Malaysia's multi-racial society contains many ethnic groups. Malays comprise a majority of just over 50%. By
constitutional definition, all Malays are Muslim. About a quarter of the population is ethnic Chinese, a group
which historically played an important role in trade and business. Malaysians of Indian descent comprise about
7% of the population and include Hindus, Muslims, Buddhists, and Christians. Non-Malay indigenous groups
combine to make up approximately 11% of the population. Population density is highest in peninsular Malaysia,
home to some 20 million of the country's 28 million inhabitants. The rest live on the Malaysian portion of the
island of Borneo in the large but less densely-populated states of Sabah and Sarawak. More than half of Sarawak's
residents and about two-thirds of Sabah's are from indigenous groups. The early Buddhist Malay kingdom of
Srivijaya, based at what is now Palembang, Sumatra, dominated much of the Malay peninsula from the 9th to
the 13th centuries AD. The powerful Hindu kingdom of Majapahit, based on Java, gained control of the Malay
peninsula in the 14th century. Conversion of the Malays to Islam, beginning in the early 14th century, accelerated
with the rise of the state of Malacca under the rule of a Muslim prince in the 15th century. Malacca was a major
regional commercial center, where Chinese, Arab, Malay, and Indian merchants traded precious goods. Drawn by
this rich trade, a Portuguese fleet conquered Malacca in 1511, marking the beginning of European expansion in
Southeast Asia. The Dutch ousted the Portuguese from Malacca in 1641. The British obtained the island of Penang
in 1786 and temporarily controlled Malacca with Dutch acquiescence from 1795 to 1818 to prevent it from falling
to the French during the Napoleonic war. The British gained lasting possession of Malacca from the Dutch in 1824,
through the Anglo-Dutch treaty, in exchange for territory on the island of Sumatra in what is today Indonesia. In
1826, the British settlements of Malacca, Penang, and Singapore were combined to form the Colonyof the Straits
Settlements. From these strongholds, in the 19th and early 20th centuries the British established protectorates over
the Malay sultanates on the peninsula. During their rule the British developed large-scale rubber and tin production
and established a system of public administration. British control was interrupted by World War II and the Japanese
occupation from 1941 to 1945. Popular sentiment for independence swelled during and after the war. The territories
of peninsular Malaysia joined together to form the Federation of Malaya in 1948 and eventually negotiated
independence from the British in 1957. Tunku Abdul Rahman became the first prime minister. In 1963 the British
colonies of Singapore, Sarawak, and Sabah joined the Federation, which was renamed Malaysia. Singapore's
membership was short-lived, however; it left in 1965 and became an independent republic. Neighboring Indonesia
objected to the formation of Malaysia and began a program of economic, political, diplomatic, and military
"confrontation" against the new country in 1963, which ended only after the fall of Indonesia's President Sukarno in
1966. Internally, local communists, nearly all Chinese, carried out a long, bitter insurgency both before and after
independence, prompting the imposition of a state of emergency from 1948 to 1960. Small bands of guerrillas remained
in bases along the rugged border with southern Thailand, occasionally entering northern Malaysia. These guerrillas
finally signed a peace accord with the Malaysian Government in December 1989. A separate, small-scale communist
insurgency that began in the mid-1960s in Sarawak also ended with the signing of a peace accord in October 1990.
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