I've asked this before but third times the charm I guess!
Found in Leonard Thompson's A History of South Africa
Between 1995 and 1997, the principal sources of direct foreign investment in South Africa were the United States and, surprisingly, Malaysia, followed by Germany, the United Kingdom, and Japan.
What was the reasoning behind this? What made Malaysia such an interested part in the development of Mandela's new South Africa? Were there diplomatic ties between the country and the ANC before?
Were there diplomatic ties between the country and the ANC before?
Yes. The issue of Apartheid was a particular foreign policy priority of Malaysian PM Mahathir Mohamad throughout the 1980s and early 1990s. He used the platform of Commonwealth Head of State Meetings to push for international adherence to sanctions regimes against South Africa. At the same time, Malaysia used their Technical Cooperation Programme in order to provide technical assistance to ANC cadres in technical-administrative tasks (administration, health care, transport and agricultural development). ^1
Nelson Mandela's release from prison in 1990 signaled a shift in South Africa-Malaysia relations. Mandela would go on to visit Malaysia in a four day trip in November 1990. In return, PM Mohamad visited South Africa and met with PM De Klerk and Nelson Mandela.
However, I feel that the Malaysia-ANC connection is only part of the story.
Even before the Mahathir Mohamad premiership, Malaysia's foreign policy orientation had long expressed interest (since the 1960s) in "south-south cooperation". That is to say, post-colonial states providing developmental aid, technical assistance and trade deals; in order to reduce dependency of countries in the Global South on the highly developed countries of the West or the Soviet bloc. This foreign policy orientation was tied to Malaysia's active involvement in the Non-Aligned Movement, and the idea of South-South Cooperation was intended to strengthen non-aligned countries ability to navigate a neutral course in Cold War politics.
In the period from 1995-97, Malaysia was deep into a 15 year sustained expansion of the economy and sustained improvement in developmental indicators. The Petronas Towers were in the middle of construction.
Malaysia was engaged in heavy Foreign Direct Investment (FDI) in South Africa but also in other Sub-Saharan African countries.
So, I tend to see this heavy FDI as Malaysia's way of announcing to the international community that they were now a middle-income country, and that with new wealth they would expand the existing policy of providing developmental aid as part of south-south cooperation.
I think that Malaysia's out-sized role in South Africa from 1995-97 is a convergence of PM Mohamad's personal policy interest in fighting Apartheid, as well as the growing wealth of Malaysia facilitating the established policy platform of south-south cooperation.