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Country Commercial Guides FY 1999: Malaysia

CHAPTER III: POLITICAL ENVIRONMENT

The Malaysian political environment is strongly favorable
to international and domestic business development. U.S.-Malaysian
bilateral relations are generally close and productive, although
there are differences on some issues.

Malaysia is a constitutional monarchy with a parliamentary
system of government. In practice, power is strongly concentrated
in the prime minister. The Prime Minister has always been head
of UMNO (the United Malays National Organization), the principal
party in the governing coalition that has ruled Malaysia continuously
since independence from the UK in 1957. The position of monarch,
the Yang Di Pertuan Agong, is rotated among the rulers of nine of
the thirteen states of Malaysia. The role over time has become
almost entirely ceremonial and symbolic.

Malaysia is a multi-ethnic society, with Malay, Chinese, and
Indian communities. Tensions among these groups were serious in
the past. Rapid economic growth over the past several decades
alleviated much of these tensions. Recent economic reversals have
not led to a resurgence of ethnic hostilities.

The Asian financial crisis has led to some intemperate statements
by Malaysian leaders about the foreign role in the economy. In
general, however, Malaysia enjoys friendly relations with the
United States and works together with the U.S. on many issues.
Malaysia has contributed forces to U.N. operations in Cambodia
and Bosnia. Malaysia is a member of ASEAN (the Association of
Southeast Asian Nations), founded in 1967 with Indonesia, the
Philippines, Singapore, Thailand, and Brunei. Vietnam, Laos, and
Burma have since joined ASEAN. The U.S. has strongly supported
ASEAN and participates in an annual dialogue with ASEAN members
at the level of foreign ministers.

ASEAN is working to create AFTA (ASEAN Free Trade Area), which,
if successful, would create a single market of over 400 million
people. Malaysia is also a member of APEC (Asia-Pacific Economic
Cooperation), which includes the U.S., China, Japan, and most
other economies of the Pacific Rim, and is chairing the group's
meetings in 1998. 

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Note* International Copyright, United States Government, 1998 (or other year of first publication). All rights under foreign copyright laws are reserved. All portions of this publication are protected against any type or form of reproduction, communications to the public and the preparation of adaptations, arrangement and alterations outside the United States. U. S. copyright is not asserted under the U.S. Copyright Law, Title 17, United States Code.

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