This series explores the threat posed by the rise of ISIS to Asia, particularly Southeast Asia, and efforts that the governments of the region have taken and could/should take to respond to it. Read More ...

In February this year, the U.K. and Australian governments issued advisories warning citizens against travel to Malaysia. Heightened security in Southeast Asia followed the January Islamic State (IS)-inspired attack in downtown Jakarta, which had links to Malaysia. The February warning reflected intelligence relating to an imminent IS attack on Kuala Lumpur markets and night clubs popular with foreign tourists. The next month, the Malaysian government announced the arrest of 15 people, including a police officer and an airplane technician suspected of planning yet another attack.[1]

The apparent reemergence of jihadist activity in Malaysia is disturbing and, perhaps, surprising for a country otherwise noted for its longstanding political stability, recent economic progress, and bright prospects. Yet, as this essay demonstrates, beneath the surface is a tangle of festering problems that have contributed to the progressive alienation of elements within Malaysian society and rendered them susceptible to the appeal of transnational jihadist influences. The rise of Islamist radicalism is one of the more visible and worrisome signs of the erosion of the authority of Malaysia’s long-standing ruling party, the United Malay National Organization (UMNO) . 

Malaysia’s Recurring Jihadist Problem

Jihadist activity in Malaysia is not new. Salafist militancy first took root in Malaysia in the 1980s.[2] Over the next decade, Malaysia played a key role in the evolution of Jemaah Islamiah (JI). Bashir, Hambali, and Abdullah Sungkah, after fleeing Indonesia in 1985, conducted missionary activity (dakwah) and established the Lukmanul Hakim boarding school in Johor Bahru, which before the fall of the Suharto regime had constituted the base for the evolving jihadist regional terror network and a hub for what became the South East Asian franchise of al-Qaeda.[3] Kuala Lumpur also played a role in the planning of the 9/11 attacks.[4]

Following the Bali bombings in 2002, Southeast Asia came to be regarded as the “second front of the war on terror”—a dubious distinction and one which, unfortunately, Malaysia had helped earn. However, Salafist jihadism in Malaysia, and in the region as a whole, seemed on the decline when, by 2011, JI’s leadership had been effectively decapitated and its “emir,” Abu Bakr Bashir, imprisoned. Meanwhile, jihadist activity appeared to have been confined to the Thai border region, where elements in Kelanatan and Kedah continued to facilitate the longstanding Malay Muslim insurgency in Southern Thailand.

However, the emergence of the Islamic State and its self-declared caliphate in Mosul, Iraq in 2014 gave a new boost to Salafist jihadism and the dream of a Southeast Asian caliphate based on Shariah law. Thereafter, IS propaganda widely disseminated on the internet became a potent lure to aspirant jihadists from both Indonesia and Malaysia. By 2015, an estimated 47 Malaysians were serving as foreign fighters in Syria. By 2016, seven had died in martyrdom operations. Two Malaysians conducted suicide bomb attacks in early 2016 that were responsible for 33 deaths in Raqqa and Baghdad.[5] Malaysians formed a core component of the Islamic State’s Southeast Asian unit, Katibah Nusantara, formed in 2014 and reportedly having grown to more than 200 dedicated fighters two years later.[6] The unit not only fought in Syria but proselytized the Islamic State’s ideology through Malay language videos, blog posts, and leaflets. It was a Katibah Nusantara cell that carried out the Jakarta attack in January 2014.[7]

Between March 2015 and June 2016, Malaysian police and security agencies detained over 160 people with links to the Islamic State and disrupted ten plots to carry out attacks in Malaysia.[8] Returning Katibah Nusantara fighters, or those with homegrown links to IS, were allegedly involved in all these plots, the most ambitious of which, only revealed in March 2016, involved the kidnapping of Prime Minister Najib Razak and attacks on Putrajaya, the nation’s administrative capital. Two months before this disclosure, the Malaysian Special Branch had arrested 13 suspects, including two servicemen involved in the operation.[9]

As early as November 2014, Prime Minister Najib had recognized that the Islamic State threat “must be taken seriously.”[10] The same month, he tabled a white paper entitled “Towards Handling the Threat of the Islamic State.” The legal consequences of the white paper included the strengthening of existing counter-terrorism laws such as the Security Offences (Special Measures) Act (2012) as well as the introduction of a new and draconic Prevention of Terrorism Act (POTA) and the Special Measures Against Terrorism in Foreign Countries (2015). POTA recreated the Internal Security Act (ISA) introduced by the former British colonial authorities during the Malayan Emergency (1948) and only recently amended by the government in 2012. Like the ISA, POTA allows for the indefinite detention of terror suspects without trial. 

