MERDEKA (MALAYSIAN INDEPENDENCE)
Malaya achieved merdeka (independence) in 1957 and became an independent state within the Commonwealth of Nations and was admitted to the United Nations. It officially became an independent country on August 31, 1957. Merdeka Square in the heart of Kuala Lumpur is where the Malaysian flag was officially first raised in 1957. Today this event is commemorated with world's tallest flagpole. The constitution guaranteed special privileges for Malays. . The sultans retained a some power and control over the land, outlined by the constitution, after the British left.
Malaya gained independence through a political "bargain" that granted Malays political dominance while offering citizenship and economic freedom to the Chinese and Indian communities. This arrangement was formalized through the Alliance, which later became known as Barisan Nasional. The first prime minister was Tunku Abdul Rahman (1895–1960), the leader of the United Malays National Organization (UMNO), the dominant Malay political party and leader of the UMNO=led Alliance Party, a loose coalition of Malay, Chinese, and Indian parties.
The eventual Federation of Malaysia, formally established in 1963, included the states of the Malay Peninsula, the island of Singapore, and the states of Sarawak and Sabah on the island of Borneo. Since Singapore has a large Chinese population, Sabah and Sarawak were included to maintain a non-Chinese majority. Brunei was also included in the plan but declined to join. After political and economic discord arose, Singapore left the federation in 1965 to establish its own independent republic. After its formal creation in 1963 Malaysia was called the Federation of Malaysia. "Federation" was later dropped from the official name. Malaysia retained Malaya's place in the United Nations and the Commonwealth, and in 1967 it became one of the founding members of the Association of Southeast Asian Nations (ASEAN).
After Singapore seceded to form an independent, sovereign state, Malaysia was made up of: A) 11 states of Peninsular Malaya: Perak, Kedah, Selangor, Negri Sembilan, Johor, Pahang, Perlis, Kelantan, Terengganu, Malacca, and Penang; and B) two states on the island of Borneo: Sabah (formerly North Borneo) and Sarawak. Between Sabah and Sarawak lies the small sultanate of Brunei, whose wealth is derived from oil. In addition to the thirteen states, there are two federally administered territories: the capital city of Kuala Lumpur in the state of Selangor and Labuan. [Source: D. R. Sar Desai, World Education Encyclopedia, Gale Group Inc., 2001]
Road to Malaysia’s Independence
During World War II, the Malay Peninsula, Sarawak, and North Borneo were occupied by Japanese forces. When Britain reasserted control in 1946, it established the Malayan Union, which merged the former Federated and Unfederated Malay States with Penang and Malacca into a single Crown colony. The Union introduced sweeping changes: all residents of the peninsula were granted Malayan citizenship regardless of ethnicity, English became the official language, and the Malay rulers were required to surrender their sovereignty. [Source: Gale Encyclopedia of World History: Governments, Thomson Gale, 2008]
Although an independence movement began to take shape after the war, it was deeply constrained by ethnic divisions. The Malay, Chinese, and Indian communities were separated by religion, language, and economic interests. Malays in particular feared that independence under the Malayan Union framework would enable the economically dominant Chinese and the sizeable Indian population—together nearly half of Malaya’s population—to gain disproportionate political influence. Opposition from Malay elites and rulers led to the collapse of the Malayan Union in 1948. It was replaced by the Federation of Malaya, which restored significant authority to the sultans, strengthened state powers, and curtailed many of the political rights previously extended to non-Malay residents.
Despite this retreat, Britain continued to prepare Malaya for self-rule. A Communist insurrection that began in 1948 had the positive effect of spurring the movement for Malayan independence. The first free elections were held in 1955, producing a decisive victory for the Alliance, a coalition representing the Malay, Chinese, and Indian communities. Working with British officials, the Alliance drafted a constitution that established a federal system, a bicameral legislature, citizenship for non-Malays, and special provisions favoring Malays in the civil service, education, and business licensing. On this basis, the Federation of Malaya achieved independence in 1957.
After Malaysia Became Independent
Independence was followed by a period of instability due to an internal Communist uprising and an external confrontation with neighbouring Indonesia. In 1963 the north Borneo states of Sabah and Sarawak, along with Singapore, joined Malaya to create Malaysia. In 1969 violent interracial riots broke out, particularly in Kuala Lumpur, and hundreds of people were killed. The government moved to dissipate the tensions, which existed mainly between the Malays and the Chinese. Present-day Malaysian society is relatively peaceful and cooperative.
