Working Paper Series Jan Stark Malaysia's Foreign Policies and a New Asian Regionalism No. 84 February 2007 - City University of Hong Kong
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Jan Stark
Malaysia’s Foreign Policies and
a New Asian Regionalism
Working Paper Series
No. 84
February 2007The Southeast Asia Research Centre (SEARC) of the City University of Hong Kong publishes SEARC Working Papers Series electronically ©Copyright is held by the author or authors each Working Paper. SEARC Working Papers cannot be republished, reprinted, or reproduced in any format without the permission of the papers author or authors. Note: The views expressed in each paper are those of the author or authors of the paper. They do not represent the views of the Southeast Asia Research Centre, its Management Committee, or the City University of Hong Kong. Southeast Asia Research Centre Management Committee Professor William Case, Director Professor Martin Painter Dr Vivienne Wee, Associate Director Dr Graeme Lang Dr Zang Xiaowei Southeast Asia Research Centre The City University of Hong Kong 83 Tat Chee Avenue Kowloon Tong, Hong Kong SAR Tel: (852 3442 6106 Fax: (852) 3442 0103 http://www.cityu.edu.hk/searc
Malaysia’s Foreign Policies and a New Asian
Regionalism
Jan Stark
Senior Research Fellow
Southeast Asia Research Centre
City University of Hong Kong
jstark@cityu.edu.hk
Regionalism and South-south cooperation have been used to explain new
forms of inter-state cooperation after the end of the Cold War. Malaysia has
taken a leading role to enhance growth in the developing world. This has
provided new opportunities for the partly privatized private sector but also for
international organizations as the OIC, NAM and ASEAN that remain politically
weak but have gained importance through promoting economic collaboration.
Impressing growth rates however can not disguise lacking integration on the
political level. Authoritarian trends remain strong in Malaysia and elsewhere
and could ultimately hamper growth and have a negative impact on the vision
of “modernization without democratization”.
Key Words: Malaysia, Southeast Asia, Foreign Policies, Regionalism
Southeast Asia Research Centre Working Paper Series, No. 84, 2007 1Introduction
Successful economic cooperation triggers development – this could be
the headline to summarize the increasingly active cooperation of countries of
the developing world, more than fifteen years after the end of an ideologically
motivated divide of the two major blocs. Soon after that, in 1991, the former
Malaysian Prime minister, Mahathir Mohamed, had formulated the goals of the
approaching millennium in his Vision 2020 – to achieve developed nation
status by the year 2020.
An Asian “Tiger state” with a Muslim majority population – this caused
considerable attention even within the Islamic world considering decades of
stagnation among the member states of the Organization of Islamic
Conference (OIC) but it was setting the path for the emerging
South-south-cooperation of the nineties that started to reach beyond
institutional and ideological frameworks like ASEAN by creating linkages
bringing together regions of the Islamic ummah as much as those of Central
Asia and Africa.
During the South summit of developing countries in Doha, Qatar, in June
2005 the new Malaysian Premier Abdullah Badawi had pointed at Malaysia’s
success in South-south-cooperation through trade ties (See ‘Doha Plan’). One
year later, while unveiling the Ninth Malaysia development plan, in late March
2006, he stressed the necessity of even distribution and to balance the gap
between urban middle classes and rural poor, symptomatic for the situation in
most developing nations where the rapid development of the last decade has
led to increasing tensions between the haves and haves-not.
Both statements signal a shift in the way the developing world looks at
itself. The experiments with nationalist and socialist ideologies being so
significant in determining the stand of the developing countries during and after
the Bandung conference of 1955 have given way to rising frictions and
conflicts within developing societies. Rising Islamic militancy as a result of
uneven development has forced a more inward-looking approach on regional
Southeast Asia Research Centre Working Paper Series, No. 84, 2007 2organizations as the OIC and ASEAN that so far had defined themselves
through their orientation towards the superpowers.
This paper argues that a new Asian regionalism has reshaped forms of
South-south-cooperation during the last two decades. There have also been
setbacks – the traditional policies of non-interference among ASEAN members
have led to social and political dissatisfaction often expressed in Islamic terms.
While trade and political linkages date back to the fifties and can be tied to the
non-aligned movement and to other regional bodies, other determining factors
such as the rising success of the private sector, threats to regional security by
political Islam and separatism or the increasing pressure by the new middle
classes to influence political decisions have created new forms of collaboration.
In the Malaysian case, Islam has created a new ideological base on which the
political, cultural and even economic exchange with regional partners
functions.
Malaysia’s Islamic Foreign Policies
Malaysia’s Prime Minister Mahathir had put Islamic solidarity high on the
agenda of his policies since he took over in 1981. Domestically Islam stood for
the interests of the increasingly successful Bumiputera (Malay) private sector –
the Malay middle classes that had pushed the Islamization of society during
the years of the Islamic resurgence in order to claim more political space in a
fragile ethnic mix that was at least economically Chinese dominated. The New
Development Policy of 1991 as a drive for privatization again provided new
business opportunities for Malay entrepreneurs who as a result were
increasingly linked with the government and became part of an expanding
corporate empire of the ruling UMNO party.
At the same time Mahathir’s Vision 2020 had provided the ideological
basis to make this economic success story an example for the developing
countries of the Islamic world and beyond. As its goal to achieve developed
nation status by 2020 through a value-instilled approach towards capitalism
has become more and more questionable throughout the years, it has
nevertheless signalled a shift in the rather pointless policies of Islamic
solidarity – often expressed through “shared values” - that had prevailed
Southeast Asia Research Centre Working Paper Series, No. 84, 2007 3among members of the OIC states since its inauguration in 1971. Mahathir’s
vision of ‘Malaysia Boleh’, Malaysia Can Do It, provided a plan of action,
modernization through rapid development, in which elements of his domestic
Islamic policies, Islamic banking, Islamic university training and the gradual
Islamization of society, could be incorporated.
From now on, the term ‘Islamic solidarity’ started to gain a new meaning,
linking newly privatized corporate sectors in the Middle East, Central Asia and
Southeast Asia with its new corporate identity that was spelled out in the
Islamic lifestyles of the new middle classes.
