An Unbalanced Balancing Act – Anwar Ibrahim’s Foreign Policy

On 17 September 2023, Malaysian Prime Minister (PM) Anwar Ibrahim landed in Nanning, Guangxi for the twentieth installation of the China-ASEAN Expo (CAEXPO), where he opened the Malaysian pavilion and met Chinese Premier Li Qiang. Anwar was on the ground for less than 24 hours. His inaugural trip to China as PM was at the Boao Forum for Asia (BFA) in Hainan and then meeting President Xi Jinping in Beijing in March 2023.

Some have speculated that Anwar’s visit to the CAEXPO, traditionally not on the priority list for Malaysia’s premiers, was to ‘balance’ his two visits to China with two upcoming trips to the US. The first will be to address the UN General Assembly in New York in late September and the second to San Francisco in November for the APEC summit. An invitation to the White House is not likely to be forthcoming, however, given Anwar’s vocal support for Hamas in the ongoing Gaza-Israel war.

If there is one key word to describe Anwar’s foreign policy approach, it would be “balancing”. Balancing between the US-China rivalry, East and West, and the global south and the developed nations. The role of a balancing bridge builder is one that is familiar to Anwar, honed by his many years of engaging with the West as an articulate, English-speaking Muslim moderate and building ties across the Muslim world using his early credentials as a Muslim activist.

Yet look underneath the hood and important unbalanced aspects of this balancing act are revealed. In any foreign policy approach, a country must seek to achieve its own strategic goals as the main priority in its engagements with other nations. This includes using Malaysia’s leverage to achieve positive outcomes from Malaysia’s foreign policy. For example, despite Anwar’s courting of the Chinese, substantive wins for Malaysia have not been obvious, especially during the celebration of the fiftieth anniversary of bilateral diplomatic ties. There was no attempt to obtain better financing terms for the largest public infrastructure project in Malaysian history – the East Coast Rail Link (ECRL) – nor did Malaysia attempt to seek compensation for the RM8 billion paid out for the Trans Sabah Gas Pipeline (TSGP) project despite less than 15 per cent of the work being completed. The only policy concession Malaysia received during Premier Li Qiang’s visit to Malaysia in June 2024 was the approval to export whole durian fruits to China.

Similarly, the strategic, economic and security benefits that could potentially accrue to Malaysia from joining the BRICS (Brazil, Russia, India, China and South Africa) grouping are unclear. (It is noteworthy that Indonesia, a founding member of the Non-Aligned Movement, has so far declined to join BRICS.) Anwar’s announcement of Malaysia’s application to join BRICS in an interview with a Chinese journalist just days before Premier Li Qiang’s visit took many, including officials at Wisma Putra, by surprise (this was communicated to the author in off-the-record conversations).

Yet look underneath the hood and important unbalanced aspects of this balancing act are revealed.

What is more, Mohamed Hasan, Malaysia’s foreign minister, had expressed caution in Parliament before Anwar’s eventual meeting with Russian President Vladimir Putin at the recent Eastern Economic Forum in Vladivostok. Anwar’s invitation to Putin to attend the 2025 ASEAN Summit has raised eyebrows, while his invitation to Russian companies to invest in Malaysia raises questions like whether these companies will be allowed to open bank accounts, transfer money, and trade freely in goods and services in Malaysia, without any negative repercussions from the EU and the US.

For example, a Malaysian company, Jatronics, was named by the US State Department for trading “Common High Priority List Items” to Russia that could potentially be used in its war against Ukraine. Given Malaysia’s paltry trade and investment ties with Russia, is Anwar appearing onstage together with Putin worth the negative optics? As a small nation, Malaysia can ill afford to be spotlighted as a place for Russian companies to do business.

While Malaysia seeks to be open to foreign direct investments (FDIs) from all countries, the reality is that most of these investment flows are coming from developed countries.  The EU, Singapore and the US occupy the top three positions with slightly more than RM100 billion in approved investments in 2023, and China is fifth, with RM15 billion. In comparison, Russian FDI totalled just RM254 million.  

To achieve a more balanced balancing act, the process of identifying and negotiating strategic outcomes must be institutionalised on a government-to-government level. As much as Anwar’s charisma, eloquence and global stature are assets, the devil is in the policy details. For interactions with China, this means increasing the number of high-level joint councils so that policy alignment on different areas including bilateral trade and investment can be achieved regardless of who is in power in Malaysia.

For engagements with the EU, it is in Malaysia’s strategic interest to restart the EU-Malaysia Free Trade Agreement negotiations so that challenging issues such as environmental and labour standards can be discussed with new opportunities, like special arrangements in high tech investments and procurement policies. For the US, it is about opening communication lines at different levels of government so that Malaysia’s companies are not blindsided by punitive trade or monetary actions taken by specific government agencies, such as the US Customs and Border Patrol (CBP). For ASEAN, it is about advancing common economic and security interests and avoiding divide-and-rule interference by external parties.

Of course, Anwar’s 32 international trips (at the time of writing) as PM may bear fruit further down the road from an institutionalisation perspective. In any case, his administration will be tested in 2025 in terms of substantive outcomes on the region’s economy and security during Malaysia’s chairmanship of ASEAN. If he can deliver the goods, then his “balancing” strategy will be seen to have worked. If not, Malaysia’s international reputation will take a hit for what might turn out to be an unbalanced foreign policy approach.

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