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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
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
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
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
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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ICT and the Multimedia Super Corridor
The Multimedia Super Corridor (MSC), created
thanks to heavy investment by the Malaysian
government to attract domestic and foreign
investors to its ICT industry, now serves as the
backbone of the ICT infrastructure in the country.
It is supported by high-speed links that to Japan,
the Association of Southeast Asian Nations
(ASEAN), the United States and Europe.
The development and widespread use of ICT are
central to the realization of a knowledge-based
economy. ICT usage has improved efficiencies
among Malaysian enterprises and increased
Malaysia’s competitiveness in the global
The computing segment is the largest application
segment for semiconductor consumption in Asia
while communications and consumer applications
are the fastest growing segments, according to
the International Data Corporation. Globally,
Malaysia is ranked as the third most favoured
location for outsourcing of business processes.
Malaysian ICT companies are capable of
providing a wide range of services, including:
mobile and wireless communication;
business application software development;
Internet-based business applications in the financial sector;
digital content development;
networking and outsourcing for e-commerce;
Malaysia is a top choice among companies
in West Asia for ICT off-shoring. Progressive
government policies, a world-class environment
and attractive incentives will continue to attract
business from around the globe.
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
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
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.