Federalism, as a governing concept, makes pragmatic sense in a country such as Malaysia where there have been in existence historically autonomous kingdoms and colonies with their own local bases of power and unique traditions. It is a system of governance that allows for particular expressions of local autonomy while still keeping the nation whole and cohesive, essentially balancing the dominating tendency of the federal government and the autonomous aspirations of its components on the periphery. Nevertheless, the type of federalism practised in Malaysia is not evenly balanced and is heavily skewed towards the domineering federal government in Putrajaya and Kuala Lumpur (Loh, 2010; Mohammad Agus, 2006; Shafruddin, 1987).

Francis Loh terms this imbalanced arrangement ‘centralised federalism’, a central–state relationship that is ‘coercive, rather than co-operative’ (Loh, 2010: 132). Loh offers three explanations why this is so: constitutional design that clearly favours the central over the state governments; the one-party political dominance that leads to the concentration of power in the executive branch; and the implementation of the New Economic Policy (NEP) in 1971 that spawned numerous statutory bodies and government-linked companies (GLCs), which resulted in the expansion of the public sector and tight control by the central authorities (Ibid., 132–4). At the crux of this highly centralised form of federalism lies the persistent drive to maintain the political status quo, that is the unbroken hegemony of National Coalition (Barisan Nasional, BN) rule since independence, in particular of the Malay political party, United Malays National Organisation (UMNO).

The management of Islamic education in Malaysia is used as the focal point to analyse the currently overbearing presence of the federal government. This chapter is organised as follows: first, background information on Islamic education in Malaysia, especially in regard to central–state relations. Then an explanation of why the federal government, via the Ministry of Education (MOE) and JAKIM, has managed to exert overwhelming influence over the character and management of Islamic education despite the states’ constitutionally empowered autonomy to administer Islamic education in their own respective areas. Two factors that contribute to this lopsided dynamic are offered. Lastly, Kelantan is used as the case study to serve as an empirical illustration of the federal government's dominance in the field of Islamic education in a state that is long renowned for its strong local traditions of Islamic learning.