The Saad Lecture

Islam and its Contemporary Manifestations in Malaysia

  1. I am delighted to be here in the beautiful city of Wellington to address such an eminent gathering of scholars. The weather outside may be considerably cooler and windier than in Kuala Lumpur but I find the people to be extremely warm and hospitable. I am particularly touched by the generosity and concern of those who have made this event possible. Thank you one and all.
  2. I have followed with interest the activities of the Malay Studies Research Centre for a number of years now. I consider it to be one of our most successful efforts at promoting cross-cultural academic research and understanding. It therefore gives me a great deal of pleasure to have been invited to give this year’s Saad Lecture. I hope that what I have to share with you this evening will further broaden and enrich the discourse that is taking place between New Zealand and Malaysia.
  3. Our two countries have relationship that spans more than five decades. It began with our Commonwealth ties, expanded through education, and deepened through shared security concerns. It is now broadening across a wide field. Our education ties have been extremely important, starting with the Colombo Plan in 1950. An estimated 13,000 Malaysians have been educated in New Zealand and the number grows each year. On security, New Zealand has stood with Malaysia in our hour of need when military personnel from this country were sent to Malaysia to help fight the communist insurgency in the 1950s. I was pleased to learn that the New Zealand special forces, the Special Air Service, was formed in 1955 in my home state of Perak. The SAS returned to Malaysia in 1965-66 to assist us during the confrontation with Indonesia. Both countries have been members of the Five-Power Defence Arrangement since 1971, under whose auspices, joint military exercises are conducted on a regular basis. We now have a host of bilateral agreements covering economic matters, education, science and technology, transport and tourism.


  1. The subject of my lecture this evening is “Islam and its Contemporary Manifestations in Malaysia”. That this is a subject of relevance does not seem to be in much doubt. It is typical of the kinds of inquiries that are made today, particularly on the part of an often-bemused West. It is interesting, however, to determine exactly why it is of interest. Obviously, it may be driven by nothing more than intellectual curiosity. But there is, however, a deeper and less articulated subtext. There is the feeling that Islam is somehow incompatible with modernity. In the eyes of the world and especially the West, Islam and Muslims are synonymous with backwardness, poor development and intolerance. Islam and Muslims are seen to be the antithesis of dynamic economic growth and multicultural existence.
  2. I am not in the least surprised by this perception. Though the Muslim world has its outstanding examples of success and progress, it also abounds with poverty, low development and hostility towards narrow secularism and the West in particular. A third of the 57 members of the Organisation of Islamic Conference (OIC) have a per capita income of less than US$500. One in three persons in Muslim countries is illiterate. On virtually every indicator of human development and progress ⎯ income level, employment, education, health and gender equality ⎯ the Muslim world lags well behind the global average. The association of Islam and Muslims with terror, violence and undemocratic rule, though grossly distorted, adds to the negative image. The media has plenty to do with creating and propagating distorted images of the Muslim world.
  3. The woes of the Muslim world, however, have hardly anything to do with the religion. Rather they have much to do with geography (Muslim as well as non-Muslim countries in sub-Saharan Africa alike are among the poorest of the poor), lack of resources, cultural traditions and poor economic policies. Where religion does have a bearing, it has been the failure to correctly understand the true teachings of Islam that have been a hindrance to the progress of the Muslim world. Unfortunately Muslims themselves have sometimes misinterpreted Islamic teachings.
  4. Islam’s concept of human development is eminently suited to progress and advancement, completely compatible with modernity, technological progress, economic development and good governance. Islam calls on its followers to be continually acquiring knowledge and to strive for economic wellbeing. Among the Abrahamaic religions, Islam is the least hostile to commerce. It was traders who first brought Islam to the Malay peninsula, through peaceful commerce not conquest.
  5. Amidst a trend of underachievement in much of the Muslim world, Malaysia has demonstrated that economic development is not incompatible with Islam. It has achieved high human development status in the UNDP rankings. It is the most competitive Muslim economy in the world. It has stood out as a country that has not gone down the path of religious radicalism. Instead, it has demonstrated that moderation and modernisation are well within the bounds of what is possible. We in Malaysia recognise that our political and economic success is the result of the collective efforts of all Malaysians, of all races and religions. It is this spirit of peaceful acceptance that has enabled us to achieve much despite the many difficulties we face.

