History of Malaysia

Malaysia is a country in Southeast Asia that formed in the second half of the 20th century. But its history goes back thousands of years, including times when people lived in prehistoric times in places like Borneo. Important moments in Malaysia’s story include becoming a country, losing Singapore as a partner, and facing big changes in government and the economy.

People have lived in what is now Malaysia for a very long time. The oldest signs of humans there are about 1.83 million years old, and modern humans have been around for about 40,000 years. Over time, many cultures and religions like Hinduism, Buddhism, and later Islam came to influence the area.

European powers such as the Portuguese and later the English took control of parts of Malaysia. After World War II, Malaysia worked toward independence from British rule. In 1957, the part called Malaya became free, and in 1963, Malaysia was formed with more areas joining. But in 1965, Singapore left to become its own country.

In recent years, Malaysia has grown quickly under leaders like Mahathir Mohamad. The country faced hard times during the 1997 Asian financial crisis and more recently during the COVID-19 pandemic. Today, Malaysia continues to change and develop, balancing its rich past with a busy present.

Prehistory

Main article: Prehistoric Malaysia

Stone tools from very early humans, likely Homo erectus, have been found in Lenggong. These tools are very old, dating back over 1 million years, showing some of the earliest human life in Southeast Asia.

The oldest known modern human remains in Malaysia are from a skull found in the Niah Caves in Sarawak. This skull is about 40,000 years old, making it one of the oldest examples of modern humans in Southeast Asia. These early people lived near what is now Niah National Park.

The area has also revealed important ancient burial sites. Malaysia was home to early groups like the Orang Asli, including the Negritos, Senoi, and Proto-Malays. These groups have rich histories and traditions that stretch back thousands of years.

Early Hindu-Buddhist kingdoms

Long ago, the Malay people became the main group living on the peninsula. Small early states were formed and were heavily influenced by Indian culture, similar to much of Southeast Asia. Indian influence in the region goes back at least to the 3rd century BC. Culture from South India was brought to Southeast Asia by the South Indian Pallava dynasty during the 4th and 5th centuries.

Trade with India and China

Ancient Indian books mention a place called Suvarnadvipa (Golden Peninsula), which some think refers to the Malay Peninsula. Another Indian book, the Vayu Purana, mentions a place named Malayadvipa, which may refer to Sumatra and the Malay Peninsula. The Malay Peninsula appeared on maps by Ptolemy as the Golden Chersonese.

Trade with China and India began in the 1st century BC. Pieces of Chinese pottery have been found in Borneo from that time, after China expanded southward. In the early centuries of the first millennium, people in the Malay Peninsula followed Hinduism and Buddhism from India, which greatly changed their language and culture. The Sanskrit writing system was used as early as the 4th century.

Early kingdoms (3rd–7th centuries)

See also: Sanskritisation

There were up to 30 small Malay kingdoms in the 2nd and 3rd centuries, mostly along the eastern side of the Malay Peninsula. One of the earliest known kingdoms was Langkasuka, located in northern Malaya on the east coast. It was closely linked to Funan in Cambodia, which also ruled parts of northern Malaysia until the 6th century. In the 5th century, the Kingdom of Pahang was mentioned in the Book of Song. Other early areas were Chi Tu and Pan Pan, believed to be in northeast Malaya.

Gangga Negara

Gangga Negara was a semi-legendary Hindu kingdom mentioned in the Malay Annals. It covered parts of today’s Beruas, Dinding, and Manjung in Perak, Malaysia, with Raja Gangga Shah Johan as one of its kings. According to the Hikayat Merong Mahawangsa, Gangga Negara was founded by Merong Mahawangsa’s son Raja Ganji Sarjuna of Kedah, who was said to be a descendant of Alexander the Great or from Khmer royalty no later than the 2nd century.

Old Kedah

The Greek geographer Ptolemy wrote about the Golden Chersonese, showing that trade with India and China had existed since the 1st century AD. During this time, coastal city-states traded with China and India and had ongoing trade and relationships with China while also contacting Indian traders. They shared a common culture.

Gradually, rulers in the western part of the archipelago began to adopt Indian culture and government styles. Inscriptions found in Palembang (South Sumatra) and Bangka Island, written in Malay using a script from India, show that they adopted Indian models while keeping their own language and social system. These inscriptions mention a Dapunta Hyang of Srivijaya who led battles against enemies and cursed those who broke his laws.

Being on the trade route between China and South India, the Malay Peninsula was part of this trade. The Bujang Valley, located at the northwest entrance of the Strait of Malacca and facing the Bay of Bengal, was a frequent stop for traders from China and South India. This is shown by discoveries of trade items, sculptures, writings, and monuments from the 5th to 14th century.

Srivijaya (7th–13th century)

See also: Srivijaya

Between the 7th and 13th centuries, much of the Malay Peninsula was influenced by Srivijaya. The center of Srivijaya’s empire is believed to have been at a river mouth in eastern Sumatra, near today’s Palembang, Indonesia. In the 7th century, a new port called Shilifoshi was mentioned, thought to be the Chinese name for Srivijaya. For over six centuries, the Maharajahs of Srivijaya ruled a trading empire that became a major power in the region. The empire was based on trade, with local leaders swearing loyalty to a main ruler for mutual benefit. In 1025, the Chola dynasty from India captured Palembang, taking wealth from the king and his family. By the end of the 12th century, Srivijaya had shrunk to a smaller kingdom, and its last ruler, Queen Sekerummong, was overthrown in 1288. Majapahit, which was once under Srivijaya, then became the main power in the area.

