The Malaysian inter-ethnic problem, if looked at on the surface is almost a ‘selfsolving’ phenomenon in that the main contention that we are seeing is really between a non-Muslim minority that is ‘big enough to look after itself ’ on the one side and the Muslims who are ‘just about a majority’ on the other (Fenton 2003: 138). In other words, the contest for political gains in Malaysia involves a ‘notso-large’ Muslimmajority group, comprising 60 percent of total population, and a ‘not so-small’ minority group of non-Muslims who form the other 40 percent. By ethnicity, Malays, who constitute the bulk of the Muslims, are the most politically dominant group while the Chinese who comprise a majority of the latter are economically dominant. Because of this configuration, there seems to be a compensatory mechanism on both sides, with the potential for envy and resentment being ‘cancelled-out’ by the economic-political balance of ChineseMalay distribution of power. Even the ethnic-arithmetic of the not-so-large size of Malays (53% of population) and the not-so-small-size of Chinese (26%) would mean than neither group alone would be able to strongly influence political outcomes, particularly in electoral politics. Nevertheless, since 1969 (the watershed year marked by racial riots) this has not really been the case. The trend has been one of a rapid built-up of Malay-Islamic political dominance, now popularly labeled as Ketuanan Melayu (literally, Malay lordship or supremacy), and the progressive decline of non-Muslim political weight in political bargaining over cultural, religious and economic rights. This is the question which will be explored in this chapter – what was responsible for this, was it political Islam or the authoritarian state? Which, between the two had been most central in carving out a Malaysian ethnic democracy, which has survived over the last four decades?