1. E-Readiness and Enabling Policies in Malaysia EDICOM 2002 PWTC, Kuala Lumpur Ministry of Energy, Communications and Multimedia 31 October 2002

2. Malaysia’s Vision To transform itself from an industrial economy into a knowledge economy with ICT as an enabler

3. Pre-requisites – e-Agenda To support the evolution of such a society, Malaysia has developed an e- Agenda that incorporates the following thrusts areas: Multimedia Super Corridor Flagship Applications Communications Infrastructure Human Resource Development Content Development

4. Malaysia’s E-Agenda Knowledge Based Society 2020 MSC Flagship Applicatio n To spur Malaysia to be E-Ready to support Government of knowledge based society 8 th Malaysia Plan Funding – RM5.1 billion MSC Content Development HRD Electronic Commerce Communications Infrastructure Flagship Applications

5. 8 th Malaysia Plan Allocation A total of RM5.159 billion has been allocated to cater for the above components meant to spur the country towards e-readiness

6. DEVELOPMENT ALLOCATION FOR 2001-2005 100.05,159.1Total 5.5284.4Others 0.210.0Local Content 21.3 1,098.0 30.2 3.0 119.8 945.0 Bridging the Digital Divide Infodesa Rural Internet Centre Universal Service Provision Computer Infrastructure for Schools 5.8300.0Research & Development 31.81,641.8Computerization 35.4 1,824 434.8 401.1 400.0 418.1 1.9 169.0 MSC Flagship Program E-Government Smart Schools Telehealth Multipurpose Card R&D Cluster Cross Flagship (%)ALLOCATION (RM MIL.)

7. What is E-Readiness? E-Readiness or Digital Readiness is the degree to which a country is prepared to participate in the digital economy. It is gauged by assessing a country’s relative advancement in key areas

8. E-Readiness Measurements Worldwide, there have been effort to measure e-readiness and among such measurements are: APEC Readiness Assessment Harvard Readiness Assessment McConnell International Assessment E-ASEAN Readiness Guide

9. E-Readiness Measurements In general, the measurements incorporates the following indicators: Infrastructure E-Society E-Commerce E-Government Trade in ICT goods and services This measurement is used for the e- ASEAN Readiness Survey

10. The measures in the revised readiness guide have been aligned with the Strategic Initiatives e-ASEAN Framework Goals e-Society Legal Framework for e-commerce Trade in ICT Goods and Services Measures Penetration Use Type Organization Promotion Measures Communication Infrastructure Internet Access Services End User devices Affordability Measures Communication Sector IT Sector ISP Sector Measures Current Status Taxation Legal Framework Physical Distribution Measures Workforce Localization Public Access points Measures Home users Business Users Education e-Government Infrastructure

11. E-Readiness Survey Results 2001

12. E-ASEAN Readiness Survey In the last 3 years (2000 – 2002), 3 surveys have been conducted by MECM with assistance of MDC Surveys conducted to monitor progress on key indicators and for comparison and benchmarking with other countries esp. the Asia Pacific and ASEAN Regions

13. The Methodology defines four stages in the development of an information economy. This approach is used to assess ASEAN readiness levels and to develop recommendations Emerging The basic infrastructure requirements for e-readiness are in place or are planned to be in place in the short term There is political commitment to positioning the country for the ICT revolution Evolving A comprehensive infrastructure framework for ICT development has been established and is being updated and modified to work effectively within the political, economic, geographic, social and demographic characteristics of the country Embedding There is general acceptance by citizens, business and the government of the dynamics in society caused by technology advances An embedding country will be incorporating e-business requirements into its policies, legislation and regulation and is using these to enhance its international standing Extending An extending country has moved to world- class practice by inventing and re- inventing traditional ways of doing things in a way which improves productivity and standards of living

14. E-Readiness – Key Characteristics - Infrastructure EmergingEvolvingEmbeddingExtending Low penetration of communication infrastructure and terminal devices Generally closed market condition Moderate to low penetration of communication infrastructure and terminal devices Mostly liberalised market condition High penetration of communication infrastructure and terminal devices Mostly liberalised market condition Very high penetration of communication infrastructure and terminal devices Broadband Internet Services gaining popularity Liberalised market condition

15. E-Readiness – Key Characteristics - E-Society EmergingEvolvingEmbeddingExtending Very low Internet penetration among home and business users; usage limited to e-mail Very low Internet penetration among schools/colleges Almost no availability of local contents Moderate to low Internet penetration among home and business users; usage limited to e- mail or info’ gathering & publishing Moderate to low Internet penetration among schools/colleges with limited use of web/computer based tools Moderate to low availability of local contents Moderate Internet penetration among home and business users; usage limited to e-mail or info’ gathering & publishing Moderate Internet penetration among schools/colleges with limited use of web/computer based tools Moderate availability of local contents Very high Internet penetration among home and business users; usage limited to e-mail or info’ gathering & publishing Very high Internet penetration among schools/colleges with some use of web/computer based tools Very high availability of local contents, INCL. In local language