Relations with the Chola Empire

See also: South-East Asia campaign of Rajendra Chola I and Chola invasion of Srivijaya

Srivijaya and the Chola Empire of South India were friendly during the rule of Raja Raja Chola I. But during the rule of Rajendra Chola I, the Chola Empire invaded Srivijaya’s cities (see Chola invasion of Srivijaya). In 1025 and 1026, Gangga Negara was attacked by Rajendra Chola I of the Chola Empire, who is believed to have destroyed Kota Gelanggi. Kedah (known as Kadaram in Tamil) was invaded by the Cholas in 1025. A second invasion was led by Virarajendra Chola of the Chola dynasty, who conquered Kedah in the late 11th century. The senior Chola’s successor, Vira Rajendra Chola, had to stop a rebellion in Kedah to remove other invaders. The Chola’s actions greatly reduced Srivijaya’s power, which had influenced Kedah, Pattani, and as far as Ligor. During the rule of Kulothunga Chola I, Chola control was set up over the Srivijaya area of Kedah in the late 11th century. The Chola rulers left a strong memory in Malaysia, as many Malaysian princes today have names ending with Cholan or Chulan, including the Raja of Perak called Raja Chulan.

Pattinapalai, a Tamil poem from the 2nd century AD, describes goods from Kedaram filling the streets of the Chola capital. The Buddhist kingdom of Ligor took control of Kedah after this. Its king Chandrabhanu used it as a base to attack Sri Lanka in the 11th century and ruled northern areas, an event recorded in a stone writing in Nagapattinum in Tamil Nadu and the Sri Lankan records, Mahavamsa.

Decline and breakup

Sometimes, the Khmer Empire, the Siamese Kingdom, and the Chola Empire tried to control the smaller Malay states. Srivijaya’s power weakened from the 12th century as its relationship with its areas broke down. Wars with Javanese forces caused it to ask for help from China, and wars with Indian states are also thought to have happened. In the 11th century, the center of power moved to Malayu, a port possibly further up the Sumatran coast near the Jambi River. The power of the Buddhist Maharajas was further weakened by the spread of Islam. Areas that turned to Islam early, like Aceh, broke away from Srivijaya’s control. By the late 13th century, the Siamese kings of Sukhothai had brought most of Malaya under their rule. In the 14th century, the Hindu Majapahit Empire took control of the peninsula.

An excavation by Tom Harrisson in 1949 found Chinese ceramics from the Tang and Song dynasties at Santubong (near Kuching) dating to those times. Santubong may have been an important port in Sarawak during that period, but its importance decreased during the Yuan dynasty, and the port was abandoned during the Ming dynasty.

According to the Malay Annals, a new ruler named Sang Sapurba was made the new leader of the Srivijayan area. It is said that after he went up Seguntang Hill with his two younger brothers, Sang Sapurba made a sacred agreement with Demang Lebar Daun, the local ruler of Palembang. The new ruler then came down from Seguntang Hill into the plain of the Musi River, where he married Wan Sendari, the daughter of Demang Lebar Daun. Sang Sapurba was said to have ruled in Minangkabau lands.

In 1324, a Srivijaya prince, Sang Nila Utama, founded the Kingdom of Singapura (Temasek). According to tradition, he was related to Sang Sapurba. He ruled Temasek for 48 years. He was recognized as ruler of Temasek by a Chinese Emperor’s envoy around 1366. He was followed by his son Paduka Sri Pekerma Wira Diraja (1372–1386) and grandson, Paduka Seri Rana Wira Kerma (1386–1399). In 1401, the last ruler, Paduka Sri Maharaja Parameswara, was driven out of Temasek by forces from Majapahit or Ayutthaya. He later went north and founded the Sultanate of Malacca in 1402. The Sultanate of Malacca took the place of the Srivijaya Empire as a Malay political power in the region.

Rise of Muslim states

Islam arrived in the Malay Archipelago through Arab and Indian traders in the 13th century, ending the age of Hinduism and Buddhism. It spread gradually, first becoming the religion of the elite before reaching common people. The form of Islam in Malaysia was influenced by earlier religions and was not strictly orthodox at first.

Malaccan Sultanate

Establishment

The port of Malacca on the west coast of the Malay Peninsula was founded in 1400 by Parameswara, a prince from Srivijaya fleeing Temasek (now Singapore). He settled in Temasek but had to leave due to threats from Siam. He then moved north and established Malacca, which became the first independent state in the peninsula.

In 1404, the first official Chinese trade envoy arrived in Malacca. Malacca's relationship with Ming China brought protection against attacks and helped it grow into a major trade center. Parameswara became a Muslim and later his son was recognized as the second ruler of Malacca by the Chinese Emperor.

