A new era of ‘Look East’ would boost both Japan and Malaysia

The story of Malaysia’s Look East Policy is as much about Japan’s postwar relationship with Southeast Asia as it is about Kuala Lumpur’s search for its post-colonial place in the world in the early 1980s.

Forty years later, the affinity and friendship between Malaysia and Japan could provide the basis for expanded cooperation in an increasingly troubled and divided world.

When Mahathir Mohamad became prime minister for the first time in July 1981, he was the first Malaysian premier not to have been educated in the U.K.

Two months after he took office, the government organized a “dawn raid” on the London Stock Exchange-traded shares of Guthrie Group to seize control of the rubber and oil palm conglomerate founded 160 years before as the first British trading company in Southeast Asia.

This fed into a wider clash with the U.K. which also saw Mahathir launch a “Buy British Last” campaign.

But Malaysia did not turn inward when moving away from its colonial past. On the contrary, the nation continued to internationalize, turning to the then-rising nations of East Asia, with an initial focus on Japan and subsequently South Korea.

The Look East Policy came to be in 1982, around the time a youth leader named Anwar Ibrahim joined the government. Though Anwar, now the nation’s prime minister, did not have a direct role in the initial shaping of the Look East Policy, he certainly had a front-row seat during its major turning points.

Malaysia’s previous economic relationship with Britain was essentially commodity-based. Its turn toward East Asian nations, which by the early 1980s were well-entrenched in Western manufacturing supply chains and becoming major exporters to North America and Europe, accelerated Malaysia’s industrialization.

This was when Japan’s influence was growing rapidly. The 1979 book “Japan as Number One: Lessons for America,” by the late Harvard University professor Ezra Vogel, aptly captured the spirit of the time.

In Malaysia’s quest for modernization, Japan was touted as a template for emulation.

In 1985, Japan reluctantly signed the Plaza Accord and was forced to appreciate the value of the yen against the dollar. The yen’s rapid climb led to an influx of Japanese investment into Southeast Asia, including Malaysia, amid a search for cheaper production bases.

The Malaysian economy contracted in 1985, so the government moved to liberalize and open further to foreign investment the next year to try to resuscitate the economy. This move was well-timed to allow Malaysia to receive a tremendous boost from Japanese foreign direct investment, as well as investment from South Korea and Taiwan.

Malaysia’s takeoff between 1988 and 1997 saw the nation rapidly grow into a stronger, more diversified industrialized economy.

In 1977, Japanese Prime Minister Takeo Fukuda reset his country’s postwar engagement with Southeast Asia in a speech in Manila where he set out what became known as the Fukuda Doctrine.

From the other direction, Malaysia’s Look East Policy marked the first instance in which a Southeast Asian society which had been traumatized by invading Japanese troops during World War II embraced contemporary Japan.

The ties built between Malaysia and Japan go beyond just an economic partnership. They are also defined by exchanges involving the two nations’ rich cultures and history.

The Alumni Look East Policy Society, which brings together Malaysian students who graduated from Japanese universities and technical colleges under government sponsorship, along with other Malaysian alumni of Japanese institutions and the Japanese who studied in Malaysia are all living testimony to the shared experiences made possible by the Look East Policy.

Four decades on, there is still more that can be done.

For about 10 years, there has been talk of Look East Policy 2.0. But amid many distractions and troubles, not enough has been done to give credence and depth to renewing the bilateral relationship and enhancing people-to-people engagement apart from the trading relationship and still-active student exchanges.

Although Japan’s growth has stalled since its economic bubble burst in 1991, the nation remains a technological powerhouse and one of the world’s largest economies. Japan is also still an important geopolitical stakeholder in Asia.

The world faces a “polycrisis” of climate change, geopolitical tensions, pandemics and financial crises. In such a time of flux, the links between Japan and Malaysia developed from the Look East Policy should be intensified to include deeper conversations between thought leaders from both sides.

The study of contemporary Japan in Malaysia should be strengthened and likewise, the study of contemporary Malaysia in Japan. More discussions among defense and security officials would help in advancing a common agenda in the international arena.

Malaysian Minister of Investment, Trade and Industry Tengku Zafrul Aziz has described his country as the gateway to Asia. Malaysia’s multilingual, multicultural population can be a bridge for Japan to connect with other societies in Southeast Asia and beyond. More Japanese companies should see Kuala Lumpur and other major Malaysian cities as potential regional hubs or headquarters.

Japan can also be a source of investment and knowledge transfer once again, especially among its highly skilled and technologically advanced small and midsize companies. This could facilitate Malaysia’s second economic takeoff.

The experience, understanding and friendships built through initiatives under the Look East Policy can form the foundation for the continuation of solid collaboration between the two nations.

Keizoku wa chikara nari, or continuation is power. Onko Chishin, or reviewing the past to predict the future, would also help us to chart the path ahead in a candid manner.

This article has been adapted from a speech delivered to the Alumni Look East Policy Society commemorating the 40th anniversary of the policy.