The outcome of the Yugoslavian civil war provided first glimpses of this new
model of inter-Islamic cooperation. Initially Malaysia had acted out of Islamic
solidarity by supplying troops for an UN peacekeeping mission in 1993 and by
establishing various funds to help Bosnian Muslim “brethren” (See, MFA,
Malaysia 1992:85 and MFA, Malaysia 1995:27). More than 300 Bosnian
refugees had been accommodated in Malaysia, being funded by donations
from an aid agency set up by the newspaper Utusan Malaysia that was able to
raise more than 3 million RM within one year. Despite the formation of a
Bosnia Action Front, Barisan Bertindak Bosnia, in order to lobby politically for
more support for the Bosnians whose situation worsened throughout 1994,
Malaysia’s ambitions were rejected by the UN. Both the proposed increase of
Malaysian troops in February 1994 in accordance with OIC resolutions as a
unilateral plan to supply Bosnians with arms were halted because of the
western domination of the UN Security Council that Mahathir lamented about
but could not change (New Straits Times, April 20, 1994). A more equitable
representation of the developing world in these organizations had been an aim
pursued for decades by the OIC, but as in the Bosnian case such a radical
restructuring – frequently being demanded by Mahathir – had not occurred.
This does not necessarily have to be a hindrance for closer cooperation, as the
initiative has been taken up by government organizations and Malaysian
Islamic banks since then.
One of the outcomes of Malaysian support for Bosnia was the preferential
treatment granted to Malaysian companies in order to reconstruct Bosnia.
Joint Bosnian-Malaysian companies were set up such as the Bosmal
construction company in 2003 that received loans from Bank Islam Malaysia
Southeast Asia Research Centre Working Paper Series, No. 84, 2007 4and its branches for infrastructure and housing projects in Bosnia (SFOR, July
25, 2003).
These and other acts of Islamic solidarity could not disguise the fact that within
the OIC, economic cooperation was rather the exception than the rule. Deeply
divided politically, the OIC had spent the first thirty years of its existence with
debates on the Palestine issue, with protests against the Iraq war 1991 or with
support for Kashmir. When Malaysia took over the chairmanship of the OIC in
2003, the gross domestic product of all OIC member states totalled 1 400
billion US$ in comparison of the 4 500 billion $ of Japan alone (According to
the Pakistani president Pervez Musharraf, See, The Muslim News, October 18,
2003).
Mahathir’s ambition to make his vision of a developed Muslim Malaysia
the blueprint for the modernization of the whole Islamic ummah could not find a
better point of departure than this symbolic turnover that marked the shift from
the stagnant, economically declining regimes of the Middle East to the Tiger
economies of Southeast Asia. The 10th summit conference of the OIC
members held in Malaysia’s new administrative capital Putrajaya in October
2003 offered the platform to gradually move from the highly ideological
discourses of the past towards growth-oriented developmentalism. For the first
time, the 57 member states agreed to the need of increased inter-OIC trade
and investment. Even though the Putrajaya Declaration at the end of the
summit contained much of the old rhetoric, it also displayed features of
Malaysia’s development strategies, the promotion of information technology,
the creation of inter-linkages within the private sector and the further
Islamization of education, knowledge and technology (See, ‘Putrajaya
Declaration’).
A few months later, in March 2004, a further effort was made to enhance
the role of a knowledge based economy supported by the private sector in the
OIC member states. 25 representatives of Science Academies of the OIC,
among them Iran, Kazakhstan and Malaysia with their striving economies,
agreed to form an inter-OIC science network and devise a mechanism for
capacity building in science and technology. Combining both had already
proven to be successful in Malaysia eight years earlier, when the Media super
corridor was set up outside Kuala Lumpur. Since then it has developed into a
Southeast Asia Research Centre Working Paper Series, No. 84, 2007 5thriving information technology hub that comprises more than 900 companies
and combines research and development aiming to achieve a
knowledge-based society by 2020.
The core group of developing countries in the OIC, initially twelve member
states, ratified the Framework Agreement on Preferential Trade System in
early 2004. A series of talks had been launched in Istanbul in October 2003 in
order to come to trade agreements within the OIC, also as a first attempt to
bridge the gap between the majority of its poorer members and their stagnant
economies and the developing ones. Similarly to the early times of the
European Community, a system of “two speeds” was developed that would
make use of the dynamics of partly privatized economies in certain growth
areas of the OIC, as in Southeast Asia and the Gulf States, but also in Turkey,
Iran and Kazakhstan, in order to link them to lesser developed regions later.
During the visit of Malaysian Prime minister Abdullah Badawi in Jeddah in
June 2004, the trade agreement was signed by the Malaysian minister of
higher education, Shafie Mohammed Salleh, on behalf of the Malaysian
government (See, ‘Malaysia’s Prime Minister).
On the official level, economic development alone, however, is not
sufficient for the OIC’s goal of gaining more importance in the developing world
and in its position towards the West. Islamic credentials are necessary that
underline the need for a different and ‘better’ approach towards modernization,
one, as Mahathir had formulated in his Vision 2020, that combines Islamic
values with capitalism in sharp contrast to the ‘cut throat’ approach of western
conglomerates. Even if this vision remains a fiction in face of the existing
global nature of economics, it has helped to appeal to the solidarity of the
Muslim ummah by creating an Islamic brand of development being reflected in
the rising importance of Islamic banking. In order to make the organization
more credible, the OIC formed a Commission of Eminent Persons in early
2005 to bring together intellectuals to give the OIC a facelift, mostly in its
structure, but also in its ideological outlook (See, ‘OIC Secretary General’).
The inaugural meeting, held in Putrajaya, Malaysia, adopted Badawi’s
Islam Hadhari as one of the basic pillars of this new concept. The
fundamentals of this ‘civilizational Islam’, ‘a free and independent people’, ‘a
just and trustworthy government’ and ‘the protection of the rights of minority
Southeast Asia Research Centre Working Paper Series, No. 84, 2007 6groups and women’, however, do not reflect the realities in most OIC member
states including Malaysia. Even though civil society has gradually gained
importance in the Muslim world, it is first of all the deregulation of the economy
and its partial privatization that might bring about social change and which
concepts as Islam Hadhari can only complement. Transformation might come
through the ‘backdoor’ as the newly emerging middle classes of the urban
centres are the ones who immediately benefit from economic growth.
