Malaysian Foreign Policy in

Term of Economic and Politics

under Tun Mahathir
1.0 Introduction

Malaysia reached independent from the United Kingdom and have its sovereignty since
1957. Malaysia also applies its foreign policy and engage in diplomatic relation with
other countries. It became internationally recognized by other states from time to time.
The development of Malaysia foreign policy was changing depends on the political
leadership or the leader or elite, the interpretation of domestic sensitivities and needs,
and behaviour of other states. (Saravanamuttu 2010, pp. 2).
Focus on the Malaysian foreign policy in term of economic and politics which applied
during Tun Dato’ Seri Dr. Mahathir bin Mohammad’s administration as the prime minister
of the countries from 1981 until 2003.
Economic
~ Look East policy,
~ OIC, the policy applied during 1997 Asian Financial crisis

Politics
~ cooperation in the international association (ASEAN and United Nation).
background about Tun Mahathir
** contribution of Tun Mahathir to Malaysia
Background

On 16 July 1981, Tun Dato’ Seri Dr.

Mahathir bin Mohamad was the fourth
Prime Minister of Malaysia.
He served as the PM from 1981 until 2003.
- making him longest-serving holder
mof that office (22 years ).
- granted the soubriquet of the
miiFather of Modernization.

- Introduced Vision 2020 /

Wawasan 2020
- set an aim for Malaysia to
reach the status of the fully
developed country like the
United States and Japan by
the end of the year in 2020.
• Announced by Prime Minister Dato Seri Dr. Mahathir
Mohamad on 8th February 1982 at the Conference 5th Annul
Joint Conference of MAJECA/JAMECA at Hilton Kuala
Lumpur.
• Main Objective: to enhance performance management and
development in the country and create the society that has
values ​and positive work ethics to raise the country's
progress
• New Economic Policy (NEP) 1971 by Tun Abdul Razak
Dato’s Hussein- eradicate poverty and restructure society
through this policy which economic progress gained
momentum as a result of modern technology can increase
national income.
• reduce the problems that exist in society and it also
can reduce the economic gap.
• Visit by Datuk Sri Dr Mahahathir Mohamad to Japan
and South Korea in 1983.
• Malaysia had outlined some of the strategies
implementation is creating cooperation among the
eastern countries in the economic field, industry,
training, technical training, academic, executive
development programs, research and management in
the administration.
• Malaysia decideded to send their students to Japan, not only
learn the academic and technical knowledge, and learn the
discipline of labor ethics and the Japanese.
• Consisted 2 parts:
1. sent the Malaysian students to Japan universities and
technology colleges
2. send students to Japan's training institutions and industries.
• Programmes: change in structure, change in behaviour and
change in training and improvement
• provide many benefits to the country such as the
increased investments from Japan and Korea in
our country.
• produce a national car, the Proton Saga.
• new industry such as Heavy Industries
Corporation of Malaysia (HICOM).
• In summary, the main objective of DPT is not to
increase bilateral trade. DPT aims to emulate the
work ethic of the people of Japan and South
Korea that have successfully developed their
country in ruins.
The Malaysia foreign policy towards Middle East

• Malaysia develop the closer relationship with the

Middle East countries in strengthening the relations in
political, social, religious and economic interest.
• Malaysia cooperate with OIC and established many
policies with the OIC members.
• Malaysia as the chairman of OIC in 2003
• Tun Mahathir separates the foreign policy under the
priorities
• In 1981,Malaysia announced its decision to accord
the Palestine Liberation Organization full diplomatic
status
• Tun Mahathir pushed a greater economic cooperation in
Islamic financial system among the OIC members.
• The investment role of Islamic Development Bank(IDB)
based on the concept of mudarabah.
• Interaction between education and tourism with the
Muslim countries
Economy policy in Asian financial crisis
• In 1997-98, Asian was having a financial crisis,
many of the countries get aid from IMF
• Malaysia had tightened the monetary policy through
raising interest rates and controls on foreign capital
flows on the speculative demand for the ringgit
• The Central Bank of Malaysia pegged the Ringgit
Malaysia at RM3.80 to a US Dollar
• Tun Mahathir blame George Soros involved in the
devaluation of Malaysia currency
• He gained billion dollar of profit from speculating
against the currency
 Association of Southeast Asian Nations

Tun Mahathir wanted to promote Malaysia to the global so that our country
will be known and recognised by other states. Hence, he used to host and
participate in regional and international event especially focus on economic
growth and development.
Therefore, Tun Mahathir believed that there was a must to branding
Malaysia as amongst the original ASEAN countries (Albar. Syed Hamid
2014).

** In 1990, Proposed the East Asia Economic Caucus (EAEC) which was a
regional free trade zone as well as China, Japan and South Korea
to balance the growing influence of the United States.
- It failed due to heavy opposition from the US and Japan.
**Establishment of ASEAN+3 mechanism
-bring closer regional co-operation after the Asian Financial
crisis.
** Chiang Mai Initiative
- manage regional short-term liquidity problems
- facilitate the work of other international financial
arrangements and organisations
** Southeast Asian Nuclear-Weapon-Free Zone Treaty/
Bangkok Treaty 1995 signed
-Use ASEAN as a platform to develop and pursuit of Malaysia’s
national goals and aspiration.
 United Nation
** strongly committed to the United Nations’ (UN) Charter
contribute to the global community by actively participating in the UN peacekeeping operations.

South-South Cooperation
** formation of Development 8
- brought together Muslim majority countries with strong economic
potential based on their rate of growth.
- took the initiative to propose the Langkawi International Dialogue (LID)
which provide the less developing countries with the leverage on
technical expertise through capacity building and other forms of
cooperation.
- Tun Mahathir emphasize on Malay nationalism as an important
domestic determinant
The Contribution of Tun Mahathir

Development in Malaysia

• Putrajaya
Putrajaya was designated as the new
administration centre of the Malaysian
Government.
• Proton
National Car Project that would help
industrialise the nation and to produce some
affordable car for the domestic markets
• PETRONAS Twin Tower
 The PETRONAS Twin Tower had become the
landmark in the city of Kuala Lumpur.
 Tun Mahathir’s policies to drive Malaysia towards
Modernization
• Light Rapid Transit(LRT)
 The demand of public transportation
• Kuala Lumpur International Airport (KLIA).
 major transportation centre for air travel in Malaysia
• MSC Bill of Guarantees
 a free flow of information, will not have any
censorship towards the internet
Conclusion

In a nutshell, we can see that the national interest

was the driver and determine of the Malaysia foreign
policy under Tun Mahathir administration. His foreign
policy was desire to seek for self-esteem and
recognition from others especially from the
developed countries.

The strong leadership of Tun Mahathir bought

Malaysia become a successful nation and gained
the respect of other states in the global arena. His
contribution as Prime Minister of Malaysia
improved the quality of lives of the people and
bring us a more peaceful environment to live in.