Malaysia has faced terror before—not only during the Communist-inspired Malayan Emergency (1947-1959). In 2000, al-Maunah, a Perak-based Islamic mystical sect led by Mohamed Amin, seized a military post in Sauk in a somewhat quixotic attempt to bring down the government of Mahathir Mohammad (1981-2002). Malaysia also incubated the Kumpulan Mujahidin Malaysia, which was similarly dedicated to the overthrow of the ruling United Malay National Organization that had ruled Malaysia uninterruptedly since independence in 1963. However, as Malaysia’s Home Minister Ahmad Zahid Hamidi observed in 2015, unlike these local terror groups, “both aiming to overthrow the government through violence in the past, now militant groups are more linked to each other internationally.”[11]

Since 2014, therefore, not only has the Islamic State’s Southeast Asian branch, Katibah Nusantara, established a Malaysian presence, but new, indigenous terror cells such as B.K.A.W., BAJ, DIMzia and ADI—known, it seems, only by their acronyms—have also emerged.[12] Operating in Selangor and Perak, they share the vision and mission of JI and IS to establish a regional “super” caliphate, the Daulah Islamiah Nusantara, that would include all the predominantly Muslim states in Southeast Asia, including Malaysia, Indonesia, southern Thailand, and the southern Philippines, as well as Singapore.[13] Abu Sayyaf, the southern Philippine-based Islamist group, which during the 1990s had links to both al Qaeda and JI, shares a similar vision and has enjoyed a new lease on life with the emergence of the Islamic State.

Evidently, Malaysia, which, despite the growth of a militant Islamist tendency, has not experienced a terror attack since 9/11, faces a grave threat. Given that Malaysia is a moderate majority-Muslim state that has enjoyed political stability and high levels of economic growth since emerging as an Asian “tiger” middle-income economy in the 1990s, what accounts for the appeal of the Islamic State? And how serious is the threat that transnational Salafism poses to the country?

Ethnicity, Religion, and Single-Party Rule in Malaysia

Apparently, Malaysia, like many modern Muslim and non-Muslim states, underestimated the sophisticated use of the internet by the Islamic State and the appeal of its call to establish a caliphate to alienated young Malays. However, upon close scrutiny, the combination of long-simmering and more recent problems that have led Malaysia to this point is quite clear. Indeed, Malaysia is a majority-Muslim, multiethnic polity, where societal consensus, based on an affirmative action pact favoring the poorer, rural Malay majority population, has progressively eroded, both in spite and because of the manner in which the system of governance has operated and the national economy has developed.[14]

Thus, beneath the surface of a stable and pluralistic electoral democracy lies a system of “oligarchic despotism.”[15] Central to this system is the manner in which a political elite within the ruling party, UMNO, came to dominate it. Under former Prime Minister Mahathir Mohammad’s long dominance of the party between 1981-2002, UMNO increasingly determined resource allocation and redistributed assets in the majority ethnically Malay state. “To lubricate and stimulate the economy,” Mahathir explained, required the party’s smart but rigid grip.[16] The evolving Malaysia Incorporated model co-opted Chinese conglomerates into UMNO business politics and entangled business with politics, whilst the expanding and ethnically Malay bureaucracy developed an institutional aversion to public scrutiny.

