Malaysia was known as “Suvarnabhumi” to the Indian, Chinese and European traders. Changes of economical factors in Europe in the 18th century pushed European countries such as France , British and Germany to compete against each other to rule a country with unlimited raw materials. The arrival of the foreign rulers changed Malaya’s economical factor to a whole new system by growing crops like rubber , sugar cane , tobacco , and palm trees in estates own by the Europeans.
Between year 1850 and 1874ical and economical order. This is a period of great political, social and economic flux as Malaya grappled with the gradual introduction of British induced capitalism. During this period western coastal Malay States of Perak, Selangor and Negeri Sembilan started to experience unprecedented influx of labour migrants , mainly Chinese and capital from the Straits Settlements that would play a big part in charting the future direction of the political economy of the Malay States.
The movement of capital and labour into these states was due to a combination of factors. First, the increase in global tin prices in the mid half of the nineteenth century stimulated Straits merchant’s interest in prospecting for more of the metal in the tin bearing western coastal Malay States of Perak, Selangor and Negeri Sembilan. Britain’s Peel’s Reform Act of 1842 that reduced duties on imported tin also triggered demands from British manufacturers for cheaper tin ores.
Favourable global prices for tin and fresh demands for the metal also coincided with the end of China’s opium war in 1842 that opened Chinese ports and encouraged a large amount of Chinese labour migrants from southern China to make their way to the Southeast Asia and to the ports of the Straits Settlements. Besides the above factors, regional trade competition also made Straits Settlements merchants to increasingly look towards the Malay States for access to new markets.
In the 1860s, Straits merchants faced stiff competition as a result of high tariff duties on imported goods imposed by Dutch-controlled East Indies and French controlled China. This growing regional competition coupled with the opening of the Suez Canal in 1869 prompted Straits merchants to call on the Straits government to assume some form of control over the Malay States, with some even calling for Britain to take full annexation of these States.
The combination of cheap capital and labour that flooded the Malay States after the 1850s, the abundant resources available in these states and the feudal administrative rrangement practiced in the Malay States brought about collaboration between local Malay territorial rulers, Chinese capitalists and Chinese organised labour in the form of Chinese Secret Societies, which signalled the start of a new partnership. Although at this point, British authority did not take a direct role in the running of the state, British influence over the Malay States took the form of intervening in the political and economic affairs of these Malay states whenever some of British protected people and Chinese secret societies faced difficulties in conducting business transaction.
Intervention took the form of advising Malay rulers and disputing parties to honour the various contracts and at times urging Malay States to keep their major waterways and the Straits of Malacca safe to facilitate trade. For instance in 1862, Colonel Cavenagh, then Governor of the Straits forced Perak’s Mantri of Larut to pay compensation to a Chinese secret society for contravening a mining contract, failing which the British authority would impose a blockade off the coast of Perak. In the period of 1850 to 1874 was also a time of increased political crisis as Malay rulers fought for control of resources.
Economic development sparked rivalry between Malay chiefs to seize control of rich resources which prompted some of these chiefs to collaborate with Chinese bosses and Chinese Secret Societies and at times seek British official sanction in pursuing their claims. It was this combination of events, the presence of various new actors and weaknesses on the part of Malay rulers in managing the political and economic flux that made Malay feudal administration increasingly untenable. Locals used harvested Tin to make weapons and musical instruments such as gongs.
At the end of the 18th century, Malaysia rulers such as Long Jaafar , Ngah Ibrahim and Datuk Kelana Putra started the mining of tins using local labours at their personal mines at Selangor and Negeri Sembilan. At the starting of the 19th century, the arrival of the British created a new form of economical system that spreaded across the country very quickly followed by their ruling at main ports , tin mines and rubber plantations making the change of tradisional ecomic into a more mordern way.
At the early 20th century, British nationals introduced Rubber plantations to Malaya. Rubber trees were formerly used as decorations at the yard of Hugh Low Residence in Kuala Kangsar,Perak. Following by the high demand of rubber around the world, rubber plantation became the main trading in Malaya ran by companies like Harrisons and Crossfield and Sime Darby. Between year 1929 and 1932, disaster struck as rubber price were hitting rock bottom causing Malaya to face a disastorous economy downfall but was later in a stable condition at 1934.
Since then, Malaya had been using the economical system taught by the British until this very day. This form of economical factor had made things more easy and modern. The economy of Malaysia is a growing and relatively open state-oriented. In 2012, the economy of Malaysia was the 3rd largest economy in South East Asia and 29th largest economy in the world. In 1991, former Prime Minister of Malaysia, Mahathis bin Mohamad outlined his ideal “VISION 2020” in which Malaysia would become a self-sufficient industrialized nation by 2020.