The British attempted to colonize Borneo as early as 1771 but did not gain a foothold in Malaysia until 1786 when the British East India Company procured the island if Penang. The British gained control of what is now Malaysia when they threw out the Dutch in 1795, and over time through conquest and deals made with sultans. In 1819 Singapore was founded. It quickly became an important port.

Sarawak, Sabah and Brunei were all once part of he powerful kingdom of Brunei. In 1841, the Englishman James Brook was granted part of Sarawak by the Sultan of Brunei after he helped the sultan by putting down a tribal rebellion. In 1888, Sarawak, Brunei and North Borneo (Sabah) became British protectorates and were separated from the rest of Borneo by British-Dutch agreement.

In 1826, Penang, Malacca and Singapore were combined as the Straits Settlement. These territories became quite valuable after the Suez Canal opened in 1869, providing a easy transportation route for Malayan tin and rubber to Europe.

The British formally made Malaysia a colony in 1867. The Federated Malay States, in southern Malaya, was formed in 1895 after the British intervened in the fratricidal wars of the sultans. The British gained control over northern Malaya through an agreement made with Thailand in 1909 and merged all the territory under their control to form Malaya.

By 1910 the pattern of British rule in the Malay lands was established. The Straits Settlements were a Crown Colony, ruled by a governor under the supervision of the Colonial Office in London. Their population was about half Chinese, but all residents, regardless of race, were British subjects. The first four states to accept British residents, Perak, Selangor, Negeri Sembilan and Pahang, were termed the Federated Malay States: while technically independent, they were placed under a Resident-General in 1895, making them British colonies in all but name. The Unfederated Malay States (Johore, Kedah, Kelantan, Perlis and Terengganu) had a slightly larger degree of independence, although they were unable to resist the wishes of their British Residents for long. Johore, as Britain’s closest ally in Malay affairs, had the privilege of a written constitution, which gave the Sultan the right to appoint his own Cabinet, but he was generally careful to consult the British first.

How the British Entered in Malaysia

English traders had been present in Malay waters since the 17th century. Until the arrival of the British European power became fully apparent in Malaysia. Before the mid-19th-century British interests in the region were predominantly economic, with little interest in territorial control. Already the most powerful coloniser in India, they were looking towards southeast Asia for new resources. The growth of the China trade in British ships increased the Company’s desire for bases in the region. Various islands were used for this purpose, but the first permanent acquisition was Penang, leased from the Sultan of Kedah in 1786. This was followed soon after by the leasing of a block of territory on the mainland opposite Penang (known as Province Wellesley). In 1795, during the Napoleonic Wars, the British with the consent of the Netherlands occupied Dutch Malacca to forestall possible French interest in the area.

When Malacca was handed back to the Dutch in 1815, the British governor, Stamford Raffles, looked for an alternative base, and in 1819 he acquired Singapore from the Sultan of Johor. The exchange of the British colony of Bencoolen for Malacca with the Dutch left the British as the sole colonial power on the peninsula. The territories of the British were set up as free ports, attempting to break the monopoly held by other colonial powers as the time, and making them large bases of trade. They allowed Britain to control all trade through the straits of Malacca. British influence was increased by Malayan fears of Siamese expansionism, to which Britain made a useful counterweight. During the 19th century the Malay Sultans aligned themselves the British Empire, due to the benefits of associations with the British and the belief in superior British civilisation.

In 1824 British hegemony in Malaya (before the name Malaysia) was formalised by the Anglo-Dutch Treaty, which divided the Malay archipelago between Britain and the Netherlands. The Dutch evacuated Malacca and renounced all interest in Malaya, while the British recognised Dutch rule over the rest of the East Indies. By 1826 the British controlled Penang, Malacca, Singapore and the island of Labuan, which they established as the crown colony of the Straits Settlements, administered first under the East India Company until 1867, when they were transferred to the Colonial Office in London.

Federated and Unfederated Malay States

The British were reluctant to acquire other commitments in the region, but periodic forays by Siam (now Thailand) into north Malay states, piracy supported by Malay rulers, and periodic conflicts between Malay rulers of tin-producing states and Chinese tin miners mobilized by Chinese secret societies all threatened British commercial interests and prompted the British to become increasingly involved in peninsular affairs. In the 1870s, the British adopted a system of indirect rule over Malay states that furnished the beginnings of a centralized state. In 1874 the British agreed to recognize and support a contender as the sultan of Pangkor in exchange for the sultan’s acceptance of a British representative, or “resident,” whose advice would be sought and followed on all issues except Malay custom and religion. British residents were later established in three other tin-producing states, which became known as “protected states.” In 1896 the Malay rulers of these states and Pangkor signed the Treaty of Federation, which established the Federated Malay States. Malay rulers were invited to provide input into the federation’s development, but in reality the new constitutional arrangements were designed to provide an appearance of Malay rule while effectively reducing traditional rulers to mere decorous bystanders.

