His announcement comes on the heels of Thailand announcing in May it was applying to join the bloc of rising economies led by Russia and China to challenge the world order dominated by the US and its Western allies.
In light of heightened tensions between the US, and Russia and China, some are questioning whether Malaysia’s intent to join BRICS will cause the US to retaliate against the country.
FMT Business breaks down Malaysia’s decision, and the potential risks of seeking membership in BRICS.
Geopolitics or economics?
Conventional wisdom says Malaysia joining BRICS will unlock benefits such as access to development finance, and increased trade and investment given that BRICS will eventually become the world’s pre-eminent economic bloc, surpassing the G7.
While that’s likely true, it’s more than just that. Geopolitics appear to feature significantly in the equation. Clearly, there is disquiet within the Malaysian government with the
world order where the US has been the undisputed hegemon since the collapse of the Soviet Union over 30 years ago.unipolar
However, its dominance has been challenged in recent years by a resurgent Russia and the economic powerhouse that is China, ratcheting up tensions between the two blocs.
Foreign Minister Mohamad Hasan said recently that Malaysia’s desire to join BRICS is to ensure the country
.does not contribute to a unipolar world
he added.BRICS is a platform for us to view the world as not overly tilted towards any side or managed by one entity alone. BRICS is a coalition of major countries, a loose bloc that can amplify our voice so that Malaysia can be heard on many platforms,
Advocating de-dollarisation
When announcing Malaysia’s plan to join BRICS, Anwar alluded to problems Malaysia faces in a world dominated by the US dollar.
He also backed comments by Brazilian President Luiz Inacio Lula da Silva criticising the dominance of the US dollar in international trade.
He cited the example where Malaysia had the highest investment ever last year, but the currency was still attacked.
lamented Anwar, a proponent on the need to de-dollarise and set up an Asian Monetary Fund.Why? A currency that is completely outside the trade system of the two countries and is irrelevant in terms of economic activities, has become dominant purely because it is used as an international (reserve) currency,
Critics claim Washington has abused its privilege of being the custodian of the world’s pre-eminent reserve currency by weaponising the greenback through increasing use of unilateral sanctions.
Why the US can’t ‘penalise’ Malaysia
Undoubtedly, there is an element of risk in Malaysia aspiring to join BRICS. The US and its allies in the European Union (EU) will surely not be pleased that Malaysia plans to join their adversaries’ camp.
The US will have no qualms sanctioning Malaysia or any other country that falls out with it. In fact, it has already done that. Last December, the US imposed sanctions on four Malaysia-based companies, accusing them of providing components for Iran’s weapons programme.
In early May, Washington sent the US Treasury department’s top sanctions official Brian Nelson to Kuala Lumpur to caution the country against becoming a jurisdiction where Palestinian group Hamas can raise funds and move money. He also raised the issue of Malaysia-based service providers allegedly enabling Iran to move its oil.
Certainly, being an ardent advocate for de-dollarisation does not endear Anwar or Malaysia to the US, whose hegemony is predicated on the US dollar being the world’s reserve currency.
The key question is whether all this will put Malaysia in the crosshairs of the US empire. As a superpower, it has many tools in its locker, apart from sanctions, if it wants to penalise any country. So, Malaysia does have to tread carefully to avoid unintended consequences.
Nevertheless, the US is unlikely to impose sanctions or other measures against Malaysia anytime soon. Here are three key reasons why:
Malaysia’s neutrality
Malaysia’s avowed position of neutrality enables it to forge good relations with all the great powers. This also aligns with Asean’s stance based on its 1971 declaration that Southeast Asia is a zone of peace, freedom and neutrality (Zopfan).
Joining BRICS does not mean Malaysia is tilting towards China or Russia. Far from it, given the country participates in various trade pacts such as the Asia-Pacific Economic Cooperation (Apec), the Regional Comprehensive Economic Partnership (RCEP), and the Indo-Pacific Economic Framework.
Apec promotes free trade throughout the Asia-Pacific and counts the US, Russia and China as members while RCEP is a free trade agreement among Asia-Pacific countries with China as the leading player. Crucially, Malaysia has signed up for the Indo-Pacific Economic Framework, the brainchild of US President Joe Biden who launched it in 2022.
So, the move to join BRICS does not signal that Malaysia is burning its bridges with the West and turning towards China and Russia.
Geographically and geopolitically important
Malaysia is blessed with being in a strategically important geographical location. It is one of the littoral states, along with Indonesia and Singapore, adjacent to the Malacca Strait, the world’s busiest waterway used by about 90,000 ships each year.
The strait, which links the Indian and Pacific Oceans through the South China Sea, is a critical chokepoint for the transportation of oil and gas from the Middle East to major markets in Asia. About 60% of global maritime trade passes through this region.
As per the UN Convention on the Law of the Sea, the strait’s safety administration, including the maintenance of navigational aids, is the responsibility of the three countries.
Perhaps more importantly, Malaysia is a key player in the geopolitics of the South China Sea. Asean countries including Malaysia, Brunei, Indonesia, the Philippines, and Vietnam are at odds with Beijing’s claim over the vast majority of the South China Sea.
The US may be hoping that Malaysia becomes like the Philippines, which has been embroiled in a deepening row with China over the territorial waters.
Washington would no doubt hope that Malaysia will become more belligerent towards China over the South China Sea claims, though it has so far not been inclined to do so.
Given that the US would want to keep Malaysia onside as regards the South China Sea vis-à-vis China, it may not want to antagonise Kuala Lumpur over its membership of BRICS.
It is also worth noting the US and Malaysia elevated their bilateral relationship to a
during President Barack Obama’s visit to Malaysia in April 2014.comprehensive partnership
The Asean factor
Though a relatively small country, Malaysia has been able to punch above its weight especially in regional matters.
It is one of the five founding members of Asean and has historically shaped key Asean efforts to manage shifting major power dynamics among the grouping’s diverse states.
Crucially, Malaysia will be assuming the chairmanship of Asean in 2025, and this will shine the spotlight on its regional leadership role.
In particular, the South China Sea remains one of the important issues on the Asean agenda, and Malaysia as the chair can influence the direction of discussions on how to resolve the problem, as well as on other key issues.
Given its prominent position within Asean, and its chairmanship next year, the US will unlikely want to rock the boat with Malaysia just because it is gravitating towards BRICS. - FMT
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