BRICS membership offers Malaysia enhanced trade and economic growth, say economists

 

Huge markets in China, India, Africa and the Middle East will be opened up with membership of the BRICS economic grouping. (AP pic)

PETALING JAYA: 

Malaysia’s bid to join the BRICS economic grouping could unlock opportunities in emerging markets, paving the way for growth in sectors like aerospace, electric vehicles, and finance, according to economists.

Universiti Malaya economist Rajah Rasiah said there would be easier access to the markets of BRICS members — Brazil, Russia, India, China, South Africa, Saudi Arabia, Egypt, the United Arab Emirates, and Ethiopia.

Turkey is also poised to join the bloc, he said.

“Malaysia can also participate in the infrastructure loans from the New Development Bank that was established in 2015. 

Given that trade transactions in the grouping will use their own currencies, especially the Chinese Yuan, it should help reduce dependence on the US dollar,

 he told FMT.

In July, Prime Minister Anwar Ibrahim said that Malaysia had applied to join the BRICS intergovernmental organisation, currently chaired by Russia.

Rajah said that Malaysia could also seek greater collaboration in aerospace and arms sectors as well for other high-tech industries, such as electric vehicles from China, light aircraft from Brazil, as well as heavy industry and fertilisers from Russia.

Malaysia can also gradually seek greater imports of cheaper oil and gas from Russia, especially so when the country’s own oil reserves are likely to be exhausted by 2035,

 Rajah added.

When asked how Malaysia could better prepare for membership in BRICS, Rajah said that the country already has a solid foundation through its relations with other nations, which support its interests.

As with the Russia-Ukraine war, while seriously calling for its end, Malaysia has taken a neutral stand calling for negotiations to solve it,

 he said.

He also pointed out that Malaysia has solid military cooperation with the US, including joining the superpower on security exercises, and will continue to work with them on economic and political fronts.

For instance, Malaysia continued to take part in the 2024 RimPac international maritime military exercise despite pressure to withdraw because of Israel’s participation in the event.

American economic interests in Malaysia have not waned since Malaysia chose to stay neutral on international matters while supporting the Palestinian cause,

 Rajah said.

Rajah likened the situation to the 1960s and 1970s, when Malaysia condemned apartheid rule in South Africa while the US and Britain supported the government there.

American investment and trade with Malaysia remains strong though it has fallen since its peak in the 1970s and 1980s. Strong diplomatic relations remain important and Malaysia has a history of doing well on this front,

 he said.

Economist Geoffrey Williams also said that Malaysia’s efforts to join BRICS is a step in the right direction, noting that the original five member countries (Brazil, Russia, India, China, and South Africa) have around 45% of the global population and 27% of the global gross domestic product at US$28 trillion.

This means greater access to huge consumer and business investment markets in China, India, Africa and the Middle East, he said.

This market access offers massive potential for trade, investment, and economic growth.

Beyond consumer sales, Williams added, Malaysia’s oil and gas and financial services sectors could see expansion through cooperation with other BRICS members. - FMT