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Malaysia’s New Economic Model and high-speed broadband

Building an inclusive society

The New Economic Model

In the months after he became Prime Minister, Dato’ Sri Mohd Najib bin Tun Abdul Razak set up an independent National Economic Advisory Council, and tasked it to carry out a thorough review of Malaysia’s economy. He asked the Council to make bold, yet practical recommendations for a new economic model to transform the country’s economy.

At the end of March 2010, the Prime Minister unveiled the Council’s preliminary report on the country’s future economic direction. The report sets out the state of the nation’s economy — its strengths and its shortcomings — and assesses current policies as well as potential areas of future focus for Malaysia. The New Economic Model, to be achieved through an Economic Transformation Programme, constitutes a key pillar for Malaysia to join the ranks of the high-income economies, in line with the goals of the country’s Vision 2020.

The growth process, which the country will embark on, needs to be both inclusive and sustainable. As the report points out, inclusive growth enables the benefits to be broadly shared across all communities. And sustainable growth should increase the wealth of current generations in a way that does not come at the expense of future generations.

A number of strategic reform initiatives are proposed. These are aimed at greater private initiative, better skills, more competition, a leaner public sector, pro-growth affirmative action, a better knowledge base and infrastructure, the selective promotion of sectors, and environmental as well as fiscal sustainability.

The next step in the process will be a public consultation to gather feedback on the key principles of the New Economic Model. The key recommendations will then be translated into actionable policies.

Unveiling the report, the Prime Minister explained: “The New Economic Model is a vital part of the Malaysia we are building, the structure that will serve our people for the future. As a metaphor, think of a house under the Malaysian sun. We need a roof — an overarching philosophy that encompasses all parts of the building. In our case, Malaysia is the roof that we gather under. The Government Transformation Programme — a programme of delivery on six key areas — is one pillar of this home. A second pillar is the Economic Transformation Plan that will deliver the New Economic Model. And the floor, the basis on which all Malaysians will move forward are the 10th and 11th Malaysian Plans.”

The report will be published and made available to the general public to gather their input and provide them with an opportunity to be part of the decision-making process. As the Prime Minister said, “It is only through consultation with the Rakyat and all the other stakeholders that we can achieve a strong, convincing and effective plan to implement our New Economic Model. The rakyat — and groups such as business leaders and investors — want and deserve input into the policy-making process. We must develop a more consultative approach to engaging our most important stakeholders. Only through such a process can we broaden our viewpoints, challenge conventional wisdom, and help build transparent and open consensus for the right way forward. This is the path we will follow. People will come first.”

Broadband on the front burner

Through a public-private partnership, a high-speed broadband network is being deployed in Malaysia and is capable of offering 10 Mbit/s to 100 Mbit/s. The government decided to launch this public-private partnership with an allocation of RM 2.4 billion over three and half years, while Telekom Malaysia will provide RM 8.9 billion more over 10 years. The first part of phase one is to connect 1.3 million premises with fibre-to-the-home (FTTH) which can reach an individual household or to the building (FTTB) by the end of 2010.

Malaysia is divided into three zones and this first roll-out is targeted for zone 1, which has a high population density, as well as being economically well off. This network will be open access and with fair access pricing and competition among all service providers. All subscribers will receive a minimum of 20 Mbit/s. After phase one it would begin — broadband for the general public, which will deliver 2 Mbit/s and will consist of both wired and wireless networks.

In March 2010, the Prime Minister launched a high-speed broadband service at Merdeka (Independence) Square in Kuala Lumpur. Recognizing high-speed broadband as a key enabler to change Malaysia from a medium-income to a high-income country, he said: “Definitely, high-speed broadband will make Malaysia a 21st century nation.” The new service is expected to stimulate the economy, enhance competitiveness, reinforce local and foreign investor confidence, enrich creative and innovative minds, and act as a conduit to disseminate information and knowledge to the people.

“It cannot be denied that high-speed broadband will make our lifestyle more sophisticated, making it easier for us to communicate with one another. For example, I have been using this service when I invited 300 of my Facebook friends to have tea with me recently. From 138 000, who have registered as my Facebook friends, I invited 300 of them for a tea reception. I feel this is my way of communicating with the people directly,” the Prime Minister said.

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In a bid to drive the social and economic transformation towards achieving high-income nation status, the Prime Minister went on to announce the following national broadband initiatives:

• The setting up of some 246 community broadband centres for 615 000 people.

• The establishment of people’s Internet centres at 138 Information Department premises nationwide for 400 000 users.

• Providing e-kiosks at community centres nationwide.

• Building a total of 873 telecommunication towers, including 278 in Sabah and 257 in Sarawak.

• Allocation of funds from the universal service provision (UPS), with the providers agreeing to hand out laptops to needy students nationwide.

• The agreement of Telekom Malaysia to reduce broadband packages with netbooks from RM 50 to RM 38 — in the UPS areas, this would be further reduced to RM 20.

Pekan leads the digital transformation

Meanwhile, the citizens of Pekan in Pahang will be experiencing the latest digital technology in a new programme announced at the end of January 2010. The Digital Pekan programme aims to ensure that the benefits of digital technology are accessible to all within the district.

The launching of Digital Pekan marks the determination of the government to incorporate information and communication technologies (ICT) and broadband into the digital district strategy, in line with the national agenda. The digital district programme is a key contributor to achieving the national target of 50 per cent broadband penetration by end of 2010. The launch of Digital Pekan was organized by the Ministry of Information, Communications and Culture, together with the Malaysian Communications and Multimedia Commission (SKMM).

The Prime Minister stated that “In our outreach to the rakyat wherever they may be, bridging the digital divide through the delivery of modern facilities and services to various parts of the country via the approach in creating digital districts is a step in the right direction. Everyone everywhere should and will be able to enjoy the benefits of ICT and broadband so that Malaysia can move towards becoming a highincome nation… The digital district strategy employs a ’building block’ approach — working on the smallest units. And with the integration of these units, we get to build up ’digital states’ and thereon towards a ’digital nation’.”

The Digital Pekan programme will set the pace for the development of other districts in the country. Through smart collaboration with various stakeholders from the government, the private sector and academia, the initiative will include the drive to own a personal computer and will provide services such as wireless hot spots, free e-mail accounts and e-government services to the rakyat in Pekan.

Innovative partnerships between the public and private sectors are needed to create opportunities and solutions to realize the vision of a digital district. Apart from the Ministry of Information, Communications and Culture, and SKMM, the Pekan project has been developed through the support and collaboration of many partners and sponsors, including Wi-Net Technology Sdn Bhd, Telekom Malaysia Berhad, Intel Malaysia Sdn Bhd, HeiTech Padu Berhad, Astro, Hewlett-Packard Malaysia, Danawa Resources Sdn Bhd, Maxis Communications Berhad, DiGi Telecommunications Sdn Bhd, Celcom Axiata Berhad, U Mobile Sdn Bhd, the Malaysian Administrative Modernization and Management Planning Unit and the Ministry of Education.

The broadband experience centre within the Pekan Resource Centre will provide a good opportunity for the rakyat to experience new broadband services and applications. This opportunity will be organized as part of an education and awareness programme relating to broadband services. Initiatives to create more local content will help increase literacy and digital inclusion among the rakyat of Pekan. The project reflects the message that broadband and going digital, with innovation as a way of life, will pave the way to creating a better quality of life and a brighter future for future generations of Malaysians.