Malaysia
Updated January 17, 2024
Malaysia
Overview
Congress have expressed concerns about human rights
The Federation of Malaysia is a majority Muslim
issues in the country including Malaysia’s record in
parliamentary democracy in Southeast Asia. It has an
combatting human trafficking (Malaysia was listed on the
ethnically and religiously diverse population of 32.7
Tier 2 Watchlist in the State Department’s 2023 Trafficking
million, with a Malay majority and large ethnic Chinese and
in Persons report), as well as Malaysia’s treatment of
Indian minorities. Malaysia is considered a middle-income
refugees from Burma (Myanmar).
country and is relatively prosperous among Southeast Asian
nations. Malaysia is one of four Southeast Asian nations
Democracy and Politics in Malaysia
that claims disputed territory in the South China Sea.
Until May 2018, Malaysia had been ruled by a single
political coalition since its independence from the United
Malaysia was led a single governing coalition from its
Kingdom in 1957. The Barisan Nasional was led by
independence in 1957 until 2018, but it has undergone
UMNO, a Malay-nationalist party that draws its
significant political upheaval since then, as a series of
membership predominantly from the country’s Malay
coalition governments have held power following national
majority. During its lengthy period in power, UMNO
elections in 2018 and 2022. A series of weak governments
enacted a series of economic and social preferences for
marked by internal rivalries have struggled to govern
bumiputera (ethnic Malays and indigenous peoples), and it
effectively. The current government is headed by Prime
derived much of its appeal from issues of ethnic identity.
Minister Anwar Ibrahim, a former deputy prime minister
Anwar was UMNO’s deputy chairman until 1998, when he
and then opposition leader who came to power in
broke with longtime UMNO leader Mahathir Mohamad and
November 2022 following elections in which no party
was later convicted and imprisoned on charges many
gained a clear majority of parliamentary seats. Anwar’s
considered politically motivated.
political coalition, Pakatan Harapan (PH), joined its
longtime rival, the United Malays Nasional Organization
Figure 1. Malaysia
(UNMO) to form a government, but the two groups remain
deeply divided on many issues.
Despite its chaotic political processes, Malaysia plays an
active role in regional diplomacy and has been a partner in
various U.S. initiatives in Asia, including trade and security
initiatives as well as efforts to combat terrorism and
religious extremism. Malaysia is a founding member of the
Association of Southeast Asian Nations (ASEAN), and sees
itself as both a regional leader and a moderate voice within
the Islamic world. Despite generally cooperative bilateral
relations with the United States, some issues constrain
closer ties, including Malaysian opposition to much of U.S.
policy in the Middle East, and U.S. concerns over some
Malaysian economic and human-rights policies.
Malaysia’s
economy is export driven, and it has pursued a
Patronage and corruption are a major part of Malaysian
variety of trade negotiations. Malaysia was a member of the
politics. Some observers heralded the changes that resulted
proposed Trans-Pacific Partnership (TPP), from which the
from the 2018 and 2022 elections, both of which brought
United States withdrew in 2017, and is one of 11 members
peaceful changes of government in a country long seen as
of the renamed Comprehensive and Progressive Agreement
an authoritarian democracy. However, in the view of many
for Trans-Pacific Partnership (CPTPP), which it ratified in
analysts, the weakness of the resulting ruling coalitions has
September 2022. Malaysia also ratified the Regional
limited the government’s ability to make domestic reforms
Comprehensive Economic Partnership (RCEP) in 2022.
and constrained Malaysia from acting as a leader on many
Malaysia participates in each pillar of the Biden
regional issues.
Administration’s Indo-Pacific Economic Framework (IPEF)
trade initiative, including trade, supply chains, clean
U.S.-Malaysia Relations
energy, and anti-corruption.
The relationship between the United States and Malaysia is
complex. In the 1980s and 1990s, under former Prime
Congress has overseen Malaysia policy, including trade
Minister Mahathir, Malaysia was one of the leading voices
negotiations in the 2000s and 2010s, as well as U.S.-
behind building the East Asia Economic Caucus, and
Malaysia cooperation on security issues. Some Members of
“Asia-only” regional institutions that excluded the United
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Malaysia
States. Since then, Malaysia has generally welcomed a
government in both the Philippines and Thailand. Malaysia
broader U.S. role in the region. Bilateral ties were elevated
is also a member of the Five Power Defence Arrangement
to a “Comprehensive Partnership” in 2014.
with Australia, New Zealand, Singapore, and the United
Kingdom.
