Last year will go down as a watershed for the partnership between Malaysia and Bahrain, although official relations between the two date back to 1974.
As the first Bahraini monarch to visit Malaysia, His Majesty King Hamad made a historic trip there in April-May 2017, resulting in Manama announcing its plans to open an embassy in Kuala Lumpur.
Last month, Malaysia’s Prime Minister Dato Sri Najib Tun Razak paid a three-day visit to Bahrain, where he became the first foreigner to be conferred with the King Hamad Order for Development.
Manama along with other GCC capitals is investing in deeper links with dynamic and fast growing Southeast Asian economic powers.
Despite lacking the natural resource wealth and larger population and geography of some of its neighbours, Bahrain’s strategic location in the Arabian Gulf and its unique business climate position the archipelago state as a “gateway to the Gulf” for Malaysia and other Association for Southeast Asian Nations (Asean) members.
As pioneers in Islamic finance, Bahrain and Malaysia continue to collaborate in this domain.
By nurturing their country’s Islamic finance sector – in addition to real estate, aviation, and communications – the Bahrainis diversified their economy beyond oil decades ago without the natural resource wealth of their neighbours, establishing Manama as a Middle Eastern financial hub.
Malaysia, which hosts the Islamic Financial Services Board, has earned widespread recognition for its “thought leadership in Islamic finance”.
Like Bahrain, the Asean country developed a vibrant Islamic finance sector without the wealth of the richest Gulf states.
Beyond Islamic finance there are other sectors where Manama and Kuala Lumpur are partnering. Malaysian construction firms have played crucial roles in Bahrain’s development.
Other sectors where officials in the two countries are optimistic about deeper co-operation include halal products, tourism, logistics, manufacturing and energy.
Bahrain and Malaysia also see certain security threats similarly.
The radical Bahrainis and Malaysians who joined Daesh’s ranks in Syria and Iraq give Manama and Kuala Lumpur further incentive to enhance co-operation in the counter-terrorism sphere.
Bahrain and Malaysia both belong to the Islamic Military Counter Terrorism Coalition, the Organisation of Islamic Co-operation and the coalition fighting in Yemen against Iran-allied rebels.
Last month, Bahrain hailed Malaysia’s “phenomenal” role in “supporting safety and security in the region.”
Yet Malaysia is keen on preventing the complications of Middle Eastern politics from interfering with the country’s ability to build stronger relations with all capitals in the Muslim world.
Building on its growing links with all Gulf countries, Malaysia has substantial potential to project more influence in Bahrain and other GCC states by attracting more capital and serving as a launch pad for investment throughout Southeast Asia.
Based on Malaysia’s Islamic identity, the country is well positioned over many of its Asian competitors to foster greater investment and trade with Bahrain and other Arabian monarchies.
In turn, the kingdom will offer Malaysia more opportunities to diversify its exports and economy at large while serving as a gateway to the Middle East.
Unquestionably, Bahraini-Malaysian relations have a long way to go in order to come close to reaching their full potential.
Nonetheless, visits by His Majesty and the Malaysian Prime Minister last year have paved the way for bilateral relations to flourish in the future.
(The author is chief executive of Gulf State Analytics, a Washington, DC-based geopolitical risk consultancy)