HISTORY OF MALAYSIA
EVOLUTION TO MALAYSIA
During the late 19th century and in the first half of the 20th century most of the Malay Peninsula, like much of Southeast Asia, was under colonial rule. Territorial boundaries were frequently redrawn and renamed as the geopolitical spheres of influences of the colonial and ruling powers ebbed and flowed. Developing and exploiting their vast natural resources to meet the growing needs of rapidly industrializing Europe and North America, by the late 19th century colonial domination in Southeast Asia was primarily concentrated among three European powers (Great Britain, the Netherlands, and France) and the United States of America, which had gained control of the Philippines from Spain in 1898.
Southeast Asia During The High Colonial Age, 1870–1914
In advancing its economic policy interests direct British control over all the territories of the Malay Peninsula was progressively established from the last quarter of the 19th century to the second decade of the 20th century. The Pangkor Treaty of 1874 was a critical milestone in the formal relationship between Great Britain and the Malay states and the subsequent extension of British rule across the peninsula. British authority was progressively formalised and consolidated through British Malaya—also sometimes referred to as Pan-Malaya—which comprised three loosely integrated groups: the Straits Settlements, the Federated Malay States, and the Unfederated Malay States. In the early 20th century there was little, if any, sense of national identity among the people living in British Malaya, with their allegiance either being to their state of residence or their motherland. Malaya was essentially a political entity without a common vision for national development.
British Malaya
Straits Settlements
From April 1867 the three strategically located port cities of Penang, Malacca, and Singapore came to be ruled directly as the British Crown Colony of the Straits Settlements, having earlier been controlled as one administrative unit by the British East India Company.   These ports were initially used to bolster and protect the East India Company’s lucrative shipping trading route to China and elsewhere in Asia. The bulk of the world’s trade to eastern Asia passed through the Strait of Malacca. Penang island in the north of the peninsula was the first settlement to be secured through a treaty with Kedah in the late 18th century. Singapore, with its even more favourable trading location in the south, followed through a treaty with the Johore Sultanate in 1819. Malacca had already been surrendered by the Dutch and this arrangement was formalized through the Anglo-Dutch Treaty of 1824, which divided the Malay Archipelago into a British zone in the north and a Dutch zone in the south.

Each of the three Straits Settlements had free port status, meaning that shipping and cargo could enter and leave without taxation. They served as a springboard for British expansion of control of the peninsula’s Malay states. The Settlements—in particular Singapore, which was a flourishing southern port centre for the ever-growing trade of commodity exports and Western and Asian imports, benefited from the Malay States coming under British protection.

Through a series of treaties Great Britain progressively gained suzerainty over the nine Malay sultanates on the peninsula (Penang and Malacca were not sultanates). Four of these were eventually grouped together as the Federated Malay States and five as the Unfederated Malay States.
Federated Malay States: the Pangkor Treaty
Formulated by the British government and the local hereditary Malay leaders of Perak, the Pangkor Treaty of January 1874 resolved a Perak royal succession dispute in favour of Raja Abdullah and muted disputes between Chinese groups for control of the Larut tin mines (Swettenham 1975). Rapid growth of the tin trade from around the mid-19th century had brought with it an influx of Chinese labour to the tin-producing west coast states of Perak, Selangor, and Negri Sembilan. Fierce competition between Chinese secret societies, rival business and social groups formed around dialect and clan membership, coincided with disputes for the control of imposts on tin coupled with intense political rivalry among local Malay rulers. The British, responding to sections of the Straits Settlements trading community who were financing the mines, intervened to safeguard and strengthen their commercial interests in lands that they perceived to be rich in natural resources.

The Pangkor Treaty provided for the appointment of a British Resident to advise the Sultan of Perak in all matters affecting the general administration, including maintaining peace and security, overseeing the collection of revenue from taxation, and encouraging economic development. The Residential system thus involved British control over all aspects of the administration other than those touching on Islam and Malay customs. The treaty signaled a formal departure from the hitherto official policy of non-intervention by the British in the affairs of the Malay states. Similar treaty arrangements were reached around the same period with the rulers in Selangor, Negri Sembilan, and Pahang, with each accepting a British- appointed Resident.

In 1895 the Federated Malay States, combining the three neighbouring states of Negri Sembilan, Selangor, and Perak on the western side of the peninsula, and Pahang on the eastern side, formally came into existence through the Treaty of Federation, with Kuala Lumpur designated as the administrative capital of the four British protected states. The Federated Malay States was administered by a Federal Council, headed by a British High Commissioner and assisted by a Resident-General, with the United Kingdom being responsible for defence and foreign affairs. For administrative purposes, each state was subdivided into districts managed by British District Officers.
Unfederated Malay States
In 1826 Great Britain, through the East India Company, signed a secret treaty known as the Burney Treaty with the Kingdom of Siam. The rulers of the four northern and eastern Malay states, Kedah, Perlis, Trengganu, and Kelantan, were not present during the signing of the agreement. The British acknowledged Siamese sovereignty over those states, and Siam accepted British ownership of Penang and Province Wellesley (now Seberang Perai) a narrow hinterland opposite the island of Penang, and allowed the East India Company to trade freely in Trengganu and Kelantan. In 1909, the Anglo-Siamese Treaty was signed by the same parties and through it Siam agreed to give up its claim over Kedah, Perlis, Trengganu, and Kelantan, which formally came under British control, while Pattani remained Siamese territory. 

