The article explores problems of modernisation and national identity in the developing world, with Malaysian higher education as the empirical site. Noting that developing nations and their university personnel are often held in the condition of what Alatas (1974) famously called ‘the captive mind’, it examines the steps taken in Malaysia to overcome this. After theorising forms of Western hegemony in the intellectual life of developing countries (diffusion, dependency, captive mind) and an outline of the history of Malaysian higher education, the authors present the findings of extended interviews with ten senior administrators and academic faculty from Malaysian universities. There have been significant attempts to break from the captive mindset, for example language policies, and centres for regional studies. The continuing issue for countries like Malaysia is how to modernise economy, society, education and knowledge while sustaining and advancing the national project: how to combine development with self-determination.