Prime Minister of Malaysia Anwar Ibrahim recently unveiled an ambitious $5.33 billion National Semiconductor Strategy (NSS). Once operational, he envisions Malaysia to be a global hub of semiconductor industry by offering itself as an alternative to both China and the US.
Global semiconductor firms with presence in China, have been searching around Southeast Asia for sites to expand their operations.
Malaysia, which already supplies 13 per cent of the world’s demand in the industry’s packaging and testing sector aims to secure at least $106 billion in new semiconductor investments to place the country at the centre of this cutting-edge technology.
Billions have already been received in investments from US firms. Intel in 2021 announced a $7 billion plan to expand its advanced packaging facility in Penang state, while graphics card giant Nvidia has made a $4.3 billion injection to develop its artificial intelligence capabilities in the country.
Free trade agreements
Malaysia’s pursuit of such ambitions is based on educated, skilled and reliable workforce, excellent physical infrastructure and connectivity, pro-business policies and a network of existing free trade agreements.
In addition to promoting this high-tech industry Anwar has been vocal in support of the Asian Monetary Fund, which was initially proposed by Japan to combat the 1997 Asian Financial Crises.
Attempting to place Malaysia as an attractive centre for economic growth, PM Anwar has recently been publicly emphasising upon Malaysia’s neutrality in Sino-American political and economic sparring. An experienced politician, he understands Malaysia stands to lose if tensions escalate in the Asia-Pacific region.
Anwar in an interview with the Post magazine (June 6, 2024) made it clear he will not get caught up in China-US geopolitical tensions and be pressured into picking a side.
“It is important to impress on the Philippines, on the Chinese, that we are here. We must be prepared and able to manage our own affairs,” he said, adding that Malaysia would push this point upon assuming the rotating chair of the Association of Southeast Asian Nations next year.
Transition to a hi-tech economy
As he looks to fast track his country’s transition to a hi-tech economy through stronger economic and strategic ties with Beijing, Anwar will most likely, play down the South China Sea issue with China or the risk of sanctions from the West.
The impending Malaysian Chairmanship in 2025 offers an opportunity for Malaysia to push for deeper integration among the ASEAN countries. He has even called for complimentary productions and economies instead of ASEAN competing in the same product.
Anwar who spent two decades waiting to become the prime minister also seems to have set a higher vision for Malaysia. He is moving ahead with his plans to join BRICS where his ideas of freeing ASEAN particularly from pressures due to Sino-American rivalry are bound to find more appeal. If Malaysia succeeds, followed by Thailand and Indonesia, ASEAN will have a formidable representation in an organisation that already represents 37.3 per cent of global GDP.
All these initiatives by Malaysia aim to bring the country back to centre stage within the region and develop its resilience. Hopefully, Malaysia and other regional states will be spared of big power pressures, allowing them to develop without constraints in the interest of the region and beyond.
Sajjad Ashraf served as an adjunct professor at the Lee Kuan Yew School of Public Policy at the National University of Singapore from 2009 to 2017. He was a member of Pakistan Foreign Service from 1973 to 2008 and served as an ambassador to several countries.
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