In Malaysia they had brought about the Islamic resurgence in the early
eighties that fundamentally changed the fabric of Malaysian society. But within
the whole ummah the prime concern remains the eradication of rural poverty.
Badawi’s domestic attempts to close the gap between the urban rich and rural
poor takes into consideration the possible consequences of political
destabilization that arises from massive social dissatisfaction – which had
become manifest after the Asia crisis of 1997/98 and had led to dramatic
losses for the ruling National Front in the elections of 1999.
It is this understanding that has led Badawi to push for the promotion of
trade and finance among the 57 OIC members, challenging the traditionally
political outlook of the group. He has again used the 30th meeting of the Islamic
Development Bank in June 2005 to propose an 11 billion US$ infrastructure
fund, a master plan of developing financial services and creating a pan-Islamic
trading bloc using the Gold Dinar as a common currency (See, ‘Malaysian PM
Proposes’). Malaysian companies had started to develop joint-ventures in the
past few years. During Badawi’s visit to Pakistan in February 2005 with a
delegation of business people, the Malaysian Multimedia Development
Corporation launched several projects on communication technologies with
the Pakistan Software Export Board (PSEB). Telekom Malaysia announced a
joint venture with Multinet Pakistan to construct a communication high fibre
cable network in Pakistan (Dinar Standard, April 15, 2005). In March 2005,
Malaysia started poverty alleviation schemes in Sierra Leone, Mauritania and
Bangladesh.
Eventually Malaysia’s policy shift might prove to be successful. Also other
Islamic countries and Islamic organizations have taken up the initiative to
promote better relations among the growth sectors of key industries.
Both the Islamic Chamber of Commerce and Industry (ICCI) and country
Southeast Asia Research Centre Working Paper Series, No. 84, 2007 7representatives as the Turkish Business Association (MUSIAD) have
presented concrete proposals to link small and medium sized enterprises
among the OIC member states. The Malaysian External Trade Development
Corporation (Matrade) has opened an office in Cairo, Egypt, in 2005 to
coordinate this cooperation with one of Malaysia’s key partners in the Arab
world that traditionally had close relations with Malaysia dating back to the 19th
century. During that year Malaysia registered an increase of trade with Egypt
of 24.2 per cent.
Egypt had been one of the first four signatories of the preferential tariff
scheme among OIC members and was one of the Arab OIC states visited by
the Malaysian international trade and industry minister Rafidah Aziz in March
2006 in order to promote trade within the OIC (See, ‘Two-Way Flow’).
Malaysia’s International South-South Policies
Both the non-alignment movement and ASEAN have initially understood
themselves as a political instrument to respond to the east-west-divide – while
the NAM emerged from the Bandung conference of non-aligned countries in
1955, ASEAN from the beginning reacted to the Soviet threat in Southeast
Asia as an anti-communist platform. After the end of the Cold War both
organizations have – similarly to the OIC – moved towards greater regional
integration and use increased trade among regional partners as a means for
strengthened South-south-cooperation – political concerns have given way to
economic ones, development and modernization.
Mahathir had given early signs of his willingness to emancipate Malaysia
from superpower interference. After coming to office he had launched policies
like Buy British Last or the Look East Policy (1982). In the years before
launching his Vision 2020 he suggested an approach combining both
ideological and economic tools for development. By looking at the working
culture and ethics of Japan and Korea he hoped to balance the fact that
Malaysia had so far too closely focused on the West, but he suggested also
that a group of like-minded developing countries could achieve growth by
adhering to a certain framework of values and privatization policies. ASEAN
would be the core group of these ‘tiger states’ and Mahathir placed them on
Southeast Asia Research Centre Working Paper Series, No. 84, 2007 8the top of his re-prioritised foreign policies agenda.
The Malaysian Technical Cooperation Programme (MTCP), launched in
1980, was an early nucleus of these policies and Mahathir’s conviction
focusing on self reliance instead of economic dependence (See, Ahmad
2005:55-59, 61-62). Even though only the privatization campaign in Malaysia
itself – under the New Development Policy launched in 1991 – allowed a
break-through in the establishing of business networks of the private sector
gradually freeing themselves from constant state interference, Mahathir slowly
moved towards South-south-cooperation within institutional frameworks in the
late eighties. In May 1986, Malaysia was the host of the South-south II
conference being attended by 99 leaders from developing countries, which
was held in order to find solutions to the most important economic problems of
developing nations. Early attempts were still overshadowed by the ideological
fall-backs into setting up committees, commissions and forums that did not
translate into concrete policies - similarly to the ‘talking clubs’ of the OIC.
The South Commission headed by Tanzanian president Julius Nyerere
was one such outcome of the 1986 conference. However, the targets
formulated addressed the need to formulate development strategies for the
South, being suggested by Mahathir to 127 heads of states in a personal letter.
The Kuala Lumpur Declaration at the end of the conference summarized the
key objectives of the commission, to suggest ways of increasing cooperation,
to strengthen South-south-cooperation organizationally and to consider the
creation of a South secretariat. This led to the formation of the G15 of
developing nations which held their first meeting in Kuala Lumpur on June 1,
1990 (Algasari 1994: 247).
In the following years, the end of the Cold War made a re-orientation of
Malaysian foreign policies even more necessary. Whereas regional
organisations as ASEAN had so far been pr-dominantly anti-communist in
nature, this ideological orientation had to be replaced by one taking into
consideration the emergence of new markets and new regional partners. One
of the more important examples of this developing regional interplay was the
independence of the Central Asian states in 1991 and the gradual set-up of
various forms of cooperation between the governments and private sectors of
these countries with Malaysia, ASEAN and the OIC. Between ASEAN and
Southeast Asia Research Centre Working Paper Series, No. 84, 2007 9Central Asia this collaboration had been full of hopes and expectations,
especially from the Malaysian and Indonesian side which hoped to strengthen
the ties with the Islamic ummah within the former Soviet Union.