16. E-Readiness – Key Characteristics – E-Commerce EmergingEvolvingEmbeddingExtending Low or zero E-Commerce No position on E- Commerce taxation E-Commerce law does not exist CA & payment gateway do not exist Physical distribution infrastructure developed only in main cities Customs has not incorporated ICT technology E-Commerce transactions almost zero Low or zero B2B & B2C E-Commerce No position on E- Commerce taxation E-Commerce law does not exist CA & payment gateway do not exist Physical distribution infrastructure developed in some parts Customs yet to fully incorporate ICT in operations E-Commerce transactions < 1% of GDP B2B & B2C E- Commerce low Taxation neutral to E-Commerce E-Commerce law, CA and payment gateway exists Physical distribution infrastructure moderately- developed Customs yet to fully incorporate ICT in operations E-Commerce transactions 1-5% of GDP B2B E-Commerce moderate, B2C low Taxation neutral to E-Commerce E-Commerce law, CA and payment gateway exists Physical distribution infrastructure well-developed E-Commerce transactions > 5% of GDP

17. E-Readiness – Key Characteristics – E-Government EmergingEvolvingEmbeddingExtending Very low PC & Internet penetration in govt. Govt. uses Internet mainly for e-mail Few govt. websites, with no/low proportion of services on-line No separate ICT ministry/agency Low/moderate PC & Internet penetration in govt. Govt. uses Internet mainly for e-mail Moderate proportion of govt. depts. have websites, with moderate proportion of services on-line Separate ICT dept. Moderate/high PC & Internet penetration in govt. G2C services & internal work processing High proportion of govt. depts. have websites, with moderate proportion of services on-line Separate ICT ministry/dept. Very high PC & Internet penetration in govt. G2C services, internal work processing & E- Commerce Very high proportion of govt. depts. have websites, with high proportion of services on-line Separate ICT ministry

18. E-Readiness – Key Characteristics - Trade In ICT Goods & Services In ICT sector, countries are at different levels in conforming to internationally agreed trade liberalisation treaties Malaysia has signed the WTO Basic Telecom Agreement and IT Agreement and is in the process of implementation

19. E-ASEAN Readiness Survey Main findings are as follows: Infrastructure - Embedding E-Society - Embedding E-Commerce - Embedding E-Government - Embedding Trade in ICT goods and services – Signed WTO Agreements On Basic Telecom and IT and in the process of implementing

20. Findings of Survey Infrastructure E-Society Trade in ICT Goods & Services E-Commerce E-Govt Emerging Embedding Extending Evolving Singapore MalaysiaMalaysia Thailand Malaysia Phillipines Thailand Malaysia Note : Emerging – Basic requirements in place Evolving – Comprehensive infrastructure framework established Embedding – Incorporation of e-business requirements into policies and programmes Extending – Moved to world-class practice

21. E-Readiness Survey – Conclusion Key Challenges Infrastructure Leverage existing infrastructure for broadband value added Internet Access E-Society Encourage home users for on-line transaction Encourage business users to adopt usage of e- commerce particularly for transaction Leverage the usage of ICT of education Promote localisation of content in local language

22. E-Readiness Survey – Conclusion Key Challenges E-Commerce Improve physical infrastructure throughout the country E-Government Develop roadmap to describe transformation strategies Increase govt. web presence & utilisation in service delivery

23. Targets For Telecommunications Indicators Source : 8 TH Malaysia Plan Report (Nov 2001) 20012005 Population 23.5M25.7M Telephone Penetration 1 20%35% Mobile Penetration 2 29%50% PC Penetration 3 9.91%30% Internet Dialup Per 100 population 10%25% Internet Users Per 100 population 21.5%24 TV per household 81%95% Satellite Users % per household 13%15% E-Commerce 1 USD Mil 10009400

24. Penetration of ICT in Government *Online Government services refer to public services which can be delivered electronically involving a two-way online interaction. Excluded are the mere provision of online information and downloading of forms. 1 : 12 1 : 7.3 1 : 4.3 1 : 6.2 1 : 6.5 Ratio PC:Staff 1 : 6 Average Agency PBT BBN BBP State Federal Ratio of PC to Staff 80.2% of Government departments have information websites 8.6% of Government services* is offered online

25. Malaysia’s Initiatives to Enhance E-Readiness

26. Policy Initiatives Widening Access Building trust and confidence in electronic transactions Privacy requirements and Personal Data Protection Information Security and integrity Harmonisation of laws to facilitate e- transactions Promoting positive use of the Internet

27. Widening Access

28. Strategies for Widening Access 4 Develop a sustainable Universal Service Program Move towards cost- based tariff More liberal licensing and reduce barriers to entry Leverage on new technologies and promote broadband rollout

29. UNIVERSAL SERVICE PROGRAM  Past Policy  Industry is responsible for all info-communications infrastructure rollout including uneconomic areas  Implications  Slow development as concentration is on economic areas and limitation of USP fund  Affects our target for 2005, particularly for the rural areas  Digital gap may widen

