Prime Minister Datuk Seri Anwar Ibrahim’s working visit to four countries in Europe and participation in the World Economic Forum in January remains a mission to deepen the economic framework and a strategic initiative to strengthen the capacity for economic and diplomatic friendshoring in boosting Malaysia’s fallback options.

This effort aims to expand the nation's economic interdependence and market networks, in line with efforts to enhance current ties with the Western framework that can provide new guarantees, apart from the efforts to engage the Global South.

This serves as a strategic tool for two main factors: first, maintaining the fundamentals of the national economic structure based on the conventional core facets of current economic tenets based on manufacturing, electronics and natural resource sectors that require sustainable and consistent markets; and second, seeking investment sources and guarantees of technological support and expertise in the country's transition toward a digital and high-tech economy.

This is centred on critical sectors, including Artificial Intelligence, semiconductors, renewable energy, big data and critical minerals such as rare earth elements, against the backdrop of an increasingly intense, uncertain and challenging geopolitical stage.

The results of each visit have yielded their own returns, ranging from ventures of new cooperation in renewable energy and green energy transitions, as well as conventional energy cooperation in oil and gas, to joint efforts in addressing climate change and the Middle East conflict while ensuring global stability.

Efforts to Position Malaysia as an International Hub

Efforts to position Malaysia as an international hub in these critical sectors, including the advancement of the digital economy, and its aspiration to become the ‘Silicon Valley of the East’, require wisdom in navigating external power competition and ensuring inflows of capital, expertise and highly skilled human capital.

These are necessary to strengthen internal capabilities to attract foreign injections to develop local industries and the capacity of domestic human capital, producing a positive chain impact on national development. This aligns with the objectives of improving social mobility, quality of life, and raising total income for the local populace, and in the ultimate drive towards a high-income nation.

The visits aim to ensure Malaysia gains the necessary attention from major global economic powers, including economic cooperative groupings and organisations. These platforms enable the structuring and integration of financial capital, investment policy planning, and more organised and holistic synergy efforts to accelerate investment policy targets and economic cooperation scopes, bringing benefits to the country.

The country’s economic transformation requires external capital and expertise injections. Reliance on external powers and markets must also be carefully crafted to ensure the future capacity of the nation's trade remains guaranteed, in ensuring strong partners in the past are not neglected for the chase to join the bandwagon of the rise of the alternatives.

As a maritime and trading nation, where stability and market openness are entirely dependent on external economic powers receiving the country's main exports – especially commodities and natural resources – the sustainability of local industries and returns to local workers and citizens can be ensured, by looking at the bigger picture in the long term.

Two main factors – confidence and desire from foreign investors in industries and private sectors, as well as strong diplomatic and economic reliance with major global economic powers – become the main drivers in ensuring overall synergy in economic returns and sustainable sectors for the country.

Thus, efforts to boost the competitiveness and resilience of the national economy depend heavily on external factors, and the economic friendshoring initiative becomes one of the required leaps to attract direct investments and strengthen comprehensive relations with economic powers that play a direct role in export markets and local economic capacity development through newly outlined industries and sectors.

With external injections in terms of capital and expertise, internal dynamics will also be accelerated with chain impacts on high-skilled human capital development, infrastructure empowerment, reducing unemployment rates and increasing high-quality and high-income employment.

Development gaps in terms of geography, demographics, skills and education can be addressed with consistent and pragmatic economic transformation efforts that must adapt to current geopolitical changes and economic realities. The country is diversifying its economic reliance through alternative systems like the Global South and BRICS, but Western technological expertise and capital remain critical.

Pragmatic and Strategic Plan

In the country's efforts to break free from the old economic model reliant on manufacturing, exports and commodities, shifts based on future realities must move in tandem. This requires pragmatic policies and wisdom to reap long-term returns, whose outcomes will not manifest overnight.

Guaranteeing returns in the context of economic transformation preparations for the long term – including the National Semiconductor Strategy and the New Industrial Master Plan – requires overall synergy to secure returns from all sectors, including defence, security, diplomacy and foreign policy, not limited to economic and trade development plans alone.

