By Dr Paul Anthony Mariadas and Dr Uma Murthy, Lecturers for the School of Accounting and Finance at Taylor’s Business School, Faculty of Business and Law, Taylor’s University.
Malaysia, a fast-growing Southeast Asian nation, has often sought to strike a balance between maintaining good relations with Western nations while also fostering deeper connections with emerging economies. One avenue Malaysia is considering is closer engagement with BRICS (Brazil, Russia, India, China, and South Africa), a bloc of rapidly developing economies. This exploration reflects Malaysia’s desire to strengthen its global presence, diversify its economic partnerships, and pursue new avenues for development. However, the question of joining BRICS comes with both significant benefits and challenges.
One of the most significant benefits Malaysia could experience by joining BRICS is access to enhanced trade and investment opportunities. BRICS nations collectively represent over 40% of the world’s population and contribute about 25% of global Gross Domestic Product (GDP). Malaysia’s inclusion in this bloc could facilitate stronger economic ties with countries like China and India, both of which are already major trading partners.
Diversifying economic partnerships beyond traditional Western markets would allow Malaysia to reduce its reliance on a few trading partners, opening doors to larger markets. For instance, joining BRICS could mean more Malaysian exports to India and Brazil, boosting sectors like palm oil, electronics, and rubber.
Besides, Malaysia, as part of BRICS, would gain a louder voice in global economic governance. Malaysia’s participation could offer it a platform to influence global financial policy more effectively, especially concerning issues like international trade, climate change, and sustainable development. Additionally, Malaysia could play a pivotal role in ASEAN-BRICS cooperation, acting as a bridge between Southeast Asia and the BRICS bloc, thus enhancing its regional and international diplomatic standing.
BRICS established the New Development Bank (NDB) in 2014, which aims to provide financing for infrastructure and sustainable development projects in member countries and other developing nations. Malaysia, with its focus on improving infrastructure, reducing inequality, and promoting sustainable development, could benefit from access to NDB funding for crucial projects, especially in sectors such as public transport, healthcare, and green energy.
Malaysia could also tap into BRICS initiatives like the Contingent Reserve Arrangement (CRA), which aims to provide liquidity support to member nations during financial crises. This could serve as an additional financial safety net for Malaysia, enhancing its economic resilience.
By aligning itself with BRICS, Malaysia could benefit from technology transfers, research collaborations, and shared expertise in growing sectors such as artificial intelligence and renewable energy. This could enhance Malaysia’s own technological capabilities and help foster a knowledge-based economy.
Furthermore, BRICS is often seen as a counterbalance to the global dominance of the U.S. and European nations, representing an emerging multipolar world. By joining BRICS, Malaysia would align itself with countries advocating for a more equitable global order, which might be advantageous in negotiating international treaties or responding to global challenges. This could give Malaysia more autonomy in its foreign policy, allowing it to navigate between competing global powers more effectively.
However, one of the biggest challenges for Malaysia would be balancing its long-standing relationships with Western countries, particularly the U.S. and the European Union, with the interests of BRICS members. Countries like Russia and China, two key players in BRICS, are often seen as adversaries by Western powers.
Moreover, Russia’s global image has suffered due to its actions in Ukraine, leading to sanctions from Western countries. Close association with BRICS could inadvertently subject Malaysia to criticism or complicate its international relations, as it seeks to maintain a neutral stance in global conflicts.
While joining BRICS could help Malaysia diversify its economic partnerships, it could also deepen its economic reliance on China, who faces its own economic challenges, including slowing growth and increasing geopolitical tensions with the U.S. and its allies. Additionally, Malaysia would need to ensure that its sovereignty and economic independence are not compromised by becoming too reliant on Chinese investments or economic policies.
In addition, closer association with BRICS might lead to internal political divisions, especially if opposition groups view the move as aligning too closely with authoritarian regimes like Russia or China. There may also be concerns that joining BRICS could detract from Malaysia’s broader goals of promoting democracy, human rights, and transparency, values that some BRICS countries are criticised for not upholding.
Although joining BRICS might open up new markets, competing with larger and more developed economies like China and India could put pressure on smaller Malaysian companies, possibly leading to job losses or market share reduction in certain sectors.
Malaysia’s membership in BRICS also could potentially create tensions within ASEAN as some members might view Malaysia’s closer alignment with BRICS as a departure from the region’s non-aligned stance and collective economic interests. This could impact ASEAN solidarity and Malaysia’s ability to navigate regional diplomacy effectively.
In conclusion, Malaysia’s potential engagement with BRICS presents both opportunities and risks. Ultimately, Malaysia would need to carefully weigh the pros and cons, considering its long-term national interests, foreign policy objectives, and domestic priorities before making any decisions regarding BRICS membership.
