This is a report for the first year of the Malaysian study of the United Nations University project on Asian Perspectives. This report is comprised of three major sections, falling naturally in line with the three sub-themes of the project. Section one deals with Transnationalization of the Malaysian economy. It gives a historical analysis of how the economy was “transnationalized” and made dependent on the industrialized countries in the colonial and pre-colonial periods. Section two covers the state and transnationalization. It discusses the evolution of the country’s political elite from the colonial period to the first phase of the post-colonial period (the “Merdeka elites”) to the second (post-1969) generation of leaders. Section three analyzes development, stratification, and ethnic relations. It takes the analysis further into the level of how the process of transnationalization has altered the structures and positions of various classes in Malaysian society.