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Federations Magazine Article
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Malaysian PM faces pressure from ethnic and pro-democracy forces

arlier this year there were
pressures on Prime Minister
Abdullah to call a snap election
so Malaysians would go
to the polls in March, long before his government’s
term was up in 2009.
If an election were held in March, the
popular opposition leader, Anwar
Ibrahim, would not yet be eligible to run
for parliament. Also, the expected
announcement by the government of a
fuel price hike would have fewer negative
consequences after an election than
before one.
The country that Mr. Abdullah governs
is a federation of 13 states and three
federal territories, divided into two
regions separated by 640 km of the South
China Sea. It is one of the world’s largest
makers of computer disk drives and produces
palm oil, rubber and timber.
The country is diverse: it is 60 per cent
Malay, 25 per cent Chinese, and 8 per
cent Indian and 7 per cent others. This
diversity is reflected in the Prime
Minister’s ruling coalition, the National
Front. The coalition has been in power
since the country was founded and controls
most of the state governments.
However, there’s trouble in paradise: a
set of restrictions on civil liberties and
freedom, including the power to
imprison suspected subversives for up to
two years without trial, and a government
that can deny newspapers a licence
to print.
A demonstration of tens of thousands,
largely from opposition political parties,
was held in Kuala Lumpur on Nov. 10,
2007, to demand reforms to clean up
Malaysia’s election process. Then on Nov.
24, unrest among Malaysia’s minority
Indian population spilled over into a
street demonstration. The Indians were
protesting lack of access to housing, civil
service jobs and places at university due
to a positive discrimination program for
poor Malays. In Malaysia, where such
demonstrations are illegal, the two political
demonstrations were the first in a
It hasn’t only been street demonstrators
who have challenged the federal
Malaysian PM faces pressure from ethnic
and pro-democracy forces
The federal government holds the trump cards when dealing with the states and other protesters
Sonia Randhawa is a Malaysian journalist. She was the executive director of the Centre for
Independent Journalism in Kuala Lumpur, Malaysia, from 2003 to 2007.
mala y sia
FEBRU ARY | MARCH 2008 Federations
Malaysia’s Prime Minister Abdullah Ahmad Badawi (r.) chats with a leader of Malaysia’s ethnic Indians, S. Samy Vellu, during an Indian
celebration in Kuala Lumpur in January. Indians make up eight per cent of Malaysia’s population.
REUTERS/Stringe r
government. Malaysia’s states have taken
on the federal government in recent
years, and in most cases have lost. Their
confrontations erupted over oil revenues,
water resources and demands for greater
democracy. The states have also been
facing environmental concerns, controversies
over legislation, and burgeoning
state-level debt. After most of these confrontations,
the power of the states has
decreased, and more power has been
c e d e d t o t h e f e d e r a l
Oil and water
One early shock to the federal
system after 1999 came over oil.
In the November 1999, general
election, the National Front
government lost control of the
oil-rich east-coast state of
Terengganu. Before the election,
a contract had been
negotiated between the state
government and Petronas,
Malaysia’s national oil company
, to gi ve the s tat e
government five per cent of
the oil revenues from oil
extracted in Terengganu. This
sum had risen to more than
US$132 million annually.
When the opposition Pan
Islamic Party came to power,
the oil company withheld
these revenues. Instead,
Petronas said they would pay
t h em t o t h e f e d e r a l
government to carry out development
projects in the state.
The withheld taxes cut the state
government’s revenues by 80
per cent. The action threatened
the independence of all
state governments dependent
on oil revenue.
Another major event that strained the
federal system was the passage of two
federal bills designed to set up a national
commission to manage the water supply
and catchment areas. The bills, defended
on environmental grounds, were passed
in May 2006, following more than two
years of controversial wrangling. Water
resources had traditionally been on the
state list of powers. However, the record
on water management had been mixed,
with some states suffering water shortages,
and others incurring large debts.
Meanwhile, the federal government had
also begun research and planning for an
inter-state water transfer project between
Pahang and Selangor. Selangor is home
to the territory of Malaysia’s federal capital
, Kuala Lumpur. The federal
government passed the water legislation
despite the unpopularity of the move
with the Pahang state government.
Passing the federal bills required a
change in the constitution, which was
done in 2005, and peninsular states have
now lost control of their water resources.
Meanwhile, the Malaysian federal
government has been remarkably longlived:
there has never been an opposition
coalition in power since 1963. This longevity
has been due in part to the unique
coalition that governs Malaysia. This
coalition, the National Front, is made up
of three major parties: the United Malays
National Organisation, the Malayan
Chinese Association and the Malayan
Indian Congress. The coalition represents
Malaysia’s three largest ethnic
groups, and opposition parties have
never been able to assemble such a coalition.
In May 1969, the Opposition had a
strong showing in the polls. Due to a mixture
of opposition parades and ruling
party instigation, riots broke out leaving
an unknown number dead. The spectre
of such violence has also been used to
ensure the ruling coalition’s victories.
