to politically well-connected businessmen and to overheated property and share markets. This was an important factor that eventually led to a financial downturn.

The 1997 Asian financial crisis affected all regional currencies, dragging them downwards. The property and share markets also dwindled, putting additional pressure on the currencies. The Malaysian ringgit had plummeted from about RM2.55 per U.S. dollar in early 1997 to about RM3.75 in April 1998, and further to RM4.2 in August 1998 (speculations against the Malaysian ringgit on the currency exchange market largely contributed to this downturn). In response to this pressure, in September of 1998 the Malaysian government introduced a range of capital and currency-exchange control measures. A key component of this unprecedented move was pegging the Malaysian ringgit at RM3.80 per US$1. The Malaysian government also closed all legal channels for the transfer of Malaysian ringgit abroad and froze the repatriation of stock assets abroad held by non-residents in Malaysia for a period of 12 months. It even limited its own tourists headed abroad from taking more than RM500 in cash.

Such tough measures reduced the impact of the financial turmoil of 1997 and 1998, although they were sharply criticized by the IMF and other international organizations. In August 1998, Russia defaulted on its international obligations, while Malaysia was slowly achieving economic recovery. Malaysia rejected financial assistance from the IMF and kept its external debt at the relatively moderate level of US$42 billion, or 59 percent of GDP, with debt service payments of about US$6.0 billion (1998). In order to rehabilitate non-performing loans (NPLs), the Malaysian government established the Danaharta, an asset-managing company with the task of buying and rehabilitating NPLs, and the Corporate Debt Restructuring Committee, which facilitated voluntary debt restructuring between creditors and debtors. By May 2000, the Danaharta had acquired about 42 percent of NPLs, with a total value of US$9.63 billion. The government also injected US$1.9 billion into 10 banking institutions. In 1999 and 2000, Malaysia's economy was recovering, prompting the government to ease many of the restrictive measures, although it will take time for international investors to revive their confidence in the Malaysian market.

Malaysia has a single stock exchange, the Kuala Lumpur Stock Exchange (KLSE). During the period of expansion in the 1980s and 1990s, the KLSE was among the fastest growing stock exchanges in the region, with ambitions to become one of the region's leading financial centers. However, the KLSE lost ground after the stock market collapse in 1997, with some shares losing up to 80 percent of their value. With the strong economic recovery, there was a return of investors and the KLSE strengthened in late 1999 and 2000.

POVERTY AND WEALTH

Malaysia experienced extraordinary economic growth during the last 3 decades, which brought prosperity and higher standards of living to the majority of the people. One of the most important achievements in Malaysia has been the elimination of extreme poverty and hunger. The urban areas—especially the capital Kuala Lumpur, and major tourist destinations and industrial cities such as George Town, Malacca, and Petaling Jaya— enjoy a quality of living very similar to that in developed countries. The major cities have first-class shopping centers, condominiums with air-conditioning and swimming pools, expensive private schools, and elite clubs. The rural population, meanwhile, often lives in traditional wooden houses in kampungs (villages) with limited facilities.

The monthly gross household income nearly doubled from MR1,167 in 1990 to MR2,007 in 1995. There has emerged a fairly strong middle class. However, incomes are still distributed unevenly. For instance, the wealthiest 20 percent of Malaysians control 53.8 percent of the wealth, while the poorest 60 percent of the population controls just 21.3 percent of wealth. At the very bottom of the income range, the poorest 20 percent of the population controls only 4.5 percent of wealth. Disparities exist along both geographic and ethnic lines. In general, the Chinese population, which has traditionally lived in urban areas and been involved in small and medium-sized businesses or employed in various industries, has had higher incomes than the Malays, who often live in small towns and villages and were traditionally engaged in agriculture. Secondly, there are considerable differences in standards of living, incomes, and access to medical and other social benefits in different parts of the country. Peninsular Malaysia, where the majority of the population lives, has much higher standards of living compared to East Malaysia.

Since 1970, the Malaysian government has actively implemented social policies aimed at the elimination of poverty and social inequality, and the development of a social welfare system . The communal unrest of 1969 prompted the Malaysian government to introduce the New Economic Policy (NEP). This 20-year program established state support of poor communities and access to education and social benefits for Malays and indigenous people (the Bumiputera ). This latter aspect included the establishment of privileged access to public services, the granting of land rights, preference in education and training, and job quotas in the public sector. In the 1980s, Malaysia's leadership envisioned the formation of the Malay Baru (New Malays), a better-educated, politically and socially active people able to live in harmony with other communities. In the early 1990s the government relaxed some privileges and reduced some quotas for Bumiputera, making the social welfare system more inclusive and accessible to a wider range of people than it had been before.

The recent economic turbulence of 1997 and 1998 brought higher unemployment, higher prices, and lower incomes. This particularly affected the most vulnerable social groups of society, not only in rural areas, but also in major urban centers. Nevertheless, there were no large groups of people migrating from the country, and Malaysia's quality of life remained much better than in neighboring Indonesia, the Philippines, or Thailand. Around 6.8 percent of the population lived below the poverty line in 1997, most of them in East Malaysia (for comparison, in the neighboring Philippines 32 percent of the population lived below the poverty line in 1997). The economic recovery of 1999 and 2000 reversed the decline in incomes and standards of living.

WORKING CONDITIONS

During the last decade the Malaysian labor force has grown rapidly, due to robust economic growth and the large proportion of young people born in the 1970s. In 1999, the Malaysian labor force was 9.3 million people, with an unemployment rate of 3 percent, or around 270,000. Due to rapid expansion of all sectors of the national economy, there has been a high demand for all types of workers, especially skilled labor in the manufacturing sector and well-trained professionals in the services sector. This led in turn to better wages and rapidly improving working conditions.

The Malaysian government is trying to develop better education at all levels, as it wants to attract skill-intensive industries and services to the country. Primary education is compulsory, and young people may choose between a large number of both public and private schools and colleges. There is an established system of vocational and technical training. A number of Malaysians receive their education overseas, many of them with state support, although during 1997 and 1998, many students returned home. The most popular destinations for overseas education are the United States, England, Canada, and Australia. However, even the rapidly growing numbers of educated and trained Malaysians cannot meet market demand. In the late 1990s, Malaysia experienced shortages of medical doctors, information technology specialists, and professionals in various other areas. In order to meet growing demand of university-trained professionals, in 1994 Malaysia allowed foreign universities to establish campuses in the country.

The higher wages and better working conditions attract large numbers of temporary workers from neighboring Indonesia, Bangladesh, Thailand, and the Philippines. Many of them are hired to work in the low-skill and low-wage construction and service sectors and on agricultural plantations. However, Malaysia has also experienced an inflow of illegal foreign workers, prompting the government to implement harsh detention measures and mass deportation of unauthorized arrivals. Malaysian law does not allow foreign workers to join trade unions. The working conditions of illegal workers are generally inferior to those enjoyed by legally contracted workers. However, labor contractors may be prosecuted if workers complain about abuses or other problems.

The first trade unions appeared in Malaysia before World War II. There are currently 544 trade unions in Malaysia, engaging in the union activities of just over 11 percent of the workforce. Most of the private-sector trade unions are members of the Malaysian Trade Union Congress (MTUC), which was established in 1951. Around 90 unions of public-and civil-sector employees are members of the Congress of Unions of Employees in the Public and Civil Services (CUEPACS). Unions maintain their independence from the government and from political parties; by law, union officers may not hold principal positions in political organizations. However, some individual trade union leaders have been elected to the parliament, and the leader of MTUC joined the ruling party in 1997. The Malaysian Trade Union Act guarantees the right to form or participate in trade union activities, but it restricts the right to strike, calling for "socially responsible behavior." Strikes are extremely rare in Malaysia for several reasons, including strong demand in the labor market and the government's promotion of "industrial harmony." In case of labor disputes, the Ministry of Human Resources may intervene in conciliation procedures; in extreme cases, disputants may refer their case to the Industrial Court. The Industrial Relations Act prohibits employers from taking actions against workers for participating in lawful trade-union activities. There is no national minimum wage, although there have been calls recently from trade unions for its introduction. The Employment Act of 1955 established a maximum 48-hour working week.

The Malaysian Constitution prohibits forced and bonded labor by children, and the government claims that it rigorously enforces child-labor provisions. However, the International Confederation of Free Trade Unions estimates that 75,000 children are engaged as laborers. Faced with the shortages in the workforce, the Malaysian government encourages women to work, providing various initiatives. Currently, more than 35 percent of the labor force are women. However, unionization among women is generally lower than among men.

COUNTRY HISTORY AND ECONOMIC DEVELOPMENT

1400s. The Kingdom of Malacca is founded.

1511. Malacca is conquered by the Portuguese under Afonso de Albuquerque.

1641. The Dutch establish control in the region.

1786. The Sultan of Kedah leases the island of Pinang to the British East India Company.

1819. Singapore is founded by Sir Thomas Raffles.

1824. Malacca falls to Britain.

1888. British North Borneo and Sarawak become British protectorates.

1896. The British form a federation, comprised of Perak, Selangor, Negri Sembilan, and Pahang.

1909. British acquire control over Kedah, Kelantan, Perak, and Terengannu—the 4 northern states in Peninsular Malaysia—from Siam (now Thailand).

1921. Port Singapore becomes the principal base for British Navy in East Asia.

1942. Malay Peninsula is occupied by Japanese Army.

1945. Malaya is liberated from Japanese occupation.

1946. British impose a system known as the Malayan Union and grant political rights to immigrants.

1948. The Federation of Malaya is established.

1948. State of Emergency is declared in response to armed campaign by the Malayan Communist Party.

1957. Malaya is granted independence within the British Commonwealth.

1963. Malaysia is expanded to form the Federation of Malaysia; Singapore joins the federation.

1965. Singapore leaves the federation.

1967. Malaysia becomes a founding member of the Association of South East Asian Nations (ASEAN).

1969. Serious rioting breaks out in the capital city, Kuala Lumpur; more than 200 people killed.

1970. The Malaysian government introduces the New Economic Policy (NEP).

1981. Dr. Mahathir bin Muhammad becomes prime minister of Malaysia.

1983. Prime minister imposes restrictions on the power of the Yang di-Pertuan Agang and the Council of Rulers.

1995. The ruling political coalition Barisan Nasional wins parliamentary elections in landslide victory.

1997. In response to the Asian financial crisis, the government imposes restrictions on currency trading and announces public spending cuts.

1998. National Economic Action Council is established to advise the Malaysian Cabinet on the economic crisis.

1998. Prime Minister Mahathir bin Muhammad dismisses his apparent successor, Finance Minister and Deputy Prime Minister Anwar Ibrahim.

1999. The ruling political coalition Barisan Nasional wins parliamentary elections while losing 14 seats in the parliament.

FUTURE TRENDS

Malaysia's economy has benefited from several factors, including a stable political environment, an effective bureaucracy, flexible economic policies, export-oriented industrialization, and inflow of foreign direct investments (FDIs). This has brought prosperity and a high level of confidence to the majority of the population. The country has a healthy, rapidly growing economy, although its government has often been criticized for state intervention into economic development and the imposition of capital and currency exchange controls in 1998. However, subsequent events have shown that these were temporary measures, and the government is considering re-liberalization of its economy. Inflation remains low and is under control. Malaysian currency exchange is still tightly regulated and pegged to the U.S. dollar; with the economic recovery, the Malaysian ring-git might be floated again within the next few years. In 1999 and 2000, Malaysia achieved strong economic recovery and, if economic growth at an annual rate of 7.4 percent continues, within the next 20-30 years Malaysia may join the international club of developed nations. In 1998, as if to announce that it had arrived on the world stage, Kuala Lumpur saw the completion of the stunning Petronas Towers, the world's tallest skyscraper complex.

Nevertheless, there are several issues to be addressed. Malaysia's government has developed close relations with its private businesses. These "special relations" with some business groups have allegedly led to the emergence of political cronies with unlimited access to public resources. The experience of neighboring Indonesia shows that this is a dangerous trend that could negatively affect economic development in the future. In 1998-99, Malaysia was widely criticized for establishing increasingly tough political control of the country, and for some harsh measures against the opposition. It remains to be seen whether these measures have in the long term strengthened political stability or undermined it. The political succession of the current leadership will also be a problem. In neighboring Indonesia and Thailand, changes in the political leadership have led to destabilization of the political environment.

In the longer term, Malaysia will need to maintain its international competitiveness, since there is growing competition from other emerging markets for FDIs and for the transfer of modern technologies. Although political and social unrest in neighboring Indonesia and the Philippines has no direct effect on Malaysia, it threatens social stability by causing influxes of refugees and by undermining regional stability. Environmental issues are also important for Malaysia in the longer term as deforestation and global climate change may undermine the country's agriculture, which still plays an important role in the national economy. The recent forest fires in the Indonesian part of Borneo affected not only East Malaysia, but Peninsular Malaysia as well, by injecting hazardous air pollution. This sort of thing, if repeated, may undermine tourism, another important sector of the Malaysian economy. The forecast global economic slowdown may also negatively effect the export-oriented Malaysian economy.

DEPENDENCIES

Malaysia has no territories or colonies.

BIBLIOGRAPHY

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U.S. Central Intelligence Agency. CIA World Factbook 2000: Malaysia. <http://www.cia.gov/cia/publications/factbook/geos/my.html>. Accessed March 2001.

—Rafis Abazov

CAPITAL:

Kuala Lumpur.

MONETARY UNIT:

Malaysian ringgit (also known as the Malaysian dollar). One Malaysian ringgit (RM1) equals 100 sens. There are coins of 1, 5, 10, 20, and 50 sens. Paper currency is in denominations of RM2, 5, 20, 50, and 100.

CHIEF EXPORTS:

Electronic equipment, petroleum and liquefied natural gas, chemicals, palm oil, wood and wood products, rubber, textiles.

CHIEF IMPORTS:

Machinery and equipment, chemicals, food, fuel, lubricants.

GROSS DOMESTIC PRODUCT:

US$229.1 billion (at purchasing power parity, 1999 est.).

BALANCE OF TRADE:

Exports: US$83.5 billion (1999 est.). Imports: US$61.5 billion (1999 est.).

MALAYSIA

Major Cities:
Kuala Lumpur, George Town

Other Cities:
Alor Setar, Ipoh, Johor Baharu, Kota Baharu, Kota Kinabalu, Kuala Terengganu, Kuantan, Kuching, Melaka, Seremban

EDITOR'S NOTE

This chapter was adapted from the Department of State Post Report dated October 1994. Supplemental material has been added to increase coverage of minor cities, facts have been updated, and some material has been condensed. Readers are encouraged to visit the Department of State's web site at http://travel.state.gov/ for the most recent information available on travel to this country.

INTRODUCTION

Malaysia is a colorful amalgam of traditional and modern influences. Situated between the South China Sea and the Indian Ocean, it has drawn on China, India, Western Europe, Polynesia, and the Arab world to create a unique multilingual and multicultural nation.

British stewardship of the Malay States began in Penang in the late eighteenth century. After Japan's temporary conquest during World War II and a major Communist insurgency during the 1950's, sovereignty was transferred peacefully in 1957 to an independent federal government. Since independence, the Federation has expanded to include the former British colonies of Sabah and Sarawak on the island of Borneo and changed its name from Malaya to Malaysia to recognize the importance to the country of Chinese, Indian, and aboriginal peoples as well as the ethnic Malays. Singapore was a part of the Federation from 1960-1968.

For over a century Malaysia had enjoyed economic prosperity based on large-scale rubber and tin production. Over the past twenty years production of oil and gas has fueled Malaysia's rapid economic growth. Manufacturing, especially of electronics components, has recently assumed the chief position among Malaysia's exports.

The prosperity brought by tin, rubber, and later natural energy and electronics is supplemented by a stable system of public administration and public services. The culture, variety, and people make it a challenging and interesting country in which to live and work.

MAJOR CITY

Kuala Lumpur

Kuala Lumpur lies within the Federal Territory, an area of 244 square kilometers surrounded by the state of Selangor. It is near the middle of the west coast of peninsular Malaysia, 400 kilometers northwest of Singapore and 40 kilometers inland. It's population is approximately 1.3 million (2000 census). Within metropolitan Kuala Lumpur are located all the major offices of the Malaysian Federal Government; the city also serves as the commercial center of the country.

Food

Kuala Lumpur has several supermarkets, minimarkets, and other local markets that sell fresh produce and imported items. While the variety is large, most imported items cost substantially more than in the U.S. Excellent tropical fruits and vegetables, which often form part of menus here, include both the familiar and the exotic, such as bananas, mangoes, mangosteens, jackfruit, papayas, and the notorious, uniquely-scented durian.

Local seafood of good quality includes prawns, crabs, and a variety of fish. Local beef, mutton, pork, and poultry are also available. Many Americans prefer frozen or chilled beef and lamb imported from Australia and New Zealand. U.S. beef is available but expensive.

Many canned, bottled, frozen, and packaged foods are imported, as are most paper products. Shoppers can usually find the desired item or brand or a good substitute, but anything imported is expensive. Most stores stock baby foods, including formula, cereals, and strained foods. These items are more expensive here than in the U.S. Strained baby foods carry freshness dates. Not all brands of American-made formula are available and not all formula containers are dated for freshness, so arrange for shipment of any special brand recommended by a pediatrician.

Clothing

Malaysians are increasingly style-conscious; many are fully aware of the latest trends in Western fashions. However, Westerners should be conscious of relatively conservative dress codes in certain circumstances, especially among Malays. Use discretion in selecting attire to avoid inadvertently causing embarrassment to your host or guests. This is particularly important for women. Traditional dresses for Malay women have ankle-length skirts and long sleeves.

Generally speaking, Malaysia's hot, humid climate calls for light clothing, except at hill resorts, where sweaters or light jackets may be needed, especially at night. Extensive use of air conditioning, often supercooled, in offices, hotels and restaurants in Kuala Lumpur and other cities, needs to be taken into account in selecting attire. Hence there are occasions when transitional clothing such as lightweight sweaters, linen jackets for women, and suit jackets or blazers for men, should be worn for comfort. Rainstorms in Kuala Lumpur can be heavy, often occurring in the afternoon or early evening, but usually are brief. Because of the heat, umbrellas are used instead of raincoats.

Clothing and shoe stores in Kuala Lumpur offer a wide selection of items. However, adult sizes tend to be smaller than in the U.S., and large sizes can be hard to find. Prices are comparable to those in the Washington area. It is possible to find shoemakers who will make shoes to order at reasonable prices.

Many reasonably priced tailors are available, and most of them stock good supplies of imported and domestic materials. Attractive, locally-produced batik ties and shirts are reasonably priced. Cotton long-sleeve batik ranges from $12 to $40; silk batiks are more expensive and can exceed $100 each. Shoes larger than size 10 are difficult to find.

Women wear lightweight dresses with either long or short sleeves, or light skirts and blouses. A number of dressmakers offer an extensive selection of materials. In general, custom-tailored clothes are better than ready-made clothes which can be expensive, poorly tailored, and of inferior quality.

There are many shoe stores in Kuala Lumpur, but shoes larger than size 9 and narrow widths are hard to find.

Clothing requirements for children are simple. Schools require uniforms, but they can be made inexpensively here. Summer-weight clothes are worn all the time, except at the hill resorts. Tennis shoes and thongs are popular for all casual activities. I.S.K.L. uniforms include regulation shirts, which must be purchased at the school, and navy blue pants or skirts which can be made inexpensively by local tailors or purchased locally. High school students can wear navy blue or white slacks or long shorts. Girls may also wear navy blue or white skirts. Bring a basic supply with you. No denim is allowed. Some students wear light weight sweaters to school because of the air conditioning.

Supplies and Services

Malaysia is becoming an increasingly consumer-oriented society, and numerous shopping malls cater to the needs of Malaysia's growing middle class and the many expatriates living in Kuala Lumpur. Almost any product you would want to buy, or a reasonable substitute, can be purchased in Kuala Lumpur, but prices are higher than in the U.S. Most standard household and medical supplies and toiletries are readily available, but tend to be more expensive here than in the U.S. Some items are in constant supply, while others appear and disappear unexpectedly.

Familiar brands of American and English cigarettes and Dutch and English cigars are sold locally, as are various pipe tobaccos, but American brands are hard to find.

Basic Services: Tailoring, dressmaking, and shoe repair are all easy to obtain. Dry-cleaning services are available, but treatment for specialcare fabrics is not always available. Beauty shops and barber shops abound. Those in the international-class hotels are convenient and provide the most acceptable service. However, many people try the numerous unisex styling salons found in the shopping malls or the small barber shops clustered in alleyway shophouses run by Malay, Indonesian and Indian barbers.

Religious Activities

Malaysia is officially an Islamic country. However, non-Moslems are free to pursue their own religious beliefs and worship as they please. A variety of religious organizations serve the local Chinese, Indian, and expatriate communities. To avoid unintentionally giving offense, try to become familiar with the standards of behavior appropriate for interacting with members of each of the major Malaysian ethnic groups.