A different governing arrangement was established with other Malay states that were more independent of British control than the Federated Malay States. Siam tenuously controlled the northern states of Kedah, Terengganu, Kelantan, and Perlis until a 1909 treaty between Britain and Siam placed those states under British influence. The sultans of these states refused to join the federation, but they did accept British advisers. Unlike residents, the advisers had no effective executive power and relied on diplomacy with the sultans for policy matters. The southern state of Johor also remained relatively independent of British influence until 1909, when the sultan accepted a British “financial adviser” with wide-ranging powers. Thus, by 1914 the Malay Peninsula was composed of 10 political entities: the Straits Settlements, four Federated Malay States, and five Unfederated Malay States.

Initially, the British followed a policy of non-intervention in relation between the Malay states. The commercial importance of tin mining in the Malay states to merchants in the Straits Settlements led to infighting between the aristocracy on the peninsula. The destabilisation of these states damaged the commerce in the area, causing British intervention. The wealth of Perak’s tin mines made political stability there a priority for British investors, and Perak was thus the first Malay state to agree to the supervision of a British resident. British gunboat diplomacy was employed to bring about a peaceful resolution to civil disturbances caused by Chinese and Malay gangsters employed in a political tussle between Ngah Ibrahim and Raja Muda Abdullah. The Pangkor Treaty of 1874 paved the way for the expansion of British influence in Malaya. The British concluded treaties with some Malay states, installing “residents” who advised the Sultans and soon became the effective rulers of their states. These advisors held power in everything except to do with Malay religion and customs. [Source: Wikipedia]

Johore alone resisted, by modernising and giving British and Chinese investors legal protection. By the turn of the 20th century, the states of Pahang, Selangor, Perak, and Negeri Sembilan, known together as the Federated Malay States, had British advisors. In 1909 the Siamese kingdom was compelled to cede Kedah, Kelantan, Perlis and Terengganu, which already had British advisors, over to the British. Sultan Abu Bakar of Johor and Queen Victoria were personal acquaintances, and recognised each other as equals. It was not until 1914 that Sultan Abu Bakar's successor, Sultan Ibrahim accepted a British adviser. The four previously Thai states and Johor were known as the Unfederated Malay States. The states under the most direct British control developed rapidly, becoming the largest suppliers in the world of first tin, then rubber.

British Rule in Colonial Malaya

Using divide and rule tactics, the British encouraged rivalries between Malaysia's different ethnic groups and between the sultans. In the early days of the British presence the sultans still held a lot of power. As time went on this power was reduced and Britain took firm control of the mainland.

The Malay Peninsula under British rule before World War II, future Malaysian Prime Minister Mahathir Mohamad wrote was “divided into many different Malay states, and each state had its own treaty with the British. The treaties were for British ‘protection,’ it was said, not colonization. The British were not too repressive...Although the British actually controlled the administration fully, they managed to give the impression that locals had status and authority. The Malaysia sultans were called ‘the rulers’ by the British, although they were never really given any power to ‘rule.’

Lasting British influence includes a parliamentary democracy with a largely ceremonial monarch. Mahathir Mohamad wrote: “The British did not send a ‘governor’ to our country, but an official they called a ‘British Advisor.’ In reality, however, his ‘advise’ had to strictly followed....The British were extremely clever at this form of semi-colonial rule: they would call things by one name, but in reality do quite another thing. What we did get from them was a well-organized administration and a fairly well-developed infrastructure. What we also got, however, was a psychological burden, was the belief that only Europeans could govern our country effectively...Most Asians felt inferior to European colonizers.

