Malaysia and Thailand keen in joining BRICS

According to NIKKEI Asia, two Southeast Asian nations, Malaysia and Thailand, have recently revealed their plans to join the BRICS grouping of emerging nations as middle power countries seek to maneuver amid growing geopolitical uncertainties, including the US-China tensions.

What kind of organization is BRICS?

BRICS, an acronym for Brazil, Russia, India, China and South Africa, was launched in 2009 as BRIC and later renamed BRICS in 2010 when South Africa joined the group. It was formed to foster economic, political and cultural cooperation among its members.

Compared to the Association of Southeast Asian Nations (ASEAN), the group operates without a formal charter or secretariat -- akin to an informal group that meets annually to allow for flexibility and prompt responses to global challenges.

Alicia Garcia-Herrero, a senior research fellow at the Brussels-based think tank Bruegel, argued in her article on the East Asia Forum that at the start of the group's formation, China dominated the bloc, and most of the growth in trade has been China-centric. However, the recent increase, mostly driven by India, has "experienced an acceleration in economic growth" of the group.

The five countries combined accounted for gross domestic product of US$25.8 trillion last year, or about a quarter of the global total, whereas Group of Seven (G7) developed nations had a combined US$46.8 trillion.

Why do Malaysia and Thailand want to join?

Participation in BRICS would foster economic cooperation with peer emerging economies, such as trade and investment.

In addition, Malaysia views this as an opportunity to engage in rising multilateralism, according to Hoo Chiew Ping, a senior fellow at the East Asian International Relations Caucus. She said joining BRICS would support a multipolar world order rather than being drawn into a new Cold War centered on the US-China rivalry.

Thailand has said a BRICS membership would enhance Thailand's role as a leader among emerging countries.

A foreign ministry spokesperson told reporters last week that the country wants to play more roles, promoting Thai potentials to co-play the roles with developed nations and underdeveloped nations to provide guidelines for global community development to promote justice and equality, adding that being a BRICS member does not mean Thailand is taking sides.

Will other countries in Southeast Asia follow?

Indonesian Foreign Minister Retno Marsudi said earlier this year that Jakarta was still assessing the benefits of joining BRICS. This follows President Jokowi Widodo's attendance at the BRICS summit in South Africa in August last year, during which he called for stronger cooperation among developing nations to fight trade discrimination.

Jokowi told reporters afterward that despite Indonesia's good economic relationships with the group's members, we don't want to rush joining the bloc.

Observers describe Indonesia's reluctance to join BRICS as a desire to avoid being seen as too close to China, already its biggest source of foreign direct investment and trading partner in recent years. China has also been the biggest trading partner to most ASEAN countries in the past decade.

This is amid Indonesia's ambition to join the OECD instead. The rich-country club opened accession discussions with Indonesia in February that, if realized, will make it the first OECD member from Southeast Asia.

Rahul Mishra, an associate professor at the Center for Indo-Pacific Studies of Jawaharlal Nehru University, said that Malaysia's and Thailand's moves will motivate Indonesia to revive its BRICS plans. Vietnam could be the next member, and a bigger BRICS would mean a collective of more voices from the Global South, he added.

Vietnam sent a delegation to attend the BRICS Dialogue with Developing Countries in Russia's Nizhny Novgorod this month. The country is watching the BRICS expansion but has not made any comments on joining the bloc. Thailand and Laos took part in the forum as well.

What would Thailand's and Malaysia's BRICS memberships mean for Southeast Asia?

The shift could put a strain on the unity and centrality of Southeast Asia's own multilateral framework, ASEAN, and the Southeast Asian bloc needs to adapt to remain relevant as its members explore other alignments, experts say.

"It is high time for ASEAN to prepare the necessary, to complement the appetite of its member states in bolstering action and crafting solutions, in which ASEAN seems to be counterproductive," said Fikry A Rahman, the head of foreign affairs at Malaysia's research institute Bait Al-Amanah.

Fikry said that ASEAN will continue to take center stage for Southeast Asia, and its members will not undermine the values, although he also pointed out that the nature of the Southeast Asian bloc limits its role in serving regional goals.