After race riots in 1969, UMNO renegotiated the post-colonial, inter-racial contract to enhance ethnic Malay economic participation. Under Mahathir’s guidance, The New Economic Policy (NEP), the first phase of which dates back to the Second Malaysia Plan (1971-1975), redistributed socio-economic goods toward the economically deprived majority Malay community.[17] The malleability of the constitution, and the money politics that became inseparable from the Malaysian electoral process, reinforced single-party rule. Since 1957, the constitution has been amended thirty four times. In all elections held between1969-2008, UMNO and its various coalition partners have secured the two-thirds majority in parliament necessary to amend it. The capacity to dominate the multiethnic Barisan Nasional coalition in the Malay interest remains central to UMNO’s past and present political thinking. As Mahathir observed in 1971, Malaysia’s internal politics were ‘racial politics’ and its evolving democracy an elite-guided one “to ensure that the mutually antagonistic races of Malaysia will not clash.”[18] To sustain this oligarchy, UMNO eroded judicial independence while increasing the authority of the party in general and the office of Prime Minister in particular. 

Mahathir was largely responsible for this evolution. Political developments, particularly since 2008, however, have eroded the societal consensus, fragmented the political opposition to UMNO, and created an environment in which issues are increasingly being framed in religious, as opposed to ethnic or racial terms, particularly amongst an alienated, young Malay community. In other words, the manner in which the ruling party has been accustomed to wielding its authoritarian grip, and the way in which that grip has weakened, is central to understanding the current political crisis in Malaysia and the emergence of an activist political Islam with a militant, transnational tendency increasingly attracted to the use of violence in order to bring about Shariah rule.

For nearly six decades, the ruling UMNO, in alliance with smaller ethnically-based Chinese and Indian parties, has overseen national development. Under former Prime Minister Mahathir Mohamad’s long dominance of the party from 1981-2002, UMNO determined resource allocation and redistributed assets in ways that produced substantial gains for the minority Chinese and, to a lesser extent, Indian business interests.

Under Mahathir’s supervision, UMNO’s New Economic Policy altered the socio-economic balance of power to the benefit of the economically deprived majority Malay community and, through this “constructive protection,” created a modern, yet somewhat conflicted, “Malaysian” identity. It is this conflict between ethnicity, posed in racial terms of Malay dominance, and religion, posed in terms of Malay Islamic identity and non-Islamic minority Chinese and Indian communities, which UMNO has consistently obfuscated. UMNO’s repression of these plural identities is central to the growing appeal of an uncompromising interpretation of the Qur’an and the imposition of Shariah discipline across the Federation.

This developing debate about religious and ethnic identity notwithstanding, UMNO’s modernization of Malaysia through the NEP transformed the resource-rich state from a commodity-based, agricultural economy of six million people into an urbanized manufacturing economy of 27 million with a per capita G.D.P. of $10,800 by 2015.[19] In the process, Mahathir’s Malaysia Incorporated model managed, after 1983, to bring the private and public sectors together. 

The first intimation that all was not well with UMNO’s version of an authoritarian political consensus came with the financial crisis of 1997. The crisis caused a rift within the UMNO elite between Mahathir and his deputy, Anwar Ibrahim. Anwar called for Reformasi to democratize the Malaysian political process and undermine its “mute syndrome.”[20]

The political crisis culminated in the six-year imprisonment of Anwar for “abuse of power.” It also saw the emergence, after Anwar’s release in 2004, of a functional opposition consisting of the latter’s new Keadilan (Justice) party, the Chinese Democratic Action Party (DAP), and the Pan Islamic Party (PAS) in a Pakatan Rakyat (Community Pact). This unstable alliance came close to winning both the 2008 and 2013 general elections.

Najib Razak, who became Prime Minister in 2009, sought to reenergize the vision of One Malaysia between 2009-2013 and set up a government company and sovereign wealth fund to support it.[21] The campaign set up benchmarks for growth and transparency in key economic areas. The One Malaysia Development Board employed British and American consultancies to promote the vision of “cool Najib.” In 2011, Najib Razak condemned Iran’s nuclear program, promoted the wasatiyyah (moderation) concept of Islam, and briefly reformed the colonial-era internal security act in order to cultivate support.