Transition to Capitalist Production in Malaysia

John H. Drabble of the University of Sydney wrote: “The nineteenth century witnessed an enormous expansion in world trade which, between 1815 and 1914, grew on average at 4-5 percent a year compared to 1 percent in the preceding hundred years. The driving force came from the Industrial Revolution in the West which saw the innovation of large scale factory production of manufactured goods made possible by technological advances, accompanied by more efficient communications (e.g., railways, cars, trucks, steamships, international canals [Suez 1869, Panama 1914], telegraphs) which speeded up and greatly lowered the cost of long distance trade. Industrializing countries required ever-larger supplies of raw materials as well as foodstuffs for their growing populations. Regions such as Malaysia with ample supplies of virgin land and relative proximity to trade routes were well placed to respond to this demand. What was lacking was an adequate supply of capital and wage labor. In both aspects, the deficiency was supplied largely from foreign sources. [Source: John H. Drabble, University of Sydney, Australia +]

As expanding British power brought stability to the region, Chinese migrants started to arrive in large numbers with Singapore quickly becoming the major point of entry. Most arrived with few funds but those able to amass profits from trade (including opium) used these to finance ventures in agriculture and mining, especially in the neighboring Malay Peninsula. Crops such as pepper, gambier, tapioca, sugar and coffee were produced for export to markets in Asia (e.g. China), and later to the West after 1850 when Britain moved toward a policy of free trade. These crops were labor, not capital, intensive and in some cases quickly exhausted soil fertility and required periodic movement to virgin land (Jackson, 1968). +\

Tin in Malaysia

John H. Drabble of the University of Sydney wrote: “Besides ample land, the Malay Peninsula also contained substantial deposits of tin. International demand for tin rose progressively in the nineteenth century due to the discovery of a more efficient method for producing tinplate (for canned food). At the same time deposits in major suppliers such as Cornwall (England) had been largely worked out, thus opening an opportunity for new producers. Traditionally tin had been mined by Malays from ore deposits close to the surface. Difficulties with flooding limited the depth of mining; furthermore their activity was seasonal. From the 1840s the discovery of large deposits in the Peninsula states of Perak and Selangor attracted large numbers of Chinese migrants who dominated the industry in the nineteenth century bringing new technology which improved ore recovery and water control, facilitating mining to greater depths. [Source: John H. Drabble, University of Sydney, Australia +]

“By the end of the century Malayan tin exports (at approximately 52,000 metric tons) supplied just over half the world output. Singapore was a major center for smelting (refining) the ore into ingots. Tin mining also attracted attention from European, mainly British, investors who again introduced new technology – such as high-pressure hoses to wash out the ore, the steam pump and, from 1912, the bucket dredge floating in its own pond, which could operate to even deeper levels. These innovations required substantial capital for which the chosen vehicle was the public joint stock company, usually registered in Britain. Since no major new ore deposits were found, the emphasis was on increased efficiency in production. European operators, again employing mostly Chinese wage labor, enjoyed a technical advantage here and by 1929 accounted for 61 percent of Malayan output (Wong Lin Ken, 1965; Yip Yat Hoong, 1969). +\

Rubber Plantations in Asia

Rubber plantation agriculture was introduced to Southeast Asia in the 19th century. It revolutionized parts of the economy there. Today, Indonesia, Malaysia and Thailand produce three quarters of the world's rubber as well as three quarters of the world's palm oil and large percentage of the coffee and cocoa crops.

Rubber trees were identified and studied in the Amazon by Sir Henry Wickham, who shipped 70,000 seedling to Kew Garden in 1876. Seedlings were sent from there to Sri Lanka and Malaysia.

In 1823 the Scottish chemist Charles Macintosh discovered that rubber dissolved in the coal-tar and the mixture could be applied to cloth. He invented the raincoat. In 1844, Charles Goodyear, an American hardware merchant, patented the vulcanization process, in which sulfur is added to rubber so that it doesn't melt in heat and go brittle in cold. Goodyear discovered the process after eight years of trying to make a useful rubber when he accidently dropped a mixture of India rubber and sulfur onto a hot stove. The rubber melted and bonded with the sulfur, producing vulcanized rubber. The air-inflated pneumatic rubber tires was invented by Scotsman J.B. Dunlop in 1887. After that the rubber industry really took off.

The rubber industry got off to a slow start in Asia and didn’t really blossom until Brazilian rubber merchants tried to corner the market in 1905 and raised rubber prices high enough so that plantation owners in Asia could maker a profit. By 1915, three million acres of land was devoted to rubber in the Asia.

Latex could be grown much more efficiently and profitably on plantations in Malaysia and other Southeast Asian countries than in Brazil. Asian latex was much quality than wild latex form Brazil, which was filled with impurities. The British made a fortune with massive rubber plantations in Malaysia. Today, the United States alone imports over a billion dollars worth of the stuff every year.

