KUALA LUMPUR: Russia has been aggressively promoting bilateral trade and investment with Malaysia amid deepening ties between both countries.
Russian ministers and officials have been leading business delegations to Malaysia in recent months.
This comes following Malaysian Prime Minister Anwar Ibrahim’s visit to Russia in September at the invitation of his counterpart Vladimir Putin to attend the Eastern Economic Forum (EEF).
The summit of business leaders, held every year since 2015 in Vladivostok, is designed to promote the economic development of the Russian Far East.
In Vladivostok, Mr Anwar called Russia a “key partner” and proposed the two countries forge a “special relationship”.
The growing economic relationship comes amid sanctions against Russia by several other countries for its invasion of Ukraine which began in February 2022.
Last year, Malaysia’s exports to Russia grew by 13 per cent to US$619.3 million from the previous year, while Russia’s exports to Malaysia rose by 10.8 per cent to US$2.49 billion.
“There are a lot of opportunities that we can explore with our Russian counterparts, Russian companies,” said Mr Abu Bakar Yusof, deputy CEO of Malaysia External Trade Development Corporation (MATRADE), the country’s agency that promotes and develops its exports.
TRADE TIES BETWEEN MALAYSIA AND RUSSIA
At the Russia-ASEAN (Association of Southeast Asian Nations) international business forum held in Kuala Lumpur last week, Russian officials said there are untapped opportunities in economic cooperation in areas such as cybersecurity, software development and telecommunications with the region.
Currently, trade between the block and the country is focused on the oil and gas, energy and agricultural sectors.
The forum was organised by the RosCongress Foundation, which is dedicated to enhancing Russia’s economic potential and international image.
“The potential is there. It is underestimated right now, so we need to be courageous enough to excavate all the potential and bring the businesses together,” said Russian Deputy Minister of Industry and Trade Alexey Gruzdev, who spoke at a key plenary session during the two-day event.
However, industry players said some companies may not want to get into business with Russia out of fear they would face trade obstacles given the ongoing sanctions.
For instance, the United States’ latest sanctions sought to further curtail Russia’s use of the international financial system.
Standardising currency used in business with Russia may therefore emerge as a challenge, noted chairman of the Small and Medium Enterprises Association of Malaysia William Ng.
Also, while Russia may have developed its own state-of-the-art software and information technology applications, they would be a hard-sell in Southeast Asia, he added.
“We have been reliant on the American (and) European vendors for many years. To now shift the reliance to Russia as an option will take a bit of learning,” he said.
“At the end of the day, we know what is the elephant in the room: That is the issue of Ukraine. Until and unless Russia solves it – and only Russia can solve this issue – everybody else will be at risk (of sanctions),” he added.
RELATIONS BETWEEN ASEAN AND RUSSIA
Still, Malaysia, which will take on the leadership of ASEAN next year, is eager to engage with Russia and BRICS member countries to diversify from its traditional markets, while maintaining ASEAN centrality amid intense superpower rivalries.
Already, ASEAN has benefitted from its trade ties with Russia.
In 2023, Russia’s trade turnover with ASEAN grew by 15 per cent from the previous year.
The BRICS grouping, which was formed to act as a counterweight to the West and originally comprised Brazil, Russia, India, China and South Africa, added 13 partner countries in October, including ASEAN nations Malaysia, Vietnam, Indonesia and Thailand.
ASEAN, with a combined GDP of almost US$4 trillion, is the fifth-largest economy in the world.
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