Lacking willingness of political and economic reform delayed the
envisioned cooperation for about one decade. After contacts stalled – also
between Russia and ASEAN – in the early nineties, they were decisively
revived at the beginning of 2000 – largely due to new business opportunities of
the partly privatized industries, the construction sector, telecommunications,
tourism and natural resources.
The 13th summit of the Non-Aligned Movement held in Kuala Lumpur in
February 2003 served as a catalyst to reiterate Mahathir’s willingness to revive
South-south relations. Earlier attempts to revive the Islamic ummah had
largely failed. Neither had the Bosnian crisis triggered a larger reconstruction
effort of the wealthier Gulf states, nor had hopes been fulfilled to create an
“Islamic belt” between Turkey and Central Asia or Central and Southeast Asia.
Also NAM being in a rather comatose state had not been able to respond to
the questions arising from the events of September 11, 2001 – a possible
clash of civilizations between East and West manifested in the rising
importance of political Islam. Rather, the final document of the 2003 summit
and its defence of the human rights record of Zimbabwe’s president Mugabe
showed that cooperation remained limited to the economic sphere – eventually
providing space for emerging middle classes to express themselves in the
niches of civil society within NGOs and human rights organisations (Mahathir
was criticized for his performance and human rights’ record by the chairman of
the Democratic Action Party (DAP), Lim Kit Siang, See, Lim 2003.)
The cooperation between Malaysia and Uzbekistan in the early nineties
had been based on Uzbek president Karimov’s admiration for Mahathir’s
model of development without democratization. While Mahathir had presented
his Vision 2020 as an attempt to reach developed nation status through a
combination of capitalism and so-called Asian values, Karimov had vowed for
a blueprint of authoritarian rule claiming empirial Uzbek and Islamic traditions.
Despite more moderate tones at the beginning of his rule in November 2003,
also Mahathir’s successor as Malaysian Prime minister, Abdullah Badawi, has
not moved towards more democratization in the new regional setting of
Southeast Asia Research Centre Working Paper Series, No. 84, 2007 10Malaysian foreign policies. One year after the NAM summit in Putrajaya, the
G15 states met in Caracas, Venezuela, to reiterate a call for a dialogue with
the industrialized North and to propose an energy cooperation. Attended by
the presidents of Venezuela and Zimbabwe, Chavez and Mugabe, and various
others, the summit triggered protests from the national opposition, which was
probably an even more important event than the summit itself (Marquez 2004).
Protests had so far quickly been clamped down by the G15 member
governments, the reformasi street protests in October 1998 had been stifled by
the Mahathir administration, and also the protests in Caracas resulted in
clashes and even deaths. The opposition had demanded to recall a
referendum on Chavez’ mandate and an investigation of his human rights
abuses. Development without democratization, the role model of Mahathir’s
‘Malaysia Boleh’ slogan (Malaysian Can Do It) has successfully spread around
the developing world – it has been adopted as an adequate form of
governance for a wide range of developing countries, be it in Southeast and
Central Asia or in Latin America and the Middle East.
The summit declaration emphasized the need for joint investment and the
exchange of human resources, an aim that was underlined by Badawi in Doha
during the meeting of the G77 states in June 2005. On the Second South
Summit at Doha in June 2005 Badawi could report about the success story of
Malaysia’s development initiatives. He stressed that the private sector had to
be involved and should serve as an engine for growth, which had actually
happened in Malaysia after parts of Malaysian industries had been privatized
following the introduction of the New Development Plan in 1991. In the last
fifteen years, the “phenomenal potential” for trade among developing countries
had been proven. In 2004, the trade volume between Malaysia, ASEAN, China
and India grew by 174.8 per cent, 726.8 and 563 per cent respectively (Media
Monitor, June 16, 2005).
Also in his capacity as chairman of the OIC, Badawi underlined the
importance of South-south trade for which Malaysia had launched a capacity
building programme in March 2005 in order to provide the least developed
member states with a chance to develop their economies. “Development
without democratization”, initially the buzzword for development strategies
among the “Tiger states” Malaysia and Singapore, has been successfully
Southeast Asia Research Centre Working Paper Series, No. 84, 2007 11introduced as the ‘Malaysian way of life’ for developing nations across the
globe. Shortcomings may emerge as they become obvious within the
Malaysian society itself. This primarily concerns the widening gap between the
rich and poor, which has contributed to gains for the Islamist Parti Islam
SeMalaysia (PAS) among rural villagers as a form of protest against the
glittering urban centres. As a result, religious and ethnic polarization has
increased in recent years.
This puts another obstacle on South-south cooperation. Apart from the
curbed civil society it is the threat from disillusioned Malays who have turned to
the Islamist and opposition parties, which opens new perspectives for
instability – an instability that is not a result of September 11 but is largely
home-made.
Merged Interests after September 11: Islam, Regional Security and the
Failure to Cooperate
It is perhaps an irony that the challenge of Mahathir’s capital friendly
development strategy propagating a social model instilled by so-called Asian
values that put respect towards authority and the state before everything else
has not been challenged by outside forces – first of all the West and its
decadent influences, as Mahathir saw it – but from within Southeast Asia itself.
In the 1990s well beyond the Asia crisis of 1997/98 it was the ‘Asian way’ of the
ASEAN members serving as a model for both a distinctive brand of foreign
policies as for development. The formula of promulgating non-interference and
a set of distinctive values of interregional harmony had served the organization
well during the years of the Cold War, where rigid ideological barriers between
East and West made it easy do chose the ‘right’ side. Much earlier, during the
period of Islamic resurgence (kebangkitan Islam) there were first signs of a
growing illiberalism with Asian societies. The brand of a conservative dakwah
Islam developing among the newly emerging middle classes of Malaysia (and
much later, after Suharto’s resignation, also in Indonesia) developed exactly
because of the huge discrepancy between outwardly ‘harmonious’ foreign
policies and rigid internal policies that left no space and provided no tradition of
political participation except through the channels of Islam (Stark 1999).
