PETALING JAYA: Joining intergovernmental organisation BRICS (Brazil, Russia, India, China and South Africa) can attract more foreign investments to Malaysia amid the intensifying economic race among global superpowers, say analysts.
Experts also said that by being part of BRICS, Malaysia could make its voice louder at the global stage.
Principal adviser for the Pacific Research Centre of Malaysia Dr Oh Ei Sun said trade and investments are urgently needed by Malaysia to boost its economy and it is only natural to join BRICS for that purpose.
“The US and other Western powers are always welcome to double their investments and trade volumes with Malaysia in order to achieve their desired goal of prying Malaysia away from China,” said Dr Oh.
Nusantara Academy for Strategic Research senior fellow Dr Azmi Hassan said when BRICS was first established in 2006, it was to counter and balance decisions made by the International Monetary Fund, World Bank and the Group of 7 (G7).
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“These three bodies are basically controlled by developed nations from mostly the northern hemisphere and the West. Therefore, Malaysia has no say in decisions made by these organisations.
“It is not that we are siding with China or Russia, but we need a platform where we can voice our opinions,” said Dr Azmi.
Malaysian Institute of Economic Research head of research Dr Shankaran Nambiar said joining BRICS augurs well for Malaysia in the long run because the new economic narrative for the next generation will be set by this intergovernmental organisation.
“As the PM mentioned – to have a global economy with a greater diffusion of power,” said Shankaran.
Institute of Strategic and International Studies (Isis) analyst Yanitha Meena Louis said the participation in BRICS is a good sign of how Malaysia views itself in the emerging regional order, as it shows the ability to balance relations with multiple regional stakeholders and partners.
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“Malaysia joining BRICS sends a key message that Putrajaya is ready to tackle the challenges of the day head on, on its own terms,” added Yanitha.
Asian Financial Cooperation Association Think Tankers fellow Mohd Sedek Jantan said BRICS enables its member countries to align their positions on specific topics such as economic and climate policies, as well as infrastructure development in accordance with the Belt and Road Initiative model.
Economist Prof Geoffrey Williams said BRICS offers a wide portfolio for trade and investment, as well as access to conventional and non-conventional trading blocks, which is crucial to Malaysia.
Williams acknowledged the shift in economic balance of power following Malaysia’s membership into BRICS, but said Putrajaya must respond positively.“The recent foreign direct investment deals are with independent minded American companies and not with the US government so this is what matters,” he said.
Chief economist at Bank Muamalat Malaysia Bhd Dr Mohd Afzanizam Abdul Rashid said BRICS would offer further diversification for Malaysia in respect to trade, investment as well as access to broader markets.
He said joining BRICS would also help to reduce over-concentration on the usage of the US dollar in trade settlement and effectively insulate the country and the region from the changes in the US monetary policy and currency volatility.
“The government would need to perform a cost and benefit analysis as the prevailing condition is quite fluid, especially in areas relating to geopolitics among the bigger nations.”
As such, he said the risks of economic sanction is something that Malaysia needs to be aware of.
Foreign Minister Datuk Seri Mohamad Hasan said Malaysia is currently analysing the feasibility of becoming a BRICS member.
Mohamad told reporters in Seremban that joining BRICS would strengthen Malaysia’s voice on various international issues.
