Malaysia is expected to reap the benefits of China’s One Belt One Road (OBOR) initiative. The new proposed trade route is expected to bring great economic growth opportunities to the region.
With the infrastructure development along the route, local businesses will be able to take advantage of, as well as leverage the connectivity that would be made available thanks to the initiative. It is also expected to create opportunities for Malaysian businesses in various forms such as joint-ventures, technology transfers and direct investment.
China first unveiled its One Belt One Road initiative back in 2013 as a development strategy which will focus on connectivity and cooperation among various countries. It consists of six economic corridors, spanning across Asia, Europe and Africa. These corridors are as follows:
- The New Eurasia Land Bridge Economic Corridor
- The China-Mongolia-Russia Economic Corridor
- China-Central Asia-West Asia Economic Corridor
- China-Indochina Peninsula Economic Corridor
- China-Pakistan Economic Corridor
- Bangladesh-China-India-Myanmar Economic Corridor
The Belt and Road Initiative has five major goals, which are: policy co-ordination, facilities connectivity, unimpeded trade, financial integration, and people-to-people bonds.
According to the Economic Report 2017/18 released in conjunction with Budget 2018, Malaysia’s annual trade with countries which run along the Belt and Road exceeded RM850 billion in 2016. With Belt and Road it is expected to increase further in the coming decade.
Being a plurilateral arrangement, the Belt and Road initiative will bring mutual benefits to all participating countries.
Shan Saeed, IQI’s Chief Economist had this to say about the Belt and Road initiative, “Belt and road is the biggest infrastructure investment strategy happening in the modern era. The total investment of belt and road is around 1.4 trillion dollars. Some countries are opposed to it and that is understandable, but more than 70 countries are part of belt and road. Overall I think that whoever is part of belt and road, will be on the right side of the table. If you’re not part of the Belt and Road, I would say it is tough luck. Overall, belt and road will actually help spur economic growth in the world and will help people who are part of belt and road to move forward not only financially but also socially.”
As a highly integrated and growing economy, OBOR bodes well for Malaysia.
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