Malaysia announced it will not rush to increase its defence budget to meet US demands for spending at 3.5% of GDP, opting for a measured approach reflecting its developing nation status and other critical needs [1, 2, 3, 4]. Defence Minister Datuk Seri Mohamed Khaled Nordin said, "It doesn’t mean that we will implement it immediately because America says so" and stressed Malaysia's acceptance of the US view that countries should defend themselves without total dependence on the US [2, 3].
Malaysia’s Defence Ministry budget for 2026 is RM21.7 billion, about 1% of GDP, an increase of RM600 million from 2025 [3]. The country is pursuing asymmetric warfare capabilities focusing on low-cost, mass-produced weapons such as drones and rockets [2, 4]. It is sourcing defence technology from Turkey, South Korea, Australia, and remains open to China and Russia [2, 4]. Malaysia is considering replacing a blocked Norwegian missile contract with US-made missiles offered by Washington [2, 4].
Defence Minister Khaled reaffirmed Malaysia’s commitment to ASEAN centrality during the Shangri-La Dialogue on May 30-31. He called on external powers to respect ASEAN norms and regional mechanisms, warning that the erosion of ASEAN centrality would have serious consequences for Southeast Asia and the Asia-Pacific region. He said, "The moment Asean centrality is compromised, regionalism in Southeast Asia will cease to be meaningful and purposeful" [5, 6]. Khaled also pledged, "We can give our assurance that the Strait of Malacca will be a strait that will allow free flow of navigation," underscoring cooperation with Indonesia, Singapore, and Thailand to manage the corridor neutrally [2, 4].
US Defence Secretary Pete Hegseth met with Khaled on May 29 and reaffirmed the US commitment to regional security amid growing geopolitical tensions. Hegseth urged Asian allies to raise their defence budgets to 3.5% of GDP and announced a US$1.5 trillion investment plan to strengthen the US military [2, 3, 4].
Malaysia began implementing its National Defence Industry Policy in early 2026 to enhance local defence capabilities and maintain defence self-reliance, avoiding dependence on any one country [3]. Khaled noted the core challenge to the international system is an erosion of trust in the rules-based global order, not just competition among states [6].
Malaysia’s defence budget and policy decisions reflect a cautious balance between modernization and socio-economic development needs. The next scheduled defence policy review will take place in 2027 to assess strategic and budgetary priorities.
