Ambition Without Alignment: Managing Malaysia’s Rare Earth Value Chain

Posted on April 23, 2026 by Tricia

This policy paper was published by the ISEAS-Yusof Ishak Institute as a Trends (Issue 14, 2026) in April 2026. It can be viewed here.

Executive Summary

  • In the escalating US-China trade war and projected increased demand for critical minerals, deposits of rare earth elements (REE)—highly essential in a range of manufacturing, defence and electronic items—have become highly sought after.
  • According to Malaysia’s Mineral and Geoscience Department (JMG), the country has identified as much as 16.1 million metric tonnes of non-radioactive REEs across several states, although this will need to be independently verified.
  • Under Malaysia’s Federal Constitution 1957, the federal government has jurisdiction over the development of mineral resources, import and export policy, regulation of labour and safety in mines, the direction of strategic industrial development, selected operating licences, and radioactive and waste management, while state governments have jurisdiction over land, forests, and exploration permits and licences. The implementation of mining regulations and environmental compliance, however, requires the co-operation of both federal and state governments.
  • Malaysia’s federal government has banned the export of raw rare earths, intending to develop a fully integrated supply chain by attracting investments and partnerships, especially in the more valuable midstream and downstream sectors.
  • Legal and institutional frameworks have, however, led to a somewhat fragmented policy outcome since authority over land resources, regulations and industrial strategy are split. While coordination exists, the decisions of some state governments do not align with federal policies—for instance, negotiating rare earth partnerships with external investors separately from the federal government—while illegal mining persists, which is environmentally damaging. States are also permitted to set their own royalty rates for rare earth mining.
  • The two states with the highest percentage of rare earth deposits are Terengganu and Kelantan, both northeastern Peninsular Malaysia states that also happen to be controlled by a party in the national opposition, the Islamic Party of Malaysia (PAS).
  • The four PAS-led states, including Kedah and Perlis, have expressed displeasure at centralizing the regulation of rare earths, noting the need for consultation, fairness and transparency. Opposition-controlled states have had a history of being discriminated against by the federal government over resource and fiscal distribution.
  • For Malaysia to achieve its lofty ambitions and benefit financially from its rare earth deposits, and doing so while minimizing adverse environmental and social effects, it will need a comprehensive strategy in which all stakeholders, chiefly the federal and state governments, are in agreement.

For the full paper, please visit the link here.

Posted in Economics, Federalism, Public Administration, Transparency and Good Governance | Leave a comment

Balancing Malaysia’s Economic Ambitions and Political Constraints

Posted on April 10, 2026 by Tricia

This article first appeared in the Caravanserai Magazine of the Royal Society of Asian Affairs (Spring 2026 Issue 9) here.

Balancing Malaysia’s Economic Ambitions and Political Constraints

Tricia Yeoh

Malaysia is at a critical juncture. Amid a rapidly shifting global geopolitical landscape, the country benefits from multinational companies adopting a China+1 strategy – a business approach in which companies diversify their manufacturing and supply chains beyond China to reduce risks associated with rising costs, geopolitical tensions, and potential disruptions. At the same time, Malaysia continues to maintain an open trading relationship with the United States, further strengthening its position as an attractive alternative hub for investment and production.

While Malaysia has a clear roadmap for high-value growth, especially in the logistics, semiconductor and rare earth sectors, it continues to grapple with internal structural legacies that, if not managed efficiently, will weigh it down. The country’s success is still tethered to a political economy defined by its State-Owned Enterprise (SOE) dominance, ethnic distributive policies and federal–state friction. As the next General Election is due by February 2028 at the latest, there is only about a year left for any significant policy implementation – and even less if early polls are called, possibly as soon as the last quarter of 2026 if the intention is to hold national elections simultaneously with the state elections of the two Peninsular states of Malacca and Johor.

The country has long established itself in the global semiconductor industry, primarily in the back end of assembly, testing and packaging. Most recently, its National Semiconductor Strategy has put forward ambitious goals of moving into front-end integrated circuit (IC) design and advanced manufacturing.

The federal government’s deal signed with UK chip design firm Arm Holdings was meant to do precisely this. Under the 10-year agreement, Malaysia would pay US$250 million (RM1.11 billion) to Arm in exchange for its intellectual property licences and computer subsystems (CSS), assets that would be made available to domestic companies in the electrical and electronics sector.

Domestic politics, however, has introduced some complications. The Malaysian Anti-Corruption Commission (MACC) is currently investigating several individuals involved in alleged mismanagement and haste in the deal. The investigation, however, has been accused by the former Minister of Economy of being politically motivated and retaliatory, following his public calls for the suspension of the MACC Chief Commissioner after incriminating Bloomberg reports alleged that the commission was involved with “the corporate mafia”. While the Arm deal is still ongoing, these developments risk spooking other investors who may fear being caught in a similar political-economy quagmire.

Malaysia has also been keen to showcase other industrial Foreign Direct Investment, particularly in the data centre space. Clusters in the central Klang Valley region and the southern Peninsular state of Johor have benefitted from global demand for data centres and the increasing use of artificial intelligence (AI). While some local infrastructure sectors – particularly construction and ICT – as well as knowledge transfer may benefit from this influx of investment, data centres could also significantly deplete the country’s resources. The water and electricity appetite of this sector is expected to place unprecedented strain on Malaysia’s water sustainability and energy supply, and may also risk jeopardising the nation’s own climate goals. The National Energy Transition Roadmap (NETR), for instance, aims for 70% renewable energy capacity by 2050.

Another major policy decision Malaysia will have to grapple with is whether the state should continue to be the primary engine of its economy. SOEs, better known in Malaysia as Government-Linked Companies (GLCs), have a heavy presence in the economy. Nine of the 13 largest listed companies in Malaysia are GLCs, while 41 GLCs account for 55% of assets, 40% of revenue, and 42% of equity and market capitalisation among the 1,043 publicly listed companies. They crowd out private investment and dominate sectors ranging from public utilities to banking, property and plantations.

The Economic Planning Unit (EPU) has now introduced a new regulation that may affect market liquidity and investor perception even further. Under the new ruling, companies intending to acquire properties of GLCs and GLICs (government-linked investment companies, of which there are seven in the country) valued at RM20 million and above will be required to “have at least 50% bumiputera equity ownership”, increased from the previous 30% threshold. The Ministry of Economy states that this is meant to align with national socioeconomic objectives and the bumiputera agenda.

In Malaysia, bumiputera comprises the Malay and indigenous populations. The nation has a long history of ethnic-based affirmative action policies tracing back to the New Economic Policy of 1971, which continues to exist in various forms, including the latest Bumiputera Economic Community (BEC), across multiple sectors such as housing, education and enterprise development. While the results of these policies, implemented over the past 50 years, have been mixed, the latest regulatory changes will likely introduce uncertainty in the short term. Market competitiveness may also be affected, given that the policy significantly narrows the pool of potential buyers.