Southeast Asia Research Centre Working Paper Series, No. 84, 2007 12The gradual falling-apart of ASEAN harmony became obvious first during
the Asia crisis when the member states ignored the disintegration of Indonesia
and the independence movement of East Timor. None of the ASEAN members
saw any necessity in reforming the Treaty of Amity and Cooperation of 1976
which reflects the strict doctrine of non-interference in mutual affairs. Instead
growing tensions among ASEAN countries have been ignored. Prominent
examples were the ongoing dispute between Malaysia and Singapore – which
have not been resolved in decades – over the shared border in the Johor
causeway, issues of border controls at the Woodlands checkpoint, exterritorial
lands of the Malaysian Railways Keretapi Tanah Melayu Berhad (KTM) and the
prize of Malaysian water for Singapore.
But also regional issues have left the ASEAN members speechless. While
South-south-cooperation has been on the top of the agenda in shaping
economic ties between Malaysia, ASEAN and the newly independent states of
Central Asia, Southeast Asian governments have done nothing to address
domestic problems of their newly won friends that might affect the stability of
the entire region and could cause considerable obstacles towards the
emerging growth-triangle between mainland Southeast Asia, the Straits of
Malacca and the ‘New Silk Road’ of Central Asia. Despite Mahathir’s support
for the Uzbek president Islam Karimov, who has adopted Malaysia’s
development model as a blueprint for Uzbekistan by moulding Islamic values
with rigid developmentalism that is even more dictatorian than Malaysia’s, the
rising tension in Uzbek society, the threat of Islamic militancy and the
suppression of protests – the last in May 2005 – have not been addressed or
even discussed.
The protests in Kyrgyzstan leading to the ouster of president Akayev in March
2005 have not received any attention as much as the fraudulent re-election of
Kazakhstan’s president Nursultan Nazarbayev at the end of the same year,
even though both countries had submitted official applications to the ASEAN
secretariat in late 2004 to get bilaterally more involved by joining the ASEAN
Regional Security Forum (ASEAN Secretariat 2004: 4).
In Central Asia as in Southeast Asia itself it is this growing unease with the
traditional concept of the nation state and first of all its elites that has triggered
a number of conflicts in the region posing a direct threat to the deceptive calm
Southeast Asia Research Centre Working Paper Series, No. 84, 2007 13of the ‘ASEAN way’. Also Mahathir’s successor Abdullah Badawi has so far
failed to make decisive changes in a system that is largely characterized by a
bargain between the races and a highly uncompetitive quota system in favour
of the Malays. The widening gap between rich and poor among all races
combined with the limited access to political decision making processes has
increasingly put the existing system into question. But as developments in
recent years show, it is not only the dissatisfaction of the rural population
translating into votes for the Islamist opposition party Parti Islam SeMalaysia
(PAS) that ultimately opposes the traditional concept of the national state as it
exists since independence. While PAS supports the creation of an Islamic state
(Negara Islam) ruled by Islamic legislation of the shariah, these ambitions do
not reach beyond national boundaries – at least for the meantime. It is rather
the aim to turn Malaysia into an Islamic state which had years ago started the
competition between the two major Malay party, Mahathir’s ruling UMNO and
the oppositional PAS, about how to gain the support of Malay voters.
The introduction of conservative Wahhabism in Malay society as a result
of Mahathir’s and Badawi’s Islamization policies of the last quarter century and
the lacking political culture of open competitiveness elsewhere has pushed
Islamist militants in both Malaysia and Indonesia, but also in the border areas
of Muslim minorities in Southern Thailand and Southern Philippines into
negating the concept of the nation state altogether. According to the views of
groups such as Kumpulan Mujahedin Malaysia or the officially defunct Jemaah
Islamiya, it will not be Asian values that dominate discourses on the
post-colonial state but a vision of the shariah-state similar to the early Arab
Caliphate of the 7th century. In Southeast Asia, such a caliphate would reach
from Aceh to Mindanao and would be the Islamic equivalent of the nationalist
Indonesia Raya (Greater Indonesia) of Sukarno in the 1960s. Since the Islamic
state would be as radically anti-capitalist as Sukarno’s and considering the
largely capitalist orientation of the new inter-Asian regionalism, both concepts
are likely to clash in the future, particularly if the climate of distrust between
ASEAN member states is not resolved.
Instead of creating a common platform to address problems of Islamic
separatism, these problems have been conveniently summarized as
“terrorism” and no solutions have been found so far. Considering the fact that
Southeast Asia Research Centre Working Paper Series, No. 84, 2007 14these problems are much less the result of remote-controlled al
Qaida-networks – as they are promoted by the media and terrorism-experts -
but are often home-grown and actively involve institutions of the state have not
contributed to new approaches (Gunaratna 2002).
The involvement of the military in the logging and narcotics trade, which it
shares with Islamist-Mafia like structures, as in Mindanao or Southern
Thailand, the instrumentalisation of Islamist groups such as Laskar Jihad by
Islamic factions within the Indonesian military in order to put pressure on the
former governments of Abdulrahman Wahid and Megawati Sukarnoputri, all
these initiatives are actually encouraged by the existing climate of
non-interference within ASEAN. New member states have quickly discovered
this, the diplomatic unilateralism of Myanmar or Vietnam has actually been
protected by the “ASEAN way” and has further underscored pre-existing
agendas.
So it is no surprise that the first attempt to institutionalize conflict
resolution has been a failure. In 1994, ASEAN had launched the ASEAN
Regional Forum as an attempt to curb regional conflicts and to build measures
on counter-terrorism. Neither the heightened security concerns as a result of
the September 11 incidents, nor regional problems as the increased piracy and
threat to international trade security have been able to force the ARE into any
concrete measures going beyond the attempt to reach consensus on the
lowest possible level. Similarly to what the OIC has achieved in terms of
practical policy measures, the ARE has remained a ‘talking shop’.
