Thomas Daniel was quoted in South China Morning Post, 11 January 2025
Can Anwar Ibrahim’s diplomatic finesse help Malaysia steer Asean through the storm of rising trade tensions and regional crises?
By Hadi Azmi
Malaysia takes the helm of Asean at a time of see-sawing threats and opportunities, with Donald Trump’s tariff-wielding return to the world stage, peaking tensions in the South China Sea and the deepening bloodshed in Myanmar all set to test the diplomatic skill of Prime Minister Anwar Ibrahim.
For Anwar, 77, this is a crowning moment in a career that has weathered persecution, imprisonment and decades in opposition. Since taking office in late 2022, he has worked to restore Malaysia’s global reputation after years of domestic political turmoil and introspective government.
His international outreach has seen him rattle through visits to China, the US, India, Russia and Turkey – to name but a few – signalling his administration’s focus on foreign relations and an acute awareness of the security and economic challenges ahead.
But will it be enough? Chairmanship of the Association of Southeast Asian Nations comes with responsibilities that are both symbolic and strategic – hosting key meetings, setting the agenda on pivotal issues including trade, security and disputes, and acting as the region’s face in global diplomacy.
Taken as a whole, the bloc represents the fifth-largest economy on Earth with a combined gross domestic product of US$3.6 trillion, growing at a combined 4.5 per cent in 2024.
Yet its effectiveness remains constrained by consensus-driven decision-making that can render it toothless when it comes to the most pressing issues. Critics have derided Asean as a “talking shop” incapable of decisive action, and Malaysia’s year in charge is unlikely to escape the same scrutiny.
“Chairs will be judged by how they manage – or mismanage – hot button issues, of which there are plenty for Malaysia to juggle this year,” Thomas Daniel, a foreign-policy analyst from Malaysia’s Institute of Strategic and International Studies, told This Week in Asia.
Trump, tariffs and trade wars
Externally, Asean faces a wild card in Washington. Donald Trump, set to return to the White House in a matter of days, has threatened sweeping new tariffs on all manner of imports – not just those from China – in a move that could send shock waves through Southeast Asian economies.
The transactional nature of his first term is tipped to continue, with investments and defence support on the line for any nation, or region, his hawkish administration perceives to be out of step with US interests.
Countries like Vietnam, Thailand and Malaysia saw an influx of manufacturers fleeing US-China trade tensions during his first term. This time, however, Trump’s trade wars are expected to target the entire region, potentially dismantling the advantages that had made Asean a magnet for global supply chains and companies relocating to avoid levies on made-in-China goods.
The US president-elect campaigned on a pledge to impose tariffs as high as 20 per cent on all imports, especially from countries with large trade surpluses.
“Early in the new administration, the Trump White House will indeed impose high new tariffs on a large scale,” warned Kurt Tong, a former US ambassador for Asia-Pacific Economic Cooperation in a report for the trade-focused Hinrich Foundation think tank. “It is also clear that Asia, and especially China, will be a top target.”
But there are opportunities amid the uncertainty. As the US appears set on retreating from environmental sustainability commitments, China could emerge as the undisputed leader in green technology, creating potential for Asean to deepen its ties with Beijing.
“Asean countries may benefit from Chinese technology, especially in vehicle, energy and food production,” Azizul Amiludin, an economist and senior lecturer at Universiti Malaya, told This Week in Asia.
The US also remains Asean’s largest foreign direct investor – pumping in US$476.3 billion in 2023 alone. Malaysia itself has enjoyed much of that influx, with the American Malaysian Chamber of Commerce reporting 172.6 billion ringgit (US$37.5 billion) of FDI that same year, largely stemming from American tech giants like Amazon, Intel and Microsoft setting up shop in the country since Anwar came to power.
The jinx of the junta
Asean’s biggest internal crisis remains Myanmar, still locked in a vortex of violent chaos nearly four years after the junta seized power. Its civil war has spilled across borders, fuelling a surge in human trafficking, drug smuggling and Southeast Asia’s worst refugee crisis.
Neighbouring nations – including fellow Asean members Thailand, Malaysia and Indonesia – have struggled to cope with the influx of displaced people, particularly the persecuted Rohingya, as the bloc finds itself split over how to handle an isolated military government assailed by a pro-democracy rebellion.
“What’s crucial is for Myanmar to return to being a peaceful country where its people can live harmoniously,” Malaysian Foreign Minister Mohamad Hasan said on December 21. But large swathes of the country are now controlled by opposing factions and warlords, and the junta has shown few signs of relinquishing its grip.
Previous Asean chair Laos largely sidestepped the issue, “struggling to find meaningful solutions”, in the words of a report from the Asean Studies Centre at Singapore’s ISEAS Yusof Ishak Institute.
Malaysia, meanwhile, has shown willingness to take a harder line. In 2022, it became the first Asean member to engage with Myanmar’s civilian National Unity Government after then-Foreign Minister Saifuddin Abdullah chastised the junta for blocking conflict resolution efforts.
