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Introduction

In an increasingly fragmented world, it is imperative for all countries plugged into the global governance and supply chain networks—and there is almost no country in the world that is excluded here—to seek ways to sustain and improve current cooperative and collaboration mechanisms. Global governance should support a system that enables every country, regardless of size or wealth, an opportunity to participate and gain benefits. Global governance initiatives should focus on empowering small and developing states, rather than becoming yet another avenue for major power competition. Indeed, global governance should support smaller states’ ability to respond to and mitigate the pressures from various challenges.

This essay aims to outline a uniquely Malaysian perspective on the existing global governance ecosystem, how it links with China’s vision of global governance and its follow-on initiatives, as well as how stakeholders can foster cooperation in a fragmented view. It will also highlight Malaysia’s past experiences with global initiatives from China, namely the Belt and Road Initiative (BRI) and Malaysia’s own current philosophy of nationhood—Malaysia Madani.

A Malaysian View of the Global Governance Environment

It has become fashionable to say that global governance is in crisis or desperately needs a significant overhaul. Indeed, there is no paucity of examples where global governance structures have shown to be less than optimal. One of the most egregious examples of this concerns the World Trade Organisation (WTO), specifically its Appellate Body. Established in 1995, the Appellate Body is as close as one gets to having a supreme court for international trade. Yet the United States has blocked the appointment of new judges to the Appellate Body since the Trump administration of 2017–2021, precipitating a major crisis in the rules-based international trading system. Following the expiry of the term of the last sitting judge on 30 November 2020, the Appellate Body has been unable to review appeals under the WTO dispute settlement mechanism. By continuing to reject proposals to select new members of the panel, the United States has rendered the WTO Dispute Settlement Understanding (DSU) thoroughly ineffective. This failure of global governance is understandably of concern to Malaysia and other similar countries dependent on both bilateral and multilateral international trade.

It is easy to blame the deficits in effective global governance on major power rivalries. In recent years, the increasingly fraught relations between major powers such as the United States, China and Russia have brought to greater focus the many shortcomings in global governance. For example, collective and concerted action was arguably deficient in response to the COVID-19 pandemic. Many countries, again with developing countries at the shorter end of the stick, struggled with mitigating the pandemic while major powers acted in self-interest, sometimes with excess abandon. So have the international community’s response to the ongoing global hunger and malnutrition crisis, which the World Food Programme estimates to affect 345.2 million people in 2023.

Yet, it is also important to remember that major powers cooperated in strengthening global governance in the past, even when they viewed each other as existential threats. Key among these were landmark international treaties such as the 1968 Nuclear Non-Proliferation Treaty (NPT), which has arguably limited the growth of nuclear weapon states, and the 1982 United Nations Convention on the Law of the Sea (UNCLOS), which is regarded as the constitution and final arbiter for the legal and policy matters on oceans. Negotiated and concluded during the Cold War, these treaties demonstrate that major power rivalries need not necessarily impede global governance.

Malaysia has a vital interest in maintaining a global governance structure that promotes the sovereign equality of states and a relatively free international trading system. This stems from its strategic location and its high dependence on external trade. Because Malaysia is a littoral state of the Malacca Strait and the South China Sea, its policymakers are keenly aware that the country is in an area that attracts the interest of and competition among the major powers, especially the United States and China.

Accordingly, Malaysian policymakers have long attached a premium on the primacy of international law and a global governance structure that insulates it—however imperfectly—from the exercise of the military and diplomatic might of bigger countries. Furthermore, as a country whose international trade exceeds its economic output—its trade as a percentage of GDP was 131 percent in 2021—Malaysia has a significant stake in global governance institutions that promote the opening of external markets and the relatively untrammelled flow of capital.