Islam in Contemporary Malaysia

  1. Despite being a Muslim-majority society, the presence and needs of other communities are neither taken for granted nor taken lightly. Upon the country gaining independence in 1957, the constitutional guarantee of the role of Islam as the “official religion of the Federation”, with the proviso that the freedom to practice all other religions in peace and harmony was also guaranteed, was consensually embraced and adopted by all communities. Community aspirations, at that period, were dedicated largely to realizing nationalist goals, and confined principally to the realms of political influence. Even the original founders of the Pan Islamic Party of Malaysia ⎯ Burhanuddin Al-Helmi, Zulkifli Mohamad and Asri Hj Muda ⎯ propagated a form of nationalist rather than Islamist politics.
  2. Following the events of May 13th 1969 and subsequent efforts to redefine social and political relations in Malaysia, Islam, as a defining factor in Malay identity, was afforded an increasingly overt and prominent role. The writings of scholars such as Naguib Al-Atas sought to examine and envision an intellectual tradition of Islam within Malay life that could lead to a harnessing and redefinition of religion in the life of Muslims in Malaysia. This, in turn, inspired the beginnings of Islamic activism in Malaysia through the founding and later, considerable influence, of groups such as ABIM (Muslim Youth Movement). This was perceived by non-Muslim communities as a challenge to the more traditional, and familiar, aspects of Malay notions of identity and politics. It is important to note, however, that on an intellectual level, groups such as ABIM were committed and did introduce a tradition of inter-faith dialogue between religions in Malaysia.
  3. Non-Muslim attitudes and perceptions of Islam ⎯ within the political, social and cultural dimensions ⎯ have been broadly shaped and defined by the vicissitudes and shifts in recent Malaysian history and the increasingly prominent role that Islam has come to perform in aspects of public life and policy-making. While there continues to be a firm and consensual respect of religion between Malaysia’s diverse communities at the levels of pure religion (the faith and ritualistic life of religion), the accentuation of Islam in public life has inspired a complex combination of apprehension, accommodation and adaptation within the non-Malay constituency in Malaysia about aspects of applied religion (the practice and influence of religion over aspects of social and political life).
  4. The events following the Iranian revolution and the perceived failure of nationalism (i.e. secular politics) particularly in the countries of the Middle East, had a significant impact on the Muslim world. Within Malaysia, it led to a lasting transformation in the attitudes of Muslims towards the role of religion in public life. Significant events include the reinvention of PAS into an ulama-led movement prescribing the creation of an Islamic state, and within the politics of the mainstream, an effort to neutralize prospective dissent of an Islamic variety through incorporation. As articulated by Mahathir Mohamad, on the eve of his premiership in a significant book entitled The Challenge, Islam was to perform an increasingly prominent role in the form of penerapan nilai-nilai Islam (inculcation of Islamic values) in the Mahathir administration.
  5. Non-Muslim attitudes at this time were devoted largely to efforts at checking the prospect of the creation of an Islamic state and seeking constitutional guarantees for the concept of freedom of religion. At a social level, Islamization led to a harnessing also of religious identity among non-Muslim communities and the formation of groups such as Malaysian Consultative Council of Buddhism, Christianity, Hinduism, Sikhism and Taoism. Within the realms of politics, Islamization led to a further assertion by non-Muslim political parties of the secular nature of the Malaysian state.
  6. Perceived tensions between Muslim and non-Muslim communities have occurred largely within the controlled realms of public administration and the legal framework. Events such as 9/11, while of considerable global importance, have nevertheless had little institutional impact in Malaysia as a result of a generally accommodative administrative structure that has allowed for the resolution of religious tensions within its boundaries.
  7. Nevertheless, religious tensions have heightened in the past few years as non-Muslim communities seek greater institutional and legal rights following the period of Islamization. Over the past few years, there exists a perception among non-Muslim communities that existing administrative structures have failed to address complicated issues including proper registration of conversion, child custody involving Muslim-non-Muslim individuals and rights to construct non-Muslim places of worship. The government takes these concerns seriously and is committed in the effort to find a workable solution to these problems.
  8. Despite increasing Islamization, we should not overdraw the influence or role of Islam in public life in Malaysia. We generally adopt and do things consistent with Islamic teachings, but their primary inspiration and content need not be Islamic. For instance, our democratic system is consistent with Islam, but its primary origin is Western and it cannot be distinguished from democracy practiced in many non-Muslim countries. We have Islamic banking, but Muslims are free to use conventional banking. Muslims are subject to syariah law only in a limited way; they live by secular law in many areas. Muslims can choose to vote and be members of Muslim or non-Muslim political parties. Indeed, one of the country’s greatest achievements has been the ability to blend with some ease, Muslim and non-Muslim influences and institutions.

