26 August 2011
Last updated at 05:19 ET
Renowned for its 'tiger economy', Malaysia saw rapid growth in the early 1990s, as its manufacturing industries took advantage of the boom in electrical products. Built in 1998, Kuala Lumpur's Petronas Towers have come to symbolise this period of prosperity and at 452m, remain the tallest twin buildings in the world.
When a financial crisis spread across Asia at the end of the 1990s, the foreign investment that previously poured into Malaysia vanished overnight and its economy stalled. A National Economic Action Council was set up to try to ensure Malaysia still achieved its ambitious goal of reaching developed-nation status by 2020.
With a 350% rise in GDP per capita since 1990 and the ensuing growth of the middle classes, Malaysia has suffered a shortage of manual labourers for many years. The country relies heavily on foreign workers, mainly from Indonesia, to fill jobs in the manufacturing, construction and service industries.
Despite government efforts to shrink the number of foreign workers, including a ban on employment in some sectors, Malaysia is home to an estimated four million migrant workers, half of whom are illegal. Voters accuse foreign workers of keeping wages low, hampering attempts to reach high-income status.
The Malay majority has historically been poorer than the ethnic Chinese. Government officials have tried to correct this since 1971 through the New Economic Policy of affirmative action, by giving Malays priority in university scholarships and government jobs. But other ethnic groups, like Indians, say they need just as much help.
The NEP policy and its successor the New Economic Model, have led to a brain drain, as well-educated ethnic Chinese and Indians leave Malaysia to seek fairer treatment elsewhere. In 2010, the World Bank reported that these groups now made up the majority of the Malaysian diaspora, an estimated 1.4 million people.
The resurgence of Islamic conversativism has made religious minorities worried their rights are being eroded. This adds to ethnic divisions in the country because race and religion are almost one and the same. The Malaysian Constitution defines ethnic Malays as Muslims, and they account for 61% of the population.
Non-Malays have the freedom to worship. Some do convert to become Muslim, but it is very difficult to renounce Islam. This is a growing source of tension between the ethnic minorities and Malay-Muslim community, with a number of legal battles still in the courts.
Multi-faith, multi-racial Malaysia was once hailed as a model of Asian development. But while the nation's global ambitions continue unabated, decades of economic policy based on ethnic and religious discrimination have left its people riddled with tension and questioning whether their tiger economy really can get the cream. <a href="http://www.bbc.co.uk/news/world-radio-and-tv-14237364">Read more at Malaysia Direct</a>