The status of federalism
Malaysia’s federal system
goes back to 1963 when the
country was born from the
union of the Federation of
Malaya with Singapore,
S a r awa k a n d S a b a h.
Singapore later became
independent, leaving 13
states and three federal
In practice, there are two
federal systems in Malaysia:
one that links the 11 states
on the peninsula with the
two on Borneo (Sabah and
Sarawak), and a second
that links all the states in
peninsular Malaysia.
Peninsular Malaysia
Peninsular Malaysia is
made up of 11 states and two
federal territories, Kuala
Lumpur and Putrajaya.
State-federal relations are
defined in the federal constitution,
officially the
supreme law of the land.
The constitution provides
that the federal laws take
precedence over state laws,
but that the state has jurisdiction
over the state list
which includes matters
such as land, local councils and local
matters, water and others. This is set out
in the Ninth Schedule of the constitution,
which also provides a list of matters that
are the responsibility of the federal government.
Constitutional supremacy has
been in decline because of frequent
amendments to the Constitution that
require only support by two-thirds of
MPs in Parliament and do not require
participation by the states.
Each state elects a legislature, the
Dewan Undangan Negeri, with between
15 and 62 members, through single-
FEBRU ARY | MARCH 2008 Federations
REUTERS/Bazuki Muhamma d
Malaysians play in a wading pool at the Kuala Lumpur City Centre
Garden in front of the Petronas Twin Towers, once the world’s tallest
FEBRU ARY | MARCH 2008 Federations
membe r c ons t i tuenc i e s . St a t e
legislatures generally fall under the purview
of the state ruler, with sitting times
and frequency varying from state to state.
Elected local councils began being
phased out during the mid-1960s, officially
as a result of the “confrontation”
with neighbouring Indonesia. Despite a
campaign for the reinstatement of local
councils, there is little movement
towards this from either the government
or opposition parties. Since 1973, when
the position of appointed local councils
was formalized in federal legislation, the
state legislature has appointed all local
government officials. The state legislatures
collect revenue from certain taxes,
such as land tax, some forms of licences
and various other sources. They can also
obtain development funds or other funds
from the federal government and, in
most cases, receive royalties from the
extraction of natural resources.
Sabah and Sarawak
The federal constitution also contains a
section that applies solely to the two
states outside the peninsula, the East
Malaysian states of Sabah and Sarawak.
These two states have greater control over
immigration, water, electricity and other
areas, such as environmental policy.
Malaysians from other states cannot buy
land or residential properties and they
must go through formal immigration
procedures when they enter these states.
This autonomy has had both a positive
and negative impact on the people of
the Eastern states. They have developed
differently – politically, economically
and socially – than the people of the peninsula.
The exploitation of vast natural
resources in timber, oil and minerals in
these states has not led to a high standard
of living for the majority of East
Malaysians. While the gap between rich
and poor in Malaysia is among the largest
in Southeast Asia, it is particularly
pronounced in these states, where timber
tycoons appear on international lists
of the world’s richest, while the people
whose lands have been logged face
increasingly difficult circumstances,
often with no access to electricity or potable,
piped water.
This neglect is not a natural consequence
of the autonomy of these states,
but this autonomy has allowed state governments
to argue that the indigenous
peoples are not subject to the same environmental
protections that apply in the
rest of Malaysia. It has allowed the states
to be exploited as the personal fiefdoms
of National Front politicians, without fear
of rebuke from federal-level political
masters, as long as they are able to ensure
their coalition victories in the polls and a
steady flow of the oil revenues paid into
the federal coffers.
An example of the fallout was the
aftermath of the 1994 Sabah state election.
Despite winning 25 out of 48 state
seats, the non-National Front parties
were unable to form a government after
opposition representatives jumped ship,
eventually giving the National Front a
majority. Since this time, the racial makeup
of Sabah has been changed, with an
influx of Muslim Filipinos from the
southern Philippines. Some Sabahbased
NGOs argue that this is an attempt
to strengthen support not only for the
National Front but for the majority ethnic
party, the Malay-based United
Malays National Organization in Sabah.
It has undermined other local National
Front coalition partners while strengthening
the peninsula-based parties in the
The future of federalism
Federalism remains an important principle
in Malaysia, particularly for the states
of Sabah and Sarawak. However,
Malaysia has experienced increasing
concentration of power in the hands of
the executive as well as a decline of the
rule of law and the importance of the
constitution. Particularly in peninsular
Malaysia, in many areas, the states enjoy
autonomy only to the extent that the
decisions that they make are in line with
the federal National Front policy. It
appears unlikely that a parallel erosion of
state power will occur in Sabah and
Sarawak, due to their distinct political,
social and economic cultures. East
Malaysians are also fiercely proud of their
autonomy and attempts to undermine
this are highly unpopular. Restoring a
healthy balance between the states and
the federal government remains a pressing
challenge for Malaysia.
Malaysia’s eastern states of Sabah and Sarawak share the island of Borneo with Indonesia, 640 km across of the South China Sea from the
nine Malaysian states on the Thai-Malay peninsula.
Illustration: Yani Roumeliotis