Malaysia is considered one of the most important regional countries in Southeast Asia; the important geopolitical arena where strategic competition between the United States and China has been intensifying over the past years. It enjoys an active diplomatic role in the region, given that it is a founding member of the Association of Southeast Asian Nations (ASEAN), along with its continuous endeavor to establish a balanced relationship with these two major powers, and even deals with them as playing constructive roles in the region. In addition, recent developments, such as Malaysia’s interactions with Hamas following the Al-Aqsa Flood operation, have highlighted Kuala Lumpur’s external role in various regional and international issues. Malaysian Prime Minister Anwar Ibrahim faces a challenge to maintain a delicate balance amid the geopolitical complexities surrounding his country on the one hand, and his country’s foreign commitments according to its national interest standards on the other hand. He usually emphasizes that his country adopts a balanced approach in foreign policy between the West and the East, and stays away from any position considered provocative; as it deals well with the United States and Europe, while at the same time maintaining excellent bilateral relations with China, South Korea and Japan.
Aspects of Movement
While there has been some continuity in Malaysian foreign policy over the past five decades regarding its general priorities, including managing relations with neighboring countries, expanding the country’s role in key regional and global forums, as well as trying to maintain an equal distance between major powers, including the United States and China; However, it is witnessing a degree of dynamism in response to global geopolitical and geoeconomic changes. Among the most important aspects of its external movements are the following:
1- Developing relations with the Middle East region: Since Anwar Ibrahim took power in November 2022, Malaysia has worked on formulating its policy towards the Middle East; Anwar praised Ankara’s diplomatic skill in balancing relations between global powers, saying: “The region should learn diplomatic skills from President Erdogan.”
On the other hand, Malaysia sought to develop cooperation ties with Iran, including sending the Malaysian Foreign Minister on a working visit to Iran in August 2023, which reflected Malaysia’s attempt to open up to Iran, especially after the Saudi-Iranian reconciliation in March 2023. Subsequently, two bilateral meetings were held between the Malaysian Prime Minister and former Iranian President Ebrahim Raisi, on the sidelines of the UN General Assembly in New York, followed by another meeting during the joint Arab-Islamic Summit in Riyadh.
In the same context, the Malaysian Prime Minister was keen to communicate with the main regional powers in the Gulf Cooperation Council countries, especially Saudi Arabia and the UAE, considering that this strategic link with the GCC countries is directly in line with the Malaysian Prime Minister’s declared goal of enhancing foreign investments in the country, and strengthening trade links and foreign exports.
2- Attempting to play a prominent role in the Palestinian issue: Since assuming the position of Prime Minister, Anwar has worked to consolidate his image as a Muslim statesman, after adopting a firm position on Islamic issues around the world, especially the Palestinian issue, which was evident after the recent conflict between Israel and Hamas, during which he defended the Malaysian government’s relations with Hamas, stressing that despite Western officials urging Malaysia to condemn Hamas, the government did not agree to the West’s pressing position, strongly opposing American efforts to intensify sanctions against Hamas.
Not only that; A few days after the Al-Aqsa Flood operation, Anwar made an official phone call with Ismail Haniyeh, head of Hamas’s political bureau, to express Malaysia’s steadfast support for the Palestinian people. He also led massive demonstrations within his country, describing the situation in the Gaza Strip as “insane” and “the height of barbarism,” criticizing Western countries for ignoring and continuing their silence regarding the war.
Regarding the Red Sea attacks, the Malaysian Prime Minister ruled out condemning the Houthi attacks in the sea, explaining that “the problem did not start with the operations launched by the Yemeni groups, but with Israel’s aggression on Gaza.” In December 2023, Malaysia announced, in a statement issued by the Prime Minister’s Office, that it had banned ships carrying the Israeli flag, and prevented ships heading to Israel from loading goods in its ports.