The Belt and Road Initiative: China’s Vision of Global Governance and Its Opportunities and Challenges with Malaysia

In recent years, China has played an increasing role in global governance, especially in emphasising the need to help developing countries. In response to the 2008 Global Financial Crisis, then Vice Premier Wang Qishan called on the Group of 20 (G20) to look “beyond the needs of the top 20”, further arguing that the developing world should have a greater say in the major decisions that shape international financial systems. Following up, a decade late in 2018, China submitted a proposal for WTO reform. The proposal detailed the need to preserve core values of non-discrimination and openness in a multilateral trading system, while safeguarding the interests of developing economies. Through the BRICS grouping, China has also called for global governance to be more inclusive and fairer in order to allow developing countries a greater voice in international affairs. These examples point towards China’s leadership in using its growing economic significance to stand up for the interests of the developing world, an effort that was previously lacking in the Western-led system. Such sentiments echo Malaysia’s vision of an inclusive global governance which empowers smaller states to develop and participate meaningfully in international economic affairs.

China also began its own initiatives in global governance, premised mainly on economic development, the most notable example being the BRI. Although the BRI is bilateral in practice, the initiative aims to draw connectivity between regions and emphasises the importance of equitable development globally. It is a bilateral initiative that acts with a vision of global governance, articulated through the concept of a “Community with a Shared Future for All Mankind”. Recognising the importance of infrastructure as key to economic development, the BRI initially focussed on mega-infrastructure projects in developing countries.

When the BRI was launched, Malaysia quickly became one of the largest beneficiaries and partners of BRI projects and investments. These were mostly in construction and infrastructure but also involved tech and communication initiatives, involving both the public and private sectors. Signature BRI projects included the Malaysia–China Kuantan Industrial Park (MCKIP), East Coast Rail Link (ECRL) and Kuantan Port Expansion Project, alongside smaller projects such as the USD 10 billion Malacca Gateway and the USD 969.9 million Trans-Sabah Gas Pipeline (TSGP). These projects aimed to advance connectivity between the east and west coast of Peninsular Malaysia, thereby significantly improving Malaysia’s competitiveness in the regional supply chain. For example, the completion of the Kuantan Port was projected to make Malaysia the largest logistic hub in Southeast Asia and through one of the region’s largest container ports, thus enhancing Malaysia’s role and prospects in the region.

The progress of BRI projects took a shift in the lead-up to and aftermath of the 13th General Election in May 2018, when the Barisan Nasional (BN), against the prevailing forecast of pundits, lost. This marked a turning point in Malaysia’s electoral history with the coalition suffering defeat for the first time since independence, smashing to smithereens the myth of invincibility which had held sway for six decades. Under then Prime Minister Mahathir Mohamad, who returned for a second stint at the helm, the new Pakatan Harapan (PH) government sought to review BRI projects that were linked to former Prime Minister Najib Razak who was embroiled in the 1Malaysia Development Berhad (1MDB) financial scandal. Indeed, a number of these BRI related projects, and Najib’s perceived close ties with China became campaign fodder for the PH coalition during the highly contested lead-up to the elections. Soon after forming government, PH announced the review and potential cancellation of the ECRL and TSGP projects.

The purpose of the ECRL and TSGP projects were never in question; both ECRL and TSGP projects were designed to improve the socio-economic development in Malaysia. The review and potential cancellations were meant to scrutinise the lack of transparency and due diligence of the projects, especially considering the costs of ECRL were linked to Najib Razak’s 1MDB scandal. After several negotiations, the ECRL was revived as a new deal in April 2019, with the costs reduced from USD 16 billion to USD 10.6 billion. The route was revised as well—which might have helped with the lower costs. On the TSGP, the Perikatan Nasional (PN) government that succeeded PH—after the infamous ‘Sheraton move’ in March 2020—planned to revive the cancelled project. However, little progress has been made to date on this.

