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Malaysia, currently the Chair of ASEAN 2025, is considering joining the New Development Bank (NDB), the financial arm of the BRICS bloc. This potential membership could offer several notable benefits and broader implications for Malaysia.
The NDB, formerly known as the Brics Development Bank, was established by developing countries to address the infrastructure and development needs of its members. With 11 members, including Brazil, Russia, India, China, South Africa, Bangladesh, the United Arab Emirates, Egypt, Algeria, Colombia, and Uzbekistan, the NDB provides loans and guarantees for private and public projects in emerging markets, with a strong focus on sustainable infrastructure, clean energy, transportation, sanitation, and social development.
For Malaysia, membership in the NDB could provide access to alternative infrastructure financing, enabling the country to secure funding for large-scale projects that may be challenging to finance through traditional channels. The NDB's flexible and less conditional funding arrangements, emphasizing mutual benefits and developmental pragmatism, could be particularly attractive for Malaysia seeking autonomy in project selection and implementation.
Joining the NDB would also align Malaysia more closely with other countries in the Global South, enhancing regional integration and cooperation, as highlighted by Malaysian officials discussing the synergy between ASEAN and BRICS. This alignment can open doors for trade and investment partnerships with other emerging economies.
Moreover, the NDB aims to devote a significant share (around 40%) of its portfolio to climate change mitigation and adaptation, providing Malaysia with support for green and resilient infrastructure projects, aligning with national sustainability goals. As Malaysia aims to accelerate the transition to a green economy, this cooperation could be crucial.
The prime minister of Malaysia, Datuk Seri Anwar Ibrahim, recently held a meeting with senior officials of the NDB on the sidelines of the Brics Leaders' Summit in Rio de Janeiro, expressing Malaysia's openness to exploring potential cooperation with the NDB within the framework of sustainable development, infrastructure financing, and strengthening South-South cooperation.
While Malaysia officially became a Brics Partner Country on January 1 this year, the country has not yet officially joined the NDB. However, the potential benefits and strategic considerations of membership are clear.
Joining the NDB could further embed Malaysia within a network of emerging market economies, diversifying its economic partnerships beyond traditional Western allies and regional institutions like the Asian Development Bank (ADB). This could reduce dependence on established financial systems and offer Malaysia a greater voice in shaping the rules of development finance.
However, like other NDB aspirants, Malaysia may face challenges in formulating bankable development projects that meet NDB’s requirements. Building institutional capacity for project preparation and management will be crucial to maximize the benefits of membership.
As Malaysia assumes the ASEAN chairmanship in 2025, deeper engagement with the NDB could enhance its leadership role within the region, promoting broader ASEAN-BRICS cooperation and setting a precedent for other Southeast Asian nations.
Geopolitically, membership in the NDB may signal a strategic shift toward a more multipolar world order, aligning Malaysia with other countries seeking alternatives to Western-dominated financial institutions. This could have diplomatic and strategic consequences, including potential scrutiny from traditional partners.
In summary, joining the NDB could provide Malaysia with alternative, flexible, and sustainable financing for development projects while positioning it more strategically within the Global South and the evolving international financial landscape. However, realizing these benefits will require careful preparation and institutional capacity building.
- Malaysia, as the current chair of ASEAN 2025, is considering joining the New Development Bank (NDB), a financial institution established by developing countries to address infrastructure and development needs, such as those in Malaysia.
- For Malaysia, membership in the NDB could offer access to alternative infrastructure financing, allowing the country to secure funding for large-scale projects, and the NDB's flexible and less conditional funding arrangements could be attractive due to Malaysia's desire for autonomy in project selection and implementation.
- Joining the NDB would align Malaysia more closely with other countries in the Global South, enhancing regional integration and cooperation, as highlighted by Malaysian officials discussing the synergy between ASEAN and BRICS, and this alignment can open doors for trade and investment partnerships with other emerging economies.
- The NDB aims to devote a significant share of its portfolio to climate change mitigation and adaptation, providing Malaysia with support for green and resilient infrastructure projects, aligning with national sustainability goals, and as Malaysia aims to accelerate the transition to a green economy, this cooperation could be crucial.
