Malaysia and the Indo-Pacific: Navigating the Ocean of Strategic Uncertainties

Rahul Mishra and Peter Brian M. Wang

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Within a fortnight, the Indo-Pacific region has witnessed a profusion of diplomatic footwork, much of which has implications for Malaysia. In mid-September, the European Commission and the High Representative presented the European Union’s formal Indo-Pacific strategy, a day after the United States, United Kingdom, and Australia launched a new trilateral security pact unimaginatively named AUKUS.

AUKUS inadvertently launched a diplomatic fireball of sorts, prompting criticism not just from France, Germany, and the EU, but Malaysia and Indonesia also. During the recently-held 11th round of China-EU High-Level Dialogue, China did not pull its punches, describing AUKUS an example of a “Cold War mentality.” In apparent solidarity with France, the EU subsequently postponed the 12th round of trade negotiations with Australia.

As a non-aligned country, Malaysia has naturally been concerned about these developments. Defense Minister Hishammuddin Hussein is to visit China soon amidst growing tensions in the region. The EU strategy and AUKUS are just two of the latest approaches highlighting members’ differing priorities to consolidate their respective positions while addressing the uncertainties posed by the rapidly changing regional economic and security dynamics. While the EU approach is multi-faceted, normative, and inclusive, AUKUS is a members-only club specifically designed to deal with security issues.

Almost all regional stakeholders have their own articulated approaches vis-à-vis the Indo-Pacific. Japan and Australia were the first to formulate Indo-Pacific policies: The Free and Open Indo-Pacific (FOIP), and the Pacific Step-Up. Indonesia has its Global Maritime Fulcrum (GMF). India’s Act East policy seeks to broaden its engagement with the “East,” while the Security and Growth for All in the Region (SAGAR), and the Indo-Pacific Oceans Initiative (IPOI) aim to strengthen its Indo-Pacific presence.

While South Korea has its New Southern Policy, Taiwan under Tsai Ing-wen has formulated a New Southbound policy. ASEAN has also attempted to jump on the bandwagon through its ASEAN Outlook on the Indo-Pacific (AOIP). Each of these strategies brings with it a range of conceptions of the ideal configuration of regional order, reflecting both the priorities and preferred approaches of the nations that have formulated them. What is clear, though, is that China is the common denominator of the strategic planners of these various state actors.

However, Malaysia still hasn’t shown its cards regarding the current Indo-Pacific dynamics and is yet to officially embrace the Indo-Pacific construct. Both Malaysia’s current foreign and defense policies – the 2019 Foreign Policy Framework of the New Malaysia and the first-ever Defense White Paper launched the same year – do not explicitly mention the Indo-Pacific. The White Paper only references it to highlight some of Malaysia’s security concerns, particularly concerning the emerging great power rivalry.

In terms of guiding principles and strategies, Malaysia’s foreign and security policies have to a large extent remained consistent over the years. Its various strategies include an emphasis on ASEAN as the cornerstone of Malaysia’s foreign policy; an equal emphasis on strengthening bilateral and multilateral relations; a commitment to advancing global peace, security, and prosperity through multilateralism (i.e., the United Nations), plurilateralism (the Non-Aligned Movement, the Commonwealth, the G77), and regionalism (FEALAC, IORA, ASEM, and APEC); and a commitment to fostering cooperation between Islamic nations through the Organization of Islamic Countries.

A wide range of diplomatic, strategic, economic, and security-related agreements and arrangements anchor Malaysia’s foreign policy posture in the region. Many of these efforts are hardly inter-regional, but the accidental by-product of Malaysia’s strategic positioning, which straddles the Indian and Pacific oceans. They are nevertheless coherent efforts to address Malaysia’s strategic and security realities and pursue Malaysia’s concerns and interests, which extend into both oceans.

On the ground, Malaysia’s foreign and security policies acknowledge and attempt to deal with the emerging realities in the Indo-Pacific. The question is: why hasn’t Malaysia taken more concrete steps toward coming up with an explicitly “Indo-Pacific” policy? After all, if it walks and quacks like a duck, then it probably is a duck.

One explanation to date that seems the most plausible is that most of the countries pushing their Indo-Pacific strategies have been viewed as doing so not so much to respond to the increasing integration between the two regions but more as a means to build a common front against China.

This is one of the reasons why AUKUS is viewed by Malaysia and others as a serious challenge to the regional security equilibrium. Malaysia and many other states in Southeast Asia do not wish to take that risk of promoting instability, which they believe would have a detrimental impact on the regional economy. As an open and trade-dependent economy, Malaysia would be among those most vulnerable.

The responses from Prime Minister Ismail Sabri Yaakob, which were echoed by his defense and foreign ministers, clearly highlight how serious Kuala Lumpur views AUKUS’ potential impact on the region. Malaysia fears that AUKUS and the nuclear submarine deal with Australia might lead to an arms race, while also provoking other powers in the region (read China) to act more assertively.

While China has been cold toward the Indo-Pacific concept, as has Russia, Malaysia’s concerns do not overlap with China, just as they do not overlap with the U.K.’s or Russia’s, either. Taking a cue from the past, especially its role in the launch of ASEAN’s Zone of Peace, Freedom and Neutrality Treaty (ZOPFAN) in 1971, Malaysia must take the lead in shaping the contours of the Indo-Pacific discourse, especially for the ASEAN region.

Unless there is a consensus on broad parameters of the Indo-Pacific order, symptomatic indicators of regional security threats such as AUKUS will keep coming up.

Considering the diplomatic and domestic debates that AUKUS has prompted, it seems timely for Malaysia to officially chart out its Indo-Pacific approach. That would also help deal with the criticism that Malaysia is tilting to either of the superpowers while also pushing aside the impression that Malaysian foreign policy is getting more ad-hoc in dealing with great power politics. It is beyond doubt that Malaysia has an Indo-Pacific policy in everything but name, but sometimes it becomes imperative to say things out loud.

Malaysia’s long-standing principles and strategies have served it well, but the ongoing contest is becoming increasingly challenging and Malaysia may eventually find itself stretched too thin in trying to maintain the status quo while adhering to long-standing principles and strategies. It may come to a point where choices have to be made. Yet what options are there for Malaysia should things escalate? This is something that Malaysian policymakers need to mull over.

Recent developments have put the writing on the wall for Malaysia and ASEAN. A mere reiteration of “ASEAN centrality” and a pledge to keep the region away from power politics is not enough. Malaysia should not presume that regional powers are content with ensuring the strategic equilibrium alone – each is seeking to tilt it in their favor – and it is here that Malaysia and ASEAN have a role to play.

Malaysia urgently needs to take proactive steps to protect its national and regional security while constantly reviewing and updating the policies and strategies that have served it so well over the years. Whether the country should act as an “interlocutor for regional peace” or a “smooth self-defense operator” is something that its top policymakers should decide. But the decision has to be made swiftly.