The nation will also have to strike a delicate balance between closing its fiscal deficit and navigating the effects of the “three-headed monster”: post-COVID recovery, the Ukraine and Iran conflicts, and global inflation. In 2025, the government made positive strides in reducing its subsidy bill on electricity, diesel, RON95 petrol and some basic goods, although the reforms remain incomplete. Proceeding to remove blanket subsidies wholesale will be politically challenging, given rising living costs combined with relatively stagnant wages.

Malaysia continues to rely significantly on its petrol-related dividends, signalling the oil and gas sector’s sustained relevance to the economy. The country’s fragile internal union, particularly concerning the Sarawak factor, is now putting this to the test. In recent months, both Petronas (the national oil company) and the Sarawak state government in East Malaysia have filed lawsuits at the Federal Court seeking clarification on whether the national law – the Petroleum Development Act 1974 – has jurisdiction in Sarawak. Sarawak is contesting the federal government’s ownership and rights over mining in the state, the consequences of which could reshape both the political and economic arrangements of the nation.

Even in the case of the country’s “new oil” – rare earth elements – the federal–state equation has yet to be resolved. While the nation has ambitions of building its midstream and downstream capabilities in the rare earth sector – elements that are in high global demand due to their use in medical, technological and defence industries – international investment will not be forthcoming if the country cannot present a coherent narrative and policy environment. In Malaysia, land and mining fall under state jurisdiction, environmental regulation is a joint responsibility, and export licensing is controlled by the federal government.

While global bifurcation is unfolding across technological, trade and digital spaces, with standards increasingly splitting down the middle, it may prove difficult for any country to maintain a neutral regulatory environment. Malaysia, however, is well placed geopolitically and geoeconomically to benefit from these developments. It will leverage its pre-existing Port Klang, the China-invested East Coast Rail Link (ECRL), and the upcoming Kuantan Port to link the Straits of Malacca on the Peninsular west coast with the South China Sea on the east coast – both crucial maritime channels for logistics and transportation. These developments could position Malaysia as an essential hub in regional supply-chain linkages.

Malaysia’s economic story has been a compelling one since its early years, particularly during its rapid growth in the 1990s. Since the fall of its dominant Barisan Nasional coalition in 2018, however, the country has been undergoing democratic consolidation alongside increasing political fragmentation, adding another layer of complexity to how its economy should be understood.

To truly escape the middle-income trap and become the global tech hub it aspires to be, the government must ultimately harmonise its national socioeconomic objectives with the ruthless efficiency demanded by global supply chains. To achieve this, sound policies grounded in both competition and equity must demonstrably deliver for its people regardless of ethnicity. Nevertheless, Malaysia’s economic execution will almost always be political – something all stakeholders will need to keep in mind, especially as the country moves closer to the next election cycle.

Posted in Economics, General Politics, Outside Malaysia | Leave a comment

Malaysia’s fiscal reset collides with global trade politics

Posted on February 18, 2026 by Tricia

This article first appeared on the East Asia Forum website on 11 February 2026, accessible here.

In Brief

Malaysian efforts at domestic fiscal balancing and external economic rebalancing remained unfinished at the end of 2025. Progress on fiscal consolidation — particularly with reductions in subsidies — were counterbalanced by new cash assistance to protect poorer Malaysian households and problems in the oil and gas industry. Externally, new trade relations were cultivated, but the immediate threat from US tariffs saw Kuala Lumpur make significant concessions to Washington.

2025 saw Malaysia press forward with fiscal consolidation amid rising global tensions and trade adjustments. Targeted domestic subsidy reforms were part of broader efforts to redirect resources towards social priorities. Malaysia also navigated external pressures, contending with evolving US trade policy, while deepening integration with other partner countries.

Malaysia has long footed a heavy subsidy bill, paying almost RM80 billion (US$20.3 billion) in total subsidies in 2022. But since 2023, the government has steadily reduced subsidies using a tiered system for electricity and diesel. 2025 saw further reductions, targeting chicken, eggs and RON95 petrol. But the reformed petrol subsidy plan does not achieve full market efficiency, as eligible citizens still pay RM0.06 (US$0.015) less per litre, while foreigners pay RM0.55 (US$0.14) more per litre, than they did originally. The expansion of the Sales and Service Tax in mid-2025, both in scope and rate, will further improve Malaysia’s fiscal outcomes with RM5 billion ($US1.27 billion) in additional revenue expected.

These fiscal measures did not come without negative consequences. They caused a level of distress to business, while increased inflationary pressures — especially rising food and material costs following the Sales and Service Tax implementation — affected households and traders.

Sensitive toward citizens’ inflation sentiments, the government redistributed RM15.5 billion (US$3.93 billion) in savings as cash handouts to low-income Malaysians, with similar concerns likely to motivate further cash assistance. Additional fiscal pressures were also generated by extended benefits to the civil service. These moves defy economic logic, but they reflect the government’s need to balance fiscal responsibility and political popularity.

Oil-related revenues, which comprised an estimated 16.9 per cent of total federal revenue in 2025, were under pressure due to problems in the oil and gas sector. National oil and gas company Petronas’s profits declined amid a challenging global environment, while the Sarawak state government and the federal government vied over oil and gas resources in a series of legal battles.

Malaysia’s federal government will have to negotiate delicately, given Sarawak contributes 14 per cent of seats to the national Parliament. The dispute spilled over into 2026, with Petronas filing a motion at the Federal Court in January to seek clarity on the applicable regulatory framework governing its operations in Sarawak.

Internationally, much of Malaysia’s 2025 was spent dealing with threats posed by the announced US tariffs — the initial 24 per cent rate was later negotiated down to 19 per cent through the US–Malaysia Agreement on Reciprocal Trade.

The agreement, while eliminating US tariffs on 1711 Malaysian exports, made significant concessions to US interests. These included exempting US tech companies from contributing to the Universal Service Provision Fund, agreeing to impose measures on third countries to protect US economic or national security, preferential market access and continued critical mineral exports.

The heaviest criticism is that the deal was rushed through with no transparency or consultation with relevant stakeholders. Malaysia’s then minister of investment, trade and industry, Tengku Zafrul Aziz, admitted that it was lopsided but stated the outcome ultimately benefited Malaysia, with the US–Malaysia relationship upgraded to a comprehensive strategic partnership.

Ultimately, despite the attention afforded to the United States in 2025, Malaysia needs international partners from all sides and persuasions, given it is deeply integrated with the global economy. As the United States overtook China as Malaysia’s largest export market in 2025, approved foreign investments surged 47.5 per cent year-on-year, attracting investments into renewable energy, semiconductors and advanced mineral processing.

These sectors align with Malaysia’s policy portfolio, with rare earths and critical minerals in particular identified by the government as an upcoming strategic sector, projected to contribute some RM91.9 billion (US$23.3 billion) to GDP by 2050. As countries seek to ensure a reliable supply chain of critical minerals essential in the production of advanced technologies, Malaysia will seek to be a key player in rare earths processing, banning exports of raw rare earths with the exception of a Chinese-led pilot project. But without alignment of interests and incentives between the federal and state governments, this remains but a lofty ambition.

