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Political Risk in Malaysia

Political stability is an important consideration in these times when it comes to making investment decisions. Political risk can be measured in terms of internal strive to conflict between neighbouring countries, and other unseen dangers due to terrorism.
Malaysia had its fair share of internal problems due to the differences and existence of various communities. Notably the conflict was among the three major communities, that is the Malay, Chinese and Indian community. The biggest incident was way back in May 1969 when tension between the Malay and Chinese caused riots and fights which resulted in hundreds of deaths. Since then, the communities have learned to live rather amicably with each other and want to avoid such a serious conflict from happening again. It is normal now to see the people of various communities working together in the same office, joking and helping each other out or eating together, although they do not necessary live in the same area.
The Malaysian government known as the Barisan Nasional or National Front consists of UMNO (United Malays National Organization) and parties from the other communities such as MCA (Malaysian Chinese Association) and MIC (Malaysian Indian Congress). They all want to work towards a peaceful society. Any action by individuals who try to incite racial tensions are dealt with strongly. Strong conflict is largely avoided although political power, largely being held by the Malays who with other indigenous Malaysians call themselves Bumiputera, or Sons of the Soil, is used to increase their status in the Malaysian economy and other areas. 

Political stability has always been a major plus for Malaysia. Despite being hit by the Asian financial crisis in 1997, the fact that Malaysia’s political stability remained intact was one of the reasons why foreign investors kept faith with Malaysia.

Last Updated on: 18-11-2009

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