The Look East Policy Failed Time To Focus On India Part 1

---

 


Since the 1980s, Malaysia’s Look East Policy has served as a fundamental aspect of its foreign relations strategy, primarily aimed at enhancing economic, political, and cultural connections with East Asia, especially Japan and South Korea.
Initiated by then-prime minister Dr Mahathir Mohamad in 1982, the policy sought to emulate the successful economic models of East Asian countries.
The intention was to cultivate stronger trade partnerships, improve technological cooperation, and incorporate essential features of East Asian work ethics, such as discipline and industrial productivity.
Nevertheless, over the years, the anticipated advantages of this policy have not fully materialised, and various obstacles have impeded its effectiveness.
ADSConcurrently, India, with its increasing economic influence and strategic significance, is emerging as a viable alternative for Malaysia.
This article’s two sections examine the shortcomings of the Look East Policy and posits that Malaysia should contemplate redirecting its focus towards India as a key trading ally in the future.
An overview
The Look East Policy was initiated during Mahathir’s initial tenure as prime minister, with the objective of drawing lessons from Japan’s post-war industrial expansion and South Korea’s swift modernisation.
Central to this policy was the goal of strengthening Malaysia’s industrial framework, advancing its technological capabilities, and enhancing productivity through the experiences of these East Asian nations.
Over time, the policy facilitated significant advancements, including the establishment of robust relationships with Japan and a surge in investments within Malaysia’s manufacturing sector, especially in the fields of electronics and automotive production.
Then prime minister Dr Mahathir Mohamad (second from left) during a showcase of the newly launched Proton Saga circa 1983A prominent aspect of the Look East Policy was Japan’s involvement in the transfer of technology and expertise to Malaysia, which played a crucial role in the development of various sectors, including manufacturing, infrastructure, and automotive industries.
For instance, during the early 1990s, Malaysia experienced considerable Japanese investment in sectors such as electronics, construction, and chemicals, while South Korea also played a vital role in Malaysia’s industrial growth through technological exchanges and strategic investments.
Despite the Look East Policy achieving certain successes, various challenges have arisen over the years, resulting in a decline in its overall effectiveness.
As Malaysia’s economy has expanded and diversified, the anticipated benefits from strengthened relations with Japan and South Korea have not materialised to the extent originally envisioned.
Challenges and failures
One of the central challenges associated with the Look East Policy is Malaysia’s excessive dependence on Japan as a principal partner.
ADSAlthough Japan’s investments in Malaysia were substantial during the initial phases of the policy, the country’s economic stagnation since the 1990s has adversely affected its capacity to sustain growth in Malaysia.
Japan’s protracted recovery from the asset bubble crisis of the 1990s, coupled with its ageing demographic, has constrained its ability to serve as a vigorous source of investment, innovation, and economic development for Malaysia.
Moreover, Japan’s preoccupation with its domestic economic challenges and its hesitance to significantly enhance investments in Malaysia’s manufacturing and technology sectors have hindered Malaysia from fully leveraging Japan’s economic potential.
The cautious approach to risk-taking and Japan’s conservative business ethos have not adequately aligned with Malaysia’s urgent need for rapid industrialisation, which necessitates more assertive technological advancements and foreign direct investment (FDI).
Malaysia’s trade relations with Japan and South Korea experienced consistent growth during the 1980s and 1990s; however, this trend has not persisted in recent years.
Since the early 2000s, Japan’s proportion of Malaysia’s overall trade has been on a gradual decline, supplanted by emerging global trading powers, notably China and the United States.
By 2019, Japan accounted for roughly seven percent of Malaysia’s total trade, a decrease from 11 percent at the beginning of the 2000s, while trade with China and Asean nations has seen remarkable expansion.
This stagnation in trade between Malaysia and Japan has prompted a re-evaluation of the Look East Policy, particularly in light of the shifting global trade landscape that increasingly favours new economic hubs in South Asia and Southeast Asia.
The primary objective of the Look East Policy was to promote the transfer of technology and spur innovation.
Nevertheless, the influence of the technological capabilities of Japan and South Korea on Malaysia has yielded mixed results.
While companies such as Toyota and Panasonic have introduced sophisticated manufacturing processes to Malaysia, the nation’s ability to innovate and develop indigenous technologies has lagged behind that of other emerging markets in East Asia.
Furthermore, the insufficient collaboration in research and development between Malaysia and its East Asian counterparts has impeded the country’s progress toward becoming an innovation-driven economy.
Consequently, Malaysia’s potential to enhance its knowledge economy and reduce its reliance on low-cost manufacturing has been constrained.
Shifting focus to India
As the global economic environment evolves, India emerges as an increasingly appealing partner for Malaysia.
With its rapidly expanding economy, youthful and skilled labour force, and thriving technological sector, India presents numerous prospects for economic collaboration, trade, and investment.
The following section of this article will examine the economic growth of India, highlighting the potential for trade and investment opportunities, as well as the advantages presented by a young and skilled workforce that Malaysia could leverage. - Mkini
R PANEIR SELVAM is the principal consultant of Arunachala Research & Consultancy Sdn Bhd (ARRESCON), 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.

---