The influential Malaysian PAS Syura council has announced that non-Islamic publications cannot use the world “Allah.” The PAS Syura is one of Malaysia’s leading authorities on religion. The council believes that the use of “Allah” by non-Muslim publications is being used as an attempt to convert Muslims. Further, in recent days the Sultan of Selangor, a powerful state, has likewise banned the use of “Allah.” by non-Muslims.

While the national government has yet to rule on the issue, these developments could signify a growing trend towards religious intolerance. Analysts speculate whether these moves could damage Malaysia’s high degree of religious tolerance? And if so what effects could this have on Malaysia’s vibrant economy?

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The move to ban the use of “Allah” would appear to be a direct violation of the teachings of the Prophet Muhammad, who believed that the God of Judaism, Christianity, and Islam are all the same one God.

According to Islam the so-called Abrahamic God, “Allah” is the God of all three religions of Abraham. Islam supports the prophet-hood of Christ and Moses and believed that Christians, Jews, and Muslims worship the “one true God.” By forbidding that Christians and Jews use “Allah,” the PAS Syura seems to be contradicting Islam itself.

As a vibrant, multi-racial society, Malaysia was built on the foundations of tolerance. The country is home to three major ethnic groups, the Chinese, Indians, and Malays; Malaysia has long been a bastion of relative tolerance in a region known for religious and ethnic tensions. Compared to its neighbors, Malaysia has a strong record of respecting the religion and identity of its various Ethnic factions.

60 percent of Malaysians practice Islam, while an addition 20 percent practice Buddhism and 10 percent practice Christianity. These numbers do not include the large number of expats, many of which hail from Christian dominate countries, such as the United Kingdom. While Islam is the official state religion, Malaysia has demonstrated religious tolerance through most of its modern history.

Tolerance has been vital for creating one of the world’s fastest growing and most stable emerging economies. Malaysia has risen from poverty in the 1960’s and developed into a Middle Income nation with a strong high-tech manufacturing industry and a rapidly growing services industry.

Unfortunately, Malaysia still faces many challenges in the years to come as its emerging neighbors undercut its cost advantages, while fully-developed neighbors, such as Singapore, may impede Malaysia’s rise into the “first world.”

Tolerance has been a major component of Malaysia’s rise. Chinese business owners and investors, for example, have been essential in building MNC’s capable of competing on the world stage.  While the Chinese  represent only 1/4 of Malaysia’s population they are estimated to control up to 60 percent of the economy. This has created tensions, especially between the Chinese and Malays; however, the Chinese have also created millions of jobs for Malaysians as a whole.

Many Chinese are also Christian and may take offense to what they view as Malay oppression.

Malaysia is a complex country. The Chinese may control business but Malays hold firm control over the government and thus ultimately the nation’s destiny. The Malays control Malaysia through the Democratically elected government as they make up just more than half of population. The electoral system is also rigged to favor rural areas, which are predominately Malay.

Perhaps more importantly than local politics, any back lash against Christians may have an international impact and could drive Western companies away or make them more leery of investing in Malaysia. Beyond just the religious implications, such moves may empower rising tensions that could destabilize Malaysia’s economy. Rising signals of intolerance could damage Malaysia’s image as a moderate and stable country.

Further, any backlash against Christians will likely be viewed negatively by the United States. Malaysia has traditionally been favored by the U.S. which has welcomed Malaysia’s moderate brand of Islam. Malaysia plays an important role in U.S. foreign policy and along with Indonesia is viewed as a buffer against the more extremist currents of Islam found in Pakistan, the Middle East, and elsewhere. Thus, any move against non-Muslim could be viewed negatively by global business and political leaders, even regardless of their own personal religious beliefs.

Malaysia is also ranked highly for providing comfort and accessibility for “expats.” In fact, Malaysia was recently ranked as the world’s third best destination for overseas retirees. With a modern infrastructure, stable economy, affordable property, and an English speaking population, many retirees have flocked to Malaysia, bringing with them valuable foreign exchange and high consumption power. However, if religious and ethnic tensions continue to increase, foreigners may view the country as less welcoming, which would also prove detrimental to the Malaysian economy.

Malaysia’s best interests would be served by setting aside religious and ethnic differences. The national government may be wise to side with religious tolerance in order to offer proof that it represents the will of all Malaysians.

Only by utilizing the strengths of the entire population will Malaysia be able to avoid the so-called “Middle Income Trap” and build a truly world-class economy. While Christians represent a small portion of Malaysia’s population they are a vocal and powerful subset and are important to the economy. Oppressing Christians will only increase tensions in the fragile society.