For Christians, local Anglican, Lutheran, Mormon, Presbyterian, Baptist, Methodist, and Roman Catholic denominations hold English-language services. The Presbyterian congregation serves as the principal expatriate international Protestant church, welcoming attendance by all worshippers without regard to previous affiliation. The nearest synagogue is located in Singapore.

Education

The International School of Kuala Lumpur (ISKL) is the only school in Kuala Lumpur which provides elementary and secondary education for foreign students using American elementary and college preparatory curricula. ISKL has been accredited by the Western Association of Secondary Schools and Colleges.

The school offers classes from pre-school (ages 3-4 years) through grade 12. Students transfer to equivalent grades in the U.S. Enrollment is generally about 1400. Students from a total of 46 countries attend ISKL. More Americans attend than any other nationality; Americans make up about 15% of the student body. (The Japanese are second at about 15%) ISKL offers a full college-preparatory program as well as a variety of extracurricular activities and intramural sports. Graduating seniors have a high acceptance rate at the colleges to which they apply in the U.S. The school provides bus transportation but no boarding facilities. Each year the faculty and students present several stage productions. The playing field is used not only for school events, but also for community softball games on Sunday-afternoons, football games sponsored by the American Association, and other community events. ISKL follows the standard American school year, but celebrates Malaysian instead of American holidays.

The school is now divided into two campuses located several miles apart (one for pre-kindergarten through grade 5, the other for grades 6-12). The upper school (grades 6-12), includes a gymnasium, swimming pool, tennis courts, outdoor basketball courts, an outdoor playing field, an open-air snack bar, air-conditioned classrooms, a library, and an auditorium.

For more information, write to the ISKL administrator at the following address:

International School of Kuala Lumpur PO Box 12645 50784 Kuala Lumpur Malaysia.

The private Alice Smith School uses a mainly British curriculum. It offers instruction from kindergarten through the equivalent of grade five. For more information, write to: Alice Smith School, Jalan Bellamy, Kuala Lumpur, Malaysia.

The Garden School, although similar to the Alice Smith School in its use of a British curriculum, differs in that it offers instruction through the secondary level. For more information, write to: The Garden School, 251 Jalan Bukit Bintang, Kuala Lumpur, Malaysia.

Special Educational Opportunities

With the exception of the International Islamic University, local 4-year colleges and universities normally are not open to foreigners, and in any case an increasing number of courses are being taught in Bahasa Malaysia instead of English. Some private 2-year colleges will accept foreigners, but check to be sure credits can be transferred to a recognized U.S. school. Other classes in various Malaysian arts and handicrafts are offered periodically in the community. For further information on these classes, check Selamat Datang, an information book published by the women's division of the American Association. Selamat Datang contains extensive information on such topics as local customs, food, tourism, shopping, churches, schools, and clubs.

ISKL has an extensive ESL program. It also offers special classes for children with reading difficulties and limited facilities for other learning disabilities. No other special educational facilities are available for the handicapped.

Sports & Clubs

Opportunities to join local clubs are limited and require some persistence and patience. Arrangements vary from club to club, but usually involve a deposit of approximately $1,000 which may or may not be refundable, sponsorship by club members, and an interview. For many years, local clubs were the main focus of organized social life and athletic activities among the expatriate community. Some of the best clubs in Kuala Lumpur now are either closed to new members, have long waiting lists, or require fees that are prohibitive. However, always inquire about temporary membership at any clubs in which you are interested.

Kelab Darul Ehsan offers "term" and fully transferable memberships. Non-golf term membership costs about $1,200 per year. Membership including golf costs about $2,000 per year. The club has indoor and outdoor tennis, squash, badminton, an exercise room, swimming pool, golf course, and restaurants. Many of the larger hotels have modern health clubs open to local residents. One that is especially convenient is the "Sweat Club", located adjacent to the MiCasa Hotel, off Jalan Tun Razak. The Sweat Club offers a full range of health club exercise facilities, including an aerobics studio, exercise machines, a swimming pool, tennis courts and a squash court. Full membership costs around $400, "off-hour" membership is about $120; monthly dues cost about $40.

The Royal Selangor Golf Club, on Jalan Tun Razak, is no longer offering individual short-term memberships. Corporate memberships of $8,000 per individual might be available, however.

The Subang Golf Club, located near the international airport 30 minutes from downtown, has facilities for golf, swimming, tennis, dining, and slot machines. Foreign applicants are restricted to temporary memberships. The two year temporary membership has a three month waiting list; entry fees are around $4,000 with monthly dues. The Hilton Hotel Racquet Club has two tennis courts and five squash courts on the roof of the downtown Hilton Hotel. Members are entitled to use the Hotel's pool. Annual dues are over $900 for family memberships; over $600 for single memberships. Members are entitled to one hour of court time per day. Court time must be booked at least two days in advance, and booking is difficult for certain times of the day.

The Lake Club, located near the Parliament Building on the other side of town, has temporary memberships with an initiation fee of about $1,200. The club has several grass and synthetic tennis courts, squash courts, a large pool complex, a library, several restaurants, and movie presentations on the weekends.

The Selangor Polo and Riding Club offers riding instruction for children and adults as well as polo for experienced adults. School horses are available for lessons, and members may board their own horses at the club. The club has a bar and schedules occasional activities in connection with tournaments and other special events. Entry fees for subscribing members are around $600; with monthly dues for families or single members. A refundable riding deposit of about $200 is required for family memberships; $100 for single members. Lessons range in price. A temporary membership for up to 2 months is available.

The Selangor Yacht Club, located an hour away in nearby Port Kelang, owns several sailboats that members can rent at moderate rates. Mooring and landing facilities are also available. The club operates a bar and restaurant featuring a selection of Western and Eastern dishes. The club, which has about 200 members, sponsors weekly sailboat races. Membership is now open and requires sponsorship by two members, a modest initiation fee, and monthly dues. Temporary memberships for up to a year are available and require, in addition to two sponsors, a low, refundable deposit and monthly dues are required. The Royal Selangor Flying Club, at the military airport 6 kilometers from the center of the city, provides its own planes for private flying instructions and for members' use. Meals are available. Fees for plane rental, which vary according to the type of plane and whether or not a professional pilot is needed.

Kelab Golf Angkatan Tentera (the Armed Forces Golf Club) is located near the Royal Selangor Flying Club on the Air Force Base just south of town. It features a short, but challenging, nine-hole golf course. The clubhouse includes a bar and small restaurant. Only 50 expatriates can be members at any one time, and a wait of 4-5 months is customary before a membership application is accepted. Entry fees, which include first quarter dues, are about $650. Monthly dues apply.

The Royal Port Dickson Yacht Club is located 1½ hours away from Kuala Lumpur on a beach along the Straits of Malacca. Facilities include a restaurant, five tennis courts, four squash courts, a swimming pool, billiards, boat rentals, equipment for windsurfing and water skiing, and an active yacht basin. When membership applications were last accepted, initiation fees were $600, and applicants needed two sponsors and were interviewed by a membership committee. Three month temporary memberships are currently available.

The Hash House Harriers, a 45-year old association of cross-country running enthusiasts, and its associated splinter groups, organize runs through oil palm and rubber plantations. Membership rates are reasonable, but expect a wait to enter as a regular member.

Several other clubs have more open membership arrangements. The Selangor Club, also known as "the Spotted Dog", is located downtown facing several of Kuala Lumpur's more picturesque colonial structures across a large public green. Housed in a renovated colonial building featuring Tudor styling, it has long been a landmark in Kuala Lumpur. The club uses the green for national tournaments and its own sporting events including cricket, soccer, field hockey, squash and tennis. Besides four grass tennis courts, the club facilities include a restaurant and ballroom. Bridge lessons are available. All membership applications must be sponsored by two members. Temporary memberships are available, but expect a wait of one year before memberships can become permanent.

Public facilities, such as swimming pools, tennis courts, and playgrounds for children, are limited. The ISKL pool is open to pupils and their families during certain hours of the day. The schedule is posted at school.

Touring and Outdoor Activities

Short trips to outstation areas offer a change of scenery and diversion from the pace of city life, but only the highlands offer any relief from the city's hot, humid climate. Hazardous driving conditions outside of Kuala Lumpur deter many potential travellers, but the rewards of the change of scenery and natural beauty of the country make it worth the effort. In general, the roads are well maintained but winding and overcrowded.

The Awana Golf Club, and Genting Highlands complex, about a one-hour drive from Kuala Lumpur into the Pahang mountains, includes several hotels and a golf course, and offers a cool change to the lowlands.

Fraser's Hill , about 100 kilometers north of Kuala Lumpur and 2½ hours away by car, sits at an altitude of 1,370 meters, and is reached by a narrow, winding mountain road. The resort offers a nine-hole golf course, a few new tennis courts, squash courts, and walking paths through the jungle. The weather is refreshingly cool despite high humidity and intense sunlight during the daytime. Sweaters or light jackets should be worn at night. Besides accommodations at a new hotel, the resort rents numerous houses and bungalows, each with full furnishings and its own staff. Make reservations at least 3 weeks in advance for the hotel and 6 months in advance for bungalows. For major holidays, some families book a year in advance.

Higher at 1,450 meters and farther north than Fraser's Hill, Cameron Highlands offers the same basic change in climate. It lies about 240 kilometers north of Kuala Lumpur, about five hours away by car. Cameron Highlands offers hotels, bungalows, restaurants, and an 18-hole golf course, all at reasonable rates. There are also several hiking trails through the mountain forest. Flowers and excellent local produce, such as strawberries, can be purchased in the area, which is also known for numerous tea plantations that dot the hillsides.

A round trip can be made in one day by car to Port Dickson , one hundred kilometers southeast of Kuala Lumpur, (about 1½ hours drive each way). Port Dickson, a seaside resort, consists of the town itself and a series of sandy bays stretching 17 kilometers south along the coastal road. Facilities are available for swimming, fishing, water skiing, windsurfing, tennis, and golf. Unfortunately, many areas of the beaches are no longer scenic and have pollution problems. Despite this, clean and picturesque coves can still be found.

Several rest houses and hotels provide meals and accommodations. Company-owned bungalows can be rented for a weekend or several days at reasonable cost, but they have become harder to find.

Malacca , situated about 150 kilometers southeast of Kuala Lumpur, a two hour drive by highway, (longer if the scenic coastal drive is taken), is one of the more interesting and picturesque places in Malaysia. The city's architecture reflects its long history as a seaport city-state and later as a colonial stronghold of the Portuguese, Dutch, and British, who held it from 1824 until Malaysia's independence in 1957. Though prices for antiques have climbed in recent years, window shopping in Malacca for Chinese, Portuguese, Dutch, and British antiques is always enjoyable. Malacca is a good place to take visitors.

Like Malacca, Penang offers many opportunities for camera enthusiasts and sightseers. An island city off the northwest coast of Malaysia, Penang boasts beautiful beach hotels, an inclined railway to the top of Penang Hill, ferries to the mainland, small antique shops, and numerous temples, mosques, and British colonial buildings.

Flights from Kuala Lumpur take about an hour. Penang can also be reached in 7 hours by car on a route that takes the traveller through the principal tin mining region of the country and near Kuala Kangsar, the site of the Ubidiah Mosque, one of the most beautiful in Malaysia.

Singapore lies about an hour away by air or 7 hours by car or train off the southern coast of the peninsula. It offers a wide range of shopping and sight-seeing opportunities, and a cosmopolitan atmosphere.

Both car and boat must be used to reach Taman Negara , the National Park, which is in the middle of the peninsula 6 hours from Kuala Lumpur. It offers camping or bungalow facilities, and trails in virgin jungles give hikers excellent opportunities to see Malaysia's flora and fauna in their natural habitat. Caution should be taken to avoid leech and insect bites during certain times of the year.

On the island of Borneo , also known as Kalimantan, the states of Sabah and Sarawak and the Sultanate of Brunei, have unique history, some modern resorts, and give the truly adventurous a chance to glimpse aboriginal culture, jungles, and mountains.

East Malaysia can be reached in 2 hours on flights across the South China Sea.

The East Coast, accessible by plane or car, offers beautiful, white-sand beaches and numerous examples of Malay culture and handicrafts. The drive to the nearest East Coast city, Kuantan , takes 4 hours. Kuala Trengganu and Kota Baru and are an additional several hours north along the coast. Roads are fairly good. The pace of life is considerably more relaxed than in Kuala Lumpur. Several resorts, including a Club Med, have opened along the coast in recent years.

A number of small, secluded islands off both coasts have hotel accommodations. Many are ideal for scuba diving and snorkeling, particularly those off the East Coast, such as Tioman Island , one hour from Kuala Lumpur by air, which is lovely, but seasonal (March to September). Off the West Coast, Pangkor Island resorts are increasingly popular year-round. By car, it is a 4½ hour drive to Lumut followed by a short ferry ride to the island.

Around Kuala Lumpur are several interesting places to visit, such as the National Museum; Batu Caves, a limestone formation north of the city; Chinatown; bird and butterfly parks, an orchid garden, a pewter factory and a local handicraft center. Tours to visit local places of interest in the vicinity are available through the hotels.

Entertainment

A number of air-conditioned theaters in metropolitan Kuala Lumpur show a good selection of American films, but many films are censored. Local cinemas also show a variety of Chinese, Indian, Indonesian, and Malaysian films, occasionally with English subtitles. Ticket prices are reasonable, but these theaters are not frequented much by the expatriate community.

Although the city has no professional theaters, the major hotels do have occasional dinner theater presentations, amateur theatrical events are staged at ISKL, and local professional productions are occasionally presented at various venues.

Dining out is a favorite pastime. The cuisine offered by local restaurants reflects the rich diversity of Malaysia's population; literally hundreds of restaurants, coffee shops, and open air food stalls specialize in Malay, Indian, Western, and any of several types of Chinese food. Except at hotel restaurants, dining out is fairly inexpensive. Restaurants are sanitary, and while not up to U.S. standards by any means, are acceptable for most people. The food can be exciting to taste and, at open air restaurants or stalls, exciting to watch being prepared. For those who seek other kinds of excitement, the city also has several discos and a number of bars and nightclubs. Visiting musicians perform at several concerts each year.

Penang and East Malaysia have several organized festivals and pageants that may appeal to the enthusiastic traveler. Most festivals in Kuala Lumpur are celebrated in a low-key manner. A parade marks Independence Day; banners and arches are erected for Hari Raya, which marks the end of the Islamic month of Ramadan; and a Quran-reading contest occurs each year during Ramadan.

At Chinese New Year, lion dancers and fire crackers can be seen and heard throughout the Chinese sections of the city. During the Indian festival of Thaipusam, hundreds of thousands of devotees come to Batu Caves just north of the city to pay homage to Krishna. Many of the devotees carry ornately decorated kavadis, some attached to their bodies with hooks through the skin. Smaller, but still elaborate, versions of the Thaipusam festivities take place in Penang and elsewhere throughout the country.

Social Activities

The American Association of Malaysia, which is open to all resident Americans, conducts charity and social programs, luncheons, and trips to Bangkok and around Malaysia. The AAM also sponsors the annual George Washington Birthday Ball, a the Memorial Day picnic, and a community 4th of July Celebration. The women's division meets monthly and offers a variety of classes and other activities.

The Lincoln Resource Center, while primarily for Malaysians, welcomes Americans interested in meeting Malaysians and joining the dialogue. The center also features a library of books, journals, films, and video cassettes specializing in American social studies and the humanities. Similar facilities are offered by the British Council, the Goethe Institute, and Alliance Francais.

Special Information

The States of Sabah and Sarawak in East Malaysia maintain separate customs and immigration offices, so travel to the Borneo States must be treated as an international journey. All long-term residents of Malaysia must obtain national identity cards (ICs).

George Town

George Town is the capital of Penang, a Malay state on the Strait of Malacca. Penang consists of Penang Island where George Town is located and a narrow strip of land along the coast on mainland peninsular Malaysia. George Town has a population of over 180,000 (2000 census), and is Malaysia's leading port. The British were first attracted to George Town's natural harbor as the spot to anchor their warships in defending British East India Company posts. As trading in the area developed, Chinese, Indians, Arabs, and many others settled harmoniously alongside the indigenous Malays.

George Town boasts two mosques; several historic churches; Chinese, Siva, and Sri Mariamman temples; and Buddhist pagodas. The temple of Kek Lok Si, in the suburb of Ayer Itam, is reputed to be the largest and finest temple in Southeast Asia. The Botanical Gardens and Fort Cornwallis, a historic landmark that marks the spot where Captain Francis Light first set ashore on Penang Island over 200 years ago, are other places of interest. Several religious and/or cultural festivals are held in George Town every year. Street markets are popular, selling interesting things to eat, drink, wear, or use in the home. Penang Island is known as a resort area.

Education

Dalat School, which offers a U.S. curriculum for grades one through 12, is located six miles from the center of the city, on the north shore of the island. Founded in 1928, the school has boarding facilities; enrollment is around 200 with a little over 100 boarders. Accredited by the Western Association of Schools and Colleges, the school is sponsored by the Christian and Missionary Alliance. The staff includes specialists in reading, computers, and learning disabilities; also available are a counselor, psychologist, nurse, and chaplain. The school year runs from the end of August to June, with a six-week vacation in December and January. The campus of Dalat School is situated on eight acres. Facilities include 22 buildings, 13 classrooms, a 10,000-volume library, and six dormitories. The school's address is: Tanjung Bunga, 11200 Penang, Malaysia.

OTHER CITIES

ALOR SETAR (also spelled Alor Star) is the capital of Kedah State in the northwestern region of Malaysia, about 50 miles north of George Town. The city, with a population of approximately 115,000 (2000 census.), lies near the Kedah River. A railway links Alor Setar with Kuala Lumpur to the south and the Thai railroad system to the north. Once a bustling inland port, the city today is fast becoming an important shopping and trading center. The Zahir Mosque in Alor Setar is one of the most beautiful in the country. The city also has a state museum that houses some ancient artifacts, and has an interesting section on early Chinese porcelain ware.

The capital city of Perak State, IPOH has an estimated population of over 566, 000 (2000 census). It is situated in western Malaysia, midway between George Town and Kuala Lumpur in the tin-producing Kinta Valley. With a hot, rainy, tropical monsoon-type climate, the city's average annual rainfall exceeds 80 inches. Limestone and tin are produced here by both modern and ancient methods. Ipoh has a thriving market and railroad. Known as "the city of millionaires," it has a lovely park, Japanese Gardens, and Chinese cave temples for tourists to visit. The city was occupied by the Japanese from 1942 until the end of World War II. The coastal town of Lumut is 55 miles southwest; its modern naval base has contributed to its fast growth. Known for its shell and coral handicrafts, Lumut is the site of the annual Sea Festival.

JOHOR BAHARU (also spelled Johore Bharu and Johore Bahru) is located in the southern Malay Peninsula, just opposite Singapore and about 175 miles southeast of Kuala Lumpur. The capital of Johor State, the city has a population of more than 384,000, most of whom are Chinese, and is connected with Singapore by a stone causeway across Johore Strait.

Johor Baharu is the seat of the sultan of Johor, and his residence, Bakit Serene, houses priceless art treasures. The beach resort of Desaru is just east of Johor Baharu on the South China Sea. There are luxury-class hotels here, an 18-hole golf course designed by Robert Trent Jones, and plans for further expansion.

Johor Lama is 18 miles from Johor Baharu. Of historic interest, it is the site of a restored fort originally built in 1587.

To the west is the town of Pontian and a famous fishing village with homes on stilts near the water's edge. It is known for its seafood restaurants.

Northwest of Johor Baharu is Ayer Hitam , known for the ceramics produced at the Aw pottery works. The quiet town of Kota Tinggi , 35 miles north, is known for its waterfalls.

Johor Baharu is accessible by a fine network of road, rail, and air services. The airport at Senai connects it to all major Malaysian cities.

KOTA BAHARU (also spelled Kota Bharu) is situated on the Malay Peninsula, about 380 miles northeast of Kuala Lumpur on the South China Sea. Historically, the city was seized by Japan on December 10, 1941, as part of the offensive against Singapore during World War II.

Today, Kota Baharu, the capital of Kelantan State, is a modern city, with an important power station, and a population of over 234,000 (2000 census). Kota Baharu is connected to almost all major cities in Malaysia and Singapore by roads, rail, and air; Kuala Lumpur is a 45-minute flight away.

The city's cultural center, Gelanggang Seni, offers performances of gasing (top-spinning), kite-flying, wayang kulit (shadow puppet theater), and silat (Malaysian art of self-defense). Native handicrafts may be purchased in the central market.

Landmarks in Kota Baharu include the State Mosque, completed in 1926; Merdeka Square, which honors Malay warriors who died during World War II; and the Istana Jahar, or State Museum, built during the reign of Sultan Muhamad IV and completed in 1899. The city has many hotels and beach resorts in the area.

KOTA KINABALU was formerly known as Jesselton and is the capital of Sabah, Malaysia in East Malaysia (formerly North Borneo). Situated on a small inlet of the South China Sea, Kota Kinabalu was founded in 1899, and in 1947 became the capital of British North Borneo, replacing Sandakan. It is a relatively new town, built on the ruins of the original city, which was razed during World War II.

