Malaysia’s two-step hedging strategy: Bilateral and regional activism

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Release of Australian Strategic Policy Institute (ASPI) Strategic Insight No. 24/2006

The Australian Strategic Policy Institute has today released a new ASPI Strategic Insight publication which examines Malaysia’s strategic objectives and positioning in relation to the great powers in its region, and its attempts to finesse bilateral and multilateral relations with those powers. 

Authored by Dr John Lee, Managing Director and co-founder of research and conferences company L21 the Insight argues that as Malaysia’s regional strategy swings between criticism of and cooperation with the US and praise and suspicion of China, these variations have made Malaysia’s strategic aims hard to read.

‘However, despite the various faces of its diplomacy, Malaysia’s strategic aim has been consistent: to hedge against domination.’ Dr Lee says.

‘Since emerging from the Cold War strategic straitjacket, Malaysia has grasped the opportunity to rethink its place in the international system and its policies towards great powers, and—crucially—to align foreign security strategy with internal and domestic priorities.’ 

‘By successfully forging its image as a renegade leader against Western ‘cultural imperialism’, Malaysia has found admirers in developing and Islamic countries. This led to Malaysia’s hedging strategy with the US suffering from diplomatic lows from late 1998 to 2001 despite the continuation of robust US-Malaysian security links during this period.’ 

The anticipated rise of China has caused consternation among ASEAN countries for decades. China’s size and proximity, the greatness and longevity of Chinese civilisation, the strength of Chinese nationalism, and the diaspora of disproportionately affluent ethnic Chinese minorities (such as in Malaysia) were all grounds for wariness. More recently, China’s continued development and military modernisation show irrefutably that her presence and influence will grow.

In May 2005, Malaysian Prime Minister Abdullah Badawi proclaimed relations with China to be at their ‘best ever’. While remaining strategically ambivalent towards China on security matters, and encouraging a continued security partnership of sorts with the US, Malaysia has used a dual tactic of bilateral economic engagement and reviving regional activism as part of its hedging strategy as it carefully watches China’s rise.