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The Role of Malaysia in Japan’s New Security Strategy

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Tokyo Report | Security | East Asia | Southeast Asia

The Role of Malaysia in Japan’s New Security Strategy

Prime Minister Kishida Fumio’s recent visit to Malaysia highlighted a growing area of cooperation between the two countries.

The Role of Malaysia in Japan’s New Security Strategy

Japanese Prime Minister Kishida Fumio (left) shakes hands with Malaysian Prime Minister Anwar Ibrahim during a summit meeting in Kuala Lumpur, Malaysia, Nov. 5, 2023.

Credit: Prime Minister’s Office of Japan

Japanese Prime Minister Kishida Fumio’s inaugural two-day visit to Malaysia heralded a new strategic bulwark for defense and security, apart from the ingrained strong ties of economic, trade, and people-to-people affiliations. Apart from strengthening defense diplomacy with China in mind, Japan is well aware of the importance of Malaysia assuming the chairmanship of ASEAN in 2025 and the commemoration of the 50th Anniversary of ASEAN-Japan Friendship and Cooperation this year.

Kishida’s charm offensive tour in Southeast Asia was initiated with Beijing in mind. Beyond his outreach to Malaysia, he visited the Philippines, where Japan gifted to Manila a coastal radar system valued at $4 million.

Japan is now entering the elite world of defense and security diplomacy by undertaking a charm offensive, both in hard and soft power expansion.

Japan’s Official Security Assistance (OSA) program, created to provide grants for defense equipment and associated infrastructure for selected recipients, remains the core of this strategy. The new OSA framework was first announced in the revised National Security Strategy at the end of last year. It focused on providing equipment, supplies and infrastructure development assistance to partner countries, mostly in the Indo-Pacific.

The OSA’s initial pool of recipients includes Malaysia, the Philippines, Bangladesh, and Fiji – all developing states at the forefront of critical strategic security calculations for Japan and the region.  Each would be allotted a quarter of this fiscal year’s 2 billion yen OSA budget. 

However, limitations and questions remain on the future sustainability of this drive, as the yen has taken a hit in global currency markets. In additions, Japan’s guidelines for arms exports – including the Three Principles on the Transfer of Defense Equipment and Technology – will restrict the OSA to nonlethal equipment such as communications satellite systems and surveillance radar.

With that in mind, Japan needs to adopt a more future-oriented approach in providing integrated capacity building and not just physical hardware and supplies. Services and maintenance and support contracts will be critical for joint security support and deterrence.

The future sustainability of the OSA to Malaysia also remains a concern, especially regarding the factors of governance and transparency. Malaysia is ranked as high risk on the Government Defense Integrity Index, compiled by anti-corruption group Transparency International. 

However, the critical defense and strategic needs of both countries against common threats trump any potential concerns. Japan is not alone in making that calculation; in fact, Tokyo is competing with defense and security overtures by other players including Ankara, Seoul, and the Middle East, all seeking to bolster the bulwark of joint deterrence. 

The OSA might be seen by some as too little too late, with its limitations in terms of budget and self imposed constraints on arms sales, but it remains a critical front for Tokyo to both bolster its regional collective security framework. For Japan, strong defense partnerships in Southeast Asia in particular are crucial as a supplement to the Quad as well as the emerging tripartite axis of defense involving Japan, South Korea, and the United State.

Bolstering Regional Fallback Efficacy

Tokyo is seeking to bolster its security assurance by enhancing trilateral ties with Seoul and Washington, as seen in the Camp David pact. At the same time, Japan is enhancing its fallback options by increasing its leverage and ties with the Global South, especially in the Middle East and South and Southeast Asia. In addition to rolling out the OSA program, Japan is seeking to build a stronger bulwark of food and energy security.

In doing so, Tokyo is building on the high level of trust in its economic and trade dealings with Southeast Asia. It is leveraging decades of proven technology transfer and local development.

While Japan has a long-held reputation for standards, values and quality, as well as its entrenched soft power leverage, Japan will need to offer more than these. This is where the OSA comes into the picture for Tokyo. Japan realizes that governments in Southeast Asia and elsewhere are in need of a strong third force that is based on stability and trust as they seek to avoid being sucked into the endless abyss of the China-U.S. rivalry.