With a population of approximately 113,000 (1980 census), the city is the chief port of the state, connected to the interior by road and rail. Rubber is exported from Kota Kinabalu's port. The Kinabalu International School is located three-and-a-half miles from the city. Founded in 1973, this coeducational, day school employs a British and Australian curriculum for kindergarten through grade six.

Kota Kinabalu has an international airport, about four miles from the city. Daily air service operates between all of Sabah's major towns—Kota Kinabalu, Labuan, Sandakan, Lahad Data, and Tawau.

Other cities of interest near Kota Kinabalu include Penampang , nine miles away, which reveals a cross-section of Sabah's exotic flora, fauna, and sociocultural life. The village of Semporna , on the south coast, is known for its cultured pearls (Sabah is the only state in Malaysia that produces pearls). Tuaran , about a half-hour drive from Kota Kinabalu, is known for its tamu (market). A colorful tamu is also held every Sunday morning at Kota Belud , 48 miles north. Kudat , 150 miles from Kota Kinabalu, is noted for its natives—the Rungus. Sandakan , the former capital of North Borneo, is on Sabah's east coast, 240 miles from Kota Kinabalu. It is a modern city sprawled along the sea's edge, with a population of over 350,000.

KUALA TERENGGANU (also spelled Kuala Trengganu) is located on the South China Sea in central Malaysia. About 175 miles northeast of Kuala Lumpur, Kuala Terengganu is the capital of Terengganu State. With a population over 250,000 (2000 census), it is both a port and the site of an important weaving industry. Situated on the Terengganu River, the city is also the home of the sultan of Teregganu.

South of the city are numerous fishing villages—Kemaman, Kemasik , and Kuala Dungan . Rantau Abang is where the famous giant leathery turtles are found. They return to this area to lay their eggs and can be seen from May to September, with the peak months being July and August.

KUANTAN , the capital of Pahang State, is rapidly developing as an important port and seaside resort. Situated on the east coast of the central Malay Peninsula on the South China Sea, Kuantan is just north of the mouth of the Pahang River. The area was a strategic point in the Japanese invasion of the peninsula, and was seized during December 1941 and January 1942.

Today, this city of over 283,000 (2000 census) offers miles of beautiful, clean, sandy beaches, ideal for fishing, swimming, and boating. Kuantan is noted for its authentic craftsmanship in woodcarving, batik printing, brocade, and pandan leaf weaving.

The numerous villages near Kuantan are known for their rich cultural traditions. Beserah , six miles north of Kuantan, is a serene fishing village. Cherating, 30 miles north, is the site of Asia's first Club Med, but is also known for its native charms. At Pekan , 28 miles south, the Royal Palace, Istana Abu Bakar, stands out as a modern architectural design in this charming town of small, old-fashioned shops. It is also the site of a four-day cultural and sporting festival celebrating the sultan's birthday. Kuantan is accessible by air and road from Kuala Lumpur 125 miles to the southwest. There is regular bus service as well as outstation taxis.

KUCHING is the capital and financial center of Sarawak in East Malaysia, formerly Northwest Borneo. Situated on the Sarawak River, Kuching is the state's largest city and a river port where sago flour and pepper are exported.

Founded in 1839 by James Brooke, the city has Anglican and Roman Catholic cathedrals and a museum of Borneo folklore. The world-famous Sarawak State Museum here houses one of the finest collections of Sarawak tribal weapons, tools, art, and artifacts. The law courts, the clock tower, and Fort Margherita are some of the best-preserved and most beautiful examples of British colonial architecture in this area. Kuching's Masjid Besar (State Mosque) was completed in 1968; the city also has several historic Chinese temples.

Interesting places near Kuching include Santubong , 20 miles away, a seaside village known for its swimming and fishing. From the seventh through 13th centuries, this town was an important trading village for the Chinese dynasties of the period. Kuching's population is approximately 152,300 (2000 census).

The historic city of MELAKA , formerly Malacca, is situated on the Strait of Malacca about 90 miles south of Kuala Lumpur. The oldest town in Malaysia, founded about 1400 by a Malay prince, Melaka was one of the leading commercial centers of the Far East until the 17th century. Traders introduced Islam to Malay through Melaka. The city was captured by the Portuguese in 1511 and by the Dutch in 1641. Using the city more as a fortress than as a trading port, the Dutch retained control of Melaka until 1824, when it was transferred to Great Britain.

Today, Melaka has little economic importance, but retains some Portuguese and Dutch buildings, as well as a Portuguese-Eurasian community. With a population about 270,000 (2000 census), most of the city's inhabitants are Chinese, who have acquired many Malay customs. It is a mecca for antique hunters, but if an antique is purchased to take out of the country, permission must be sought from the director general of Museum Negara. Melaka can be reached from Kuala Lumpur by express buses or cabs. Domestic flights are also available.

SEREMBAN is situated between Kuala Lumpur and Melaka in southern Malaysia. Linked by rail with Port Dickson on the Strait of Malacca, Seremban is the commercial center for the surrounding rubber-growing region. Tin mines are also located near the city which, as the capital of Negeri Sembilan, has a population over 133,000.

Of interest are Lake Gardens and the State Museum which features a Malay house built without the use of a single nail. Negeri Sembilan is traditionally a matriarchal state, where women inherit rights over property and land to the exclusion of men. West of Seremban is the royal town of Sri Menanti , where the Istana, or ruler's palace, is located.

COUNTRY PROFILE

Geography and Climate

Peninsular Malaysia, slightly smaller in size than Michigan, extends south for 800 kilometers from Thailand's Isthmus of Kra to Singapore and the Indonesian Archipelago. Sabah and Sarawak, the states of East Malaysia that together are about the size of Kansas, lie 600 kilometers to the east across the South China Sea. These two states, former British colonies on the northeast coast of Borneo, stretch for 1000 kilometers to the southern islands of the Philippines.

Malaysia's land area covers 336,400 square kilometers. A central mountain range with peaks rising to 2100 meters divides peninsular Malaysia. Scenic coastal plains lie on either side of the mountains; most of the population lives in the plains and foothills of the western coast along the Straits of Malacca. The eastern coast, along the South China Sea, has beautiful white, sandy beaches but fewer people. Between the two coasts lie the mountains and an often impenetrable jungle. Primary forest covers 60% of Malaysia and contains a variety of flowering plants and immense, but now diminishing, timber reserves. Vegetation, even in the cities, is lush and tropical. Forest wildlife includes gibbons; tigers; elephants; mouse deer; countless species of birds, monkeys, and insects; and, in Sabah and Sarawak, the orangutan.

The weather in Kuala Lumpur varies little throughout the year. daily minimum and maximum temperatures remain fairly constant averaging 24°C (75°F) and 32°C (90°F). Average annual rainfall of 250 centimeters keeps the humidity high. Kuala Lumpur's location in a valley compounds not only the humidity but also the smog problem brought on by increasingly congested streets. Longtime foreign residents sometimes complain of the enervating effect of the unchanging climate.

Although Kuala Lumpur is not subject to typhoons or cyclones, brief rainy seasons occur each year and bring scattered flooding to the metropolitan area. One to two months of relatively dry weather usually precede the rainy seasons, although afternoon and evening thunder showers occur regularly in Kuala Lumpur throughout the year. The east coast and East Malaysia experience longer rainy seasons, and more widespread flooding occurs as a result.

Malaysia, an entomologist's paradise, abounds in insect life of all kinds, including beautiful jungle butterflies and incredibly large cockroaches. Insects do carry disease in Malaysia. Mosquitoes and other bugs can be bothersome; dengue, cholera, and malaria are endemic in parts of the country, but with the exception of dengue, rarely affect the expatriate population in Kuala Lumpur or other major cities.

Population

In 2000, Malaysia's estimated population was approximately 21.8 million, with about 83% in Peninsular Malaysia and 17% in East Malaysia. In 1991, the Federal Territory, consisting primarily of the city of Kuala Lumpur, had a population of over 1.1 million. Malaysia's population is growing at over 2% per year.

The population of Malaysia includes several ethnic groups; the largest group, the Malays, make up about 58% of the population. Almost without exception, Malays follow the state religion of Islam and speak the national language of Bahasa Malaysia (formerly called Malay).

Chinese, most of whose ancestors came to Malaysia from southern China during the 19th and early 20th centuries to work in the tin mines or to set up small businesses, make up about 27% of the population. Today, most Chinese live in urban areas and work in trade, business, and finance. The most common Chinese dialects are Cantonese and Hokkien; however, Mandarin is also widely understood as it is the language of instruction in Chinese schools.

Malaysians of Indian descent make up another 8% of the population. Their ancestors came from the Indian subcontinent as laborers on the rubber plantations and as civil servants in the British colonial government.

Non-Malay indigenous groups, Eurasians, and Europeans make up the remainder of the population. Most of the non-Malay indigenous peoples are concentrated in East Malaysia, where they are an important social and political force.

About 84% of the population speaks Bahasa Malaysia. The literacy rate for the country as a whole is approximately 84%; the rate in East Malaysia is somewhat lower than in Peninsular Malaysia. English is still widely spoken, particularly in urban areas. English proficiency declined in the 1980s, when the government promoted the use of Bahasa Malaysia in schools, government, and business. In recent years, however, the government has promoted English language skills.

Public Institutions

Malaysia has a parliamentary system of government based on free, multi-party elections. A free market economy, abundant natural resources, and a well-educated population have helped Malaysia become one of the most prosperous of the developing countries. Malaysia is a constitutional monarchy, nominally headed by the Yang Di-Pertuan Agong, or paramount ruler. The ruler is elected for a five-year term from among the nine hereditary rulers of the peninsular Malay states. The ruler also is the leader of the Islamic faith in Malaysia, as are the rulers in their own states.

Malaysia's Constitution was promulgated in 1963 when Sabah and Sarawak joined the Federation of Malaya to form Malaysia. The Constitution has been amended frequently since its original enactment. Executive power is vested in the Cabinet, led by the Prime Minister. The Cabinet is chosen from among the members of parliament as in the British system of government. All of Malaysia's Prime Ministers since independence have been the leaders of the country's predominant political party, the United Malays National Organization (UMNO).

The bicameral Parliament consists of the Dewan Negara (the National Council or Senate) and the Dewan Rakyat (the People's Council or House of Representatives). Of the 69 members of the Senate, the Paramount Ruler appoints 43 and each of the 13 state legislatures elects two. All Senators sit for 6-year terms. Members of the House, the more influential of the two bodies, are elected in single member constituencies by universal adult suffrage. General elections must be called at least once every 5 years. The House has 180 members, of which 133 are from the states of Peninsular Malaysia and the island of Labuan and 47 are from Sabah and Sarawak. Legislative power is divided between the Federal Parliament and the elected assemblies of Malaysia's 13 states, with state governments retaining power over several important areas, including land use and religion.

The Malaysian legal system is based on English Common Law. The Supreme Court, the highest court in Malaysia, reviews decisions referred from the High Courts and has original jurisdiction in constitutional matters and in disputes between states or between the Federal Government and a State. Below the Supreme Court are two High Courts, one for Peninsular Malaysia and one for East Malaysia. Islamic, or Syariah, law applies nationwide to Moslems. Islamic courts come under the jurisdiction of the individual states, and ultimate appellate authority rests with the ruler of the state concerned.

The titular heads of 9 of the 13 states in Malaysia are the hereditary rulers, the others being Governors appointed by the Federal Government. Effective executive power rests in the hands of the Chief Minister of each State, and the members of their State cabinets, selected from the members of the State assemblies.

Arts, Science, and Education

Intellectual life in Malaysia is not limited to the country's seven universities. In addition to public lectures and seminars given in the national language at the universities, there are various other professional and service organizations whose activities are open and which welcome foreigners as members. Examples are the Malaysian Nature Society, the Malaysian Association for American Studies, and the Malaysian Culture Study Group.

The National Museum in Kuala Lumpur houses exhibits on Malaysian culture and history. The city also has a National Art Gallery and several small private art galleries that regularly put on exhibits of local and internationally recognized artists. Major hotels and foreign missions frequently sponsor exhibitions and musical and dramatic performances. Several amateur groups also present dramatic and/or musical performances relating to the major cultures represented in Malaysia.

The Museum of Asian Art at the University of Malaya exhibits an excellent collection of ceramic art. Lessons are available in Kuala Lumpur in Asian art and music.

Commerce and Industry

Manufacturing has accounted for 33% of GDP in 2000. Principal manufactured products include semiconductors, consumer electronic and electrical products, textiles, and apparel. Malaysia is the world's third-largest producer and one of world's largest exporters of semiconductors. The U.S. is the primary trading partner for these products, taking about 26% of Malaysia's electronic products in 2000.

The agricultural sector employs about 15% of the work force. Malaysia is the world's largest producer and exporter of palm oil (about half of the world's supply). Malaysia is also a significant producer of natural rubber, cocoa and tropical timber.

An increasing variety of American companies are involved in Malaysia, such as Esso, Motorola, Intel, Texas Instruments, Mattel, Colgate-Palmolive, RJR Nabisco, Citibank, American International Assurance (AIA), Johnson and Johnson, and Baxter Healthcare. In 1992, an Embassy survey of U.S. companies in Malaysia indicated that U.S. firms held nearly $7 billion in assets in Malaysia at the end of 1991, chiefly in the petroleum (65% of total investment) and the microelectronics and manufacturing (32%) sectors.

The United States is Malaysia's third most important trading partner (after Singapore and Japan).

Transportation

Buses and minibuses are dangerously overcrowded except late at night and can be unreliable at all times. Taxis are numerous, metered, and inexpensive, but hard to find at peak hours or when it is raining. Drivers usually speak enough English to reach a destination and to follow directions, but language problems are still frequent and some drivers do not know the city well.

Kuala Lumpur's narrow and winding streets, built a century ago to handle hawkers and trishaws, are now very crowded. While several new "circular" roads have been built recently to help alleviate the overcrowding, and more new highways are under construction, traffic remains heavy, especially at peak hours. Multilaned highways often merge into narrow two lane roads in the center of town and cause added congestion.

Malaysia's west coast has a well-developed system of roads between major cities. Paved and fairly well-maintained, these primarily two-lane roads are usually congested because of heavy use by buses, intercity taxis, and trucks carrying timber and other commodities. A paved coastal road follows the east coast. Its traffic is not as heavy as that on the west coast, but the main trunk roads occasionally suffer from lack of repair. A good road across the peninsula connects Kuala Lumpur with the east coast. Other cross-peninsular routes exist farther south; in the north a new east-west highway cuts through the jungles and mountains and links the two coasts. Although the roads on both coasts are scenic and you can drive to Singapore, Penang, and other distant cities, most employees prefer to fly to these cities and avoid the congested, often hazardous traffic. By car, Singapore and Penang are 6 to 8 hours from Kuala Lumpur. A new Malaysia/Singapore divided highway stretches from Singapore to the Thai border.

Train travel is inexpensive. Many employees find it quaint, even rustic, but occasional delays occur. Daily train service connects Kuala Lumpur with Penang and Singapore. From Penang, the international express operates to Bangkok daily, but reservations must be booked in advance. The trip to Singapore takes from 6 to 10 hours, depending on the type of train. First-class accommodations with air conditioning are available, as are sleeping compartments on night trips. Subang International Airport is 20 kilometers from Kuala Lumpur. Regular jet service operates between major cities in the region with connections to Western Europe and the U.S. Because American carriers do not yet offer direct passenger service to Kuala Lumpur (although United has plans pending), travelers to and from post use Singapore, Tokyo, Seoul, Hong Kong, or Bangkok to change from either Northwest Orient Airlines or United Airlines to foreign carriers. Taxis are available at the airport. Fares are based on a zone system.

Communications

Telephone and Telegraph

Direct-dial facilities exist to most of Peninsular Malaysia, Singapore and the U.S. The telephone system is only occasionally overloaded.

Telephone service to the U.S. is available 24 hours daily. A 3-minute overseas call to any point within the U.S. through the Malaysian telephone company is about $9 for person-to-person and $6 for station-to-station; each additional minute costs around $2. Persons with an AT&T Calling Card can reach the U.S. via AT&T's "USA Direct" ser-vice by dialing 800-0011. Such calls cost about $3.70 for the first minute and $1.48 for each additional minute, plus a service charge of $2.50. Sprint and MCI have similar calling plans and can be accessed in Malaysia. Calls from the U.S. are usually cheaper than those placed from Malaysia. The Malaysian telephone company, Telekom Malaysia, has recently introduced a service which enables callers in the U.S. to dial a special toll-free number which will connect them to the Malaysian telephone system so they can make a collect call to someone in Malaysia.

Telegrams may be sent from main telegraph offices, post offices, and hotels, by phone. The minimum charge is over $4 for 22 words; the address counts as regular wording. Each additional word costs $0.20. FAX facilities are also available, and are often a cost-effective way to communicate.

Radio and TV

English-language programs share time with broadcasts in Malaysian, Chinese, and Tamil on both radio and TV in Malaysia. Voice of America and BBC can be received with some interference, but Radio Singapore and Radio Australia are usually clear. There are three television channels, two of which are run by the Malaysian government. In addition to local productions, Tamil movies, and Chinese movies and soap operas, the stations show a variety of American, British, and Australian programs. Weekday broadcasting usually begins at 4:00 p.m. and lasts until midnight. Programming begins earlier in the afternoon on weekends and in the morning on local holidays.

Malaysia uses the European PAL TV system.

Newspapers, Magazines, and Technical Journals

Numerous magazines and newspapers are published in East and West Malaysia, most in Malaysian, Chinese, and Tamil. Several are published in English, and some English-language newspapers in Kuala Lumpur serve a national market. Most foreigners read the New Straits Times (morning), the Star (morning), and the Malay Mail (afternoon), which give limited coverage to U.S. and international news and sports and more extensive coverage to local news and to other more sensational topics. The Asian Wall Street Journa l and Asian editions of USA Today, Time, Newsweek, and Reader's Digest are sold locally. A few other selected U.S. periodicals arrive by air close to the time of their release in the U.S. or by surface mail several weeks or months later. The International Herald Tribune, printed in Singapore, usually arrives in Kuala Lumpur in mid-afternoon on the day of publication and always has good coverage of U.S. news and sports. The Far Eastern Economic Review and Asiaweek give excellent coverage of Asian news.

The Lincoln Resource Center, the library of the U.S. Information Service, has the best collection of American books in the country. It also has an extensive reference section, periodical section, and videotape collection. The International School also has a good library but it does not include recent best sellers.

American and British hardback and paperback books are sold in hotels and numerous bookstores, but they are usually expensive.

Health and Medicine

Medical Facilities

Many local physicians have received at least part of their training in Australia, the U.K. or the U.S.

American citizens are advised to go to Subang Jaya Medical Center in an emergency. A private facility, this hospital resembles a standard western hospital in operation with an emergency room staffed 24 hours daily. Tawakal Hospital, has 24 hour emergency room service and is convenient if time is critical. The General Hospital, which should be used only in an emergency as an alternative to Subang or Tawakal hospitals, also has a 24 hour emergency room. Other hospitals have emergency rooms that are not open or staffed by doctors around the clock. Three other hospitals in the area, Pantai, Assunta, and University, are used to a lesser degree.

Several dentists operate private clinics in the city and can meet routine dental needs including orthodontic care. Orthodontia tends to be cheaper than in the U.S., but treatment may differ from U.S. practices.

No special facilities provide services for the handicapped except for special instruction given by the International School on a limited basis for children with reading disabilities and some other learning difficulties.

Community Health

Tropical fatigue can last for 6 weeks after arrival. The climate can be debilitating over an extended period because of rainfall, high humidity, uniformly high temperatures, and lack of seasonal variations.

Colds, bronchial disturbances and sinus conditions are common and tend to linger longer than they do in the U.S. Air conditioning probably contributes to this problem since many restaurants and shops are uncomfortably overcooled in relation to the outside temperature. Exhaust fumes from numerous and inadequately maintained motor vehicles combine with smoke from burning brush piles to cause discomfort for those with respiratory conditions.

Dengue fever, including the hemorrhagic variety, exists throughout Malaysia, and expatriates are occasionally affected in Kuala Lumpur. Cholera cases, which are reported less frequently, occur principally in rural areas. In the past, Americans have contracted hepatitis A and dengue fever. Chloroquine-resistant malaria exists, mostly in rural areas, and the number of reported cases has increased. Open drainage ditches and stagnant water at construction sites facilitate breeding of mosquitoes in the city. Malaria suppressants are recommended for extended travel in rural areas outside of Kuala Lumpur. The recommended dose is 500mg of Chloroquine per week and 200 mg of Paludrine daily.

Food poisoning rarely occurs, but a few Americans experience mild forms of dysentery or diarrhea after eating in the local open-air food stalls and, occasionally, the better restaurants.

As in any tropical country, skin rashes, fungi, and parasites are common. There are also several varieties of snakes, some of which are poisonous.

Drinking water is potable in the urban area of Kuala Lumpur. In outstation areas, water should be boiled or chemically treated. Most medical items and drugs can be purchased locally, but some drugs available over-the-counter in the U.S. require prescriptions in Malaysia, and pharmacies may not have a licensed pharmacist on duty at all times.

