Malaysia and the ‘Indo-Pacific’: Why the Hesitancy?

The past few years have seen near-constant discussion about the implications for the Association of Southeast Asian Nations (ASEAN) in the evolving power rivalry between the United States and China. Over the years, ASEAN has taken pride in its role as a key player in regional security and economic processes, an ambition that is captured in the notion of “ASEAN centrality.” As China-U.S. strategic competition intensifies in the region, the idea of ASEAN centrality has been increasingly challenged by the rise of the “Indo-Pacific” as a strategic concept.

What is the regional bloc’s standpoint on the Indo-Pacific? Since its coining by Japan and adoption by the U.S. government in 2017, the term has been contested and political, and is open to manipulation and interpretation following configurations of interest and power by external powers.

For the most part, ASEAN member states have been ambivalent about the Indo-Pacific idea. There are several reasons why. For decades, the region’s identity has been anchored in the broader concept of the Asia-Pacific. For some nations, the term “Indo-Pacific” signals a U.S.-led strategy to counter China’s growing power and influence. This is a contest in which most ASEAN member states are determined not to choose a side. The bloc’s preferred vision of the Indo-Pacific is one that prizes multilateral cooperation, connectivity, and economic interaction. China’s heightened sensitivity toward the Indo-Pacific has likely added to the reluctance of some Southeast Asian nations to fully and officially endorse the concept.

In June 2019, ASEAN released a joint statement at the 34th ASEAN Summit in Bangkok called the ASEAN Outlook on the Indo-Pacific (AOIP). Designed as a response to the growing strategic competition between the U.S. and China, and the increasing prominence of the Indo-Pacific as a way of framing that competition, the AOIP emphasized the role of ASEAN-centered institutional mechanisms. Yet in the three years since, progress in fulfilling the visions set out by the AOIP has been stagnant.

Compared to Indonesia and Vietnam, which have in one way or another internalized the strategic logic of the Indo-Pacific, the term “Asia-Pacific” continues to be more commonly used in Malaysia. This article examines why Malaysia has opted for a more neutral stand on the Indo-Pacific and explores the reasons that can explain why it has not taken more concrete steps toward coming up with an explicitly “Indo-Pacific” policy.

Malaysian leaders and officials have generally not referred to the Indo-Pacific, but there are a few ongoing trends that are worth further exploration. Key official documents and white papers, including the 2019 “Foreign Policy Framework of the New Malaysia: Change in Continuity,” the 2019 Defense White Paper, and the 2021 publication “Focus in Continuity: A Framework for Malaysia’s Foreign Policy in a Post-Pandemic World,” notably do not explicitly mention the Indo-Pacific.

Like most ASEAN member states, Malaysia views it as undesirable to endorse such a contentious concept in an explicit manner. This is seen as unwise because it might increase the risks of drawing Malaysia into a great power conflict as the China-U.S. rivalry grows. Choosing a side is not an option for Malaysia, which prefers a more pragmatic and non-aligned approach to foreign policy.

As an open economy, Malaysia would also like to avoid any detrimental impacts on the regional economy, especially during the economic recovery from the COVID-19 pandemic. Domestic politics also play a role. After the AOIP was formulated in 2019, Malaysia faced a spell of internal political turmoil, which culminated in the collapse of the government and its replacement by the opposition.

Inside Malaysia, the debate on the Indo-Pacific exists but not in a rigorous manner. During the 33rd Asia Pacific Roundtable (APR) in 2019, Tan Sri Rastam Mohd Isa, the former chairman of the Institute of Strategic and International Studies (ISIS), one of Malaysia’s leading think-tanks, acknowledged that while the discussion on the Indo-Pacific was growing, there is no intention from ISIS Malaysia to rename its signature international conference to the “Indo-Pacific Roundtable.” Nevertheless, a panel discussion titled “Asia Pacific vs Indo Pacific: Rationale, Contestation and Implications” was included to initiate a discussion on what the Indo-Pacific concept means for the region’s security.

However, the Indo-Pacific idea remained mostly absent from this year’s 35th APR. A session on “A Resurgent Europe in Asia/Indo-Pacific” was included in the agenda, but there was no further elaboration on Malaysia’s stance.

At the same time, there has been a growing commitment from the Malaysian government to the concept of the Indo-Pacific. For instance, Foreign Minister Saifuddin Abdullah, on the sidelines of the ASEAN-India Foreign Ministers Meeting in New Delhi in June, was quoted as saying, “We need to own the leadership. ASEAN has to claim leadership in talking about the region, rather than reacting to other people talking about the region.”

The focus on Indo-Pacific has also intensified since the announcement in May of the Indo-Pacific Economic Framework (IPEF), which Malaysia joined along with 12 other partners. During the virtual IPEF Ministerial Meeting hosted by the U.S. in July 2022, Minister of International Trade and Industry Mohamed Azmin Ali proposed that partners in the IPEF collaborate to set up a center of excellence to provide a structured platform to facilitate exchanges of ideas among the members.

During another conference in May, Prime Minister Ismail Sabri Yaakob said that he was confident that the IPEF would strengthen Indo-Pacific economic cooperation. He said, “Malaysia is ready to discuss relevant issues through the IPEF to ensure that the members can optimize the economic and strategic benefits as outlined in the framework.”

However, in an exclusive interview with Nikkei given on the sidelines of the conference, former Prime Minister Mahathir Mohamad said he did not share the government’s sentiment. In his view, the IPEF was inherently political since it omitted China. For Mahathir, this defeated the purpose of enhancing multilateral trade cooperation.

While the Indo-Pacific concept is yet to be internalized as part of ASEAN’s strategic culture, there is a growing sentiment within the region that the Indo-Pacific is here to stay. As suggested above, the geopolitical narrative amid the strategic rivalry between China-U.S. is critical in determining Malaysia’s stance on the Indo-Pacific.

With this in mind, Malaysia should take a more proactive approach to the shaping of the Indo-Pacific construct. For a start, more dialogue and discussion about the idea are necessary within Malaysia itself, involving a wide range of different stakeholders. Only then will Malaysia be able to engage with the U.S. and its Quad partners about the shape and trajectory of the Indo-Pacific concept going forward.