Johore, in the south of the peninsula, accepted a treaty of protection with Great Britain in 1885, and in 1914 yielded to British pressure to accept a resident British Advisor. Johore, while accepting protectorate status, remained outside of the Federated Malay States. Johore, which was multi-ethnic and had benefitted economically from its proximity to Singapore, was comparable to the four states of the Federated Malay States in its level of development.

In contrast with the Federated Malay States the Unfederated Malay States were more autonomous with their rulers enjoying some political discretion and they were not administered collectively. Each had a British Advisor in its administration. Apart from Johore which was more developed, these states were heavily rural and predominantly Malay in population composition, with employment being overwhelmingly concentrated in traditional agriculture and fishing.
Sabah and Sarawak
Sabah and Sarawak, who acquired colonial status in 1946, were administered separately from the Malay states on the peninsula and Singapore as well as from each other. Separated from the Malay Peninsula by some 500 kilometres of the South China Sea, these two vast, under-populated, and resource-rich states were a world away from the political and economic life of Malaya.

In 1881 the British North Borneo Chartered Company was established and began administering a territory on Borneo island that had been ceded by the Sultan of Brunei and the Sultan of Sulu. This territory of North Borneo, much later to be known as Sabah, was made a British Protectorate in 1888, still administered by the Company, which also administered Labuan until 1906 when it was joined to the Straits Settlements. Following Japanese occupation in 1941–1945 it became the British Crown Colony of North Borneo in July 1946.

Sarawak also existed as a British protectorate from 1888 and was governed by the Brooke family. The Sultan of Brunei elevated James Brooke, a British adventurer, as Rajah of Sarawak, a reward for his help in calming a rebellion in Brunei. Sarawak was gradually enlarged with additional grants of land from the Sultan, and the River Lawas area bought from the North Borneo Chartered Company in 1905.

Following the end of Japanese occupation in 1945, Sabah and Sarawak came under 17 years of direct British colonial rule. In September 1963 they became the largest member states of the Federation of Malaysia, albeit lagging economically and socially the states in the peninsula. Under the Federal Constitution, Sabah and Sarawak retain greater control over immigration, education, and the civil service than is enjoyed by the states in the peninsula.
Towards Malaysia
While there was no blueprint for self-determination British colonial dominance of the Malay peninsula had been irreversibly weakened by World War II in general, and the Japanese occupation in particular. After the Japanese surrender a short period of British Military Administration ensued until March 1946 when an attempt was made by the British to impose a Malayan Union. The Straits Settlements were dissolved. Penang and Malacca were then grouped with the Unfederated Malay States and the Federated Malay States to form the Malayan Union on 1 April 1946.
The Union was to have a single sovereignty and a common citizenship, by transferring jurisdiction over the states from the sultans to the British crown and by offering citizenship to Malays and non-Malays on equal terms. There was however widespread opposition to this British-imposed politically unified system of administration, particularly marked among the Malays in the Unfederated Malay States who feared the encorachment of the other races.

In February 1948 the British colonial government proposed a new agreement to replace the Malayan Union in the form of the Federation of Malaya comprising the 11 states on the peninsula and with the Malay rulers playing an important role in its administration thourgh a federal legislative council and an executive council presided over by the British High Commissioner. The federation, which survived despite various secession attempts by Penang, Kelantan, and Johore, provided the basis for subsequent British decolonization and the achievement of full independence in August 1957.

The evolution of the various territories that eventually came together to form Malaysia in 1963, and which all shared a common background of British colonial administration, is summarized in the figure below.

Further reading:

Cheah, B. K. 2001. Early Modern History 1800–1940. The Encyclopedia of Malaysia, Vol. 7. Singapore: Archipelago Press.

Heussler, R. 1981. British Rule in Malaya, The Malayan Civil Service and Its Predecessors, 1867–1942. Oxford: Clio Press.

Jackson, J. C. 1968. Sarawak: A Geographical Survey of a Developing State. London: University of London Press.

Purcell, V. 1967. Malaysia. New York: Walker and Company.

Sultan Nazrin Shah. 2017. Charting the Economy: Early 20th Century Malaya and Contemporary Malaysian Contrasts. Kuala Lumpur: Oxford University Press

Thio, E. 1969. British Policy in the Malay Peninsula, 1880–1910: Volume I, the Southern and Central States. Kuala Lumpur: University of Malaya Press.

RELATED SITES

ECONOMIC HISTORY OF MALAYA
c/o Asia-Europe Institute
University of Malaya,
50603 Kuala Lumpur


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