Muhammad Azzubair Awwam Mustafa (1226339)

Section 1
Mr. Abbas Hassan
Introduction to Law and Government (PSCI 1020)
Federalism in Malaysia

Semester 3, 2012/2013
Kulliyyah of Islamic Revealed Knowledge and Human Sciences
International Islamic University Malaysia
 INTRODUCTION
The form of government illustrate on how the way government run the
administration in certain country. It can be classified the government into two
types which are referring to unitary and federation. The history of Malaysia that
through many historical moments leads to the federation based country.
In explaining about federalism in Malaysia, the concept of federalism in
general should be understood to ensure deep understanding on this concept.
Federalism derived from Latin word „foedus‟ which means covenant, compact,
treaty, league or an alliance between states for mutual support and joint action.
Generally, federalism can be understood as a collection of states agree to unite
under one centralize administration but at the same time maintain certain type of
power. It should be noted, this state will have uniformity in aspects of
administration but at the same time they maintain their own sovereignty on
certain field of administration.1
In Malaysia, the combination of 13 states under one central government
known as Federation of Malaysia and at the same time maintain state
administration on certain provision. Throughout this paper, there will be
discussion on historical development on federation in Malaysia, features of
federation, the division of power between central and state government as well
as the effects of federation on the state.

HISTORICAL DEVELOPMENT OF FEDERATION IN MALAYSIA

In discussing about federation in Malaysia, the idea of federation can be
traced back to formation of Federated Malay State that founded on 1895. This
federation involving four states including Selangor, Perak , Negeri Sembilan
and Pahang. According to the agreement according to this federation, the Ruler
of the State which is referring to the Sultan agreed to follow the advice of

1
Abdul Rashid, Moten, ed., Government and Politics in Malaysia, Singapore: Cengage Learning, 2008, 63.

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Resident located by the British in their state‟s administration. Besides, the
Rulers also agreed to follow the help each other among these four states in term
of military and financial assistant. This four state also known as the four
“Protected State”.2
However, this federation considered failed when the Rulers of the State
realize this is the way for the aliens to take over the administration of the state.
This can be proved when the Malay Rulers only have absolute power on matters
regarding Malay custom and Islamic matters. On the other side, the Malay‟s
Sultan also dislike the action that took by British by bringing lots of immigrants
from China to works in mine and immigrants from India to work in the estate.
The establishment of Federal Council in 1909, give impact to the Rulers of
these states when they have equal position in voice out their idea since they are
recognized as ordinary member of this council. On 1914, the states in
Peninsular of Malay State divided into three types which are Federated Malay
State (Selangor, Pahang, Perak and Negeri Sembilan), Unfederated Malay State
(Terengganu, Kelantan, Kedah and Perlis) and Straits Settlement (Singapore,
Penang and Malacca). Johor became an independent state since their good
relation with British government.
After the invasion of Japan in World War II, British back to administer
the Malaya. They tried to reconstruct their method of administration in this land.
Since that, they introduced Malayan Union. It should be noted, some of features
of Malayan Union that was against by Malay people at that time. Firstly, the
common citizenship which allows anyone to claims Malaya as their homeland
based on their birth or suitable period of residence. Secondly, Malayan Union
also will make the state government lost their power and leads the Rulers lost
their power totally. The against by Malaya‟s people toward Malayan Union
created unstable condition in Malaya leads British surrendered on installment of
Malayan Union.
2
Ibid, 65.

