Malaysia’s Quiet Recalibration

By Mehmet Enes Beşer

The promise of a “New Malaysia” first captured global attention in 2018, when a surprise electoral upset ended sixty-two unbroken years of Barisan Nasional coalition government. Pakatan Harapan coalition win—and return to politics of veteran politician Mahathir Mohamad—was welcomed as a democratic victory, a harbinger that Malaysia was poised to redefine itself politically, economically, and diplomatically. Subsequent local unrest, leadership chaos, and a rapidly changing world order, however, have rendered such an option remote. As Malaysia finds itself in a bipolar world environment of great power competition, economic unpredictability, and regional maneuvering, it is re-starting foreign policy in jerky beginnings—but with care. New Malaysia is not defined by speechifying or revolutionary break, but by foul pragmatism that hungers for resilience, diversification, and measured positioning.

Malaysia’s foreign policy has historically been defined by careful balancing. With its small, commercial economy at the intersection of major sea routes, it’s had a multilateral, non-aligned foreign policy for years—to the West close China, but building ties with China, the Middle East, and ASEAN neighbors. This policy, encapsulated in its commitment to the Non-Aligned Movement (NAM) and sincere interaction with ASEAN, allowed Malaysia to punch above its weight internationally in diplomacy, often acting as a middleman and a mediator between nations in regional and international politics.

The post-2018 era did not diverge from this doctrine but brought new tensions. Locally, political instability—such as the fall of Pakatan Harapan in 2020, the ensuing succession crisis, and navigating the pandemic—filled policy bandwidth and dissuaded long-term thinking. Internationally, China-U.S. rivalry escalated, compelling Southeast Asian nations to navigate an increasingly bipolar world. Meanwhile, challenges such as the South China Sea tensions, vaccine nationalism, and supply chain disruption required agile adaptive diplomacy.

Here, the recalibration of Malaysia’s foreign policy has been precipitated by a series of strategic shifts. At the forefront of these has been economic diplomacy. With growth imperatives that have underlying pandemic recovery imperatives driving it, Malaysia has been keen to diversify trade, investments, and maintain supply chain resilience. Securing and backing such deals as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Regional Comprehensive Economic Partnership (RCEP) is a move to anchor Malaysia in multilateral platforms which can act as a shock absorber from the outside and a gateway to central markets without committing the binary option of joining the U.S. or China.

Second, Malaysia has stepped incrementally closer with ASEAN. Even firmly the fulcrum of ASEAN centrality, current moves betray an increasing necessity to play pioneer roles, particularly on matters like the Myanmar political crisis and regional economic integration. Malaysia’s forceful stand on Myanmar—calling for brasher action than ASEAN consensus diplomacy—betrays a concern of an appreciation that passive action in a region under threat of inner and outer tensions will not be possible.

Third, with regard to China, Malaysia adopts a twin-track approach: economic engagement and judicious strategic hedging. China is the largest trade partner and largest investor in BRI infrastructure for Malaysia. And yet, at the same time, Malaysia has never shied away from proclaiming maritime interests in the South China Sea via diplomatic protests and demarcation of its Exclusive Economic Zone (EEZ) by legal and operational declarations. This two-track policy is part of a broader regional strategy: attempting to get maximum economic returns with strategic autonomy.

Westward alignments are being reappraised, however, in a context of selective engagement. Malaysia welcomes security cooperation with America and defense cooperation under the Five Power Defense Arrangements (FPDA), but opposes proposals that are perceived to be openly anti-China, like AUKUS or military “containment” policies against China. Malaysia seeks to cooperate on matters like technology, climate change, and public health that are congenial to local capabilities without embarking on ideological conflicts.

New Malaysia’s international relations with the Muslim world have also been inconsistent. Remaining true to its historic lean towards the likes of Saudi Arabia and in general the Organization of Islamic Cooperation (OIC), Malaysia has sought to pursue more diversified relations with Turkey, Qatar, and even Iran—seeking to project moderate, progressive Islam amidst a period of global polarization. Efforts like the Kuala Lumpur Summit substantiated this commitment, although after-the-fact has been undermined by internal political instability.

Above all, Malaysia’s new foreign policy culture is distinguished by a change of generation and society. Young cosmopolitan Malaysian citizens expect greater values-based foreign policy at the cost of being a paladin of human rights and adhering to multilateralism. The administration is forced to balance hard-headed pragmatism with normative expectations—be it the Rohingya case, the Palestinian case, or enhancing international governance more broadly.

But there remains a problem. Malaise of internal political insecurity haunts Malaysia’s foreign policy like a ghost. Foreign policy may still remain reactive rather than strategic without the visionary and bold leadership and national inspiration. Fiscal prudence limits Malaysian diplomatic overreach, as global trends toward protectionism, technological bifurcation, and environmental pressure are system-wide pathologies no one state can cure alone.

But even amidst these challenges, Malaysia’s pragmatic shuffling may be a virtue. In an era where ideological rigidification is costly, and coalition allies are fleeting, flexibility to move, to adapt, and to create issue-based coalitions is a virtue. Malaysia will not triumph by adhering to a new Cold War, but by coalescing on principle that serves its national interest and promotes regional and international stability.

New Malaysia as world power is no revolution, nor should it be and nor can it ever be. It is a benediction in subtle diplomacy, in being able to construct bridges instead of walls, and in creating an open, responsive, inclusive understanding of sovereignty. In a bipolar world, such pragmatism is not weakness. It is the coin of survival—and perhaps of leadership.