Rise of Malacca

After paying tribute to Ayutthaya at first, Malacca quickly became an independent power, dominating trade between China and India. It officially adopted Islam, and the Malacca Sultanate helped spread Islam widely through the region. Malacca became a cultural center, influencing Malay culture with elements from India, China, and Islam. The Malay language became important and was used officially in Malaysian states.

Post-Malaccan sultanates

After Malacca fell to the Portuguese in 1511, new sultanates like Johor and Perak were founded. The Portuguese tried to convert people to Catholicism, but local rulers continued to resist. The importance of the Strait of Malacca as a trade route grew, and the region became valued for its natural resources.

Johor Sultanate

The Johor Sultanate grew powerful and controlled many areas around the Straits of Malacca. It faced conflicts with the Portuguese and later the Dutch. In 1641, the Dutch and Johor forces defeated the Portuguese and took control of Malacca.

Perak Sultanate

The Perak Sultanate was founded in the early 16th century and became known for its tin trade. It remained independent from Siamese control for over 200 years. Perak faced challenges from Aceh and internal conflicts but continued to be an important trading state.

Pahang Sultanate

The Pahang Sultanate was established in the 15th century and was originally a vassal of Malacca. It grew independent and sometimes rivaled Malacca. Pahang faced conflicts with Johor and Aceh but remained a significant power in the region.

Selangor Sultanate

During conflicts between Johor and Jambi, Bugis mercenaries helped Johor and later settled in Selangor. In 1766, the Bugis founded the Selangor Sultanate, making it unique as the only state on the Malay Peninsula founded by the Bugis.

Brunei Sultanate

Brunei was an early independent kingdom that later converted to Islam. By the 15th century, its influence extended to parts of Borneo, the Philippines, and Mindanao. The Brunei Sultanate faced challenges from western powers like Spain but continued to maintain control in Borneo.

16th–18th century

The Brunei empire's influence extended to areas like the Kapuas River delta in West Kalimantan. It had close relations with other sultanates in the region, sometimes acting as a hegemon. The Sultanate of Sarawak was self-governed under Sultan Tengah before being integrated into the Bruneian Empire.

19th century

By the early 19th century, Sarawak was loosely governed by Brunei. Internal conflicts and the discovery of antimony ore led to unrest. In 1841, James Brooke was appointed governor of Sarawak by the Sultan of Brunei, marking the beginning of British influence in the region.

Struggles for hegemony

The small coastal Malay states were weak, which led to people from Sulawesi, called the Bugis, coming to the peninsula. They took control of Johor in 1699 after the old ruler was killed. The Bugis also grew powerful in Johor, Kedah, Perak, and Selangor. Another group, the Minangkabau from Sumatra, settled in Negeri Sembilan.

With Johor gone, nearby kings from Ayutthaya Kingdom took control of five northern Malay states: Kedah, Kelantan, Patani, Perlis, and Terengganu.

The 18th century saw Malaya's importance to Europe grow. Its tin was used for tea chests, and its pepper was valued in Europe. Gold mines also existed. This led to more people from faraway places moving to Malaya, including Arabs, Indians, and later Chinese.

Siamese expansion into Malaya

After the fall of Ayutthaya in 1767, the northern Malay states were free from Siamese control for a time. In 1786, a British trader got control of Penang Island from the ruler of Kedah for the East India Company. Siam took back control of the northern Malay states and attacked Pattani. Kedah was controlled by Siam. In 1821, Siamese forces invaded and took over Kedah. Local Arab families helped the Sultan resist. In 1842, the Sultan agreed to Siamese terms and returned to power in Kedah.

Around 1760, a leader from Patani united Kelantan. This caused conflict with Terengganu. Terengganu remained stable under Sultan Omar Riayat Shah, who supported trade. In 1909, an agreement moved four northern Malay states from Siamese to British control, but Patani stayed with Siam and was not part of Malaysia later.

British influence

Main articles: British Malaya and British Borneo

Before the mid-1800s, Britain was mostly interested in trade, not taking land. They wanted new bases for their ships because of trade with China. In 1786, they got Penang Island from the Sultan of Kedah. Later, they also got land on the mainland called Province Wellesley. In 1819, they got Singapore from the Sultan of Johor. This made Britain the main colonial power on the peninsula.

The British set up their areas as free ports to increase trade and control through the Malacca Straits. Malay rulers liked working with Britain because they were afraid of attacks from Siam or Burma. In 1824, a treaty between Britain and the Netherlands divided control of the Malay Archipelago. Britain got Penang, Malacca, Singapore, and Labuan, calling them the Straits Settlements.

Colonial era

Main articles: British Malaya, North Borneo, Crown Colony of North Borneo, Raj of Sarawak, and Crown Colony of Sarawak

British in Malaya

The British first tried to stay out of the fights between different groups in the Malay states. But because tin mining was very important, fighting between local leaders hurt trade. This led the British to start guiding some states, helping them make decisions. Over time, more states agreed to let British advisors help them rule.

By the early 1900s, several states had British advisors. Some states kept more of their own ways, but all were affected by British rule. The British helped build up parts of Malaysia that had tin and rubber, making them very important for trade.

