（Andrew Kam Jia Yi , Associate Professor,The National University of Malaysia ,Institute of Malaysian and International Studies）
In recent years, the blue economy has emerged not only as an environmental or developmental concept but increasingly as a site of geopolitical and political-economic contestation. For developing countries such as Malaysia, the push to develop a blue economy reflects more than just a commitment to sustainability. It is part of a broader realignment of national development strategies in response to shifting global economic pressures, regional power dynamics, and the imperative to secure maritime sovereignty. Malaysia’s engagement with the blue economy is shaped by its status as a developing, semi-industrialized state embedded in global production networks, dependent on maritime trade, and exposed to the vulnerabilities of resource-based growth.
Malaysia’s coastline stretches over 4,600 kilometers, granting it jurisdiction over vast marine territories and economic zones. Much of this maritime space lies within the South China Sea, a region that is not only ecologically rich but also strategically charged. The South China Sea plays a crucial role in global trade flows, houses abundant fish stocks and hydrocarbon reserves, and is increasingly marked by overlapping territorial claims and great-power rivalries. For Malaysia, the blue economy is not merely about expanding marine-based industries; it is also about asserting sovereignty, managing contested resources, and maintaining autonomy in a region dominated by more powerful actors.
The country’s traditional ocean economy has long been anchored in fisheries, port logistics, and tourism. In recent years, the state has sought to reposition these sectors within a broader developmental framework. In fisheries, for example, the government has shifted focus from capture-based to aquaculture-based production, citing overfishing and declining marine biodiversity. Policies under the National Agrofood Policy and the Twelfth Malaysia Plan aim to enhance the productivity of aquaculture while promoting sustainability. Yet, beneath the surface, these transitions have implications for the distribution of economic power. Capital-intensive aquaculture projects have increasingly attracted the participation of large firms, including state-linked companies and foreign investors, thereby marginalizing small-scale fishers and traditional communities.
Maritime logistics is another pillar of Malaysia’s blue economy aspirations. The country’s ports, particularly Port Klang and Tanjung Pelepas, are integral to its export-oriented growth model. Port infrastructure has seen ongoing investment, with the state playing a coordinating role in attracting public–private partnerships and foreign capital. While these investments enhance connectivity and trade efficiency, they also reveal a deeper political economy dynamic: the competition for regional dominance in maritime transport, especially vis-à-vis neighboring ports. Port development is not just a question of logistics, but one of geopolitical leverage and national positioning in the global value chain.
The South China Sea context introduces a layer of strategic complexity to Malaysia’s blue economy ambitions. As a claimant state, Malaysia has consistently pursued a pragmatic and diplomatic approach to managing disputes in the region, emphasizing peaceful dialogue and adherence to international law. China’s growing presence in the South China Sea through its infrastructural expansion, maritime enforcement activities, and historical claims has understandably drawn regional attention. While these developments have implications for Malaysia’s maritime space, they exist alongside a robust and growing bilateral relationship. China is not only an important regional actor but also one of Malaysia’s most significant economic partners, including in areas linked to the blue economy. This dual reality requires Malaysia to carefully navigate its strategic interests, maintaining constructive cooperation with China while safeguarding its maritime rights and long-term sovereignty. Rather than a dilemma, it reflects Malaysia’s broader foreign policy tradition of engagement without alignment, seeking balance in a dynamic regional environment.
Internal challenges include governance of the blue economy. In Malaysia, this remains fragmented, reflecting long-standing issues in public administration and federal-state relations. While several ministries oversee different sectors such as fisheries, environment, transport, and tourism, coordination is often weak, and overlapping mandates persist. This institutional fragmentation is not just a technical issue but also a political one, as different interest groups compete over policy space, budget allocations, and jurisdictional authority. Efforts to create an integrated blue economy framework have encountered resistance from entrenched bureaucratic silos and the political calculus of federal-state power sharing, particularly in maritime-rich states such as Sabah and Sarawak.
Financialization and investment politics also further complicate Malaysia’s blue economy development. Access to financing remains a constraint, particularly for smaller enterprises and community-based initiatives. While international financial institutions and development agencies have begun promoting blue bonds and blended finance models, their application in Malaysia remains limited. In this context, China has emerged as an alternative partner, exploring opportunities in areas such as the Blue Carbon initiative, waste management and pollution control, research and development, and marine infrastructure, especially in East Malaysia.
At the regional and global levels, Malaysia has actively participated in forums that promote blue economy cooperation, including within ASEAN and through its engagement with China. In 2023, under the ASEAN–China Joint Statement on Mutually Beneficial Cooperation on the ASEAN Outlook on the Indo-Pacific, initiatives related to marine environmental protection, marine biodiversity conservation, and the sustainable use of ocean and marine resources have provided important platforms for soft diplomacy, capacity building, and knowledge exchange. While such cooperation enhances Malaysia’s access to technical expertise and development resources, it also reflects the growing importance of regional dialogue mechanisms in shaping the discourse on maritime governance in Southeast Asia.
Finally, Malaysia’s aspirations for blue economy development are shaped by the intersection of domestic political economy structures and its engagement with powerful external actors, particularly China which is the most influential maritime power operating in the South China Sea. While the blue economy is often portrayed as a win-win solution for sustainability and growth, in practice it reflects contested processes of resource allocation, institutional reform, and strategic positioning. Malaysia, like many developing economies in the region, the challenge is not only to mobilize investment and build capacity but to ensure that blue economy development contributes to inclusive growth, environmental integrity, and national sovereignty. As global interest in ocean governance continues to rise, Malaysia’s ability to assert its developmental priorities within this evolving space will depend on how effectively it navigates both domestic constraints and the broader regional dynamics in which China plays an increasingly influential role.