Despite these developments, the BRI never truly lost its attractiveness in Malaysia. When the PH government announced the cancellations, Malaysia went from being touted as a BRI success story to being castigated as contractual miscreant riding rough shod against the grain of economic diplomacy, conjuring the ghost of Sri Lanka’s debt trap fiasco. Certainly, Malaysia faced issues with many BRI projects including exorbitant costs, environmental implications, source of labour, lack of transparency and slow progress. However, according to the BRI Monitor launched by the Institute for Democracy and Economic Affairs in July 2022, “while there is a general tendency to blame all the issues on Beijing’s loans […] the research shows that this viewpoint neglects to hold the gaps in Malaysia’s project governance equally accountable.” While it would be naïve if not altogether disingenuous to cast off the challenges posed by the Chinese projects, the fluctuating status of BRI projects in Malaysia can be best explained by the shifting local political dynamics and instability, as evidenced by the ever-changing policies between the various governments.

Contrary to some assessments at that time, the BRI for Malaysia was far from unattractive and certainly not “dead”. Rather, PH sought a new direction with the BRI, a necessary step to distinguish itself from the previous Najib Razak-led government. Instead of mega-infrastructure projects, PH preferred cooperation on knowledge and technological transfer. For example, the PH government was keen to keep the Digital Free Trade Zone (DFTZ), which was launched in November 2017 by former Prime Minister Najib Razak and Alibaba Group Founder Jack Ma, as a means to grow Malaysia’s digital economy and advance Industry 4.0. The DFTZ indicates the initial phases of the BRI’s Digital Silk Road in Malaysia.

Collaboration between carmaker Zhejiang Geely Holdings Group and Malaysia’s national automobile group Proton is another case in point. Ever since, Proton has experienced an exponential growth particularly in its exports, which grew 290% between 2018 and 2022. Prime Minister Anwar Ibrahim’s visit to China in April this year saw a windfall of FDIs including the signing of a Heads of Agreement in Beijing, underscored by an investment of RM32 billion to spur expansion. Although the Geely-Proton partnership is not widely recognised as a BRI project, it demonstrates how China’s private sector is venturing into BRI markets and co-developing with companies abroad. Such an initiative not only bolsters Malaysia’s economic capabilities, it also echoes China’s global governance approach of improving relations while driving development.

Global Governance and New Chinese Initiatives

The BRI and the “Community with a Shared Future for All Mankind” promoted a China-led vision of economic and political global governance. In advancing this vision, especially in a global setting ravaged by the human, security and economic effects of the global pandemic, China soon announced a trio of initiatives—the Global Development Initiative (GDI), Global Security Initiatives (GSI) and Global Civilisation Initiative (GCI). While the details of these initiatives are still unclear, what is apparent is that they are non-hierarchical and are inclusive of the developing world. They do not appear, at least at this stage, to create the political distinction between developed and developing countries, but instead aim to bridge the development imbalance between the Global North and Global South.

This approach differs from the traditional global governance structures that were erected in the aftermath of the Second World War, before the decolonisation phenomenon, which saw ideas and doctrines such as “liberalism”, “democracy”, and “free market” being embedded and institutionalised under the auspices of Western (read American) leadership. Further, in the name of providing collective security, these systems were ostensibly designed to maintain peace and stability, while also facilitating economic activity, particularly via the Bretton Woods Institutions, namely, the IMF and World Bank. While this is not the forum to critically assess their importance, suffice it to say that they played a crucial role in promoting international economic cooperation and making globalisation work, on the one hand. On the other, detractors point to the institutions being weaponised as instruments to foist the Washington Consensus’ doctrine of the “free market,” on borrowing countries (generally less developed and developing countries) by prescribing conditionalities in the lending protocols. These became more glaring in the aftermath of the Asian financial crisis of 1997 which, coupled with other events, has since set off a chain of reactive sequences, including the erosion of acceptance of the global governance structures. Today, we are at the crossroads of a new critical juncture which demands the reform of the global governance structures including a reordering of the priorities for the benefit of developing countries.

Nevertheless, it would be naïve to assume that reform in this direction would be plain sailing or that the powers that be would concede. The upshot: build alternative but complementary global governance institutions in order to ensure the participation of developing countries. This seems to be China’s intention with the GDI, GSI and GCI, considering this trio of initiatives were designed at the outset to align with the principles of the United Nations Charter.