British in Borneo

In the late 1800s, the British also took control of parts of Borneo. One part was ruled by a local leader who got help from a British explorer named James Brooke. He became the leader of a place called Sarawak. Another part was controlled by a British company. These areas grew and changed over time.

Race relations during colonial era

Before the British came, there were no fixed groups like “Malay” or “Chinese.” The British started to sort people into groups. They brought many workers from India and China to help work in mines and farms. This created towns with many Chinese people and changed the way society worked.

Over time, different groups started to form their own schools and businesses. Some Malays felt they were losing their power, and this led to new ideas about being Malay. The British tried to educate some Malays to help run things, but this also caused some to want more independence.

World War II and the state of emergency

When World War II started, the British were not ready. Japanese forces attacked and quickly took over Malaysia. During this time, many people suffered, and different groups became more divided.

After the war, the British came back, but people wanted independence. New groups formed, and some began fighting for their ideas. This led to a long and hard time for Malaysia as it moved toward becoming its own country.

Emergence of Malaysia

Struggle for an independent Malaysia

The journey to create an independent Malaysia began with efforts by different groups to work together. Leaders from Malay, Chinese, and Indian communities formed alliances to achieve independence. They worked hard to create a stable and fair nation where everyone could live together peacefully.

In the early 1960s, leaders from Malaya, Singapore, Sarawak, and North Borneo discussed joining together to form a new country called Malaysia. After many talks and agreements, Malaysia was officially formed on September 16, 1963, including Malaya, Sarawak, North Borneo, and Singapore. This new nation aimed to bring together people from different backgrounds under one government.

Challenges of independence

After becoming independent, Malaysia faced many challenges. The country had to build its economy and ensure that all groups felt fairly treated. Leaders worked on plans to improve industries and help people live better lives. They also had to handle disagreements between different groups and manage relations with nearby countries.

During these early years, Malaysia worked to create policies that would help all its people, no matter their background. The government focused on education and economic development to build a strong and fair nation. Leaders aimed to balance the needs of different communities while promoting growth and stability across the country.

Modern Malaysia

See also: Human rights in Malaysia and Freedom of religion in Malaysia

In 1970, many Malaysians living below the poverty line were ethnic Malays, most of whom were rural workers largely excluded from Malaysia's modern economy. The government introduced the New Economic Policy (NEP) in 1971 to address these disparities, with a series of four five-year plans scheduled from 1971 to 1990. The NEP aimed to achieve two main goals: reducing poverty, especially in rural areas, and addressing the economic imbalance by eliminating the association between race and economic prosperity.

To increase Malay participation in the modern economy, the government established several state-owned enterprises and agencies, including Perbadanan Nasional Berhad (PERNAS), Petroliam Nasional Berhad (PETRONAS), and the Heavy Industries Corporation of Malaysia (HICOM). These entities not only directly employed Malay workers but also invested in growing sectors of the economy, creating new technical and administrative roles often allocated to Malays. Consequently, Malay equity in the economy increased from 1.5% in 1969 to 20.3% by 1990.

Mahathir administration

Main article: First premiership of Mahathir Mohamad

Mahathir Mohamad was sworn in as the fourth Prime Minister of Malaysia on 16 July 1981. One of his initial actions was to release 21 detainees held under the Internal Security Act (ISA).

During his early tenure, Mahathir implemented an assertive economic strategy, exemplified by the Guthrie Dawn Raid on 7 September 1981. This strategic economic maneuver, executed by Permodalan Nasional Berhad (PNB), enabled Malaysia to reclaim control of Guthrie Corporation, a British-owned plantation company, by rapidly acquiring its shares on the London Stock Exchange. The operation transferred approximately 200,000 acres of agricultural land into Malaysian ownership, aligning with the New Economic Policy (NEP) objectives of increasing Bumiputera equity. However, the raid strained diplomatic relations with the United Kingdom. In response, British Prime Minister Margaret Thatcher tightened stock market regulations, while Malaysia introduced the "Buy British Last" policy in October 1981, prioritizing non-British suppliers in government procurements. Diplomatic reconciliation occurred in 1983 when Thatcher hosted Mahathir at 10 Downing Street, leading to agreements on student subsidies, technical assistance programs, and the resolution of the landing rights issue.

To promote economic development and reduce dependence on Western models, Mahathir introduced the Look East Policy in 1982, encouraging Malaysians to adopt the work ethics, industrial strategies, and economic practices of Japan and South Korea. Alongside this policy, the government emphasized industrialisation to diversify the economy away from agriculture. The establishment of the Heavy Industries Corporation of Malaysia (HICOM) in 1983 led to the launch of Malaysia's first national car, the Proton Saga, in 1985 by Proton, Malaysia's automotive company.

The government introduced its privatisation policy in the early 1980s to improve efficiency, reduce government expenditure, and encourage private-sector growth. Privatization efforts spanned key sectors, including telecommunications, utilities, and transportation, attracting foreign investment and supporting Malaysia's economic growth. This program complemented Mahathir's broader focus on industrialization and infrastructure, establishing a foundation for major development projects in later years.