Malaysia straddles the growing US–Chinese trade tensions by being friendly to all parties. Malaysia officially became a BRICS partner country on 1 January 2025, allowing closer engagement with the bloc’s large emerging economies. And as the 2026 ASEAN Chair, it hosted an inaugural ASEAN–Gulf Cooperation Council–China Summit. Still, it might be the Comprehensive and Progressive Agreement for Trans-Pacific Partnership — which Malaysia is a member of — that will deliver actual trade benefits.

Simultaneously, Malaysia signed an agreement to expand trade ties with Switzerland, Norway, Iceland and Liechtenstein. Negotiations on the Malaysia–EU free trade agreement are expected to conclude by 2027.

Moving into 2026, Malaysia’s strategic priorities will remain largely unchanged. Ongoing pressures on debt and its budget deficit necessitate fiscal consolidation. The domestic economy, particularly small and medium enterprises — which contribute nearly 40 per cent of GDP — will require support to remain competitive amid rising costs, stricter regulatory pressures and US tariffs.

Malaysia will continue seeking new markets and international partnerships. Given the weakening of the rules-based international order, it is imperative that Malaysia, alongside its ASEAN neighbours, gives greater emphasis to open and interconnected trade — all the while preparing for a general election that must be held no later than February 2028.

Tricia Yeoh is Associate Professor of Practice at the University of Nottingham, Senior Fellow at the Asia Pacific Foundation of Canada and Visiting Senior Fellow at the ISEAS-Yusof Ishak Institute.

This article is part of an EAF special feature series on 2025 in review and the year ahead.https://doi.org/10.59425/eabc.1770804000

Posted in Economics, General Politics, International Relations | Leave a comment

Malaysia’s Budget 2026: Fiscal Reform or Fragility?

Posted on November 5, 2025 by Tricia

This was first published on Fulcrum on 3 November 2025 here.

Malaysia’s 2026 budget continues fiscal reforms but exposes structural fragilities such as heavy operating costs and rising debt. These factors may threaten long-term fiscal stability.

Earlier this month, the Malaysian Madani administration tabled its fourth annual budget. The expansionary budget of RM470 billion for 2026 continues the administration’s emphasis on fiscal reform, but still lags on key issues such as heavy operating expenditures, a narrow revenue base, and governance accountability. 

This was not an election budget but a continuation of the administration’s generally prudent fiscal approach. However, the RM470 billion figure includes RM50.8 billion in investments from government-linked companies (GLCs), which are not conventionally recorded as government expenditure. Deducting the injections from government-linked investment companies (GLICs), federal statutory bodies (FSBs) and Minister of Finance Incorporated (MOF Inc) companies, total operating and development expenditure amounts to RM419.2 billion – only slightly higher than 2025’s RM410.9 billion.

Since the pandemic, the government has increasingly relied on its GLICs and GLCs to cushion public spending and stimulate recovery. While they serve an important socio-economic function, over-dependence risks displacing what truly drives long-term growth: a competitive private sector operating in a predictable, business-friendly environment.

From a public finance perspective, it is a positive that subsidies and social assistance are expected to fall by RM8 billion, or 2.7 per cent. The government projects annual savings of RM15.5 billion from reduced subsidies for chickens, eggs, electricity, diesel and RON95 petrol. However, there have been calls for the government to be transparent about its math and how these figures are computed.

These savings have been channelled into cash handouts and assistance schemes. The RM100 Sumbangan Asas Rahmah (SARA) cash aid for adults will continue. The same applies to Sumbangan Tunai Rahmah (STR) for low-income families, whose allocations will be increased from RM13 billion to RM15 billion in 2026. While politically popular, such handouts reduce the fiscal room gained from subsidy rationalisation.

Cancelling out the increase in savings will also impact the country’s fiscal outlook. Although the fiscal deficit is projected to narrow slightly from 3.8 per cent in 2025 to 3.5 per cent in 2026, achieving the 3 per cent target under the Public Finance and Fiscal Responsibility Act (FRA) 2023 within five years is uncertain. Debt levels also continue to rise, with the debt-to-GDP ratio climbing from 64.7 per cent in 2025 to 65.8 per cent in 2026 – above the FRA’s 60 per cent target.

This was not an election budget but a continuation of the administration’s generally prudent fiscal approach.

The debt service charge (DSC) will also increase from 16.3 per cent to 17 per cent of revenue, meaning RM17 of every RM100 earned will go toward servicing debt (principal and interest), leaving only RM83 to pay for other types of spending. Under the IMF-World Bank Debt Sustainability Framework for low-income countries, countries with strong debt-carrying capacity like Malaysia should maintain an external debt service-to-revenue ratio below 23 per cent. Malaysia remains within this range, but the upward trend is of concern.

At the same time, development expenditure — which funds infrastructure, public transportation, schools and hospitals — is declining as a share of GDP, from 4 per cent to 3.8 per cent, despite a modest 2.9 per cent increase year-on-year. This indicates there is reduced fiscal space for long-term growth investments. 

Operating expenditure continues to weigh disproportionately heavily, constituting more than 80 per cent of total spending. Two particularly concerning components are emoluments and retirement charges, both of which are seeing allocations increasing by 5.7 per cent and 7 per cent respectively. Emoluments — civil servants’ salaries — the largest component of operating expenditure, will see a 7-15 per cent salary increase for some of them. This follows a 13 per cent increase in December 2024. Retirement charges are also set to grow as the number of pensioners is expected to increase. To address this, the government plans to introduce a defined-contribution pension scheme administered by the Employees’ Provident Fund, which could help reduce long-term fiscal pressure. 

Given the spending and debt pressures, it is troubling that revenues as a percentage of GDP are projected to fall from 16.6 per cent in 2025 to 16.1 per cent in 2026. Compounding this is the lowest Petronas dividend in nine years at RM20 billion. The government plans higher excise duties on tobacco and alcohol, and a new carbon tax on steel, iron and energy set to be rolled out in 2026. But these are modest measures. This was a missed opportunity to broaden Malaysia’s narrow revenue base by restoring the goods and services tax (GST).

The currently expanded sales and service tax (SST) is expected to generate RM51.7 billion in 2025, but it covers only 41 per cent of goods and services, compared to GST’s 76 per cent (when it was in force). Restoring the GST, while politically sensitive, would strengthen fiscal resilience and provide more sustainable revenue. Expanding revenues and national productivity must therefore form the backbone of the country’s medium to long-term strategy.

Malaysia has seen improvements in the legal and regulatory framework governing public finance with the passing of new laws in recent years, such as the FRA and the Government Procurement Act (GPA) 2025. Despite flaws, these laws enhance Malaysia’s fiscal framework by institutionalising transparency and responsibility.

However, more is needed to strengthen government accountability further and curb abuse and leakages. Several new laws, such as the Freedom of Information Act, Ombudsman Act and State-Owned Enterprises Act, were mentioned in the pre-budget statement but were omitted from the Prime Minister’s budget speech. These omissions are disappointing given the government’s heavy reliance on the GLC ecosystem. 

