Malaysia is reacting to crises, not preparing for them

Malaysia’s decision in mid-July 2026 to study a national petroleum reserve is a belated move.

It comes only after the military crisis in West Asia, which has been worsening since February.

The timing shows a deeper problem in government: the absence of proactive strategic foreight. It reacts to crises instead of preparing for them.

A petroleum reserve is a sensible safeguard for the country’s energy security. But building one only after a shock has hit points to a wider failure of foresight in government.

Malaysia needs to build real resilience against global shocks. To do that, it must move beyond the linear planning models used by the Economic Planning Unit (EPU). It should set up an empowered strategic foresight body, similar to Singapore’s Centre for Strategic Futures (CSF).

Reacting, not planning ahead

The EPU has long relied on an input-output-outcome-impact model to shape policy. This works well for infrastructure and budgets. But it is not built to handle fast-moving, unpredictable crises.

Global crises rarely unfold in a straight line. Most move quickly, change rapidly and are hard to predict.

The crisis in West Asia, like other volatile markets, should not have caught Malaysia off guard. The push to study a petroleum reserve only began once the crisis had deepened.

This reactive approach shows there is no dedicated system for scanning the horizon for risks. There is no standing list of possible future scenarios either.

So the government ends up managing crises instead of seeing them coming. That leaves the country exposed to sudden supply shocks and price swings (Schwartz, P, 1996).

Singapore offers a sharp contrast. Its CSF was set up in 2009 within the strategy group of the prime minister’s office. It exists to avoid this kind of institutional blind spot.

The CSF scans continuously for emerging risks. It gives ministries an early warning system, so they share a common picture of what may be coming (CSF, 2023). By building foresight into top-level decisions, Singapore makes sure its policies are planned well and discussed in advance.

Malaysia has no equivalent body. There does not appear to be a unit that pulls together scattered data on global trends and supply chain risks into one clear picture. Without that, the cabinet is left weaker in its decision-making. It ends up relying on analyses after a shock, rather than formulating strategy before one.

The risk to critical minerals

The lack of foresight is not just about oil. It also threatens Malaysia’s control over other key resources, especially rare earth elements.

These minerals matter, so the country needs its own critical mineral framework. Policymakers must understand global supply crises and the global politics tied to these resources. Such a framework should not be dictated by other countries with their own neo-imperial interests.

There is a real risk of resource colonialism dressed up as foreign investment. Malaysia should be careful about handing over the processing of its rare earth elements to more technically skilled advanced ecosystem, such as Australia’s or China’s. This needs strong safeguards (Golev et al, 2014).

Foreign technical expertise can help build local capacity. But if Malaysia gives up control over the full production chain, it risks its own national security.

The critical mineral framework must protect the country’s strategic independence. Foreign players should be prevented from monopolising the value chain of Malaysia’s mineral wealth.

A foresight unit should also stress-test and carefully evaluate long-term plans. These include the coal exit and the plan to bring in nuclear power by 2050. It should test these against possible shocks, such as liquefied natural gas price spikes, delays to the Asean power grid, export controls from major powers, environmental and safety considerations, or a change of government mid-transition.

This calls for a clear grasp of global supply chain politics. Malaysia, not other countries, should set the terms of any technology transfer (Ali et al, 2017).

Building foresight into government

Fixing this requires a structural shift in the civil service.

A new Malaysia strategic futures unit could run a civil service rotation programme. This would train foresight-literate officials across the EPU, the Ministry of Investment, Trade and Industry, the Ministry of Finance, and the investment offices of government-linked investment companies.

Scenario planning cannot live only inside this new unit. It has to be embedded in the officials who carry out measures to safeguard the nation from what the unit foresees.

That foresight unit needs a formal mandate. It should scan the horizon for early signs of change across global politics, the economy and technology. It should also keep a standing library of possible future scenarios, updated regularly, so ministries can test their policies against different outcomes (Schoemaker, PJ, 1995).

Crucially, it must have the authority to put alternative decision papers in front of the cabinet before a shock hits, not after.

Malaysia needs a strategic foresight unit with a clear mandate to scan the horizon. It needs a robust scenario-planning library too, and the authority to guide cabinet decisions in advance.

Only this kind of forward planning can protect the country’s energy and mineral resources in an increasingly unstable world.

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