Mahathir sought to redefine the balance of power between the monarchy and Parliament through a constitutional amendment in 1983. This amendment required the Yang di-Pertuan Agong to assent to any bill within 15 days of its passage by Parliament; otherwise, it would automatically become law. Additionally, it proposed transferring the power to declare a state of emergency from the Agong to the prime minister. Initially supported by the Agong at the time, the proposal was later met with hesitation from him and the Sultans, who baulked at its implications for state-level legislation. A public standoff ensued, with Mahathir organizing rallies to gather public support. The crisis concluded with a compromise, retaining the Agong's emergency powers but allowing Parliament to override a veto by re-passing the bill.

In Mahathir's early years as prime minister, Malaysia saw a resurgence of Islam and conservatism among the Malay population. Pan-Malaysian Islamic Party (PAS), which had previously joined UMNO in government during the 1970s, responded to this shift by adopting a more assertive Islamist stance under the leadership of Yusof Rawa. Mahathir sought to appeal to religious voters by establishing institutions such as the International Islamic University of Malaysia (IIUM) to promote Islamic education within a framework overseen by the government.

As part of his efforts to moderate Islamist influence, Mahathir successfully drew Anwar Ibrahim, leader of the Malaysian Islamic Youth Movement (ABIM), into UMNO. Mahathir's government also employed repressive measures against more extreme exponents of Islamism. In 1985, the Memali Incident occurred, resulting in a confrontation between police and followers of Islamist preacher Ibrahim Mahmud, known as Ibrahim Libya, in Kampung Memali, Baling, Kedah. This clash led to 18 deaths, including four police officers. Al-Arqam, a religious sect, was banned in 1994, and its leader, Ashaari Mohammad, was arrested under the Internal Security Act (ISA) due to the movement's deviation from Islamic principles and its perceived potential as a political threat.

Following rising racial tensions and political unrest, Operasi Lalang was launched in 1987. The government detained 119 individuals, including opposition politicians, activists, and intellectuals, under the Internal Security Act (ISA). These detentions, carried out without trial, were criticized by human rights groups.

Mahathir's party, the United Malays National Organisation (UMNO), entered a crisis in 1987. After Mahathir narrowly defeated Tengku Razaleigh Hamzah in the 1987 UMNO presidential election, Razaleigh's supporters claimed irregularities in the voting process and filed a lawsuit. In 1988, the High Court declared UMNO to be an unlawful society due to unregistered branches that violated the Societies Act 1966. This ruling effectively dissolved UMNO, leaving the party without legal status and creating uncertainty in its leadership. In response, Mahathir formed a new party, UMNO Baru (New UMNO), which most UMNO members joined. The reconstituted party later adopted the original name, UMNO. The situation escalated into a constitutional crisis when Mahathir's administration sought to assert greater control over the judiciary, suspending Salleh Abas, the Lord President of the Supreme Court, along with several senior judges, following Salleh's criticism of the government's attempts to influence judicial matters.

Mahathir also worked to resolve the long-standing insurgency by the Malayan Communist Party (MCP). Building on Malaysia's bilateral relations with China established in 1974, the Malaysian government encouraged Chinese leaders, including Deng Xiaoping, to influence the MCP to lay down their arms. By 1988, the MCP, weakened by diminishing support and the collapse of the communist bloc, agreed to peace negotiations mediated by Thailand. The talks culminated in the Hat Yai Peace Accord, signed on 2 December 1989, which required the MCP to cease militant activities, disband armed units, and pledge loyalty to the Yang di-Pertuan Agong.

The conclusion of the New Economic Policy (NEP) in 1990 led Mahathir to introduce Vision 2020, aiming to transform Malaysia into a fully developed nation by the year 2020. Achieving this objective required an average economic growth rate of seven percent per annum. The New Economic Policy (NEP) was succeeded by the National Development Policy (NDP) in 1991, which expanded certain government programs to include non-Bumiputera ethnic groups. By 1995, the NDP had contributed to poverty reduction, with fewer than nine percent of Malaysians living in poverty, and it had helped to narrow income inequality. The administration also reduced corporate taxes and liberalized financial regulations, attracting foreign investment and boosting economic growth rates to over nine percent annually until 1997.

Mahathir's second constitutional amendment in 1993 further curtailed royal privileges by removing the legal immunity of the royal family, allowing them to be prosecuted in a special court. This amendment reinforced the government's stance that all citizens, including royalty, should be subject to the rule of law.

Throughout the 1990s, Mahathir prioritized large-scale infrastructure projects. Among them was the development of the Multimedia Super Corridor, aimed at establishing Malaysia as a center for information technology. Other key projects included the creation of Putrajaya as the administrative capital and the establishment of the Formula One Grand Prix in Sepang. Among the more controversial was the Bakun Dam in Sarawak, a hydroelectric project intended to supply electricity across the South China Sea to Peninsular Malaysia. However, its construction was halted during the 1997 Asian financial crisis. The Petronas Twin Towers, completed in 1996, became an iconic symbol of Malaysia's rapid modernization. Mahathir envisioned the towers and the surrounding Kuala Lumpur City Centre (KLCC) as a global business hub, transforming Kuala Lumpur's skyline.