The Madani Budget 2026 has already generated much debate and praise, but its omissions and shortcomings deserve continued scrutiny. It signals continued reform, but reveals certain structural fragilities that the government must urgently tackle to ensure fiscal and governance resilience. With these in place, Malaysia will be laying strong foundations to withstand any unexpected global shocks while working toward sustainable future long-term growth.

Posted in Economics, Public Administration | Leave a comment

What We Don’t See is Harming Our Children: The Smartphone Blackhole

Posted on October 30, 2025 by Tricia

By Dr Tricia Yeoh and Dr Chua Sook Ning

This piece was first published on Makchic.com on 22 October 2025, here.

Last week saw a tragic incident that few expected in Malaysia. The country was jolted by the shocking news on 14th October 2025 of Yap Shing Xuen, a 16-year-old girl being stabbed to death by a 14-year-old boy at a local public secondary school.

While details of the investigation are still unfolding, what is apparent is that the boy left a handwritten note, indicating that he may have been influenced by a range of different cultural artefacts including anime, video games, and past US school shooting incidents. The Selangor police also raised the possibility that certain social media content may have shaped his mindset.

This event has compelled Malaysians to reconsider its many policies and approaches towards children and teenagers. In the coming weeks and months, the Ministries of Education, Youth and Sports, Women, Family and Community Development, and Home Affairs will be inundated with policy decisions as they confront the realities at our doorstep.

To Ban or Not To Ban: What Other Countries are Doing

At the time of writing, the government has announced it is considering a ban on the use of personal devices in schools for those under 16, as well as to raise the minimum social media age access to 16. While some studies show that use of digital and social media does have some benefits, including opportunities for social contact and exposure to new knowledge, the converse is also true – there is an increased and unsupervised risk of exposure to inappropriate and unsafe content and contacts.

For instance, the American Academy of Pediatrics’ technical report on digital media found high levels of media use are associated with negative health outcomes such as increased risks of depression and obesity, and problems with sleep, attention, and learning. The real and significant negative effects of social media on children and adolescents have led to governments taking steps to protect young people by applying age-restrictions to social media platforms. Australia was the first country to ban social media for those under 16 (to be implemented by December 2025), while Singapore will likely roll out similar age-appropriate content with social media platforms. The UK has also enforced new laws, protecting under-18s from harmful content.

While the efficacy and feasibility of a social media ban is not yet known, there is a broad consensus among experts that a ban alone is insufficient to prevent harm and promote the well-being of Malaysian children and adolescents. This goal requires a whole-of-society approach, including having clearly defined duties of care for digital service providers, teaching digital literacy in schools, and having clear household rules on content, communication, and co-viewing.

How We Got Here — The Generation Rewired by Smartphones

In the US, mental illness increased exponentially between 2010 and 2015 for adolescents, while older generations were much less affected. Social psychologist Professor Jonathan Haidt, in his book “The Anxious Generation” (2024) attributed the sharp increases in depression and anxiety among adolescent boys and girls between 2010 and 2020 to the wide-spread adoption of the smartphone. Haidt argues that it was precisely the arrival of the smartphone that changed life for these youth through what he calls the “Great Rewiring of Childhood”.

How did this happen, precisely?

In Haidt’s research, amongst the harms that smartphones created in the US – and by extension, easy access to either social media or other digital platforms – were social deprivation, sleep deprivation, attention fragmentation and addiction. As adults, we too find ourselves “doom scrolling” our various social media platforms; how much more difficult it would be for young children to resist the constant alerts and notifications.

He argues that girls’ social lives moved onto social media platforms in which existing peer pressure of comparing themselves with others to fit a social image escalated, while boys “burrowed deeper into the virtual world as they engaged in a variety of digital activities, particularly immersive online multiplayer video games, YouTube, Reddit, and hardcore pornography”, available for free, right on their smartphones.

The “gradual disengagement with the real world and deepening immersion in the virtual world” appears to be more common among boys who feel frustrated, isolated, and disaffected. They turn to virtual reality (such as gaming, online networks, or pornography) to escape and avoid real-world problems and their own emotional experiences. These boys become increasingly drawn into “virtual packs”, which is only natural given that boys thrive when they have a group of friends. While we understand that there is expert debate over Haidt’s arguments, even his critics seem to agree that adaptation is needed for children to have a safer internet experience.

Malaysia is not exempt from this pattern. Our own National Health and Morbidity Surveys shows that mental health issues among children aged 5 to 15 have risen from 12 per cent to 16 per cent in less than a decade. Among secondary school students, loneliness has doubled from 8 per cent to 16 per cent, and suicidal thoughts have increased from 8 per cent to 13 per cent. In 2022 alone, almost one in five secondary school boys and over a third of girls reported symptoms of depression.

The 2023 Malaysia Youth Mental Health Index paints an equally troubling picture in older youths (15–30 years old): 16 per cent experience anxiety and a staggering 40 per cent experience symptoms of depression. New research is needed to establish whether these trends are linked to the usage of digital media in Malaysia.

Another concerning development within some online spaces for some vulnerable boys is the rise of the “incel” culture (involuntary celibate). The rise and impact of incel culture was highlighted in the widely applauded Netflix series “Adolescence”. Referring to men who blame women and society for their lack of romantic success, they are considered part of the “manosphere”, an ideological web of men’s rights activists and “alpha male” influencers that attract primarily young men searching for meaning and community. At the core of this lies misogynistic tendencies, which may facilitate violence targeting women and girls.

Could these global trends be deeply embedded in Malaysian online spaces too? It is time that Malaysian parents, as well as the whole of society, approaches the internet and access to it, through smartphones, with great wisdom and care.

Raising the Age of Internet Adulthood

We call for society to raise the age of “internet adulthood” to 16. Having a nationwide ban on social media for those under 16 may help parents who are trying to restrict their children from smartphones. This is less of an argument for the effectiveness of a social media ban, but the acknowledgment that contextual factors can hinder or help the effectiveness of parental mediation, the latter of which often feels daunting, confusing, and impossible to implement. Common barriers to parental mediation of digital media use include adolescents’ expectations, rules set by other parents, and social norms.

Regardless of the ban, if the entire village of parents collectively agrees not to provide smartphones (use basic phones instead) and social media access for children under 16, this could help shape teenagers’ own expectations and reduce peer pressure for both parents and children. In the UK, a parent pact to withhold smartphones from children under 14 has been signed by signatories representing just under 35,000 children. Parents are also creating ‘landline pods’, where children can call each other on landline phones that are helping them communicate and listen better.

When children eventually receive personal devices, these should ideally be used in communal, family spaces – not in the private space of a bedroom. Adopting healthier digital media habits does not mean abolishing them completely; family movie nights, for example, allow for active interaction amongst family members.

For parents of children who are already accessing digital media, the American Academy of Pediatrics’ 5 C’s of Media Use might be useful. It encourages parents to:

  1. Think about the unique risks and benefits of media for their child.
  2. Know what digital activities are engaged in and to actively discuss aspects of the content with their child (such as unrealistic beauty standards, or use of violence).
  3. Learn how to manage strong emotions and challenges rather than relying on avoidance coping or escapism.
  4. Increase real-life engagement – reducing screen time frees up energy and time to do other things families care about, but that have been crowded out by screen time.
  5. Communicate about media early and often to build digital literacy and to help identify when their child is struggling.