The primary aim of the GDI is even directed at the UN Sustainable Development Goals 2030, which demonstrates China’s recognition that climate change and environmental degradation are the central challenges of our time. More importantly, the GDI should be seen as an initiative that qualitatively improves the process of development. It proposes the concept of “common development” which puts the interests of developing economies on an equal level to developed economies because the economic success of one country is directly related to that of its neighbours and the world at large.

The GSI was introduced soon after the GDI, recognising that security is a precondition for development. The current security climate is increasingly hostile and dominated by great power rivalry, such as US–China competition and the Russia–Ukraine War, which has significantly impacted the global economy. Such divisions have intensified the polarisation of international affairs, disproportionately affecting smaller countries that are less able to respond and manage uncertainty. The GSI recognises this imbalance and introduces the concept of “indivisible security” whereby all countries are equal in terms of interests. It envisions a security architecture that is common, comprehensive, cooperative, and sustainable.

Both the GDI and GSI highlight that regardless of their development status, all countries will experience their own challenges and insecurities but ultimately aspire for peace and prosperity. Yet, distrust between countries and systems continues to deepen tensions and divisions. Here, it harkens to the central thesis of Huntington’s “clash of civilisations”, that despite international systems in place, differences in culture, language, history, tradition or religion are the primary sources of conflict within and among societies. No doubt, while Huntington himself has conceded that this theory is a simplification, not to mention that without more, such a theory is negative and destructive, it nevertheless speaks to the shaping of a new world political and economic order slouching towards divergence rather than convergence.

To address this challenge, the GCI aims to focuses on the civilisational divide by promoting the common values of humanity, such as peace, justice, equity and freedom. Just as the GSI views all countries’ interests as equal, the GCI aspires for true equality among all civilisations and forego feelings of superiority. This hopes to promote dialogue and encourage cultural exchanges to transcend estrangement. China’s mediation in the Saudi–Iran reconciliation seven years after ties were severed and all other efforts failed potentially demonstrates the success of GCI in practice.

Malaysia Madani and China’s Global Initiatives

In principle, China’s vision of global governance as articulated through the Global Initiatives falls in line with Malaysia’s aspirations of a global system that values and respects the participation of all countries, regardless of size, systems of governance, ideologies, or wealth. In fact, a cursory examination indicates that there are many similarities between the GCI and Malaysia Madani, the philosophy of nationhood for Malaysia advocated by Prime Minister Anwar Ibrahim. This includes but is not limited to embracing pluralism, not in the narrow sense of confessional articulation of religious tenets but within the larger context of multicultural and multi-religious societies and the imperative of respecting differences.

As a policy based on inclusivity and integrity in shaping the nation’s identity, Malaysia Madani is guided by six core values of sustainability, prosperity, innovation, respect, trust, and compassion. It calls for greater sincerity in policymaking towards realising a more humane economy, predicated on a more holistic approach to development and growth steered by empathy, ethics and anchored on the principles of justice and welfare. In essence, the growth of the national economy must not only be productive and business friendly, but must also give opportunities to all, especially to the segments of community that fall through the cracks. The concept parallels the GDI in working towards reducing inequality and enhancing standards of living while keeping sustainability at the forefront.

In the realm of foreign policy, Malaysia Madani approaches bilateral and multilateral engagements with ethics, sincerity and integrity. The philosophy emphasises the drive to restore Malaysia’s global reputation of dignity and glory, with the hope that this in turn will once again play a role in the resurgence of an Asian renaissance characterised by the revival of an independent, inclusive, peaceful, and prosperous Asia. Again, it is not too far when it comes to the bridging of concepts and goals between Malaysia Madani and China’s Global Initiatives.

It is imperative to note that while Malaysia Madani is immersed in both Malaysian and Asian pride and values, it is fundamentally a universal philosophy or approach that can bridge the East and the West. Despite differences in cultures across the region and the world at large, diplomacy and dialogue guided by values of respect, trust and compassion encourages mutual understanding and peaceful cooperation. This vision echoes that of China’s GCI, in building compassion and peace in an increasingly divisive world.