During the Asia crisis in 1997, ASEAN has organized two meetings on
transnational crime, but there was no legal commitment and the 1999 follow-up
meeting only produced an agreement to enhance cooperation. With active
Malaysian support, a Senior Officials Meeting on Transnational Crime was
established in 1999 in order to enhance interregional collaboration. Additionally,
divisions among ASEAN members increased at the end of 2001 over the US
involvement in Afghanistan, of which Malaysia and Indonesia as Muslim states
were highly critical. Only because of constant pressure of the US government,
a nominal understanding was achieved one year later over an anti-terror joint
declaration. Not only because of the lacking tradition of interference into each
others affairs, but also because of respective interests outlined above, the
Southeast Asia Research Centre Working Paper Series, No. 84, 2007 15Special ASEAN Ministerial Meeting held in May 2002 in Kuala Lumpur did not
come to any results that translated into concrete policy recommendations
(Abuza 2003: 247-250).
Since 2002 security and anti-terrorism agreements have been mostly
bilateral in nature. The capture of Philippine Moro rebel leader Nur Misuari was
a result of joint border surveillance carried out by the Joint
Malaysian-Indonesian General Border Committee. In December 2001 the
countries involved had agreed to deport Misuari to Manila. This initial success
led to further bilateral activities. In May 2002 Malaysia, Indonesia and the
Philippines signed a counter-terrorist treaty which was concluded after four
months of negotiations. The treaty was supposed to be a counter-weight to US
involvement in the Philippines as part of the “war on terror”. Especially
Malaysia and Indonesia had strictly opposed any plans of the US military to
fight piracy in the Straits of Malacca, one of the most important shipping lines in
Southeast Asia and even worldwide.
Throughout 2003-2005 the ASEAN Regional Forum has met several
times to discuss measures on transport security and transnational crime.
Measures however are again taken on bilateral level to translate these
recommendations into action.
The Developing World’s New Idiom: the Private Sector in Foreign
Policies
The years since the Asia Crisis in 1997/98 have witnessed remarkable
changes taking place in the way state hegemony has been put into question in
Malaysia and in the whole Asian region, ranging from neighbouring Southeast
Asian to Central Asia and the Middle East. The result is not only a
re-orientation in leadership and in governance styles, but also the emergence
of other players on the scene that challenge and replace the state in its once
dominant role.
The gradual departure from Mahathir’s vision of an authoritarian state and
its focus on a value-instilled developmentalism proceeds very slowly and took
many different faces. Challenges to his highly personalized hegemony started
to arise before Anwar Inrahim’s arrest in late 1998, the onset of reformasi,
Southeast Asia Research Centre Working Paper Series, No. 84, 2007 16Malay disunity and culminated in the slogan of Mahazalim, “Mahathir, the
Oppressor”, who represented all the perceived shortcomings of the political
establishment of the ruling National Front.
Also under Badawi, the economic as the political vision remains in
transition, after his succession in October 2003 had given the impression of a
cautious departure from the overarching visions of Vision 2020 and the New
Economic Policy. However, the whole political system is so streamlined to
comply with the existing ethnic arrangements – primarily safeguarding the
political leading position of the Malays – that change can only come from a
gradual “infiltration” of the Malays into the cooperate sector – an aim
repeatedly expressed by the government since more than three decades.
Mahathir’s cautious shift from highly regulatory state-controlled policies to
the New Development Policy and its inclination towards privatization has not
brought about the expected success of Malays challenging the Chinese
position and repeating the success stories of other privatized conglomerates,
as in Japan or South Korea.
The re-nationalization of key conglomerates such as the Malaysian Airline
System (MAS) or the Indah Water Consortium in 2001 proved that the private
sector was not ready yet to free itself from the dependence by the state.
However, this “mixed environment” of partly privatized, partly state-owned
medium-scale enterprises had developed as a result of Mahathir’ s
privatization efforts and proved to be the breeding ground in establishing
linkages with other economies that are in a similar trajectory from state-control
towards privatization (See, Khoo 2003: 38-70). In various fields such as the
banking sector, construction, plantation, tourism, resource exploitation etc.,
Malaysian companies have been given the incentive to explore new markets.
Initially, the Malaysian logging and timber industry was active abroad.
After formulating the New Development Policy in 1991, which gave the private
sector a more important role in government policies, Malaysian companies
started to venture into neighbouring regions of Southeast Asia, into Central
Asia, the Middle East, Africa and Latin America. In some countries, as the
islands of the South Pacific, shifts in foreign policies had led to Malaysian
private sector investment – more importance was given to
South-south-investment to reduce the dominance of neighbouring Australia
Southeast Asia Research Centre Working Paper Series, No. 84, 2007 17and Japan.
As early as 1982 Mahathir had attempted to establish new South-South
trading links with the region of Asia Pacific. The Malaysian government created
the Malaysian Overseas Investment Cooperation by merging Malaysian
government subsidiaries and the private sector in order to strengthen
Malaysian overseas investment. After an initial visit to Fiji with representatives
of the MOIC and Mahathir in December 1982, this new South-South
investment instrument was officially launched in January 1983. Three years
later, the MOIC received a first concession as logging company by the
government of Papua New Guinea in October 1986 (Dorney 1993: 230).
From the beginning, the activities of the big Malaysian logging companies
involved in the South Pacific and elsewhere were controversial for several
reasons. In Papua New Guinea they were accused of massive environmental
abuse and of becoming an institution of its own, bribing government officials
and taken over numerous other businesses in trading, real estate and the
media. As it had become obvious by government policies in Malaysia itself,
capitalism was supposed to spread freely and with no limitations regarding to
the social and natural environment. In the early nineties this had led to rising
tensions between Mahathir and his deputy, Anwar Ibrahim, who had – in
Islamic terms – suggested a less radical approach towards development.
Mahathir however saw all criticisms as an effort of foreign powers to obstruct
Malaysia’s legitimate right to develop. When the logging practices of one of the
biggest Malaysian companies, Rimbunan Hijau, were criticized by the
Australian government during the South Pacific Forum in August 1994,
Mahathir suspected a conspiracy of western countries in order to protect their
economic interests (Business Times, March 29, 1997).
In such a climate of distrust which was further fuelled by Mahathir’s
suspicion that the West intended to impose his values on Asian societies in
order to create new forms of dependence and colonialism,
South-South-cooperation rather became an ideological tool than anything else.