Malaysia’s political upheaval and changes in U.S. Indo-
Pacific policy have led to uncertainties about the future of
Malaysia has cordial relations with its neighbors, and has
the relationship. Many observers argue that Malaysian
promoted cooperation among the 10 ASEAN countries.
sensitivities about aligning with the United States constrain
Following the February 1, 2021, coup in Burma, Malaysian
the establishment of a deeper strategic relationship. Areas
officials have been among Southeast Asia’s most outspoken
of friction in U.S.-Malaysia ties include Malaysia’s
critics of the Burmese military regime, arguing against
opposition to U.S. military interventions in the Middle East
including representatives of the military government in
and U.S. support for Israel and the war in Gaza. The United
regional meetings, and in favor of engaging members of
States has criticized the Malaysian government for weak
Burma’s National Unity Government (NUG) in exile.
human rights protections, constraints on press freedom,
Approximately 150,000 members of Burma’s Rohingya
economic policies based on ethnic preferences, and
minority are in Malaysia, although the nation has not signed
prosecution of opposition political leaders.
the 1951 U.N. Refugee Convention or the 1967 Protocol
Regarding the Status of Refugees. Other regional issues
U.S.-Malaysia security cooperation includes numerous
Malaysia prioritizes include managing relations with
military exercises, ship visits, and military education
Singapore, with which Malaysia has deep economic
exchanges. Key areas of U.S.-Malaysia security
interdependency; combatting piracy in the Straits of
cooperation include counterterrorism activities aimed at
Malacca along with Indonesia and Singapore; repelling
terrorist networks operating in Southeast Asia and
Philippine armed groups that claim parts of Malaysian
bolstering maritime security in the South China Sea. The
territory; and managing immigration and migrant labor
U.S. and Malaysian navies also cooperate as part of
communities from Burma, Indonesia, and other neighbors.
multilateral efforts to combat piracy near the Malacca Strait
and off the Horn of Africa. Malaysia in 2023 sent military
China-Malaysia Relations
forces to participate in the United States’ Rim of the Pacific
Malaysia has long adopted careful hedging strategies to
(RIMPAC) exercise.
balance its relations with China and the United States. It has
assumed a relatively low profile in ASEAN’s quarrels with
Malaysia’s Economy
China over tensions in the South China Sea, pursuing a less
Malaysia is the United States’ 17th largest trading partner
confrontational diplomatic approach than have the
and the United States is Malaysia’s third largest trading
Philippines and Vietnam despite its own territorial disputes
partner after China and Singapore. Bilateral trade in goods
with China. Malaysia prioritizes the negotiation of a Code
with the United States was $72.4 billion in 2022. U.S. direct
of Conduct between ASEAN and China to govern behavior
investment in Malaysia was $13.2 billion in 2022. Electrical
in disputed waters. However, since the early 2010s,
machinery and equipment dominate bilateral trade flows in
Malaysia has grown increasingly alarmed by China’s
both directions, reflecting Malaysia’s role as a major site
assertions and activity in disputed waters. Since 2019,
for consumer electronics manufacturing. Malaysia is an
Chinese vessels have regularly harassed Malaysian energy
important part of regional consumer electronics supply
exploration vessels in Malaysia’s declared Exclusive
chains, manufacturing parts and components that are
Economic Zone.
exported and assembled elsewhere. It is also an oil and
natural gas producer; some of its reserves are located in
Malaysia is part of some Chinese foreign investment
disputed waters in the South China Sea.
projects under Beijing’s Belt and Road Initiative (BRI). The
government announced in April 2019 that it would go
The United States and Malaysia undertook free trade
ahead with a renegotiated East Coast Rail Link investment
agreement negotiations from 2005 to 2008, but did not
deal that reportedly will cost one-third less than first
conclude an agreement. Those talks were later folded into
planned. Some Chinese investments, including port
the TPP negotiations. The United States’ main trade-related
modernization projects, the East Coast Rail Link, and
concerns are Malaysia’s government procurement policies,
employment-generating manufacturing investments, align
protection of intellectual property rights, and market access
with Malaysia’s own development goals.
for key goods and services. Malaysia’s economy is divided
along regional and ethnic lines; a wide-ranging economic
Congressional Interest
program known as the New Economic Policy (NEP)
In the 118th Congress, interest in Malaysia is manifest in
attempts to address socioeconomic disparities by
proposed regionally focused legislation such as the
privileging bumiputera in government contracts, education,
PARTNER with ASEAN Act (S. 682), which would extend
and government hiring.
full diplomatic recognition to ASEAN officials including
Malaysians and their regional partners, and S.Res. 141, a
Malaysia’s External Relations
resolution that would express support for ASEAN centrality
Malaysia pursues active diplomacy on numerous regional
in the Indo-Pacific region.
and global issues. Efforts to promote moderate Islam and
marginalize religious extremism have been a major part of
Ben Dolven, Specialist in Asian Affairs
Malaysian diplomacy, including acting as a mediator in
conflicts between Muslim separatist groups and the central
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Malaysia
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https://crsreports.congress.gov | IF10316 · VERSION 16 · UPDATED