30. UNIVERSAL SERVICE PROGRAM  Policy Review  Government to finance communications infrastructure for schools and other agencies  RM 1 billion has been approved to supplement and complement industry’s fund for 2001-2005  Sustainable USO Fund - industry to contribute

31. “Last Mile” Liberalization Rationale  Tomorrow's businesses require less complicated, more flexible and exponentially more powerful environment  Malaysia recognises the importance of rolling out broadband services

32. Widening Access to ICT Services  200 schools to be connected in 2002  Balance of 2000 schools & clinics by 2005  All schools to be smart schools by 2010  All schools to be provided with electricity  Rural Internet Centres  Rural clinics, rural libraries and other government agencies to be connected under RMK-8

33. Rural Internet Programme Rationale To bridge the digital divide between the information rich and the information poor To balance development between urban and rural/underserved To compensate for low PC and Internet penetration

34. Leverage on New Technologies & Promote Broadband Rollout Web-based and Internet-based applications Wireless and satellites (eg. 3G, MMDS, VSAT, CDMA, etc.) Voice-over-Internet Protocol Need to increase broadband penetration

35. Building Trust and Confidence in Electronic Transactions

36. Proposed Personal Data Protection Legislation Rationale To provide a secure electronic environment in line with MSC objectives To create confidence among consumers and users of both network and non-network industries To accelerate uptake of e-based transactions Target implementation - 2003

37. Addressing the Security and Integrity Issue Formulation of National Policy Framework on Security and Integrity Certification of Security Systems - Towards a Malaysian Security Standard Target Implementation - 2003

38. HARMONIZATION OF LAWS AND PROPOSED NEW CYBERLAWS

39. HARMONIZATION OF MALAYSIAN LAWS MSC ICM requested the Ministry of Energy, Communications and Multimedia (MECM) to study existing laws to ensure consistency and harmonization with the Cyberlaws.

40. HARMONIZATION OF MALAYSIAN LAWS The study covers 739 statutes. 22 Ministries and Federal Departments Proposed amendments and new laws

41. 2 Major Findings Some of the existing laws are inadequate or may impede dealings in the electronic environment in a variety of ways; Some of the existing policies can be “fine-tuned” Harmonisation of Malaysian Laws

42. Types of Legal Inadequacies Control & Regulate Application Interpretative Procedural & Administrative Administrative requirements for manual transaction e.g. Birth registration Interpretation to include online activity e.g. stamping Application not extendable to online activity e.g. Information Theft Requirements for licensing of online activities e.g. Travel agents Laws should be amended to enable the activity to be done electronically

43. Existing Policies Generally do not hinder e-Transactions but can be fine tuned to promote e- business by creating conditions that are favourable for entrepreneurship and innovation encourage knowledge acquisition promote investments moderate the digital divide and promote participation in international forums

44. Legal Inadequacies & Recommended Solutions Control & Regulate Application Interpretative Procedural & Administrative Enact the Electronic Government Activities Law No change needed, but constant review to be done Monitor case law development & address then Remove licensing or change in policy in issuing licenses Laws should be amended to enable the activity to be done electronically In respect of the Control & Regulate Impediment – it is necessary to determine whether as a matter of policy, on-line activities should be licensed? If they are, then a change in licensing policy must occur - i.e. of granting new licenses.

45. Introduction of New Cyberlaws Electronic Transactions Act Law of general applications that provides the necessary legal certainty for e-transactions E-Government Activities Act Law that enables the removal of all procedural and administrative impediments. Applicable to all interactions by individuals with the Government or vice versa

46. Electronic Transactions Act General Law such as Contracts Act Purpose: Provide recognition Avoid risk of adverse findings by a court of law Address key issues in electronic transactions

47. Electronic Transactions Act Main Provisions : Legal recognition of electronic communications Legal recognition of electronic signatures Legal recognition of electronic documents as originals Attribution of electronic communications Record retention and management requirement Formation, validity, time and place of contracting Automated transactions and electronic agents Correction of errors

48. Advantages of Electronic Government Activities Act Applies once an Agency is ready Consistent approach to public e-dealings. Avoids inconsistency if laws were amended individually. Uniform Guidelines: easier and speedier implementation Technology Neutral: gives Act a longer life-span State has flexibility: States have the option whether to adopt this Act as part of State laws. Choice for public: no compulsion for public to deal electronically.

49. Internet – Promotion of Positive Use Awareness and educational programmes Potential benefits Negative aspects Guidelines Users, Parents, Teachers Increase positive website contents Preparation of the Content Code by Content Forum/CMC Govt. Internet Centres and Cyber cafés as learning centres

50. Conclusion Malaysia has a clear objective and agenda towards achieving a knowledge-based society E-Readiness is key towards achieving the objectives Malaysia is positioned at Embedding level in e-ASEAN Readiness Assessment

51. Conclusion (cont’d) Policies are being formulated and implemented towards enhancement of e-readiness in areas: Widening access Creating trust and confidence Harmonisation of laws Promoting positive use of Internet

52. Thank You