The political scandals besetting Prime Minister Najib since the 2013 federal election, which the UMNO-dominated ruling Barisan Nasional (National Front) coalition only narrowly won, have further facilitated the fragmentation of Malay and Malaysian identity. It is this uncertainty that a more assertive political Islam, not only of a militant variety, has sought to exploit.

Najib only won the 2013 election by employing the well-established practice of vote-buying. The questionable electoral victory eroded UMNO’s legitimacy and exacerbated the communal tensions that UMNO’s Barisan Nasional was designed to heal. The erosion of the ruling coalition’s mandate arose from a ‘Chinese tsunami’ of votes cast for the opposition coalition.[22] In the aftermath of the 2013 election, UMNO played the racial card, promoting the Malay-first racial ideology of the populist Perkasa faction of the party and exploiting the ethnic and religious differences between the secular ideologies of the Chinese DAP and its coalition partner PAS’s commitment to the promotion of hudud (Shariah law) federally.

Over the course of 2014, the Islamic opposition party fragmented, with one faction remaining loyal to the opposition coalition and the other calling for the rigid implementation of Shariah across the Federation. At the same time, Najib resumed the perennial persecution of Anwar. In February, the High Court found Anwar guilty of sodomy, a “crime” that incurred a further five-year sentence. Without Anwar’s presence, the opposition disintegrated.

However, revelations in the Wall Street Journal and the U.K.-based Sarawak Report that Prime Minister Najib Razak had secreted hundreds of millions of dollars from the state sovereign wealth fund One Malaysia Development Berhad into his personal offshore account, while the fund that Najib had inaugurated after becoming Prime Minister in 2009 accumulated losses of $11 billion.[23] Former Prime Minister Mahathir called upon Najib to resign. Yet, Najib is by no means alone in practicing this Malaysian version of creative accountancy. Indeed, Mahathir’s criticisms of current elite practice appears particularly surreal. In other words, the current financial scandal is not something new in governmental financial practice but reflects the slow motion collision of the Malaysia Incorporated model and its networks of patronage and nepotism with the social media realities of the online world.

It is in this context of the loss of moral and political legitimacy by the UMNO elite committed to ruling in the Malay ethnic interest and offering a moderate version of Islam that the appeal of a purified Islamic practice freed from the taint of money politics, together with the appeal of a more militant Salafism, must be situated. In this context of Islamic appeals for social and political justice, the draconian counter-terrorism laws risk backfiring. As Human Rights Watch’s Asia Division has observed, POTA has opened a “Pandora’s box for politically motivated abusive state actions.”[24]

The Islamist demand for justice and accountability has, in fact, reinforced a political call for Shariah from both the Malay Islamic Party (PAS), which historically has dominated governments in the northern states of the Malaysian Federation, Kedah and Terengannu, and from the transnational Islamist movement Hizb ut Tahrir (HuT), which has, over the last decade, achieved a growing presence in the region and offers a more sophisticated message that appeals to the Malay middle classes in the academic, media, and public sectors of Kuala Lumpur and Selangor. Nominally non-violent, Hizb ut Tahrir has very effectively promoted the ideal of a Daulah Islamiah Nusantara on campuses, on websites, and through its publications. In other words, it shares the end, if not the means, of Katiba Nusantara.


Given Malaysia’s importance as one of the world’s few successful Muslim states, it is noteworthy that the West and its media have adopted a complacent attitude toward recent Malaysian developments. The Commonwealth failed to send observers to the 2013 election. The West has, in other words, ignored the fact that UMNO’s post-modern version of Oriental despotism has become highly divisive. “Once UMNO loses,” Mahathir observed, “it cannot be rehabilitated.”[25] UMNO, however, is fragmenting, caught between the rock of reform and the hard place of its traditional, authoritarian racial politics. The rise of political and militant Islam, which is also ethnically coded in terms of Malay identity, is the outward and visible sign of the internal erosion of UMNO's authority.

[1] Amy Chew, “ISIS, Malaysia and the Risks of Lost Moral Authority,” The Diplomat, March 22, 2016.