Preventive Measures

Before coming to Post, you should be inoculated against tetanus, hepatitis B, immune globulin, and should take an oral dose of typhoid vaccine. Take a tuberculin test so that any change during your stay can be investigated. Children and young adults should be inoculated against diphtheria and take the oral polio vaccine. Yellow fever immunization is required for everyone arriving from Africa and Latin America or other infected areas. Exposure to the intense tropical sun should be gradual to avoid serious sunburns.

LOCAL HOLIDAYS

Jan. 1… New Year's Day

Jan/Feb. … Thaipusam^*

Feb. 1… Kuala Lumpur City Day

Feb. … Chinese New Year (2 days)^*

Mar/Apr. … Good Friday^*

Mar/Apr. … Easter^*

May 1… Malaysia Labor Day

Apr/May … Wesak^*

May 1… Labor Day

June (1st Sat) … Birthday of HM the King, Seri Paduka Baginda Yang di-Pertuan Agong

Aug. 31 … Malaysian National Day

Oct. … Diwali^*

Dec. 25 … Christmas Day

… Ramadan^*

… Hari Raya Haji/Id al-Adha^*

… Hari Raya Puasa/Id al-Fitr^*

… Muharram^*

… Mawlid an Nabi^*

… Nuzul al Qur'an^*

^*variable

NOTES FOR TRAVELERS

Passage, Customs & Duties

A passport valid for at least six months is required to enter Malaysia. American citizens do not need a visa for a pleasure or business trip if their stay in Malaysia is 90 days or less. For more information on entry requirements, contact the Embassy of Malaysia, 2401 Massachusetts Avenue, N.W., Washington, D.C. 20008, telephone: (212) 328-2700, or the Malaysian Consulates located in New York, telephone (202) 328-2700, or Los Angeles, telephone (213) 892-1238. See also the Malaysian Government home page on the Internet at http://www.jaring.my. Overseas inquiries should be made at the nearest Malaysian embassy or consulate.

Malaysia's customs authorities may enforce strict regulations concerning temporary importation into or export from Malaysia of items such as firearms, religious materials, antiquities, medications, business equipment, currency, ivory, and other items. It is advisable to contact the Embassy of Malaysia in Washington or one of Malaysia's consulates in the United States for specific information regarding customs requirements. Customs officials encourage the use of an ATA (Admission Temporaire/Temporary Admission) carnet for the temporary admission of professional equipment, commercial samples, and/or goods for exhibitions and fair purposes. ATA Carnet Headquarters, located at the U.S. Council for International Business, 1212 Avenue of the Americas, New York, NY 10036, issues and guarantees the ATA carnet in the United States. For additional information call (212)354-4480; send an e-mail to atacarnet@uscib.org, or visit http://www.uscib.orgfor details.

Malaysia strictly enforces its drug laws. Malaysian legislation provides for a mandatory death penalty for convicted drug traffickers. Individuals arrested in possession of 15 grams (1/2 ounce) of heroin or 200 grams (seven ounces) of marijuana are presumed by law to be trafficking in drugs.

U.S. citizens living in or visiting Malaysia are encouraged to register at the U.S. Embassy in Kuala Lumpur and to obtain updated information on travel and security within the country. The U.S. Embassy is located at 376 Jalan Tun Razak 50400, Kuala Lumpur. The mailing address is P.O. Box No. 10035, 50700 Kuala Lumpur; Telephone (60-3)2168-5000. The fax number for the U.S. Embassy is (60-3)242-2207; the fax number for the Consular Section is (60-3)248-5801. Internet home page: http://usembassymalaysia.org.my/ ; e-mail address: klconsular@state.gov.

Pets

Pets shipped from non-Common-wealth countries must be quarantined for one month upon arrival in Malaysia. Current vaccination records must be available at time of entry.

The Subang International Airport quarantine kennel is a 30 minute drive from Kuala Lumpur. The kennel costs about $1.20 per day to board cats and $1.60 for dogs.

Excellent veterinary care is available locally. Several tropical canine diseases, for which treatment is not fully successful, are peculiar to Malaysia. Ticks and fleas can be a serious problem in some sections of the city. American pet foods are available, although more expensive than in the U.S.

Currency, Banking, and Weights and Measures

The Malaysian ringgit is freely convertible. The exchange rate, which fluctuates daily, was US$l.00 = RM3.80 as of May 2002.

Malaysia has adopted the metric system, and government efforts to enforce its use have done away with a host of old measuring units, including pounds, katis, taels, and piculs.

RECOMMENDED READING

Nonfiction

American Association of Malaysia. Selamat Datang. Given to newly-assigned personnel on arrival at post.

APA Photoguide. Prentice-Hall, Inc.: Englewood Cliffs, NJ.

Andaya, Barbara Watson and Leonard Y. A History of Malaysia. Macmillan: London, 1982.

Barber, Noel. War of the Running Dogs: How Malaya Defeated the Communist Guerillas, 1940-60. Collins: London, 1971.

Bedlington, Stanley S. Malaysia and Singapore: The Building of New States. Cornell University Press: Ithaca, NY, 1978.

Bock, Philip K. ed. Culture Shock: A Reader in Modern Cultural Topology. University Press of America: Lanhan, MD, 1981.

Chandra, Muzaffar. Islamic Resurgence in Malaysia. Penerbit Fajar Bakti Sdn. Bhd.: Petaling Jaya, Malaysia, 1987.

Chapman, Spencer. The Jungle is Neutral.

Fisk, E.K., and Osman Rani, eds. The Political Economy of Malaysia. New York: Oxford University Press, 1982.

Gullick, John. Malaysia: Economic Expansion and National Unity. Boulder, CO: Westview Press, 1981.

Hall, D.G.E. A History of Southeast Asia. 4th ed. St. Martin's Press: New York, 1981.

Han Su Yin. And the Rain My Drink. Jonathan Cape: London, 1956; reprint Grafton Books, 1973.

Henderson, John W., et al. Area Handbook for Malaysia. American University Foreign Area Studies: Washington, DC, 1970. (Available from U.S. Government Printing Office, Washington, DC 20402.)

Hoefer, Hans, ed. Jalan-Jalan. Apa Productions: Hong Kong, 1981.

Husin Ali, S. The Malays, Their Problems and Future. Kuala Lumpur: Heinemann Asia, 1981.

Jackson, Robert. The Malayan Emergency: The Commonwealth's Wars 1948-66. London: Routledge, 1991.

Mahathir bin Mohammed, Datuk Seri. The Malay Dilemma. Federal Publications: Kuala Lumpur, 1982.

Malaysia, A Country Study. U.S. Department of the Army: Washington, DC, 1984. (Available from U.S. Government Printing Office, Washington, DC 20402.)

Means, Gordon P. Malaysian Politics: The Second Generation. Oxford University Press: Singapore, 1991.

Milne, R.S., and Diane K. Mauzy. Politics and Government in Malaysia. Singapore: Federal Publications, 1978.

Nagata, Judith. The Reflowering of Malaysian Islam. University of British Columbia Press: Vancouver, 1984.

Rehman Rashid. A Malaysian Journey. Rehman Rashid: Petaling Jaya, Malaysia, 1993.

Rimmer, Peter J., and Lisa M. Allen, eds. The Underside of Malaysean History: Pullers, Prostitutes, Plantation Workers. Singapore: Singapore University Press, 1990.

Roff, M.C. The Politics of Belonging: Political Change in Sabah and Sarawak. London: Oxford University Press, 1975.

Roff, William R. The Origins of Malay Nationalism. Yale University Press: New Haven, 1967.

Runciman, Steven. The White Rajas, A History of Sarawak From 1841 to 1946. Cambridge University Press: London, 1960.

Ryan, N.J., The Cultural Heritage of Malaysia. 2d ed. Humanities Press, Inc.: Altantic Highlands, NJ, 1971.

Sandhu, K.S. Indians in Malaya: Some Aspects of Their Immigration and Settlement (1786-1957). London: Cambridge University Press, 1969.

Syed Amin, Noor Ainu. Malaysian Customs and Etiquette: A Practical Handbook. Times Books International: Singapore and Kuala Lumpur, 1991.

Turnbull, C. Mary. A Short History of Malaysia, Singapore, and Brunei. Washington, DC: Three Continents Press, 1981.

Wang Gungwu, ed. Malaysia, A Survey. Praeger: New York, 1964.

Fiction

Burgess, Anthony. The Long Day Wanes: A Malayan Trilogy. Norton: New York, 1977.

Burgess, Anthony, ed. Maugham's Malaysian Stories. Heinemann Asia: Singapore, 1969.

Fauconnier, Henri. The Soul of Malaya. (Translated from the French by Eric Sutton.) Oxford University Press: Kuala Lumpur and London, 1965.

Theroux, Paul. The Consul's File. Houghton Mifflin Co.: Boston, 1977.

Malaysia

Compiled from the December 2007 Background Note and supplemented with additional information from the State Department and the editors of this volume. See the introduction to this set for explanatory notes.

Official Name:

Malaysia

PROFILE

Geography

Area: 329,749 sq. km. (127,316 sq. mi.); slightly larger than New Mexico.

Cities: Capital—Kuala Lumpur. Other cities—Penang, Ipoh, Malacca, Johor Baru, Shah Alam, Klang, Kuching, Kota Kinabalu

Terrain: Coastal plains and interior, jungle-covered mountains. The South China Sea separates peninsular Malaysia from East Malaysia on Borneo.

Climate: Tropical.

People

Nationality: Noun and adjective—Malaysian(s).

Population: (2006) 26.9 million.

Annual growth rate: 1.8%.

Ethnic groups: Malay 50.2%, Chinese 24.5%, indigenous 11.0%, Indian 7.2%, non-Malaysian citizens 5.9%, others 1.2%.

Religions: Islam (60.4%), Buddhism (19.2%), Christianity (9.1%), Hinduism (6.3%), Confucianism (2.6%), tribal/folk (0.8%), other (0.4%), none/unknown (1.2%).

Languages: Bahasa Melayu (official), Chinese (various dialects), English, Tamil, indigenous.

Education: Years compulsory—6. Attendance—98.5% (primary), 82% (secondary). Literacy—93.5%.

Health: Infant mortality rate (2005)—5.1 /1,000. Life expectancy (2005)—female 76.2 yrs., male 71.8 yrs.

Work force: (10.55 million, 2005) Services—51%; industry—36% (manufacturing—28.4%, mining and construction—7.6%); agriculture—13%.

Government

Type: Federal parliamentary democracy with a constitutional monarch.

Independence: August 31, 1957. (Malaya, which is now peninsular Malaysia, became independent in 1957. In 1963 Malaya, Sabah, Sarawak, and Singapore formed Malaysia. Singapore became an independent country in 1965.)

Constitution: 1957.

Political subdivisions: 13 states and three federal territories (Kuala Lumpur, Labuan Island, Putrajaya federal administrative territory). Each state has an assembly and government headed by a chief minister. Nine of these states have hereditary rulers, generally titled “sultans,” while the remaining four have appointed governors in counterpart positions.

Government branches: Executive—Yang di-Pertuan Agong (head of state and customarily referred to as the king; has ceremonial duties), prime minister (head of government), cabinet. Legislative—bicameral parliament, comprising 70-member Senate (26 elected by the 13 state assemblies, 44 appointed by the king on the prime minister's recommendation) and 219-member House of Representatives (elected from single-member districts). Judicial—Federal Court, Court of Appeals, high courts, session's courts, magistrate's courts, and juvenile courts. Sharia courts hear cases on certain matters involving Muslims only.

Political parties: Barisan Nasional (National Front)—a coalition comprising the United Malays National Organization (UMNO) and 13 other parties, most of which are ethnically based; Democratic Action Party (DAP); Parti Islam se Malaysia (PAS); Parti Keadilan Rakyat (PKR). There are more than 30 registered political parties, including the foregoing, not all of which are represented in the federal parliament.

Suffrage: Universal adult (voting age 21).

Economy (2005)

Nominal GDP: $130.8 billion.

Annual real GDP growth rate: 7.1% (2004); 5.2% (2005).

Per capita (GDP) income: $5,042.

Natural resources: petroleum, liquefied natural gas (LNG), tin, minerals.

Agriculture: palm oil, rubber, timber, cocoa, rice, tropical fruit, fish, coconut.

Industry: Types—electronics, electrical products, chemicals, food and beverages, metal and machine products, apparel.

Trade: Merchandise exports—$145.0 billion: electronics, electrical products, palm oil, petroleum, liquid natural gas, apparel, timber and logs, plywood and veneer, natural rubber. Major markets—U.S. 18.8%, Singapore 15.0%, Japan 10.1%. Merchandise imports—$118.0 billion: machinery, chemicals, manufactured goods, fuels, and lubricants. Major suppliers—Japan 16.1%, U.S. 14.6%, Singapore 11.2%.

PEOPLE

Malaysia's multi-racial society contains many ethnic groups. Malays comprise a majority of just over 50%. By constitutional definition, all Malays are Muslim. About a quarter of the population is ethnic Chinese, a group which historically played an important role in trade and business. Malaysians of Indian descent compprise about 7% of the population and include Hindus, Muslims, Buddhists, and Christians. Non-Malay indigenous groups combine to make up approximately 11% of the population.

Population density is highest in peninsular Malaysia, home to some 20 million of the country's 27 million inhabitants. The remaining 7 million live on the Malaysian portion of the island of Borneo in the large but less densely-populated states of Sabah and Sarawak. More than half of Sarawak's residents and about two-thirds of Sabah's are from indigenous groups.

HISTORY

The early Buddhist Malay kingdom of Srivijaya, based at what is now Palembang, Sumatra, dominated much of the Malay peninsula from the 9th to the 13th centuries AD. The powerful Hindu kingdom of Majapa-hit, based on Java, gained control of the Malay peninsula in the 14th century. Conversion of the Malays to Islam, beginning in the early 14th century, accelerated with the rise of the state of Malacca under the rule of a Muslim prince in the 15th century. Malacca was a major regional commercial center, where Chinese, Arab, Malay, and Indian merchants traded precious goods.

Drawn by this rich trade, a Portuguese fleet conquered Malacca in 1511, marking the beginning of European expansion in Southeast Asia. The Dutch ousted the Portuguese from Malacca in 1641. The British obtained the island of Penang in 1786 and temporarily controlled Malacca with Dutch acquiescence from 1795 to 1818 to prevent it from falling to the French during the Napoleonic war. The British gained lasting possession of Malacca from the Dutch in 1824, through the Anglo-Dutch treaty, in exchange for territory on the island of Sumatra in what is today Indonesia.

In 1826, the British settlements of Malacca, Penang, and Singapore were combined to form the Colony of the Straits Settlements. From these strongholds, in the 19th and early 20th centuries the British established protectorates over the Malay sultanates on the peninsula. During their rule the British developed large-scale rubber and tin production and established a system of public administration. British control was interrupted by World War II and the Japanese occupation from 1941 to 1945.

Popular sentiment for independence swelled during and after the war. The territories of peninsular Malaysia joined together to form the Federation of Malaya in 1948 and eventually negotiated independence from the British in 1957. Tunku Abdul Rahman became the first prime minister. In 1963 the British colonies of Singapore, Sarawak, and Sabah joined the Federation, which was renamed Malaysia. Singapore's membership was short-lived, however; it left in 1965 and became an independent republic. Neighboring Indonesia objected to the formation of Malaysia and began a program of economic, political, diplomatic, and military “confrontation” against the new country in 1963, which ended only after the fall of Indonesia's President Sukarno in 1966. Internally, local communists, nearly all Chinese, carried out a long, bitter insurgency both before and after independence, prompting the imposition of a state of emergency from 1948 to 1960. Small bands of guerrillas remained in bases along the rugged border with southern Thailand, occasionally entering northern Malaysia. These guerrillas finally signed a peace accord with the Malaysian Government in December 1989. A separate, small-scale communist insurgency that began in the mid-1960s in Sarawak also ended with the signing of a peace accord in October 1990.

GOVERNMENT

Malaysia is a constitutional monarchy, nominally headed by the Yang di-Pertuan Agong, customarily referred to as the king. Kings are elected for 5-year terms from among the nine sultans of the peninsular Malaysian states. The king also is the leader of the Islamic faith in Malay-

Executive power is vested in the cabinet led by the prime minister; the Malaysian constitution stipulates that the prime minister must be a member of the lower house of parliament who, in the opinion of the Yang di-Pertuan Agong, commands a majority in parliament. The cabinet is chosen from among members of both houses of parliament and is responsible to that body.

The bicameral parliament consists of the Senate (Dewan Negara) and the House of Representatives (Dewan Rakyat). All 70 Senate members sit for 3-year terms, which are normally extended for an additional 3 years; 26 are elected by the 13 state assemblies, and 44 are appointed by the king. Representatives of the House are elected from single-member dis-

tricts by universal adult suffrage. The 219 members of the House of Representatives are elected to parliamentary terms lasting up to 5 years. Legislative power is divided between federal and state legislatures.

The Malaysian legal system is based on English common law. The Federal Court reviews decisions referred from the Court of Appeal; it has original jurisdiction in constitutional matters and in disputes between states or between the federal government and a state. Peninsular Malaysia and the East Malaysian states of Sabah and Sarawak each have a high court.

The federal government has authority over external affairs, defense, internal security, justice (except civil law cases among Malays or other Muslims and other indigenous peoples, adjudicated under Islamic and traditional law), federal citizenship, finance, commerce, industry, communications, transportation, and other matters.

Principal Government Officials

Last Updated: 2/1/2008

Paramount Ruler: Sultan MIZAN ZainalAbidin ibni Al-Marhum, Sultan Mahmud Al-Muktafi Billah Shah

Dep. Paramount Ruler: Sultan ABDUL HALIM Muadzam Shah

Prime Minister: ABDULLAH bin Ahmad Badawi

Dep. Prime Min.: Mohamed NAJIB bin Abdul Razak

Min. of Agriculture & Agro-Based Industry: MUHYIDDIN bin Mohamed Yassin

Min. of Arts, Culture, & Heritage: RAIS Yatim

Min. of Defense: Mohamed NAJIB bin Abdul Razak

Min. of Domestic Trade & Consumer Affairs: SHAFIE Apdal

Min. of Education: HISHAMUDDIN Tun Hussein

Min. of Energy, Communications, & Multimedia: LIM Keng Yaik

Min. of Entrepreneur Development: KHALED Nordin

Min. of Federal Territories: ZULHASNAN Rafique

Min. of Finance: ABDULLAH bin Ahmad Badawi

Second Min. of Finance: NOR Mohamed bin Yakcop

Min. of Foreign Affairs: Syed HAMID bin Syed Jaafar Albar

Min. of Health: CHUA Soi Led

Min. of Higher Education: MUSTAPA Mohammed

Min. of Home Affairs: RADZI Sheikh Ahmad

Min. of Housing & Local Government: ONG Ka Ting

Min. of Human Resources: FONG Chan Onn

Min. of Information: ZAINUDDIN Maidin

Min. of Internal Security: ABDULLAH bin Ahmad Badawi

Min. of International Trade & Industry: RAFIDAH binti Abdul Aziz

Min. of Natural Resources & the Environment: AZMI Khalid

Min. of Plantation Enterprises & Commodity: Peter CHIN Fah Kui

Min. of Rural & Regional Development: ABDUL AZIZ Shamsuddin

Min. of Science & Technology: JAMALUDIN Jarjis

Min. of Tourism: Tengku ADNAN Tengku Mansur

Min. of Transport: CHAN Kong Choy

Min. of Women, Family, & Community Development: SHAHRIZAT binte Abdul Jalil

Min. of Works: S. Samy VELLU

Min. of Youth & Sports: AZALINA Othman Said

Min. in the Dept. of the Prime Min.: Maximus ONGKILI

Min. in the Dept. of the Prime Min.: EFFENDI Norwawi

Min. in the Dept. of the Prime Min.: ABDULLAH Mohamed Zain

Min. in the Dept. of the Prime Min.: Mohamed NAZRI Abdul Aziz

Min. in the Dept. of the Prime Min.: Bernard Giluk DOMPOK

Min. in the Dept. of the Prime Min.: ABDULLAH Mat Zin

Governor, Central Bank: ZETI Akhtar Aziz

Ambassador to the US: RAJMAH binti Hussain

Permanent Representative to the UN, New York: HAMIDON Ali

Malaysia maintains an embassy in the U.S. at 3516 International Court NW, Washington, DC 20008, tel. (202) 572-9700; a Consulate General at 550 South Hope Street, Suite 400, Los Angeles, CA 90071, tel. (213) 892-1238; and a Consulate General at 313 East 43rd Street, New York City, NY 10017, tel. (212) 490-2722/23.

POLITICAL CONDITIONS

Malaysia's predominant political party, the United Malays National Organization (UMNO), has held power in coalition with other parties since independence in 1957. The UMNO coalition's share of the vote declined in national elections held in May 1969, after which riots broke out in Kuala Lumpur and elsewhere, mainly between Malays and ethnic Chinese. Several hundred people were killed or injured. The government declared a state of emergency and suspended all parliamentary activities.

