Whether it is a ‘tiger’ or a ‘tiger cub’ economy, it does not really matter: Malaysia is a key country, and its importance in international affairs is likely to further increase. No wonder that ‘great powers’ and financial markets paid much attention to Malaysia’s highly contested general election on the last 5 May.
Facing two oceans (the Indian and the Pacific) and being a member of the ASEAN are two crucial assets. Moreover, Malaysia controls the Malacca Strait, a key energy choke point through which 85% of the oil directed to China (and a fourth of the world oil trade) is shipped. Malaysia is also the third world exporter of liquefied natural gas and the second ASEAN economy in terms of per capita Gdp, after neighbouring Singapore.
In geopolitical terms, it lies at the heart of the ASEAN, which is the key region for the USA ‘doctrine’ of ‘pivoting to Asia’. Washington can enjoy the support of a traditional ally, the Philippines, and has been promoting Myanmar’s political liberalisation and democratisation in the last few years, up to Obama’s visit in November 2012. Vietnam and Malaysia itself have negotiated their accession into US-sponsored TPP (Trans Pacific Partnership) for several years, and Singapore is already a member of the original core of the potentially grandiose transcontinental trade agreement of the Pacific region. Other countries, however, seem to remain closer to China (for example, Cambodia), and the recent ASEAN summit in Brunei (24-25 April) has again ended in a stalemate, despite the ambitious aim of forming a full economic community by 2015. Taking the ‘pivot to Asia’ concept seriously means that Washington needs fully reliable allies in the region; and Malaysia, for the reasons described above, should be one of them.
Since its independence 56 years ago, Malaysia has always been ruled by a coalition whose main party, the Barisan Nasional (BN) stands for the rights of the Malay ethnic majority, mainly based in rural areas. Throughout the whole period, the country has enjoyed formidable growth, and it aims at becoming a fully developed economy by 2020. While billionaires such as Robert Kuok and Ananda Krishnan have built large multinational empires, a rising and vocal urban and educated middle class has increasingly complained about ethnic discrimination (usually perpetrated against Chinese and Indian minorities), corruption and BN’s cronyism. Is Malaysia ready for change? ‘Change’ (Ubah) was the main ‘slogan’ of the opposition leader, Anwar Ibrahim, in the recent and bitterly fought general election.
Despite Ibrahim’s popularity and the outstanding voter turnout (around 80%), the BN has maintained its majority in Malaysia’s parliament, although with the narrowest margin ever – 133 seats out of 222. Financial markets have reacted positively and Najib Razak has been confirmed as premier. But will his future be ‘business as usual’?
This seems to be difficult, especially from the point of view of the USA. As we have seen, Washington needs strong and loyal allies, especially in the ASEAN. Would a BN-ruled Malaysia, in which the premier enjoys a narrow lead, mainly obtained in rural areas and mainly thanks to a well-defined ethnic group, make for a strong and reliable ally? Mr Ibrahim was a controversial and sometimes apparently contradictory figure, but nevertheless he went quite close to a win, and exposed the country’s internal fractures. Wouldn’t the USA prefer to rely on a more cohesive Malaysia, in which the Indian and Chinese business communities would enjoy stronger political power? The perspective of a peaceful ‘Malaysian spring’ could not be distant from the USA’s wishes. After all, the States have ‘promoted democracy’ (through funding and targeted programmes) all over the world, and Malaysia is no exception. Furthermore, enlisting the support of its wealthy and business-inclined Chinese community would increase Washington’s authority vis-a-vis China, an issue somebody in the District of Columbia is probably reflecting upon. Could Malaysia’s Chinese minority become influential in the USA’s attempt to ‘pivot to Asia’ and contain China?
Washington’s economy after all seems to be back on the right track. In the first term, its annualised growth rate was about 2.5%, well ahead of the early and gloomy forecasts for the EU. US diplomacy, especially with State Secretary John Kerry, is also more active on the dramatic Syrian crisis, and attempting to negotiate a solution with Russia, after a bloodshed which has lasted for more than two years. Sectors of the Republican Party and the armed forces would not feel uncomfortable with the possibility of a military intervention, also in the light of Washington’s withdrawal from Iraq and Afghanistan. Even if US international stance were more assertive, however, her potential to influence events in Southeast Asia would remain uncertain.
Unlike China, the USA is distant and dependent on her allies for any initiative in the region. Moreover, China’s economy, despite the much debated ‘slowdown’, is constantly rising at a tremendously fast pace. China is already now one of Malaysia’s most important trade partners and, according to HSBC Malaysia’s economist Tan Yew Yan, Malaysian companies would benefit by using the Yuan in trade instead of dollars. In financial terms, an important battle is then still open: who will lead a likely ‘Asia-Pacific’ stock exchange? China or the USA? The issue is topical also because the USA is already controlling the largest transatlantic bourse (NYSE-Euronext) and is promoting a Trans-Atlantic Partnership with the EU; together with the proposed Trans Pacific Partnership, will there be a US-led transpacific stock exchange? Or has Beijing rather different intentions?
A final consideration refers to the ASEAN itself. The ‘association’ of South East Asian States aims at becoming a fully-fledged ‘community’ and is in part following the example of the European Union. The lesson of current EU, however, is rather bitter: divisions bring about internal tensions and allow ‘external’ players to somehow ‘divide and rule’ Europe, at least economically. Look at Russia’s grip on energy and its effects on the EU. If ASEAN countries want to economically and politically survive and thrive in a world of old and new ‘giants’, they have to unite and perhaps set an example for the EU by creating a truly political community. Otherwise, their divisions risk pushing them onto a slippery slope, and ultimately setting the stage for decline.