Nature, a source of wealth
Malaysia's success is based on its natural resources, notably oil, water, timber and iron. The discovery of oil reserves off Borneo in the early 20th century helped the country secure its energy supply and generate foreign exchange earnings. In 2023, the Petronas oil group announced net sales of almost 9 billion euros, holding exclusive exploration and production rights in the country. In 2022, Malaysia exported nearly 500,000 barrels of oil per day, mainly to China. Customs data show that China imported 54% more crude oil from Malaysia in 2023 than in 2022, or 1.1 million barrels a day. The country's vast water resources, with their many rivers, make it possible to diversify energy supplies through hydroelectric dams spread across the country, making Malaysia the leading electricity exporter in Southeast Asia. A program to build 12 dams, launched in 2012 for the state of Sarawak, has been controversial, however, not least because of the destruction of the habitat of indigenous populations in remote primary forest areas. The indigenous people of central Borneo actively protested for years against the Baram dam project, finally winning their case. The vast forests, particularly on the island of Borneo, are intensively exploited for their timber, prized for its strength. By 2023, Malaysia's exports of wood and wood-based products were worth around 4.7 billion euros. After deforestation, areas are often replanted with oil palm plantations. Along roads lined with oil palms, the local industry processes the fruit into oil, which is sold mainly for food purposes. Despite this, environmental protection remains a marginal concern. The industry is thinking of increasing the value of rubber and oil palm to limit the pressure on natural forests. At present, only a few forests are exploited sustainably, with careful selection and extraction of the desired species. Underground, mineral resources, particularly iron, are overexploited to meet the growing demand of the new technologies industry, in particular for the production of semiconductor circuits and printed circuit boards. These components are then exported to China and Korea for integration into telephones, computers, machine tools and other equipment.
The services in reinforcement
While primary industry still underpins a large part of the country's economy, you have to look to the service economy to find the most profitable companies. The many Malaysian companies operating in the banking and finance sector reflect the overall health of the Malaysian economy, which is growing at an annual rate of almost 4%. Tourism is the other mainstay of the country's economic development. Malaysia highlights its exceptional wildlife and the beauty of its islands to attract tourists. The country hopes to break into the top 10 most-visited countries, but there's still a long way to go. The sector is on the rise, with 5.8 million tourists in the first quarter of 2024, up 32.5% on the previous year's 4.3 million, according to the Ministry of Tourism, Arts and Culture. Visa facilitation, as well as improved flight accessibility and connectivity, are key to achieving the goal of attracting 36 million tourists and generating RM150 billion for the "Visit Malaysia 2026" campaign. The country is investing heavily to facilitate these arrivals. Numerous regional air links provide direct access to key destinations on the peninsula and in Borneo. Chinese, Indians, South Koreans and Australians top the list of visitors. Geographical proximity, flora and fauna, gastronomy and the - relatively - low value of the ringgit are just some of the strong arguments that attract people from the China Sea. Tourism seems to be one of the few vectors that can turn the diversity of Malaysia's peoples into an asset.
The community malaise
Historically, ethnic tensions in Malaysia have their roots in the British colonial period, when the divide-and-rule policy exacerbated differences between the Malay, Chinese and Indian communities. The British imported Chinese and Indian labor to work in the mines and plantations, reinforcing economic and social distinctions. These divisions were perpetuated after independence, culminating in the race riots of May 13 1969, a violent episode that profoundly affected the nation and led to the introduction of the New Economic Policy (NEP). This policy aimed to reduce poverty and restructure society in order to narrow the economic gap between the Malays and other communities, but it was also criticized for creating new inequalities and tensions.
Malaysia today faces a major challenge: uniting its people so that each inhabitant feels fully a citizen. Ethnic and religious divisions are significant obstacles to this unity, driving the different communities apart. The Malays accuse the Chinese of monopolizing wealth and controlling the economy, while the Chinese accuse the Malays of excluding them from the political and social landscape, relegating them to the status of second-class citizens.
Political decision-makers seem to have difficulty grasping the scale of this problem, although the need to bring the communities closer together is obvious. The percentage of Chinese in the Malaysian population has plummeted from 38% at independence in 1957 to 23% in 2016, with over 2 million departures recorded during this period. To encourage expatriates to return, the government has set up a program offering tax breaks. However, according to the latest data from 2023, the proportion of Chinese in the Malaysian population has continued to decline, reaching around 21%, despite efforts to reverse this trend. Although this issue is often addressed on an individual level, it remains largely taboo politically, and policy reforms to improve inclusivity remain timid.
Progress to be made in women's and LGBTQIA+ rights
In terms of the rights of women, children and LGBTQIA+ people, Malaysia still has a long way to go and is under increasing pressure from the international community in this respect. LGBTQIA+ people face institutionalized discrimination, including funding for conversion practices to change sexual orientation or gender identity. Federal laws severely condemn homosexual relationships and gender non-conformity, leading to frequent arrests. In 2022, Google removed a government "conversion therapy" app from its Play Store. Blockbusters such as "Lightyear" and "Thor: Love and Thunder" were banned following Disney's refusal to cut LGBT elements. Furthermore, in August 2022, the Court of Appeal overturned a 2021 High Court ruling granting automatic Malaysian citizenship to children of Malaysian mothers and foreign fathers. In April 2022, MP Maria Chin Abdullah was jailed for criticizing Sharia law. Malaysia has also been criticized for not sufficiently combating child marriage - Selangor and Kedah are the only states to have raised the minimum legal age of marriage to 18.