All eyes will now be on Anwar’s administration – in particular Hasan and newly appointed Special Envoy to Myanmar Othman Hashim – to see if it will push for a stronger stance or fall back into Asean’s default mode of cautious diplomacy.
Further complicating the issue is Anwar’s recent appointment of former Thai prime minister Thaksin Shinawatra as a personal adviser on Asean matters. Thaksin advocated for a previous Myanmar junta during his time in office and his ties to the country’s generals have raised eyebrows among activists.
“This decision sends a troubling message to the people of Myanmar, who have hoped for a stronger Asean stance under Malaysia’s leadership,” said Salai Ling, deputy executive director of the Chin Human Rights Organisation that aims to support marginalised groups in the war-torn nation.
Bad currents
Then there’s the South China Sea, where China’s increasingly aggressive stance has split Asean members into opposing camps. Nations like Vietnam and the Philippines, which have the most to lose, are pushing back hard against Beijing’s sweeping territorial claims. Others, including Cambodia and Laos, remain reluctant to challenge their largest trading partner.
Malaysia, for its part, has struck a delicate balance, maintaining cordial ties with China while quietly resisting its encroachments. A leaked diplomatic cable last year revealed that Beijing had made threats against Malaysia’s oilfields in contested waters. Yet Anwar has played down the tensions, insisting that Malaysia has no problems with China.
This is in stark contrast to the Philippines, which has pushed back against continual harassment from Chinese coastguard vessels and militia ships, buoyed by its mutual defence treaty with Washington – a pact that also risks dragging the US into any future conflict should animosities escalate.
Still, Malaysia plans to use its chairmanship to push for a long-awaited code of conduct in the South China Sea, Defence Minister Mohamed Khaled Nordin said during a November meeting with Chinese Ambassador Ouyang Yujing. This procedural framework is designed to prevent conflicts, but years of negotiations have produced little progress.
“The limited progress underscores the US’ continued role as a strategic counterweight for nations such as the Philippines and Vietnam,” said Hafidzi Razali, CEO and founder of public affairs, policy advisory and strategic communications firm Strategic Counsel.
Follow the Brics road?
As Malaysia navigates this treacherous diplomatic terrain, analysts say Anwar’s personal charisma and international network will serve as key assets.
“His international network is impressive, and he’s been able to endear himself to other state leaders,” said Tunku Mohar Mokhtar, a political analyst from the International Islamic University in Kuala Lumpur.
While mostly focused on trade and wooing investors to return to Malaysia following the upheavals of the 1MDB scandal, Covid-19 pandemic and Trump’s first trade war, Anwar has also used the global stage to push for other agendas, particularly in his advocacy for Palestinians amid the indiscriminate slaughter of the Gaza war.
“Anwar is friendly with leaders in the West and the East and is brave enough to express his stance without necessarily insulting his targets,” Tunku Mohar said.
Anwar is friendly with leaders in the West and the East and is brave enough to express his stance
Tunku Mohar Mokhtar, political analyst
The Malaysian leader has also presided over his country becoming a partner nation of Brics, a coalition of major emerging economies spearheaded by Brazil, Russia, India, China and South Africa that represents over 40 per cent of global GDP and is expanding in a challenge to Western-led multilateral frameworks.
Economists have voiced scepticism about the benefits of joining Brics, which encompasses diverse geographies, demographics and sometimes conflicting interests.
“This lack of cohesion makes it difficult to predict the economic benefits for member countries,” said Doris Liew from the Institute of Democracy and Economic Affairs (IDEAS) Malaysia.
Still, Asean’s largest economy, Indonesia, became the latest full Brics member this week, the bloc’s current chair Brazil announced on Monday. Malaysia and Thailand both became Brics partners following a summit in Kazan, Russia last October.
Universiti Malaya economist Azizul said Brics could provide Asean member states with leverage in international negotiations, such as those with the European Union over its ban on palm oil due to deforestation concerns.
“Asean as an organisation however, may be wary of formalising any grouping arrangement with Brics as it balances US-China geopolitical interests in the region,” he said.
For his part, Anwar has pushed for Asean to become more of an international player, influencing world affairs.
“Southeast Asia’s ambition reaches beyond its borders, striving to be a force for positive change on the global stage,” he said in an opinion piece published by Project Syndicate on December 16.
To that end, Malaysia aims to bolster engagement with Brics, as well as Asean’s external partners – such as Japan, South Korea, Australia and New Zealand – calling it “essential” as a signal of the bloc’s intent to expand economic and strategic networks.
Anwar’s task will be made all the more challenging by Asean’s code of “centrality” – the idea that member countries work together to shape decisions in the region – which often masks rifts and a lack of cohesion as member countries focus on their own interests.
“Only a cohesive, united and institutionally strengthened Asean can be effectively ‘central’ in an emerging global order that is fragmented and transactional,” ISIS Malaysia’s Thomas said.
In his December commentary, Anwar underscored the importance of Asean seizing the moment.
“The choice is stark: Asean must move forward in unity or face the divisive forces gathering momentum across Asia and beyond,” he said
But the strength of those “divisive forces” is yet to be fully revealed.
This article first published in South China Morning Post, 11 January 2025
