1 UNCTAD – ESCAP ASIA PACIFIC REGIONAL CONFERENCE ON E-COMMERCE STRATEGIES FOR DEVELOPMENT November 21, 2002 Bangkok, Thailand MALAYSIA: The New Economy Technology Powering Economic Transformations BY Rahayu Ezrani ABDUL RAHMAN E-Business Department, Multimedia Development Corporation

2 MSC Strategic Policy Directions for the ICT Sector Development Strategic Policy Directions for the ICT Sector Development The MSC VisionAgenda Challenges

3 A knowledge and idea-based economy where the key to wealth and job creation are the extent to which information, ideas, innovations and technology are embedded in all the various sectors of the economy

4 1999: Consultant engaged to study and propose future policy directions Policy options proposed: –delayed transition towards full competition; or –rapid transition towards full competition. Factors taken into account: –Global trends –Status of infrastructure –Regulatory readiness –Industry readiness Strategic Policy Directions

5 CURRENT STATUS OF MALAYSIAN ICT INDUSTRY IIIIIIIV “Rudimentary” “Average” “Advanced” Competition” “Monopoly” “Early Competition” “Managed Competition” “Full MALAYSIA “Rapid Transition” Path “Delayed Transition” Path POLICY FRAME WORK

6 Multimedia Super Corridor (MSC) initiatives Universal service provision- policy framework in place with funding from industry and Government Moves towards cost based tariff started with tariff re-balancing implemented on March 1, 2002 for fixed line services Opening up the last mile by issuing new licenses POLICIES TO FACILITATE RAPID TRANSITION

7 Voice-Over-Internet Protocol legalized which serves as an efficient and cheaper voice service for international calls Control of mobile telephony charges lifted in August 2000 which led to exponential growth of mobile penetration Develop a National Spectrum Plan to maximize spectrum usage with 3G as the first block of spectrum assignment POLICIES TO FACILITATE RAPID TRANSITION

8 MSC Strategic Policy Directions for the ICT Sector Development The MSC Vision The MSC VisionAgenda Challenges

9 Multimedia Super Corridor 15x50 km garden corridor south of downtown Kuala Lumpur Special cyberlaws, policies and practices tailored to enable residents to achieve the full promise of multimedia World-class physical infra- structure and next- generation Gb multimedia network A one-stop shop to facilitate investment - the MDC The MSC – A Quick Glance

10 Create the ideal multimedia environment to attract world-class companies to use MSC as a hub Catalyze a highly competitive cluster of Malaysian multimedia/IT companies that become world- class over time Leapfrog into success in the Information Age Go Global Lead Regional Create value from Information Age businesses Leapfrogging Into The Information Age Enhance domestic productivity

11 Ten Bill of Guarantees No.1No.1 Flagship Applications No.2No.2 Incentives & Programs to Create Enablers, Meet Outcomes

12 Bill of Guarantees 4.Unrestricted employment of foreign knowledge workers 5.Freedom of ownership ~ Co. can be wholly owned by foreign legal entities, can register as a branch. 6.Freedom to source capital globally 7.World-class physical & IT infrastructure 8.Globally competitive tariffs 9.High-quality urban development 10.Excellent education facilities & human resource talent pool 1.Five-year exemption from Malaysian income tax renewable to 10 years, ~ relief from tax on statutory income percent Investment Tax Allowance (ITA). ~ those engaging in capital-intensive activities, or those multimedia activities that are treated as cost centers and not as revenue-generating businesses. 3.Duty-free importation of multimedia equipment. FINANCIAL NON-FINANCIAL

13 E-Business Telehealth Smart Schools Multipurpose Card R&D Cluster Electronic Government Worldwide Manufacturing Web Borderless Marketing Center Technopreneur Development MSC Flagship Applications

14 MSC Strategic Policy Directions for the ICT Sector Development The MSC VisionAgenda Challenges

15 We have seen and done things, are seeing and doing things, but are also still learning… Build Trust on the Web -Encryption technology development -Integrated logistics hub -Awareness & education Attracting Inbound Consumers -Trading hubs -Internet Exchange -Global Connectivity Organization Transformation -Awareness and education program -Work Culture -Re-structuring of companies to exploit E-Commerce Policy and Regulatory Framework -IP Management System -Taxation -Consumer protection Build Critical Mass -internet & access devices’ penetration -Network access & tariffs -Telecoms infrastructure

16 Thank you