Malaysia’s BRICS move and US-China rivalry

 

When Prime Minister Anwar Ibrahim met Russian President Vladimir Putin on Sept 4 in Russia to discuss, among other things, Malaysia’s application for admission to the BRICS intergovernmental organisation, some Malaysians were skeptical and even questioned the wisdom of meeting Putin.

Joining BRICS, and definitely meeting Putin, was risky as it could upset the US and western nations, some said.

But Anwar does not think so. He thinks it is beneficial to be friendly with Russia and to join BRICS – an informal organisation comprising Brazil, Russia, India, China, South Africa, Iran, Egypt, Ethiopia and the United Arab Emirates.

It was reported in July that 22 countries had applied to join BRICS – including, I assume, Malaysia and Thailand – and that another 20 plus had expressed interest in joining the group which was established in 2009 by Brazil, Russia, India and China.

It’s interesting to note that the founding members did not coin the acronym BRICS. The credit for that, I learnt, goes to Goldman Sachs banker Jim O’Neill who, in 2001, lumped Brazil, Russia, India and China into the acronym BRIC when predicting that these nations would significantly impact the global economy in the coming years.

And in 2006, Goldman Sachs opened a BRIC investment fund pegged to growth in these four nations.

I suppose this attention to their possible joint clout caused the leaders of the four nations to come together to form the informal club. South Africa joined in 2010, and contributed the 

S

 to BRIC.

Goldman Sachs closed the BRIC fund in 2015 due to its low returns but BRICS continued crawling along lazily. Until recent times, that is. There has been a sudden spurt of interest in the group in the past year or so.

For a while now, many nations in the South and elsewhere have questioned the shortcomings of a world order designed and conducted by the US and the West, including their giant transnational corporations.

There is today a pushback against globalisation, where domestic considerations are sometimes expected to become subordinated to international institutions and systems that are seen as favouring Western or developed nations.

Increasingly BRICS is being seen as an organisation that could challenge a world order established and dominated by the US and its Western allies.

I belief this newfound interest in BRICS – both by the West and South – is due largely to a move by BRICS nations to develop a new reserve currency for trade among themselves and others who are interested in doing so.

Such a currency, they hope, will help them become independent of the US dollar and serve their economic interests more effectively.

There is talk that this currency – called the Unit – may be unveiled at the forthcoming summit in Kazan later this month. However, this has not been confirmed.

Those nations which are so fed-up with the dominance enjoyed by the US dollar – the world’s primary reserve currency – that they want to dethrone it to hurt the US may want to join any organisation that allows for de-dollarisation.

The US itself is concerned about the impact of such a move on its world economic dominance and its domestic economy.

Also, although it remains economically and militarily the strongest nation, the US’ influence is perceived to be waning. It is no longer seen as the superpower it once was, or the guardian of human rights.

Today we live in a multipolar world, with China aggressively asserting itself, rising nationalism and many nations banding together to safeguard their mutual interests.

These, I believe, are among the main reasons fuelling the popularity of BRICS.

I would think it is a cry for a greater say in the global theatre so that the interests of the small players are not kicked into the drain.

The possible impact of BRICS can be seen in the fact that it currently has almost 45% of the world’s population and accounts for a quarter of the global economy. If more nations join, BRICS can become a formidable grouping, provided members can manage the many differences in interest and approach they individually bring to the table.

Anwar said recently that Malaysia had accepted Russia’s invitation to participate in the forthcoming BRICS Summit in Kazan, Russia, on Oct 22-24.

Malaysia’s application is expected to be approved soon. Anwar has informed, or held discussions with, the leaders of China, India and Brazil on joining the group.

Anwar said membership would offer bigger economic opportunities for Malaysia and that cooperation between the Global South countries would be highly beneficial.

It is a calculated move, given the rivalry between the US and the West on one side and China and Russia on the other.

Indonesia and Saudi Arabia were earlier invited to be members of BRICS but have yet to join, bringing to mind the dictum of that great historian and author professor C Northcote Parkinson, who was once lecturing at the University of Malaya in Singapore: 

Delay is the deadliest form of denial.

It is possible that Indonesia and Saudi Arabia do not want to join yet another grouping. It is also possible that they do not want to offend the US.

But Anwar is going ahead.

Perhaps he is borrowing from the playbook of India’s Prime Minister Narendra Modi who has masterfully maintained sovereignty while having strong relations with both the US and its bitter rival Russia, and also a good standing – diplomatically and economically – with China.

Modi continues to woo investments from both China and the US, and to sit with their leaders in separate groupings. He also continues to trade with Russia despite sanctions by the West against Moscow after it invaded Ukraine. In this, he is taking care of the interests of his nation while being cordial, if not chummy, with everyone.

But then, India is a major global player and is predicted to become the world’s third largest economy before 2030, even as early as 2027.

Having said that, I must note that Malaysia has always endeavoured to be friendly with all nations, without compromising on its independence, from the time of first prime minister Tunku Abdul Rahman.

I suspect joining BRICS is also Anwar’s way of telling the US that while it appreciates the friendship, Malaysia wants to chart its own course and not be beholden to any single power.

Certainly Malaysia’s trading opportunities will expand with membership in BRICS, especially if another 20 or more countries were to join, as indicated. Members could also benefit if BRICS becomes a more influential global player, even possibly working on helping reset the current world economic order.

Working in BRICS, Malaysia can add to the voices calling for a fairer international financial system.

Malaysia is a small economy with a relatively small domestic market. As such, external trade becomes a key economic driver. Already, its membership in Asean offers it a large population base, and membership in BRICS will surely expand its market further.

However, there is a possibility that an expanded BRICS will become – like the United Nations – too clunky to be effective. But that’s another story.

The danger is that BRICS may be dominated by one or two nations and morph into a gawky giant bent on checkmating the US and the West.

China, Russia and, to some extent, Brazil are not exactly bosom buddies of the US and the West; and new member Iran is a clear enemy of the US.

Also, China must be hoping to increase friends, flex its muscles and attempt to dominate BRICS in its power play with the US.

This is where Malaysia, together with nations such as India and Thailand, can play the role of keeping the grouping grounded.

Being part of organisations such as the Asia-Pacific Economic Cooperation forum and Asean, and soon BRICS, will only give Malaysia more friends and trading partners. And perhaps a better opportunity to influence global events – however small. - FMT

The views expressed are those of the writer and do not necessarily reflect those of MMKtT.