Post independence

In 1963, Malaya along with the then-British crown colonies of Sabah (British North Borneo), Sarawak and Singapore, formed Malaysia. The Sultanate of Brunei, though initially expressing interest in joining the Federation, withdrew from the planned merger due to opposition from certain segments of its population as well as arguments over the payment of oil royalties and the status of the Sultan in the planned merger. The actual proposed date for the formation of Malaysia was 31 August 1963, to coincide with the independence day of Malaya and the British giving self-rule to Sarawak and Sabah. However, the date was delayed by opposition from the Indonesian government led by Sukarno and also attempts by the Sarawak United People's Party to delay the formation of Malaysia. Due to these factors, an 8-member United Nations team has to be formed to re-ascertain whether Sabah and Sarawak truly wanted to join Malaysia.

The early years of independence were marred by the conflict with Indonesia (Konfrontasi) over the formation of Malaysia, Singapore's eventual exit in 1965, and racial strife in the form of race riots in 1969. The Philippines also made an active claim on Sabah in that period based upon the Sultanate of Brunei's cession of its north-east territories to the Sulu Sultanate in 1704. The claim is still ongoing. After the 13 May race riots of 1969, the controversial New Economic Policy—intended to increase proportionately the share of the economic pie of the bumiputras ("indigenous people", which includes the majority Malays, but not always the indigenous population) as compared to other ethnic groups—was launched by Prime Minister Abdul Razak. Malaysia has since maintained a delicate ethno-political balance, with a system of government that has attempted to combine overall economic development with political and economic policies that promote equitable participation of all races.

Between the 1980s and the mid-1990s, Malaysia experienced significant economic growth under the premiership of Mahathir bin Mohamad. The period saw a shift from an agriculture-based economy to one based on manufacturing and industry in areas such as computers and consumer electronics. It was during this period, too, that the physical landscape of Malaysia has changed with the emergence of numerous mega-projects. The most notable of these projects are the Petronas Twin Towers (at the time the tallest building in the world, and still retains its status as the tallest twin building), KL International Airport (KLIA), North-South Expressway, the Sepang International Circuit, the Multimedia Super Corridor (MSC), the Bakun hydroelectric dam and Putrajaya, the new federal administrative capital.

In the late 1990s, Malaysia was shaken by the Asian financial crisis as well as political unrest caused by the sacking of the deputy prime minister Dato' Seri Anwar Ibrahim. In 2003, Dr Mahathir, Malaysia's longest serving prime minister, retired in favour of his deputy, Abdullah Ahmad Badawi. On November 2007, Malaysia was rocked by two anti-government rallies. The 2007 Bersih Rally numbering 40,000 strong was held in Kuala Lumpur on 10 November campaigning for electoral reform. It was precipitated by allegations of corruption and discrepancies in the Malaysian election system that heavily favour the ruling political party, Barisan Nasional, which has been in power since Malaysia achieved its independence in 1957. Another rally was held on 25 November in the Malaysian capital lead by HINDRAF. The rally organiser, the Hindu Rights Action Force, had called the protest over alleged discriminatory policies that favour ethnic Malays. The crowd was estimated to be between 5,000 and 30,000. In both cases the government and police were heavy-handed and tried to prevent the gatherings from taking place. In 16 October 2008, HINDRAF was banned as the government labelled the organisation as "a threat to national security".

Government and politics
Main article: Politics of Malaysia

Current Prime Minister of Malaysia, Najib Tun Razak.
The Malaysian Houses of Parliament is the building where the Malaysian Parliament assembles. It was officially opened on November 21, 1963. The main building houses the Dewan Rakyat and the Dewan Negara while the representatives' offices are located in the tower.
The Perdana Putra is a building complex in Putrajaya which houses the Prime Minister of Malaysia's office.Malaysia is a federal constitutional elective monarchy. The federal head of state of Malaysia is the Yang di-Pertuan Agong, commonly referred to as the King of Malaysia. The Yang di-Pertuan Agong is elected to a five-year term among the nine hereditary Sultans of the Malay states; the other four states, which have titular Governors, do not participate in the selection.

The system of government in Malaysia is closely modeled on that of Westminster parliamentary system, a legacy of British colonial rule. Since independence in 1957, Malaysia has been governed by a multi-party coalition known as the Barisan Nasional (formerly known as the Alliance).

Legislative power is divided between federal and state legislatures. The bicameral parliament consists of the lower house, the House of Representatives or Dewan Rakyat (literally the "Chamber of the People") and the upper house, the Senate or Dewan Negara (literally the "Chamber of the Nation"). The 222-member House of Representatives are elected from single-member constituencies that are drawn based on population for a maximum term of five years. All 70 Senators sit for three-year terms; 26 are elected by the 13 state assemblies, two representing the federal territory of Kuala Lumpur, one each from federal territories of Labuan and Putrajaya, and 40 are appointed by the king. Besides the Parliament at the federal level, each state has a unicameral state legislative chamber (Malay: Dewan Undangan Negeri) whose members are elected from single-member constituencies. Parliamentary elections are held at least once every five years, with the last general election being in March 2008. Registered voters of age 21 and above may vote for the members of the House of Representatives and in most of the states, the state legislative chamber as well. Voting is not compulsory.

Executive power is vested in the cabinet led by the prime minister; the Malaysian constitution stipulates that the prime minister must be a member of the lower house of parliament who, in the opinion of the Yang di-Pertuan Agong, commands a majority in parliament. The cabinet is chosen from among members of both houses of Parliament and is responsible to that body.

State governments are led by Chief Ministers (Menteri Besar in Malay states or Ketua Menteri in states without hereditary rulers), who is a state assembly member from the majority party in the Dewan Undangan Negeri. In each of the states with a hereditary ruler, the Chief Minister is required to be a Malay Muslim, although this rule is subject to the rulers' discretions.

Foreign relations
Malaysia is a founding member of the Association of Southeast Asian Nations (ASEAN) and participates in many international organisations such as the United Nations. As a former British colony, it is also a member of the Commonwealth of Nations. It is a member of the Developing 8 Countries. Malaysia has diplomatic relations with many countries but does not recognize the State of Israel.

Military
Malaysia defence requirements are assigned to the Malaysian Armed Forces (Angkatan Tentera Malaysia-ATM). The armed forces has three branches, the Royal Malaysian Navy (Tentera Laut Diraja Malaysia-TLDM), Malaysian Army (Tentera Darat Malaysia-TD), and the Royal Malaysian Air Force (Tentera Udara Diraja Malaysia-TUDM). The Tentera Udara Diraja Malaysia operates both American made and Russian made fighter aircraft.