Impact of Rubber on Malaysia

John H. Drabble of the University of Sydney wrote: “While tin mining brought considerable prosperity, it was a non-renewable resource. In the early twentieth century it was the agricultural sector which came to the forefront. The crops mentioned previously had boomed briefly but were hard pressed to survive severe price swings and the pests and diseases that were endemic in tropical agriculture. The cultivation of rubber-yielding trees became commercially attractive as a raw material for new industries in the West, notably for tires for the booming automobile industry especially in the U.S. Previously rubber had come from scattered trees growing wild in the jungles of South America with production only expandable at rising marginal costs. Cultivation on estates generated economies of scale. In the 1870s the British government organized the transport of specimens of the tree Hevea Brasiliensis from Brazil to colonies in the East, notably Ceylon and Singapore. There the trees flourished and after initial hesitancy over the five years needed for the trees to reach productive age, planters Chinese and European rushed to invest. The boom reached vast proportions as the rubber price reached record heights in 1910. Average values fell thereafter but investors were heavily committed and planting continued (also in the neighboring Netherlands Indies [Indonesia]). By 1921 the rubber acreage in Malaysia (mostly in the Peninsula) had reached 935 000 hectares (about 1.34 million acres) or some 55 percent of the total in South and Southeast Asia while output stood at 50 percent of world production. [Source: John H. Drabble, University of Sydney, Australia +]

“As a result of this boom, rubber quickly surpassed tin as Malaysia's main export product, a position that it was to hold until 1980. A distinctive feature of the industry was that the technology of extracting the rubber latex from the trees (called tapping) by an incision with a special knife, and its manufacture into various grades of sheet known as raw or plantation rubber, was easily adopted by a wide range of producers. The larger estates, mainly British-owned, were financed (as in the case of tin mining) through British-registered public joint stock companies. For example, between 1903 and 1912 some 260 companies were registered to operate in Malaya. Chinese planters for the most part preferred to form private partnerships to operate estates which were on average smaller. Finally, there were the smallholdings (under 40 hectares or 100 acres) of which those at the lower end of the range (2 hectares/5 acres or less) were predominantly owned by indigenous Malays who found growing and selling rubber more profitable than subsistence (rice) farming. These smallholders did not need much capital since their equipment was rudimentary and labor came either from within their family or in the form of share-tappers who received a proportion (say 50 percent) of the output. In Malaya in 1921 roughly 60 percent of the planted area was estates (75 percent European-owned) and 40 percent smallholdings (Drabble, 1991, 1). +\

“The workforce for the estates consisted of migrants. British estates depended mainly on migrants from India, brought in under government auspices with fares paid and accommodation provided. Chinese business looked to the "coolie trade" from South China, with expenses advanced that migrants had subsequently to pay off. The flow of immigration was directly related to economic conditions in Malaysia. For example arrivals of Indians averaged 61 000 a year between 1900 and 1920. Substantial numbers also came from the Netherlands Indies. +\

“Thus far, most capitalist enterprise was located in Malaya. Sarawak and British North Borneo had a similar range of mining and agricultural industries in the 19th century. However, their geographical location slightly away from the main trade route and the rugged internal terrain costly for transport made them less attractive to foreign investment. However, the discovery of oil by a subsidiary of Royal Dutch-Shell starting production from 1907 put Sarawak more prominently in the business of exports. As in Malaya, the labor force came largely from immigrants from China and to a lesser extent Java. The growth in production for export in Malaysia was facilitated by development of an infrastructure of roads, railways, ports (e.g. Penang, Singapore) and telecommunications under the auspices of the colonial governments, though again this was considerably more advanced in Malaya (Amarjit Kaur, 1985, 1998) +\

Life in Malaysia Under British Colonial Rule

Describing an ordinary Malayan town in the 1930s, Mahathir Mohamad wrote, “The rich families lived in the northern part of town; we lived in the southern. And the Europeans of course, lived in there own quarters . They were very exclusive with their own clubs and private golf course and did not mix with the local population.”

At official diners in the 1920s and 30s, waiters wore headdresses and guest were entertained by Filipino bands on the veranda. While on picnic people ate from “tiffin” lunch boxes.

In many cases British men arrived without their wives. In some cases Japanese brothels were set up to accommodate them. In the town of Sandakan in northern Borneo, nine such brothels, operated from the early 1900s to World War II. Most of the girls were sex slaves sold by their families and bonded to their brothels where they worked. One Malay man told a Japanese newspaper, “They were very beautiful in their kimonos, and they wore lots of makeup. People like us farmers could not afford Japanese prostitutes. White men got the prettiest ones, followed by the Chinese coolies from the plantations, because they had money and were bachelors.”