The 1997 Asian financial crisis significantly impacted Malaysia, with the Malaysian ringgit depreciating, foreign investment declining, and the stock market index dropping by over 75%. Initially following International Monetary Fund (IMF) recommendations, the government implemented spending cuts and raised interest rates, exacerbating economic strain. In 1998, Mahathir shifted policies by increasing government spending and pegging the ringgit to the US dollar, allowing Malaysia to recover faster than some neighboring countries.

The year 1998 also marked the dismissal of Deputy Prime Minister Anwar Ibrahim by Mahathir, leading to the Reformasi movement, which advocated for political reform and an end to corruption. Anwar's subsequent arrest and trial on charges of sodomy attracted widespread attention and criticism from international human rights organizations and fueled mass protests in Kuala Lumpur.

The Reformasi movement led to the formation of the National Justice Party (KeADILan), the predecessor to the People's Justice Party (PKR), in 1999, strengthening the opposition. The government responded with arrests and media restrictions, including curbs on PAS's Harakah newspaper. In the 1999 Malaysian general election, Barisan Nasional retained a two-thirds majority, though PAS and KeADILan made gains under the Alternative Front (BA) coalition.

In February 2003, Malaysia hosted the 13th Non-Aligned Movement Summit, where Mahathir condemned the United States' plans to invade Iraq as a violation of international law and urged NAM members to oppose unilateral military actions.

Although he had announced his retirement in June 2002 and named Abdullah Ahmad Badawi as his successor, Mahathir officially stepped down in October 2003 after over 22 years in office, making him the world's longest-serving elected leader at the time.

Abdullah administration

Main articles: Islam Hadhari and Premiership of Abdullah Ahmad Badawi

Abdullah Ahmad Badawi was sworn in as Malaysia's fifth prime minister on 31 October 2003, beginning his term with a pledge to combat corruption by strengthening anti-corruption agencies, expanding public channels for reporting corruption, and improving transparency in the award of government contracts. He promoted Islam Hadhari, an approach to Islam emphasizing compatibility between Islamic principles and economic and technological development. Aligning with this approach, his administration introduced the j-QAF programme in 2004 to strengthen Islamic education in schools. In the same year, he also introduced the National Integrity Plan and Malaysian Integrity Institute to foster ethical governance. Additionally, Abdullah's government sought to improve access to higher education and bolster Malaysia's standing as a regional educational hub, expanding funding and infrastructure for tertiary education.

Following the 2004 general election, Abdullah led the Barisan Nasional (BN) coalition to a major victory, securing over 90% of parliamentary seats. Later that year, the Indian Ocean tsunami affected parts of Malaysia, particularly Penang and Kedah, prompting Abdullah's administration to coordinate relief efforts and establish a tsunami warning system to improve disaster preparedness. In 2005, Malaysia hosted the inaugural East Asia Summit under Abdullah's leadership, aiming to enhance cooperation among Southeast Asian nations and major global powers.

To advance economic development, Abdullah launched the Special Task Force to Facilitate Business (PEMUDAH) in 2007 to streamline business processes and reduce bureaucratic inefficiencies. Between 2006 and 2008, his administration introduced five economic corridors—Iskandar Malaysia, Northern Corridor Economic Region (NCER), East Coast Economic Region (ECER), Sabah Development Corridor (SDC), and Sarawak Corridor of Renewable Energy (SCORE)—to drive regional development.

The government sought to transition into a value-chain economy while maintaining its manufacturing base by revitalizing Malaysia's agriculture sector to enhance food security, incorporating modern agrotechnology and implementing a national food security plan in 2008 amid the world food price crisis at the time. Abdullah also faced criticism over rising petrol and electricity costs linked to subsidy restructuring, as these changes were seen as potentially undermining Malaysia's traditional advantage as an exporter.

Sheikh Muszaphar Shukor became Malaysia's first astronaut on 10 October 2007, travelling aboard the Russian Soyuz TMA-11, a milestone for Malaysia's space exploration program. That same year, two major anti-government rallies took place. The first Bersih Rally on 10 November in Kuala Lumpur called for electoral reform amid corruption allegations and criticisms of a system favouring Barisan Nasional. Later that month, on 25 November, the HINDRAF rally organised by the Hindu Rights Action Force (HINDRAF) protested perceived ethnic discrimination policies. The government subsequently banned HINDRAF in October 2008, labelling it a security threat.

The 2008 financial crisis led to reduced demand for Malaysian exports such as electronics, palm oil, and rubber, causing the country's GDP growth to slow significantly and contract in early 2009 before beginning a gradual recovery. To mitigate the impact, Abdullah's government introduced two stimulus packages totalling approximately RM67 billion, supporting domestic spending, infrastructure projects, and vulnerable sectors. These measures, alongside Malaysia's diversified economy, contributed to a relatively swift recovery. In 2009, his administration also established the Malaysian Anti-Corruption Commission (MACC), replacing the Anti-Corruption Agency (ACA), to enhance anti-corruption efforts. That same year, his administration also established the Judicial Appointments Commission (JAC) to improve transparency in judicial appointments, strengthening judicial independence.

In the 2008 general election, Barisan Nasional lost its two-thirds majority for the first time since 1969, a result of the political tsunami brought about by the 2008 Malaysian Opposition Wave, which signaled a significant decline in public support. Mounting criticism over unmet anti-corruption promises and perceived ineffective leadership led Abdullah to announce his resignation in October 2008, with his departure finalised in April 2009 when Najib Razak took office as his successor.