[2] See David Camroux, “State Responses to Islamic resurgence in Malaysia: Accommodation, Co-option and Confrontation,” Asian Survey 36,9 (1996): 855-860.

[3] Marc Sageman, Understanding Terror Networks (Philadelphia: University of Pennsylvania Press, 2004), chapter 5.

[4] M. Tito Karnavian, Explaining Islamist Insurgencies (London: Imperial Press, 2015) 43.

[5] Aliza Shah, “Malaysian Suicide Bomber Kills 13,” New Straits Times (Kuala Lumpur), January 31, 2016, accessed July 14, 2016,….

[6] “More than 200 Indonesians and Malaysians Fighting for ISIS Arm Kalibah Nusantara,” The Straits Times, January 17, 2016, accessed July 14, 2016,….

[7] Prashanath Paramesawaran, “More ISIS Attacks Likely Amid Leadership Rivalry,” The Diplomat February 4, 2016.

[8] Amy Chew, “ISIS Malaysia and the Risks of Lost Moral Authority,” The Diplomat, March 22, 2016.

[9] Ibid.

[10] Rachel Middleton, “Malaysian Prime Minister Najib Razak Warns ISIS Threat Very Real,” International Business Times, January 25, 2016, accessed July 14, 2016,….

[11] Farik Zolkepli, “Civil servant and housewife detained for IS links,” The Star Online, March 24, 2015, accessed April 1, 2015,….

[12] “Four New Terrorist Groups Operating in Malaysia Now,” Straits Times, July 1, 2014, accessed July 2, 2014,

[13] “Islamic State Militants Have Putrajaya in Crosshairs, Bukit Aman Says,The Malaymail Online, August 11, 2014, accessed August 11, 2014,….

[14] The population is composed of Malays (63 percent), Chinese (25 percent) and Indians (8 percent); See Chandra Muzaffar, The NEP Development and Alternative Consciousness (Penang: Aliran, 1989) 25-30.

[15] Or an “Authoritarian Leviathan”. See Dan Slater, Ordering Power: Contentious Politics and Authoritarian Leviathans in South East Asia (Cambridge, UK: Cambridge University Press, 2010) 146

[16] “To lubricate and stimulate the economy, the idea of a nation incorporated with all parties … cooperating … appealed to us.” Mahathir Mohamad, A New Deal for Asia (Kuala Lumpur: Pelanduk, 1999) 89.

[17] See C. Muzaffar, The NEP 25; In The Malay Dilemma (Singapore: Time Books International, 1970) 31, Mahathir terms the policy constructive protection. In the course of the 1980s, Mahathir preferred the more politically correct notion of affirmative action. See The Way Forward (London:Weidenfeld and Nicholson 1998) 79.

[18] Mahathir Mohamad “Problems of Democratic Nation-Building in Malaysia,” Solidarity 6,10 (1971) 15.

[19] World Bank,

[20] Shahnon Ahmed used this term to describe the suppression of alternative voices during the Reformasi debate in 1998. See Shahnon Ahmad, Shit Novel Politik Yang Busuk Lagi Membusukan (Pustaka Reka: Kelantan, 1999 ) 56.

[21] The One Malaysia Development Berhad is a wholly government-owned sovereign wealth fund that Najib inaugurated to promote investment and development. See

[22] Jeremy Grant, “”Malaysia’s Chinese Tsunami Puts Najib in a Bind,” Financial Times, May 7, 2013.

[23] Tom Wright and Ken Brown, “Malaysia’s 1MDB Scandal,” The Wall Street Journal, October 27, 2015, accessed July 14, 2016, The London-based Sarawak Report first identified the scandal. See “PM’s Anonymous ‘Donation’ Was Transferred Back To Singapore! MAJOR EXCLUSIVE,” Sarawak Report, August 15, 2015.

[24] “New Anti-terror Laws a Giant Step Backwards Says Global Human Rights Body,” The Malaysian Insider, April 7, 2015.

[25] Quoted in “Mathathir Slams Najib, Says BN Will Lose Power,” Today Online (Singapore), April 2, 2016, accessed July 14, 2016,…


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