Indonesia leads the way as Southeast Asia enters BRICS

Now Indonesia is officially the first Southeast Asian nation to join BRICS as a full member. The move comes after Indonesia, Malaysia, Thailand, and Vietnam were invited last October to become “BRIC” partner countries, a status newly created at the Kazan summit. That invitation creates a pathway for full membership in the economic bloc and positions ASEAN countries closer to a multipolar world order.And unlike the EU, a common market open to goods, services, and people, most economic blocs – the G7, ASEAN, and BRICS – are merely trade agreements rather than integrated economies. All these alliances promote economic cooperation but do not abolish import/export taxes nor allow cross-border movement. The rise of BRICS signals a shift in global trade dynamics, especially for Southeast Asia in an economic nationalist world.Since the start of the U.S.-China trade war under Trump, countries have reframed their strategies around self-sufficiency and new trade deals. Indonesia’s move towards BRICS engagement shows ASEAN’s growing role in this fractious world economy where free trade agreements compete with growing national interests.

Indonesia joining BRICS demonstrates its willingness to work with several world partners and to grow economically. Indonesia is Southeast Asia’s biggest economy, with more than USD 1.4 trillion in GDP and over 270 million people. That fits Jakarta’s broader foreign policy goals of preserving relations with Western countries while building economic and diplomatic links with countries of the Global South.In a written statement, Indonesia’s Ministry of Foreign Affairs said, “Indonesia views its membership in BRICS as a strategic step to increase collaboration and cooperation with other developing countries, based on the principles of equality, mutual respect, and sustainable development.”President Joko Widodo’s administration has emphasized that joining BRICS will provide Indonesia with greater access to alternative sources of financing, particularly from the New Development Bank (NDB), BRICS’ financial institution. The NDB, established to reduce dependency on Western financial systems, is expected to offer Indonesia more favorable loan conditions for infrastructure and development projects.Additionally, BRICS membership enables Indonesia to expand trade and investment ties with major economies like China, Russia, India, Brazil, and South Africa. Indonesia’s trade with BRICS nations has already been growing, with China being its largest trading partner and India a key buyer of its palm oil and coal.

The inclusion of Indonesia as a full BRICS member and the invitation extended to Malaysia, Thailand, and Vietnam signals a broader effort to integrate Southeast Asia into the bloc’s expanding framework. ASEAN, which has traditionally maintained a neutral stance in global power struggles, is now more directly involved in an economic grouping that seeks to challenge Western economic dominance.For ASEAN members, BRICS represents an opportunity to access new markets, alternative financial institutions, and increased geopolitical influence. With the Global South gaining more prominence in international economic governance, ASEAN’s alignment with BRICS could strengthen its negotiating power in global trade and investment discussions.Malaysia, Thailand, and Vietnam’s current “partner country” status offers them a pathway to full membership, provided they meet certain economic and geopolitical conditions. Given the economic trajectories of these nations—Malaysia as a key high-tech manufacturing hub, Thailand with its strong industrial base, and Vietnam as a rapidly growing economic powerhouse—each country has strong incentives to deepen its engagement with BRICS.

In Southeast Asia, supply chains may be reshaped as Indonesia partners with BRICS, with an increased focus on trade routes beyond Western markets. Regional manufacturing networks exist for China and India—two dominant players in BRICS. These nations may drive infrastructure development in logistics, ports, and transport hubs. This realignment could provide ASEAN businesses with cost advantages and heighten dependence on BRICS nations for trade and access to technology.Southeast Asian manufacturing is traditionally a key link in global production networks, especially in electronics, textiles, and automotive components. BRICS countries are extending their reach, and companies in ASEAN might find themselves adapting to new standards, regulations, and trade agreements. Mainland Chinese-backed initiatives like the Belt and Road Initiative (BRI) might include Southeast Asian factories in wider regional supply chains but also present growth opportunities and challenges in balancing geopolitical interests.Multinational corporations in Southeast Asia may face a delicate balancing act as Indonesia moves closer to the BRICS. Western companies operating in the region might need to reevaluate their supply chain strategies—possibly reducing reliance on Western trade partners while enhancing engagement with BRICS-aligned economies. While more ASEAN-BRICS integration may offer economic upsides, companies should prepare for disruptions in supply chains. Changing trade policies, currency realignments, and investment flows may redefine regional competitive advantages for manufacturers. As Southeast Asia repositions itself within this emerging bloc, businesses must adapt to a new global trade order.

