Managing External Risks: Challenges for Malaysia

Panel Presentation to Global Leadership Foundation/ISIS Malaysia Asia Pacific Leaders Dialogue, Kuala Lumpur, 8 February 2023

We are all well aware that the new Malaysian government is, and will remain for the foreseeable future, intensely focused on domestic issues, with international relations clearly taking a back seat.

But the reality is that the present international environment – both globally and regionally – is as volatile and fragile as it has been for a very long time, and Malaysia, like all the rest of us, has no choice but to be giving some serious thought as to how to respond.

It is not for us in GLF to be offering prescriptions to Malaysian policymakers: that would be arrogant and inappropriate. But maybe we visitors can – with our outsiders’ perspective and experience – help advance discussion here on possible ways of managing the external risk environment you face, and help identify areas where Malaysia really can play a significant leadership role.

The observations that I will offer draw partly on my experience leading the International Crisis Group for 10 years from 2000-2009, based in Europe and working on conflict prevention and resolution in more than 60 countries around the world. But I guess they will draw even more on my experience as an Australian policymaker, given the significant common ground that exists between our two countries, helping to bind and unite us:

• we are of comparable size and weight internationally, and think of ourselves, rightly, as significant middle powers – states lacking the military or economic strength to impose our will on others, sufficiently capable, credible and motivated to be able to make an impact on international policymaking through persuasion and coalition-building;
• we are both strategically located in the Asia-Pacific/ Indo-Pacific (even if Dr Mahatir was never happy about Australia identifying itself as part of Asia in any way!);
• we have had a long shared history of working closely together on geopolitical and economic issues (including as fellow members of the Five Power Defence Arrangements, and now enjoying ‘Comprehensive Strategic Partnership’ status, one previously shared by Malaysia only with China and Turkiye); and
• many close person-to-person relationships have been forged through education, business, travel and migration links – with these destined to be further advanced by the appointment of Malaysian-born Penny Wong as our Foreign Minister.

The present global and regional environment with which both of our countries have to deal really is more fraught than it has been for many years. We have seen:

• the rise of China and - comparative - decline of the US, leading to massive strategic competition, and growing fear of outright conflict, especially over Taiwan;
• in the case of China, Xi Jinping – with his power now consolidated by the 20th Party Congress – unquestionably more ideological and assertive than recent predecessors, making it clear that China wants its own strategic space in East Asia, no longer prepared to play second fiddle to US; wants to push its influence to the limits in South East Asia and the South Pacific; and that, when it comes to the global order which it played little part in creating, is no longer prepared to be just a rule-taker or bystander, but determined to be a major player, a rule maker;
• the US for its part, showing no signs, on either side of politics, of accommodating China’s aspirations, by relinquishing any of its traditional primacy both globally and in the region: reinforced by recently-released National Security Strategy. Washington seeing every arena as zero-sum struggle for dominance, with latest economic decoupling move, to ban sales of chip-making technology, significantly upping the ante. And its passionate talk about democracy notwithstanding, American democracy is not a thing of beauty, with ever-present fears of a Trump, or Trump-like reincarnation;
• the region responding to these developments nervously, but not very decisively, with nobody – including US’s long-standing allies and partners – really wanting to choose between their biggest economic partner and traditional major security guarantor. Torn between two competing instincts:
• fear of abandonment – manifested particularly in emergence of the Quad (the new US, Japan, India, Australia cooperation grouping) and AUKUS (the Australia- UK- US defence technology-sharing agreement)
• fear of entrapment - that US muscle-flexing (especially of kind we are seeing over Taiwan, with ‘strategic ambiguity’ becoming less ambiguous) will increase tensions to the point of possible major conflict, which everyone desperately wants to avoid;
• our regional economic and security dialogue forums –APEC, ARF and the EAS – losing much of whatever salience they might have had;
• ASEAN struggling to maintain its coherence and effectiveness, both internally (Myanmar) and externally (maintaining a united front against Chinese overreach in South China Sea);
• Russia’s legally and morally indefensible invasion of Ukraine, tearing up the most fundamental principles of the UN Charter and international law, particularly shocking given Russia’s status as a foundation member of the UN Security Council;
• the UN Security Council being reduced to impotence, with less confidence generally in multilateral processes and institutions;
• the renewed salience of nuclear weapons in security discourse, with Putin’s threat of use in Ukraine; North Korea consolidating its position as a nuclear armed state; hopes of reinstating the Iran nuclear deal vanishing; and every nuclear weapon-state in the Indo-Pacific, especially China, now modernizing and in most cases expanding their arsenals; and
• an acute consciousness now of all three major existential risks – not just nuclear weapon, but climate and pandemics as well as nuclear weapons – but real anxiety as to the world’s capacity to cooperatively respond to them.

All this creates multiple foreign policy, defence and trade challenges – and to some extent opportunities – for all of us in this region. There are three challenges in particular on which I think – again, from an outsider’s perspective, with all the modesty that requires – Malaysia needs to, or can usefully, prioritise, and where it is able in fact play quite a leading role.

Navigating US-China Strategic Competition

This is a challenge on which Malaysia, like the rest of us in the region, can’t avoid focusing. We are all hugely economically dependent on China, the major trading partner for most of, but at the same time have real security concerns which demand pushback– not least, in Malaysia’s case, in relation to Beijing’s continued overreach in the South China Sea, making legally indefensible territorial claims, militarising the islands and reefs it does occupy, and being obviously keen to exercise the kind of hegemony that will reduce its ASEAN neighbours to tributary status.