In addition, there is a need to develop digital parenting training programmes to equip parents with the necessary strategies related to the rules of using digital devices both online and offline to protect children’s safety from the threat of its use. This may include the use of parental controls and content filters on all digital devices in the home. Initial data is promising with improvements in children’s digital use habits and parental bonding.

On this note, a feasible next step for Malaysia is to follow Australia’s eSafety Commission in offering free webinars online on topics such as understanding AI Companions, using parental controls, and recognising online coercive control. These webinars are essential for parents and carers to give them the knowledge, skills, and tools to provide safe digital spaces for their children in the fast-evolving digital world.

While parents play a central role, they cannot and should not be expected to carry this responsibility alone. Many are working long hours, lack digital literacy, or feel outpaced by constantly evolving technology. They need clear guidance, accessible tools, and a supportive community to help them set boundaries, supervise use, and rebuild connection at home.

When families are backed by schools, communities, platforms and policy, they are far more able to create homes with meaningful conversations, screen-free time, outdoor and free play, and opportunities for children to lead in real life rather than escape into virtual worlds. This is not just a parenting issue – it is a societal responsibility. If we act together, we can protect childhood, strengthen families, and prevent the mental health crisis from deepening. Our children should not have to pay the price for our collective inaction.

And now is the time for us to act. The research is clear, the risks are visible, and we can no longer claim ignorance or inevitability. We have enough information to act with intention. What we now need is alignment. If parents, educators, policymakers and technology companies each take responsibility for their part, we can create healthier social and digital norms, and overall safer environments for our young people. May last week’s tragedy be a wake-up call for all members of society to do their part.

Dr Tricia Yeoh is a public policy analyst, social science lecturer, and parent. She is also advisor of Relate Malaysia.

Dr Chua Sook Ning is a practicing clinical psychologist and public health practitioner, lecturer and founder of Relate Malaysia, a not-for-profit mental health organisation.

Posted in Civil Society, Media, Media, Culture, Literature, Public Administration | Leave a comment

The 2025 PKR Party Election: Feuding, Factionalism and the Future of the People’s Justice Party

Posted on October 10, 2025 by Tricia

This Perspective was published by ISEAS-Yusof Ishak Institute on 22 September 2025. For the full publication, please visit this link here.

  • The People’s Justice Party (PKR)’s party election in 2025, its first while holding executive office in federal government, generated heated contests and attracted extensive public attention.
  • The 2025 party election saw a series of surprising outcomes. More than 30,000 delegates representing 222 divisions voted for central leadership positions. At the division level, several senior or upcoming figures lost their contests, and there were allegations of fraud and complaints of electoral inconsistencies made to the party, which were eventually dismissed by the party’s central election committee.
  • The contest for the Deputy Presidency between incumbent Rafizi Ramli and Nurul Izzah Anwar (daughter of Anwar Ibrahim), was the most heated. Nurul’s ‘unity’ defeated Rafizi’s ‘reform’ campaign by a large margin, but this result and the preceding controversies have raised questions about whether there will be another round of factional strife that may split the party.
  • Rafizi and Nik Nazmi subsequently resigned their ministerial positions, and Rafizi has become highly critical of the federal administration. 
  • The future of PKR continues to be of great importance to Malaysia, given the likelihood that PKR will remain a significant player in the country’s coalitional politics. In this context, the issues of party cohesion and leadership succession that have arisen in the aftermath of the 2025 PKR party election will remain closely watched by observers of Malaysia’s political scene.

INTRODUCTION

The 2025 election of the People’s Justice Party (Parti KeADILAN Rakyat, or PKR) has been one of the most hotly contested and reported of its party elections historically. It is the first time the party held its elections while also holding executive office within the federal government. The winning individuals would be considered successors to the party president, favourable and influential in political and policy decision-making. The stakes were certainly high going into the election. The party had previously held its elections in 2022, 2018 and 2014. In the 2025 edition, the results have given rise to deep fissures in the party, and it is uncertain whether the faction out of favour with the party’s leadership will eventually leave.

This Perspective traces the events of the PKR party election in 2025, focusing on the division between key personalities, as well as the underlying events that led to that moment. It concludes with thoughts about the party’s future, which will invariably impact the country’s immediate and long-term future.

For the full publication, please visit this link here.

Posted in Elections, General Politics | Leave a comment

Increasing Government Efficiency in Malaysia through a New Act

Posted on August 29, 2025 by Tricia

This article was first published on Fulcrum, the ISEAS-Yusof Ishak Institute platform, on 20 August 2025 here.

A new Act to improve government efficiency in Malaysia would help streamline the bureaucracy and reduce regulatory burdens. It could be improved, however, by adding some parliamentary oversight.

Since taking office in November 2022, Malaysia’s MADANI government has rolled out at least 12 official national master plans and policy frameworks. Under the 13th Malaysia Plan, it aims to deliver 95 per cent of government services fully online by 2030, positioning Malaysia as a “high-income digital economy powered by artificial intelligence (AI)”.

Yet, the implementation of such plans remains a perennial question. Monitoring and evaluation of these targets are rarely done or reported. To address this, Prime Minister Anwar Ibrahim is banking on the Government Service Efficiency Commitment Act 2025. This was passed earlier this year to “enhance the quality, efficiency and effectiveness of the government service” by streamlining the bureaucracy, reducing regulatory burden and introducing service performance ratings.

The Public Service Department, which will lead reforms with the Ministry of Economy and the Malaysia Productivity Corporation (MPC), aims to transform work culture and strengthen public-private sector collaboration. These efforts also align with the new Chief Secretary (CS) Tan Sri Shamsul Azri Abu Bakar’s plans to revamp the civil service.

The Act enshrines principles of service efficiency, governance responsibility, structural reform and regulatory effectiveness. Significantly, it embeds governance, integrity, and transparency — language rarely adopted by the civil service — against a backdrop where 43 per cent of those detained by the Malaysian Anti-Corruption Commission (MACC) in 2024 were civil servants.

Under the Act, Government entities are required to reduce the regulatory burden by at least 25 per cent every three years, as well as review the procedures under their regulatory instruments. Then Economy Minister Rafizi Ramli had said in August 2024 that the intention was for the legislation to reduce bureaucracy and simplify procedures for businesses. However, which entities will be required to do so and how exactly “regulatory burden” is defined or measured is not stated within the Act.

Notably, the Act provides wide powers to the CS to design rating methods for service delivery, issue directives and require heads of government entities to prepare and submit periodic service performance reports, and “any other information as may be directed”.

This is a significant development. While the CS already oversees the administration of ministries and their agencies, this law extends reporting to statutory bodies, state government entities and even local governments, which are not currently under the CS’ purview. If the reporting line for state government entities and local governments bypasses state governments, this potentially further centralises authority within federal hands. Clarification on how the provisions relate to individual statutory bodies’ Acts is also required.