In his latest statements, the Malaysian Prime Minister praised South Africa’s lawsuit against the occupation in the International Court of Justice, confirming his country’s full support for this step. He also expressed his country’s readiness to cooperate with Indonesia to send UN peacekeeping forces to Palestine; To ensure a ceasefire in the sector. For his part, Malaysian Finance Minister Amir Hamzah Azizan indicated that Malaysia has not prevented any company from investing in Malaysia, but it adheres to its position of not allowing Israeli-owned companies to do so in any part of its territory.
3- Efforts to strengthen relations with China: Despite Anwar Ibrahim’s statements at the beginning of his tenure that Malaysia would remain non-aligned and would not risk getting involved in the conflicts of the great powers, the year 2023 witnessed notable developments in bilateral relations between Kuala Lumpur and Beijing, compared to the level of Malaysian-American relations; Which raised doubts about the Malaysian strategic orientation during the coming period.
Anwar held several high-level meetings with senior Chinese officials, including Foreign Minister Wang Yi, Premier Li Qiang, and President Xi Jinping. He also traveled to China twice in one year, during which the two countries agreed on an economic and trade cooperation plan that will continue until 2028, through the signing of several memoranda of understanding worth billions of dollars in investments, foremost of which is the extension of the railway project, which costs $10.6 billion, as it is considered an important part of the Chinese Belt and Road Initiative near its border with Thailand. On the other hand, the Prime Minister did not hold meetings with senior American officials, despite the stability of relations between the two sides.
Anwar defended his government’s policy towards China, arguing that the rapprochement in bilateral relations stems from geographical proximity, deep cultural relations, and the fact that China has been Malaysia’s largest trading partner for 14 consecutive years. Moreover, 2024 marks the fiftieth anniversary of diplomatic relations between Malaysia and China, which is likely to witness efforts to raise relations to higher levels.
4- Variation in the Malaysian position on the Russian-Ukrainian war: Malaysia was among most Southeast Asian countries that strongly condemned the Russian military operation on Ukraine in February 2022. But on the other hand, and like the rest of the countries of the Global South, Kuala Lumpur did not join in imposing sanctions on Moscow, and there was even sympathy for Russia among sectors of its population, but at the same time it voted with the United States in the UN General Assembly in March 2022 to condemn the war; This indicates that it is less strict with Moscow than Washington would like, but it also does not show signs of explicit bias towards Russia in this conflict.
Indirectly affected by the war, the ban imposed on Moscow after the war prevented Malaysia from purchasing Su-30 aircraft directly from the Kremlin; This means the possibility of Malaysia’s current stocks of spare aircraft running out, according to an analysis conducted by the International Institute for Strategic Studies. Among the countries trying to break into this field is South Korea, which signed a contract in 2023 to supply it with 18 Korean-made fighter planes of the (FA-50) model. The Ukrainian National Resistance Center also revealed that it had detected Malaysian mercenaries working in the Donetsk region controlled by Russia; This is in addition to many other nationalities that Moscow recruited to help it in the war.
5- Exploiting the Chinese-American economic competition: The ongoing trade tension between the United States and China has helped position Malaysia as a major source for importing new raw materials, parts, components and final products for companies looking to reduce their dependence on either of the two superpowers. In addition, many companies working in the field of technology have moved to open new factories in the country located in Southeast Asia, including the Chinese company Fengshi, which expanded its business in northern Malaysia in 2022 with the aim of manufacturing semiconductor equipment, coinciding with many other foreign companies accelerating their desire to expand there, including the American chip giants Micron and Intel, and European semiconductor companies, such as AMS Osram and Infineon; This is with the aim of protecting them from potential geopolitical disturbances.
This competition has pushed Kuala Lumpur to become a major investment destination in the region; Some believe that the increasing restrictions imposed by the United States on Chinese technology, especially in the chip industry, constitute a main reason for the attractiveness of the neutral country.
Regarding foreign investments witnessed by Malaysia, the country attracted $12.8 billion in 2023, which is more than the total investments it received from 2013 to 2020 combined. In an interview with the Financial Times, Prime Minister Anwar Ibrahim indicated that developing the semiconductor industry and workforce in Malaysia is a “critical goal” for his ambitious development plan; To attract more foreign investments. According to the Malaysian Investment Development Authority in February 2024, Malaysia accounts for 13% of the global market for chip packaging, assembly and testing services, and exports of semiconductor devices and integrated circuits reached $81.4 billion in 2023, despite weak global demand for chips.
