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UNCTAD – ESCAP ASIA PACIFIC REGIONAL CONFERENCE UNCTAD – ESCAP ASIA PACIFIC REGIONAL CONFERENCE ON E-COMMERCE STRATEGIES FOR DEVELOPMENTON E-COMMERCE STRATEGIES FOR DEVELOPMENT

November 21, 2002Bangkok, Thailand

MALAYSIA: The New EconomyMALAYSIA: The New Economy

Technology Powering Technology Powering Economic TransformationsEconomic Transformations

BYBYRahayu Ezrani ABDUL RAHMANRahayu Ezrani ABDUL RAHMAN

E-Business Department, Multimedia Development CorporationE-Business Department, Multimedia Development Corporation

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MSC

Strategic Policy Strategic Policy Directions for the Directions for the ICT Sector ICT Sector DevelopmentDevelopment

The MSC Vision

AgendaAgenda

Challenges

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A knowledge and idea-based economy A knowledge and idea-based economy where the key to wealth and job where the key to wealth and job creation are the extent to which creation are the extent to which

information, ideas, innovations and information, ideas, innovations and technology are embedded in all the technology are embedded in all the

various sectors of the economyvarious sectors of the economy

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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 DirectionsStrategic Policy Directions

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CURRENT STATUS OF MALAYSIANCURRENT STATUS OF MALAYSIANICT INDUSTRYICT INDUSTRY

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2

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I II III IV

“Rudimentary”

“Average”

“Advanced”

Competition”“Monopoly”

“Early Competition”

“Managed Competition”

“Full

MALAYSIA

“RapidTransition”

Path

“DelayedTransition”

Path

POLICY FRAME WORK

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• 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 POLICIES TO FACILITATE RAPID TRANSITIONTRANSITION

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• 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 POLICIES TO FACILITATE RAPID TRANSITIONTRANSITION

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MSC

Strategic Policy Directions for the ICT Sector Development

The MSC The MSC VisionVision

AgendaAgenda

Challenges

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Multimedia Super CorridorMultimedia 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 2.5-10 Gb multimedia network

• A one-stop shop to facilitate investment - the MDC

The MSCThe MSC – A Quick Glance– A Quick Glance

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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 AgeLeapfrogging Into The Information Age

Enhance domestic

productivity

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Ten Bill of GuaranteesTen Bill of Guarantees

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.1N

o.1

No

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o.1

Flagship ApplicationsFlagship Applications

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.2N

o.2

No

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o.2

Incentives & Programs to Create Enablers, Incentives & Programs to Create Enablers, Meet OutcomesMeet Outcomes

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Bill of GuaranteesBill 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.

2. 100-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

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E-BusinessE-Business

TelehealthTelehealth

Smart SchoolsSmart Schools Multipurpose CardMultipurpose Card

R&D ClusterR&D Cluster

Electronic GovernmentElectronic Government

Worldwide Worldwide Manufacturing WebManufacturing Web

Borderless MarketingBorderless MarketingCenterCenter

Technopreneur Technopreneur DevelopmentDevelopment

MSC Flagship ApplicationsMSC Flagship Applications

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MSC

Strategic Policy Directions for the ICT Sector Development

The MSC Vision

AgendaAgenda

ChallengesChallenges

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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 & educationAttracting Inbound Consumers-Trading hubs-Internet Exchange-Global ConnectivityOrganization Transformation-Awareness and education program-Work Culture-Re-structuring of companies to exploit E-CommercePolicy and Regulatory Framework-IP Management System-Taxation-Consumer protection

Build Critical Mass-internet & access devices’ penetration-Network access & tariffs-Telecoms infrastructure

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http://www.mdc.com.myhttp://www.mdc.com.my

Thank youThank you