What does a bigger BRICS mean for the world?

The expansion of BRICS would amplify the voice of the Global South and point to a further disparity of a more polarized world.

In January 2024, BRICS expanded its membership to include more prominent Global South countries: Egypt, Ethiopia, Iran and the United Arab Emirates (UAE), with more countries potentially joining the group.

"The expanded BRICS membership is a direct response to heightened bipolar rivalry, which has significantly increased global geopolitical uncertainties," Hoo said, highlighting how middle powers maneuver amid the tension between superpowers.

However, Hoo cautioned that the inclusion of more countries, especially with Russia's involvement in the grouping, could send a problematic signal to the US and its allies, as membership can be viewed as adversarial to Western interests and values.

Pakistan Stock Exchange experiences lack luster week

Pakistan Stock Exchange experienced a subdued week, posted a nominal decline of 365 points (0.46%WoW), primarily due to weakness in the banking sector following news of the continuation of the ADR-based tax.

Average daily trading volume also declined to 356 million shares for the week, down 13%WoW.

The incidence of futures rollover, coupled with it being the last week of the fiscal year overall contributed to the lack luster performance.

Several important data points came in during the week, including a CAD of US$270 million, below expectations of a slight positive balance. This was due to the SBP acting swiftly to clear the backlog of overdue outward dividend repatriations, impacting the balance negatively.

Monthly FDI was reported at US$271 million, up 95%YoY, taking 11MFY24 FDI to US$1.73 billion, up 15%YoY.

Federal Budget for FY25 was approved by the National Assembly on Friday, with several amendments in previously presented finance bill.

These included introduction of a 15% FED on sales by builders/developers, continued concessions on HEV imports, and increased FED on cement, among other changes.

On the external front, foreign exchange reserves held by State Bank of Pakistan (SBP) declined by US$239 million to US$8.9 billion.

The domestic currency continued to strengthen against the greenback, ending the week at PkR278.34/US$ (up 0.06%WoW).                    

Other major news flows during the week included: 1) World Bank approved US$535 million for social protection, livestock development, 2) No cut in gas tariff, 3) Finance Minister issues warning to retailers, 4) the GoP raises PKR908 billion new debt via T-Bills, PIB, and 5) Foreign investors repatriate record US$918 million in May.

The best performing sectors included: Tobacco, Jute and Vanaspati & allied, while ETFs, Refinery and Property were amongst the worst performers.

 Major selling was recorded by mutual funds with net sell of US$5.8 million and other organizations with net sell of US$2.2 million. Brokers and companies absorbed most of the selling with a net buy of US$4.9 million and US$1.5 million, respectively.

Top performing scrips of the week were: MUREB, FABL, PAKT, UNITY and HGFA, while the laggards included: YOUW, MCB, EPCL, CNERGY and CEPB.

With the approval of the Federal budget, clarity on new budgetary measures has emerged, and the market is anticipated to sustain positive momentum as new fiscal year commences.

The focus will now shift to upcoming discussions with the IMF regarding the next EFF program, with a keen eye on their assessment of the approved budget.

The anticipated easing of inflation figures for May 2024 is expected to reinforce positive market sentiment further.

 

 

Iran: Presidential election and there after

In the Iranian presidential election being held today, six handpicked candidates are participating. Though, the scanty details have started pouring in, these are mostly tweaked. The details coming from western media are aimed at proving that elections are eyewash. The western media is also busy in creating discontent among the Iranians and using a few dissent voices.

Ironically, the presidential debate in the United States is engrossed in self-created issues of United States, i.e. trade war with China, Russia-Ukraine conflict and above all on going genocide in Gaza by Israel. All these issues have been created and garnered by military complexes that are the key donors of election campaigns in United States for ages.

One may recall that once there was a ban on export of oil from United States, now the country has attained the status of major oil and gas producing and exporting country. The lust for getting complete control over energy trade is touching new highs.

Therefore, the United States wants to keep Iran out of energy trade. However, the bigger objective is, not to allow Iran to become a regional power. Saudi Arab – Iran animosity has been used for more than five decades to keep Iran out of energy trade and luring Saudi Arabia to buy more and more lethal weapons.

