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Brazilian Involvement In Asia Strengthened By Malaysia Deal – Analysis

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A recent move by Brazilian conglomerate EBX Group to commit US$6billion for fast-tracked high impact strategic foreign direct investments (FDI) into Malaysia is a further sign of Brazil’s increasing involvement in Asia.

The announcement of the deal followed a half-hour long phone dialogue between Brazil’s President Dilma Rousseff and Malaysia’s Prime Minister Najib Razak.

Both leaders discussed further consolidating bilateral economic ties via major long-term ‘smart’ partnerships and fast-tracked high impact strategic investments.

Malaysia
Malaysia

For Malaysia, the deal gives it increased economic cooperation with one of the world’s emerging economic powers and major petroleum exporters.

Brazil is estimated to have in excess of 100 billion barrels in petroleum reserves and is among the world’s top ten oil producers.

This helps give Malaysia the ability to address its long term energy security interests as a result of the six-billion dollar deal.

Malaysia already seems to be taking advantage of this, with representatives from the Malaysian petroleum company Petronas set to visit Brazil to pursue opportunities relating to energy production.

The deal is also beneficial for Brazil as it gives it a long-term economic presence in a major Southeast Asian nation that is socially and politically stable.

It is also beneficial due to Malaysia’s continuous economic growth – it achieved 7.2 per cent growth in 2010, 5.1 per cent in 2011 and is expected to achieve approximately 5 per cent growth in 2012.

Brazil’s increased presence in Malaysia as a result of the deal will also help boost its overall status as an emerging global influence in the region.

The nation has sought to become a major player in Asia (and other parts of the world) since the Presidency of Luiz Inácio ‘Lula’ da Silva.

This has resulted in increased economic and political relations between Brazil and a variety of countries throughout Asia.

Brazil’s recent activity in Vietnam, for instance, has increased in recent times, with two-way trade turnover in the first half of 2012 totalling US$876 million, a 35 per cent increase over the same period in 2011.

Much of Brazil’s exports to Vietnam in the aforementioned period have largely consisted of food products, such as soybean meal and poultry by-products. This has helped increase Brazil’s importance in addressing food security in Vietnam.

Relations with Sri Lanka have also been boosted, as seen by the Brazilian Minister for External Affairs Antonio Patriota’s visit to Sri Lanka in March 2011. Patriota detailed plans for Brazilian co-operation on various infrastructure, agriculture and engineering projects during the visit.

Brazil has also sought to increase bilateral relations with fellow Portuguese-speaking nation, East Timor as a way to increase its influence in Asia.

A mission was sent from Brazil to monitor the July 2012 elections in East Timor, something it also did in the 2007 East Timorese elections.

The mission mainly assisted with education, training, justice and security matters, for which it was highly commended by both Dili and other regional states.

Both countries also have an education co-operation programme under which Brazilian professors are training Timorese teachers in a variety of disciplines. These initiatives have helped restore stability to East Timor following its independence from Indonesia.

The aforementioned efforts by Brazil combined with recent initiatives in other Asian nations and the EBX-Malaysia deal have made it a welcome partner in a growing region with increased demands for food, energy and customers.

Although financial relations between Brazil and most Asian nations have been on the low end of the scale, the major financial scope of the Malaysia deal shows Brazil aims to change this.

While the world largely remains focussed on China’s growth and the US and Europe’s continuing economic woes, Brazil continues to pursue initiatives in Asia that will help ensure its growth and emergence as a major global actor.


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Bruno de Paiva

Bruno de Paiva

Bruno de Paiva is an analyst focusing on Geopolitics in Asia and Indian Ocean regions and North Korean issues.

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