The CS may at his discretion request reports “from time to time”, without a standardised rating procedure or schedule across all government entities. Ministers may appoint qualified persons to examine and assess these reports, the findings of which are submitted to the CS. However, without an independent verification process, self-reporting risks becoming both highly subjective and perfunctory. Since better ratings can lead to greater federal recognition and funding, the stakes for these assessments are high.

Accountability gaps still remain. Ministers are not obliged to table performance reports in Parliament; the Act only says they “may” do so. A “Government Service Efficiency Commitment Report” on overall performance is to be prepared every three years. At the very least, a redacted version of this report should also be published online and tabled in Parliament for public access.

The Act provides a broad framework to improve service performance in Malaysia, but detailed governance mechanisms are needed to truly transform the public service’s work culture.

The third element of the Act that is striking is that service performance reports can be submitted voluntarily by any state government entity to the CS. This is consequential to federal-state fiscal relations in the country, given that these reports – and ratings contained therein – can be used as criteria to determine federal financial allocations to the state entity.

Apart from federal-to-state grants based on population, road coverage, revenue growth and ecological indicators, other forms of federal government transfers to state governments have no formula. In the past, the politicisation of development funds took place, favouring states aligned with the ruling government. While some performance requirements already exist for some federal-state transfers, the new Act links performance to financial rewards in a more direct and concrete way.

The Act provides a broad framework to improve service performance in Malaysia, but detailed governance mechanisms are needed to truly transform the public service’s work culture. This could drive a culture shift in the country’s public service, if implemented transparently and fairly. However, without sufficient checks and balances, it risks consolidating power in the hands of the federal executive through the CS, whom the government of the day appoints.

One way of improving the Act’s governance is to introduce parliamentary scrutiny on top of existing executive oversight. Lower House Standing Orders were recently amended to enhance executive accountability to Parliament, by elevating the status of Special Select Committees to Standing Select Committees. This made them permanent. That said, however, important public institutions like the MACC do not fall under the purview of any permanent select committees. A new select committee could be set up to oversee government service efficiency, where the Government Service Efficiency Commitment Report could be reviewed.

Finally, federal and state-level government-linked investment companies and government-linked companies (GLICs and GLCs) could be included under the Act, while a separate State-Owned Enterprise (SOE) Governance Act should also be enacted. These moves would strengthen transparency and accountability, ensuring the government fulfils its promise of delivering a more efficient and responsive public service. They would also help the government to implement policies and plans more effectively.

Posted in Public Administration, Transparency and Good Governance | Leave a comment

Mahathir Mohamad at 100: Monumental Achievements, Mixed Legacies

Posted on July 21, 2025 by Tricia

by Tricia Yeoh and Francis Hutchinson

This was first posted on Fulcrum (ISEAS-Yusof Ishak Institute platform) on 10 July 2025, the 100th Birthday of Tun Dr Mahathir Mohamad here.

An edited version of this opinion piece was republished on the South China Morning Post portal platform here, under the title of “Malaysia’s Mahathir Mohamad: a 100-year mixed legacy”, on 20 July 2025.

To live a long political life in Malaysia is not unusual; to have a century’s longevity and the lengthiest career guarantees its two-time former premier ‘Dr M’ a unique place in the history books.

Mahathir Mohamad, the spry two-time prime minister of Malaysia, turns 100 today. Visionary but detail-oriented, charismatic yet divisive, Mahathir has profoundly shaped the country’s politics, economy, and society over the past six decades.

Mahathir’s incursion into electoral politics was a milestone. In 1964, he first ran for parliament for the United Malays National Organisation (UMNO) in Kedah. In contrast to UMNO’s urbane first-generation leaders, Mahathir came from a rural background and articulated a more ethnically focused vision for the country than was then the norm.

Following a brief period in the political wilderness due to his disagreements with Malaysia’s first prime minister (PM), Tunku Abdul Rahman, Mahathir rejoined UMNO in the wake of the May 1969 racial unrest. His rhetoric and worldview fit in with Malaysia’s conscious pivot towards addressing wealth disparities between different ethnic groups.

Becoming PM in 1981, Mahathir led the country for an unprecedented 22-year term. During this period, his economic stewardship was, at the macro level, laudable. Mahathir was committed to balanced budgets, having a relatively open economy, investing in infrastructure, and attracting foreign direct investment. The result was an average annual growth rate of between six and seven per cent per year.

Mahathir was determined to make Malaysia a modern, self-sufficient, and “fully developed” nation by 2020. His quest was further enabled by Malaysia’s deep reservoirs of petroleum, whose rents burgeoned in the 1980s. Mahathir’s ensuing infrastructure drive transformed the country’s landscape with landmarks such as the Kuala Lumpur International Airport, the Petronas Twin Towers, and the questionable Multimedia Super-Corridor.

As PM, Mahathir focused on revitalising the bureaucracy. Leading by example, he prioritised excellence and professionalism, introducing name badges for civil servants, time-keeping, and a Client’s Charter to promote accountability. In addition, the Public Complaints Bureau and Anti-Corruption Agency were strengthened during his tenure.   

At the international level, Mahathir was a supporter of the Non-Aligned Movement. He espoused moderate Islam, cementing Malaysia’s reputation as one with whom the West could engage. He also promoted a “Look East Policy”, aimed at learning from the successes of Japan and South Korea, and deepened Malaysia’s engagement with China.

At his best, Mahathir articulated a vision based on pride and nationalism, the pursuit of economic growth, and technological ambition that unified Malaysia. Although the country has yet to attain high-income status even now, Mahathir’s economic stewardship during his first administration underpins the residual goodwill he enjoys today, recent political events notwithstanding.

Beyond economic management, increasing state capacity, and mobilising Malaysians around a specific vision, however, Mahathir’s legacy in many areas is mixed. In some cases, middling results were caused by his seeking to maintain rhetorical ambiguity, and in others, his formidable personality played a role.

Perhaps the best way to sum up Mahathir is as someone with great ambition, high standards, and an exceptional work ethic, but who also has an uncompromising nature that undermined many initiatives.

As to the first factor, Mahathir modelled Malaysia as a moderate Muslim country but undercut this narrative to outflank UMNO’s existential rival, the Islamic party, Partai Islam SeMalaysia (PAS). In response, he co-opted Anwar Ibrahim, then leader of the Malaysian Islamic Youth Movement into UMNO. Once in government, Anwar promoted increasing Islamisation, including boosting religious education in schools. Mahathir’s consequent pronouncement in 2001 that Malaysia is an “Islamic State” provided a rhetorical opening to his opponents.

Throughout his career, Mahathir supported ethnic-based affirmative action, while seeking to galvanise Malays by accusing them of being lazy, lacking a long-term perspective, and ungrateful. Operationally, he sought to build on Malaysia’s affirmative action programmes to uplift Malay and indigenous communities by hand-picking businessmen to receive preferential concessions for water provision, rail, airlines, and auto production. While the goal was to create genuine corporate leaders, the reliance on non-market mechanisms made many of these debt-fuelled corporate empires untenable, leading to massive corporate bailouts.