6- Malaysia’s increasing desire to join the BRICS bloc: Amid the absence of Southeast Asia from the BRICS group, Malaysia announced that it would apply for membership in the BRICS group, with a high possibility of its application being accepted. In fact, the consequences of the expansion of the BRICS group on competition between the superpowers are often misunderstood from a zero-sum perspective, while the group’s expansion indicates continued dissatisfaction with the US-led world order. Therefore, the expansion of BRICS to the pragmatically oriented Southeast Asian region also means the Global South countries’ pursuit of multipolar logic, not just building blocs.
7- Expanding Malaysia’s economic participation regionally: As part of its interest in its surrounding regional circle, Malaysia signed a memorandum with Singapore to develop the economic zone in January 2024, with the aim of providing freedom of movement of goods and people between the resource-rich state of Johor and Singapore. Malaysia explained that the final agreement is expected to be reached by September 2024; Where the two countries hope to attract new investments, in order to stimulate the economic growth process.
This region aims to actually involve both the Malaysian state of Johor and Singapore in the busiest land border in the world; Where hundreds of thousands of Malaysians residing in Johor travel to Singapore for work every day. According to Onn Hafiz, Governor of Johor State, there is a proposal for the economic zone to extend over a vast area covering 3,505 km2, which would make it larger than the Shenzhen region; The special economic zone located on the border of Hong Kong, and it will include 16 economic sectors, including electricity, electronics, manufacturing and health care.
Multiple motivators
The escalation of Malaysian activity on the international and regional arena is driven by a set of main motivators, perhaps the most prominent of which are the following:
1- The Malaysian leadership’s interest in foreign policy issues: Anwar Ibrahim focused on making his country’s foreign policy serve Malaysian national interests, and the Prime Minister was active and frank in his diplomatic statements. Anwar Ibrahim’s foreign policy priorities focused on three main areas: the Association of Southeast Asian Nations (ASEAN), the Middle East, and relations between the major powers.
2- Malaysia’s position in the global trade movement: Malaysia has always been a commercial country; It is located in a strategic location along the Strait of Malacca, and is located on a major shipping channel connecting the Indian and Pacific Oceans, which was reflected in Kuala Lumpur’s focus on the Malaysian goods and services export sector; Therefore, it adopted liberal trade policies, focusing heavily on regional and bilateral trade agreements; Malaysia currently has seven bilateral free trade agreements with countries (Australia, Chile, India, Japan, New Zealand, Pakistan, and Turkey).
In addition, Malaysia participates in many free trade agreements within the framework of the Association of Southeast Asian Nations (ASEAN), including the Free Trade Area of the Association itself, which primarily aims to increase ASEAN’s competitiveness as a production base in the global market; This is in addition to the Association’s conclusion of other regional free trade agreements with China, Japan, Korea, India, Australia and New Zealand, as well as its current negotiation of several other free trade agreements with Iran and the European Union.
3- Attempting to interact with the changing environment of the international system: The Malaysian orientation towards diversifying its foreign relations movement – including its desire to join the BRICS grouping – stems from its desire to proactively hedge in a world in which the relative power of the United States is slowly eroding, and in which the future of the global system becomes largely uncertain; For example, through its accession to BRICS, Malaysia will obtain better opportunities to access the BRICS Development Bank (New Development Bank), in addition to enhancing the collective voice on reforming the international system.
With the escalation of tensions between the great powers, secondary sanctions have increasingly become the preferred tool in Washington’s strategy. With this trend, momentum has increased around de-dollarization around the world. In this regard, both Southeast Asian countries and BRICS have a common interest in moving this issue; For example, Malaysia achieved nearly 20% of its trade in non-dollar currencies.
In addition, the ideas of the Global Security Initiative, such as the vision of “shared, comprehensive, cooperative and developmental security” – put forward by Beijing – are ideas that Malaysia does not widely disagree with, especially since many of them reflect Malaysia’s own ideas about security.
