ABSTRACT
This chapter explains how, since independence, natural resource extraction has been an important means to 'buy off' peace in Malaysia's rentier state system. While the economy of pre-colonial Malay kingdoms was based largely on subsistence agriculture, this changed with the advent of British colonial rule. British rule triggered the systematic exploitation of natural resources, by placing large tracts of land under state 'ownership', introducing forestry and agriculture departments, and bringing in new technologies for harvesting and natural resource extraction. The chapter presents the methods by which the Malaysian rentier state has been able to 'buy off' the larger population. Rentier states may employ large-scale distributive or 'populist' policies, including increasing public sector employment, apportioning subsidies, or providing free education and healthcare. The rentier state framework is applied to the Malaysian palm oil sector to explain the ruling elite's political dependency on natural resources in an updated context.
