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[AI Library] Chapter 7: Federal System and Local Governance
Malaysia and the Malacca Strait: Whoever Controls It Controls the World
Chapter 7: Federal System and Local Governance
Kim Kyung-jin
Part Two: Malaysia's Political System
The Composition of 13 States and 3 Federal Territories
Malaysia is a federal country comprising 13 states and 3 federal territories. The 13 states consist of 11 states on the Malay Peninsula (Johor, Kedah, Kelantan, Melaka, Negeri Sembilan, Pahang, Penang, Perak, Perlis, Selangor, and Terengganu) and 2 states on the island of Borneo (Sabah and Sarawak). The 3 federal territories are the capital city of Kuala Lumpur, the administrative capital of Putrajaya, and the island of Labuan.
First, the 11 states on the Malay Peninsula are as follows:
Johor is located at the southern tip of the Malay Peninsula and borders Singapore. Historically, it was the center of the Johor Sultanate and has developed into an economically important region centered on manufacturing and trade.
Kedah is located in the northwest of the Malay Peninsula and shares a border with Thailand. Kedah is one of Malaysia's oldest sultanates and is known as an agricultural center famous for rice production and the tourist destination of Langkawi Island.
Kelantan is a state in the northeast of Malaysia bordering Thailand, known for its strong Islamic culture and developed traditional handicraft and batik industries.
Melaka is located in the southwest of Malaysia and was the capital of the Malay Sultanate in the 15th century. As a historic city that experienced colonial rule by Portugal, the Netherlands, and Britain and absorbed diverse cultural influences, it is designated as a UNESCO World Heritage Site.
Negeri Sembilan is located in the south-central region of Malaysia and is a unique state that retains strong Minangkabau culture from Sumatra, Indonesia, maintaining matrilineal social traditions.
Pahang is a state located on the east coast of the Malay Peninsula. It has the largest land area and was historically famous for its tin industry. Today it is known for tropical rainforests and ecological tourism.
Penang is a state comprising an island in the northwest and part of the mainland. It served as a trading port during British colonial times and features the historic city of Georgetown, giving it strong multicultural characteristics.
Perak is located on the northwest coast of the Malay Peninsula. It has a history of prospering from tin mining and currently features various historical sites and developed natural tourism attractions.
Perlis is Malaysia's smallest state, located at the northwestern tip bordering Thailand. With its peaceful rural environment, agriculture is the main industry.
Selangor is the center of Malaysia's economy and industry, surrounding Kuala Lumpur. It is the most populous state in Malaysia and a region experiencing rapid urbanization.
Terengganu is located on the east coast of Malaysia. With its beautiful beaches and numerous islands, the tourism industry is well developed. Islamic culture and the petroleum industry are its main characteristics.
Sabah and Sarawak in the East Malaysia region of Borneo Island are important areas with unique history and culture.
Sabah is located in the northeast of Borneo Island and carries the nickname "Land below the wind." Historically, Sabah was influenced by the Brunei Sultanate and the Philippine Sulu Sultanate. From the late 19th century, it came under the rule of the British North Borneo Company and joined the Malaysian Federation in 1963. The Philippines continues to claim sovereignty over parts of Sabah, creating ongoing diplomatic disputes. Sabah is famous for Mount Kinabalu, Southeast Asia's highest peak, as well as its dense tropical rainforests and rich ecological resources. Various indigenous peoples such as the Kadazan-Dusun, Bajau, and Murut live there, making it a culturally diverse region.
Sarawak is Malaysia's largest state, located in the northwest of Borneo Island, and is well known as the "Land of Hornbills." In the mid-19th century, James Brooke, a British national, took power from the Brunei Sultanate and established the "Brooke Dynasty" (the White Rajahs), which ruled for about 100 years. After that, Sarawak passed through British colonial rule and became part of the Malaysian Federation in 1963. Sarawak possesses diverse natural environments including the world's ancient tropical rainforests, the Rajang River, and the extensive cave systems of Mulu National Park. It is the state with the most complex ethnic composition in Malaysia, with numerous indigenous peoples such as the Iban, Bidayuh, Malanau, and Orang Ulu coexisting. Christianity, Islam, and traditional beliefs exist together, and the state is also famous for its unique traditional longhouse architecture and diverse folk culture.
