Malaysia Defence & Security Report Q2 2014
Feb 6, 2014 - Business Monitor International - 89 pages
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Malaysia has enjoyed a relatively stable post-election period; a sweeping victory for Prime Minister Najib Razak's political allies within the United Malays National Organisation (UMNO) following the latest party election suggests that we could see further progress on fiscal reforms in 2014. This should help cement internal stability. Externally, the country faces tensions over China's activities and territorial disputes in the South China Sea region; some Islamist groups are also operating in Malaysia and neighbouring states. However, overall defence spending and procurement has been relatively static, which the 2014 budget seeing a cut in money available for military development.

Malaysia's regional security situation also remains generally benign; the country is also enjoying a burgeoning defence relationship with the United States. A January 2014 meeting in Washington between the country's two defence ministers should likely result in more joint-forces exercises.

Malaysia's relations with neighbours Thailand, Singapore and Indonesia are cordial, and China's territorial disputes with a number of countries in the region has so far had relatively little impact on Malaysia, although this does not rule out the possibility of more serious tensions in the future. A visit last year by the Chinese premier resulted in the signing of a new strategic pact between Malaysia and China, it what was interpreted as a reward to Malaysia's calm response - which has contrasted with that of other Southeast Asian countries - to China's regional activities. Malaysia already engages in defence industry collaboration with China, especially in the area of missile technology, and these joint efforts are now likely to deepen, with Malaysian industry the likely beneficiary.

The Washington meeting in January this year may go some way to resolving the fallout from US President Barack Obama 's failure to travel to Southeast Asia in October 2013 on what should have been a four-nation tour kicking off with a state visit to Malaysia. Obama pledged that he would still visit Malaysia during his presidency. And while it can hardly be claimed that Obama's failure to come to the region has fatally damaged the US strategic 'pivot' to Asia, his signature foreign policy, it certainly has weakened the US's image as a country that can get things done in the region vis-a-vis China. The full implications of this for Malaysia and the region could take some time to emerge, however, and the US continues to stress its commitment to the Asia-Pacific despite political gridlock at home.

The domestic security agenda continues to be dominated by the fallout of a remarkable incident in February 2013, when Sabah in East Malaysia was invaded by a force of 200 armed men, who claimed the territory on behalf of the Sulu Sultanate (the Sulu Archipelago now being a part of the Philippines). The action resulted in an assault on the area by the Malaysian military, which left at least 31 of the militants dead. It also strained Malaysian-Philippine relations, and may yet have implications for the ongoing peace process in the southern Philippines. While there is every reason to hope that this event was a one-off, the government has established a new East Sabah Security Zone (ESSZONE), and the military command has begun outlining organisational changes and procurement objectives with a view to significantly boosting its capabilities in the East of the country.

The Air Force is keen to press on with the procurement of a new multirole fighter aircraft (MRCA). Although the requirement is relatively small at around 18 aircraft, would-be suppliers have already begun lobbying fiercely for the contract. Boeing, Dassault, Eurofighter and Saab are all interested in fulfilling the Malaysian requirement.

The Air Force is also planning to acquire a new airborne early warning and control aircraft in the near future. As with the MRCA, a tender was expected to be issued in 2H 2013, with Saab and Northrop Grumman seen as the companies likely to be competing for the order.

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