In 1963, Malaya along with the then-British crown colonies of Sabah (British North Borneo), Sarawak and Singapore, formed Malaysia. The Sultanate of Brunei, though initially expressing interest in joining the Federation, withdrew from the planned merger due to opposition from certain segments of its population as well as arguments over the payment of oil royalties and the status of the Sultan in the planned merger. The actual proposed date for the formation of Malaysia was 31 August 1963, to coincide with the independence day of Malaya and the British giving self-rule to Sarawak and Sabah. However, the date was delayed by opposition from the Indonesian government led by Sukarno and also attempts by the Sarawak United Peoples Party to delay the formation of Malaysia. Due to these factors, an 8-member United Nations team has to be formed to re-ascertain whether Sabah and Sarawak truly wanted to join Malaysia.
The early years of independence were marred by the conflict with Indonesia over the formation of Malaysia, Singapore's eventual exit in 1965, and racial strife in the form of race riots in 1969. The Philippines also made an active claim on Sabah in that period based upon the Sultanate of Brunei's cession of its north-east territories to the Sulu Sultane in 1704. The claim is still ongoing. After the 13 May Race riots of 1969, the controversial New Economic Policy—intended to increase proportionately the share of the economic pie of the Bumi Putras, which includes the majority Malays, but not always the indigenous population) as compared to other ethnic groups—was launched by Prime Minister Abdul Razak. Malaysia has since maintained a delicate ethno-political balance, with a system of government that has attempted to combine overall economic development with political and economic policies that promote equitable participation of all races. (
Between the 1980s and the mid-1990s, Malaysia experienced significant economic growth under the premiership of Mahathir Bin Mohammed The period saw a shift from an agriculture-based economy to one based on manufacturing and industry in areas such as computers and consumer electronics. It was during this period, too, that the physical landscape of Malaysia has changed with the emergence of numerous mega-projects. The most notable of these projects are the Petronas Twin Towers (at the time the tallest building in the world, and still retains its status as the tallest twin building), KL International Airport (KLIA), North-South Expressway, the Sepang International Circuit, the Multimedia Super Corridor (MSC), the Bakun hydroelectric dam and Putrajaya, the new federal administrative capital.
In the late 1990s, Malaysia was shaken by the Asian Financial Crisis as well as political unrest caused by the sacking of the deputy prime minister Dato' Seri Anwar Ibrahim. In 2003, Dr Mahathir, Malaysia's longest serving prime minister, retired in favour of his deputy, Abdulla Ahmad Badawi. On November 2007, Malaysia was rocked by two anti-government rallies. The 2007 Bersih Rally numbering 40,000 strong was held in Kuala Lumpur on 10 November campaigning for electoral reform. It was precipitated by allegations of corruption and discrepancies in the Malaysian election system that heavily favour the ruling political party, Barisan Nasional, which has been in power since Malaysia achieved its independence in 1957. Another rally was held on 25 November in the Malaysian capital lead by HINDRAF. The rally organiser, the Hindu Rights Action Force, had called the protest over alleged discriminatory policies that favour ethnic Malays. The crowd was estimated to be between 5,000 and 30,000. In both cases the government and police were heavy-handed and tried to prevent the gatherings from taking place. In 16 October 2008, HINDRAF was banned as the government labelled the organisation as "a threat to national security".