To ensure holistic returns, it is necessary to strengthen conventional ties and open new opportunities to attract global industry leaders and deepen relations with emerging economic powers.

In the era of geopolitical competition and intense economic and investment rivalry, particularly in critical sectors, economic and defence friendshoring is key in securing trust and confidence with key global industries and networks.

This involves leveraging the country’s unique strengths, including geography, infrastructure, a complete transportation network, demographic advantages, human capital base, government policies, and investment and business incentives.

These factors complement robust economic growth efforts, focusing on high-tech and digital technology sectors, the blue economy, new energy economy, and leveraging platforms like ASEAN and Malaysia’s ASEAN Chairmanship to position the country as a high-tech investment hub in the region.

Capabilities such as the Johor-Singapore Special Economic Zone and ASEAN’s broad market appeal, coupled with Malaysia’s collaborative efforts within ASEAN, are assets to ensure Malaysia emerges as an influential middle power.

This positions Malaysia to play a more significant role on the global economic, diplomatic and geopolitical stage, beyond the ASEAN platform alone. Expanding influence through partnerships with strategic state actors and relevant regional and international organisations is a primary plan to ensure Malaysia’s presence and relevance in global geopolitical and power dynamics remains dynamic and resilient.

Beyond economic, geopolitical and defence platforms, these diplomatic and friendshoring efforts are also critical in forming joint networks to address universal threats such as climate change, food security, supply chain resilience and digital threats.

This is even more critical amidst ongoing global power struggles, political uncertainty and traditional and non-traditional threats undermining supply chains, food security, energy security and regional stability.

To position Malaysia on the global stage and ensure the nation remains secure in terms of stability and safety, formulating successful action plans or goals without risks is challenging.

All this requires wisdom, past legacy experience, and the capacity and capability of top leadership to navigate new pathways and face challenges in a new era, guided by the principle that there are no permanent friends or enemies in international relations, only permanent interests.

Building Trust and Confidence

High-level trust and confidence between the country’s top leaders and non-state actors are essential to ensure smooth policy and strategy implementation. Without direct friendships and esprit de corps at the individual level, relationships will revolve solely around formal and Track I boundaries. This affects the scope, intensity, and sustainability of multilateral cooperation, especially in diverse sectors.

Close ties between leaders also serve as critical reliance factors to address arising concerns, internal issues and potential conflicts early. This allows leaders to manage and prevent these challenges and issues from escalating and threatening bilateral relations.

This role is best carried out by top leaders, highlighting the importance of Prime Minister Anwar's close personal relationships with his counterparts. Trust and reliance based on these relationships are key factors in shaping other actors’ policies toward Malaysia.

Under Prime Minister Anwar, Malaysia is actively positioning ASEAN as a new economic and geopolitical force capable of revitalising global economic growth while serving as a stabiliser for regional and global security dynamics.

However, internal constraints within ASEAN persist, including intense competition among member states, limited intra-regional trade, and policy divisions in responding to external geopolitical dynamics.

Malaysia is working to improve ASEAN’s collective composition, ensuring the region’s overall economic strength becomes a major attraction, especially in critical new sectors where each member state plays a role. This reduces internal competition and uses shared strengths strategically.

As ASEAN Chair, Malaysia must uphold universal values that have long guaranteed global stability and peace, rooted in international norms and laws. These values emphasise peace, freedom, inclusive development, ethics, universal moral values and human rights, advancing sustainable development for all demographics.

Malaysia’s leadership in ASEAN reflects its ‘MADANI’ concept, promoting balanced and future-focused civilisational progress. Diplomatic friendshoring is critical to building trust and confidence, ensuring security cooperation based on shared understanding and threats.

Early economic interventions and strategies to expand ASEAN’s relevance and role with organisations like GCC, BRICS, Global South, EU, OIC, WTO and WEF are fallback measures to ensure broader networks for fostering universal values, peace norms, and sustainable economic and humanitarian development.

-- BERNAMA

Collins Chong Yew Keat is Foreign Affairs, Strategy and Security Analyst with Universiti Malaya.