Najib administration

Main articles: 1Malaysia and 1Malaysia Development Berhad scandal

Najib Razak was sworn in as Malaysia's sixth prime minister on 3 April 2009. Early in his tenure, he introduced the 1Malaysia campaign, a national unity initiative aimed at fostering ethnic harmony, service efficiency, and equitable opportunities. The concept expanded into a public service brand covering various social and economic policies aimed at unifying Malaysia's multicultural society.

On 15 September 2011, Najib announced plans to repeal the Internal Security Act 1960 (ISA), which had been criticised for allowing indefinite detention without trial. It was replaced by the Security Offences (Special Measures) Act 2012 (SOSMA), which came into effect on 31 July 2012. However, critics argued that SOSMA was misused to silence dissenting voices, with several activists detained under the law.

In early February 2013, an incursion occurred in Lahad Datu when hundreds of militants, some armed, arrived by boats in Lahad Datu District, Sabah, Malaysia, from Simunul Island, Tawi-Tawi, in the southern Philippines. The group was sent by Jamalul Kiram III, a claimant to the throne of the Sultanate of Sulu. In response, Malaysian security forces launched a major operation to repel the militants, resulting in a decisive Malaysian victory that concluded the conflict by late March 2013. Following this, the Eastern Sabah Security Command (ESSCOM) was established to enhance security along Sabah's eastern coast.

In the 2013 general election, Najib led the Barisan Nasional (BN) coalition to victory, retaining a majority in Parliament. However, the election was marred by allegations of electoral irregularities, including accusations of gerrymandering and alleged misuse of government resources. This led to widespread public protests, which demanded electoral reform.

On 8 March 2014, Malaysia Airlines Flight 370 disappeared en route from Kuala Lumpur to Beijing, leading to one of the largest and most costly search efforts in aviation history. Four months later, on 17 July 2014, Malaysia Airlines Flight 17 was shot down by a surface-to-air missile over Eastern Ukraine while flying over territory controlled by Russian-backed militants, resulting in the deaths of all 298 passengers and crew on board.

On 1 April 2015, Najib's administration introduced a controversial 6% Goods and Services Tax (GST) on most goods and services to expand Malaysia's tax base. The GST was widely unpopular, with many Malaysians expressing concerns over rising living costs. Later that year, Najib's administration was engulfed in scandal when Najib and other officials were implicated in a multibillion-dollar embezzlement and money-laundering scheme involving 1Malaysia Development Berhad (1MDB), a state-owned investment fund allegedly masterminded by Low Taek Jho. This triggered widespread calls and protests from Malaysians, including opposition parties, demanding Najib's resignation. These protests culminated in the Malaysian Citizens' Declaration, a declaration from a coalition of political and civil leaders calling for Najib's removal from office.

From 2011 to 2016, the Bersih movement held several large rallies calling for electoral reform, transparency, and accountability in governance. The Najib administration's response included arrests of activists and restrictions on media coverage, which garnered both domestic and international scrutiny. Amid growing dissent, Najib removed his then-deputy, Muhyiddin Yassin, suspended several newspapers, and enacted the National Security Council Act 2016, granting unprecedented powers to the prime minister. Additionally, living costs surged due to subsidy cuts, and the Malaysian ringgit experienced a sharp decline.

In 2017, diplomatic tensions flared between Malaysia and North Korea after the assassination of Kim Jong-nam in Malaysia, an incident that sparked a major diplomatic row and brought international media attention.

Najib's tenure ended after the 2018 general election, in which Barisan Nasional lost its parliamentary majority for the first time in Malaysia's history.

Second Mahathir administration

Main articles: 2018 Malaysian general election and Second premiership of Mahathir Mohamad

Mahathir Mohamad was sworn in as the seventh Prime Minister after winning the election on 10 May 2018. A number of issues contributed to Najib Razak's defeat, including the ongoing 1Malaysia Development Berhad (1MDB) scandal, the 6% Goods and Services Tax, and the rising cost of living.

Mahathir promised to "restore the rule of law" and conduct elaborate and transparent investigations into the 1Malaysia Development Berhad scandal.

Anwar Ibrahim was given a full royal pardon and was released from prison on 16 May 2018. He was designated to take over the reins from Prime Minister Mahathir Mohamad as planned and agreed by the coalition before GE14.

The unpopular tax was reduced to 0% on 1 June 2018. The government under Mahathir tabled the first reading Bill to repeal GST in Parliament on 31 July 2018. GST was successfully replaced with Sales Tax and Service Tax starting 1 September 2018.

Mahathir's administration promised to review all Belt and Road Initiative projects in Malaysia that were initiated by the previous government. He characterised these as "unequal treaties" and said some were linked to misappropriated funds from the 1MDB scandal. The government suspended work on the East Coast Rail Link and continued it after terms had been renegotiated. Mahathir cancelled approximately $2.8 billion worth of deals with China Petroleum Pipeline Bureau, stating that Malaysia would not be able to repay its obligations to China.

