AS Malaysia stands at a critical juncture in anticipation of the 2024 US presidential election, the outcome is likely to resonate well beyond American borders, particularly within ASEAN.
With former president Donald Trump and vice president Kamala Harris as the leading candidates, Malaysia faces a complex array of challenges and opportunities that could reshape its foreign policy and economic landscape.
Should Trump secure the presidency, we may witness a revival of his “America First” doctrine, leading to a more unpredictable and transactional approach to diplomacy.
This shift could heighten tensions between the US and China, placing Malaysia in a precarious position, especially given China’s status as Malaysia’s largest trading partner.
Increased tariffs under a protectionist US administration might threaten Malaysia’s competitiveness in critical sectors such as electronics and palm oil.
Conversely, a victory for Harris would likely see a continuation of the Biden administration’s emphasis on strategic partnerships in the Indo-Pacific, potentially offering Malaysia a more stable diplomatic environment.
Such stability could enhance Malaysia’s role within ASEAN and foster regional cooperation and economic resilience in an increasingly multipolar world.
Historically, the US has been a vital trade partner for Malaysia, and political developments there are expected to have direct repercussions on Malaysian markets.
Investment sentiment is likely to fluctuate depending on the election outcome, with investors favouring stability over uncertainty.
In this context, Malaysia’s strategy of engaging in multilateral trade agreements – such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Regional Comprehensive Economic Partnership (RCEP) – is crucial for mitigating potential adverse effects of shifting US policies.
Moreover, the ongoing technological rivalry between the US and China presents Malaysia with a significant opportunity to position itself as a preferred destination for companies reassessing their supply chains, particularly in the semiconductor sector.
As global firms seek to diversify away from China, Malaysia’s strengths in manufacturing and technology could attract substantial foreign direct investment (FDI), boosting economic growth. However, the outcome of the 2024 US elections may influence FDI flows, depending on the policies of the winning candidate.
Historically, Malaysia has adopted a policy of strategic ambiguity, cultivating beneficial relationships with multiple global powers to maximise economic opportunities while preserving its sovereignty.
As the global landscape shifts towards multipolarity, Malaysia must balance its engagements with various blocs without overly committing to any singular partnership.
Domestically, enhancing workforce development is critical, particularly in the rapidly expanding technology sector, which encompasses semiconductor chips and data centres.
A strong emphasis on education is vital for equipping the workforce with the skills and knowledge required in this dynamic environment.
By fostering partnerships between industry and academia, Malaysia can cultivate a skilled talent pool capable of meeting evolving economic demands.
This investment in human capital will be essential as Malaysia aims to establish itself as a preferred destination for foreign direct investment (FDI), including from the US, in support of its economic growth. Malaysia has set an ambitious target of RM50 bil in annual FDI by 2030.
The ramifications of the 2024 US presidential election will extend across Southeast Asia, with Malaysia uniquely positioned to adapt to changing geopolitical tides.
Decisions made in Washington will reverberate throughout the region, impacting trade, investment, and diplomatic relations.
By adopting a flexible and pragmatic diplomatic approach, actively participating in multilateral trade initiatives, and investing in human capital, Malaysia can navigate the uncertainties of a multipolar world.
Thus, it is essential for Malaysia to position itself not only as a leader within ASEAN but also as a resilient player on the global stage, ready to embrace the changes ahead and ensure continued prosperity amid global transformations. – Nov 4, 2024
Dr Lee J. Peter is an Assistant Professor at Heriot-Watt University Malaysia.
The views expressed are solely of the author and do not necessarily reflect those of Focus Malaysia.
Main image: Nikkei Asia
