Malaysia Unveils Ambitious Defence Reform with Drones and Lasers

Malaysia is set to enhance its national defence capabilities by developing advanced technologies, including “kamikaze drones” and laser systems. The announcement comes as part of a broader initiative under the National Defence Industry Policy (NDIP), which aims to reduce dependence on foreign defence technology and strengthen local industrial capacity. Defence Minister Mohamed Khaled Nordin outlined these plans during a launch event on January 21, 2024, emphasizing the need to adapt to evolving security challenges.

The NDIP is designed as a long-term strategy to foster domestic expertise in defence technology. Key components include the production of loitering munition systems, or “kamikaze” drones, and a locally-developed satellite that will provide defence services once the current contract concludes in 2029. Additionally, Malaysia plans to establish a laser defence system, passive radar systems, and defence simulators to enhance its operational capabilities.

Under the new policy, the government is instituting a requirement for at least 30 percent of local content in defence procurements. Maintenance, repair, and overhaul (MRO) services must be conducted by Malaysian companies, except during warranty periods. Contracts can be terminated if companies do not meet standards for innovation, cost efficiency, and capability building. Khaled stated that this initiative is crucial for transforming public defence spending into sustainable industrial capabilities.

Malaysia’s defence budget for 2026 is set at RM21.74 billion (US$5.4 billion), reflecting a 2.9 percent increase from the previous year. Of this amount, RM6 billion is dedicated to acquiring military assets and equipment. Khaled highlighted that the NDIP’s success will depend on sustained budget support, robust institutional leadership, and advances in research and development (R&D).

Strengthening Governance and Combatting Corruption

The NDIP also aims to enhance governance within the defence sector. This initiative aligns with the government’s commitment to address corruption, which has been a significant issue in recent years. Khaled referred to corruption as a “cancer” affecting the credibility of the defence industry, especially following scandals involving two former high-ranking military officials. Nizam Jaffar, the former armed forces chief, faces charges related to accepting nearly US$190,000 in bribes, while Muhammad Hafizuddeain Jantan, a former army chief, is implicated in money laundering activities.

To effectively implement the NDIP, Khaled aims to empower the Defence Industry Council, which will serve as the central coordinating body for procurement, industrial development, and national defence needs. Established in 1999, the council comprises government officials and private sector representatives. A more robust council is essential for providing strategic direction and ensuring cohesive decision-making across various agencies involved in defence development.

Additionally, the government will enforce the Industrial Collaboration Programme (ICP) more aggressively, compelling foreign companies engaging in government tenders to contribute to the local economy and job market. Khaled announced the launch of a new defence industry portal, which will facilitate applications for ICP participation, R&D grants, and technology offerings.

The NDIP represents a significant shift in Malaysia’s approach to defence, moving towards self-reliance and sustainability in its defence industry. As the nation navigates a landscape marked by complex and uncertain security realities, these initiatives reflect a commitment to strengthening Malaysia’s sovereignty and enhancing the capabilities of its armed forces.