In the years that followed, Malaysia undertook several initiatives that became integral parts of its socioeconomic model. The New Economic Policy (NEP), launched in 1971, contained a series of affirmative action policies designed to benefit Malays and certain indigenous groups (together known as bumiput-era or “sons of the soil”). The Constitution was amended to limit dissent against the specially-protected and sensitive portions of the Constitution pertaining to the social contract. The government identified intercommunal harmony as one of its official goals. The previous alliance of communally based parties was replaced with a broader coalition—the Barisan Nasional (BN) or National Front. The BN won large majorities in the 1974 federal and state elections.

Dr. Mahathir Mohamad was Prime Minister between 1981 and 2003, leading UMNO and BN to successive election victories. Mahathir emphasized economic development during his tenure, in particular the export sector, as well as large scale infrastructure projects. Mahathir attributed the success of the Asian tiger economies to the “Asian values” of its people, which he believed were superior to those of the West. Mahathir sharply criticized the International Monetary Fund (IMF), international financiers such as George Soros, and Western governments during the sharp economic and financial crisis that affected Asia in 1997-8, and denied that the downturn was due to the failures of corruption and “crony capitalism.”

The end of Mahathir's tenure was marred by a falling out with his deputy and presumed successor, Anwar Ibrahim. In September 1998, Mahathir dismissed Anwar and accused him of immoral and corrupt conduct. Although Anwar was convicted on both charges in 1999 and 2000, the trials were viewed as seriously flawed. Malaysia's Federal Court eventually freed Anwar after overturning his immoral conduct conviction in September 2004.

Mahathir stepped down as prime minister in October 2003 after 22 years in power, and his successor, Deputy Prime Minister Abdullah Ahmad Badawi, was sworn into office. Abdullah called elections and won an overwhelming victory in March 2004, with Barisan Nasional taking 199 of 219 seats in the lower house of parliament. UMNO itself won 110 seats. The Islamic opposition party (PAS), which had made electoral inroads in 1999, was reduced to six seats in parliament and lost control of the state of Terengganu. The left of center Democratic Action Party (DAP), with predominately urban ethnic Chinese support, won 12 seats in parliament, and party chairman Lim Kit Siang became Leader of the Opposition in parliament.

Since taking office, Abdullah, an Islamic scholar, has promoted the concept of “Islam Hadhari” or “civilizational Islam,” emphasizing the importance of education, social harmony, and economic progress. His relationship with Mahathir eventually soured, and the former prime minister now expresses regret at supporting Abdullah to be his successor. Under the terms of the constitution the government must next call elections no later than May 2009.

ECONOMY

Since it became independent, Malaysia's economic record has been one of Asia's best. Real gross domestic product (GDP) grew by an average of 6.5% per year from 1957 to 2005. Performance peaked in the early 1980s through the mid-1990s, as the economy experienced sustained rapid growth averaging almost 8% annually. High levels of foreign and domestic investment played a significant role as the economy diversified and modernized. Once heavily dependent on primary products such as rubber and tin, Malaysia today is a middle-income country with a multi-sector economy based on services and manufacturing. Malaysia is one of the world's largest exporters of semiconductor devices, electrical goods, and information and communication technology (ICT) products.

The government has taken an active role in guiding the nation's economic development. Malaysia's New Economic Policy (NEP), first established in 1971, sought to eradicate poverty and to enhance the economic standing of ethnic Malays and other indigenous peoples (collectively known as “bumiputeras”). One NEP goal was to expand the share of corporate equity owned by ethnic Malays. In June 1991, after the NEP expired, the government unveiled its National Development Policy, which contained many of the NEP's goals. In April 2001, the government released a new plan, the “National Vision Policy,” to guide development over the period 2001-2010. The National Vision Policy targets education for budget increases and seeks to refocus the economy toward higher-technology production. The stated goal is for Malaysia to be a fully developed economy by 2020.

The Malaysian economy went into sharp recession in 1997-1998 during the Asian financial crisis, which affected countries throughout the region, including South Korea, Indonesia, and Thailand. Malaysia's GDP contracted by more than 7% in 1998. Malaysia narrowly avoided a return to recession in 2001 when its economy was negatively impacted by the bursting of the dot-com bubble (which hurt the ICT sector) and slow growth or recession in many of its important export markets.

In July 2005, the government removed the 7-year old peg linking the ringgit's value to the U.S. dollar at an exchange rate of RM 3.8/ U.S.$1.0. The dollar peg was replaced by a managed float against an undisclosed basket of currencies. The new exchange rate policy was designed to keep the ringgit more broadly stable and to avoid uncertain currency swings which could harm exports.

FOREIGN RELATIONS

Regional cooperation is a cornerstone of Malaysia's foreign policy. It was a founding member of the Association of Southeast Asian Nations (ASEAN) and served as the group's chair most recently in 2005-2006. It hosted the ASEAN Summit and East Asia Summit in December 2005, as well as the ASEAN Ministerial and the ASEAN Regional Forum in July 2006. Malaysia is an active member of the Asia Pacific Economic Cooperation (APEC), the Organization of the Islamic Conference (OIC), the Non-Aligned Movement (NAM), and the United Nations. It is the current chair of the OIC and has also chaired the NAM. Malaysia hosted the APEC Leaders’ Meeting in 1998. Malaysia is a frequent contributor to UN and other peacekeeping missions, including recent deployments to East Timor, Indonesia, Pakistan, Sierra Leone, Kosovo, and Lebanon.

U.S.-MALAYSIAN RELATIONS

The United States and Malaysia share a diverse and expanding partnership. Economic ties are robust. The United States is Malaysia's largest trading partner and Malaysia is the tenth-largest trading partner of the U.S. Annual two-way trade amounts to $49 billion. The United States and Malaysia launched negotiations for a bilateral free trade agreement (FTA) in June 2006.

The United States is the largest foreign investor in Malaysia. American companies are particularly active in the energy, electronics, and manufacturing sectors. The cumulative value of U.S. private investment in Malaysia exceeds $10 billion. The United States and Malaysia enjoy strong security cooperation. Malaysia hosts the Southeast Asia Regional Center for Counterterrorism (SEARCCT), where over 1,100 officials from multiple countries have received training. The United States is the largest foreign provider of training courses at the center. The U.S. and Malaysia share a strong military-to-military relationship with numerous exchanges, training, joint exercises, and visits.

Secretary of State Condoleezza Rice visited Kuala Lumpur in July 2006.

Principal U.S. Embassy Officials

Last Updated: 2/19/2008

KUALA LUMPUR (E) 376 Jalan Tun Razak, APO/FPO American Embassy–KL, APO, AP 96535-8152, [6] (03) 2168-5000, Fax [6] (03) 2142-2207, Workweek: 7:45am–4:30pm, Website: http://malaysia.usembassy.gov.

TRAVEL

Consular Information Sheet

March 29, 2007

Country Description: Malaysia is a constitutional monarchy with an elected federal parliamentary government. The country is comprised of 13 states, 11 on the Malay Peninsula and two, Sabah and Sarawak, on the island of Borneo. There is also a federal district, which contains the capital city of Kuala Lumpur, the administrative center of Putrajaya, and the island of Labuan (located off the southwest coast of Sabah). Malaysia is a multi-ethnic country of 27 million people. Malays form the predominant ethnic group. The two other large ethnic groups in Malaysia are Chinese and Indians. Islam is the national religion. Bahasa Malaysia is the official language, although English is widely spoken. Travelers to Malaysia may access information on areas of interest through the Malaysian government's website at http://www.kln.gov.my/ and Tourism Malaysia's website at http://www.tourismmalaysia.gov.my.

Safety and Security: The Department of State remains concerned about the possibility of terrorist attacks against U.S. citizens in Southeast Asia. Extremist groups in the region have demonstrated the capability to carry out transnational attacks in locations where Westerners congregate, and these groups do not distinguish between civilian and official targets. The United States Government has designated two such groups, Jemaah Islamiyah (JI) and the Abu Sayyaf Group (ASG) as Foreign Terrorist Organizations. JI is linked to al-Qaeda and other regional terrorist groups, such as the ASG, and has cells operating throughout Southeast Asia.

The ASG, based in the southern Philippines, has kidnapped foreigners in Malaysia in recent years. Criminal elements are also responsible for kidnapping and piracy committed against foreigners. These acts of violence have occurred in the eastern islands and coastal areas of the state of Sabah, closest to the border with the Philippines. The most recent incident involving American citizens occurred in 2000. There are indications that both criminal and terrorist groups continue to plan acts of violence against foreigners.

For these reasons, the Department of State urges American citizens to evaluate carefully the risks of travel to the eastern islands and coastal areas of the state of Sabah. Americans who wish to visit these areas should exercise caution, remain alert to their surroundings, and use good personal security measures. Also, Americans who travel overland from Malaysia to Thailand should be aware of the Department of State's safety and security information for Thailand, and in particular for the several Thai provinces bordering Malaysia. Americans planning to travel to Malaysia are encouraged to register and update their contact information at the State Department's travel registration website.

For the latest security information, Americans traveling abroad should regularly monitor the Department's website where the current Travel Warnings and Travel Alerts, including the Worldwide Caution Travel Alert, can be found. Up-to-date information on safety and security can also be obtained by calling 1-888-407-4747 toll free in the U.S., or for callers outside the U.S. and Canada, a regular toll-line at 1-202-501-4444.

Entry Requirements: American citizens are required to have a passport valid for at least six months to enter Malaysia, but Americans do not need to obtain a visa in advance for a pleasure or business trip if their stay in Malaysia is 90 days or less. Upon or prior to entry into Malaysia, visitors will be given a Malaysian Disembarkation Card to complete and present to Malaysian immigration upon arrival. Immigration officials will then issue a social visit pass (visa) in their passport. While in Malaysia, Americans should carry their passports with them at all times.

Travelers are required to carry their passports for travel from peninsular Malaysia to eastern Malaysia (on the island of Borneo) and between the provinces of Sabah and Sarawak, both of which are on Borneo. Social visit passes (visas) issued at immigration points such as KLIA airport, Johor Bahru, and Kota Kinabalu (Sabah) for entry into peninsular Malaysia are not valid for entry into the state of Sarawak and usually have 3 months’ validity. New social visit passes must be obtained upon arrival at Kuching or Miri airports in Sarawak. In most cases, social visit passes issued by Sarawak immigration officials are valid for any part of Malaysia and usually have 1 month’ validity. For more information on the latest entry procedures and requirements, contact the Embassy of Malaysia, 3516 International Court, N.W., Washington, D.C. 20008, telephone: (202) 572-9700, the Malaysian consulates located in New York, telephone: (212) 490-2722, or Los Angeles, telephone: (213) 892-1238, or visit the Malaysian government's web site, which has information on Malaysian embassies and consulates abroad at www.kln.gov.my. Overseas inquiries should be made at your nearest Malaysian embassy or consulate.

Visa Overstays: Malaysian immigration authorities routinely have detained foreigners who overstay their social visit passes (visas). In light of the arrests of several American citizens in connection with immigration sweeps conducted by Malaysian police and immigration authorities, American citizens should carry their passports (containing the Malaysian social visit pass) with them at all times. Depending upon the nature of the violation, detentions may last from a few hours to several weeks, pending a formal hearing. American citizens are urged to check their visa status periodically while in Malaysia and strictly follow immigration laws and regulations.

Crime: Violent crime involving tourists and expatriates in Malaysia is relatively uncommon. Petty theft, particularly purse snatching and pick-pocketing, and residential burglaries are the most common criminal activity directed against foreigners. Other types of non-violent criminal activity include credit card fraud and automobile theft. Malaysia's national emergency number is 999 (equivalent to the U.S. 911). An alternate number is the Royal Malaysia Police Operations Center in Kuala Lumpur, 2115-9999. In tourist areas such as Bang-sar, Kuala Lumpur, and the main square in Malacca, the police have established small “Tourist Police” stations.

Purse-Snatching: In most incidents, two men on a motorcycle speed up from behind a victim and the passenger on the back snatches a purse, handbag, or cellular phone. Thieves have also conducted snatch-thefts while leaning out of the passenger side of moving vehicles. These thefts occur at all hours and often in front of large groups of witnesses, even in upscale neighborhoods frequented by expatriates. Women walking by themselves or with small children are the most common targets. Victims have been injured and even killed after falling and being dragged by thieves in cars or on motorcycles.

To avoid becoming the victim of a purse snatching, be alert and aware of your surroundings. Pedestrians should walk facing traffic and keep a close eye on all vehicular traffic, particularly motorcycles. If possible, try to walk on the sidewalk away from the curb. Avoid poorly lit streets, shortcuts, and narrow alleys. Purses or shoulder bags should be closed and tucked under the arm. Do not wrap the strap around your arm or shoulder. People have been injured or killed by being pulled to the ground by their purse straps as the thieves speed off. If your purse or bag is snatched, immediately let go of it. Do not struggle with the attacker. Remain calm until the incident is over, and report the incident as soon as possible to the police.

Credit Card Fraud: Travelers in Malaysia should avoid using credit cards, if possible, and credit card numbers should be closely safeguarded at all times. Credit card fraud continues to be a serious problem in Malaysia, although enhanced technology has somewhat reduced reported instances of fraud. Unauthorized charges may not show on a credit card account for several months, but can unexpectedly appear in amounts of $5,000 or more. One of the more common methods is for retailers to swipe the credit card under the counter where account information is received into a machine containing a mobile phone SIM card and is transmitted to a criminal organization for reproduction. Travelers should watch retailers closely and any “under the table” transactions should be reported to the local police. In some cases sophisticated criminal organizations have tapped into data lines emanating from retail establishments. Credit card information is then stolen while it is being transmitted to financial institutions. If you must use a credit card in Malaysia, you are advised to check your account information frequently for fraudulent charges. ATM cards are safer as long as the machines where they are used are associated with reputable Malaysian banks.

Residential Burglaries: Incidents have occurred in neighborhoods with large expatriate communities. Detached, single family residences, and residences adjacent to open fields, are common targets. There have been instances where burglars entered residences by breaking through rooftops. Some burglaries are crimes of opportunity and thieves prey on soft targets with obvious vulnerabilities. Thefts from vehicles parked at residences and along city streets have also occurred. Gated apartment or condominium complexes with 24-hour guards have a lower burglary rate than other residential units, and apartments in general are burglarized less often.

Kuala Gandah Elephant Conservation Center (KGECC): Visitors to Malaysia, including Americans, have reported serious problems after responding to independent Internet advertisements to donate money to be directed to the KGECC. The ads also offer opportunities to do wildlife volunteer work, and to engage in jungle trekking and survival experiences. The KGECC is operated by the Government of Malaysia's Department of Wildlife and National Parks and does not accept donations or support of this nature, nor does it operate jungle trekking and survival programs. Please visit the KGECC's Web site at http://www.wildlife.gov.my/bhg_ekogandah.htm for the most recent information.

In many countries around the world, counterfeit and pirated goods are widely available. Transactions involving such products may be illegal under local law. In addition, bringing them back to the United States may result in forfeitures and/ or fines. More information on this serious problem is available at http://www.cybercrime.gov/18usc2320.htm.

Information for Victims of Crime: The loss or theft abroad of a U.S. passport should be reported immediately to the local police and the nearest U.S. Embassy or Consulate. If you are the victim of a crime while overseas, in addition to reporting to local police, please contact the nearest U.S. Embassy or Consulate for assistance. The Embassy/Consulate staff can, for example, assist you to find appropriate medical care, to contact family members or friends and explain how funds could be transferred. Although the investigation and prosecution of the crime is solely the responsibility of local authorities, consular officers can help you to understand the local criminal justice process and to find an attorney if needed.

Medical Facilities and Health Information: Medical facilities and services are adequate in the larger cities, where Western-trained doctors can be found. The American Embassy can provide a list of English-speaking doctors and hospitals upon request. Psychological and psychiatric medical and counseling services are limited. Serious medical problems requiring hospitalization and/or medical evacuation to the United States can cost thousands of dollars or more. Doctors and hospitals often expect immediate cash payment for health services although major credit cards are acceptable.

Malaysian ambulance attendants lack training equivalent to U.S. standards. Callers to Malaysia's “999” emergency number (equivalent to the U.S. 911) are connected to the Red Crescent and patients are directed to whichever hospital the dispatcher chooses. Americans staying in Malaysia for extended periods, especially those who have known health problems, are advised to investigate private ambulance services in their area and to provide family and close contacts with the direct telephone number (s) of the service they prefer.

Air quality in Malaysia is acceptable most of the time. However, when burning of vegetation occurs in Malaysia and nearby countries, especially from March through June and during September and October, air quality can range from “unhealthy for sensitive groups” to “unhealthy.”

Recorded information on vaccinations and other health precautions, such as safe food and water precautions and insect bite protection, may be obtained from the Centers for Disease Control and Prevention's hotline for international travelers at 1-877FYI-TRIP (1-877-394-8747), fax 1-888-CDC-FAXX (1-888-232-3299), or from its website at http://www.cdc.gov/travel. For information about outbreaks of infectious diseases abroad and other health information for travelers consult the World Health Organization's (WHO) website at http://www.who.int/en.

Medical Insurance: The Department of State strongly urges Americans to consult with their medical insurance company prior to traveling abroad to confirm whether their policies remain in force overseas and whether they cover emergency expenses such as a medical evacuation.

Traffic Safety and Road Conditions: While in a foreign country, American citizens may encounter road conditions that differ significantly from those in the United States. The information below concerning Malaysia is provided for general reference only, and may not be totally accurate in a particular location or circumstance.

Traffic in Malaysia moves on the left side of the road, and most vehicles use right-hand drive. Seat belts are mandatory. Cell phones cannot be used while driving. Laws against drinking and driving are strictly enforced with stiff penalties. Motorcyclists attempt to circumvent traffic blockage by weaving in and out of traffic, temporarily using vacant oncoming traffic lanes, and running through red lights. This poses a hazard for both drivers and pedestrians unfamiliar with such traffic patterns. Drivers should use their turn signals well in advance of turning to alert motorcycles of their intent to turn. There has been a recent rise in the reported number of incidents involving late-night road rage. The majority of these violent incidents occur after midnight. Drivers are advised to avoid confrontational behavior if involved in an accident, especially with a motorcyclist. If threatened, drivers should leave the scene and file a report with the local police within 24 hours. Traffic is heavy during the morning and afternoon rush hours and slows down considerably when it rains; monsoon rains can quickly flood roads located in low lying areas. Bottlenecks are common in major cities. Development of the infrastructure has not kept pace with the proliferation of motorized vehicles. Multi-lane highways often merge into narrow two-lane roads in the center of town and cause added congestion. Many streets are narrow and winding. Taxis are metered, but some drivers charge a rate much higher than the metered rate during peak hours, when it is raining, or when the passenger's destination is to or through a heavily congested area.

A well-maintained, heavily used, divided multi-lane toll highway runs the length of peninsular Malaysia from Singapore to the Thai border. Malaysia's West Coast also has well-developed paved roads between major cities. These two-lane highways are usually congested. Serious accidents can occur from collisions and from drivers who lose control of their vehicles while driving too fast in hilly regions.

Sobriety checkpoints: Police operate sobriety checkpoints in many entertainment districts frequented by expatriates. At these checkpoints, all drivers are required to submit to alcohol breath tests. A failure of the breath test results in an arrest. Laws against drinking and driving are strictly enforced with serious penalties.

Aviation Safety Oversight: The U.S. Federal Aviation Administration (FAA) has assessed the Government of Malaysia's Department of Civil Aviation as being in compliance with International Civil Aviation Organization (ICAO) aviation safety standards for oversight of Malaysia's air carrier operations. For more information, travelers may visit the FAA's internet website at http://www.faa.gov.

Flooding: A tropical monsoon season lasts from November through about mid-February. During this period, heavy rains and thunderstorms may occur every afternoon. In urban areas with poor drainage, street flooding often results. In less developed areas, landslides can cause road closures.

Earthquake/Tsunamis: Because earthquakes may occur at any time in this region and, in rare cases, may cause tsunamis, American citizens are urged to move away from beaches following an earthquake and to monitor local media for important information.

Currency: Currency exchange is readily available; international bank-to-bank transfers may take several days and require adequate identification. Credit cards are accepted throughout the country, but travelers should be aware that criminal syndicates have frequently compromised credit card numbers, even at well-established businesses. ATMs can be a safer means of obtaining Malaysian Ringgit. Western Union money transfers are available through Bumiputra Commerce Bank.

Customs Regulations: Malaysia's customs authorities enforce strict regulations concerning temporary importation into or export from Malaysia of items such as firearms, narcotics, medication, business equipment, currency and books or other printed material, video, and audio recordings which might be considered obscene or in any way harmful to public interest and cultural property. It is advisable to contact the Malaysian Embassy in Washington, D.C., or one of Malaysia's consulates in the United States for specific information regarding customs’ requirements.

