How long can Malaysia keep hedging its bets?

Just two years after the last one was published, Malaysia has launched a new foreign policy framework, aptly titled ‘Focus in continuity: a framework for Malaysia’s foreign policy in a post-pandemic world’. With the challenges brought about by both the Covid-19 pandemic and the brewing great-power contest in the Indo-Pacific, Malaysia may have felt a need for a greater sense of direction. The framework takes note of the resulting disruptions but traverses a rather safe route by avoiding any major detours from the previous framework.

Launched on 8 December, the framework is an official policy document that covers many foreign policy priorities for Malaysia. In addition to addressing the negative impact of the pandemic and rising regional tensions, it serves as a guiding document for Malaysian policymakers and practitioners to deal with a range of traditional and non-traditional security areas such as climate change, downward trends in globalisation and multilateralism, and the reversal of gains made on democratic and human rights fronts—particularly in Southeast Asia.

More importantly, it highlights the principles and approaches that Malaysia will be adopting. First, it pledges continued adherence to the principle of non-alignment, which keeps Malaysia’s diplomatic manoeuvring space wide but also signals the country’s reluctance to be drawn into the ongoing regional rivalries.

A second and equally significant aspect is its continued support for the rules-based liberal international order, with some proposed tweaks such as reforms to the UN Security Council, and greater sincerity on and support for multilateralism. Human rights is identified as a key guiding principle for Malaysia—which is hardly surprising since it has just been elected to the UN Human Rights Council, a position it will hold for the period 2022–2024. The framework clearly states where Malaysia’s priorities are: vulnerable groups, women, youth and addressing the impact of business and climate change on human rights. More collaborative action is likely to occur on these fronts with partners including Qatar, the United Arab Emirates, India and Kazakhstan.

The list of foreign policy priorities and strategies has been expanded, with more elucidation on existing ones in comparison to the previous iteration. For instance, the new framework shows a sense of responsibility and urgency in areas such as revitalising Malaysia’s links to the global economy, which have been severely curtailed due to bans on international travel and disruptions to international trade; pursuing health diplomacy to overcome public health challenges; and developing domestic vaccine production capacity.

Other priorities include facilitating the country’s digital economy goals, which include addressing regional digital economic issues, and attracting high-technology foreign investment into the country. Cultural diplomacy, which has been constrained in the past year, remains a permanent feature in Malaysia’s foreign policy toolbox. Strategies include promotion of cultural and sports diplomacy, though such efforts could be undermined by incidents like the recent axing of a world squash event due to Malaysia’s decision to not issue visas for Israeli competitors.

One area that the framework remains relatively silent on is the ongoing regional rivalry in the Indo-Pacific, a point we highlighted recently in our critique of Malaysia’s foreign and security policies. For the most part, the document skirts contentious aspects of this critically important issue, even though there’s no doubt that policymakers understand the impact these regional rivalries have on Malaysia, which lies at the centre of these developments, both literally and figuratively.

Certainly, Malaysia’s foreign policy interests go beyond the Indo-Pacific region. Yet the Indo-Pacific and the major developments there are of immediate and top concern. This could be a part of a cautious attempt not to flare up the US–China polarisation of the region. China looms large over Southeast Asia, which has undoubtedly shaped policy responses from countries across the region. Malaysia’s own conservative assessment of how China would behave with its smaller neighbours in case of heightened US–China rivalry is another critical factor.

The introduction of this new framework is timely. It comes at a time when Malaysia, according to the Lowy Institute’s Asia Power Index, has fallen in its power-projection capabilities. It is currently ranked 11th out of the 26 selected Indo-Pacific countries for comprehensive power, down a ranking, having been overtaken by Indonesia. Its overall score of 18.3 out of 100 is a 2.4-point or 11% drop from the previous year. In fact, Malaysia performed poorly in most of the areas measured by the index, with diplomatic influence experiencing the biggest drop of all (–8.9 points). Even in areas in which it usually performs best, like cultural influence, Malaysia experienced a 4.0-point drop from last year. It’s hoped that the new policy will address this fall.

Indonesia’s rise in the index is an outcome of President Joko Widodo’s bold and proactive foreign policy moves. Even though Indonesia and Malaysia have similar approaches on regional and international issues, it’s the clear articulation of preferences and priorities that is increasingly making the difference. From climate change to the Natuna Islands, Indonesia has been vocal about its rights and concerns.

Nevertheless, Malaysian foreign policymakers believe that the document’s guiding principles, approaches and strategies remain relevant. For instance, in launching the framework, Prime Minister Ismail Sabri Yaakob said that it ‘will serve as a reminder and guidance to all Malaysian foreign affairs practitioners that regardless of the evolving regional and international architecture, the cardinal principles of Malaysia’s foreign policy will remain consistent and unchanged’.

The new framework, like Malaysia’s current defence policy, essentially reflects a non-aligned policy with (albeit diminishing) elements of a hedging strategy. It is perhaps the genius of Malaysia’s foreign and defence policymakers that they have been able to continue to keep us all guessing. However, if Malaysia wants to stay ambiguous vis-à-vis the competing superpowers, adoption of opposite and counteracting measures along with a foolproof fallback position is a must. There is a smattering of evidence of this in this latest foreign policy framework but not enough.

Hedging strategies like Malaysia’s can sometimes fail or, in the case of Southeast Asia, have variable effectiveness. Malaysia may eventually find itself having to make a choice between the superpowers. It has to decide too whether to act as an ‘interlocutor for regional peace’ or a ‘smooth self-defence operator’. As one of us recently commented, ‘Hedging is a luxury middle powers cannot afford for long, especially when the stakes are high, superpowers are pushy, and the rivalry is intensifying.’