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 The abolishment of Malayan Union leads to the Federation of Malaya
Agreement in 1948. There is clear difference between Malayan Union and
Federation of Malaya. Malayan Union diminished the power of state and give
absolute power to central government to run the administration while Federation
of Malaya give power to central government to ruling the country on certain
aspect but at the same time the power of state remains there. Through this
federation, there will be position on High Commissioner, Executive Council and
Legislative Council. In the state level, every state have their own Executive
Council and Legislative Council.3
However, the establishment of this federation cannot satisfy everyone.
There were few against from three states. Firstly, in 1955, Johor dissatisfied
with this federation when this stated included in Unfederated Malay States that
leads they lost their status as independent states as previous. The resistance was
done by Johor Malay National Orginisation (PKMJ) but at the end they agree
with the idea of Federalism when they realize they are alone in this resistance.
Secondly, in 1956, Kelantan resist to join the federation when they feel that the
right of Malay will be equal to the Chinese when this federation established.
The resistance under Kelantan Malay United Front (KMUF) was finally ended
when they realize the Malay right protected through the acknowledgment of
Islam as official religion, protection of Malay language and Malay customs.
Lastly, Penang also resist to join the federation with two reasons. The reasons
were they want to remain as part of the Straits Settlement with dominance
Chinese population and they does not want to lose their right as free port status.
The Federation of Malaya 1948 very significance when the first election
conducted in July 1955 to choose Federal Legislative Council. As a result, The
Alliance consist UMNO, MCA and MIC won 51 from 52 seats and the other

3
Mohd Agus, Yusof, Malaysian Federalism: Conflict or Consensus, Bangi: Penerbit Universiti Kebangsaan
Malaysia, 2006, 54.

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one seats won by PAS. This election was very important in determining the next
movement of the country. In 1956, there was a group of Malaya people consist
representatives from Alliance Government and Malay Rulers conducted a
conference in London to request for independence. From the conference,
Malaya can get their independence by following certain criteria. The
government that will be form should be central government that at the same
time protecting the state government in term of autonomy and give common
nationality among the people. The government also should protect the Malay
right, position of the Malay Rulers while at the same time not neglecting the
others races right.
Federation of Malaya 1957 reacts as new form of federation after the
independence and become the guideline for the government administration. This
federation debated by the Federal Legislative Council in July 1957 before the
country got independent. The federation was covering special position of
Malays and the status of Malacca and Penang as states without Malay Rulers.4
In 1963, the idea formation of Malaysia was suggested by Tunku Abdul
Rahman, Prime Minister of Malaysia. Hence, the federation of Malaysia should
cover Malaya states, Sabah, Sarawak and Singapore. This federation aimed to
limit the movement of communist at that time as well as to balance the
population. To realize the establishment of Malaysia, Malaysian Act was passed
in 20th August 1963 and leads to the formation of Malaysia in 16 th September
1963.5
Through establishment of Malaysia, some amendments were done to the
constitution. This amendment is necessary to ensure the constitution will fulfill
the right of Sabah and Sarawak as a new comer to this federation. This
amendment covers the protection on national language, position of natives in
both states as well as the immigration procedure. The special privileges enjoyed

4
Ibid, 58
5
Ibid, 60

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by Sabah and Sarawak make them look more powerful. As a result, for the
declaration of Malaysia Agreement not agreed by Sultan of Kelantan and makes
them accused this amendment is invalid. However, through the Article 159, it
stated the amendment should not get consent from any ruler of states. Hence,
the agreement should be signed by the federal government only. In 1965, the
secession of Singapore from Malaysia leads to the amendment of constitution.
Previously, there are no provisions in the constitution that prohibit any states to
withdraw from federation.
After 50 years, the Federation of Malaysia was guided by 183 articles of
constitution which become the basic for the government to run their
administration. Historical development of federation since 1895 up to nowadays
is assisting the government administration to be matured in accepting abrupt
situation. Consequently, constitution becomes the highest law in this country.

DIVISON OF POWERS BETWEEN FEDERAL AND STATE

GOVERNMENT
In discussing about federalism, it cannot be denied the existence of two
governments which is referring to federal or central government and provision
or state government. It can be explained, every state was united under federal
government while at the same time protecting their right in certain jurisdiction.
Hence, the division of power can be viewed clearly through Article 74, Ninth
Schedule which divided the power into three which are Federal List, State List
and Concurrent List.
Firstly, Federal List provides major matters in this country. Though this
list, there are 27 matters covered by the federal government. The matters
covered by government were external affairs, defence, internal security,
citizenship, finance, trade, commerce, shipping, navigation, fisheries, civil and
criminal law and procedure, industry, communication, transports, survey,

