Malaysia aims to boost its profile in the Asia-Pacific region

Malaysian Prime Minister Anwar Ibrahim recently unveiled an ambitious $5.33 billion National Semiconductor Strategy (NSS) that, once implemented, envisions Malaysia becoming a global hub for the semiconductor industry, replacing China and the United States.

Global semiconductor companies based in China are exploring different areas of Southeast Asia as bases for their expansion.

Malaysia already supplies 13 percent of global demand in the packaging and testing sector of the semiconductor industry and is aiming to secure at least $106 billion in new semiconductor investment to position the country at the heart of this cutting-edge technology.

It has already attracted billions of dollars in investment from U.S. companies: Intel announced $7 billion plans to expand its advanced packaging facility in Penang in 2021, and graphics card giant Nvidia has pumped $4.3 billion into developing artificial intelligence capabilities in the country.

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Free Trade Agreement

Malaysia’s foundation for pursuing these ambitions is a well-educated, skilled and reliable workforce, excellent physical infrastructure and connectivity, business-friendly policies, and an existing network of free trade agreements.

In addition to promoting the high-tech industry, Anwar has been an active supporter of the Asian Monetary Fund, which was originally proposed by Japan to counter the 1997 Asian financial crisis.

Anwar has publicly emphasized Malaysia’s neutrality in the political and economic dispute between the United States and China in recent days in an effort to position the country as an attractive center of economic growth. As a seasoned politician, he understands that Malaysia stands to lose if tensions rise in the Asia-Pacific region.

In an interview with The Post (June 6, 2024), Anwar made it clear that he has no intention of getting caught up in the geopolitical tensions between the U.S. and China and being pressured to choose a side.

“It is important to impress upon the Philippines and China that we exist. We must be ready and capable of managing our own affairs,” he said, adding that he would make this a point when Malaysia assumes the rotating chair of the Association of Southeast Asian Nations next year.

Transitioning to a high-tech economy

Anwar is likely to downplay the South China Sea dispute with China and the risks of Western sanctions as he seeks to accelerate his country’s transition to a high-tech economy through stronger economic and strategic ties with Beijing.

Malaysia’s 2025 chair is an opportunity for the country to promote deeper integration among ASEAN countries, as he wants ASEAN to have complementary production and economies rather than competing with the same products.

After waiting two decades to become prime minister, Anwar seems to have a loftier vision for Malaysia. He is pursuing plans to join BRICS, which would give further support to his vision of freeing ASEAN from the pressures of the US-China conflict. If Malaysia succeeds, and Thailand and Indonesia follow, ASEAN will have strong representation in an organisation that already accounts for 37.3% of global GDP.

All these efforts by Malaysia are aimed at putting the country back at the centre of the region and enhancing its resilience, hopefully allowing it and other regional countries to escape pressure from big powers and develop unconstrained for the benefit of the region and beyond.

Sajjad Ashraf was an Adjunct Professor at the Lee Kuan Yew School of Public Policy, National University of Singapore from 2009 to 2017. He served in Pakistan’s Ministry of Foreign Affairs from 1973 to 2008 and served as ambassador to several countries.



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