[Columnist] BRI or Not to BRI: Malaysia’s economic tightrope walk

Positioned at the crossroads of East and West, Malaysia finds itself at a critical juncture, poised to make decisions that will decisively shape its future.

The undeniable allure of the BRI is evident: this initiative has made its economic mark in 140 countries and international organizations, with China's foreign direct investment in these nations surpassing a staggering USD 1.016 trillion earlier this year.

Surely, Malaysia wants a slice of the pie. Nonetheless, it is imperative to delve beneath the surface of the ostensible economic shine and critically evaluate the underlying factors at play.

Malaysia's geopolitical trump card lies within the Malacca Strait, which has historically served as the lifeblood of global commerce.

Consider this: one-quarter of the world's traded goods traverse this narrow channel, generating a mind-boggling annual value of USD 5.3 trillion.

It is certainly no exaggeration to regard Malaysia's geographic position as a cornerstone of global trade. However, with Thailand's land bridge project, supported by the BRI, offering a shorter route that bypasses the Malacca Strait, Malaysia stands at the precipice of potentially witnessing a significant diversion of this vital traffic.

Meanwhile, the South China Sea dispute represents a more contentious turn of events. Despite the Permanent Court of Arbitration's invalidation of China's nine-dash line in 2016—an assertion that claims a significant portion of the South China Sea—territorial tensions have seen little respite. Malaysia, bolstered by the United Nations Convention on the Law of the Sea (UNCLOS), maintains legitimate territorial claims that intersect with China's assertions.

A peaceful resolution based on laws is indisputably in the best interest of the ASEAN community, but the overwhelming influence of the BRI may further complicate this already delicate situation.

Debt will always remain as a looming concern, particularly due to the potential risks associated with the BRI's perceived "debt traps," a notion that resonates with participating countries.

Sri Lanka's Hambantota port scenario, often cited as an example, has engendered a tangible apprehension that nations might unwittingly trade their sovereign assets in exchange for unsustainable debt burdens. Malaysia itself bears a national debt that hovers at 60.4% of its GDP, a figure that necessarily demands caution when embarking upon large-scale economic endeavors, no matter how imperative it is.

However, it is not all doom and gloom. Bilateral trade between Malaysia and China soared to an impressive RM 203.6 billion in 2022.

The BRI's involvement holds the potential to further amplify this already remarkable figure. Nonetheless, the emphasis must undoubtedly be on quality rather than quantity. Is it sufficient to merely boast staggering trade numbers, or should the focus also encompass the creation of local job opportunities and the nurturing of domestic industries?

One must bear in mind that the propensity of the initiative to favor Chinese contractors, with 89% of BRI projects employing them according to the Peterson Institute for International Economics, may not necessarily bode well for Malaysia's local economic landscape.

Furthermore, the environmental repercussions should not be disregarded. Malaysia's priceless biodiversity-rich regions, such as Borneo, may find themselves under the radar for potential infrastructure projects, bringing with them the looming risk of ecological imbalances.

If not addressed immediately, the Southeast Asian region confronts environmental costs that could potentially escalate to a staggering $2 trillion by 2100.

While Malaysia's participation in the BRI is laden with immense economic opportunities, it is inextricably intertwined with a complex web of geopolitical, environmental, and legal challenges. As the nation charts its course forward, striking an optimal balance between economic aspirations and long-term sovereignty stands as a paramount objective.

The responsibility lies with Putrajaya to ensure that while the modern incarnation of the Silk Road promises prosperity, it does not come at the expense of the nation's core values and fundamental strengths.