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education and publications. Hence, the federal government will be accountable
and focused through this matter.
Secondly, States List covers 13 subjects. Every state should be
questionable and capable to carry out these 13 subjects. The subjects that
covered by States are Islamic law, land, agriculture, forestry, local government,
water, Malay reservation, turtles and revering fishing. Through the State List, it
can be notified that the field covered by the state government is minor field.
Thirdly, Concurrent List referring to the field or matters that should be
covered mutually by then state and federal government. It can be explained that
federal and state government should cooperate in these matters. This Concurrent
List containing 14 fields includes social welfare, scholarship, drainage,
irrigation, public health, fire safety measures, National Parks,culture, sport and
housing. Thus, it can be notified that Concurrent List requires commitment from
both governments even though with different political background.6
However, Ninth Schedule also providing supplementary list for Sabah
and Sarawak. This Supplementary List covering in term of State List and
Concurrent List. The addition on State List cover six matters includes native law
and custom, ports and harbor, Sabah railway citizenship and immigration. On
the other side, the addition also can be found in the Concurrent List for Sabah
and Sarawak includes water power and electricity, agriculture and forestry
research, trust and public amusement. This addition to the list was a response to
demand of both states when they join the Federation of Malaysia in 1963.
Through this clear division of power, there will no clash or misconception
of fields and jurisdiction between both governments. The special addition to
Sabah and Sarawak List should be understood since the history of their
acceptance to formation of Malaysia as well as the geographical factors that

6
Shad Saleem, Faruqi, Document on Destiny: The Constitution of Federation of Malaysia, Kuala Lumpur: Star
Publication, 2008, 164.

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they have. Therefore, it can be clearly noted that constitution conduct the way
on both governments run their administration and any clash can be referred to
constitution since it is supreme law.

ISSUES RELATED TO FEDERALISM IN MALAYSIA

Throughout the concept of federation since 1985, this concept was never
silent with the issues and polemics. Obviously after establishment Federation of
Malaysia in 1963 up to nowadays, the issues are focusing on relation between
state governments and federal government. The duality of governments leads to
some issues that can be discussed between them.
Firstly, in term of constitutional amendments that gives full authority to
the federal government through legislature in the Parliament. There is clearly
can be viewed here that there is no involvement of states government. However,
the amendment regarding territorial changes to the boundaries of state should
get consent from the state government. At the same, the amendment regarding
rights of Sabah and Sarawak also should get approval from their states
government.7
In addition, regarding the amendment of constitution, states obviously
have minor power to object the amendment through Senator in Dewan Negara.
It clearly can be viewed that every states only have two Senators to represent
their state‟s voices. In term of amendment regarding the matter on Sabah and
Sarawak rights, it should be noted the federal government should have an
approval from the Governors from these states. However, positions of
Governors were the position that appointed by federal government and it mostly
have tendency for the Governors to be in the side of federal government. Hence
from these two issue regarding amendment, it can be pointed that the states have
little power of amendment of the constitution.

7
Ibid, 165

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 Secondly, the proclamation of emergency is really killing the power of
states. When the emergency enacted, any law that require the consultation of
states no longer apply the consent of states. However, there six matters that
cannot be amended which are religion, citizenship, language, Muslim law,
customs of Malays and the native law in Sabah and Sarawak. This situation
looks likely the federal government to be unitary system.
In the history of this country, there are four examples can be viewed
regarding the issues of emergency law enacted. Firstly, the emergency was
declared in 1964 when there was a confrontation with Indonesia when they are
refusing the establishment Federation of Malaysian in 1963. This emergency is
necessary to ensure the government can create any law in protecting country
from international threats. Secondly, the emergency enacted in 1966 when the
Chief Minister of Sarawak got no confidence votes from State Legislative
Assembly but he refuse for his resignation. The emergency declaration is
needed for federal government to amend the law regarding that issue. Thirdly,
the emergency was declared in 1969 when there was a tragedy of 13 th May 1969
regarding racial riots. Emergency law is required to reconstruct the
administration of this country. Lastly, the emergency declared in 1977 on
Kelantan when their Chief Minister refused to resign from that position after got
no confidence votes. Overall, the emergency declaration is necessary for federal
government for stability of the country but will leads to misuse of power when
it repeatedly for many times.
Thirdly, the other issue on federalism in Malaysia is international treaties
that not necessarily required any consent from the states government. To be
explained this, the matters in the States List can be across through any treaty by
federal government with other countries can be do without any consent from the
state. However, matters regard Islamic law and custom of Malays and native
law and customs of Sabah and Sarawak strictly should be consulted with the

