Malaysia Needs a Stronger Defence Strategy

 

Malaysia’s 10th-place position in the Lowy Institute’s 2025 Asia Power Index should be read not as a measure of national prestige, but as a strategic warning.

Malaysia is classified as a middle power with significant diplomatic, economic and cultural influence, yet its military capability ranks only 17th among 27 countries and territories.

This imbalance raises an important question: does Malaysia’s defence strategy adequately match the strategic environment it faces?

The answer is increasingly uncertain.

Malaysia’s overall power score of 20.6 reflects a country whose influence exceeds its hard-power capacity. Its diplomatic influence ranks ninth, economic relationships eighth and cultural influence sixth. Military capability, however, stands at 17th.

This disparity has allowed Malaysia to pursue strategic autonomy and maintain constructive relations with competing major powers, but it also exposes a potential vulnerability: diplomacy can reduce tensions, but it cannot substitute indefinitely for credible deterrence.

Malaysia’s Defence White Paper already recognises this reality. Its strategy is built around three pillars i.e. Concentric Deterrence, Comprehensive Defence and Credible Partnerships while seeking an integrated, agile and focused armed force.

It also recognises Malaysia’s unusual geography: the country must be capable of operating simultaneously in two theatres because Peninsular Malaysia is separated from Sabah and Sarawak by the South China Sea.

The problem is therefore not the absence of a defence strategy. The problem is whether Malaysia is developing the capabilities required to execute it.

The South China Sea is the clearest test. Malaysia does not need to pursue an offensive military posture or enter an arms race with China. But it must possess sufficient surveillance, maritime presence and rapid-response capability to protect its territorial waters, exclusive economic zone, offshore resources and strategic sea lines of communication.

The Mid-Term Review of the Defence White Paper, launched in 2025, recognises that the strategic environment has changed substantially. It identifies advanced technology, South China Sea tensions, cyber insecurity and non-traditional threats as increasingly important challenges.

Malaysia should therefore move from a platform-centric approach to a network-centric defence strategy.

This means prioritising maritime domain awareness, satellites, unmanned aerial and maritime systems, secure communications, electronic warfare, cyber defence, intelligence fusion and integrated command-and-control.

Expensive conventional platforms remain necessary, but a smaller middle power cannot afford to compete symmetrically with larger military powers. Malaysia must instead maximise the effectiveness of every ringgit spent on defence.

The Royal Malaysian Navy and Royal Malaysian Air Force deserve particular attention. Malaysia's geography makes maritime and air surveillance fundamental to national sovereignty. Malaysia’s Defence White Paper identifies the Strait of Malacca, South China Sea, Sulu Sea and Sulawesi Sea as four strategically vital maritime areas requiring persistent surveillance and rapid-response capabilities.

A credible defence strategy also requires greater readiness in Sabah and Sarawak. Malaysia's two-theatre geography cannot be treated merely as a logistical inconvenience. It should be a central determinant of force structure, basing, mobility and procurement.

At the same time, Malaysia should strengthen credible partnerships. The objective should not be alignment with one great power against another. Rather, Kuala Lumpur should deepen defence cooperation with ASEAN partners, Australia, Japan, the United States, the United Kingdom, India and other compatible partners while preserving strategic autonomy.

The Mid-Term Review itself places renewed emphasis on wider bilateral and multilateral defence relationships, including the Five Power Defence Arrangements (FPDA).

The Lowy ranking ultimately exposes Malaysia’s central strategic dilemma: its diplomatic power is stronger than its military power.

That is an advantage during periods of stability. But in an increasingly contested Indo-Pacific, Malaysia needs the hard-power foundation to make its diplomacy credible.

Malaysia’s objective should not be to become a military great power, but a credible smart middle power that is economically resilient, diplomatically influential, technologically capable and militarily difficult to coerce.

Malaysia's future defence strategy should therefore be measured not by the number of platforms purchased, but by whether the nation can detect threats early, respond rapidly, protect its maritime interests and sustain operations across two theatres.

The Lowy Index delivers a stark strategic warning: Malaysia must urgently bridge the widening gap between defence ambition and actual capability by strengthening its military readiness, technological capacity and strategic partnerships before an unforeseen crisis exposes these vulnerabilities at a far greater cost.

19.08.2026

Kuala Lumpur.

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