KUALA LUMPUR: Malaysia must navigate rising geopolitical tensions and economic pressures as a trading nation deeply integrated into global supply chains, says Datuk Seri Anwar Ibrahim.
The Prime Minister said Malaysia had managed to navigate the shifting geopolitical landscape by maintaining strong economic and trade ties with both the West and the East.
“A trading nation that is naive about these realities does not stay a trading nation for long,” he said at the Khazanah Megatrends Forum 2026.
He said Malaysia had benefited from investments and trade with the United States and Europe while also maintaining close relations with China and other major Asian economies such as South Korea, Japan and India.
Referring to his engagements with Chinese President Xi Jinping and US President Donald Trump last year, Anwar said Malaysia had to continue engaging both sides despite the challenges.
“Don’t envy me for having to, for example, meet and discuss with President Xi Jinping and having to dance with President Donald Trump just to keep the temperature down. And it’s a limited success, by the way,” he said.
Anwar said wars and disruptions to major trade routes were reshaping the geopolitical landscape, while artificial intelligence, chips and data were increasingly influencing economic and political outcomes.
At the same time, tariffs, export controls and restrictions on chips and critical minerals had turned trade into a tool of economic pressure, he added.
Anwar said Malaysia had to continue engaging with multilateral and international institutions as the global order came under growing pressure for reform.
“For a country that lives by trade, with factories in the middle of the world’s chip supply chains, this is not a mere theoretical consideration,” he said.
Anwar noted “reluctance” among major powers to reform key institutions – including the United Nations, World Trade Organisation, World Bank and International Monetary Fund – despite their stated emphasis on democracy, human rights and economic justice.
At the same time, countries in the Global South were seeking greater weight in global affairs through groupings such as BRICS and other new initiatives, reflecting calls for greater representation amid the changing balance of global power, he said.
Political power is the main source of problems in the world and in Malaysia, Anwar said, as he warned that authority today is moving faster than the institutions meant to govern it.
He called for greater accountability among those wielding political and economic power, saying the failure to hold them fully accountable had become a fundamental challenge for modern societies.
The Prime Minister also pointed to Asean as an important platform for managing geopolitical differences and preserving regional stability.
Malaysia, he said, was fortunate to be part of a region where differences could generally be managed through negotiations, with countries focusing on economic ties, trade and investment rather than allowing disputes to escalate into conflict.
“Credit goes to leaders in this region who focus on and emphasise the need to maintain peace in order to sustain growth and economic development,” he said.
However, he said Asean’s centrality should translate into greater ability to influence developments rather than simply provide a platform for meetings.