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respective state. Unluckily, the term „consult‟ here does not necessarily obey the
state‟s advice.
Fourthly, the power of government to uniform any law in the State List is
one the issues in the federalism in Malaysia. It should be noted that federal
government have a power to standardize any law in the State List as stated in
the Article 76 (1) (b). The examples can be illustrated for this uniformity are the
Land Law through National Land Law Code, Shari‟ah Courts and Religious
Affairs Council. However, there are some exceptions for the uniformity law in
Malaysia. The exceptions include law that only operated by one state only, the
law in Sabah and Sarawak as well as the requirement of adoption is waived in
the all matter land and local government. Thus, this clearly explained states
matters can be centralized by federal government.8
Fifthly, the interruption of federal government in states matter can be
viewed in term of policy making bodies. The federal government will allocate
the council that consist expertise and academician to advice the states in certain
matters. The example can be illustrated when the federal government introduced
National Land Law Council, National Council for Local Government, National
Finance Council as well as statutory bodies like FELDA and Majlis Amanah
Raya (MARA). In addition, it can be assumed that federal government likely
lost their trust to states government in run their states administration. Therefore,
in the silent way by these councils, the federal government can control over the
states administration.
Sixthly, the interruption of federal government can be viewed in term of
developmet plans. To describe this, Yang Dipertuan Agong can be proclaimed
any area of state as development area through Article 92 (1). However, the term
Yang Dipertuan Agong here can be addressed to the Prime Minister and his
cabinet ministers through his advice to the Yang Dipertuan Agong. In addition,
National Land Council will reacts as body to advice to this development plans.
8
Ibid, 16

10
The example can be illustrated for this development plan is Iskandar
Development Region in Johor (now known as Iskandar Malaysia) in 2006 by
ex- Prime Minister, Tun Abdullah Ahmad Badawi. Unfortunately, this
development plan leads to the control of neighboring country over the economy
of the people in this state. On the other, policy for development plans will not
available automatically for Sabah and Sarawak unless with the consent of their
Governors.
Seventhly, fiscal matters also one of the issues in the federalism in
Malaysia. To be explained, federal government will takes major revenues like
direct and indirect taxes. As a result, Article 109 and 110 explain that federal
government will pay money reimbursement in form of Capitation Grants and
State Road Grants. Unfortunately, the states ruled by opposition party
government will be discriminated their right in term of this reimbursement when
the company given to representative of federal government in that states instead
of state government. The condition will be more serious, when the state have
lower fiscal matters are not allowed to borrow money except from federation or
federally approved government.
In fiscal matters, it can be divided revenue and expenditure of federal
and states government. In term of federal government, the revenues can be
derived from sources like income tax, custom and excise duties, sales tax,
license for motor vehicles, banking, foreign exchange, capital issues, passports,
visas and other immigration charges. As a massive numbers of revenues, the
expenditure of federal government also huge that covering 27 lists in the
Federal List. That expenditure includes national defence, internal security, the
armed forces, education, pensions and gratuities, communication and transport.9
For the state governments, the state‟s revenues quite smaller compared to
the federal government. State‟s revenues can derived the capitation grants given