Dual Nationality: Malaysia does not recognize or permit dual nationality. If Malaysian authorities learn that an American citizen is also a citizen of Malaysia, they may require that the dual national either renounce United States citizenship immediately or forfeit Malaysian citizenship. Dual American/Malaysian citizens should consider this issue seriously before traveling to Malaysia.

International Child Abduction: There have been cases of parental child abduction in Malaysia. While each case is different, Malaysian courts and police have been consistent in enforcing valid U.S. sole custody decrees.

Criminal Penalties: While in a foreign country, an American citizen is subject to that country's laws and regulations, which sometimes differ significantly from those in the United States and do not afford the protections available to the individual under U.S. law. Penalties for breaking the law can be more severe than in the United States for similar offenses. Persons violating the law, even unknowingly, may be fined, expelled, arrested or imprisoned. Penalties for possession, use, or trafficking in illegal drugs in Malaysia are severe, and convicted offenders can expect long jail sentences and heavy fines. Malaysia strictly enforces its drug laws. Malaysian legislation provides for a mandatory death penalty for convicted drug traffickers. Individuals arrested in possession of 15 grams (1/2 ounce) of heroin or 200 grams (seven ounces) of marijuana are presumed by law to be trafficking in drugs.

The Malaysian criminal code includes a provision for a sentence of caning for certain white-collar crimes, including criminal misappropriation, criminal breach of trust and cheating. Unauthorized collection and/or removal of local flora and fauna may be prosecuted as a crime and can result in heavy fines, expulsion, and/ or imprisonment.

Although access to prisoners is permitted, the U.S. Embassy may not learn of the arrest of U.S. citizens in smaller, more remote areas until several days after the incident. Prison conditions are harsh. American citizens are encouraged to carry a copy of their U.S. passports and of their current social visit pass (visa) with them at all times, so that, if questioned by local officials, proof of identity, U.S. citizenship and legal status in Malaysia is readily available.

Engaging in sexual conduct with children or using or disseminating child pornography in a foreign country is a crime, prosecutable in the United States.

Children's Issues: For information on international adoption of children and international parental child abduction, see the Office of Children's Issues website at http://travel.state.gov/family.

Registration and Embassy Locations: American citizens living in or visiting Malaysia are encouraged to register their stay in Malaysia on line through the State Department's Travel Registration website or in person by visiting the U.S. Embassy's American Citizen Services (ACS) section. The U.S. Embassy is located at 376 Jalan Tun Razak 50400, Kuala Lumpur. The local mailing address is P.O. Box No. 10035, 50700 Kuala Lumpur.

The U.S. Embassy's telephone (60-3) 2168-5000 is available 24 hours a day for emergencies such as arrests, serious illness/injury, or death of Americans, (after business hours, please press 1 at the recording). The ACS Unit's telephone number is (60-3) 2168-4997/4979, and the Consular section's fax number is (60-3) 2148-5801. The U.S. Embassy's general fax number is (60-3) 2142-2207 and Web site is http://malaysia.usembassy.gov. The Consular section's e-mail is klconsular@state.gov.

International Adoption

February 2008

The information in this section has been edited from a report of the State Department Bureau of Consular Affairs, Office of Overseas Citizens Services. For more information, please read the International Adoption section of this book and review current reports online at http://travel.state.gov/family.

Disclaimer: The information in this flyer relating to the legal requirements of specific foreign countries is based on public sources and current understanding. Questions involving foreign and U.S. immigration laws and legal interpretation should be addressed respectively to qualified foreign or U.S. legal counsel.

Please Note: Adoptions are not common in Malaysia. Adoptions of non-relatives are generally difficult and time-consuming procedures. Prospective parents may be required to remain in Malaysia for two or more years during the process. Prospective adoptive parent(s) who are non-Muslims may NOT adopt Muslim children. Prospective American guardians may also want to review our Shari’a Adoption Flyer on Guardianship in Muslim Countries.

Availability of Children for Adoption: Over the past ten years, five Malaysian children have received U.S. immigrant visas based on their adoption by U.S. parents.

Adoption Authority: The government office responsible for adoptions in Malaysia is the Family and Children's Division, Social Welfare Department, Ministry of National Unity and Social Development. You can reach them at:

14 th Floor Wisma Shen
50100 Kuala Lumpur, Malaysia.
Telephone: (6) (03) 269-25011
E-mail: pprljkm@kempadu.gov.my

Non-Muslim Adoptions: The adoption of a non-Muslim child is governed by the Adoption Act of 1952 (Act 257). The identification of a prospective child may occur privately through friends or relatives in Malaysia or through the Malaysian Social Welfare Department. Once the child has been identified, the prospective adoptive parent(s) must obtain a statutory declaration (notarized affidavit) from the biological parent(s) relinquishing all parental rights towards the child. The prospective adoptive parent notifies the Social Welfare Department of the Malaysian State in which he/she is resident of his/her intention to apply for an adoption order of the child. If the Social Welfare Department identified the child, an “offer”letter will be issued to the adoptive parents. This notification must be in writing. No matter how the child was identified, the adoptive parent(s) must reside with and care for the child not less than three (3) consecutive months before petitioning the Sessions Court or the High Court for the adoption order.

When an application for an adoption order is made, the Court appoints a guardian ad litem for the child. In most cases, the court will appoint a Social Welfare office employee. To safeguard the interests of the child before the Court, the guardian ad litem investigates the background and circumstances of the child and the adoptive parent(s), including all matters relevant to the proposed adoption. The completed guardian ad litem report is submitted to the Court on the day of the hearing. The Court may issue an adoption order or an interim order awarding custody of the child to the adoptive parent(s) for a probationary period of not less than six months and not exceeding two years, subject to provisions for the maintenance, education and supervision of the welfare of the child.

The Registrar of the Court sends a certified copy of the adoption decree to the Registrar-General at the National Registration Department and to the adoptive parent(s) within seven days. The Registrar-General enters the adoption order in the Adopted Children Register. The Register entry serves as the child's official record instead of the original birth certificate. The adoptive parent may apply for a copy through the Registrar-General.

Muslim Adoptions: Only prospective adoptive parents who are Muslims may adopt Muslim children. The Registration of Adoptions Act of 1952 and relevant Shariah laws govern the adoption of a Muslim child in Malaysia. A prospective child may be identified privately or through the Social Welfare Department. A court petition is not required. The Muslim prospective adoptive parent applies to the National Registration Department to document the child as his/her adopted child. To qualify, the adoptive parent must have resided with and had continuous custody of the child for a period of not less than two years. The application should include evidence relating to the care, maintenance, and education of the child during the two years from the date of the biological parents statutory declaration (notarized affidavit) relinquishing all parental rights of the child.

If the National Registration Department is satisfied with the evidence submitted, an entry will be made in the Register and a certified copy of the entry delivered to the adoptive parents. If the Registration Department is not satisfied with the evidence, an officer from the Social Welfare Department will conduct an investigation on the well being of the child. Children adopted under the Registration of Adoptions Act cannot assume the name or inherit property of the adoptive parents.

Age and Civil Status Requirements: The adoptive parent must be an “ordinary resident” in Malaysia, who has been is working and living in Malaysia for at least two years prior to the application. One of the prospective parents in non-Muslim adoptions must be at least 25 years old and at least 21 years older. If the prospective adoptive parent is a relative of the child, he/she must be at least 21 years of age.

One of the prospective parents in Muslim adoptions must have attained the age of 25 and be at least 18 years older than the child. If the prospective adoptive parent is a brother, sister, uncle or aunt of the child, he/she must be at least have attained the age of 21.

Adoption Agencies and Attorneys: There are no agencies in Malaysia. All adoption inquiries should be directed to the Social Welfare Department, Ministry of National Unity and Social Development.

Doctors: The U.S. Embassy in Kuala Lumpur maintains current lists of doctors and sources for medical examinations that may be required.

Documentary Requirements: The prospective adoptive parent must present the following documents to the Malaysian Social Welfare Department under the Ministry of National Unity and Social Development:

• His/her valid passport
• The original birth certificate of the adoptive child
• Notarized letters of consent from the biological parents

U.S. Immigration Requirements: A Malaysian child, even if adopted by an American citizen, must obtain an immigrant visa before he or she can enter the U.S. as a lawful permanent resident. Prospective adopting parents are strongly encouraged to consult USCIS publication M-249, The Immigration of Adopted and Prospective Adoptive Children, as well as the Department of State publication, International Adoptions. Please see the International Adoption section of this book for more details and review current reports online at http://travel.state.gov/family.

Malaysian Embassy in the United States
2401 Massachusetts Avenue, NW
Washington, D.C. 20008
Tel: 328-2700
E-mail: mwwashdc@erols.com
Malaysia also has Consulates in New York City and Los Angeles.

U.S. Embassy
376 Jalan Tun Razak
50400 Kuala Lumpur
Tel: (6)(03) 2168-5000
Fax: (6)(03) 248-5801
E-mail: klconsular@state.gov

Questions: Specific questions regarding adoption in Malaysia may be addressed to the Consular Section of the U.S. Embassy in Kuala Lumpur. You may also contact the Office of Children's Issues, SA-29, 2201 C Street, NW, U.S. Department of State, Washington, DC 20520-2818, telephone 1-888-407-4747 with specific questions.

International Adoption

Important Notice Regarding Adoptions from Sarawak July 30, 2002

U.S. citizens contemplating adoption in Sarawak are advised to exercise extreme caution and should expect delays with no guarantee of approval for a U.S. immigrant visa for the adopted child. Sarawak's adoption law is separate and distinct from that of the rest of Malaysia and may not meet the requirements of U.S. immigration law. Moreover, local adoption facilitators” knowledge of and compliance with U.S. immigration law is unknown at this time.

International Parental Child Abduction

February 2008

The information in this section has been edited from a report of the State Department Bureau of Consular Affairs, Office of Overseas Citizens Services. For more information, please read the International Parental Child Abduction section of this book and review current reports online at http://travel.state.gov/family.

Disclaimer: The information in this flyer relating to the legal requirements of specific foreign countries is provided for general information only. Questions involving interpretation of specific foreign laws should be addressed to foreign legal counsel.

General Information: Malaysia is not a party to the Hague Convention on the Civil Aspects of International Child Abduction, nor are there any international or bilateral treaties in force between Malaysia and the United States dealing with international parental child abduction. Therefore, there is no treaty remedy by which the left behind parent would be able to pursue recovery of the children should they be abducted to or wrongfully retained in Malaysia. Once in Malaysia, the child or children would be completely subject to Malaysian law for all matters including custody.

The United States is not a party to any treaty or convention on the enforcement of court orders. A custody decree issued by a court in the U.S. has no binding legal force abroad, although it may have a persuasive force in some countries. Furthermore, a U.S. custody decree may be considered by foreign courts and authorities as evidence and, in some cases, foreign courts may voluntarily recognize and enforce it on the basis of comity (the voluntary recognition by courts of one jurisdiction of the laws and judicial decisions of another).

Custody Disputes: Parental child abduction is not a crime under Malaysian law. Custody disputes are considered civil legal matters that must be resolved between the concerned parties or through the courts in Malaysia. Although there is no treaty in force between the United States and Malaysia on enforcement of judgments, the Malaysian courts will also take into consideration child custody decrees issued by foreign courts in deciding disputes regarding children residing in Malaysia. The Malaysian legal system is based on English common law.

The Federal courts have original jurisdiction in constitutional matters and in disputes between states and reviews decisions referred from the Court of Appeals. In addition to high courts, the Peninsular Malaysian states and the East Malaysian States of Sabah and Sarawak have magistrate courts, session courts, and juvenile courts. These courts would have jurisdiction on civil law cases, including child custody disputes among Malays or other Muslims/indigenous peoples. By Constitutional definition, all Malays are Muslim, and the “paramount ruler,” customarily referred to as the “King” is also the leader of the Islamic faith in Malaysia. Malaysia's official religion is Islam and Islamic (Sharia) law applies in family and religious matter for all Muslims. Although civil law cases are adjudicated under Islamic and traditional law, certain cases involving Muslims only are heard in Sharia courts and Sharia law applies in family and religious matters. Questions on specific Islamic laws as they pertain to custody rights should be addressed to a lawyer licensed to practice in Malaysia.

In order to bring a custody issue before the local court, the left-behind parent will require the assistance of an attorney licensed to practice in Malaysia. Ideally, these orders and proceedings ensure due process under the local laws as well as providing protection for the child or children. A parent holding a custody decree issued in U.S. courts must retain local Malaysian counsel to apply to the Malaysian courts for recognition and enforcement of the U.S. decree, or to petition for custody of minors.

Although visitation rights for non-custodial parents are not expressly stipulated in Malaysian Civil Code, court judgments often provide visitation rights for non-custodial parents. Since compliance with the local court rulings is essentially voluntary, Malaysian police or local law enforcement are reluctant to get involved in custody disputes and could not be counted on to enforce custody decrees issued by the Malaysian courts. For more information, please read the International Parental Child Abduction section of this book and review current reports online at http://travel.state.gov/family.

Deportation: While there is an extradition treaty between the United States and Malaysia, parental child abduction is not an extraditable offense.

However, if the taking parent is a U.S. citizen whose U.S. passport has been revoked due to an outstanding federal Unlawful Flight to avoid Prosecution (UFAP) warrant or indictment on charges of International Parental Kidnapping (IPKCA) in violation of 18 USC Section 1204, Malaysian authorities may consider deportation based on lack of a valid travel document.

Dual Nationality: A child with a parent who was born outside of the U.S. or who has acquired a second nationality through naturalization in another country may have a claim to citizenship in that country. There is no requirement that a U.S. citizen parent consent to the acquisition by his/her child of another nationality and in many cases a parent is unaware that his/her child may have dual citizenship. The Embassy of Malaysia in Washington D.C. will be able to provide more detailed information on whether your child has a claim.

Initiating Foreign Enforcement Proceedings Under Local Law : If a country is not a signatory to the Hague Convention on the Civil Aspects of International Child Abduction, it may be necessary for you to initiate a child custody action in the courts in the foreign country. For additional information, see judicial assistance for Malaysia on the Internet at http://caweb/cainternet/malaysia_legal.html.

Retaining a Foreign Attorney: A list of English speaking attorneys is available from the U.S. State Department Office of American Citizens Services.

Legal Aid: Some countries provide legal aid services in child custody cases. The legal attache or consular section of the foreign embassy in Washington, D.C. may have specific guidance.

The ISS headquarters are in Geneva, Switzerland, but information or assistance may be available through its New York branch at 10 W. 40th Street, New York, N.Y. 10018, Tel. No.: 212-532-6350. The National Center for Missing and Exploited Children (NCMEC) maintains a list of attorneys interested in Hague Convention and International Child Custody cases.

NCMEC handles all Hague Convention applications for return when children from other countries are abducted and believed to be in the U.S. You may obtain additional information about the attorney program at the National Center by calling 1-800-843-5678 or 703-274-3900. The Internet home page for the National Center can be reached directly at http://www.missingkids.org

Criminal Remedies : Foreign countries may not recognize parental abduction as a crime. Please note that the extradition process applies only to the abducting adult/fugitive and not the child. The proper channel for the return of the child is through civil mechanisms or voluntary return arrangements. Additional information is also available on the Internet at the web site of the U.S. Department of Justice, Office of Juvenile Justice and Delinquency Prevention (OJJDP) at http://www.ojjdp.ncjrs.org.

For further information on international parental child abduction, contact the Office of Children's Issues, U.S. Department of State at 1-888-407-4747 or visit its web site on the Internet at http://travel.state.gov/family. You may also direct inquiries to: Office of Children's Issues, U.S. Department of State, Washington, DC 20520-4811; Phone: (202) 736-9090; Fax: (202) 312-9743.

Malaysia

Compiled from the December 2006 Background Note and supplemented with additional information from the State Department and the editors of this volume. See the introduction to this set for explanatory notes.

Official Name:
Malaysia

PROFILE

PEOPLE

HISTORY

GOVERNMENT

POLITICAL CONDITIONS

ECONOMY

FOREIGN RELATIONS

U.S.-MALAYSIAN RELATIONS

TRAVEL

PROFILE

Geography

Area: 329,749 sq. km. (127,316 sq. mi.); slightly larger than New Mexico.

Cities: Capital—Kuala Lumpur. Other cities—Penang, Ipoh, Malacca, Johor Baru, Shah Alam, Klang, Kuching, Kota Kinabalu

Terrain: Coastal plains and interior, jungle-covered mountains. The South China Sea separates peninsular Malaysia from East Malaysia on Borneo (370 mi.).

Climate: Tropical.

People

Nationality: Noun and adjective—Malaysian(s).

Population: (2006) 26.9 million.

Annual growth rate: 1.8%.

Ethnic groups: Malay 50.2%, Chinese 24.5%, Indigenous 11.0%, Indian 7.2%, non-Malaysian citizens 5.9%, others 1.2%.

Religions: Islam (60.4%), Buddhism (19.2%), Christianity (9.1%), Hinduism (6.3%), Confucianism (2.6%), tribal/folk (0.8%), other (0.4%), none/unknown (1.2%).

Languages: Bahasa Melayu (official), Chinese (various dialects), English, Tamil, indigenous.

Education: Years compulsory—6. Attendance—98.5% (primary), 82% (secondary). Literacy—93.5%.

Health: Infant mortality rate (2005)—5.1/1,000. Life expectancy (2005)—female 76.2 yrs., male 71.8 yrs.

Work force: (10.55 million, 2005) Services 51%; Industry 36% (Manufacturing 28.4%, Mining and Construction 7.6%); Agriculture 13%.

Government

Type: Federal parliamentary democracy with a constitutional monarch.

Independence: August 31, 1957. (Malaya, which is now peninsular Malaysia, became independent in 1957. In 1963 Malaya, Sabah, Sarawak, and Singapore formed Malaysia. Singapore became an independent country in 1965.).

Constitution: 1957.

Political subdivisions: 13 states and three federal territories (Kuala Lumpur, Labuan Island, Putrajaya federal administrative territory). Each state has an assembly and government headed by a chief minister. Nine of these states have hereditary rulers, generally titled “sultans,” while the remaining four have appointed governors in counterpart positions.

Government branches: Executive—Yang di-Pertuan Agong (head of state and customarily referred to as the king; has ceremonial duties), prime minister (head of government), cabinet. Legislative—bicameral parliament, comprising 70-member Senate (26 elected by the 13 state assemblies, 44 appointed by the king on the prime minister’s recommendation) and 219-member House of Representatives (elected from single-member districts). Judicial—Federal Court, Court of Appeals, high courts, session’s courts, magistrate’s courts, and juvenile courts. Sharia courts hear cases on certain matters involving Muslims only.

Political parties: Barisan Nasional (National Front)—a coalition comprising the United Malays National Organization (UMNO) and 13 other parties, most of which are ethnically based; Democratic Action Party (DAP); Parti Islam se Malaysia (PAS); Parti Keadilan Rakyat (PKR). There are more than 30 registered political parties, including the foregoing, not all of which are represented in the federal parliament.

Suffrage: Universal adult (voting age 21).

Economy (2005)

Nominal GDP: $130.8 billion.

Annual real GDP growth rate: 7.1% (2004); 5.2% (2005).

Per capita (GDP) income: $5,042.

Natural resources: petroleum, liquefied natural gas (LNG), tin, minerals. Agricultural Products: palm oil, rubber, timber, cocoa, rice, tropical fruit, fish, coconut.

Industry: Types—electronics, electrical products, chemicals, food and beverages, metal and machine products, apparel.

Trade: Merchandise exports—$145.0 billion: electronics, electrical products, palm oil, petroleum, liquid natural gas, apparel, timber and logs, plywood and veneer, natural rubber. Major markets—U.S. 18.8%, Singapore 15.0%, Japan 10.1%. Merchandise imports—$118.0 billion: machinery, chemicals, manufactured goods, fuels, and lubricants. Major suppliers—Japan 16.1%, U.S. 14.6%, Singapore 11.2%.

PEOPLE

Malaysia’s population comprises many ethnic groups, with the politically dominant Malays comprising a majority of just over 50%. By constitutional definition, all Malays are Muslim. About a quarter of the population is Chinese, who have historically played an important role in trade and business. Malaysians of Indian descent comprise about 7% of the population and include Hindus, Muslims, Buddhists, and Christians. About 85% of the Indian community is ethnically TamilNon-Malay indigenous groups make up more than half of the Borneo state of Sarawak’s population and about 66% of the Borneo state of Sabah’s population. They are divided into dozens of ethnic groups, but they share some general patterns of living and culture. Until the 20th century, most practiced traditional beliefs, but many have become Christian or Muslim. Population distribution is uneven, with some 20 million residents concentrated in the lowlands of peninsular Malaysia, an area slightly smaller than the state of Michigan.