Since Islamic revolution in Iran, United States has tried to sponsor anti-cleric groups but failed miserably. The US has killed many of the Iranian scientists and commanders, with close coordination with Israel. The elimination of President Ebrahim Raisi was an attempt to disrupt the process of choosing the successor of Rahbar Ali Khamenei.

The United States is also annoyed by the growing cordial diplomatic relations with Saudi Arabia. The biggest disturbing point is that in case these two countries become friend, not only US hegemony in the region will be reduced but the two countries will get control over oil and gas moving through Strait of Hormuz and Red Sea.

Whatever may be the outcome of Iranian elections, United States remains adamant at imposing new sanctions of Iran, keeping it out of energy trade and disrupting normalization of Saudi-Iranian relations. The bigger objective is to support Israel in killing Gazans and get control over the tiny piece of land extra rich in oil and gas.

 

  

 

 

Brazil to become largest cotton exporter

Brazil is set to become the world’s largest cotton exporter in 2023-24, knocking the United States from the top spot it has held for decades, following a more than 80% surge in shipments this season, reports Reuters.

China, Vietnam, Bangladesh, Turkey and Pakistan are some of the largest buyers of Brazilian cotton

The South American country’s position as the world’s number one exporter is driven by the record output, strong demand from Asian countries and a drop in US production due to adverse weather.

“It happened a little earlier than we imagined,” Anea head Miguel Faus told Reuters. “The main reason is that there was a failure in the US crop, while the Brazilian production increased.”

Faus said Brazil’s exports could increase further next season, as farmers begin to harvest a crop expected to hit a new record, and again in 2025-26. “I think that in the medium term, Brazil will consolidate itself in this leadership position”, he said.

He cited data from the US Department of Agriculture (USDA), which this month increased its forecast for Brazil’s cotton exports this year by 300,000 bales to 12.4 million bales, while reducing the US forecast by 500,000 bales to 11.8 million bales.

According to a USDA report, the US had led global cotton exports since the early 1990s.

Brazil already surpassed the US in terms of production in 2023-24, ranking third in the world behind China and India — positions that are expected to be maintained in 2024-25.

Brazil has been more generally increasing its commodity exports, including corn and coffee.

It has long been the world’s largest coffee producer and exporter and Faus said it would still have more influence in that market than in cotton.

“In the case of cotton, the forces are more balanced… But of course, if Brazil’s production rises or falls, the market will be paying attention,” he said.

 

Fourth annual ONE Terminal Run

Ocean Network Express (ONE) and Hutchison Ports Gdynia hosted another successful charity run through container rows in Poland last weekend in support of local causes.

The event was put together through the collaborative efforts of Ocean Network Express (ONE), Hutchison Ports Gdynia (GCT) and The North Event, and raised further funds for local charity organizations.

The organizers said the ONE Terminal Run initiative aims to connect members in the maritime industry in the spirit of fundraising and wellbeing.

This year’s race around GCT’s terminal in Gdynia, Poland, welcomed approximately 1,300 runners including children who joined the children’s run, and over 3,000 supporters.

Spectators were invited to join the adult runners in the festivities with a warm up to music before the runners set off on their choice of either a one nautical mile (1.8 km) or 5 km run.

The routes weaved back and forth between rows of stacked containers in the terminal, and the start and finish arches were both spanned by an arch formed of ONE containers.

Monies raised by the run will be donated to local charities and added to the tally of over €33,000 raised by the event series to date. The beneficiaries of funds, that are raised though ticket sales as well as online auctions, include: The Why Not Association, an organization supporting children and youth with disabilities, The Szkwal Foundation, supporting young people at risk, and two local schools supporting children with disabilities.

ONE said previous event donations have provided the local community with amenities including three sensory integration rooms in primary schools in Gdynia, specialized wheelchair equipment for the Cool Awi Association, as well as donations to local schools helping those with disabilities.

Donations are still adding up for the ONE Terminal Run 2024 as the online auction is still open, but to date, the fourth edition has already raised estimated funds of €19,000.