At independence, Malaya enjoyed substantial economic advantages. It ranked among the world’s leading producers of rubber, tin, and palm oil, and was also a significant exporter of iron ore. Revenues from these commodities generated healthy government surpluses, which were reinvested in industrial development and infrastructure. Like many developing countries in the 1950s and 1960s, Malaya—and later Malaysia—emphasized state-led planning, even though United Malays National Organization (UMNO) was not a socialist party. The First and Second Malayan Plans (1956–60 and 1961–65) promoted growth through public investment in industry and the rehabilitation of roads, ports, and other infrastructure damaged during the war and the Emergency. [Source: Wikipedia]
At the same time, the government sought to reduce dependence on primary commodities, which exposed the economy to volatile global prices. Policymakers recognized that demand for natural rubber would decline with the expansion of synthetic alternatives, a serious concern given that roughly one-third of the Malay workforce depended on rubber for employment. Growing international competition further eroded profitability, increasingly tying the industry’s survival to low wages and thereby entrenching rural Malay poverty.
The independent Federation of Malaya represented a continuation of the 1948 Persekutuan Tanah Melayu and its constitutional framework, which upheld the dominant political position of the Malays and protected their rights, privileges, and “special position.” Malay was established as the national language, the Malay Rulers became constitutional monarchs, and citizenship was extended to qualified non-Malays who pledged loyalty to Malaya and were guaranteed freedom to practice their religion, language, and culture. These arrangements were largely drawn from an UMNO–MCA–MIC Alliance memorandum submitted to the constitutional commission and later described as a “social contract.” Under Tunku Abdul Rahman, the new national government sought to promote inter-ethnic unity, advance economic and social development, and continue the fight against the communist insurgency. [Source: Cheah Boon Kheng, National University of Singapore, New Zealand Journal of Asian Studies 11, 1 (June 2009): 132, Wikipedia]
The constitutional settlement emerged from prolonged negotiations following the 1948 Federation of Malaya Agreement, in which Britain committed itself to eventual self-rule but faced deep ethnic divisions. British efforts to foster national unity focused on cooperation among non-communist communal leaders, with a broad understanding that political power-sharing would depend on non-Malay support for improving Malay economic conditions. Between 1952 and 1955, UMNO, the MCA, and the MIC formalized their cooperation in the Alliance, which won successive local, municipal, and federal elections and came to represent Malayan national interests. The Constitutional Commission appointed in 1956 produced a document balancing competing ethnic, religious, and linguistic claims: Malay was designated the national language while English retained official status for a transitional period; Islam became the state religion alongside guarantees of religious freedom; and Malay special privileges were preserved without undermining non-Malay civil rights. Ratified by the Federal Legislature on 15 August 1957, the constitution came into force with independence on 31 August 1957.
Federation of Malaysia, Brunei and Singapore
The original plan for Malaysia was to create a Federation of Malaysia comprised of states of Malaysia, joined with Crown colonies of Singapore, North Borneo (Sabah), Sarawak and the protectorate of Brunei. Singapore was "pressed into a Malaysian federation along with British colonial territories in Borneo.” The federation was proclaimed on September 15, 1963 but began to fall apart almost immediately after it was created.
Brunei withdrew from the Federation of Malaysia in 1963 to form its own state. One problem with the defection was the recently crowned Miss Malaysia, Catherine Loh, was from Brunei and she was expected to preside over independence ceremonies. In 1965 Singapore pulled out of the Malaysian Federation over fears that its mostly Chinese population would discriminated against in Malaysia, which was fighting a Communist insurgency supported by China.
After the Japanese surrender the Brooke family and the British North Borneo Company gave up their control of Sarawak and Sabah respectively, and these became British Crown Colonies. They were much less economically developed than Malaya, and their local political leaderships were too weak to demand independence. Singapore, with its large Chinese majority, achieved autonomy in 1955, and in 1959 the young socialist leader Lee Kuan Yew became Prime Minister. The Sultan of Brunei remained as a British client in his oil-rich enclave. Between 1959 and 1962 the British government orchestrated complex negotiations between these local leaders and the Malayan government. [Source: Wikipedia]
In 1961, Abdul Rahman mooted the idea of forming "Malaysia", which would consist of Brunei, Malaya, Sabah, Sarawak and Singapore, all of which had been British colonies. The reasoning behind this was that this would allow the central government to control and combat communist activities, especially in Singapore. It was also feared that if Singapore achieved independence, it would become a base for Chinese chauvinists to threaten Malayan sovereignty. To balance out the ethnic composition of the new nation, the other states, whose Malay and indigenous populations would cancel out the Singaporean Chinese majority, were also included.
