Achieving a United, Prosperous and Dignified Nation through Digital Economy

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By Dr. Nur Aainaa Syafini binti Mohd Radzi, Senior Research Analyst, Institut Masa

09/03/2021

The launch of the National Unity Policy (NUP) on 15th February 2021, and Malaysia Digital Economy Blueprint (MyDigital) in the same week, by the Prime Minister, Tan Sri Muhyiddin Yassin is timely, especially in response to the socio-economic impact of Covid-19.

As a country that is uniquely composed of different ethnicities, backgrounds, history, culture, class, generation gap, geography, and religion, Malaysia faces many socio-economic challenges that could lead to intense conflicts at any time. Although we could see that the pandemic has improved the sense of unity and togetherness in our country, a good baseline and guidelines to preserve unity is vital for a harmonious future.

The NUP themed Unity in Diversity, has three main objectives, which are to (1) strengthen unity and national integration based on the Federal Constitution and Rukun Negara, (2) building a national identity with a sense of self, patriotism, compassion, tolerance, and being responsible towards and respectful of each other, and (3) producing Malaysians who appreciate and practise unity.

Meanwhile, MyDigital that has been launched on 19th February 2021 sets out initiatives and targets for Malaysia in Digital Economy across three phases of implementation until 2030, which includes ideas and plans to improve digital literacy, creates high-income employment opportunities, transform direction for businesses, make banking and finance business easier and more organised, provide virtual educational access to children in the country and bring medical facilities to remote towns.

Addressing Regional and Social Gaps through Digital Economy

Malaysia has grown and benefited tremendously from the digital economy since the very first launch of the Multimedia Super Corridor (MSC) back in 1996. According to the World Economic Forum (WEF), Malaysia is now ranked 34th globally, in terms of Network Readiness with 90.1 per cent of households having an internet connection in 2019.

The digital economy has also contributed about 19.1 per cent to the country’s Gross Domestic Product (GDP) in 2020 and is expected to be boosted further to 22.6 percent by 2025.

Although digital technology was not invented to tackle inequality and address unity issues, it has served globally as an effective tool to address the root causes such as the income gap among regions, ethnicities, and education, which has been identified as the biggest challenges for many countries to achieve unity.

A World Bank report entitled “E-Commerce Development: Experience from China” points out that online platforms also promote gender equality. While the vast majority of offline entrepreneurs are men, their online counterparts are as likely to be female. This situation may also happen to other countries, including Malaysia as everyone in the country has an equal opportunity to access the platform.

To date, with various government initiatives, there are about 335,834 SMEs involved in e-commerce in Malaysia. There are many individuals across the country that leverage on the e-commerce platform such as Lazada, Shopee, EBay, and Amazon to generate income directly from local and international markets. As it promotes a promising “gig-economy” in the country, it also has bridged the regional and social gaps by providing equal access to economic opportunities for all.

 

Strong Commitment from the Government for the future of Malaysia, through MyDigital

A well-documented policy with a specific execution plan is not just a normal document. It is a commitment for a firm way-forward by the government to develop the country, and act as a reference point by all of the stakeholders in planning for the next steps, moving forward.

On top of that, it will also facilitate Malaysia to boost our Foreign Direct Investment (FDI) as it assures opportunities and stability of the country to the investors. According to the World Investment Report published by the United Nations Conference on Trade and Development, the growth of Malaysia’s FDI in comparison to the neighbouring country has been weak since 12 years ago with just about 3 per cent on average, annually (before COVID-19). This is lower in comparison to Singapore, Indonesia, and Vietnam which grew about 18, 9, and 4 per cent annually, respectively.

Back in 2019, McKinsey suggested that Malaysia could accelerate its FDI growth by focusing on a four-point strategy and capturing greater benefits for the country. This includes (1) reassessment of FDI strategy and priority sectors to focus on sectors that have strong growth and employment prospects, (2) building up unique, deal-focused value propositions, as companies mostly invest in deals, not in countries (3) focusing on investment-promotion activities, and (4) ensuring end-to-end support for committed investments. In the same year, the Shared Prosperity Vision (SPV2030) was launched with 15 identified Key Economic Growth Activities (KEGA) for Malaysia, which includes Digital Economy, and it is in line with the first strategy proposed by the renowned consultancy firm.

Now that MyDigital is introduced with a very comprehensive plan to support what we already started, it gives an assurance that Malaysia is on the right track to pull out the best of the future opportunities, including the FDI, and move forward competitively.

MyDigital could be a “Game-Changer” for the country in narrowing the social gaps with equal economic opportunities for the rakyat, which will then create greater chances for Malaysia to achieve a united, prosperous and dignified nation. As long as the “Guiding Principles” of the SPV2030 is upheld tight by the stakeholders, MyDigital would definitely be able to be implemented successfully.

Let’s leverage on the opportunities and play our part to support the government in this, for the benefits of our country, and us, the rakyat.

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