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MALAYSIA

During the late 18th and 19th centuries, Great Britain established colonies and protectorates in the area of current Malaysia; these were occupied by Japan from 1942 to 1945. In 1948, the British-ruled territories on the Malay Peninsula formed the Federation of Malaya, which became independent in 1957. Malaysia was formed in 1963 when the former British colonies of Singapore and the East Malaysian states of Sabah and Sarawak on the northern coast of Borneo joined the Federation. The first several years of the country's history were marred by Indonesian efforts to control Malaysia, Philippine claims to Sabah, and Singapore's secession from the Federation in 1965.

LOCATION

Southeastern Asia, peninsula bordering Thailand and northern one-third of the island of Borneo, bordering Indonesia, Brunei, and the South China Sea, south of Vietnam. slightly larger than New Mexico.

POPULATION

23,522,482 (July 2004 est.). Muslim, Buddhist, Daoist, Hindu, Christian, Sikh; note - in addition, Shamanism is practiced in East Malaysia.

NATURAL RESOURCES

Tin, petroleum, timber, copper, iron ore, natural gas, bauxite.

NATURAL PROBLEMS

Air pollution from industrial and vehicular emissions; water pollution from raw sewage; deforestation; smoke/haze from Indonesian forest fires.

ECONOMICS

Malaysia, a middle-income country, transformed itself from 1971 through the late 1990s from a producer of raw materials into an emerging multi-sector economy. Growth was almost exclusively driven by exports - particularly of electronics. As a result Malaysia was hard hit by the global economic downturn and the slump in the information technology (IT) sector in 2001 and 2002. GDP in 2001 grew only 0.5% due to an estimated 11% contraction in exports, but a substantial fiscal stimulus package equal to US $1.9 billion mitigated the worst of the recession and the economy rebounded in 2002 with a 4.1% increase. The economy grew 4.9% in 2003, notwithstanding a difficult first half, when external pressures from SARS and the Iraq War led to caution in the business community. Healthy foreign exchange reserves and a relatively small external debt make it unlikely that Malaysia will experience a crisis similar to the one in 1997, but the economy remains vulnerable to a more protracted slowdown in Japan and the US, top export destinations and key sources of foreign investment. The Malaysian ringgit is pegged to the dollar, and the Japanese central bank continues to intervene and prop up the yen against the dollar. Peninsular Malaysia - rubber and oil palm processing and manufacturing, light manufacturing industry, electronics, tin mining and smelting, logging and processing timber; Sabah - logging, petroleum production; Sarawak - agriculture processing, petroleum production and refining, logging

Debt - external: $48.84 billion (2004 est.)

Internet hosts: 107,971 (2003)

Internet users: 8,692,100 (2003)

CONFLICTS

involved in complex dispute with China, Philippines, Taiwan, Vietnam and possibly Brunei over the Spratly Islands; the 2002 "Declaration on the Conduct of Parties in the South China Sea" has eased tensions but falls short of a legally binding "code of conduct" desired by several of the disputants; disputes over deliveries of fresh water to Singapore, Singapore's land reclamation, bridge construction, maritime boundaries, and Pedra Branca Island/Pulau Batu Putih persist - parties agree to ICJ arbitration on island dispute within three years; ICJ awarded Ligitan and Sipadan islands off the coast of Sabah, also claimed by Indonesia and Philippines, to Malaysia; a 1 kilometer segment at the mouth of the Golok River remains in dispute with Thailand; Philippines retains a now dormant claim to Malaysia's Sabah State in northern Borneo based on the Sultanate of Sulu's granting the Philippines Government power of attorney to pursue the Sultanate's sovereignty claim; in 2003 Brunei and Malaysia ceased gas and oil exploration in their offshore and deepwater seabeds until negotiations progress to an agreement over allocation of disputed areas; Malaysia's land boundary with Brunei around Limbang is in dispute

OTHER CONSIDERATIONS