The confrontation between Mahathir and the West reached its peak during the
Asia crisis of 1997/98 in which he accused the western world to use foreign
investment and capital speculation as a tool to bring Malaysia down.
Despite an economic recovery after the crisis, the Malaysian economy
Southeast Asia Research Centre Working Paper Series, No. 84, 2007 18has attempted to find new niches in the market that cover areas going beyond
‘conventional’ industries. If the private sector has managed to establish
linkages with regional partners, it is the Islamic banking and Islamic products
sector that offers considerable prospects for expansion within and beyond the
Islamic world.
Islamic banking had always been an important part of Mahathir’s Islamic
and foreign policies. Since the Islamic Bank was opened in 1983, Malaysia has
managed to develop Islamic banking as a niche within the market, much more
so since it propagates ummah-wide networking as one of the crucial points of
its development oriented policies and a key part of South-south cooperation in
which Malaysia intends to play a leading role. During the last few years,
Malaysia has made efforts to become one of the key hubs for Islamic banking
not only in Southeast Asia but within the whole Islamic world. In 2004, five
banks were awarded Islamic banking licences by the Malaysian central bank.
This included two banks from the Middle East, Saudi Arabia’s largest bank Al
Rajhi Banking and a consortium of banks in Qatar. Three local Malaysian
banks also received approvals. This has provided the Malaysian Islamic
banking sector with assets of more than 89 million Ringgit at the time after the
licences were issued and constitutes 11 per cent of the overall banking
activities by 2006. The government aims to double this to 20 per cent within
the next four years (Business Report, October 18, 2004).
Also the traditionally non-Muslim states of Eastern Malaysia try to profit
from the prospects of Islamic banking. The state of Sarawak is about to issue a
300 million US$ Islamic bond by July 2006 with assets coming from the Middle
East, Europe and by 75% from Asia itself (Islamic Banking and Finance News,
Jan 30, 2005).
This growing Malaysian banking industry is closely linked to activities in
other Islamic sectors, as the production of halal food and the tourism industry.
Malaysia increasingly attracts tourists from the Middle East and especially from
the wealthy Gulf states also because it is able to offer a wide range of Islamic
banking and financial services. The trade ties built through Malaysian initiative
among OIC member states only enhance the economic networks that develop
since the last decade. In its attempt to make Islamic banking part of the
mainstream, the government has also encouraged setting up institutions
Southeast Asia Research Centre Working Paper Series, No. 84, 2007 19dealing with Islamic bank regulatory measures. It has established the Islamic
Financial Services Board in which Muslim central bankers from the whole
Islamic world come together to work on new forms of Islamic banking
supervision and regulations. Whereas the demand for Islamic banking services
has traditionally come from the Middle East, it is the former Islamic periphery,
Southeast Asia and Malaysia that move into the centre of Islamic banking
activities today.
Political Limitations and Challenges since Badawi’s Takeover
While the private sector and banking services have developed certain
dynamics of their own and seem poised to take up Badawi’s call for an
increased regional economic integration under Malaysia’s leadership, the
signals on the political scene seem much more mixed, even detriment to
Badawi’s own position.
On November 1, 2003 Badawi became Mahathir’s successor. Less than
three years later an open rift has appeared between the two which emerges
over differences in the handling of economic policies. By May 1, 2006 ‘Dr M’
alluded to the new leadership as a “half-past six country which has no guts”,
followed by accusations of broken promises and ingratitude. Apart from the
involvement of several figures of Badawi’s inner circle into the twist as
Abdullah’s son-in-law, who was accused of a campaign of demonizing
Mahathir by Mahathir’s former political secretary, these differences go far
beyond party politics and welcome opportunities to denounce personal and
political adversaries (Khoo 2006).
Mahathir’s criticism evolved from three issues, Badawi’s suspension of
building a bridge linking Johor and Singapore, his handling of the Automobile
Policy which intends to open the protectionist Malaysian car market and its
Proton brand to foreign competition, and Badawi’s decision to halt further
construction in Putrajaya, Malaysa’s new administrative capital (Ramakrishnan
2006).
Badawi’s hesitation to continue with Mahathir’s mega projects is nothing
new, shortly after coming to power, he had stopped the multi-billion Ringgit
double-tracking rail project between Johor and the Thai border. On the other
Southeast Asia Research Centre Working Paper Series, No. 84, 2007 20hand, Badawi has continued some of Mahathir’s policies. His Islam Hadhari,
creating a more modern liberalized understanding of Islam, may not stop
Islamic fundamentalism in and outside the country, but, at least, it has been a
continuation of the Islamic values debate which has been a part of the Vision
2020.
Mahathir’s disappointment with Badawi does not come from alleged
political incongruencies that have evolved lately. After all, Badawi’s initial
efforts to make government agencies as the immigration and police
departments more efficient and transparent had been preceded by Mahathir’s
campaign of a “clean, efficient and trustworthy” government more than twenty
years earlier. But quarrelling over seemingly petty issues signals a much more
crucial rift emerging between Mahathir and Badawi, which could also impact
on further South-south-cooperation as Badawi’s project in so far as the
performance of the Malaysian economy is concerned.
While Mahathir pursued his Vision 2020, the developed nation status for
Malaysia, as a nationalist economic project with an ambition that reached far
beyond Malaysia, Badawi seems to dismantle this over-arching vision in the
name of liberalization, competition and globalization. If neither the prospering
construction sector continues to profit from mega projects nor the Proton car
maker is shielded by high taxes from competitors in Korea and Japan,
Mahathir’s vision unravels that he had so vigorously protected by sacking
Anwar (against Anwar’s project of a more open and human Islamic civil society,
the masyarakat madani) and by imposing capital controls in 1998.
A challenged leadership torn apart by internal frictions is nothing new in
Malaysian politics, Mahathir had been challenged by his deputies, the ruling
party UMNO had been split in two camps in 1987-88 – Team A and B – but this
time things seem to be different. The great vision of Malaysian developed
nation status gradually falls apart, hampered by changes in economic policies
with still unclear outcomes and by raising doubts in Badawi’s sincerity as a
political reformist.
