In Southeast Asia, discontent with the current world order is growing. By joining the BRICS alliance, some countries in the region are hoping for the best of all worlds.
While the American-dominated world order is crumbling, Malaysia and Thailand are looking for new allies. They have applied for membership in the BRICS alliance. Vietnam is also showing great interest in becoming a BRICS member. The American government will be following developments with scepticism. For them, BRICS, with China at the helm, is an attack on their country’s hegemonic position.
Diversity of member states as a burden
The Foreign Ministry in Bangkok reassured that it was not taking sides by joining the BRICS, not least because Thailand wants to become a member of the Organisation for Economic Co-operation and Development (OECD), which is dominated by Western countries. Rather, Thailand wants to create a fairer world together with developed and developing economies, the Foreign Ministry said. Unspoken, this is a harsh criticism of the current world order, and the countries of the so-called global south feel underrepresented.
In order to strengthen each other in this situation, Brazil, Russia, India and China founded the loose association of states known as BRICS in 2009. A year later, South Africa joined as the fifth member; since January of this year, Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates have also been members of the organization. And BRICS continues to grow: more than 30 countries are said to have applied for membership.
Brics has no formal charter and no secretariat. The members see themselves as an informal group that meets annually and wants to respond flexibly and quickly to global challenges. But so far it is unclear what Brics stands for.
This is also due to the diversity of the member states. They pursue different interests and have different cultural, political, religious and economic systems. In addition, they often appear on the world stage as opponents rather than partners: Iran is arguing with Saudi Arabia, China with India.
Despite all the antipathies, the countries are united by their desire to replace the predominance of the United States with a multipolar world order. They want more say. Dissatisfaction with America and its ally Europe has continued to grow in recent months.
Southeast Asia is particularly outraged by Israel’s actions in Gaza, with the approval of America and Europe. Malaysia’s Muslim head of government Anwar Ibrahim says he is annoyed that only the Hamas massacre on October 7 is being talked about, while the 70-year history of the conflict is being ignored. “The Western countries want to control the discourse, but we can no longer accept this because they are no longer a colonial power and independent countries should be able to express themselves freely,” says Anwar.
The Southeast Asian countries also describe it as double standards when the West isolates Russia after the attack on Ukraine, while those responsible for the second Iraq war remain unpunished. In Southeast Asia, Singapore is the only country to have imposed sanctions against Russia.
The dominance of the dollar causes unease
The central lever of American dominance is the financial architecture with the International Monetary Fund and the World Bank as well as the dollar as the world’s reserve currency. It still accounts for around 89 percent of global trade financing.
The BRICS countries have a number of reasons for striving to break away from the dominance of the dollar. They suffer the consequences of a strong dollar through expensive imports, they doubt the American government because of its protectionist trade policy, a rapidly increasing national debt, unclear political leadership and weakening institutions. In addition, the dominance of the dollar allows the American government to unilaterally impose sanctions around the world.
The BRICS have made the greatest progress in creating a new financial architecture. In addition to the Asian Infrastructure Investment Bank (AIIB), which was launched by China in 2014, the BRICS countries have created the New Development Bank and provided it with 100 billion dollars in capital.
By 2023, the two multilateral banks have granted loans totaling $71 billion for investments in infrastructure, public health and clean energy. The need for such investments is also great in Malaysia and Thailand. They are hoping for new sources of financing to expand infrastructure.
Regional currency blocs emerge
The New Development Bank has already issued a fifth of its loans in yuan. The path to replacing the dollar as the reserve currency will be long and difficult. However, the share of BRICS member countries in global resource extraction gives an indication of the strategy the organization could pursue.
The BRICS countries’ share of global oil and gas production currently amounts to 43 and 32 percent respectively – with an increasing trend when countries such as Kuwait or Venezuela join the BRICS. 38 percent of the demand for oil and gas comes from the existing BRICS countries.
If major producers and consumers of oil and gas join together in a group, they will begin to conduct transactions in currencies other than the dollar and thus outside the Western-dominated financial system.
This approach is also in the interest of Malaysia and Thailand. Both countries emphasize that they want to conduct bilateral trade in their respective national currencies in order to avoid the dollar. BRICS will provide a platform for this.
The central banks of China and Thailand signed a memorandum of understanding in May to promote bilateral cooperation on transactions in their respective currencies. Regional currency blocs are likely to gradually emerge in response to the dominance of the dollar.
No one can get past China
However, there are also doubts about the decision of Malaysia and Thailand. The Thai newspaper “Thai PBS World” headlined that Thailand should wait to join the BRICS. Behind this is the concern that Malaysia and Thailand could become too closely tied to China through BRICS membership and give Beijing leverage to influence Malaysian and Thai foreign policy.
But China is an economic reality in Southeast Asia: in 2000, the Association of Southeast Asian Nations (ASEAN), which comprises ten countries, traded with the United States at $135 billion and with China at just $40 billion. Twenty-two years later, ASEAN’s trade with China was nearly $1 trillion, more than double that with the United States.
A containment policy by Asean towards its most important trading partner would be tantamount to economic suicide.
The USA will be annoyed by the applications for BRICS membership. However, the American government’s hands are tied. It needs Kuala Lumpur and Bangkok as partners in Southeast Asia in the struggle against China. Malaysia and Thailand are aware of their role and are maximising their strategic leeway without taking sides: America should provide them with security, China should provide economic progress.