9
Ibid, 169.

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by federal government as explained in Article 109 and the Tenth Schedule Part
1.
Besides, state governments also can have their state road grant according
to the miles of roads in that states. After that, taxes from natural resources like
land, mines and forests also belong to the state government. Next, states also
receive all taxes and fees from entertainment places, water supplies, toddy
shops, zakat and baitulmal. On the other sides, states also can have State
Reserve Fundsafter consultation with National Finance Council. Lastly,
conditional grants also will provide to necessary states but it considered based
on political consideration.
For the Sabah and Sarawak, they enjoy certain privileges as stated in the
constitution. This includes the States are allowed to borrow money for their
purposes with the consent of Bank Negara only as stated in Article 112B. Next,
these states also provided with special grants to fulfill their needs as stated in
Article 112C & 112D. Lastly, Sabah and Sarawak enjoys the import and excise
duty on petroleum, export duty on timber and forest produce and subject to
ceiling, export duty on minerals, port and harbours and states sales taxes.
Eighthly, public servant becomes the issue in federalism in Malaysia. In
explaining this, states are free to choose their public servant, however, the
important posts was filled by the officer on secondment of federal government
to the states. This is clearly explained by Article 134 that federal government to
second federal officers in state. The serious situation is when the states like
Malacca, Negeri Sembilan, Penang and Perlis does not have State Service
Commission that leads them to depend on federal‟s public servants. Thus, this is
can be clearly assumed that federal government put their dissatisfy for the state
government to run the administration.
Ninthly, Article 75 of constitution is clearly becomes a threat to the law
in state. Through this article, it can be explained that any law that inconsistent
with the federal law, the federal law shall prevail while the state law are invalid.
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This clearly shows the supremacy of the law made and passed by federal. The
court interpreted this law are available for the matters in Concurrent List only.
Some scholar defined that if any conflict happens between federal and state
government, the federal law ought to prevail. 10

CONCLUSION
From the overview, it can be summarized that federalism that cultivated
more than 100 years ago in Malay States up to federalism of Malaysia guided
the way administration ran. Throughout the historical evolution of federalism in
Malaysia, it stands on their central administration but at the same time the states
government remains their own independency in certain matters in
administration. It can be noted the against of Malays people towards Malayan
Union give impact in maintaining the federal system in this country as well as
protecting the special right of Malays and the sovereign of Malays Rulers. Thus,
up to nowadays, Islam, the right of Malay, position of Malay and Malay
language are protected through constitution.
In discussing about the division of power between federal and state
government, it can be concluded that constitution clearly explains the list on
matters on the responsibility of both government. Federal List explains the
major matters that relates with the important things like defence, education and
finance. On the other hand, State List explains the minor matters that need
requirement from state government like land, Islamic law and agriculture.
However, constitution also explains the matters that need commitments from
both governments to cooperate known as Concurrent List that includes matter
like scholarship and social welfare. Hence, any matters that clash the power
between both governments shall be referred to constitution.
In discussing about the issues about federalism, it clearly can be
generalize that the power of federal government is more than state government.
10
Ibid, 171.

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The over power of federal government can be viewed through the power in
constitutional amendment as well as power to declare emergency law. At the
same time, federal government also have a power in interrupt the matters on
states like signing treaties regarding state matters, secondment of public
officials, establish council to advice the states government. On the other side,
the limited sources of revenue of states require state governments to be
dependent on the federal government and sometimes discriminated to the state
ruled by opposition party. Lastly, in term of law, the inconsistency and clash
law enacted by states to the federal government will leads to the law by federa;
government prevail. Thus, from the issues, it clearly can be stated federal
government over in term of division of power.
Overall, it can be concluded, the more power given to the federal
government leads to positive impacts and negative impacts. From the positive
side, the more on federal government gives them full commitment to their
administration nationally as well as gives positive relationship internationally.
On the other side, the more revenues of federal government also will ensure the
government to run the well administration that requires huge number of
expenditure. However, from the negative point of view, the state government
will lack their budget in running their administration and requiring them to
borrow more funds in fulfilling their needs. On the other hands, the less power
given to the state governments will looks them less power and dysfunction by
the people. Therefore, toleration and good communication from both
governments is needed to create balance and well administration in both sides.

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 BIBLIOGRAPHY
Abdul Aziz, Bari, Malaysian Constitution: A Critical Introduction (Kuala
Lumpur: The Other Press, 2003)
Abdul Rashid, Moten, ed., Government and Politics in Malaysia, (Singapore:
Cengage Learning, 2008)
E. C. S., Wade, Constitutional Law and Administrative Law (Longman, 1977)
Mohd Agus, Yusof, Malaysian Federalism: Conflict or Consensus, (Bangi:
Penerbit Universiti Kebangsaan Malaysia, 2006)
Shad Saleem, Faruqi, Document on Destiny: The Constitution of Federation of
Malaysia (Kuala Lumpur: Star Publication, 2008)

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