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Malaysia


Updated January 28, 2025


Overview
The Federation of Malaysia is a majority Muslim
parliamentary democracy in Southeast Asia. It has an
ethnically and religiously diverse population of 32.7
million, with a Malay majority and large ethnic Chinese and
Indian minorities. Malaysia plays an active role in regional
diplomacy and is a partner in numerous U.S. initiatives in
Asia, including trade and security programs as well as
efforts to combat terrorism and religious extremism.
Malaysia is a founding member of the Association of
Southeast Asian Nations (ASEAN) and serves as ASEAN's
chair in 2025. It sees itself as both a regional leader and a
moderate voice within the Islamic world. Despite generally
cooperative bilateral relations with the United States, some
issues constrain closer ties, including Malaysian opposition
to much of U.S. policy in the Middle East, ongoing
outreach to Hamas by Malaysian leaders including Prime
Minister Anwar Ibrahim, and U.S. concerns over some
Malaysian economic and human-rights policies.

Congress has overseen Malaysia policy, including trade
negotiations in the 2000s and 2010s, as well as U.S.-
Malaysia cooperation on security and counterterrorism
issues. Some Members of Congress have expressed
concerns about human rights issues in the country including
Malaysia's record in combatting human trafficking
(Malaysia was listed on the Tier 2 Watchlist in the State
Department's 2023 Trafficking in Persons report) and
Malaysia's treatment of refugees from Burma.

  Democracy and Poitics in Malaysa
Malaysia was led by a single governing coalition from its
independence from the United Kingdom in 1957 until 2018.
That coalition, known as the Barisan Nasional (BN), was
led from 1973 by UMNO,  a Malay-nationalist party. During
its lengthy period in power, UMNO enacted a series of
economic and social preferences for the majority
bumiputera (ethnic Malays and indigenous peoples), and it
derived much of its appeal from issues of ethnic identity.
Prime Minister Anwar was UMNO's   deputy chairman until
1998, when he broke with longtime UMNO  leader
Mahathir Mohamad   and was later convicted and imprisoned
on charges many considered politically motivated.

Malaysia has undergone significant political upheaval since
2018, as national elections in 2018 and 2022 resulted in
weak coalition governments marked by internal rivalries
that have struggled to govern effectively. The current
government is headed by Anwar, a former deputy prime
minister who was imprisoned for five years in the 1990s
and 2000s and became an opposition leader upon his
release. After another three years in prison in the 2010s,
Anwar  came to power in November 2022 following
elections in which no party gained a clear majority of
parliamentary seats. His political coalition, Pakatan


Harapan (PH), joined its longtime rival, the United Malays
Nasional Organization (UNMO)  to form a government, but
the two groups remain deeply divided on many issues.

Figure I. Malaysia


conomic Lflallenges
In the decades following independence, Malaysia
underwent a profound economic transformation, adopting
an export-led growth model that propelled the country from
a commodity-based economy  to an upper-middle-income
country and a leading export of electronics and other
manufactured goods. Over the past decade, GDP, wage, and
productivity growth has slowed and inequality has risen,
contributing to concerns that the government is not
providing adequate opportunities for new entrants to the
labor force or support for its aging population.

Malaysia's government has pursued a variety of trade
agreements. Malaysia was a member of the proposed Trans-
Pacific Partnership (TPP), from which the United States
withdrew in 2017, and is one of 11 members of the renamed
Comprehensive  and Progressive Agreement for Trans-
Pacific Partnership (CPTPP), which it ratified in 2022.
Malaysia also ratified the Regional Comprehensive
Economic  Partnership (RCEP) in 2022. Malaysia fully
participates in the Indo-Pacific Economic Framework
(IPEF) initiative, including the trade, supply chains, clean
energy, and anti-corruption pillars.

Patronage and corruption are a major part of Malaysian
politics and economic policy. (In November 2024, for
example, Malaysian businessman Leonard Fat Leonard
Francis was sentenced to 15 years in jail for his role in the
largest corruption scandal in the U.S. Navy's history.)
Some  observers heralded Malaysia's peaceful changes of
government that resulted from the 2018 and 2022 elections,
raising the prospects for political and economic reforms.
However, the weakness of the resulting coalitions limited

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