The unique history, culture, and geographical characteristics of each state blend together to form a highly diverse national identity. Sabah and Sarawak, in particular, are recognized as especially important regions that symbolically represent this multicultural character.
Division of Powers Between the Federal Government and State Governments
The Malaysian Constitution clearly distinguishes the powers between the federal government and state governments, forming an important foundation for Malaysia's federal system. The federal government handles defense, foreign relations, internal security, civil and criminal law, education, health, and labor. State governments hold authority over land, agriculture, forestry, local government, and Islamic law and customs.
The federal government is responsible for national security and foreign relations and directly manages defense policy and military operations. For example, the organization and operation of the Malaysian Armed Forces (MAF) are under federal government jurisdiction, and major decisions such as overseas peacekeeping deployments and defense budget allocations are made by the central government. Additionally, foreign policy is a federal government responsibility, including establishing diplomatic relations between nations, appointing ambassadors, and concluding international treaties. When a maritime boundary dispute arose between Malaysia and Singapore, the federal government's Ministry of Foreign Affairs led the resolution process.
Internal security and law enforcement are also major federal government responsibilities. Police organizations (Polis Diraja Malaysia, PDRM) and national security policies are controlled at the federal level. The federal government also holds the authority to invoke the National Security Act in case of terrorist threats. Criminal and civil law are likewise enacted at the federal level and applied nationwide. For example, the Malaysian Anti-Corruption Commission Act enforced by the federal government is applied uniformly across all states and coordinates government-level anti-corruption efforts.
Education and health are also federal government domains. Malaysia's public education system is managed by the Ministry of Education, and the operation of public schools and national universities is led by the federal government. Major national universities such as the University of Malaya operate with support from the central government. Medical services and public health policy are also federal government responsibilities. A notable example is the federal Ministry of Health's implementation of a nationwide vaccination program during the COVID-19 pandemic.
State governments hold independent authority over land and local development. They can decide on real estate development and land use changes and can pursue policies to designate specific areas as economic zones. The Penang state government can independently establish plans to develop specific regions as economic zones, and the Sabah and Sarawak state governments also autonomously operate land policies.
Agricultural and forestry management are also areas managed by state governments. The Pahang state government can determine policies for establishing palm oil plantations, and the Sarawak state government can exercise authority over logging permits. These can be applied differently based on each region's natural environment and economic needs. State governments can independently pursue resource utilization and environmental protection policies for their respective areas.
Islamic law and customs also fall under state government jurisdiction. While Malaysia recognizes Islam as the official religion, the application of Sharia law is determined by each state government, and the operation of Syariah Courts is also a state government responsibility. For example, the Selangor state government can adjust the scope of Sharia law application, and policies related to religious education are also decided at the state government level.
Conflicts sometimes arise between the federal government and state governments. The Sabah and Sarawak state governments were granted special autonomy when they joined the Malaysian Federation in 1963, but as time passed and the federal government increasingly centralized more powers, they have demanded expanded autonomy. The Sarawak state government wishes to control its own petroleum and gas revenues and is negotiating with the federal government on this matter.
The scope of Islamic law application is also a contentious issue. The Kelantan state government attempted to implement stricter Islamic criminal law (Hudud Law), but the federal government declined to approve it, citing constitutional violations. This issue has become sensitive in Malaysia's multiethnic and multireligious society.
The Role and Functions of Local Councils
Each state has its own constitution, state assembly, and a sultan or governor. The state assembly is the state-level legislative body that enacts laws concerning issues within the state. However, the state assembly's powers are limited to areas specified in the constitution. The administration of urban and rural areas is handled by municipal councils. These councils manage urban planning, public sanitation, and local infrastructure, and are mostly composed of members appointed by the state government. While Malaysia's federal system has a strong centralizing tendency, there has been increasing demand in recent years for local decentralization and enhanced autonomy.
Kim Kyung-jin
Attorney · Former Member of the National Assembly · AI Policy Researcher
© 2026 Kim Kyung-jin. All rights reserved.
