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Government and Economy

Malaysia - Government and Economy

The King

Malaysia has a king (Yang di-Pertuan Agong), an office which was established in 1957 when the Federation of Malaya (now Malaysia) became independent. The role of the king is mainly ceremonial, but the government is vested in him and a federal Council of Ministers. This council is headed by the Prime Minister, who is chosen by the king from the elected members of parliament. The king is an elected monarch, meaning that instead of automatically ascending to the throne by heredity, he is appointed to the role by the Malaysian Conference of Rulers. However, he is elected from an elite group. The monarch is chosen from the nine rulers of the Malay states which still have heredity royal rulers. These nine rulers also make up the Council which decides the next monarch. From these nine state monarchs, the king is elected to a five-year term. After a ruler has served as the king, he may not stand for election again until each ruler from every other state has also stood for election.


Malaysia has a parliament which is split into an upper house (Dewan Negara) and a lower house (Dewan Rakyat), this is known as a bicameral system. The upper house seats 70 senators. 26 of these senators are elected by the state legislative assemblies with each state in the Federation represented by two senators. The other 44 are appointed by the King, from this selection, four senators are chosen to represent the federal territories.

The lower house seats 222 Members of Parliament who are elected by the general public in general elections, according to the first-past-the-post voting system. Both the upper and lower houses meet at the Malaysian Houses of Parliament in the country’s political capital, Kuala Lumpur. All bills must be passed by both the upper and the lower house before they are given Royal Assent by the king.

Each of the 13 Malaysian states has a state legislative assembly which is made up from elected representatives from single member constituencies who are chosen during state elections. The assemblies have the power to enact state laws in accordance with the Constitution of Malaysia. The party with the majority in each of the state legislative assemblies then forms the state government. The leader of the majority party becomes the Chief Minister (menteri besar) for that state.


Elections take place every 4-5 years, and any Malaysian citizen over the age of 21 may vote in the elections, but only once he or she has officially registered in the Voters’ Registry with the Electoral Commission. After verifying their identity at a polling station, each voter is given two paper ballots: one for deciding the parliamentary seat of the constituency and one for deciding the state assembly seat. As with any secret ballot, the voter marks his/her choice on the ballot and folds it up, dropping each slip into separate boxes for state assembly and parliamentary seats. British expatriates in Malaysia may only vote if they have successfully undergone the registration or naturalization process to officially become a Malaysian citizen.


Malaysia has the 3rd largest economy of any of the countries in South-East Asia. Its economy is defined as a newly industrialised market economy, which is relatively open. The state does play an important factor in guiding levels of economic activity, but its direct intervention in the economy is decreasing year on year.

The public debt of Malaysia has stood at around 50% of GDP for the last few years and its credit rating is a single A. Malaysia’s main import and export trading partners are unsurprisingly mainly its neighbours. Singapore, China, Japan, Thailand and Indonesia all play vital roles in the economy of the country by providing crucial trade links. The USA is also an important link as they provide around 8% of both the country’s exports and imports.

Malaysia’s exchange rate was fixed after an economic crisis in 1997, so that it was worth 3.8 against the US dollar. This system was in place until 2005, when the free floating system was adopted once again. Today, the Malaysian ringgit is traded freely on an international basis.

Expat Health Insurance Partners

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