4- Weak American compatibility with Kuala Lumpur’s aspirations: Malaysia recognizes that the United States has probably played the most important role in maintaining the security system in the Southeast Asian region; This is by promoting economic openness and maintaining its network of regional alliances. But in the maritime domain, apart from the broad acceptance of the principle of freedom of navigation, Malaysia differs with the United States on the extent to which this principle applies to military activities; As it considers these activities unauthorized in its exclusive economic zone, which is consistent with Beijing’s principles in the same regard.
It is also noteworthy that the lack of diplomatic efforts with Washington was surprising to many analysts; They had imagined that Anwar was more inclined to the West; Given the support he received from the United States when he was in prison, however, amid escalating geopolitical tensions, many concerns were raised in Washington and its allies that Anwar’s government was more inclined towards Beijing than expected. This is due to the weak American interest in Kuala Lumpur; Recent trips by US leaders to Southeast Asia ignored Malaysia and gave priority to other countries such as Vietnam. The last senior US official to visit Malaysia was Secretary of State Antony Blinken in December 2021; That is, about one year before Anwar’s government came to power. Therefore, it seems that the lack of diplomatic warmth was mutual; This indicates that both sides have other priorities.
5- The importance of the Indo-Pacific region in Malaysian policy circles: Anwar’s active diplomacy to strengthen relations, especially with ASEAN member states, constitutes a notable effort amid talk of increasing divisions in the bloc, and it also clarifies the growing role that Malaysia plays in developing stronger and more stable relations in the region.
But on the other hand, Kuala Lumpur faces many regional disputes, which force it to focus on its regional surroundings in the first place; For example, there is a diplomatic dispute between Malaysia and the Philippines over the Malaysian state of “Sabah”. On the other hand, tensions escalated between Singapore and Malaysia over the water agreement signed between them in 1927, which will remain in effect until 2061, according to which Singapore pays Malaysia for the right to withdraw more than 960 million liters of water daily from the Johor River. But since the beginning of this century, Malaysia and Singapore have disagreed about the fairness of the agreement; Malaysia seeks to renegotiate to reach a fairer value for the water it sells, while Singapore has adhered to the terms of the current agreement, but Kuala Lumpur believes that the agreement effectively gives priority to water security in Singapore at the expense of its own security, and the latest wave of tension erupted in November 2023, when Malaysia pushed for a review of the agreement.
6- The impact of religious diplomacy on Malaysian politics: Kuala Lumpur’s foreign movements are based primarily on the principle of religious diplomacy, which was evident during Anwar Ibrahim’s foreign tours, which he conducted in his capacity as head of government; He was keen to constantly communicate with Muslim minorities, make visits that received wide media coverage, and sometimes deliver religious sermons in mosques abroad.
The Middle East agenda initially aimed to strengthen Malaysia’s relations with the Islamic world and strengthen economic relations. But the conflict in Gaza has since dominated Anwar’s engagement in the region; Since October 7, 2023, Malaysia has taken a sharp stance on the war between Israel and Gaza; Anwar emerged as one of Israel’s harshest critics. It is therefore not surprising that Malaysia, with its Muslim majority, is one of the most pro-Palestinian voices.
In conclusion: Malaysia enjoys a great deal of pragmatism in its foreign policy; Where it combines many political, economic and religious considerations. Add to that the fact that most countries of the Global South, especially Southeast Asia, are not in a position that allows them to abandon their practices based on “hedging policy”, despite the increasing polarization between the great powers, and the intensification of pressures to align with either side; Therefore, Kuala Lumpur’s approach to dealing with international and regional issues will remain of paramount importance to monitor in the coming years, especially until the end of Anwar Ibrahim’s term in 2027; Where the Prime Minister may be able to transform Malaysia into one of the most strategic powers in the region, and his ability to mobilize consensus in ASEAN will be a major test of his leadership, especially in light of Malaysia’s presidency of ASEAN in 2025.
