In Malaysia, the national government has seen fit to steer higher education policy in a direction that is in the "national interest". This notion of "national interest" is best exemplified by the changing relationship between the State, higher education institutions and the market. Since the late 1960s, we saw the gradual but steady erosion of university autonomy with the increasing dominance of the State. The recently launched National Higher Education Strategic Plan 2020 and the National Higher Education Action Plan, 2007-2010, which operationalised the Strategic Plan, promises greater autonomy for the universities. While this increased autonomy for universities could be regarded as Malaysia's response to deal with emerging issues in higher education management and governance, the amendments to the University and University Colleges Act, 1995 have not resolved the issue of wider autonomy from the Malaysian treasury regulations for public universities. For the State, in the present climate of political and economic uncertainty, giving full autonomy to the public universities is seen to be inappropriate and untimely. The State considers public universities as still heavily dependent on the State for resources, and thus the need for regulation and supervision.