Malaysia’s membership sets the stage for the BRICS gold-backed currency to revolutionize financial system in critically important Southeast Asia.
This year has marked a pivotal moment for the BRICS+ Alliance, with Malaysia’s decision to join the bloc reflecting a significant geopolitical shift in Southeast Asia.
In This Article:
- The Growing Influence of the BRICS Alliance
- Malaysia’s Key Role and Economic Ties
- Southeast Asia’s Pivot from the Western G7 Bloc
- Future Implications for Singapore and the New BRICS Gold-backed Currency
As the BRICS Alliance grows in influence, Malaysia’s membership promises to reshape economic and strategic dynamics in the region, particularly with the potential introduction of a new gold-backed BRICS currency system, the UNIT.
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The Growing Influence of the BRICS Alliance
The BRICS+ Alliance, now represents nearly 45% of global oil reserves, 45% of the world’s population, and 28% of the global economy.
The alliance’s strategic expansion includes plans for a commodities exchange and an independent financial framework, emphasizing its growing global influence.
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With the upcoming BRICS Summit in October, the bloc’s list of prospective members continues to expand, highlighting its appeal as an alternative to the Western-dominated G7 alliance.
The proposed introduction of the UNIT system, a new gold-backed currency, further underscores BRICS’s ambition to reshape the global financial landscape.
Malaysia’s Key Role and Economic Ties
Malaysia’s application to join BRICS, formally submitted to Russia, reveals its strategic intent. The country’s growing economic ties with China and Russia reinforce its pivotal role.
A recent bilateral trade agreement with China and increasing exports from Russia illustrate Malaysia’s shift towards a multipolar economic partnership.
Prime Minister Anwar Ibrahim’s foreign policy prioritizes international collaboration, aligning with BRICS’s vision of economic growth and multipolarity.
Strengthening Trade and Economic Ties
Malaysia’s trade with China has nearly doubled over the past decade, reaching $27 billion in 2023.
The two countries’ economic ties are focused on integrated circuits, petroleum gas, and equipment. Similarly, Malaysia’s exports from Russia have grown significantly, with a 44% increase between 2017 and 2022.
Key exports include crude oil and coal, while imports to Russia are primarily machinery, oils, and miscellaneous equipment.
Support for De-dollarization
Malaysia’s supportive stance on de-dollarization is another critical factor in its BRICS membership.
During Prime Minister Anwar Ibrahim’s recent trip to China, he emphasized the need to reduce reliance on the US dollar in international trade, advocating for the use of local currencies.
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This aligns with BRICS’s broader strategy to promote financial sovereignty among its members.
Southeast Asia’s Pivot from the Western G7 Bloc
The BRICS expansion in Southeast Asia signals a broader regional shift.
Thailand’s formal request to join BRICS and Vietnam’s increasing cooperation with Russia highlight a trend away from Western economic influence.
Malaysia’s membership in BRICS exemplifies Southeast Asia’s move towards a multipolar global order, reducing dependence on Western financial systems.
Strategic Importance of Malaysia’s Membership
Malaysia’s strategic location and economic potential make its BRICS membership particularly significant.
Given NATO’s expanding presence in Asia, Malaysia’s alignment with BRICS offers a counterbalance to Western influence in the region.
The timing of Malaysia’s application, coinciding with Russian Foreign Minister Sergey Lavrov’s visit, underscores the geopolitical importance of this development.
Future Implications for Singapore and the New BRICS Gold Currency
Malaysia’s BRICS membership sets a precedent for neighboring Singapore.
With its significant role in manufacturing, finance, and shipping, Singapore’s potential involvement in BRICS could enhance the alliance’s economic and strategic capabilities. The introduction of the UNIT system, a gold-backed BRICS currency, could further revolutionize the global financial landscape.
If both Malaysia and Singapore participate in this new currency system, it would be a game-changer for the international financial order.
Potential Benefits of the Gold-backed UNIT System
The UNIT system aims to provide a stable and reliable alternative to the US dollar, backed by gold reserves. This new currency could facilitate smoother trade among BRICS members and reduce exchange rate volatility.
For Malaysia and Singapore, joining the UNIT system could offer significant economic benefits, including enhanced financial stability and increased trade efficiency.
Singapore’s Strategic Role
Singapore’s participation in BRICS and the UNIT system could further solidify Southeast Asia’s shift towards a multipolar global order.
As a major financial, manufacturing, and global logisitics hub, Singapore’s involvement would lend significant credibility to the UNIT system, attracting other nations to consider joining the BRICS alliance.
Singapore’s has a remarkable economic success story is evidenced through its high GDP per capita, which reached $127,564.60 in 2022, significantly above the global average.
It’s powerhouse economy is driven by strategic factors such as aggressive automation in manufacturing, a highly skilled and multilingual workforce, a pro-business environment with low taxes and strong rule of law, and a stable political system.
The country’s focus on export-oriented manufacturing and key industries like electronics, precision engineering, finance, and insurance continues to fuel growth.
The Bottom Line
Malaysia’s decision to join the BRICS Alliance marks a significant geopolitical shift in Southeast Asia. This move, driven by economic and strategic considerations, underscores the growing appeal of the BRICS block as an alternative to the Western G7 alliance.
As Malaysia strengthens its ties with BRICS members and champions a multipolar world, the implications for regional dynamics and the future participation of countries like Singapore will be profound.
The potential introduction of the UNIT system, a gold-backed currency, further highlights the transformative impact of BRICS’s expansion on the global financial landscape.
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