The Shift in the Malaysian Politics and Our Changing Narrative

Lau Zheng Zhou, Senior Director

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The Shift in the Malaysian Politics and Our Changing Narrative

Lau Zheng Zhou, Senior Director

Asian Strategy & Leadership Institute, Center for Public Policy Studies, Malaysia

Good morning, ladies and gentlemen,

On behalf of the Asian Strategy & Leadership Institute or ASLI, I would like to thank the organizer for inviting me to speak. ASLI is the top think-tank in Malaysia, and we have been connecting the industry and the government since our inception 25 years ago.

I would like to say something about the shift in the Malaysian politics and our changing narrative with regards to the South China Sea territorial dispute.

As we all know, the uncertainties in security that the world faces today are caused not by careless and miscalculated tensions between nations, but are increasingly triggered by the ordinary people at home countries yearning for a change in the status quo. The people are somewhat fed up with the existing systems in which they are subject to, which many have believed to have produce chronic societal ills such as the rising inequalities, entrenchment of the elites in the corridors of power, as well as immigration and foreign investment which may have reduced the opportunity for the locals to compete and to accumulate wealth.

The consequences for domestic shifts in the status quo have produced outcomes that defied the assumptions of many, especially the political elites, as can be seen in Brexit, the election of Donald Trump as President, the success of far-right parties in Europe. There has also been development in the calls for more autonomy or outright secession in many parts of the world. Closer at home, rising domestic discontent had translated into a total rejection at the ballot box of the incumbent National Front government which had ruled Malaysia for more than 61 years at the recent election. The opposition victory also meant that Malaysia would see the return of Dr. Mahathir Mohammad as the Prime Minister for the second time.

The transition in power has so far caused anxiety and lack of clarity in the Malaysia-China relations, especially when it comes to Chinese investment in Malaysia. We anticipate that this relation will be further tested when Dr. Mahathir starts responding more formally with regards to the South China Sea issue.

The South China Sea territorial disputes have remained unresolved for decades, with six countries each claiming sovereignty over overlapping portions of the area. A Code of Conduct is currently being negotiated with little details on the terms being released to the public. In the previous administration under Najib, Malaysia adopted a pragmatic, “ad-hoc”, and practicing “soft approach” in dealing with claimant countries, especially China. Many even pointed out that the Najib-administration had been side-stepping the issue without a more concerted effort to resolve it.

The Najib-administration believed that the possibility of a conflict was low in the area and that Malaysia had its advantage of being further away from mainland China compared to the other claimants, therefore enabling her to retain a positive position and to exclude any confrontation with China. In fact, Malaysia’s general perception of China’s rise as concerns was based on the similarities in cultural and historical experiences.

Underlying that observation is the fact that China is Malaysia’s largest trade partner and a fast-growing source of foreign direct investment. The need to preserve our cordial relation for economic gains was fundamental to Najib’s push for greater FDI from China especially since 2013 when the Chinese President Xi Jinping first spoke about his ambitious “Belt and Road Initiative”. The surge in Chinese FDI had been noticeable and there was a great sense in the air that both Malaysia and China had now entered a new normal in the bilateral relations.

But alas, as previously mentioned, domestic discontent about rising cost of living and deep, profound suspicion by the general Malaysians over the distribution of gains by the Chinese FDI, had resulted in the fall of a relatively China-friendly administration. Our Prime Minister Dr. Mohammad is highly regarded as the champion of the South- South nations especially ASEAN and confusion is there when it comes to policies concerning foreign trade, investment, and gradually on diplomacy. Will we see continuity in policies or shifting attitudes towards the “soft approach” that former Prime Minister Najib had adopted. This development has serious implication to countries along the Belt and Road Initiative because if the unique domestic challenges are not resolved or addressed adequately, suspicion will grow over China’s economic presence, and this will spill-over to the maritime dispute.

It remains to be seen if the new government will adopt a firmer stance in the South China Sea disputes. ASEAN-China relations and consensus on the South China Sea issues have been repeatedly tested by unfriendly activities in disputed areas. It is our hope that such actions should be avoided by all claimants and efforts should be channelled to focusing on building a friendlier cooperation and forging more sustainable solution.