Singapore requested inclusion in the Federation of Malaya in 1957 and again in 1959, but Malay leaders were uneasy about Singapore’s leftist politics and feared that the addition of Singapore would make Malaya a majority-Chinese state. In order to overcome such concerns, Singapore and Malaya met with the British and proposed an association that would include Brunei, Malaya, North Borneo (Sabah), Sarawak, and Singapore. The proposal generally neutralized Malay opposition because the projected federation’s states would all have indigenous majorities, but some groups in North Borneo, Sarawak, and Singapore opposed this proposal. Nevertheless, in 1962 and 1963 pro-merger political parties won elections in all of these territories. The 1957 constitution was amended to include numerous compromises among the states, and on September 16, 1963, the Federation of Malaysia came into existence. Brunei’s sultan, however, opted to remain independent since he was reluctant to be only one of 10 Malay rulers or to share Brunei’s oil revenues.
Konfrontasi
Newly independent Malaysia was soon faced with external threats from Indonesia and the Philippines. Indonesia opposed the Federation of Malaysia. For a number of years it supported guerilla attacks against Sarawak, Sabah and Malaya. In 1960, the northern states of Borneo, , which bordered on Indonesian Kalimantan, were somewhat reluctant to join Malaysia. Indonesian President Sukarno saw himself as the true leader of the Malay people. Indonesia supported an attempted revolution in Brunei and railed against British imperialism. The Indonesian army increased its budget. British forces provided assistance to Malaysia in their fight against the Indonesians. A brief war—known as Confrontation (Konfrontasi) —soon involved Britain, the United States, the Soviet Union, and China and eventually settled rival claims in Borneo.
The Indonesian government led by Sukarno contended that the new federation of Malaysia was a neocolonialist plan to prevent Indonesia and Malaysia from combining into a Greater Malaysia, an entity that Malaysian leaders had previously supported. Soon after the Federation of Malaysia was established, Indonesia attempted to spark a popular revolt in the fledgling country by engaging in acts of terrorism and armed confrontation in various places. However, these actions strengthened popular support for Malaysia, and in 1964 Australia, Britain, and New Zealand sent troops and military aid to Malaysia.
Sukarno was backed by the powerful Communist Party of Indonesia (PKI). Indonesia backed a Communist insurgency in Sarawak, mainly involving elements of the local Chinese community. The Indonesian army mounted offensives along the Kalimantan–Malaysia border and the PKI demonstrated in the streets in Jakarta. Indonesian irregular forces were infiltrated into Sarawak, where they were contained by Malaysian and Commonwealth of Nations forces.
See Separate Articles: INDONESIA' S RELATIONS WITH MALAYSIA factsanddetails.com ; INTERNATIONAL RELATIONS UNDER SUKARNO: NON-ALIGNMENT, ISOLATION, WAR WITH MALAYSIA factsanddetails.com
Philippine’s Claim to Sabah
In the 1960s there were disputes between the Philippines and Malaysia over Sabah in northeast Borneo, The Philippines objected to the formation of the Malaysian federation, which including Sarawak and Sabah in northern Borneo, claiming North Borneo was part of Sulu, and thus the Philippines. It was discovered, after an army mutiny and murder of Muslim troops in 1968 (the "Corregidor Incident") that the Philippine army was training a special unit to infiltrate Sabah.
Philippine Muslims regard themselves as descendants of the Royal Sultanate of Sulu. The Royal Sultanate of Sulu was an Islamic kingdom that ruled the islands and seas in the southern Philippines and northern Borneo long before the arrival of the Spanish in the 15th century.
In 1966 the new president, Ferdinand Marcos, dropped the claim, although it has since been revived and is still a point of contention marring Philippine-Malaysian relations. The Philippines’ differences with Malaysia did not involve organized violence but were longer lasting. A legally complex territorial dispute over Sabah led to the occasional suspension of diplomatic relations between 1963 and 1968, although relations were restored in December 1969. Relations were later strained as Sabah’s chief minister allowed Muslim insurgents from the Philippines to use Sabah as a haven until he lost an election in April 1976. [Source: Wikipedia]
Secession of Singapore
Malaysia’s independence was also followed by difficulties with Singapore. Under the terms of federation, Singapore accepted underrepresentation in the House of Representatives and also accepted that its residents could not participate as full citizens in Malaysia without fulfilling stringent naturalization requirements. Singapore’s chief minister Lee Kwan-Yew was, however, critical of Malays’ special status, and Malays perceived Lee’s efforts to reduce their special status as an attack on Malay rights and on the country’s racial harmony. In August 1965, officials from the federal government and Singapore held secret meetings to arrange for Singapore’s peaceful withdrawal from Malaysia, and Singapore became independent on August 6, 1965. [Source: Library of Congress, 2006]
Although Lee Kuan Yew supported the proposed merger, opposition was widespread elsewhere. In Singapore, the Socialist Front rejected the plan, arguing that it would allow Britain to retain indirect control over the region. Most political parties in Sarawak opposed the merger, while in Sabah—where formal political parties had yet to emerge—community leaders also expressed reservations. Although the Sultan of Brunei initially supported the proposal, it was strongly opposed by the Parti Rakyat Brunei. At the Commonwealth Prime Ministers’ Conference in 1961, Tunku Abdul Rahman elaborated on his proposal to critics, and in October secured conditional British approval, subject to consultation with the affected territories. To this end, the Cobbold Commission, chaired by Lord Cobbold, was appointed to assess opinion in the Borneo territories. The Commission endorsed the merger with Sabah and Sarawak, though it reported significant opposition in Brunei. In Singapore, a referendum showed that around 70 percent of voters supported merger, provided that the state retained substantial autonomy.
