TIME
Wednesday, Nov. 28, 2007
By Hannah Beech/Kuala Lumpur

Revathi Masoosai should be the perfect embodiment of Malaysia. Her ethnic Indian parents were both born in the ancient port of Malacca in 1957, the very year the colony of Malaya gained independence from the British. Her father was Christian, her mother came from a Hindu family, but they both officially converted to Islam, the religion practiced by Malaysia’s majority Malays. Yet Revathi does not feel welcome in her ethnically and religiously diverse homeland. According to Malaysian law, Muslims can only marry other Muslims. Revathi, who was actually raised in the Hindu faith, had fallen in love with a Hindu man. But because of her parents’ earlier conversion, she was deemed a Muslim and a judge refused to change her religious status. Revathi’s marriage was never recognized by the state, nor was her daughter’s birth. Earlier this year, an Islamic Shari’a court ordered her to spend six months at a Faith Rehabilitation Center, where she had to wear a Muslim headscarf and pray five times a day. “The constitution says there’s freedom of religion in Malaysia, but I have not felt that freedom,” says the 30-year-old homemaker. “How can they force me to believe something I do not believe? What has happened to my country?”

Malaysia commemorated 50 years of independence this past summer, but the celebratory pageantry masked an underlying identity crisis. In many ways, the country is a success story, the very model of a modern Asian nation. Buoyed by oil revenue, capital Kuala Lumpur bristles with skyscrapers and industrial parks, while a massive administrative capital called Putrajaya has risen from what were palm-oil plantations two decades ago. In September, Malaysia’s first astronaut blasted into space, his flight mirroring the nation’s ambitions. Poverty has been reduced from half the population at independence to just 5% today, as an affirmative-action policy created a prosperous Malay middle class that had never before existed. In Asia, only the nations of Singapore, Japan, South Korea and Brunei rank higher than Malaysia in the U.N.’s Human Development Index. Most impressively, while other multiethnic nations like Yugoslavia, Sri Lanka and Rwanda fractured into conflict, Malaysia has largely kept peace between groups that include Muslim Malays (about 50%); Buddhist and Christian Chinese (roughly 25%); Hindu, Sikh and Muslim Indians (less than 10%); and indigenous peoples, who abide by many faiths including animism (around 10%). “Our biggest achievement is that we have not only survived but we have progressed and thrived,” Prime Minister Abdullah Ahmad Badawi told TIME in a written statement in August.

Yet for all these accomplishments, Malaysia is suffering from midlife anxiety. Increasingly, the nation’s diverse ethnicities live in parallel universes, all Malaysians, yes, but seldom coming together as they once did for meals or classroom discussions. Religion, too, has divided the nation, as some Malaysians assert that a conservative strain of Islam is causing a segment of the faith’s worshippers to withdraw from a multicultural society. Malaysia’s economy is being challenged by regional competitors, with many questioning the future of the affirmative-action scheme that has served as the country’s financial bedrock. At the same time, a nation that once prided itself on its robust institutions is finding these foundations eroding. Little wonder, then, that up to a million Malaysians, mostly the white-collar talent needed to keep the economy humming, have simply abandoned the country since independence; by the government’s own estimate, 70,000 Malaysians, the majority ethnic Chinese, have renounced their citizenship over the past two decades, although far more have emigrated without officially giving up their nationality. Many local companies are leaving, too, investing so much offshore that as much money now leaves Malaysia as is attracted to it. “There’s no question we accomplished a lot over the past 50 years,” says Ramon Navaratnam, president of the Malaysia office of Transparency International, the corruption watchdog. “But if we don’t face up to [our] problems, we will not be able to sustain the same level of success over the next 50 years.”

Minority Report

The man who must minister to Malaysia’s malaise is Abdullah. When he was handpicked for power four years ago by longtime Prime Minister Mahathir Mohamad, Abdullah was dismissed as a political lightweight. But Abdullah surprised even his harshest critics. He vowed to combat corruption, liberalize the press and restore the reputation of a judiciary whose independence had been repeatedly questioned during the latter part of Mahathir’s 22-year rule. To underscore Malaysia’s commitment to economic efficiency, Abdullah initially scaled back several of Mahathir’s prestige megaprojects, including a money-losing national auto company and a massive dam in Borneo. The son of a moderate Muslim cleric also brought a measure of spiritual authority to the ruling coalition, which had been fighting the rise of an Islamic-based political party that attracted Malay votes even as it alienated non-Malays. “The important thing is that everyone’s rights are protected,” Abdullah told TIME. “Malaysia is the country that it has become because of the contributions of all the different races and people that populate the country.”