Hill Stations

In the intense Asian summers, the English gentry and their servants fled the cities for the hill stations in the cooler mountains. The British built 96 hill stations in India, Malaysia, Sri Lanka and Burma. The Dutch built some in Indonesia, the French in Vietnam and the Americans in the Philippines. Most were built between 1820 and 1885. Simla, the largest hill station, was the capital of British India for most of the year and headquarters for the imperial army.

The first hill stations were built in 1820 after it was discovered that British soldiers fighting Gurhkas in the foothills of the Himalayas felt better and came down with less diseases in the high altitude than soldiers stationed at low altitudes.

The hill stations began as sanatoriums and convalescent centers, but it wasn’t long before they became places where healthy upper class people went to escape the heat of the lowland plains. Most of the hill stations were located above 6,000 feet because that seemed to be the ceiling of malaria-carrying mosquitos. Naturally cool air proved to be the perfect remedy for a world where air conditioning, insect repellant and antibiotics had not been invented.

Most hill stations were built on ridge tops. Now, while this had its advantages in fighting disease. It was not practical for supplying water, especially when trees were cut down and ground water levels drops. In the early days there were no scenic train rides. Visitors were brought up the slopes in bullock carts, on horseback, or in sedan chairs. A few walked.

Book: Great Hill Stations of Asia by Barbara Crossette (Harper Collins/ Westview, 1998)

Hill Station Life

The hill station were complete towns with sanitariums, churches, cottages, clubs, libraries and activities. Social activities went on almost around the clock and status and rank was rigidly defined. The hill stations were set up like towns back home. They featured comfortable cottages, steepled churches, clubs, schools, tearooms, and gardens with European flowers.

The atmosphere at the hill stations was both formal, strange and hedonistic. People attended full dress balls, drank a lot, slept in closed rooms to avoid the "miasma," indulged in extramarital affairs and had sex with prostitutes. One chronicler wrote, "I verily believe that when the white man penetrates the interior to found a colony, his first act is to clear a space and build a clubhouse."

One journalist described hill station life as "ball after ball, each followed by a little backbiting." Another said, "There is a theory that anyone who lives above 7,000 feet starts having delusions, illusions and hallucinations. People who, in the cities, are the models of respectability are known to fling more than stones and insults at each other when they come to live up here. “

Hill station residents lived quite well. Dinners often features a large selection of wines, ales and spirits, a choice of soups, fish, joints of Bengal mutton, Chinese capons, Keddah fowls, Sangora ducks, Yorkshire hams, Java potatoes and Malay ibis, rice, curry and fruit. Some Indians were invited. Describing the bejeweled maharajahs in Simla, Aldous Huxley wrote," At the Viceroy's evening parties the diamonds were so large they looked like stage gems. It was impossible to believe that pearls in the million-pound necklaces were the genuine excrement of oysters."

Arrival of Chinese and Indians in Malaysia

The first Chinese to enter Southeast Asia were Buddhist monks, maritime traders and representatives of the Imperial Chinese government.. In ancient and medieval times, Chinese traders utilized Southeast Asian ports on maritime Silk Road but in the early days much of this trade was carried out by Arab mariners and merchants. Regular trading between China and Southeast Asia didn’t really begin in earnest until the 13th century. Chinese were attracted by trade opportunities in Malacca, Manila, Batavia (Jakarta). Some of the most detailed descriptions of Angkor Wat and other Southeast Asian civilizations came from Chinese travelers and monks. The Chinese eunuch explorer Zheng He (1371-1433) helped establish Chinese communities in parts of Java and the Malay Peninsula in part, many historians believe, to impose imperial Chinese control.

Beginning in the late-1700s, large numbers of Chinese — mostly from Guangdong and Fujian provinces and Hainan Island in southern China — began emigrating to Southeast Asia. Most were illiterate, landless peasants oppressed in their homelands and looking for opportunities abroad. The rich landowners and educated Mandarins stayed in China. Scholars attribute the mass exodus to population explosion in the coastal cities of Fujian and prosperity and contacts generated by foreign trade.

So many people left Fujian for Southeast Asia during the late 18th century and early 19th century that the Manchu court issued an imperial edict in 1718 recalling all Chinese to the mainland. A 1728 proclamation declared that anyone who didn't return and was captured would be executed.

Most of the Chinese who settled in Southeast Asia left China in the mid 19th century after a number treaty ports were opened in China with the signing of the Treaty of Nanking in 1842 after the first Opium War. The ports made it easy to leave and with the British rather than imperial Chinese running things there were fewer obstacles preventing them from leaving. British ports in Southeast Asia, particularly Singapore, gave them destinations they could head to.

