The daylong flight was tolerable in business class, with legroom and hostesses to fuss over us. We were a small group of conservative Washington types, guests of Malaysia’s Institute of Strategic and International Studies (ISIS), on a week’s journey to Kuala Lumpur and a resort at Langkawi. Prior to the trip, I knew nothing about the country, and a visit to Kramerbooks, the well-stocked Dupont Circle bookstore, proved no help.

The new KL airport, glistening with international-brand shops, immediately brought home that the Third World isn’t what it used to be. The capital city contains the world’s tallest buildings, with the poor hardly visible. (I never found how the government keeps the very poor from begging in the city center.) The affluence and energy of a new urban middle class was striking. Near our hotel was a mall to rival anything in the U.S., frequented by thousands who were buying, not window shopping. Consumerism is no sign of spiritual health, but one felt that Malaysia’s new middle class felt a genuine sense of national accomplishment.Forty-three years ago, Malaysia lagged behind Haiti in per capita income; since then it has grown an average of 7 percent annually and would rank third in per capita wealth in the Western Hemisphere. By almost any standard, its growth is outstanding. Given what the country was able to overcome—the deadly Malay-Chinese race riots in 1969, continued muted ethnic divisions, the lack of a democratic tradition, a prior dependence on extractive industries—Malaysia is one of the great international success stories of the past generation.During most of that time, it has been led, in a semi-democratic, partially autocratic fashion, by Dr. Mahathir bin Mohamad, known (or perhaps notorious) for his rhetorical sallies against an American-dominated globalization. Throughout his tenure Mahathir has (occasionally) postponed elections and jailed opponents, and reading the tepid Malaysian press one misses the First Amendment. On the other hand, he has addressed with genuine candor some of the country’s toughest political questions. Mahathir’s first book The Malay Dilemma—first published in the wake of the 1969 riots—is an astonishing document for any politician to have written, notable for its politically incorrect but telling analysis of the gap between the indigenous Malays and the country’s substantial Chinese minority.

Perhaps only a Malay leader could write that in “early Malaya, no great exertion or ingenuity was required to obtain food. … Under these conditions every one survived. Even the weakest and least diligent were able to live in comparative comfort, to marry, to procreate … the hot humid climate is not conducive to either vigorous work or even to mental activity.” In any case, the British colonial administration encouraged Chinese (and Indian) immigration—in great part because they could not get Malays to work hard in the tin mines. But the new immigrants changed the country completely. Wrote Mahathir, “[W]hatever the Malays could do, the Chinese could do better … before long the industrious and determined immigrants had displaced Malays in petty trading and all branches of skilled work.”

It has been Mahathir’s great accomplishment to create a sense of balance and accommodation between the Malays and the 25-30 percent Chinese and 10 percent Indian minorities. Modern Malaysia has been built with an elaborate affirmative-action and quota system that requires businesses over a certain size to have Malay partners and reserves 45 percent of the spots in the public university for Malays. It hardly works seamlessly, but clearly a Malay technocratic governing class has been created, which oversees a fairly transparent and accessible legal system and state bureaucracy. There is an official multiculturalism of the smiling-Malaysians-of-every race-striding-forward-together sort.

If the educational gaps between Chinese and Malays have been finessed, it is not clear that religious tensions won’t unravel the national fabric. Unlike the Chinese and most of the Indians, Malays are Muslim, a legacy of Arab traders who reached the peninsula five centuries ago. But Islam is now the principal source of opposition to the delicate balance Mahathir has fostered. As all Malaysians we met were quick to tell us, theirs is an “Islamic country” and supportive of “fundamentalist” Islam—but of course opposed to “extremist” Islam.

But what are the boundaries of “extremist”? I have never felt such limits in my own imagination as when standing next to a Muslim couple waiting for the elevator in our hotel lobby. The man was dressed like tourists everywhere, the woman in a black robe, head to toe, black head scarf, opaque black veil, only slits for her eyes to see. One has no idea what this spectral creature might be thinking, of you, or of the Chinese girl standing on her other side in the skimpiest of hot pants. One strains for a snatch of conversation, a tone of voice that might give some clue. Actually, she is laughing sweetly, talking to her husband. For our encounter with Islam, we need, at the very least, a new Dostoevsky or Flaubert, but of course there isn’t one.

The Islamic party (PAS) is growing in Malaysia, the majority party in two of the 13 states. One of our ISIS hosts (a Chinese historian, trained in the United States) told us that young Malays want to go to Pakistan to study who knows what, instead of to America or Britain to study engineering or business. Obviously this poses a long-term threat to the modern, religiously moderate, rather cosmopolitan trading state that Malaysia has become.

Our schedule was jammed with meetings—with police officials, with government officials, with bank officials, with the American ambassador, the Chamber of Commerce, the assistant prime minister, with human-rights groups, with the “Sisters in Islam” (a group of “progressive” Muslim women who argue that polygamy and wife-beating are not sanctioned by the Koran). We were groggy with jet lag, hardly able to respond to the exquisite politeness of the Malaysians—which didn’t stop efforts at political advocacy. One of our group pressed our hosts on the question of whether the crime rate (low by American standards) would be lower still if all Malaysians were permitted to own firearms.

Perhaps our most interesting event was dinner with “Young Malaysians”— an elite group of young men in their 30s, working as attorneys, aides to government ministers, journalists, researchers. To my delight, our hosts soon began interrogating us about the “neoconservatives,” about whom they had been reading much in the Western press. Opposition to the Iraq war and to America’s Mideast policies was unanimous among the Malaysians we met—probably driven most of all by the sense that our approach poured kerosene on the latent divisions in their own country. As one Malaysian diplomat explained to me (in reference to the Israel-Palestine conflict), moderate Muslims desperately need arguments to prove the West’s fairness and good faith for their own showdown with Islamic extremists.

It’s not only a Malaysian tune. We hadn’t expected condemnation of American foreign policy from the businessmen we met for a luncheon at the American Chamber of Commerce, but we got an earful. A Boeing exec said, with surprising bluntness, that Bush’s foreign policy was killing American business in Asia—he stressed particularly the need to do something about the “Palestine problem.” Everyone at the table agreed, and we registered a not unsurprising fact about the global village: the conflict in the Holy Land resonates strongly at a distance of 10,000 miles.

Americans living outside the U.S. are keen monitors of the growing global dismay at the conduct of “the world’s only superpower,” and one wishes they had a bit more nerve in expressing themselves.

The power gap between Washington and Kuala Lumpur is so vast that one can see how Americans might conclude that concerns from the likes of Malaysia can be safely discounted. That’s not a sentiment any of our group felt after a week there. More the opposite: that the fate of such middling countries—no longer poor, not yet rich, increasingly well-educated, vital as allies if Islamic terrorism is to be isolated and contained, and bellwethers of global opinion—will count heavily in the politics of the new century.