Role of the Sultans

  1. At this time, I would like to draw attention to a constitutionally-provided stabiliser that is not often talked about but which plays an important role in the way Islam is practiced in Malaysia. This is the institution of monarchy. Malaysia has one king (Yang di Pertuan Agong) and nine sultans. The sultans reign for life in their respective states. The king is elected but he is a sultan in his own state. He is elected not by universal suffrage, but by the other sultans and his term of office is five years. He can be removed, but only by the other sultans. The election and limited terms of office of the king are features unique to the Malaysian monarchy.
  2. The sultanates have been in existence for over six centuries. The first kingdoms were imported by Hindu traders based on the maharaja model. The Arab traders who followed brought Islam and converted the kingdoms to sultanates in the Middle Eastern tradition. In the nineteenth century, the sultanates proved a stumbling block to British ambitions for outright colonies resulting in the establishment of the residency system, a form of indirect colonialism, which nevertheless preserved the semblance of Malay sovereignty, so as not to provoke the resistance of their subjects.
  3. The British, however, were percipient in one important respect. They were careful to accord reserve powers to the sultans on sensitive matters pertaining to Malay custom and religion. The principle applies to this day. The sultans remain not only as constitutional head of their respective states, but also as head of Islam.
  4. As a general rule, and on most matters, the sultans, as constitutional heads of state, are constitutionally bound to act on the advice of the head of government. An important exception is Islam. The sultans are the custodians of Islam in Malaysia. They have wide powers and discretion, which are enshrined in the federal and state constitutions. As a result, the sultans have a great deal of influence in the direction of religious matters.
  5. They appoint the important religious officials ⎯ the mufti and the judges and officials of the syariah court. They oversee the establishment, activities and administration of mosques and other religious institutions. They are empowered to issue formal accreditation without which religious teachers and missionaries are not allowed to practice. Fatwas (religious edicts) require the prior consent of the sultan before they can be put into effect.
  6. The monarchy, by its very nature, is a force for moderation over extremism. In this sense, it can be seen as a bedrock of the constitutional process. Increasingly, the sultans have made their voices heard on important issues affecting the Muslim community in Malaysia, most importantly against extremism and chauvinism.
  7. For whilst the sultans themselves are, without exception, Malay and Muslim, the people of Malaysia are Malays, Chinese, Indians, Eurasians, Ibans, Kadazans and other tribal people. Malaysians in the main are Muslims, Buddhists, Hindus and Christians. Not only that, but the countervailing strengths of the multiethnic profile of our population and the inherent dangers in these divisions have been compounded by our less orthodox policy of integration, rather than assimilation, to preserve the diversity of this plurality. Forging a sense of one community and one nation is a challenging task in the midst of this plurality. Yet our inherent differences have been accommodated within a constitutional framework that reflects the social contract between our multi-ethnic communities.
  8. Malaysia’s monarchy has and will continue to play a proactive role in further forging this sense of community to which we aspire. It is a role the institution can more meaningfully play than anyone else given the special position it holds in society.

Ladies and Gentlemen,

  1. Allow me now to touch on three areas of Malaysian public life where Islamic Influence has been prominent in recent years. These are the role of the syariah courts, Islamic finance and Malaysia’s world-view and foreign policy concerns.