Brunei ultimately withdrew from the planned federation due to domestic opposition, disputes over oil royalties, and disagreement over the Sultan’s constitutional status. These tensions were exacerbated by an armed uprising led by the Parti Rakyat Brunei, which, although quickly suppressed, was viewed as a potential threat to the stability of the proposed federation. Following the Cobbold Commission’s report, the British government appointed the Lansdowne Commission to draft a constitution for Malaysia. The resulting document closely resembled the 1957 Malayan constitution, with modifications recognizing the special position of the indigenous peoples of Sabah and Sarawak and granting Sabah, Sarawak, and Singapore greater autonomy than the states of Malaya.
In July 1963, agreement was reached to establish Malaysia on 31 August 1963, comprising Malaya, Sabah, Sarawak, and Singapore, coinciding with Malaya’s independence anniversary and the granting of self-government to Sabah and Sarawak. However, strong objections from Indonesia and the Philippines delayed implementation. Indonesia denounced Malaysia as a form of “neocolonialism,” while the Philippines laid claim to Sabah. Opposition from the Indonesian government under Sukarno, together with resistance from the Sarawak United People’s Party, led to the formation of an eight-member United Nations mission to verify popular support for the merger in Sabah and Sarawak. Following its findings, Malaysia was formally established on 16 September 1963, with a population of approximately 10 million.
Malaysian Economy After Independence
Two long-term postwar challenges emerged: political fragmentation combined with continued British control and heavy dependence on a limited range of primary exports, such as rubber and tin. The first challenge was partly addressed through political restructuring, which was reinforced by International Bank for Reconstruction and Development (IBRD) reports in 1954 and 1963. These reports recognized Malaya as a national economy and promoted closer economic integration among the Malaysian territories. The second challenge, economic vulnerability, led to recommendations for diversification through import-substitution industrialization, though reliance on primary commodities persisted in the short term.
During the Japanese occupation in World War II, exports of primary commodities were restricted to the limited needs of the Japanese economy. As a result, large areas of rubber cultivation were abandoned and many tin mines were shut down, increasingly hampered by shortages of machinery and spare parts. Numerous businesses—particularly those owned by Chinese entrepreneurs—were seized and transferred to Japanese control. Severe reductions in rice imports forced much of the population to focus on subsistence food production. Large numbers of laborers were conscripted for military projects, including the construction of the Thai–Burma railway, where mortality rates were high. Overall, the war years brought severe disruption to the export economy, extensive damage to infrastructure such as roads and bridges, and a decline in public health. They also intensified inter-ethnic tensions, as the Japanese treated some groups—especially the Chinese—with particular brutality, while adopting a more accommodating stance toward indigenous communities. Among Malays, this experience contributed to a growing sense of ethnic nationalism. [Source: John H. Drabble, University of Sydney, Australia +]
Malaysia’s “Look East Policy” looked to Japan rather than the West for inspiration and invested heavily in public health, and saw GNPs soar, family size shrink and lifespan lengthen. Malaysia had an average of 6.5 percent growth from 1957 to 2005. Over the past several decades, the Malaysian economy has undergone a profound transformation. It has shifted from an agricultural base reliant on a narrow range of commodities—oil, natural gas, rubber, and palm oil—toward a more diversified, export-oriented economy with a strong emphasis on manufacturing and information technology. Malaysia’s development has been achieved despite structural constraints: it has been too small to compete directly with low-wage economies such as Indonesia, Vietnam, and China, yet has also lagged behind the more advanced East Asian “Tiger” economies such as South Korea and Taiwan.
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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 January 2026