A particularly large number of Chinese left from the British treaty ports of Xiamen (Amoy) and Fuzhou (Foochow) in Fujian province. Many were encouraged to leave by colonial governments so they could provide cheap coolie labor in ports around the world, including those in colonial Southeast Asia. Many Chinese fled the coastal province of Fujian and Zhejiang after famines and floods in 1910 and later during World War II and the early days of Communist rule. Many of the legal and illegal immigrants from China continue to come from Fujian.

Unlike some colonial powers, the British always saw their empire as primarily an economic concern, and its colonies were expected to turn a profit for British shareholders. Malaya’s obvious attractions were its tin and gold mines, but British planters soon began to experiment with tropical plantation crops – tapioca, gambier, pepper and coffee. But in 1877 the rubber plant was introduced from Brazil, and rubber soon became Malaya’s staple export, stimulated by booming demand from European industry. Rubber was later joined by palm oil as an export earner. All these industries required a large and disciplined labour force, and the British did not regard the Malays as reliable workers. The solution was the importation of plantation workers from India, mainly Tamil-speakers from South India. The mines, mills and docks also attracted a flood of immigrant workers from southern China. Soon towns like Singapore, Penang and Ipoh were majority Chinese, as was Kuala Lumpur, founded as a tin-mining centre in 1857. By 1891, when Malaya’s first census was taken, Perak and Selangor, the main tin-mining states, had Chinese majorities. [Source: Wikipedia]

Life of Chinese and Indians in Malaysia

Peranakan Chinese-Malay culture flourished in southwest Malaysia from the 17th century to its peak at the turn of the 20th. The Peranakan culture, also known as Baba-Nyonya — men were called babas, women were nyonyas — incorporated Dutch, English, Portuguese and Indian influences.

The Chinese mostly arrived poor; yet, their belief in industriousness and frugality, their emphasis in their children's education and their maintenance of Confucian family hierarchy, as well as their voluntary connection with tightly knit networks of mutual aid societies (run by "Hui-Guan", or non-profit organisations with nominal geographic affiliations from different parts of China) all contributed to their prosperity. In the 1890s Yap Ah Loy, who held the title of Kapitan China of Kuala Lumpur, was the richest man in Malaya, owning a chain of mines, plantations and shops. Malaya’s banking and insurance industries were run by the Chinese from the start, and Chinese businesses, usually in partnership with London firms, soon had a stranglehold on the economy. Since the Malay Sultans tended to spend well beyond their means, they were soon indebted to Chinese bankers, and this gave the Chinese political as well as economic leverage. At first the Chinese immigrants were mostly men, and many intended to return home when they had made their fortunes. Many did go home, but many more stayed. At first they married Malay women, producing a community of Sino-Malayans or baba people, but soon they began importing Chinese brides, establishing permanent communities and building schools and temples. [Source: Wikipedia +]

The Depression of the 1930s, followed by the outbreak of the Sino-Japanese War, had the effect of ending Chinese emigration to Malaya. This stabilised the demographic situation and ended the prospect of the Malays becoming a minority in their own country. +

The Indians were initially less successful, since unlike the Chinese they came mainly as indentured labourers to work in the rubber plantations, and had few of the economic opportunities that the Chinese had. They were also a less united community, since they were divided between Hindus and Muslims and along lines of language and caste. An Indian commercial and professional class emerged during the early 20th century, but the majority of Indians remained poor and uneducated in rural ghettos in the rubber-growing areas. +

Attitude of the Malays Towards the Chinese and Indians in Malaysia

Traditional Malay society had great difficulty coping with both the loss of political sovereignty to the British and of economic power to the Chinese. By the early 20th century it seemed possible that the Malays would become a minority in their own country. The Sultans, who were seen as collaborators with both the British and the Chinese, lost some of their traditional prestige, particularly among the increasing number of Malays with a western education, but the mass of rural Malays continued to revere the Sultans and their prestige was thus an important prop for colonial rule. A small class of Malay nationalist intellectuals began to emerge during the early 20th century, and there was also a revival of Islam in response to the perceived threat of other imported religions, particularly Christianity. In fact few Malays converted to Christianity, although many Chinese did. The northern regions, which were less influenced by western ideas, became strongholds of Islamic conservatism, as they have remained. [Source: Wikipedia +]

