Malaysia a Failed State?

Ho Su Wei
3 min readJul 15, 2021

Is Malaysia a failed state? At least Daniel Gloss seems to think that Malaysia is heading in that direction. But is that true? What does the data say? This article here will first explore what is the definition of a failed state, then examine Malaysia’s position in the world. It will then investigate the historical trend of Malaysia’s performance, and analyze which composition of Malaysia’s performance are the highest and lowest. This analysis will utilise data from Fund for Peace.

What is a failed state? It generally means that the state is unable to protect its citizens or perform its basic government functions.

Failed state first got its definition from Max Weber. The state maintained its monopoly of the legitimate use of physical force within its borders. Put it simply, it has the power to enforce laws and regulations on ordinary people. People, in turn, submit to this authority. What do basic government functions here mean then? It means the ability to ensure law and order through the police and military and provide basic services such as healthcare, sanitation, shelter, and others more.

Hence, Fund for Peace publishes indicators related to what constitutes a failed state since 2006. It looks at 5 main indicators which can be categorised as cohesion, economic, political, social and cross cutting. The 5 main indicators are then combined into a total indicator called the Fragile States Index (FSI), where the lower the score, the better a state is.

Where is Malaysia in terms of being a failed state? Malaysia is actually not that much of a failed state at all.

Believe it or not, Malaysia is actually considered very decent in the rankings. As of the latest data in 2021, Malaysia scores 56.9 on the FSI, ranking it123rd out of 179. For context, the lower the score, the higher the ranking. This leaves Finland the best country at 179th ranking. The worst failed state in the ranking is Yemen with a score of 111.7, in the 1st position. Remember, the lower the score, the better. The only countries in the region that performs better than Malaysia is Singapore scoring a 26.6 on the FSI and ranking at 165th, and Brunei scoring a 56.3 at 124th position. Vietnam scores 67.6 and ranks 114th, while Indonesia is at 99th and Thailand is at 87th.

Source: Fund for Peace

How has Malaysia’s performance as a state been? It has actually been climbing the rankings since 2006, having continuous improvements.

Since the publication of the FSI, Malaysia’s FSI has actually improved (declined) from its peak of 69.2 in 2010 to 56.9 currently. It is interesting to note that Malaysia’s FSI score was highest during the late 2000s and early 2010s. If you recall back, 2008 was the turning point in Malaysia’s political scene when the ruling coalition lost its two-thirds majority. The reign after that saw the removal of Badawi and the appointment of Najib Razak, which sparked the 1MDB saga later. Malaysia’s performance improved drastically when the ruling government was defeated in 2018 and onwards. The emergence of a two-party state greatly enhanced the economic and security aspect of Malaysia.

Source: Fund for Peace

What aspects of Malaysia’s are the best performing? Economy, Refugees and External Intervention.

As mentioned before, there are 5 main indicators that Fund Your Peace looks at — cohesion, economic, political, social, and cross-cutting. In Malaysia’s case, it does the best in three fields of external intervention, refugees and IDPs and the economy. External intervention here measures the influence of external actors in the functioning of the state. This means that Malaysia functions properly as a sovereign state without interference from other countries. Refugees and IDPs score top possibly due to Malaysia’s acceptance of refugees from other countries. The economy indicator here looks at all manner of the economy like government debt, interest rates, price and productivity.

Source: Fund for Peace

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Ho Su Wei

Founder of Slice of P.I.E and hopes to provide simple investment, economics and personal development insights to ordinary people.