Mahathir was supportive of the 2018–19 Korean peace process and announced that Malaysia would reopen its embassy in North Korea and resume relations.

On 28 September 2018, Mahathir addressed the United Nations General Assembly, stating that his government would promise to ratify the International Convention on the Elimination of All Forms of Racial Discrimination (ICERD). However, after weeks of receiving racially and religiously charged demonstrations against the convention, particularly from Bumiputras, the Pakatan Harapan government chose not to accede to the ICERD on 23 November 2018.

Mahathir announced the Shared Prosperity Vision 2030 in October 2019, which aimed to increase the incomes of all ethnic groups, focus more on the technology sector, and for Malaysia to become a high-income country by 2030. Malaysia's freedom of the press improved slightly under Mahathir's tenure, and the country's rank rose in the Press Freedom Index.

Political infighting within the Pakatan Harapan coalition, as well as the uncertainty of the date of the transition of power to his designated successor, Anwar Ibrahim, soon culminated in a political crisis known as the Sheraton Move in February 2020.

Muhyiddin administration

Main articles: 2020–2022 Malaysian political crisis, Malaysian movement control order, COVID-19 pandemic in Malaysia, 2021 Malaysian state of emergency, and Muhyiddin cabinet

On 1 March 2020, a week after the country was thrown into a political crisis, Muhyiddin Yassin was appointed as the eighth Prime Minister by the Yang di-Pertuan Agong, following the abrupt resignation of Mahathir Mohamad. The fallen government was replaced by the new Perikatan Nasional (PN) coalition government, led by BERSATU leader Muhyiddin.

During his administration, COVID-19 spread throughout the nation. In response, Muhyiddin implemented the Malaysian movement control order (MCO) on 18 March 2020.

On 28 July 2020, the High Court convicted former Prime Minister Najib Razak of abuse of power, money laundering and criminal breach of trust, becoming the first Prime Minister of Malaysia to be convicted of corruption. After failing several appeals, he entered Kajang Prison on August 23, 2022, to serve his sentence.

In mid-January 2021, the Yang di-Pertuan Agong declared a national state of emergency until at least 1 August in response to the COVID-19 crisis and political infighting. Parliament and elections were suspended while the Malaysian government was empowered to introduce laws without approval.

Muhyiddin commenced the country's vaccination programme against COVID-19 in late February 2021.

On 19 March 2021, North Korea announced the severance of diplomatic ties with Malaysia, after the Kuala Lumpur High Court rejected North Korean businessman Mun Chol Myong's appeal from extradition to the United States.

Muhyiddin officially resigned as prime minister on August 16, 2021, after losing the majority in parliament support due to the country's political crisis, as well as calls for his resignation due to economic stagnation and the government's failure to prevent COVID-19 infections and deaths. He was afterwards appointed back as caretaker prime minister by the Yang di-Pertuan Agong until a replacement can be selected.

Ismail Sabri administration

Main article: Premiership of Ismail Sabri Yaakob

Ismail Sabri Yaakob was sworn in as the ninth Prime Minister on August 21, 2021. During his inaugural speech as prime minister on 22 August 2021, Ismail Sabri introduced the Keluarga Malaysia idea. During his tenure, he lifted the Movement Control Order (MCO) following the expansion of the vaccination programme and oversaw the Twelfth Malaysia Plan.

The Constitution (Amendment) Act 2022 was passed, restoring Sabah and Sarawak as equal partners to Peninsular Malaysia per the Malaysia Agreement of 1963, effective from 11 February 2022. Later in the same year, a constitutional amendment prohibiting members of parliament from switching political parties was also passed. Several UMNO lawmakers called for a snap election before the end of 2022 to resolve ongoing infighting in the party and obtain a stronger mandate. This led to an earlier general election in November 2022, which resulted in a hung parliament, the first federal election to have such a result in the nation's history.

Anwar administration

Main article: Premiership of Anwar Ibrahim

Anwar Ibrahim, the chairman of Pakatan Harapan (PH), was appointed and sworn in as the 10th Prime Minister of Malaysia on 24 November 2022 by the Yang di-Pertuan Agong, after securing support for a grand coalition government, thereby ending the nation's political crisis. He launched the Malaysia Madani concept as a national policy on January 19, 2023, in Putrajaya which replaced the Keluarga Malaysia concept from the previous administration of Ismail Sabri Yaakob.

On June 18, 2024, Anwar announced Malaysia's intention to join BRICS, emphasizing that this decision would not impact domestic politics. Malaysia officially submitted its application in July 2024. Anwar attended the 9th Eastern Economic Forum in Vladivostok, Russia, in September, where Russian President Vladimir Putin invited Malaysia to the upcoming BRICS Summit. On October 24, 2024, Malaysia, represented by Economy Minister Rafizi Ramli, attended the 16th BRICS Summit and formally attained BRICS partner country status on January 1, 2025, enhancing its economic and trade collaborations with BRICS nations.

In April 2025, Malaysia hosted Chinese President Xi Jinping for a state visit, his first to the country in 12 years. The two nations signed 31 agreements across sectors such as trade, infrastructure, technology, and cultural exchange, and issued a joint declaration to strengthen bilateral relations.