PETALING JAYA: Malaysia is a step closer to becoming a high-income developed nation with Brazil's US$6bil (RM18.6bil) commitment towards foreign direct investments (FDI) here.
MIDF Research chief economist Anthony Dass said closer economic ties would see Malaysian companies going over to Brazil, whether with private investments or by rendering services.
“When we talk about achieving a high-income nation status, we cannot just look at attracting quality FDIs, but also at providing our services to other countries. If you look at high-income nations, they render a lot of services,” he said, adding that the matter was not just about economic growth.
Calling it a win-win situation, Dass added that Brazil was doing extremely well at the moment, being the largest economy in South America.
He was commenting on Prime Minister Datuk Seri Najib Tun Razak's announcement that Brazilian conglomerate EBX Group would commit US$6bil for fast-tracked high impact strategic FDIs into Malaysia.
Najib said this after a 30-minute telephone conversation with Brazilian President Dilma Rousseff on Thursday.
Rousseff also invited Malaysia to partner Brazil via the EBX Group in the energy and natural resources sector as part of a long-term energy security programme.
This would allow for a strong foothold into Brazil's vast energy resource basins as it is estimated to have petroleum resources in excess of 100 billion barrels.
Najib had said Petronas would be sending a team there in September.
EBX Group chairman Eike Batista, who visited Najib here, said he would work with the Economic Planning Unit to identify and implement such projects as soon as possible.
RAM Holdings Bhd group chief economist Dr Yeah Kim Leng said the commitment was a “major boost” to private investment here.
“This is an affirmation of foreign investors' confidence in our economy and will greatly enhance our economic ties with one of the world's largest emerging economies,” he said, pointing out that Brazil was in the same league with economies like Russia, India and China.
Dr Yeah said this move was positive as Malaysia also needed to explore other markets besides traditional advanced economies like Europe and the United States, which were currently experiencing difficult times.
He said both Brazil and Malaysia, with very large natural resources such as tropical rain forests, could benefit from exchanging industry expertise.
“Better economic ties will also create more people-to-people relationships.”