Malaysia is a maritime nation by geography. Straddling the strategic artery of the Strait of Malacca and facing the contested waters of the South China Sea, its prosperity, sovereignty, and security are inseparable from the sea. More than 90 per cent of its trade is transported by sea. Yet Malaysia’s naval capabilities have not kept pace with the complexity of its maritime environment. Naval modernisation is no longer a matter of prestige but of a strategic necessity.
The Royal Malaysian Navy (RMN) operates across two distinct maritime theatres: Peninsular Malaysia and East Malaysia. The latter, in particular, is geographically located near to disputed features in the South China Sea and sits near critical sea lanes and Malaysia’s offshore energy infrastructure.
Malaysia’s Exclusive Economic Zone (EEZ) is rich in hydrocarbons and fisheries, but it is also increasingly contested with the intrusions of foreign coast guards and fishing vessels. The former demonstrates external actors’ determination to operate in grey zones below the threshold of conflict and to challenge Malaysia’s rights over its EEZ, probing resolve without triggering open hostilities. In such an environment, deterrence depends not only on diplomacy but on credible, persistent presence at sea.
However, the Malaysian navy has long struggled with fleet fragmentation and ageing platforms. Decades of incremental procurement, fiscal constraints, and shifting political priorities have produced a diverse but logistically burdensome fleet. Different classes of vessels complicate maintenance, training, and supply chains. The result is reduced operational availability and higher lifecycle costs. Modernisation, therefore, must be as much about rationalisation as acquisition.
The centrepiece of Malaysia’s naval renewal is the Littoral Combat Ship (LCS) programme, based on the Gowind-class corvette design. Envisioned as a multi-role platform capable of anti-surface, anti-air, and anti-submarine warfare, the LCS was meant to replace ageing vessels and provide a step-change in capability. Yet the programme has been marred by delays, cost overruns, and governance controversies. These setbacks have understandably eroded public confidence.
Still, abandoning modernisation is not an option. Nevertheless, Malaysia must double down on reforming defence procurement processes. It needs to enhance transparency, strengthening oversight, and ensuring realistic project management. Defence industrial ambitions should be aligned with operational priorities. Local industry participation is important for economic and strategic reasons, but it cannot come at the expense of timely delivery and combat readiness.
Beyond the LCS, Malaysia’s “15-to-5” fleet transformation plan, aimed at consolidating 15 classes of ships into five core classes, remains conceptually sound. Standardisation improves interoperability, reduces maintenance burdens, and enhances training efficiency. If implemented consistently, the transformation program will provide a balanced mix of platforms suited to Malaysia’s needs: sea control in key areas, maritime security operations, and humanitarian assistance and disaster relief (HADR).
Subsurface capability is another critical pillar. Malaysia currently operates two Scorpène-class submarine submarines, which provide strategic deterrence disproportionate to their numbers. Submarines complicate adversary planning, enhance sea denial, and contribute to intelligence gathering. Sustaining and eventually expanding this capability will be essential if Malaysia wishes to preserve strategic ambiguity in contested waters.
However, ships alone do not constitute maritime power. Naval modernisation must be integrated with maritime domain awareness (MDA). This is where the United States has played a significant role in boosting the maritime domain awareness’ capability of Malaysia.
In 2024, the United States handed over three Indonesian-built CN-235 aircrafts belonging to the Royal Malaysian Air Force, which have been converted with grant funding by the United States, to maritime surveillance configuration. Western defence officials have also privately shared that the US had trained Malaysian personnel in maintaining these aircraft.
Further back in 2020, the United States assisted Malaysia in building up its unmanned system capability by donating six ScanEagle unmanned aerial vehicle (UAV) units to the Royal Malaysian Navy. Unmanned systems offer cost-effective ways to monitor the vast maritime spaces of the Malaysian EEZ.
Modern navies require credible missile capabilities to strengthen deterrence, and Malaysia’s decision to acquire the Norwegian Naval Strike Missiles and Turkish ATMACA is a step in the right direction. These systems will replace the ageing Exocet MM40 Block II missiles that have been in service for nearly three decades, restoring the Royal Malaysian Navy’s ability to impose credible costs on any hostile actor.
Although operating two missile types raises questions about interoperability and logistics, the decision reflects strategic prudence. Diversifying suppliers reduces overdependence on a single source, mitigates supply-chain and political risks, and strengthens Malaysia’s bargaining position in future defence procurements.
There is also a domestic dimension. Public support for defence expenditure depends on trust that funds are used effectively and transparently, a point clearly made by Malaysian Prime Minister Anwar Ibrahim in January 2026. The controversy over the LCS program a few years ago is a prime example – 65% of the allocated budget of more than USD$2 billion was paid to the builder, even though none of the six warships ordered had been completed or delivered to the Malaysian navy. When Malaysians understand that their tax money is spent wisely on defence, strong domestic support of naval modernisation will naturally follow suit.
Finally, Malaysia must view naval modernisation as a long-term national project, not a political cycle initiative. Capability development spans decades. A bipartisan consensus on core defence priorities would provide stability and signal seriousness to partners and potential adversaries alike.
For a maritime nation at the crossroads of global trade, naval modernisation is not optional. It is the keel that will steady Malaysia through uncertain waters.