But honeymoons don’t last forever. Abdullah will almost certainly win re-election in polls expected early next year, because of the well-oiled political machine of the governing National Front, which has dominated the country since independence. Yet the 68-year-old PM’s tenure is dogged by the same ills — alleged graft, inefficiency, ethnic and religious rivalry — that he had promised to combat. Questions about Abdullah’s leadership came to the fore earlier this year when his deputy, Najib Razak, stunned the country by defining Malaysia as an Islamic state, going so far as to say the country had never been secular. (The nation’s constitution is unclear about the issue, stating both that Islam is the religion of the federation and that freedom of religion is guaranteed.) Abdullah told TIME, “We are not a secular state, but neither are we a theocracy.” But such hedging seems unlikely to satisfy all constituencies. Liow Tiong Lai, the head of the youth wing of the Malaysian Chinese Association, part of the usually cohesive National Front coalition, asserted that Malaysia was indeed a secular nation. Bernard Giluk Dompok, a minister in Abdullah’s Cabinet who is Christian, concurs. “If we define Malaysia as an Islamic state,” he told TIME, “the implication is that non-Muslims do not belong.”

Abdullah points out that the ruling coalition is composed of parties representing various ethnic communities. “We have adopted a power-sharing formula for over 50 years now, so every community gets a seat at the table when it comes to governing the country,” he told TIME. “Everyone participates, and everyone’s voice is heard.” Many non-Malays don’t agree — and their sense of alienation starts early. Government primary schools that used to be essentially secular now feature Islamic prayer halls. Today, only 6% of Chinese parents send their children to such schools, while in the 1970s more than half did. Chinese students have a much harder time securing places in Malaysia’s public universities because of quotas, so those with sufficient funds head overseas. Many do not return. Those who do find workplaces are increasingly divided along ethnic lines. “[In the 1970s] there was a bar at Parliament, and we would all socialize together,” recalls Lim Kit Siang, the Chinese head of the opposition Democratic Action Party, who has served off and on in Parliament since 1969. “Now, everything is separate, and non-Malays feel like second-class citizens in their own country.” Many ethnic Indians, whose economic gains have lagged behind those of Malaysia’s other communities, feel the same way. On Nov. 25, thousands gathered under the shadow of Kuala Lumpur’s Petronas Towers, the world’s tallest twin buildings, for a rare protest to call attention to what they believe is an unwillingness by the government to address the root causes of their marginalization. The demonstrators were dispersed by tear gas; the day before, three rally organizers had been arrested on sedition charges, but were later given a conditional discharge.

A Gap in Wealth

If Malaysia’s races are separating, it is partly because of the legacy of the New Economic Policy (NEP), an ethnically based affirmative-action plan instituted in 1971 to create opportunities for the economically disadvantaged Malays. During colonial times, Chinese traders were favored by the ruling British, and they controlled much of the economy upon independence. Malays and indigenous peoples — collectively known as bumiputras, or “sons of the soil” — wanted to redress that economic imbalance. The NEP, which offers preferential treatment to bumiputras in everything from education to politics, has lifted millions of Malays into the middle class. But some analysts argue that the NEP has outlived its usefulness and has been hijacked by a Malay ruling élite that uses the race-based policy to secure sweetheart deals for themselves while leaving poor Malays in the dust. Indeed, the World Bank estimates that despite Malaysia’s impressive $10,000 per capita annual income, the country is burdened with the largest income disparity in all of Southeast Asia. “The Malays are being let down by their own people,” says Transparency International’s Navaratnam, “because the rich are getting richer while the poor are staying the same.”