Syariah courts

  1. Malaysian Muslims come under the jurisdiction of the syariah courts in personal and family matters. The latter include marriage, divorce, child custody, division of property and alimony, and succession and probate. Also covered are a limited number of sexual, decency and religious offences, including apostasy. In other areas, including civil, criminal and commercial matters, both Muslims and non-Muslims are subject to the civil courts. Attempts by some states to introduce Islamic criminal penalties or hudud law have not been successful because of lack of constitutional jurisdiction.
  2. Syariah law in these areas has in fact applied to Muslims since the 15th century and so it is hardly a recent introduction. The only innovation was when in 1988 the syariah courts were granted exclusive jurisdiction in these areas. Prior to this, syariah law was administered by the civil courts. Non-Muslims are not subject to the authority of these courts even if they voluntarily choose to be subject to them. In many types of personal and certain commercial transactions, Muslims themselves have a choice of whether to be governed by the syariah or civil courts.
  3. For the most part, the syariah courts have few problems in carrying out their functions in the designated areas. Islamic law is based on a well-developed body of legal traditions and thought, and there are constant efforts to research and update the interpretation of laws. Problems primarily arise when there are issues of overlapping jurisdiction. This most often occurs when the powers of the court are challenged on the grounds that one or more of the parties is a non-Muslim.
  4. Under normal circumstances, if the court in question is unable to reach a decision, a higher court would be called to hear the case. The civil courts have been very careful not to infringe on the jurisdiction of the Islamic courts even when a constitutional right of a citizen is involved. This is, of course, recognised to be an untenable situation and efforts are underway to address this conflict over jurisdiction.

Islamic finance

  1. Let me now turn to the development of Islamic finance. Malaysia has been at the forefront of efforts to develop an Islamic financial services industry. To my knowledge, Malaysia is the first country to have a full-fledged Islamic financial system that operates alongside a conventional one. The Islamic financial system comprises the Islamic banking institutions, the takaful (insurance) and re-takaful industry and the Islamic money and capital markets. The assets of the Islamic banking system now comprise 16% of the market, while the takaful sector has 7% market share. In the Islamic capital market, the outstanding amount of Islamic private securities amounted to USD79 billion or 54.3% of the total outstanding private securities in the market. Eighty-five percent of the listed Malaysian stocks are syariah-approved counters.
  2. Malaysia launched the Malaysia International Islamic Financial Centre (MIFC) in 2006 as part of our initiative to integrate Malaysia within the Islamic international financial community, and to position the country as an international Islamic financial centre. To this end, a key component of our strategy has been to progressively liberalise the Islamic financial services industry to allow for increased foreign participation.
  3. The sukuk or Islamic bond market in particular has become an important avenue for international fund raising and investment activities. The Malaysian sukuk market has now evolved into the world’s largest Islamic bond market, accounting for about 60% of the global sukuk outstanding at end 2007.
  4. We in Malaysia believe there is tremendous upside potential for Islamic finance. We believe the current financial turmoil provides an opportunity for Islamic finance to position itself as a viable alternative to conventional finance by providing investors with other asset classes and markets that provide stability. Already there is strong and growing demand for Islamic financial products in the global market, far exceeding their supply.
  5. The strengths from Islamic finance are derived from syariah principles that have contributed towards its overall stability and resilience. Syariah injunctions require that financial transactions be accompanied by an underlying productive activity thus giving rise to a close link between financial and productive flows. Syariah principles also prohibit excessive leverage and speculative financial activities thus insulating the parties involved from too much risk exposure.
  6. Amidst an increasingly uncertain global environment, Islamic finance, as a form of financial intermediation in the international financial system has continued to be viable and competitive. There is now greater awareness and interest among the international financial community of the potential role Islamic finance can play in contributing towards greater financial stability in the international financial system.