HISTORY

The early Buddhist Malay kingdom of Srivijaya, based at what is now Palembang, Sumatra, dominated much of the Malay peninsula from the 9th to the 13th centuries AD. The powerful Hindu kingdom of Majapahit, based on Java, gained control of the Malay peninsula in the 14th century. Conversion of the Malays to Islam, beginning in the early 14th century, accelerated with the rise of the state of Malacca under the rule of a Muslim prince in the 15th century. Malacca was a major regional entrepot, where Chinese, Arab, Malay, and Indian merchants traded precious goods. Drawn by this rich trade, a Portuguese fleet conquered Malacca in 1511, marking the beginning of European expansion in Southeast Asia. The Dutch ousted the Portuguese from Malacca in 1641. The British obtained the island of Penang in 1786. In 1795, the Dutch gave up Malacca to the British temporarily to prevent it from falling to the French during the Napoleonic war. It was returned to the Dutch in 1818. In 1824, through the Anglo-Dutch treaty, Malacca was given to the British in exchange for Bengkulen on the island of Sumatra, in what is today Indonesia.

In 1826, the British settlements of Malacca, Penang, and Singapore were combined to form the Colony of the Straits Settlements. From these strongholds, in the 19th and early 20th centuries the British established protectorates over the Malay sultanates on the peninsula. Four of these states were consolidated in 1895 as the Federated Malay States.

During British control, a well-ordered system of public administration was established, public services were extended, and large-scale rubber and tin production was developed. This control was interrupted by the Japanese invasion and occupation from 1941 to 1945 during World War II.

Popular sentiment for independence swelled during and after the war and, in 1957, the Federation of Malaya, established from the British-ruled territories of peninsular Malaysia in 1948, negotiated independence from the United Kingdom under the leadership of Tunku Abdul Rahman, who became the first prime minister. The British colonies of Singapore, Sarawak, and Sabah (called North Borneo) joined together with the Federation to form Malaysia on September 16, 1963.

Singapore left the Federation on August 9, 1965, and became an independent republic. Neighboring Indonesia objected to the formation of Malaysia and pursued a program of economic, political, diplomatic, and military “confrontation” against the new country, which ended only after the fall of Indonesia’s President Sukarno in 1966.

Following World War II, local communists, nearly all Chinese, launched a long, bitter insurgency, prompting the imposition of a state of emergency in 1948 (lifted in 1960). Small bands of guerrillas remained in bases along the rugged border with southern Thailand, occasionally entering northern Malaysia. These guerrillas finally signed a peace accord with the Malaysian Government in December 1989. A separate, small-scale communist insurgency that began in the mid-1960s in Sarawak also ended with the signing of a peace accord in October 1990.

GOVERNMENT

Malaysia is a constitutional monarchy, nominally headed by the Yang di-Pertuan Agong, customarily referred to as the king. Kings are elected for 5-year terms from among the nine sultans of the peninsular Malaysian states. The king also is the leader of the Islamic faith in Malaysia.

Executive power is vested in the cabinet led by the prime minister; the Malaysian constitution stipulates that the prime minister must be a member of the lower house of parliament who, in the opinion of the Yang di-Pertuan Agong, commands a majority in parliament. The cabinet is chosen from among members of both houses of parliament and is responsible to that body.

The bicameral parliament consists of the Senate (Dewan Negara) and the House of Representatives (Dewan Rakyat).

All 70 Senate members sit for 3-year terms, which are normally extended for an additional 3 years; 26 are elected by the 13 state assemblies, and 44 are appointed by the king. Representatives of the House are elected from single-member districts by universal adult suffrage. The 219 members of the House of Representatives are elected to parliamentary terms lasting up to 5 years. Legislative power is divided between federal and state legislatures.

The Malaysian legal system is based on English common law. The Federal Court reviews decisions referred from the Court of Appeal; it has original jurisdiction in constitutional matters and in disputes between states or between the federal government and a state. Peninsular Malaysia and the East Malaysian states of Sabah and Sarawak each have a high court.

The federal government has authority over external affairs, defense, internal security, justice (except civil law cases among Malays or other Muslims and other indigenous peoples, adjudicated under Islamic and traditional law), federal citizenship, finance, commerce, industry, communications, transportation, and other matters.

Principal Government Officials

Last Updated: 12/13/2006

Paramount Ruler: Sultan MIZAN Zainal Abidin ibni Al-Marhum Sultan Mahmud Al-Muktafi Billah Shah

Dep. Paramount Ruler: Sultan ABDUL HALIM Muadzam Shah

Prime Minister: ABDULLAH bin Ahmad Badawi

Dep. Prime Min.: Mohamed NAJIB bin Abdul Razak

Min. of Agriculture & Agro-Based Industry: MUHYIDDIN bin Mohamed Yassin

Min. of Arts, Culture, & Heritage: RAIS Yatim

Min. of Defense: Mohamed NAJIB bin Abdul Razak

Min. of Domestic Trade & Consumer Affairs: SHAFIE Apdal

Min. of Education: HISHAMMUDDIN Tun Hussein

Min. of Energy, Communications, & Multimedia: LIM Keng Yaik

Min. of Entrepreneur Development: KHALED Nordin

Min. of Federal Territories: ZULHASNAN Rafique

Min. of Finance: ABDULLAH bin Ahmad Badawi

Second Min. of Finance: NOR Mohamed Yakcop

Min. of Foreign Affairs: Syed HAMID bin Syed Jaafar Albar

Min. of Health: CHUA Soi Led

Min. of Higher Education: MUSTAPA Mohammed

Min. of Home Affairs: RADZI Sheikh Ahmad

Min. of Housing & Local Government: ONG Ka Ting

Min. of Human Resources: FONG Chan Onn

Min. of Information: ZAINUDDIN Maidin

Min. of Internal Security: ABDULLAH bin Ahmad Badawi

Min. of International Trade & Industry: RAFIDAH binti Abdul Aziz

Min. of Natural Resources & the Environment: AZMI Khalid

Min. of Plantation Enterprises & Commodity: Peter CHIN Fah Kui

Min. of Rural & Regional Development: ABDUL AZIZ Shamsuddin

Min. of Science & Technology: JAMALUDIN Jarjis

Min. of Tourism: Tengku ADNAN Tengku Mansur

Min. of Transport: CHAN Kong Choy

Min. of Women, Family, & Community Development: SHAHRIZAT binte Abdul Jalil

Min. of Works: S. Samy VELLU

Min. of Youth & Sports: AZALINA Othman Said

Min. in the Dept. of the Prime Min.: Maximus ONGKILI

Min. in the Dept. of the Prime Min.: EFFENDI Norwawi

Min. in the Dept. of the Prime Min.: ABDULLAH Mohamed Zain

Min. in the Dept. of the Prime Min.: Mohamed NAZRI Abdul Aziz

Min. in the Dept. of the Prime Min.: Bernard Giluk DOMPOK

Min. in the Dept. of the Prime Min.: ABDULLAH Mat Zin

Governor, Central Bank: ZETI Akhtar Aziz

Ambassador to the US: GHAZZALI bin Sheikh Abdul Khalid

Permanent Representative to the UN, New York: HAMIDON Ali

Malaysia maintains an embassy in the U.S. at 3516 International Court NW, Washington, DC 20008, tel. (202) 572-9700; a Consulate General at 550 South Hope Street, Suite 400, Los Angeles, CA 90071, tel. (213) 892-1238i; and a Consulate General at 313 East 43rd Street, New York City, NY 10017, tel. (212) 490-2722/23.

POLITICAL CONDITIONS

Malaysia’s predominant political party, the United Malays National Organization (UMNO), has held power in coalition with other parties since independence in 1957. The UMNO coalition’s share of the vote declined in national elections held in May 1969, after which riots broke out in Kuala Lumpur and elsewhere, mainly between Malays and ethnic Chinese. Several hundred people were killed or injured. The government declared a state of emergency and suspended all parliamentary activities.

In the years that followed, Malaysia undertook several initiatives that became integral parts of its socioeconomic model. The New Economic Plan (NEP), launched in 1971, contained a series of affirmative action policies designed to benefit Malays and certain indigenous groups (together known as bumiputera or “sons of the soil”). The Constitution was amended to limit dissent against the specially-protected and sensitive portions of the Constitution pertaining to the social contract. The government identified intercommunal harmony as one of its official goals. The previous alliance of communally based parties was replaced with a broader coalition —the Barisan Nasional (BN) or National Front. The BN won large majorities in the 1974 federal and state elections.

Dr. Mahathir Mohamad was Prime Minister between 1981 and 2003, leading UMNO and BN to successive election victories. Mahathir emphasized economic development during his tenure, in particular the export sector, as well as large scale infrastructure projects. Mahathir attributed the success of the Asian tiger economies to the “Asian values” of its people, which he believed were superior to those of the West. Mahathir sharply criticized the International Monetary Fund (IMF), international financiers such as George Soros, and Western governments during the sharp economic and financial crisis that affected Asia in 1997-8, and denied that the downturn was due to the failures of corruption and “crony capitalism.”

The end of Mahathir’s tenure was marred by a falling out with his deputy and presumed successor, Anwar Ibrahim. In September 1998, Mahathir dismissed Anwar and accused him of immoral and corrupt conduct. Although Anwar was convicted on both charges in 1999 and 2000, the trials were viewed as seriously flawed. Malaysia’s Federal Court eventually freed Anwar after overturning his immoral conduct conviction in September 2004.

Mahathir stepped down as prime minister in October 2003 after 22 years in power, and his successor, Deputy Prime Minister Abdullah Ahmad Badawi, was sworn into office. Abdullah called elections and won an overwhelming victory in March 2004, with Barisan Nasional taking 199 of 219 seats in the lower house of parliament. UMNO itself won 110 seats. The Islamic opposition party (PAS), which had made electoral inroads in 1999, was reduced to six seats in parliament and lost control of the state of Terengganu. The left of center Democratic Action Party (DAP), with predominately urban ethnic Chinese support, won 12 seats in parliament, and party chairman Lim Kit Siang became Leader of the Opposition in parliament.

Since taking office, Abdullah, an Islamic scholar, has promoted the concept of “Islam Hadhari” or “civilizational Islam,” emphasizing the importance of education, social harmony and economic progress. Abdullah continues to place increased focus on rural development, including the agricultural sector. Unhappy with the cancellation of various development projects begun under the previous administration, Mahathir publicly criticized Abdullah on multiple occasions in 2006; however Mahathir’s attacks were blunted when he failed to be elected as a delegate to the UMNO party convention in November.

ECONOMY

Since the 1970’s, Malaysia has transformed itself from an economy dependent on raw materials production and with a largely poor population to a multi-sector economy with a middle-income population. The industrial sector has been the primary source of economic growth since the 1980’s, particularly the manufacture of electronics for export. However, export dependence has exposed the economy to global market fluctuations and to economic changes in its top export destinations and key sources of foreign investment, such as the United States and Japan.

At independence, Malaysia inherited an economy dominated by two commodities—rubber and tin. In the 40 years thereafter, Malaysia’s economic record was one of Asia’s best. From the early 1980s through the mid-1990s, the economy experienced a period of broad diversification and sustained rapid growth averaging almost 8% annually. New foreign and domestic investment played a significant role in the transformation of Malaysia’s economy. Manufacturing grew from 13.9% of GDP in 1970 to 30.9% in 2003, while agriculture and mining, which together had accounted for 42.7% of GDP in 1970, dropped to 8.7% and 7.2%, respectively, in 2003. Malaysia is one of the world’s largest exporters of semiconductor devices, electrical goods, and appliances, and the government has ambitious plans to make Malaysia a leading producer and developer of high-tech products, including software. The Government of Malaysia has taken an active role in guiding the nation’s economic development. Malaysia’s New Economic Policy (NEP), first established in 1971, sought to eradicate poverty and end the identification of economic function with ethnicity. In particular, it was designed to enhance the economic standing of ethnic Malays and other indigenous peoples (collectively known as “bumiputeras”). Rapid growth through the mid-1990s made it possible to expand the share of the economy for bumiputeras without reducing the economic attainment of other groups. One controversial NEP goal was to alter the pattern of ownership of corporate equity in Malaysia, with the government providing funds to purchase foreign-owned shareholdings on behalf of the bumiputera population. In June 1991, after the NEP expired, the government unveiled its National Development Policy, which contained many of the NEP’s goals, although without specific equity targets and timetables. In April 2001, the government released a new plan, the “National Vision Policy,” to guide development over the period 2001-10. The National Vision Policy targets education for budget increases and seeks to refocus the economy toward higher-technology production. The goal is for Malaysia to be a fully-developed economy by 2020.

In July 2005, the government removed the 7-year old peg linking the ringgit’s value to the U.S. dollar (at an exchange rate of RM 3.8/U.S.$1.0), replacing it with a managed float against an undisclosed basket of currencies. This move aims to keep the ringgit stable to support the country’s export-based economy.

FOREIGN RELATIONS

Malaysia views regional cooperation as the cornerstone of its foreign policy. It was a founding member of the Association of Southeast Asian Nations (ASEAN) and served as the group’s chair most recently in 2005-6. It hosted the ASEAN Summit and East Asia Summit in December 2005, as well as the ASEAN Ministerial and the ASEAN Regional Forum in July 2006.

Malaysia is an active member of the Asia Pacific Economic Cooperation (APEC), the Organization of the Islamic Conference (OIC), the Non-Aligned Movement (NAM), and the United Nations. It is the current chair of the OIC and has also chaired the NAM. Malaysia hosted the APEC Leaders’ Meeting in 1998.

Malaysia is a frequent contributor to UN and other peacekeeping missions, including recent deployments to East Timor, Indonesia, Pakistan, Sierra Leone, Kosovo and Lebanon.

U.S.-MALAYSIAN RELATIONS

The United States and Malaysia share a diverse and expanding partnership.

Economic ties are robust. The United States is Malaysia’s largest trading partner and Malaysia is the tenth-largest trading partner of the U.S. Annual two-way trade amounts to $45 billion. The United States is the largest foreign investor in Malaysia. American companies are particularly active in the energy, electronics and manufacturing sectors. The cumulative value of U.S. private investment in Malaysia exceeds $20 billion.

The United States and Malaysia launched negotiations for a bilateral free trade agreement (FTA) in June 2006. If the on-going negotiations are successful and the agreement is approved by Congress, Malaysia will become the largest U.S. trading partner with an FTA except for the NAFTA countries.

The United States and Malaysia enjoy strong security cooperation. Malaysia hosts the Southeast Asia Regional Center for Counterterrorism (SEARCCT), where over 1,100 officials from multiple countries have received training. The United States is the largest foreign provider of training courses at the center. The U.S. and Malaysia share a strong military-to-military relationship with numerous exchanges, training, joint exercises and visits.

Principal U.S. Embassy Officials

KUALA LUMPUR (E) Address: 376 Jalan Tun Razak; APO/FPO: American Embassy–KL, APO AP 96535-8152; Phone: [6] (03) 2168-5000; Fax: [6] (03) 2142-2207; Workweek: 7:45am–4:30pm; Website: http://malaysia.usembassy.gov.

Last Updated: 11/28/2006

TRAVEL

Consular Information Sheet : October 10, 2006

Country Description: Malaysia is a constitutional monarchy with an elected federal parliamentary government. The country is comprised of 13 states, 11 on the Malay Peninsula and two, Sabah and Sarawak, on the island of Borneo. There is also a federal district, which contains the capital city of Kuala Lumpur, the administrative center of Putrajaya, and the island of Labuan (located off the southwest coast of Sabah). Malaysia is a multi-ethnic country of 25 million people. Malays form the predominant ethnic group. The two other large ethnic groups in Malaysia are Chinese and Indians. Islam is the national religion. Bahasa Malaysia is the official language, although English is widely spoken. Travelers to Malaysia may access information on areas of interest through the Malaysian government’s website at http://www.kln.gov.my/ and Tourism Malaysia’s website at http://www.tourismmalaysia.gov.my/en/.

Safety and Security: The Department of State reiterates its ongoing concern about the safety of American citizens, especially those contemplating travel along the east coast of the Malaysian state of Sabah and overland travel into southern Thailand. The Department of State strongly urges American citizens to defer all non-essential travel to eastern Sabah’s coastal areas and offshore islands.

There are indications of continued planning of kidnappings, including of foreigners, in eastern Sabah’s coastal areas and offshore islands. Several kidnappings and piracy incidents have occurred in this area, most recently in March 2005. The Abu Sayyaf Group (ASG), based in the southern Philippines, has been responsible for some of these incidents; other incidents have been attributed to unidentified criminals. Emergency assistance in the area may not always be available.

The United States Government has designated Jemaah Islamiyah (JI) as a Foreign Terrorist Organization. JI is an extremist group linked to alQaeda and other regional terrorist groups, such as the ASG, and has cells operating throughout Southeast Asia. Extremist groups in the region have demonstrated the capability to carry out transnational attacks in locations where Westerners congregate. Terrorist groups do not distinguish between official and civilian targets.

Americans who travel overland from Malaysia to Thailand should be aware of the Department of State’s safety and security information for Thailand. Americans planning to travel to Malaysia are encouraged to register and update their contact information at the State Department’s travel registration website

For the latest security information, Americans traveling abroad should regularly monitor the Department’s website where the current Travel Warnings and Public Announcements, including the Worldwide Caution Public Announcement, can be found. Up-to-date information on safety and security can also be obtained by calling 1-888-407-4747 toll free in the U.S., or for callers outside the U.S. and Canada, a regular toll-line at 1-202-501-4444. These numbers are available from 8:00 a.m. to 8:00 p.m. Eastern Time, Monday through Friday (except U.S. federal holidays).

Entry/Exit Requirements: American citizens are required to have a passport valid for at least six months to enter Malaysia, but Americans do not need to obtain a visa in advance for a pleasure or business trip if their stay in Malaysia is 90 days or less. Upon or prior to entry into Malaysia, visitors will be given a Malaysian Disembarkation Card to complete and present to Malaysian immigration upon arrival. Immigration officials will then issue a social visit pass (visa) in their passport.

Travelers are required to carry their passports for travel from peninsular Malaysia to eastern Malaysia (on the island of Borneo) and between the provinces of Sabah and Sarawak, both of which are on Borneo. Social visit passes (visas) issued at immigration points such as KLIA airport, Johor Bahru, and Kota Kinabalu (Sabah) for entry into peninsular Malaysia are not valid for entry into the state of Sarawak and usually have 3 months’ validity. New social visit passes must be obtained upon arrival at Kuching or Miri airports in Sarawak. In most cases, social visit passes issued by Sarawak immigration officials are valid for any part of Malaysia and usually have 1 month’s validity.

For more information on the latest entry procedures and requirements, contact the Embassy of Malaysia, 3516 International Court, N.W., Washington, D.C. 20008, telephone: (202) 572-9700, the Malaysian consulates located in New York, telephone: (212) 490-2722, or Los Angeles, telephone: (213) 892-1238, or visit the Malaysian government’s web site, which has information on Malaysian embassies and consulates abroad at www.kln.gov.my. Overseas inquiries should be made at your nearest Malaysian embassy or consulate.

Visa Overstays: Since 2003, Malaysian immigration authorities routinely have detained foreigners who overstay their social visit passes (visas). In light of the arrests of several American citizens in connection with immigration sweeps conducted by Malaysian police and immigration authorities, American citizens are reminded to carry a copy of their passport identification and visa page(s) with their Malaysian social visit pass at all times. Depending upon the nature of the violation, detentions may last from a few hours to several weeks, pending a formal hearing. American citizens are urged to check their visa status periodically while in Malaysia and strictly follow immigration laws and regulations.

Crime: Violent crime involving tourists is in Malaysia relatively uncommon. Petty theft, particularly purse snatching and pick pocketing, is the most common criminal activity directed against foreigners. Thieves on motorcycles commit “snatch thefts” in crowded shopping areas. In most incidents, two men on a motorcycle speed up from behind a victim, and the passenger on the back snatches a purse, handbag or cellular telephone. These thefts occur at all hours and often in front of large groups of witnesses. Women walking by themselves or with small children are the most common targets. People have been injured or killed by being pulled to the ground by their purse straps by thieves on motorcycles or leaning out of cars. Automobile burglaries also occur. Credit card fraud is a serious problem in Malaysia. Travelers should avoid using credit cards, if possible. Credit card numbers should be closely safeguarded at all times.

Visitors to Malaysia, including Americans, have reported serious problems after responding to private sector Internet advertisements to donate money to be directed to the Kuala Gandah Elephant Conservation Center (KGECC). The ads also offer opportunities to do wildlife volunteer work, and to engage in jungle trekking and survival experiences. The Kuala Gandah Elephant Conservation Center is operated by the Government of Malaysia Department of Wildlife and National Parks and does not accept donations or support of this nature, nor does it operate jungle trekking and survival programs. Please visit the KGECC website at http://www.wildlife.gov.my/bhg_ekogandah.htm for the most recent information.

Persons interested in participating in wildlife volunteer programs or taking trekking and survival courses should contact the American Citizens Services (ACS) section of the U.S. Embassy for further information.

Information for Victims of Crime: The loss or theft abroad of a U.S. passport should be reported immediately to the local police and the nearest U.S. Embassy or Consulate. If you are the victim of a crime while overseas, in addition to reporting to local police, please contact the nearest U.S. Embassy or Consulate for assistance. The Embassy/Consulate staff can, for example, assist you to find appropriate medical care, to contact family members or friends and explain how funds could be transferred. Although the investigation and prosecution of the crime is solely the responsibility of local authorities, consular officers can help you to understand the local criminal justice process and to find an attorney if needed.

