Malaysia In A Shifting World Order

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The global geopolitical landscape is undergoing a seismic shift. For decades, American dominance economically, militarily, and diplomatically has defined the post–Cold War international order.
Today, that dominance is increasingly challenged by emerging powers and shifting global alignments. The rise of competing powers, growing distrust of US intentions, and the resurgence of nationalist economic policies, particularly under Donald Trump’s second term, are accelerating the fragmentation of global power.
In place of a US-led unipolar order, a multipolar world is emerging, one increasingly defined by the rivalry between the United States, an emerging axis of Russia-China-India (RCI), and a recalibrated European Union.
Trump’s recent moves to impose tariffs on a wide swath of countries, including traditional allies like the European Union, Canada, South Korea, and India, mark a decisive turn away from multilateralism.
ADSThe US under Trump appears less interested in preserving alliances than in asserting economic leverage to secure short-term national interests.
India, for instance, faces US tariffs due to its continued oil trade with Russia, while European states face penalties despite shared democratic values. These actions have weakened global trust in American leadership and encouraged other powers to seek alternatives to the US-centric system.
Prime Minister Anwar Ibrahim (left) and Indian Prime Minister Narendra Modi, July 2025The result is a slow but steady alignment of interests among Russia, China, and India. While not formal allies, these countries are cooperating more closely in trade, defence, and energy. Russia remains a key energy supplier and geopolitical counterweight to the West.
China, with its vast economic influence and Belt and Road Initiative, offers an alternative vision of globalisation.
India, although traditionally aligned with the West, is asserting a more independent foreign policy, strengthening its role in the Global South, and resisting US pressure on Russia-related issues.
Together, these powers are exploring financial systems outside of Swift, expanding Brics collaboration, and discussing alternative trade currencies, actions that directly challenge US economic hegemony.
Meanwhile, the European Union, once America’s closest ally, is rethinking its dependency. Trump’s economic aggression and his transactional approach to diplomacy have led EU leaders to prioritise strategic autonomy.
The EU’s efforts to develop independent digital, defence, and energy strategies alongside deeper engagement with Asia, Africa, and Latin America signal a broader desire to avoid entanglement in the US-China rivalry.
European Union flagsThe EU may not align with the RCI bloc, but it is increasingly pursuing a third path, forming a new pole in the global order.
Navigating uncertainty on a neutral path
For Malaysia, this changing world order brings both uncertainty and opportunity. As a middle power deeply embedded in global trade networks, Malaysia cannot afford to take sides in great power competition.
At the same time, it must not be passive. Malaysia’s long-standing commitment to neutrality, rooted in its non-aligned foreign policy tradition, must evolve into an active strategy of diversification, engagement, and resilience.
ADSFirst, Malaysia must reaffirm and modernise its policy of strategic neutrality. This means rejecting rigid alignment while maintaining open channels with all major powers.
Malaysia’s position within Asean provides a crucial platform to strengthen regional voice and unity. By championing Asean centrality, Malaysia can help prevent Southeast Asia from becoming a theatre for proxy competition and preserve the region’s collective autonomy.
Second, Malaysia needs to invest in economic resilience. This includes diversifying its trade partnerships, moving up the value chain, and integrating further into regional economic frameworks like the Asean Free Trade Area and the Regional Comprehensive Economic Partnership (RCEP).
Strengthening ties with non-traditional partners, including the EU, the Middle East, and Africa, will reduce exposure to US-China volatility.
Third, Malaysia should enhance its regional security role. Without entering into formal alliances, Malaysia can support multilateral defence dialogues, invest in maritime domain awareness, and participate in joint capacity-building exercises.
The South China Sea remains a sensitive flashpoint, and Malaysia must defend its sovereignty while advocating for peaceful, rules-based resolution mechanisms such as Unclos.
Fourth, Malaysia must remain a vocal proponent of multilateralism and international law. As powerful states bend or break norms to serve national interests, smaller nations like Malaysia have every reason to insist on the sanctity of global institutions.
Supporting the United Nations, World Trade Organization, and regional conflict-resolution bodies will be critical in upholding a predictable international environment.
Finally, Malaysia should embrace its role as a bridge builder. As a Muslim-majority democracy with deep ties to both East and West, Malaysia is uniquely positioned to mediate, convene, and foster dialogue.
It has a track record of hosting peace talks, and its balanced relationships allow it to engage credibly across ideological divides. This middle-power diplomacy can be a powerful asset in a divided world.
Sticking to principles
The rivalry between the United States and the RCI axis, along with the EU’s pursuit of strategic independence, marks the dawn of a new global configuration. Power is no longer concentrated in one capital or alliance but spread across regions, ideologies, and networks.
This is not necessarily a more dangerous world, but it is a more complex one. For Malaysia, the path forward lies not in choosing sides but in choosing principles: sovereignty, regional cooperation, economic inclusivity, and peaceful engagement.
In a time of shifting alliances and contested norms, Malaysia must act with foresight, agility, and unity. Its strength will lie not in military might or economic scale, but in its ability to stay true to its values while adapting to the winds of change.
The world may be entering a new order, but with the right strategy, Malaysia can help shape it rather than be shaped by it. - Mkini
R PANEIR SELVAM is the principal consultant of Arunachala Research & Consultancy Sdn Bhd, a think tank specialising in strategic national and geopolitical matters.
The views expressed here are those of the author/contributor and do not necessarily represent the views of MMKtT.

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