Regional states are not keen to choose a side, but also at the same time are heavily dependent on Washington in providing security assurances. By doing so, they risk further economic retaliation from Beijing. In this context, Tokyo’s role as both an economic and security alternative remains critical for these governments.

Tokyo is seeking to capitalize on this opening by reasserting its once dominant position of influence in this region, before the rise and expansion of China. This new drive encompasses both a bilateral approach as well as engagement with regional and international organizations, especially with ASEAN, the Organization of Islamic Cooperation, the Gulf Cooperation Council, the Organization of the Petroleum Exporting Countries , and others.

Players in the Indo-Pacific region that sit at the critical geostrategic nexus of maritime trade and security routes – especially Malaysia, Indonesia, Singapore and India – have a direct role in ensuring Japan’s future food and energy security as well as in providing critical support lines during times of conflict.

The new OSA approach bolsters the expanded deterrence and fallback options for Japan, as it seeks to build a network of strategic security partners and allies of support through galvanizing these players’ existing geostrategic importance in maritime trade and security. Japan is actively courting the countries with leverage over geographical chokepoints that will determine the outcome of potential conflicts.

Malaysia’s Strategic Value for Tokyo

The existing Quad and Camp David trilateral are not sufficient for Japan to have a complete and balanced approach to its security and defense structure. The new OSA, combined with regional engagement through responsible and trusted FDI and economic development can fill the gaps. Development support that is interlinked and intertwined with security assistance is needed to present a complete and balanced picture of Japan as a trusted player with a historical track record and legacy of being a sincere regional major power. 

Malaysia is a key recipient of these initiatives, as it is critical both for Japan’s food and energy security and hard power assurances. Malaysia’s role as a provider of palm oil, and its potential role in semiconductor and rare earths supply chains, only add to its importance.

Regarding potential rare earths development and cultivation in the country, the Australian-owned Lynas plant in Kuantan is strategically vital for Tokyo, as it seeks to ensure secure access to the minerals. The production of rare earths is currently dominated by China.

Malaysia is also vital as a regional player for building Japan’s integrated leadership. Malaysia will hold the chairmanship of ASEAN in 2025 and also serves as a bridge to other vital actors in the Middle East, the Muslim world, and the Global South.

Other existing and future plans are increasing Japan-Malaysia economic and technology cooperation in sectors including the green and digital economy, electronics, semiconductors, natural resources, talent mobility, and people-to-people integration. In these efforts, Japan is using existing commercial ties to increase its economic security and reduce its dependence on any one partner. At the same time, economic cooperation based on mutual trust and responsibility is serving as an enabler in increasing interdependence in the security realm.

 Japan’s commitment to the free and open Indo Pacific (FOIP) mantra has undergone significant shifts since the Abe Shinzo era. Kishida has focused on the broader overarching spectrum of a “free and open international order based on the rule of law.” This reflects the changing nature of threats, as well as reinforcing a distinct Kishida policy.

Yet Japan faces an uphill battle in ensuring its economic and security interests within the realm of the Indo-Pacific, especially since Beijing has broadened and expanded its global economic and security agenda. China’s port-building and efforts to foster economic dependency now stretch from near waters to as far as Latin America via its trademark BRI.

While Japan can’t match the depth of BRI’s soft-power building capacity, both in financial and security might, Tokyo can make up for the gap with its far greater and longer legacy of trust. Unlike China, Japan has a proven track record of a responsible and sustainable economic, security and investment agenda underscored by shared standards and values. Japan’s Official Development Assistance (ODA) dwarfs the BRI in terms of historical timeline and impact acceptance, having first been created in 1954.

Already enjoying the fruits of the decades-old labor of consistent and high level trade and people-led connections, the shift to a greater emphasis on areas of high politics seems to be long overdue. The spillover impact from robust and intertwined investment and trade entanglement has so far failed to translate into a greater urgency for enhancing defense ties, both in the transfer of assets and expertise transfer and in security assurances. The time is ripe for a strategic reorientation of Tokyo-Kuala Lumpur ties to pivot toward a focus on defense and security, in light of both players’ insecurity both in the traditional and non-traditional domains.