The event was made possible by the generosity of sponsors from the transport. logistics, and maritime industries including; Port of Gdynia Authority, Morska Agencja Gdynia, MacGregor Global, Loconi Intermodal S.A, ECU Worldwide, Uni-logistics Sp. z o.o and E-containers.eu. 

The children's run was sponsored by both and IT Logistics and Nautiqus Food Logistics, which celebrated the participation of almost half of its employees and other mini container trophy for its three-time podium finisher in the adult's race, Dorota.

 

Iran: Voting for presidential election on Friday

Iranian cities are buzzing with election fever as posters and placards adorn streets, big screens air presidential debates, and candidates crisscross the country in a bid to sway voters. 

Anticipation has swept across Iran and observers wonder whom Iranians will entrust with the presidency and the responsibility of leading the country, 40 days after the passing of President Ebrahim Raisi in a helicopter crash in northwestern Iran. 

Western media outlets, which rejoiced at the decreased voter turnout of around 50% in the 2021 presidential elections, appear poised for disappointment this time around. Estimates indicate that a significantly larger number of individuals will be casting their votes, despite the unprecedented levels of propaganda from Western and Israeli sources urging a boycott of the election.

“Channels such as BBC and International are urging us not to vote. It's puzzling how Iranians living abroad and receiving payment from Western governments or Zionists have the audacity to dictate our actions. We are concerned about the future of our country and want to elect the most suitable candidate. All these traitors and lackeys of the West can say whatever they want, we don’t care about them,” a man in his 20s told IRIB during a street interview. 

Rather than deciding to boycott the elections, Iranians are preoccupied with whom they should be voting for. "I feel a sense of duty as an Iranian to participate in the election. While I haven't made a final decision on my vote yet, I know I must make up my mind by Friday morning," shared an Iranian woman with IRIB reporters.

The race is close between two conservative contenders and one reformist candidate. Mohammad Baqer Qalibaf, Saeed Jalili, and Masoud Pezeshkian are currently leading the pack, and experts believe that if both conservative candidates remain in the race, elections could head to a second round. 

Reformist politicians have also shown great enthusiasm and hope in supporting the sole reformist candidate, Pezeshkian, after largely avoiding participation in election processes over the past three years, partly due to bitterness stemming from the significant loss of clout following the end of President Hassan Rouhani’s administration.

Rouhani, along with the influential figures Mohammad Khatami and Mohammad Javad Zarif, were among the most notable reformists making a return to the political scene by throwing their support behind Pezeshkian.

While the election outcome remains uncertain, one thing is clear, the June 28 vote will see Iranians rejecting external pressures from the West and Israel. Iranians will demonstrate their resilience and independence, and show up to choose their own path.

In this pursuit of independence, efforts by foreign forces to create politicization, especially in the field of foreign policy will also yield no results. Iranians now understand that every candidate’s purpose will be to terminate the sanctions while attempting to neutralize them at the same time. 

 

Russia sends coal to India via Iran

Russia has for the first time sent two trains laden with coal to India via the International North-South Transport Corridor (INSTC), which connects Russia to India via Iran, according to a statement by Russia’s national railway company.

According to RT, a multimodal route that includes a railway, roadway network and seaports, the INSTC spans 7,200 km (4,500 miles) from St. Petersburg to the port of Mumbai in India.

The corridor is part of Russia’s push to find new transport routes in light of Western sanctions, which have forced it to shift trade flows from Europe to Asia and the Middle East.

Construction of the INSTC started in the early 2000s, but developing it further has taken on a new impetus in light of the restrictions facing Moscow.

New Delhi has also touted the route as an alternative to China’s Belt and Road Initiative.

“For the first time, two trains with Kuzbass coal headed to India along the International North-South Transport Corridor. The trains set off from the Kemerovo region. They followed along the eastern branch of the INSTC through Kazakhstan and Turkmenistan to the Iranian port of Bandar Abbas,” Russian Railways said.

The coal will be shipped by sea along the final part of the route from Iran’s port of Bandar Abbas to the Indian port of Mumbai.