As for his personality, Mahathir’s ability to chart clear directions made him intransigent. This undermined leadership succession, as seen by Mahathir’s diatribes against subsequent prime ministers, including but not limited to Abdullah Badawi, Najib Razak, and his protégé-turned-nemesis, current PM Anwar Ibrahim.  

This inflexibility impacted the country’s institutions. In UMNO, Mahathir centralised power in the office of party president. In government, he weakened checks on the executive by maintaining tight control of the media, constraining the country’s royalty, and eroding the institutions of the judiciary and Parliament. The budget, size and reach of the Prime Minister’s Office expanded rapidly under his tenure, even absorbing parliament’s own civil service. The role of state governments was also curtailed through enhanced budgetary controls and constitutional amendments to reduce their scope.

Mahathir had an autocratic side. In 1987, with the questionable rationale of preventing racial riots, he orchestrated a crackdown on political activists, opposition politicians, and students, detaining them without trial under the Internal Security Act. In 1998, Mahathir sacked his deputy, Anwar Ibrahim, on the alleged grounds of sexual misconduct and corruption, igniting a national Reformasimovement in response.

After 21 years — and scenting a potential electoral defeat for UMNO and its coalition, Barisan Nasional — Mahathir voluntarily stepped down in 2003. His second stint as prime minister and his subsequent downfall are a perfect case study of the mixed record of his legacy.

The effects of Mahathir’s concentration of power in the PM’s position were made manifest under Najib Razak’s tenure. To contain the effects of the multi-billion-dollar exposé of the national investment fund, 1MDB, the latter used the awesome power of the prime minister’s office to remain in power.

To unseat Najib, Mahathir exited UMNO to set up a new party, Bersatu. He then partnered with former foes including Anwar Ibrahim’s Pakatan Harapan (PH) coalition. Drawing on his achievements and oratory, Mahathir was instrumental in appealing to Malay-majority constituencies, allowing PH to cobble together a parliamentary majority and seize power.

In office for the second time, Mahathir had a unique opportunity to fix the structural excesses of the structures he created. However, Mahathir’s distaste for Anwar eventually overcame his desire for continuity, as his constant toying with the handing over of power without doing so became untenable.

Had he ceded leadership to a named successor, Mahathir would have been able to credibly claim he restored Malaysia’s democracy. However, caught between giving way to Anwar or allying with Najib Razak and his faction in UMNO, Mahathir sought to lead a “unity government” that brought together all parliamentary factions. When this was not forthcoming, Mahathir resigned. This led to one of the most turbulent periods in Malaysia’s political history, with an unprecedented four governments in three years.

Since the end of his second prime ministership, Mahathir has shifted from being a mainstream politician to one on the fringe. Gone are his association with UMNO and Bersatu. In the 2022 general election, he suffered an electoral defeat — not even garnering enough votes to keep his deposit.

Perhaps the best way to sum up Mahathir is as someone with great ambition, high standards, and an exceptional work ethic, but who also has an uncompromising nature that undermined many initiatives. This depiction explains his longevity, physical and political. That no prime minister who has followed him can live up to his expectations and that Malaysia has yet to attain high-income status fuel this centenarian’s angst and drive.

2025/224

Tricia Yeoh is a Visiting Senior Fellow at the ISEAS – Yusof Ishak Institute and is an Associate Professor of Practice at the University of Nottingham Malaysia’s School of Politics and International Relations. 

Francis E. Hutchinson is Senior Fellow and Coordinator of the Malaysia Studies Programme, ISEAS – Yusof Ishak Institute.

Posted in Economics, General Politics, International Relations, Public Administration, Reflections | Leave a comment

Featured on BBC World Questions Panel

Posted on June 25, 2025 by Tricia

I was recently invited to be a panellist at the BBC World Questions programme, recorded live in a studio with an audience of 150 people in Kuala Lumpur.

This programme has been conducted in over 100 countries around the world. Questions are posed randomly to the panel, and we do not know the questions beforehand.

The programme was recorded live on 10 June 2025.

The edited video podcast version.

Here is a fuller radio (audio only) version of the session.

Posted in Academia, Civil Society, Economics, Ethno-Religious Politics, General Politics, Human Rights, International Relations, Politics, Public Administration, Transparency and Good Governance | Leave a comment

The 2025 ASEAN Summit Creates an Opportunity for Canada

Posted on June 25, 2025 by Tricia

This commentary was first published on the Asia Pacific Foundation of Canada website on 17 June 2025, and can be found here.

The recent ASEAN Summit in Kuala Lumpur, Malaysia — held against the backdrop of rising U.S. protectionism and U.S. President Donald Trump’s second-term tariffs — was an opportunity for Southeast Asian nations to coalesce and deepen their existing trade and economic ties. 

The theme of Malaysia’s 2025 ASEAN chairmanship is ‘inclusivity and sustainability,’ with an emphasis on ASEAN centrality and economic integration. At their May 26–27 Summit, ASEAN leaders adopted and signed the Kuala Lumpur Declaration on ASEAN 2045: Our Shared Future, a 20-year roadmap to guide the bloc in navigating global ‘megatrends’ while reinforcing its role as a community. 

The goals, as articulated in the declaration, include significantly increasing intra-ASEAN trade and investment, making ASEAN “the industrial and manufacturing hub of the Indo-Pacific with dynamic micro, small and medium enterprises (MSMEs),” and using the ASEAN Digital Economy Framework Agreement (DEFA) to double the value of the region’s digital economy to US$2 trillion by 2030. 

ASEAN meetings have long been criticized for failing to deliver meaningful progress, stemming from members’ adherence to the principles of consensus and non-interference. Nevertheless, the recent summit stood out in a number of ways. 

One of its most significant achievements was the first-ever ASEAN-GCC-China Summit, which took place at the same time as the ASEAN Summit. (Members of the GCC, or Gulf Cooperation Council, include Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates.) This linkage with the GCC is significant: its total commodity trade with China was nearly US$298 billion in 2023 and it accounted for 36 per cent of China’s total crude oil imports that year. It is also ASEAN’s seventh-largest trading partner. 

This bringing together of three of the world’s fastest-growing regions for a trilateral meeting was historic, in that it blended old trading ties with present-day geopolitical urgency. While ASEAN and the GCC had previously held formal meetings, it was the first time China was brought into the fold. This three-way intersection melds financial leverage from the Gulf, technological capabilities from China, and the ASEAN market’s dynamic demand and supply chain linkages. Among the commitments made by the three partners were enhanced economic collaboration, improved connectivity, co-operation on sustainable development, and a more active role for the Global South in global governance. 

The talks also touched on de-dollarization and financial self-reliance, with delegates advocating for interoperable cross-border payment systems to buffer against external volatility. Collectively, these developments indicate that the Global South is responding to what it perceives as an increase in U.S. trade isolationism. Less than two months after Trump’s April 2 ‘Liberation Day’ reciprocal tariff announcement, the implications are already reverberating in this region, with new trade and geoeconomic relationships rapidly developing as a way to hedge against overdependence on the U.S. 

