What a Biden presidency means to Malaysia

By Zaidi Isham Ismail

After a fiercely fought presidential election, Joe Biden has officially been declared as President Elect to succeed President Donald Trump.

What does Biden's win mean to Malaysia?

We take a look at some of the implications which might happen in the near to medium future.

Oil companies could be under pressure

During his presidential election campaign, Biden had consistently declared his preference for renewable energy.

He had numerous times mentioned that he will put a stop to fracking, an oil refining process.

"Yes he is anti oil companies. He believes in environmental sustainability and will pursue green technology and renewable energy," said University Putra Malaysia Datuk Dr. John Antony Xavier.

"What that means is that demand for fossil fuels will go down and so will oil prices unless there is a big recovery in the world," Xavier told DagangNews.com.

Xavier added for the future, oil is on the way out and battery power will be the mainstay for the automobile industry in 10 years time.

Oil prices could soften

Nobody really knows what will happen to oil prices in the next couple of months.

But with Biden's preference on renewable energy, crude oil prices could actually be under siege.

And although its still early to tell, Petronas might be a mild casualty from Biden's energy policy.

A boon to battery makers

Crude oil's bane could be a boon for battery makers.

As a proponent of renewable energy, Biden's win could prompt automobile makers to roll out more energy efficient vehicles.

There will be more hybrid vehicles on the roads jointly powered by lithium ion batteries and petrol.

This could be a new bellwether for the world's and possibly Malaysia's energy efficient vehicles industry.

Will the TPP be revived?

The now absconded Trans Pacific Partnership (TPP) was on the verge of being a reality back in 2016 only to be derailed by Donald Trump who became president beating Hillary Clinton.

Xavier said, Biden may resurrect the TPP but he will have many other items on his plate. 

"TPP was designed to exclude China.  Now we have the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) that includes China and with a similar membership as the TPP minus US. 

"But it is unlikely that these countries will want to go back to the US unless US joins the CPTPP which is unlikely given the war that is going on between the US and China," said Xavier.

So we will just have to wait and see.

More FTAs can be forged

Biden's win could pave the way for more free trade agreements (FTAs) to be forged in Asia and ASEAN countries.

This will be a boon for trade in the region which will definitely benefit Malaysia.

Will Malaysia and the US sign their ever elusive  FTA? Only time will tell.

The ringgit could strengthen

Biden's win should be positive for the stock markets and currencies in the region which include the ringgit and Bursa Malaysia.

This is because Biden's win has snuffed all uncertainties in the capital markets and the business community all over the world.

More easing from the US Federal Reserve over the next few months will weaken the US and strengthen regional currencies including the ringgit.

US will keep China in check in the South China sea

One of the many concerns in the Asian region is the volatile and potentially explosive situation in the South China Sea.

As many nations claim a stake in the oil rich Spratlys iskands, war could advertently or inadvertently erupt.

Biden's win could see an enhanced US military presence in the area as a check and balance to all military powers in the region especially China.

A peaceful situation is imperative to ensure all countries in the region, Malaysia included can prosper peacefully and economically.

In 2016, on a visit to Australia, Biden vowed that the US would "ensure the sea lanes are secure, and the skies remain open."

"And I assure you, the United States is going nowhere," he said. "The United States is here in the Pacific to stay," said Biden.

Overall, there won't be any fundamental change in policies vis-a-vis Malaysia. 

Perhaps student visas and residence permits into the US might be easier and incidents of Islamophobia could dwindle.

But fundamentally, Malaysia-US relations which have been lukewarm for the past four years could enter a new phase.

A US under a Biden presidency could open new frontiers between Kuala Lumpur and Washington. - DagangNews.com

The writer is former NST Business assistant editor