The one consolation to Malay pride was that the British allowed them a virtual monopoly of positions in the police and local military units, as well as a majority of those administrative positions open to non-Europeans. While the Chinese mostly built and paid for their own schools and colleges, importing teachers from China, the colonial government fostered education for Malays, opening Malay College in 1905 and creating the Malay Administrative Service in 1910. (The college was dubbed “Bab ud-Darajat” – the Gateway to High Rank.) A Malay Teachers College followed in 1922, and a Malay Women’s Training College in 1935. All this reflected the official British policy that Malaya belonged to the Malays, and that the other races were but temporary residents. This view was increasingly out of line with reality, and contained the seeds of much future trouble. +

The Malay teacher's college had lectures and writings that nurtured Malay nationalism and anti-colonialist sentiments. Due to this it is known as the birthplace of Malay nationalism. In 1938 Ibrahim Yaacob, an alumnus of Sultan Idris College, established the Kesatuan Melayu Muda (Young Malays Union or KMM) in Kuala Lumpur. It was the first nationalist political organisation in British Malaya, advocating for the union of all Malays regardless of origin, and fighting for Malay rights and against British Imperialism. A specific ideal the KMM held was Panji Melayu Raya, which called for the unification of British Malaya and Dutch East Indies. +

In the years before World War II, the British were concerned with finding the balance between a centralised state and maintaining the power of the Sultans in Malaya. There were no moves to give Malaya a unitary government, and in fact in 1935 the position of Resident-General of the Federated States was abolished, and its powers decentralised to the individual states. With their usual tendency to racial stereotyping, the British regarded the Malays as amiable but unsophisticated and rather lazy, incapable of self-government, although making good soldiers under British officers. They regarded the Chinese as clever but dangerous – and indeed during the 1920s and ‘30s, reflecting events in China, the Chinese Nationalist Party (the Kuomintang) and the Communist Party of China built rival clandestine organisations in Malaya, leading to regular disturbances in the Chinese towns. The British saw no way that Malaya’s disparate collection of states and races could become a nation, let alone an independent one. +

Migrants and the Malaysian Economy Before World War II

John H. Drabble of the University of Sydney wrote: “By the 1920s the large inflows of migrants had created a multi-ethnic population of the type which the British scholar, J.S. Furnivall (1948) described as a plural society in which the different racial groups live side by side under a single political administration but, apart from economic transactions, do not interact with each other either socially or culturally. Though the original intention of many migrants was to come for only a limited period (say 3-5 years), save money and then return home, a growing number were staying longer, having children and becoming permanently domiciled in Malaysia. The economic developments described in the previous section were unevenly located, for example, in Malaya the bulk of the tin mines and rubber estates were located along the west coast of the Peninsula. In the boom-times, such was the size of the immigrant inflows that in certain areas they far outnumbered the indigenous Malays. In social and cultural terms Indians and Chinese recreated the institutions, hierarchies and linguistic usage of their countries of origin. This was particularly so in the case of the Chinese. Not only did they predominate in major commercial centers such as Penang, Singapore, and Kuching, but they controlled local trade in the smaller towns and villages through a network of small shops (kedai) and dealerships that served as a pipeline along which export goods like rubber went out and in return imported manufactured goods were brought in for sale. In addition Chinese owned considerable mining and agricultural land. This created a distribution of wealth and division of labor in which economic power and function were directly related to race. In this situation lay the seeds of growing discontent among bumiputera that they were losing their ancestral inheritance (land) and becoming economically marginalized. As long as British colonial rule continued the various ethnic groups looked primarily to government to protect their interests and maintain peaceable relations. An example of colonial paternalism was the designation from 1913 of certain lands in Malaya as Malay Reservations in which only indigenous people could own and deal in property (Lim Teck Ghee, 1977). [Source: John H. Drabble, University of Sydney, Australia +]

“Prior to World War II the international economy was divided very broadly into the northern and southern hemispheres. The former contained most of the industrialized manufacturing countries and the latter the principal sources of foodstuffs and raw materials. The commodity exchange between the spheres was known as the Old International Division of Labor (OIDL). Malaysia's place in this system was as a leading exporter of raw materials (tin, rubber, timber, oil, etc.) and an importer of manufactures. Since relatively little processing was done on the former prior to export, most of the value-added component in the final product accrued to foreign manufacturers, e.g. rubber tire manufacturers in the U.S. +\