Medical Facilities and Health Information: Medical facilities and services are adequate in the larger cities, where Western-trained doctors can be found. The American Embassy can provide a list of English-speaking doctors and hospitals upon request. Psychological and psychiatric medical and counseling services are limited. Serious medical problems requiring hospitalization and/or medical evacuation to the United States can cost thousands of dollars or more. Doctors and hospitals often expect immediate cash payment for health services although major credit cards are acceptable.

Malaysian ambulance attendants lack training equivalent to U.S. standards. Callers to Malaysia’s “999” emergency number (equivalent to the U.S. 911) are connected to the Red Crescent and patients are directed to whichever hospital the dispatcher chooses. Americans staying in Malaysia for extended periods, especially those who have known health problems, are advised to investigate private ambulance services in their area and to provide family and close contacts with the direct telephone number (s) of the service they prefer.

Air quality in Malaysia is acceptable most of the time. However, when burning of vegetation occurs in Malaysia and nearby countries, especially from March through June and during September and October, air quality can range from “unhealthy for sensitive groups” to “unhealthy.”

Recorded information on vaccinations and other health precautions, such as safe food and water precautions and insect bite protection, may be obtained from the Centers for Disease Control and Prevention’s hotline for international travelers at 1-877-FYI-TRIP (1-877-394-8747), fax 1-888-CDC-FAXX (1-888-232-3299), or from its website at http://www.cdc.gov/travel/. For information about outbreaks of infectious diseases abroad and other health information for travelers consult the World Health Organization’s (WHO) website at http://www.who.int/en/.

Medical Insurance: The Department of State strongly urges Americans to consult with their medical insurance company prior to traveling abroad to confirm whether their policies remain in force overseas and whether they cover emergency expenses such as a medical evacuation.

Traffic Safety and Road Conditions: While in a foreign country, American citizens may encounter road conditions that differ significantly from those in the United States. The information below concerning Malaysia is provided for general reference only, and may not be totally accurate in a particular location or circumstance.

Traffic in Malaysia moves on the left side of the road, and most vehicles use right-hand drive. Seat belts are mandatory. Cell phones cannot be used while driving. Laws against drinking and driving are strictly enforced with stiff penalties. Motor-cyclists attempt to circumvent traffic blockage by weaving through vehicles and pedestrians. There has been a recent rise in the reported number of incidents involving late-night road rage. The majority of these violent incidents occur after midnight. Traffic is heavy during the morning and afternoon rush hours and slows down considerably when it rains. Bottlenecks are common in major cities. Development of the infrastructure has not kept pace with the proliferation of motorized vehicles. Multi-lane highways often merge into narrow two-lane roads in the center of town and cause added congestion. Many streets are narrow and winding. Taxis are metered, but some drivers charge a rate much higher than the metered rate during peak hours, when it is raining, or when the passenger’s destination is to or through a heavily congested area. A well-maintained, heavily used, divided multi-lane toll highway runs the length of peninsular Malaysia from Singapore to the Thai border. Malaysia’s West Coast also has well-developed paved roads between major cities. These two-lane highways are usually congested. Serious accidents can occur from collisions and from drivers who lose control of their vehicles while driving too fast in hilly regions.

Aviation Safety Oversight: The U.S. Federal Aviation Administration (FAA) has assessed the Government of Malaysia’s Department of Civil Aviation as being in compliance with International Civil Aviation Organization (ICAO) aviation safety standards for oversight of Malaysia’s air carrier operations. For more information, travelers may visit the FAA’s internet website at http://www.faa.gov.

Natural Disasters: Since the December 26, 2004, Asian tsunami, aftershock earthquakes have been felt in parts of Malaysia. Because earthquakes may occur at any time in this region and, in rare cases, may cause tsunamis, American citizens are urged to move away from beaches following an earthquake and to monitor local media for important information.

Currency: Currency exchange is readily available; international bank-to-bank transfers may take several days and require adequate identification. Credit cards are accepted throughout the country, but travelers should be aware that criminal syndicates have frequently compromised credit card numbers, even at well-established businesses. ATMs can be a safer means of obtaining Malaysian Ringgit. Western Union money transfers are available through Bumiputra Commerce Bank.

Customs: Malaysia’s customs authorities enforce strict regulations concerning temporary importation into or export from Malaysia of items such as firearms, narcotics, medication, business equipment, currency and books or other printed material, video, and audio recordings which might be considered obscene or in any way harmful to public interest and cultural property. It is advisable to contact the Malaysian Embassy in Washington, D.C., or one of Malay-sia’s consulates in the United States for specific information regarding customs’ requirements.

Dual Nationality: Malaysia does not recognize or permit dual nationality. If Malaysian authorities learn that an American citizen is also a citizen of Malaysia, they may require that the dual national either renounce United States citizenship immediately or forfeit Malaysian citizenship. Dual American/Malaysian citizens should consider this issue seriously before traveling to Malaysia.

International Child Abduction: There have been cases of parental child abduction in Malaysia. While each case is different, Malaysian courts and police have been consistent in enforcing valid U.S. sole custody decrees.

Criminal Penalties: While in a foreign country, an American citizen is subject to that country’s laws and regulations, which sometimes differ significantly from those in the United States and do not afford the protections available to the individual under U.S. law. Penalties for breaking the law can be more severe than in the United States for similar offenses. Persons violating the law, even unknowingly, may be fined, expelled, arrested or imprisoned. Penalties for possession, use, or trafficking in illegal drugs in Malaysia are severe, and convicted offenders can expect long jail sentences and heavy fines. Malaysia strictly enforces its drug laws. Malaysian legislation provides for a mandatory death penalty for convicted drug traffickers. Individuals arrested in possession of 15 grams (1/2 ounce) of heroin or 200 grams (seven ounces) of marijuana are presumed by law to be trafficking in drugs.

The Malaysian criminal code includes a provision for a sentence of caning for certain white-collar crimes, including criminal misappropriation, criminal breach of trust and cheating. Unauthorized collection and/or removal of local flora and fauna may be prosecuted as a crime and can result in heavy fines, expulsion, and/or imprisonment.

Although access to prisoners is permitted, the U.S. Embassy may not learn of the arrest of U.S. citizens in smaller, more remote areas until several days after the incident. Prison conditions are harsh. American citizens are encouraged to carry a copy of their U.S. passports and of their current social visit pass (visa) with them at all times, so that, if questioned by local officials, proof of identity, U.S. citizenship and legal status in Malaysia is readily available.

Engaging in sexual conduct with children or using or disseminating child pornography in a foreign country is a crime, prosecutable in the United States.

Children’s Issues: For information on international adoption of children and international parental child abduction, see the Office of Children’s Issues website at http://travel.state.gov/family/family_1732.html.

Registration/Embassy Location: American citizens living in or visiting Malaysia are encouraged to register their stay in Malaysia on line through the State Department’s Travel Registration website or in person by visiting the U.S. Embassy’s American Citizen Services (ACS) section. The U.S. Embassy is located at 376 Jalan Tun Razak 50400, Kuala Lumpur. The local mailing address is P.O. Box No. 10035, 50700 Kuala Lumpur. The U.S. Embassy’s telephone (60-3) 2168-5000 is available 24 hours a day for emergencies such as arrests, serious illness/injury, or death of Americans, (after business hours, please press 1 at the recording). The ACS telephone number is (60-3) 2168-4997/4979, and the Consular section’s fax number is (60-3) 2148-5801. The U.S. Embassy’s general fax number is (60-3) 2142-2207 and Web site is http://malaysia.usembassy.gov. The Consular section’s email is klconsular@state.gov.

International Adoption : February 2007

The information below has been edited from a report of the State Department Bureau of Consular Affairs, Office of Overseas Citizens Services. For more information, please read the International Adoption section of this book and review current reports online at www.travel.state.gov/family.

Disclaimer: The information in this flyer relating to the legal requirements of specific foreign countries is based on public sources and current understanding. Questions involving foreign and U.S. immigration laws and legal interpretation should be addressed respectively to qualified foreign or U.S. legal counsel.

Please Note: Adoptions are not common in Malaysia. Adoptions of non-relatives are generally difficult and time-consuming procedures. Prospective parents may be required to remain in Malaysia for two or more years during the process. Prospective adoptive parent(s) who are non-Muslims may NOT adopt Muslim children.

General: The following is a guide for U.S. citizens who are interested in adopting a child in Malaysia and applying for an immigrant visa for the child to come to the United States. This process involves complex Malaysian and U.S. legal requirements. U.S. consular officers give each petition careful consideration on a case-by-case basis to ensure that the legal requirements of both countries have been met, for the protection of the prospective adoptive parent(s), the biological parents(s) and the child. Interested U.S. citizens are strongly encouraged to contact U.S. consular officials in Kuala Lumpur, Malaysia before formalizing an adoption agreement to ensure that appropriate procedures have been followed which will make it possible for the Embassy to issue a U.S. immigrant visa for the child.

Availability of Children for Adoption: Over the past ten years, five Malaysian children have received U.S. immigrant visas based on their adoption by U.S. parents.

Adoption Authority: The government office responsible for adoptions in Malaysia is the Family and Children’s Division, Social Welfare Department, Ministry of National Unity and Social Development. You can reach them at:

14 th Floor Wisma Shen
50100 Kuala Lumpur, Malaysia.
Telephone: (6) (03) 269-25011
E-mail: pprljkm@kempadu.gov.my

Adoption Procedures:

Non-Muslim Adoptions: The identification of a prospective child may occur privately through friends or relatives in Malaysia or through the Malaysian Social Welfare Department. Once the child has been identified, the prospective adoptive parent(s) must obtain a statutory declaration (notarized affidavit) from the biological parent(s) relinquishing all parental rights towards the child. The prospective adoptive parent notifies the Social Welfare Department of the Malaysian State in which he/she is resident of his/her intention to apply for an adoption order of the child. If the Social Welfare Department identified the child, an “offer” letter will be issued to the adoptive parents. This notification must be in writing. No matter how the child was identified, the adoptive parent(s) must reside with and care for the child not less than three (3) consecutive months before petitioning the Sessions Court or the High Court for the adoption order.

When an application for an adoption order is made, the Court appoints a guardian ad litem for the child. In most cases, the court will appoint a Social Welfare office employee. To safeguard the interests of the child before the Court, the guardian ad litem investigates the background and circumstances of the child and the adoptive parent(s), including all matters relevant to the proposed adoption. The completed guardian ad litem report is submitted to the Court on the day of the hearing. The Court may issue an adoption order or an interim order awarding custody of the child to the adoptive parent(s) for a probationary period of not less than six months and not exceeding two years, subject to provisions for the maintenance, education and supervision of the welfare of the child.

The Registrar of the Court sends a certified copy of the adoption decree to the Registrar-General at the National Registration Department and to the adoptive parent(s) within seven days. The Registrar-General enters the adoption order in the Adopted Children Register. The Register entry serves as the child’s official record instead of the original birth certificate. The adoptive parent may apply for a copy through the Registrar-General.

Muslim Adoptions: Only prospective adoptive parents who are Muslims may adopt Muslim children. A prospective child may be identified privately or through the Social Welfare Department. A court petition is not required. The Muslim prospective adoptive parent applies to the National Registration Department to document the child as his/her adopted child. To qualify, the adoptive parent must have resided with and had continuous custody of the child for a period of not less than two years. The application should include evidence relating to the care, maintenance, and education of the child during the two years from the date of the biological parents statutory declaration (notarized affidavit) relinquishing all parental rights of the child.

If the National Registration Department is satisfied with the evidence submitted, an entry will be made in the Register and a certified copy of the entry delivered to the adoptive parents. If the Registration Department is not satisfied with the evidence, an officer from the Social Welfare Department will conduct an investigation on the well being of the child. Children adopted under the Registration of Adoptions Act cannot assume the name or inherit property of the adoptive parents.

Age and Civil Status Requirements: The adoptive parent must be an “ordinary resident” in Malaysia, who has been is working and living in Malaysia for at least two years prior to the application. One of the prospective parents in non-Muslim adoptions must be at least 25 years old and at least 21 years older. If the prospective adoptive parent is a relative of the child, he/she must be at least 21 years of age.

One of the prospective parents in Muslim adoptions must have attained the age of 25 and be at least 18 years older than the child. If the prospective adoptive parent is a brother, sister, uncle or aunt of the child, he/she must be at least have attained the age of 21.

Adoption Agencies and Attorneys: There are no agencies in Malaysia. All adoption inquiries should be directed to the Social Welfare Department, Ministry of National Unity and Social Development.

Doctors: The U.S. Embassy in Kuala Lumpur maintains current lists of doctors and sources for medical examinations that may be required.

Documentary Requirements: The prospective adoptive parent must present the following documents to the Malaysian Social Welfare Department under the Ministry of National Unity and Social Development:

• His/her valid passport;
• The original birth certificate of the adoptive child; and
• Notarized letters of consent from the biological parents.

U.S. Immigration Requirements: A Malaysian child, even if adopted by an American citizen, must obtain an immigrant visa before he or she can enter the U.S. as a lawful permanent resident. Please see the International Adoption section of this book for more details and review current reports online at www.travel.state.gov/family.

Malaysian Embassy in the United States:
2401 Massachusetts Avenue, NW
Washington, D.C. 20008
Tel: 328-2700
E-mail: mwwashdc@erols.com
Malaysia also has Consulates in New York City and Los Angeles.

U.S. Embassy in Malaysia:
376 Jalan Tun Razak
50400 Kuala Lumpur
Tel: (6)(03) 2168-5000
Fax: (6)(03) 248-5801
E-mail: klconsular@state.gov

Additional Information: Prospective adoptive parents are strongly encouraged to consult USCIS publication M-249, The Immigration of Adopted and Prospective Adoptive Children, as well as the Department of State publication, International Adoptions. Please see the International Adoption section of this book for more details and review current reports online at www.travel.state.gov/family.

Questions: Specific questions regarding adoption in Malaysia may be addressed to the Consular Section of the U.S. Embassy in Kuala Lumpur. You may also contact the Office of Children’s Issues, SA-29, 2201 C Street, NW, U.S. Department of State, Washington, DC 20520-2818, telephone 1-888-407-4747 with specific questions.

Important Notice Regarding Adoptions from Sarawak–July 30, 2002

U.S. citizens contemplating adoption in Sarawak are advised to exercise extreme caution and should expect delays with no guarantee of approval for a U.S. immigrant visa for the adopted child. Sarawak’s adoption law is separate and distinct from that of the rest of Malaysia and may not meet the requirements of U.S. immigration law. Moreover, local adoption facilitators’ knowledge of and compliance with U.S. immigration law is unknown at this time.

International Parental Child Abduction : February 2007

The information below has been edited from the report of the State Department Bureau of Consular Affairs, Office of Overseas Citizens Services. For more information, please read the International Child Abduction section of this book and review current reports online at www.travel.state.gov.

Disclaimer: The information in this flyer relating to the legal requirements of specific foreign countries is provided for general information only. Questions involving interpretation of specific foreign laws should be addressed to foreign legal counsel.

General Information: Malaysia is not a party to the Hague Convention on the Civil Aspects of International Child Abduction, nor are there any international or bilateral treaties in force between Malaysia and the United States dealing with international parental child abduction. Therefore, there is no treaty remedy by which the left behind parent would be able to pursue recovery of the children should they be abducted to or wrongfully retained in Malaysia. Once in Malaysia, the child/ren would be completely subject to Malaysian law for all matters including custody.

Custody Disputes: Parental child abduction is not a crime under Malaysian law. Custody disputes are considered civil legal matters that must be resolved between the concerned parties or through the courts in Malaysia. Although there is no treaty in force between the United States and Malaysia on enforcement of judgments, the Malaysian courts will also take into consideration child custody decrees issued by foreign courts in deciding disputes regarding children residing in Malaysia.

Malaysia’s official religion is Islam and Islamic (Sharia) law applies in family and religious matter for all Muslims. Although civil law cases are adjudicated under Islamic and traditional law, certain cases involving Muslims only are heard in Sharia courts and Sharia law applies in family and religious matters. Questions on specific Islamic laws as they pertain to custody rights should be addressed to a lawyer licensed to practice in Malaysia.

In order to bring a custody issue before the local court, the left-behind parent will require the assistance of an attorney licensed to practice in Malaysia. Ideally, these orders and proceedings ensure due process under the local laws as well as providing protection for the child/ren. A parent holding a custody decree issued in U.S. courts must retain local Malaysian counsel to apply to the Malaysian courts for recognition and enforcement of the U.S. decree, or to petition for custody of minors. Although visitation rights for non-custodial parents are not expressly stipulated in Malaysian Civil Code, court judgments often provide visitation rights for non-custodial parents. Since compliance with the local court rulings is essentially voluntary, Malaysian police or local law enforcement are reluctant to get involved in custody disputes and could not be counted on to enforce custody decrees issued by the Malaysian courts.

The American Citizen Services division of the Consular Section at the U.S. Embassy can assist in locating children believed to be in Malaysia and in verifying the child’s welfare. If a child is in danger or if there is evidence of abuse, consular officers will request assistance from the local authorities in safeguarding the child’s welfare. Consular officers maintain lists of attorneys practicing in the particular areas of Malaysia, as well as general information regarding child custody practices.

Reaching the U.S. Embassy or Consulate that serves Malaysia: The U.S. Embassy is located at 376 Jalan Tun Razak 50400, Kuala Lumpur. The mailing address is P.O. Box No. 10035, 50700 Kuala Lumpur; Telephone (60-3) 2168-5000. The fax number for the U.S. Embassy is (60-3) 242-2207; the fax number for the Consular Section is (60-3) 2148-5801. Internet home page: http://usembassymalaysia.org.my/; email address: klconsular@state.gov

Reaching the Foreign Country’s Embassy in the U.S.: For further information contact the Embassy of Malaysia, 3516 International Court, N.W., Washington, D.C. 20008; Telephone No.: (202) 572-9700 or nearest Consulate: CA (213) 892-1238 or NY (212) 490-2722. Additional information also available from malwash@ kln.gov.my.

Deportation: While there is an extradition treaty between the United States and Malaysia, parental child abduction is not an extraditable offense. However, if the taking parent is a U.S. citizen whose U.S. passport has been revoked due to an outstanding federal Unlawful Flight to avoid Prosecution (UFAP) warrant or indictment on charges of International Parental Kidnapping (IPKCA) in violation of 18 USC Section 1204, Malaysian authorities may consider deportation based on lack of a valid travel document.

Dual Nationality: A child with a parent who was born outside of the U.S. or who has acquired a second nationality through naturalization in another country may have a claim to citizenship in that country.

There is no requirement that a U.S. citizen parent consent to the acquisition by his/her child of another nationality and in many cases a parent is unaware that his/her child may have dual citizenship. The Embassy of Malaysia in Washington D.C. will be able to provide more detailed information on whether your child has a claim.

Initiating Foreign Enforcement Proceedings Under Local Law: If a country is not a signatory to the Hague Convention on the Civil Aspects of International Child Abduction, it may be necessary for you to initiate a child custody action in the courts in the foreign country. For additional information, see judicial assistance for Malaysia on the Internet at http://caweb/cainternet/malaysia_legal.html.

Retaining a Foreign Attorney: A list of English speaking attorneys is available from the U.S. State Department Office of American Citizens Ser-vices.

Legal Aid: Some countries provide legal aid services in child custody cases. The legal attache or consular section of the foreign embassy in Washington, D.C. may have specific guidance. Legal aid information may also be available from a local branch of the International Social Service. The ISS’ headquarters are in Geneva, Switzerland, but information or assistance may be available through its New York branch at 10 W. 40th Street, New York, N.Y. 10018, Tel. No.: 212-532-6350.

The National Center for Missing and Exploited Children (NCMEC) maintains a list of attorneys interested in Hague Convention and International Child Custody cases. NCMEC handles all Hague Convention applications for return when children from other countries are abducted and believed to be in the U.S. You may obtain additional information about the attorney program at the National Center by calling 1-800-843-5678 or 703-274-3900. The Internet home page for the National Center can be reached directly at http://www.miss-ingkids.org.

Service of Process: If you need to serve process on a person abroad in connection with a child custody case, you may obtain copies of our country specific judicial assistance flyers on this subject through via our home page on the Internet at http://caweb/cainternet/judicial_assistance.html.

Criminal Remedies: Foreign countries may not recognize parental abduction as a crime. The proper channel for the return of the child is through civil mechanisms or voluntary return arrangements. Additional information is also available on the Internet at the web site of the U.S. Department of Justice, Office of Juvenile Justice and Delinquency Prevention (OJJDP) at http://www.ojjdp.ncjrs.org.

For more information, please read the International Parental Child Abduction section of this book and review current reports online at travel.state. gov.

For further information on international parental child abduction, contact the Office of Children’s Issues, U.S. Department of State at 1-888-407-4747 or visit its web site on the Internet at http://travel.state.gov. You may also direct inquiries to: Office of Children’s Issues; U.S. Department of State; Washington, DC 20520-4811; Phone: (202) 736-9090; Fax: (202) 312-9743.