In the preferential quota system, which makes the Malays the immediate
benefitiaries of the government, no substantial changes have been made since
Badawi’s accession to power. The shift in policies from mega-projects to those
of education and training therefore do not seem credible because it does not
Southeast Asia Research Centre Working Paper Series, No. 84, 2007 21address the root problem that Malays are awarded at least 70 per cent of the
available places at institutions of higher learning for merely ethnic reasons.
The Ninth Malaysia plan tries to achieve 6 per cent of economic growth
from 2006 until 2010, it attempts to reduce hardcore poverty and income
disparities between ethnic Malays and Chinese (Economic Planning Unit
2006). After economic growth rates averaging 4,5 per cent for the last five
years it seems unlikely that the developed nation goal can be achieved.
Income disparities have not risen between the races only but include urban
and rural Chinese and Indians as well, not only Malays. The continuing
problem of ethnic and religious polarisation has not been addressed despite
some attempts to portray Malaysia as a modern and liberal country. Badawi’s
concept of Islam Hadhari is continuously being challenged by Islamic
fundamentalism and the opposition’s attempt to establish an Islamic state
based on the shariah.
This attempt to liberalize has so far not been translated into concrete
action, rather Badawi has moved backwards in the human rights issue and as
such is in line with the majority of Muslim nations.
Last year a new family law has been introduced that further curtails the
rights of Muslim women and provides protection to men engaging in polygamy
and divorce. This is part of a creeping Islamization of the judiciary, exactly in
line with the demands of the Islamic opposition party Parti Islam SeMalaysia
(PAS) to introduce the shariah and make Malaysia an Islamic state. Such
moves of the party in the east coast state of Kelantan and Terengganu had led
foreign and local investors to leave the state. On the federal level a number of
court decisions have put the shariah law against the civil courts and Malaysia’s
formally secular constitution. In two recent cases, a Muslim convert to
Christianity was charged under Islamic law and accused of apostasy. A born
Hindu was buried in a Muslim cemetery after courts ruled that he had
converted to Islam (See, ‘Shariah Cases’).
Badawi’s concept of Islam Hadhari has done nothing to prevent the
growing influence of conservative Islam in Malaysian society which has
already undergone a deep-rooted Islamization since the last quarter century,
when kebangkitan Islam, an ummah-wide Islamic revival, had caused changes
in life-style, in inter-race relations and in the social fabric. Islam Hadhari rather
Southeast Asia Research Centre Working Paper Series, No. 84, 2007 22features prominently in the Ninth Malaysian Plan which is the first time that
Islam has been used to formulate the multi-ethnic nation’s development goals.
Badawi has remained rooted in the Mahathir legacy where the use of
authoritarian rule is concerned. All draconian laws as the Internal Security Act,
the Sedition and Printing Presses and Publications Act that controls the media
have firmly remained in place (Gatsiounis 2006).1
These continuous authoritarian trends also keep to be reflected in the
Malaysian approach towards regional cooperation that since Mahathir has put
growth and development above everything else and has sidelined political
participation and civil society. This capitalist vision of a state-regulated
collaboration in which the private sector with its close linkages to the
government has an important role to play, has been Mahathir’s credo and it
seems at least from the political point of view that there is no fundamental
change in sight under Badawi’s administration. Exposing companies as the
Proton car maker to more global competition, is just in line with the goals of the
New Development Policy introduced by Mahathir in 1991 vowing to reduce
state control in Malaysian private sector.
Conclusion
Malaysia as one of the most developed Muslim nations has taken a
leading role to enhance cooperation within the developing world. Mahathi’s
Vision 2020 had set the stage in 1991 for a development model that relied
heavily on a state-regulated capitalist approach increasingly involving the
private sector in which so-called Asian values replaced political participation
and democratic transparency. Development without democratization became
the blueprint for an export of the Malaysian development scheme in the
developing world.
Both within the OIC, ASEAN or in Central Asia, governments have relied
on privatized industries to achieve impressing growth rates. Also Malaysia’s
new Prime minister Abdullah Badawi has continued Mahathir’s legacy, there is
no sign – also domestically – that he could follow the policies of, say, the
European Union that combines economic collaboration closely with political
and institutional integration.
Southeast Asia Research Centre Working Paper Series, No. 84, 2007 23Organizationally, the OIC, ASEAN or the Non-Alignment Movement have
remained weak, because they have not managed to develop conflict solving
instruments that would make it possible to solve bilateral disputes, as the ones
between Malaysia and Singapore, amicably. Instead, ASEAN has led new
members as Vietnam or Myanmar to pursue their domestic policies as part of
the ‘ASEAN way’ approach of non-interference.
Recently, the rise of militant Islam after the attacks of September 11 has
again put this approach into question. Since governments as the Malaysian
have actively supported the rise of conservative Wahhabi-style Islam in the
past decades, this problem is not so much one of international networks, but
often home-made. Rising Islamic conservatism that, as in Malaysia’s case,
more and more infiltrates the nominally independent and secular judiciary
might create a climate in which foreign investors become hesitant and – as a
consequence – where the success story of unlimited economic growth rates in
the cooperation among developing nations wanes.
References
Abuza Z (2003) Militant Islam in Southeast Asia: Crucible of Terror, London:
Lynne Rienner, pp. 247-250.
Ahmad F A H (2005) Malaysia and South-South Cooperation during Mahathir’s
Era, Kelana Jaya: Pelanduk Publications, pp. 55-59, 61-62.
Algasari G (1994) Mahathir: The Awakening, Labuan: Uni-Strength Sdn. Bhd.,
p. 247.
ASEAN Secretariat (2004), Chairman’s Report of the ARF SOM, Yogyakarta,
May 12, 2004’, in ‘Matrix of ASEAN Regional Forum Decisions and Status,
1994-2004’, ASEAN Secretariat, October 2004, p. 4.
Business Report, Malaysia, ‘Malaysia Set to Become Islamic Financial Hub’,
October 18, 2004.
Southeast Asia Research Centre Working Paper Series, No. 84, 2007 24You can also read