“It is clear from this situation that Malaysia depended heavily on earnings from exports of primary commodities to maintain the standard of living. Rice had to be imported (mainly from Burma and Thailand) because domestic production supplied on average only 40 percent of total needs. As long as export prices were high (for example during the rubber boom previously mentioned), the volume of imports remained ample. Profits to capital and good smallholder incomes supported an expanding economy. There are no official data for Malaysian national income prior to World War II, but some comparative estimates are given in Table 1 which indicate that Malayan Gross Domestic Product (GDP) per person was easily the leader in the Southeast and East Asian region by the late 1920s. +\

“However, the international economy was subject to strong fluctuations. The levels of activity in the industrialized countries, especially the U.S., were the determining factors here. Almost immediately following World War I there was a depression from 1919-22. Strong growth in the mid and late-1920s was followed by the Great Depression (1929-32). As industrial output slumped, primary product prices fell even more heavily. For example, in 1932 rubber sold on the London market for about one one-hundredth of the peak price in 1910 (Fig.1). The effects on export earnings were very severe; in Malaysia's case between 1929 and 1932 these dropped by 73 percent (Malaya), 60 percent (Sarawak) and 50 percent (North Borneo). The aggregate value of imports fell on average by 60 percent. Estates dismissed labor and since there was no social security, many workers had to return to their country of origin. Smallholder incomes dropped heavily and many who had taken out high-interest secured loans in more prosperous times were unable to service these and faced the loss of their land. +\

“The colonial government attempted to counteract this vulnerability to economic swings by instituting schemes to restore commodity prices to profitable levels. For the rubber industry this involved two periods of mandatory restriction of exports to reduce world stocks and thus exert upward pressure on market prices. The first of these (named the Stevenson scheme after its originator) lasted from 1 October 1922- 1 November 1928, and the second (the International Rubber Regulation Agreement) from 1 June 1934-1941. Tin exports were similarly restricted from 1931-41. While these measures did succeed in raising world prices, the inequitable treatment of Asian as against European producers in both industries has been debated. The protective policy has also been blamed for "freezing" the structure of the Malaysian economy and hindering further development, for instance into manufacturing industry (Lim Teck Ghee, 1977; Drabble, 1991). +\

Malaysia had very few secondary industries before World War II. The little that did appear was connected mainly with the processing of the primary exports, rubber and tin, together with limited production of manufactured goods for the domestic market (e.g. bread, biscuits, beverages, cigarettes and various building materials). Much of this activity was Chinese-owned and located in Singapore (Huff, 1994). Among the reasons advanced are; the small size of the domestic market, the relatively high wage levels in Singapore which made products uncompetitive as exports, and a culture dominated by British trading firms which favored commerce over industry. Overshadowing all these was the dominance of primary production. When commodity prices were high, there was little incentive for investors, European or Asian, to move into other sectors. Conversely, when these prices fell capital and credit dried up, while incomes contracted, thus lessening effective demand for manufactures. W.G. Huff (2002) has argued that, prior to World War II, "there was, in fact, never a good time to embark on industrialization in Malaya."

Early Twentieth Century of Malaysia

By the late nineteenth century, stable forms of government had emerged in Malaysia, and its economy and culture began to assume characteristics that would endure for decades. In the late 1800s, copious deposits of tin ore were discovered in the northwestern state of Perak, and this led to substantial growth in mining and the creation of administrative and transportation infrastructure to service the tin industry, which in turn enabled the growth of other industries along the west coast, such as rubber plantations. This early export diversification helped the economy respond to changing international prices for primary commodities and generally aided economic growth. [Source: Wikipedia +]

In addition, an ethnic Malay identity began to emerge in this period. Although ethnic Malays shared a common religion in Islam and a common language in Malay, their social identities were often localized to their respective states, and their political loyalties were generally to their respective sultans. By contrast, the Chinese and Indians in Malaysia often occupied particular economic niches, which helped instill in them more distinct and salient ethnic identities. This situation began to change in the early 1900s with the emergence of Malay cultural organizations and publications. These entities had numerous political differences but generally claimed that Malays share a common ethnicity and thus promoted the emergence of the Malay nation. +

Image Sources:

Text Sources: New York Times, Washington Post, Los Angeles Times, Times of London, Lonely Planet Guides, Library of Congress, Malaysia Tourism Promotion Board, Compton’s Encyclopedia, The Guardian, National Geographic, Smithsonian magazine, The New Yorker, Time, Newsweek, Reuters, AP, AFP, Wall Street Journal, The Atlantic Monthly, The Economist, Foreign Policy, Wikipedia, BBC, CNN, and various books, websites and other publications.

Last updated June 2015

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