That China featured prominently was no surprise; Premier Li Qiang, who attended the trilateral summit, said that China is willing to join hands with ASEAN and the GCC to “fully harness the synergy of one plus one plus one being greater than three” to share “common Asian values of peace, cooperation, openness and inclusiveness.” 

This statement comes on the back of Chinese President Xi Jinping’s recent Southeast Asia tour, described as a ‘charm offensive’ at a time when the U.S.-China trade war was heating up. Although talks between Washington and Beijing have just concluded, the uncertainty that has pervaded 2025 is sufficient to force ASEAN states to forge new friendships elsewhere. Hence, the bloc’s member states have advanced negotiations on both the ASEAN Trade in Goods Agreement (ATIGA) and the ASEAN-China Free Trade Agreement 3.0 (ACFTA), both major steps toward deeper economic integration and greater supply chain resilience. Specifically, the ACFTA upgrade introduced nine new chapters on the digital economy, green economy, and supply chain connectivity, and aims to build a “China-ASEAN mega market” premised on a shared future and promoting “common prosperity and development.” 

However, geopolitical positioning notwithstanding, questions remain as to whether anything substantial and concrete was achieved at the recent ASEAN Summit. For instance, Malaysia, as ASEAN Chair, had previously encouraged bloc members to take a common ASEAN stance in response to the U.S tariffs, but Vietnam, among the hardest hit in the region, sent negotiators directly to Washington, D.C., with Malaysia  following suit. 

In the end, the ASEAN Summit’s position was to reaffirm its commitment to refrain from imposing any retaliatory measures in response to U.S. tariffs. While individual members will proceed with bilateral negotiations with Washington, ASEAN leaders have also formed a task force to co-ordinate the regional response. Malaysian Prime Minister Anwar Ibrahim has also reached out to Trump to hold a U.S.-ASEAN Summit. Further negotiations and strategizing, rather than a hardline position, seem to be the likely approach. 

Other challenges include Myanmar and the South China Sea. During the summit, there was a renewed push for the Five-Point Consensus (5PC) for resolving Myanmar’s crisis. A statement on “an extended and expanded ceasefire” was endorsed, urging all parties to build on the temporary April 2025 ceasefire following that country’s devastating earthquake the previous month. As for the more delicate South China Sea issue, the summit statement reaffirmed strong support for a legally binding ASEAN-China Code of Conduct based on international law, including the 1982 United Nations Convention on the Law of the Sea (UNCLOS). 

It will be an uphill battle, however, to arrive at a common position on the South China Sea, given that individual states have different territorial claims. The Philippines has been singularly vocal in pushing back against China’s infractions in the West Philippine Sea and is calling for ASEAN states to collectively adopt the transparency initiative it launched in February 2023 by publicly releasing photos and videos of a Chinese vessel using a military-grade laser against a Philippines coast guard ship. This transparency initiative is intended to expose China’s actions in the South China Sea, which Manila hopes will unite ASEAN around the desire to defend its territorial waters. 

Other ASEAN states, including Malaysia, have been reluctant to sign on to this initiative, which it fears could lead to more aggression from China and run counter to the bloc’s preference for quiet diplomacy. At a dialogue on ASEAN maritime security in Manila in May 2025, ASEAN diplomats, think-tankers, and academics discussed common solutions for this ongoing problem, while upholding a commitment to a UNCLOS- and rules-based order. However, attendees were highly skeptical that the ASEAN-China Code of Conduct would be concluded within the next decade and doubted its effectiveness in maintaining peace and order in the South China Sea. 

Considering the group’s ability to make tremendous progress on the trade front, ASEAN could benefit from a stronger and more united position on the South China Sea issue, one that would not provoke China but rather affirm that the Southeast Asian region needs long-term security and defence-related stability to see the greatest returns from its trade and economic integration.

Another major milestone at this ASEAN Summit was an announcement that the regional bloc will admit its newest member, Timor Leste, this year. With Timor-Leste soon becoming a full member of the bloc, ASEAN will now include every sovereign state within the geographic boundary of Southeast Asia. This could support and expand ASEAN’s commitment to multilateralism, as Timor-Leste is a member of the Community of Portuguese Language Countries, which, notably, includes Brazil. 

While there was initially some concern about Timor-Leste’s capability and readiness, as a small nation, to join ASEAN, regional neighbours have contributed to its institutional and diplomatic readiness. For example, in the past, Malaysia, Indonesia, and the Philippines have contributed to Timor-Leste’s civil service training and technical capacity. This is therefore a historic moment for ASEAN, welcoming the entry of a nation that fought hard to achieve its independence. Further, Timor-Leste is one of only three Southeast Asia member states — the others being Indonesia and the Philippines — that are part of the international Open Government Partnership platform, a transparency initiative that promotes accountability, inclusion, and participation, and could encourage other ASEAN member states to participate and reinvigorate their commitments to transparency and accountability. 

These developments are significant to ASEAN’s dialogue partners, including Canada, the European Union, and other Western powers. As global trade uncertainties continue, ASEAN will present itself as a hub in an increasingly multipolar world. As the ASEAN-GCC-China Summit shows, ASEAN can harness its ability to bring together communities across the globe. 

For Canada, this is an opportunity for its new prime minister, Mark Carney, to deepen relationships with the region. In October 2024, then-prime minister Justin Trudeau joined ASEAN leaders at an ‘ASEAN-Canada Special Summit on Enhancing ASEAN Connectivity and Resilience.’ In May 2025, at the 22nd ASEAN-Canada Dialogue, held in Laos, Canada reaffirmed its commitment to its strategic partnership and co-operation across areas such as maritime co-operation, cybersecurity, and combating transnational crime. As the Joint Declaration on ASEAN-Canada Enhanced Partnership (2021-2025) expires at the end of this year, Canada’s leaders should anticipate the adoption of the new ASEAN-Canada Plan of Action for 2026-2030, especially in the run-up to the partner summit in late 2025. 

It should be noted that the U.S. is still a major player in ASEAN’s foreign direct investment (FDI), accounting for 32 per cent of the total as of 2023. Because of this, and because of other geopolitical and geoeconomic factors, ASEAN will not shut its doors on negotiating on tariffs or anything else trade-related with the U.S. However, as the U.S. has shown itself to be an increasingly unpredictable and unreliable partner, Canada is well-placed to position itself differently. 

Canada can do so while reaffirming its commitment to a rules-based international order, which ASEAN also supports. For decades, Canada’s international position has been tied so closely to that of the U.S. that for partners outside of North America, the two countries have been nearly indistinguishable. For the benefit of Canada’s international relations, it should brandish its own credentials, standing strong on its foundations as a middle power, and foster stronger and deeper relationships with ASEAN through various means. Encouraging ASEAN’s commitment to multilateral free trade, international rules-based order, and strategic neutrality is one way to do so; introducing concrete strategic pathways to develop economic and trading relationships would accelerate this further. 

• Edited by Erin Williams, Director, Programs, Vina Nadjibulla, Vice-President Research & Strategy, and Ted Fraser, Senior Editor, APF Canada 

Posted in Economics, International Relations, Outside Malaysia, Politics, Public Administration | Leave a comment