THE United Kingdom announced that it was leaving the European Union or Brexit in June last year and there were a lot people who are not sure on what will happen next.
At that time, many were not sure on how it will impact Malaysia.
Let us take a look at how Brexit has affected Malaysia and the rakyat at this moment.
What is Brexit?
The UK is part of a grouping in Europe called the European Union. Its 30 members include France, Germany, Spain and Italy.
The people of the UK voted to exit the European Union in 2016 and leave the European Union and this is called Brexit.
Due to Brexit, many are not sure on what will happen next as the UK will be all alone.
Many are not sure on how its trade relations with other countries like Malaysia.
But so far, things have been improving.
Malaysia can expect more investments
Maybank Kim Eng chief executive officer Datuk John Chong said investment in Asean and Malaysia would be higer as people are not sure on what will happen in Europe after Brexit.
Speaking to New Straits Times at Maybank Invest Asia UK 2017, Chong said because investors are not sure on what will happen, they will invest their money in market where they are comfortable with such as in Asean.
Investors from Europe would take their money out of EU and invest in Asean as well as in Malaysia.
So Brexit, could have a positive impact on Malaysia and this will benefit the rakyat.
This is because foreign investments which come into Malaysia will benefit the rakyat by providing them jobs and an income.
Asean has a market of over 600 million people
Once the UK announced it was leaving the European Union, investors in the country were not sure on what will happen next.
As a result, investors take out their money and invest in Asean which has a strong market and a total population of over 600 million people.
The investors were advised not to invest in markets which are emerging or not so strong yet such as in East Europe or China as a lot of things were uncertain.
But Asean on the other hand is an established and strong economic zone and that is why investors who left Brexit invested their money in Asean as well as Malaysia.
France may also follow the UK
France elected Emmanuel Macron as its new president a few days ago and France already said that it also wants to leave the European Union.
As soon as France said that, Asean’s stock markets as well as Malaysia’s stock market improved.
The ringgit also increased 0.7 percent RM4.36 against the US dollar.
This is because, investors would see this as a sign that France wants to leaves the European Union and its investors are looking at investing their money in Malaysia.
This will be positive for the economy and benefit the rakyat.
The UK’s economy is already getting stronger
Ever since Brexit, the UK economy is already performing very well and this could lead to higher trade with Asean and Malaysia.
UK companies are already merging with each other to become stronger and this will make the economy more active.
Furthermore, the UK and Malaysia are good friends with strong trade relations which will be good for the economies of both countries.
Some Malaysian companies are going to the UK
Due to Brexit, some Malaysian companies are going to the UK to build and buy properties.
This is because in the UK, there is a demand for 50,000 affordable homes every year.
TH Properties Sdn Bhd chief executive officer Datuk Roszali Othman told the New Straits Times on May 8 that it is going to the UK as property market is very attractive right now and can appreciate later on.
This is good development for the rakyat as TH Properties is owned by Lembaga Tabung Haji.
Whenever TH Properties make a profit, the rakyat can share the profit as Tabung Haji will pay dividends.
The Employees Provident Fund, Felda Investment Committee, Sime Darby and SP Setia also own properties in the UK and they all can pay dividends to the rakyat whenever they make a profit as the companies pay dividends.