With the US, we all need to recognize the extraordinary stabilizing role it has played in the region for many decades, and its continuing capacity – with its allies and partners – to act as a military counterweight and deterrent against a potentially over-ambitious Beijing. But its inability to conceptualise its own role – both in the region and globally – in terms other than the ‘p’ words – primacy, predominance, and pre-eminence – makes for continuing real, and potentially acute, tensions, and we know from the past (not least Vietnam and Iraq) that Washington is capable of making some terrible judgment calls.

There is nothing inevitable about the so-called Thucydides Trap (the claimed tendency, when a rising power challenges an established one, for things to end in tears) and every reason to believe that, despite all the rhetoric, caution will prevail over Taiwan on both sides for the foreseeable future – but there are real risks which have to be managed.

The crucial need for all of us in the region is to maintain our balance, and national agency, and not get completely sucked into the orbit of either Beijing or Washington. We need to get along with them – and recognize their positive contributions to prosperity and stability – where we possibly can, but stand up to them where we must. That balance is probably easier for Malaysia to achieve than Australia – given the extent of our longstanding commitment to the US alliance, compared with your tradition of claiming general adherence to the principle of non-alignment – but I believe it is something for which we all must strive.

What all of us in the region can probably most usefully do – and middle power voices have a critical leadership role here – is to emphasise, over and again, the crucial importance of approaching all these issues with not a confrontational but a cooperative security mindset - that approach which focuses on finding security with others, not against them; on confidence-building strategies; on seeing security as multidimensional, with many economic and social as well as military and other hard-edged traditional components; and above all on building habits of dialogue, consultation and cooperation between nations.

Building a More Effective ASEAN

This is a challenge that Malaysia could continue to avoid if it chose, but it would be in its own and many other’s interests to tackle – and indeed play a leadership role. While ASEAN has continued to be one of the world’s great internal conflict prevention success stories, with its member states showing no signs of lapsing back into bad old confrontational habits over sea and land borders and the like; while it has made an extremely significant continuing contribution to South East Asian economic development; and while it has played an important convening role in developing such cooperative regional dialogue architecture as we have, it is hard to deny that in relation to two really crucial benchmark issues (identified by Marty Natalegawa among others) ASEAN has simply gone missing.

The first is providing any kind of effective collective response to external security threats, maintaining cohesion in the face of a newly confident and assertive China, and reaching consensus on any kind of sustained, substantive, collective reaction on the South China Sea issue.

The second is ASEAN living up to the standards of democratic and human rights governance to which it is formally committed It has always been something of a tightrope act balancing ASEAN’s traditional, and understandable, desire to continue to give primacy to state sovereignty and non-interference against the need to address unacceptable violations of universally recognised civil and political rights, but its conspicuous impotence over Myanmar has put a major dent in its credibility.

Anwar Ibrahim’s new government has made clear its commitment to strengthening relations with key ASEAN members, and seems particularly well placed to so with Indonesia, whose role as ever is crucial. Malaysia cannot single-handedly change ASEAN’s direction, but if it becomes again a key member of the activist, principle, reforming grouping within the organization it can and will make a difference.

Being a Voice for Decency in Wider International Policy-Making

Malaysia has had a long record of active engagement with the UN, but in an environment where multilateralism has been under real siege, there is the potential for you to play an even more significant and visible role in the global interest. That is particularly the case with the kind of energetic, creative leadership that Anwar seems to want to provide – and given the great personal respect with which he is already regarded worldwide after thirty years on the international stage.

I am thinking here not only of the importance of Malaysia’s voice in the regional security issues I have already mentioned, and on the big trade policy issues – global and regional – where Anwar’s economic credentials are particularly credible, but something more than that: what I call good international citizenship, or decency issues – those issues (including some major global risk issues) where active engagement may bring no direct or immediately obvious national security or economic return to the country in question, but which are nonetheless hugely worth pursuing for their own sake, and do bring other kinds of national reward if that engagement is seen to be sincere and well done.

The benchmarks that matter in assessing whether a country is or is not seen to be a good international citizen include doing everything it can to protect and advance universally recognized human rights; doing everything it reasonably can to prevent the horror and misery of war and mass atrocity crimes, and alleviate their consequences, including for refugees fleeing their impact; and being an active participant in cooperative attempts to meet the great existential risks, to life on this planet as we know it, of pandemics, global warming, and nuclear war.

My argument has always been that to be and be seen to be a good international citizen in all these and other ways is not just a moral imperative, but a national interest imperative because of the returns it generates for a country’s reputation and others’ willingness to support it, deal with it and follow its lead – a variation on the familiar theme of ‘soft’ power. Moreover, such evidence as there is from opinion polls in my own and other countries, is that the domestic politics of decency are wholly positive: that having a strong international reputation for doing the right thing is something that appeals to voters’ pride and sense of self-worth.

There seems plenty of reason to believe that the new government ‘gets it’ on all the external challenge issues I have mentioned, and that – although clearly preoccupied for now with internal challenges – is determined over time to make its mark internationally, and to contribute some real leadership in making this region and the wider world safer, saner, more prosperous and just. We at GLF will be delighted to help in any small way we can to make that happen.