African nations are turning to Asia for partners in development. Can Malaysia pave the way for an ASEAN-Africa model?
With an increasingly heavy investment footprint spanning the length and breadth of the African continent, Malaysia is establishing itself as an important dynamic in the emerging ASEAN-Africa nexus.
In the run-up to the Bandung Asia-Africa Summit in April 2015, statements from Malaysian Prime Minister Najib Razak’s office suggested a long-range view for enhancing relationships on the continent. Driven by “commitment in strengthening cooperation” and achieving “prosperity through South-South cooperation,” Malaysia is expressing great enthusiasm and commitment to exploring opportunities in Africa.
Indeed, Africa could find itself playing a central role as part of Malaysia’s effort to develop a latticework of political and trade relationships with developing nations. Since the 1990s, Singapore’s northern neighbor has undertaken a sustained effort to build partnerships across the developing world as part of its vision to achieve greater resiliency on the global stage through political and economic diversification. In the wake of the recent financial crisis, this aspiration has all but certainly been renewed.
Taking note of Africa’s burgeoning investment opportunities, which have delivered some of the highest returns globally in recent years, Malaysia has responded with ever larger amounts of foreign direct investment (FDI) that have blazed a trajectory of consistent 20 percent year-on-year growth over the past decade. These FDI flows culminated at a whopping $19.3 billion in 2011, eclipsing those of both China and India on the continent, and following behind only the United States and France as the third largest international investor that year.
Malaysian firms can now be found operating in a wide range of sectors across Africa, including resource extraction, hotel and leisure, shopping, and financial services. The diversity of undertakings reflects Malaysia’s own recent transformation into a more multi-sectored and dynamic economy, and it indicates the private sector’s appetite to establish meaningful in-roads into frontier markets well-beyond the Association of Southeast Asian Nations (ASEAN).
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