The World Will Not Wait for Malaysia: Digital Policies towards Socio-economic Revitalisation

• New administration must show urgency & be both decisive & inclusive
• Reversal of cabotage exemption by former Minister of Transport damaging

With the appointment of Ismail Sabri Yaakob as Malaysia's ninth Prime Minister, it is imperative that the incoming government identify and prioritise agile and timely implementation of key policies to leverage technology as an enabler in socio-economic revitalisation. Secure, trusted, and inclusive application of technology is more critical than ever in a nation’s economic recovery.

The world will not wait for Malaysia, and it is imperative that we move forward quickly and decisively.

Below are the Social & Economic Research Initiative (SERI) recommendations on five digital policies which require urgent implementation:

1. Clarity in relation to law enforcement access to data – to bolster Malaysia’s position as a regional datacentre hub and increase confidence of other nations storing data in Malaysia.

Regulators around the world are developing new legal frameworks to replace conventional search and seizure rules which do not apply to cloud computing. Removing a server from a hyper-scale cloud datacentre would not enable access to the information as data stored on servers are encrypted both at rest and in transit. This increases the urgency of common approaches to trusted government access to data held or processed by cloud service providers (CSPs).

As the global data economy grows, a principled rules-based approach to government law enforcement access to data would enhance legal certainty and increase investment opportunities, allowing countries to become datacentre hubs or innovation testbeds. With increased clarity, countries would be more willing to store their data in Malaysia, with the knowledge that law enforcement would not be able to access data arbitrarily without due process.

2. Open data and cross-border data flow - Data is the lifeblood of the digital economy, fuelling our ability to develop data-driven insights and policies. With Malaysia currently ranked #87 on the Global Open Data Index, the nation requires more concerted efforts to be advanced in this area. Open data can be a powerful force for public accountability, making information more accessible, and allowing for greater public scrutiny.

As today’s trade routes are digital, the digital economy also depends on the trusted and uninterrupted flow of data between countries. Virtually no economic activity today can happen in national silos; instead, it depends on close interaction with users, partners, and customers in different countries. The secure storage, processing and transfer of personal data underlie all these exchanges, including remote work and virtual collaboration, distance learning, telemedicine, cybersecurity, the fights against cybercrime and child abuse online.

Clarity of law enforcement access to data and allowing the free movement of data would enable greater regional and global collaboration and cooperation. International efforts on Covid-19 research and responses provide vivid examples of how data flows have enabled new discoveries, information sharing, and collaboration that have helped mitigate the global crisis by enabling better understanding of the virus, tracking the spread of the pandemic and evolution of the different variants, and development and distribution of vaccines.

3. Regulatory clarity and stakeholder consultation towards increased technology FDI

A) Exemption to Malaysia’s cabotage policy, i.e., allow foreign vessels to install and repair submarine cables while developing local capacity. The reversal of the cabotage exemption by Wee Ka Siong in his former role as Minister of Transport has led to Malaysia taking a backseat in digital investment decisions, losing out to countries in the region.

Reinstating the cabotage exemption and allowing foreign vessels to lay cables and provide maintenance services would:

• Encourage more international submarine cable landings in Malaysia;
• Allow for shorter repair times resulting in improved connectivity;
• Attract more global data centers to reside in Malaysia; and
• Bolster capabilities of domestic data center companies

The Malaysia Digital Economy Blueprint (MyDigital) specifically sets the goal of Malaysia having the highest number of submarine cable landings in ASEAN by 2025. This makes it all the more important that the Cabinet makes the right decision pertaining to Malaysia’s cabotage policy.

Given the multi-stakeholder nature of the digital economy, a collaborative approach would be more appropriate, especially in relation to cable repairs as we lack local specialised talent and equipment to address cable damage quickly and effectively.

B) Address urgent concerns regarding the Malaysian Communications and Multimedia Commission (MCMC)’s proposed licensing of data centres and cloud service providers. The decision to introduce a licensing obligation without meaningful stakeholder consultation with data centre and cloud service providers is of grave concern. Implementing a licensing framework on data centres and cloud service providers will reduce Malaysia’s appeal and competitiveness as an investment destination, impacting broader socio-economic growth in the country.

4. Bridge the Digital Divide with digital infrastructure – The Highways of the 21st Century

The growth of a sustainable and inclusive digital economy relies on resilient digital infrastructure, connectivity, and devices.

• Connectivity: While there are various efforts to increase internet access, these must be accelerated. The MyDigital blueprint stipulates that Malaysia will have 100% internet access by 2025. However, with education, economic activity, and social interactions being forced into online spaces, stable and accessible internet connectivity is no longer a luxury – it is critical infrastructure.
• Hardware: The absence of devices and poor or unavailable internet connection prevents productive and fruitful lessons or even worse, bars the overall learning process. While the government has expressed the intention to provide devices for students to access their respective online learning platforms, this has yet to be delivered upon and efforts need to be accelerated. Without the means to participate in online lessons, students’ education will continue to be halted, or intermittent at best. The government has the option of providing refurbished devices which may be more cost-efficient as opposed to brand new devices. However, this may require replacement or repairs sooner than a new device.

5. Skills Development

Ensuring that Malaysia’s digital infrastructure provides consistent, reliable, and ultra-fast broadband service is key to unlocking the potential of the digital economy. But it is important to note that access to data, connectivity, and devices in isolation do not create economic opportunity. Skills must be at the center of efforts to bridge the opportunity divide across all segments of the population.

Policymakers and policymaking must also evolve in tandem with technology advancement. For example, as governments seek to harvest the insights within their data estates, digital literacy and data literacy become critical skills within the civil service, for both technical and non-technical personnel.

Malaysia’s efforts to develop an inclusive digital economy must be anchored on digital skills development, with opportunities made available to everyone across the nation – people with disabilities, women-headed households, educators, those of us in precarious working conditions, B40 and marginalised communities.

As a non-partisan thinktank founded with the aim of advancing evidence-based policies to reduce inequality, SERI hopes that the new administration will demonstrate a sense of urgency and be both decisive and inclusive in taking Malaysia forward in this digital era.

Dr Helmy Haja Mydin is the founder of SERI, a non-partisan think-tank dedicated to the promotion of evidence-based policies that address issues of inequality, particularly at the intersection of technology and society. For more information, please visit seri.my