ASEAN’s increasing role in BRICS has profound economic implications. BRICS, which already contributes nearly 30% of global GDP, offers ASEAN nations an alternative economic framework that reduces dependency on Western-dominated institutions.By aligning with BRICS, ASEAN countries gain increased access to major economies outside the traditional Western markets. Trade with China, Russia, India, Brazil, and South Africa is expected to increase, potentially cutting into US and European markets. This may especially benefit the manufacturing, agriculture, and energy sectors, where ASEAN nations enjoy strong competitive advantages.Indonesia, for example, has major exports such as palm oil, coal, and nickel that could see expanded trade agreements with BRICS nations. Vietnam’s growing electronics and technology sector may also benefit from increased investment flows and partnerships with BRICS countries, particularly in digital infrastructure.

One of the primary benefits of BRICS membership for ASEAN nations is access to alternative sources of financing. The New Development Bank (NDB) was created to counterbalance the World Bank and International Monetary Fund (IMF), providing loans with fewer political strings attached. This could be a game changer for ASEAN countries looking to develop infrastructure without excessive dependency on Western financial institutions.BRICS funding could help Indonesia accelerate its ambitious infrastructure projects, such as high-speed rail, smart cities, and renewable energy initiatives. Malaysia and Thailand, known for their advanced infrastructure, could also leverage BRICS investment to boost economic growth and technological advancements.

Despite the benefits, Indonesia’s entry into BRICS and ASEAN growing ties with the bloc are not without challenges. The most immediate concern is how this move will affect relations with Western allies, particularly the United States and the European Union.Indonesia and ASEAN nations have long-standing economic and security partnerships with the West, and closer BRICS ties could create diplomatic friction. The United States has previously expressed concerns over BRICS’ growing influence, viewing it as a challenge to Western-led financial institutions like the IMF and World Bank.ASEAN has traditionally adhered to a non-aligned foreign policy, carefully maintaining neutrality between major powers. Aligning with BRICS, a bloc that includes China and Russia—both of whom have adversarial relations with the West—could complicate ASEAN’s diplomatic positioning.Furthermore, ASEAN countries may face increased pressure from the US and its allies to limit BRICS engagement. Washington’s Indo-Pacific strategy aims to counter China’s rising influence, and ASEAN’s participation in BRICS could be viewed as a shift towards China’s sphere of influence.

The participation of ASEAN countries in BRICS is heavily influenced by the bloc’s largest economies—China, India, Russia, Brazil, and South Africa. These nations, particularly China and India, play a crucial role in shaping ASEAN’s economic and geopolitical trajectory within BRICS.China has been ASEAN’s largest trading partner for over a decade, and deeper economic cooperation under BRICS could further cement this relationship. China’s Belt and Road Initiative (BRI) has already invested billions into Southeast Asian infrastructure, including high-speed rail projects in Indonesia and Thailand, as well as port developments in Malaysia. As a key BRICS member, China may leverage its financial and trade policies to align ASEAN nations more closely with the bloc’s economic agenda. India is strengthening its economic ties with ASEAN through initiatives such as the ASEAN-India Free Trade Agreement. India’s growing consumer market presents good prospects for ASEAN technological, agricultural, and manufacturing exporters. India’s focus on digital transformation and financial technology may also offer investment prospects for ASEAN countries modernizing their economies.Russia, another major BRICS economy, also plays a growing role in ASEAN through energy partnerships, particularly in oil and gas investments with countries like Vietnam and Indonesia.Meanwhile, Brazil and South Africa present new opportunities for ASEAN markets in agricultural trade, natural resources, and alternative financial cooperation. These significant BRIC economies collectively aid ASEAN in becoming more integrated within the bloc while balancing regional ties with the West through South-South cooperation.

As Indonesia joinied the BRICS is just the start of a period that may change ASEAN. If Malaysia, Thailand, and Vietnam follow suit, the BRICS will strengthen its position in Southeast Asia and become more involved in global economic governance.With its increasing engagement with BRICS, ASEAN may indicate a pivotal shift toward a more multipolar framework in global trade, finance, and geopolitical alliances, raising whether this will result in a more equitable and balanced world economy or heightened tensions. In many ways, Indonesia’s decision to align more closely with BRICS moves in the opposite direction of Trump’s first 100 days in office, when he announced sweeping tariffs and trade barriers to protect American industries. As the U.S. and some Western nations push for protectionism, Indonesia is doubling on open trade with emerging markets, signaling Southeast Asia is looking beyond traditional power centers to secure its economic future.