Saturday, July 13, 2024 | 09:22 WIB

Explainer: What’s behind Malaysia’s plan to join BRICS

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Jakarta, IO – Malaysian Prime Minister Anwar Ibrahim in a recent interview with Chinese news site Guancha expressed the country’s desire to join the grouping of five major emerging economies BRICS, which comprises Brazil, Russia, India, China and South Africa. The club was expanded earlier this year to include four new members: Egypt, Ethiopia, Iran and the United Arab Emirates. 

Seen as a counter to the West, BRICS has continued to grow and expand its influence in the world. Several other countries are said to be queuing up to join. In Southeast Asia, aside from Malaysia, Vietnam and Thailand are also said to be interested. 

So, why could possibly explain Malaysia’s bid to join the alliance? Here are some plausible reasons: 

1. Strategic importance of the Strait of Malacca. 

According to Hong Kong-based English language newspaper South China Morning Post, Wednesday (19/6), Anwar said Malaysia’s potential membership in BRICS would be of strategic importance given the Strait of Malacca’s position as an important shipping lane connecting the Pacific and Indian Oceans. 

2. Commitment to the Global South. 

Anwar also said that Malaysia is committed to the Global South, which refers to various countries around the world that are sometimes described as “developing,” “less developed” or “underdeveloped.” Many of these countries are in the Southern Hemisphere, largely in Africa, Asia and Latin America. He said he was relieved that the world was no longer unipolar, with BRICS providing a ray of hope that there are checks and balances in the world.

“We can no longer accept the scenario where the West wants to control the discourse because the fact is they are not colonial powers any more and independent countries should be free to express themselves,” Anwar said.

3. Support de-dollarization. 

Shankaran Nambiar, senior research fellow at the Malaysian Institute of Economic Research (MIER), welcomed Anwar’s statement. According to news portal Free Malaysia Today (FMT), Nambiar said that Malaysia’s decision to join BRICS shows that Asean countries are taking strategic steps towards the de-dollarization efforts. 

In an interview with Guancha, Anwar also echoed Brazilian President Luiz Inacio Lula da Silva who criticized the dominance of the US dollar in international trade. Anwar stated that Malaysia should explore de-dollarization and even supported the idea of the Asian Monetary Fund. 

For the reference, at the 42nd Asean Summit in Indonesia May last year, the 10-member bloc agreed to strengthen the use of local currencies in trade and investment. This move is seen as a strategy to shift away from the US dollar hegemony as the world’s reserve currency. 

So, what does Malaysia hope to gain from joining BRICS? Experts noted that as part of BRICS, Malaysia can diversify its strategic relationships, strengthen its economy, and give it a stronger voice on the global stage. 

Datuk Prof. Dr. Mohd Faiz Abdullah, chairman of the Institute of Strategic and International Studies Malaysia, said whether it concerns trade promotion, development funding through the New Development Bank (NDB), or even new currency arrangements, it is critical for Malaysia to be at the BRICS table. 

There are at least three benefits that Malaysia is poised to reap by joining BRICS: 

1. Economic impact. 

Mohd Faiz said Malaysia’s intention in joining BRICS should not be interpreted as a shift away from the country’s longstanding, traditional relationships, including with countries of the West. He noted that the Global South is a strategic reality that cannot be ignored, and such a move is not a zero-sum game. 

“Prime Minister Datuk Seri Anwar Ibrahim has iterated on various occasions, in the best traditions of our diplomacy, Malaysia will seek to harness the complementarities between our various ties,” he was quoted as saying by Malaysia’s news agency Bernama. 

According to Mohd Faiz, joining BRICS is a natural corollary to Malaysia’s current efforts to move the needle in the Global South agenda. “Building our ties with these key countries will make our economy more resilient.” 

2. Global influence. 

Malaysian Foreign Minister Datuk Seri Mohamad Hasan said Malaysia was currently analysing, monitoring and assessing the feasibility of becoming a BRICS member, should it bring substantial benefits to the country. 

He said three main factors formed the basis for Malaysia’s participation, namely the interests and benefits to be gained, as well as the impact of participation, particularly in providing a platform for the country to voice its aspirations in international issues.

“Through joining this bloc, Malaysia can effectively voice any issue on the international stage because such a collective voice is more impactful than acting individually,” he told the New Straits Times (NST). 

“It is not about boasting to become a BRICS member, but rather about the benefits, considering some member countries have exited the bloc after feeling it no longer serves a meaningful purpose.” 

3. Trade and investment. 

Economists believe that joining the BRICS group will help Malaysia further diversify its trade and investment, as well as enhance the nation’s access to broader market, boosting the economy. Renowned economist Prof Dr Geoffrey Williams highlighted the strategic importance of Malaysia in maintaining a diverse portfolio in trade and investment. He also emphasized the flexibility BRICS provides, enabling Malaysia to navigate geopolitical issues while maintaining its non-aligned and independent stance. 

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“So, flexibility is important and BRICS offers that. However, geopolitical issues will always be important too, as some countries might not like alignment with Russia but Malaysia is non-aligned and independent which means it can choose for itself who and who not to do business with,” he told the NST.

“The economic balance of power is shifting and so Malaysia as a small open economy must respond positively. There are trade and investment opportunities with BRICS and this will create demand for the ringgit and strengthen the currency over time.” (cms)

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