Leading the political charge against the NEP is a Malay, former Deputy Prime Minister Anwar Ibrahim. In 1999, Anwar was jailed for six years on sodomy and corruption charges that human-rights activists characterized as politically motivated. Now he has emerged as de facto leader of the opposition People’s Justice Party, which is campaigning to dismantle the race-based NEP and replace it with a class-based scheme that would, say, help poor Indians while preventing rich Malays from taking handouts they don’t need. Anwar blames the NEP both for breeding corruption and decreasing competitiveness, since many lucrative state contracts are reserved for bumiputra companies. “Globalization does not treat kindly people who feel as though they must be protected because of injustices from colonial times,” says Anwar. “If we don’t want to be displaced by an up-and-coming country like Vietnam, we must play by the rules of the global game.”

Local rules need to be followed, too, if Malaysia is to continue attracting foreign investment. In September, two Shari’a court officials were detained over corruption charges. In the same month, 1,000 lawyers and activists, including the country’s Bar Council president, took to the streets to highlight what they consider deteriorating judicial independence and integrity. Their protest was galvanized by a video clip that appeared to show a well-known lawyer helping fix top bench appointments. (The government says it will set up a royal commission to investigate the video.) “I used to be proud to say I was a Malaysian lawyer,” says Karpal Singh, a prominent human-rights lawyer. “But now? The system is getting worse.”

Indeed, the courts may actually be exacerbating Malaysia’s divisions. Revathi’s case is only one of several that have challenged the complicated legal system set up by Malaysia’s founding fathers. The country employs a dual-track structure in which Muslims are bound by an Islamic Shari’a court on issues such as family law, while non-Muslims are governed by civil courts. For many years, overlapping issues, as in the case of intermarriage, were quietly negotiated by both courts. But now, Shari’a courts are increasingly refusing to accept conversions out of Islam, arguing that apostasy is illegal in the Muslim faith. At the same time, civil courts have become less willing to rule on religious issues they say are the domain of the Muslim legal system. In a landmark case earlier this year, the nation’s highest court decided that it had no jurisdiction to deem a person non-Muslim, because that is the Shari’a courts’ prerogative.

The mainstream press has avoided the topic because of a government directive ordering media to maintain “peace and harmony” by blacking out debate over Islam’s role in the state. The censorship disappoints journalists who were pleased when Abdullah initially allowed for more freedom of expression than predecessor Mahathir. In October, Malaysia received its worst-ever ranking in the worldwide press-freedom index compiled by watchdog Reporters Without Borders, falling by 32 places to No. 124. The drop was due, in part, to two separate cases in which a blogger and a publisher of an online newspaper were both pulled in for official questioning. “There’s lots of intimidation toward people who speak out,” says Steven Gan, editor of the online publication Malaysiakini. “Instead of saying, we’re all Malaysians who need to unite and equip ourselves against our competitors in a globalized world, the government is pursuing divisive politics and making the media the scapegoat.”

Back to the Future

Malaysiakini has continued its aggressive coverage. The online paper has been particularly influential in investigating massive cost overruns in the building of a free-trade zone at Port Klang, not far from Kuala Lumpur. The latest official figures show that the project has ballooned to about $1.4 billion, more than double what was projected in 1999. Critics contend that graft has plagued the project, undercutting Abdullah’s much-vaunted anticorruption drive. “Thus far, Abdullah’s promises to curb corruption remain just that: promises,” says Ramasamy Palanisamy, a former professor of politics at the National University of Malaysia. At the same time, the PM, who once earned plaudits for cutting back Mahathir’s excesses, has signed off on several megaprojects, including a reinstatement of the controversial dam in Borneo.

Concerns about corruption could strengthen the political opposition. The Islamic Party of Malaysia gained control of two of Malaysia’s 13 states in 1999 after convincing voters that fighting graft was a fundamental Muslim virtue. The party lost power in one of those states three years ago but is predicting a rebound in next year’s polls. Anwar’s party is optimistic, too, and has been campaigning on a clean-government platform. Realistically, neither opposition party is strong enough to challenge the ruling coalition. But even a few lost seats would be an embarrassment to a governing élite that has controlled the nation since independence.

Under the rule of the National Front, Malaysia has come a long way. Looking back at the past 50 years, Deputy Prime Minister Najib, himself tipped as a possible future leader of Malaysia, told TIME: “We have arrived. It has been an era of transformation in more than one sense: physical, social, economic.” But if the next half-century is to be as uplifting, Malaysia will have to heal the divisions that are now all too evident in its society.

— with reporting by Baradan Kuppusamy/Kuala Lumpur