‘BRICS set to bring more opportunities and competition’
06 Nov 2024
Malaysia should capitalise on the growth opportunities presented by BRICS while addressing the challenges ahead to enhance its competitiveness on the global stage, say industrialists.
Small and Medium Enterprises Association of Malaysia (Samenta) national president Datuk William Ng foresees a significant increase in trade missions, coupled with enhanced diplomatic and economic representation, following the country’s admission as a partner nation of BRICS.
He believes this will lead to greater overall trade and investment opportunities within the international bloc.
“Our inclusion as a partner country is an important first step in that direction. It offers Malaysian businesses greater opportunities in member countries that go beyond free trade agreements.
“It will also reinforce Malaysia’s standing as a non-aligned economy in an increasingly polarised world,” he said.
BRICS, originally comprising Brazil, Russia, India and China, was established in 2009 as a cooperation platform for emerging economies, with South Africa joining in 2010.
The grouping has since expanded to include Iran, Egypt, Ethiopia and the United Arab Emirates.
This year, Malaysia has been one of 13 nations officially added as a partner country to the bloc that collectively accounts for one-fifth of the global trade.
The other 12 are Indonesia, Thailand, Vietnam, Algeria, Belarus, Bolivia, Cuba, Kazakhstan, Nigeria, Turkiye, Uganda and Uzbekistan.
However, none of these countries have achieved full membership yet.
Looking ahead, Ng called for efforts to reduce non-tariff barriers among BRICS member and partner economies to encourage a smoother flow of people and goods.
“One low-hanging fruit to achieve is to negotiate visa-free movement across the bloc, if not for all travellers, then at least for business purposes.
“With the expected greater business exchanges via trade missions and perhaps the ‘upgrading’ of diplomatic and economic representations, we hope to see more trade and investments across the bloc,” he said.
Federation of Malaysian Manufacturers Penang (FMM Penang) chairman Datuk Seri Lee Teong Li said while Malaysia’s participation in BRICS presents exciting new opportunities, it also brings a set of challenges that need to be carefully considered.
“The business community feels cautiously optimistic but recognises the potential benefits and preparations for competitive challenges.
“There would be access to new market and trade opportunities, as BRICS membership could open doors for Malaysian businesses to access new and diverse markets in major economies like Brazil, Russia, India, China and South Africa, which collectively have substantial demand for various goods and services,” he said.
Lee also noted that Malaysia can reduce reliance on traditional trade partners.
“We can expect an increase in foreign direct investment (FDI), with member countries looking to expand in South-East Asia, and this will benefit local industries through capital inflow, technology transfer and job creation.”
He added that if BRICS pursues a shared currency or alternative trade mechanisms, local companies might benefit from lower transaction costs and reduce dependence on volatile currency exchange rates to enhance trade stability.However, Lee said regulatory and cultural differences are aspects to be looked into.
“Entering BRICS markets requires navigating varied regulations, business practices and cultural differences.
“Businesses may need support in these areas to fully capitalise on BRICS opportunities,” he said.
BRICS represents about 40% of the global population and accounts for a cumulative gross domestic product (GDP) of US$26.6 trillion, or 26.2% of the world’s GDP, nearly matching the economic strength of the Group of Seven (G7).
Source: The Star
