The island of Penang, which once produced only rubber, palm oil and tin, is today the biggest exporter of hard drives and memory chips in the world.
Maverick
Dr Mahathir has become the all-powerful figurehead of a new, confident, middle-class nation.
He is hailed by many as a folk hero, who has put Malaysia on the world map.
Dr Mahathir wanted Islam to thrive in a modern setting
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Most people here tolerate, or even support, his maverick outbursts on the international stage.
Many are even prepared to forgive him for his "crony capitalism" and his cowing of the press and the courts.
But the man who in the past few weeks has so angered the world's Jews, may be regretting the day he first stoked the fires of political Islam in his own country.
Having barely even mentioned religion when he wrote 'The Malay Dilemma,' Dr Mahathir began what was known as the Islamicisation process, after he became prime minister, in an effort to ward off the challenge of PAS, the main Islamic opposition party.
Anwar Ibrahim, the radical leader of an Islamic youth movement affiliated with PAS, was co-opted by the ruling party, Umno, in the late 1980s, and before long had risen to become Deputy Premier.
But then Dr Mahathir turned savagely on his handpicked heir apparent.
In 1998 Anwar was dismissed from the cabinet, expelled from the party and accused of corruption and sodomy.
He is still serving the resulting jail sentences.
The action taken against Anwar was entirely due to his political threat to Dr Mahathir, according to Nasharuddin Mat Isa, Secretary-General of PAS.
"Anwar was very popular. To me, should there be any accusation, you should bring evidence and prove it, make it public...but till today the whole process is still very vague."
He said the Anwar affair turned out to the political benefit of PAS, helping it to pick up new seats at the last general election in 1999.
Overall it won about 60% of Malay Muslim votes.
He thinks his party will win more seats at the next general election, which is due within the next year and is expected by some observers as soon as December.
Religion
Which side truly represents Islam - the government or the main opposition party - is now the main issue in Malaysian politics.
Dr Mahathir recently claimed the high ground by denying that he was a "moderate" Muslim leader.
He went back to the fundamental teaching of Islam, he said, whereas PAS was using and abusing religion for political purposes.
This is hotly disputed by Nasharuddin.
"Our understanding of fundamental is applying the teachings of the Koran. After 46 years of independence, there is not much sign of these teachings being applied in Malaysia. When we tried to bring Islamic law into the two states we won at the last election, the resistance from Dr Mahathir was much greater than that from non-Muslims".
But there is little doubt that the non-Muslim Chinese and Tamil communities - as well as foreign investors - regard the possibility of Islamic law throughout Malaysia with deep dismay.
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