By Nigel Cory

The Malaysian military deployed soldiers, vehicles, and aircraft as part of Malaysia’s response to the incursion into Sabah of hundreds of militants from the southern Philippines in early 2013. Photo courtesy of Wikimedia Commons user CEphoto Uwe Aranas, used under a creative commons license.

Malaysia’s national security focus is shifting to its eastern state of Sabah, evidenced by the money, personnel, and equipment allocated to the state in the 2015 defense budget. This shift comes in response to incidents along Sabah’s long and porous maritime border with the insecure islands of the southern Philippines. It also belies the deep distrust between the two neighbors over border issues. Malaysia’s interests in the South China Sea also come into play given that the realignment of men and materiel will allow greater force projection into the area.

Malaysia’s defense forces have been sorely tested in recent years. The disappearance of Malaysia Airlines Flight 370 in the southern Indian Ocean raised questions about radar coverage and Malaysia’s limited ability to respond to maritime incidents. Its lack of maritime surveillance aircraft meant Malaysia had to cede authority to Australia, China, and the United States in conducting the search, prompting the Malaysia Air Force to request the procurement of maritime patrol aircraft. However, it is in Sabah that Malaysia’s defense and security forces face their most serious challenges.

Insecurity along the Malaysia-Philippines border has long been a serious bilateral issue. Abu Sayyaf’s kidnapping of 21 tourists from an island resort off Sabah’s east coast in 2001 spurred Malaysia into spending more on border security in the area. The threat is difficult to counter as the militants typically use small, fast boats to conduct operations inside Malaysia before disappearing back to the Philippines.

Security incidents originating from the nearby islands of the southern Philippines continue to cause major headaches. In March 2013, 100 armed militants from the Philippines’ Sulu Archipelago took over a town in Sabah as part of an effort to revive a historical claim to the state by the sultan of Sulu. Malaysia had to use a large-scale military assault, including air strikes, to oust the militants. The subsequent deployment of more forces under the newly created Eastern Sabah Security Command off the state’s east coast in March 2013 has failed to stop incursions. So far in 2014 there have been four kidnap-for-ransom incidents in Sabah.

To combat these threats despite Malaysia’s tight fiscal situation, Prime Minister Najib Razak announced in October a 10 percent increase in the defense budget to $5.4 billion. This includes funding for two new Sabah-based battalions (with a total of 1,280 personnel), land and sea-based police and military outposts, radars, and an airfield upgrade.

While the defense procurement and research budget also increased 6 percent, to over $1 billion, the government did not budget for any of the many big ticket defense purchases requested by the Malaysian defense force, including replacements for its aging Russian-built MiG-29 fighter jets, due to retire in 2015. Maritime surveillance aircraft, attack helicopters, and other equipment would help Malaysia focus on Sabah and broader security issues, including the South China Sea.

Malaysia’s interests in the South China Sea are also in focus as the budget funds the permanent relocation of 19 multirole light combat fighters to the island of Labuan, which faces the South China Sea on Sabah’s west coast. This deployment allows both a rapid response to any further land incursions in Sabah and the ability to monitor the eastern part of the South China Sea, where Chinese naval ships undertook operations at Malaysia’s James Shoal in 2013 and 2014.

Labuan was also the airfield that reports, since walked back by Malaysian officials, suggested Kuala Lumpur had offered to host U.S. Navy P-8 surveillance aircraft. Nonetheless, it appears that Malaysia has agreed to allow U.S. surveillance aircraft to operate out of Labuan and other airfields on a case-by-case basis.

The United States is in a good position to help Malaysia’s realignment. U.S. defense secretary Chuck Hagel and Malaysian defense minister Hishammuddin Hussein announced in August 2012 that the United States and Malaysia were discussing how to expand and upgrade the chain of eight coastal surveillance radars along Sabah’s coast that the United States has already helped construct. Malaysia’s decision to setup a marine battalion, modeled off the U.S. Marines, to station on a new base at Bintulu in the South China Sea also opens up a range of opportunities for joint training.

The United States and its partners also need to work behind the scenes with Malaysian and Philippine leaders on ways to build genuine trust and cooperation. Distrust over border issues and accusations of internal meddling runs deep between the two, despite Malaysia’s recent role in facilitating peace between the Moro Islamic Liberation Front and the Philippine government. Finding ways to bridge long-lingering feelings of distrust will not be easy, but it is necessary as this lack of trust stands in the way of greater cooperation both along the shared border and in maritime, defense, and security issues more broadly.

Mr. Nigel Cory is a researcher with the Sumitro Chair for Southeast Asia Studies at CSIS. He previously served as an Australian diplomat in Malaysia and the Philippines.