A BRICS membership has its benefits, but Malaysia has also benefitted from keeping an active neutrality since independence.
THERE are many advantages to being actively neutral at a time of heightened geopolitical tensions, and Malaysia should not just leverage the BRICS group of emerging economies to achieve its goals or aims.
The ability to manoeuvre at the global or regional levels should not be hindered by membership in any group, while at the same time continuing to pursue trade and investment initiatives that contribute to domestic economic development.
Due to conflicts around the world, it is all the more important to avoid the division of the world into opposing camps as occurred during the Cold War period just after the Second World War.
How important is it to join BRICS in order to ensure economic and political cooperation? Would membership be relevant to Malaysia’s claims in the South China Sea, where major powers seem poised for a war in the not-too-distant future?
BRICS may have benefits for Malaysia, but it’s unclear how it can avoid being “defined by how major powers see the world”, as Prime Minister Datuk Seri Anwar Ibrahim stated in a Facebook post on June 7.
Joining BRICS may lead Malaysia towards defining itself as one group of major powers against another. Since independence, Malaysia has maintained strong and fruitful relationships with both China and the US. Both countries are major trade partners and investors in the country. What has changed? Where does Malaysia stand?
Joining BRICS is not all about trade and investment. It’s a political decision that can either boost Malaysia’s influence among South-South governments or put the country in a difficult position as the group has different aims even among members.
Malaysia must be cautious of taking sides within the group, as there is also intra-group rivalry, for example, between China and India, who have overlapping claims in the high Himalayas that have recently turned violent.
Problematic issues include how to reconcile violations of international law, whether they occur in the Gaza Strip by Israel or in Ukraine by Russia, a BRICS member.
Rajesh Ramachandran, a senior lecturer at Monash University’s school of business, points out that BRICS membership could offer Malaysia a platform to counterbalance China’s dominance in the region, due to India also being a member of the group.
He argues that India’s membership also offers Malaysia opportunities for economic diversification, technological collaboration and strengthened cultural ties.
“In this multifaceted geopolitical environment, Malaysia’s bid to join BRICS is a strategic effort to balance its economic, security and moral imperatives. By aligning with a bloc that includes both its largest trading partner and a key regional competitor, Malaysia aims to secure a more balanced and resilient position on the global stage,” Rajesh says.
There has been a longstanding focus among BRICS members on dedollarisation, or reducing the dominance of the US dollar in trade and finance.
However, many of the countries who have applied to join the group have inherently volatile currencies as a result of unstable economies, and the lack of financial infrastructure makes the process expensive, inefficient and complicated.
The BRICS central banks and finance ministers, who will make a report on the use of non-US dollar currencies and financial infrastructure at the BRICS summit in Kazan, Russia in October, may be able to provide a more detailed explanation.
However, Malaysia has other avenues to pursue its trade and investment goals despite the economic weight and influence of the BRICS economies. In the absence of BRICS membership, Prof Sufian Jusoh believes the country should focus on overall development objectives.
“It is worth considering joining BRICS if Malaysia can assure itself that it can benefit from a greater inflow of high technology, high quality investments from BRICS members, without interfering in the existing and potential investments from non-BRICS, especially the G7 countries,” he points out.
Sufian says the country can also focus on Asean and retain the policy of active neutrality as part of its foreign policy.
He notes that two high-income and highly competitive economies, Singapore and Switzerland, adopt active neutrality and in the case of Singapore, it leverages on free trade agreements (FTAs) to engage with the rest of the world.
“Malaysia, as the incoming chair of Asean, should promote Asean centrality in engaging with the rest of the world, whilst providing the much-needed leadership for Asean,” he adds.
Centre for Market Education CEO Carmelo Ferlito says Malaysia can benefit more by taking a multilateral approach through FTAs.
“This will give the country a higher degree of freedom of manoeuvre, while really pursuing free trade (which ultimately benefits the whole nation both in terms of import, export and manufacturing), rather than taking an extremely risky approach on the wider geopolitical scenario,” he says, adding that promoting free and fair trade is the most effective tool to lasting peace.
A BRICS membership has its benefits, but Malaysia has also benefitted from keeping an active neutrality since independence.
The rising geopolitical tensions in the region bring to mind Mohammad Hatta, a former Indonesian vice- president. A speech he gave in September 1948 outlined Indonesia’s foreign policy as “mendayung antara dua karang,” or rowing between two reefs, or steering a course between the US and USSR.
Today, Malaysia has to steer a course between China and the US.
This article first appeared in Star Biz7 weekly edition.