Malaysia’s Worldview and Foreign policy

  1. Malaysia’s worldview and external initiatives are conditioned by many factors. Not least among them are its demography and its Muslim majority. Malaysia values peace and cooperation among all civilizations and peoples. Consistent with the principles of Islam, it places great emphasis upon justice and the rule of international law. Like New Zealand, we are absolutely appalled by nuclear weapons, and, indeed, all weapons of mass destruction. Malaysia was instrumental in moving the concept of a Zone of Peace, Freedom and Neutrality and the Treaty of Bangkok that has, as its aim, the establishment of a Southeast Asia Nuclear Weapons Free Zone.
  2. Cooperation among Muslim nations for the common good is high on Malaysia’s foreign policy agenda. We are a leading and active member of the OIC and other Islamic organizations such as the Islamic Development Bank and the World Islamic Economic Forum. In all these forums, we are a consistent voice for education and human capital development, economic development and the full empowerment of women. We are also a strong advocate for peace, moderation and a just resolution of the Palestinian issue. The plight of the Palestinian people and their legitimate cause resonates especially poignantly among Malaysians.
  3. Since 9/11, Muslims all over the world have been demonized. Islam and Muslims have become heavily associated with terrorism especially in the West. Sometimes it even seems that all Muslims are terrorists, and all terrorists are Muslims. Malaysia has not been spared from this sweeping perception.
  4. Allow me to put the record straight. Ordinary Muslims all over the world are very much like everyone else, concerned about the quality of life for themselves and their children. But unfortunately, the moderates, who form the majority, prefer to remain silent and shy away from speaking about how they configure their Islamic identity. This is unfortunate and can be perilous because, in the vacuum, it is the more strident voices that are heard.
  5. Terrorism knows no religion. Neither does it know race or nationality. The biggest threat to my country came from the Communist Party of Malaya in the 1950s. New Zealanders helped us fight them on Malayan soil. We will always be grateful.
  6. Terrorism perpetrated by whichever group for whatever cause is our common enemy. Malaysia is fully committed to the global campaign against international terrorism, and we are uncompromising in our stand. The Jemaah Islamiyah elements in Malaysia who had links with Al Qaeda and targeted the interests of the United States and its Western allies have all been incapacitated.
  7. We believe, however, that large-scale terrorist networks like Al Qaeda tap on powerful and widespread grievances against perceived domination, oppression and injustice. Issues like Palestine and Iraq breed terrorism and militancy. They can only be resolved by addressing the deep-seated political issues in a just manner.

Concluding Remarks

  1. Malaysia is today held up as an exemplar of the kind of modern, progressive, moderate and enlightened Muslim country that we truly are. It has demonstrated that economic development and technology are not incompatible with Islam. Islam as practiced in Malaysia is open to the Knowledge Age. Islamic banking and insurance are two examples of innovation that have become models for other countries. Muslim Malaysia can thus become a voice in the global debate, helping to correct the current inter-religious misunderstandings that are dangerously dividing the world. If we are to be an influence in this debate, it will be by example, not just precept.
  2. I do not mean to imply from all this we have created a multi-racial and multi-religious utopia. This is by no means true. The historical, racial and religious complexity of modern Malaysia has been taken for granted by scholars and observers partly because of the effectiveness of a strong and stable government. Multiethnic countries often seem more resilient than they actually are (witness Yugoslavia). Hidden beneath the surface are seething stresses and strains as groups jostle for position and power or simply take steps to redress what they see as injustices. No group takes the prospect of a loss of influence lightly and this is as true of Malaysia’s Muslim and non-Muslim communities, as it is just about anywhere in the world. Occasionally, there are excesses. When extremist groups usurp the discourse, the moderate majority is discredited, and all hell breaks loose.
  3. If the success of a nation is measured by how many obstacles it had to overcome, Malaysia has not done too badly. Many did not fancy the country’s chances of survival at independence half a century ago. Many believed it would succumb to inter-ethnic and inter-religious conflict. The communist insurgency, the confrontation with Indonesia, the Singapore separation, the 1969 riots did nothing to build confidence in the country.
  4. That Malaysia has prospered despite the odds is due in large measure to the pragmatism of its leaders and people. Malaysia’s great strength is that it has tried and has been largely successful at accommodating the aspirations of its multi-ethnic citizens. It has striven for compromise and avoided corner solutions, preferring political, legal and religious pluralism over unitarianism. Rather than cave-in to the demands of any one group, religious or secular, it has sought to balance the interests and aspirations of the many. This has been possible because each community has looked beyond the confines of its narrow interests and to the greater national good. Muslims have chosen to share political power with non-Muslims. Muslims did not impose Islam on those of other faiths but respected, learned and worked with them. Non-Muslims have agreed to share economic gains. Both have cooperated to strengthen the foundations of social and economic stability.

I thank you for your patience. It is my hope that the substantial people-to-people bond that exists between our two countries will continue into the future.

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