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Last Updated: Thursday, 8 June 2006, 08:09 GMT 09:09 UK
Reviving Malaysia's hi-tech dreams
By Jonathan Kent
BBC News, Kuala Lumpur

Petronas Towers in Malaysia
Asia's financial crisis hit Malaysia's plans to be a global tech giant
It is difficult to overestimate the impact that Malaysia's former Prime Minister Mahathir Mohammed had on his country during his 22 years in power.

Arguably the most impressive of his achievements was to be among the first of the world's leaders to grasp the potential of the internet, all the more striking because he was already 70 years old at the time.

It was back in 1996 that Malaysia launched the Multimedia Super Corridor, otherwise known as the MSC.

"It was visionary," says Jeff Ooi, a telecoms consultant and one of Malaysia's most influential bloggers.

The MSC, now celebrating its 10th anniversary, was intended to tempt technology companies to Malaysia to build on its growing success as a hi-tech manufacturing centre.

The government's aim was to move the country up the value chain so that more people would be employed in the lucrative software and product development sectors.

"One, we had put together a impressive financial incentive package," says Mr Ooi. "Two, [Malaysia promised the] facilitation of easy flow of manpower; three, to have a good infrastructure for investors that may come from all over the world."

Utopian vision

Malaysia wanted to create what Badlisham Ghazali, CEO of the body that runs the MSC, calls "the Silicon Valley of the East".

Mr Ghazali is still hoping to establish a technology "utopia" taking advantage of Malaysia's strategic location at the heart of East Asia, its relatively low cost base and its linguistic resources.

Looking out from his office in Cyberjaya, the purpose-built tech city that has risen from the jungles outside Kuala Lumpur, he can point to the progress Malaysia has already made.

As late as 2002 it was easier to get high-speed internet connections in Kuala Lumpur than in much of London. But though Malaysia was once way ahead of the curve in attempting to turn itself into Asia's technology hub, it has been slipping behind.

There's a big gap when it comes to the human resources supply from the local universities
Jeff Ooi, telecoms consultant
"It was a unique proposition to the world 10 years ago," admits Mr Badlisham, "but as you know since then the world has changed, there are many issues that have cropped up."

He cites Asia's financial crisis in 1997/8, the dotcom bust, as well as rival nations setting up other initiatives.

But events beyond Malaysia's control are only part of the story. After all Singapore, Thailand, China, India and South Korea all had to contend with the same problems and are pulling ahead of Malaysia.

Indeed, in the Malaysian experience there are some clear lessons for governments hoping to nurture software and research companies.

"What went wrong was the devil was definitely in the implementation," says Jeff Ooi. "We have prohibitive immigration laws which makes an application for a working visa for expatriates so difficult.

"There's a big gap when it comes to the human resources supply from the local universities."

Talent pool

Malaysian schools and universities are long on rote learning and short on original thinking. They do not turn out the problem solvers and innovators tech companies need.

Malaysia's former Prime Minister Mahathir Mohammed
Mahathir Mohammed backed the tech corridor
Compared with China and in particular India, who can play the numbers game by churning out tens of thousands of graduates per year, Malaysia's talent pool is tiny in comparison.

Then there was Malaysia's decision to only help companies within the Multimedia Super Corridor geographical limits, odd when one of the internet's great strength is its lack of borders.

"We are looking at MSC like a supermarket," says Jeff Ooi. "We build it and people will come and the property developers will make some money."

But perhaps the clearest indicator of the problems Malaysia faces is to be found in the performance of local telecoms companies.

Dhillon Andrew of Hack in the Box, which organises the world's largest hackers conference, says locals are looking enviously at their neighbours.

"In Malaysia you can only get a one megabit connection as opposed to a four or six megabit just over the border and that's really one of the main reasons you see the broadband adoption in Thailand and Singapore is shooting through the roof," says Mr Andrew.

Malaysia's telecoms industry is dominated by lethargic government-linked companies. There is precious little competition and no one seems to be prepared to take responsibility for the problem.

Malaysia's Communications Minister Lim Keng Yaik declined to be interviewed. His office told the BBC that the internet was not his responsibility. The trouble is it certainly it is not anyone else's.

Open invitation

So when Mr Badlisham tries to inject new life into a once world leading proposition, he is up against the "tidak apa" (don't care) attitude of officials who should be his key partners.

But at least he has one powerful ally, the Science and Technology Minister Jamaluddin Jarjis.

Man on mobile phone in Malaysia
The cigar-wielding Mr Jamaluddin has a touch of Donald Trump about him, albeit with better hair.

He wants tech sector CEOs to think of Malaysia as their home from home in Asia and just to underline that point he is rolling out the red carpet.

"My priority is to tell those boys come to Malaysia, tell us what is the play and we will get all those resources in place when you come to town," he says.

Come to Malaysia, Mr Jamaluddin is saying, and we will do our best to make a deal that reflects your needs. We will train people for you, give you the infrastructure you need and make the numbers add up in a way that makes your accountants smile.

"We're offering them a customised service," he says. "You tell us, you come to this country, you tell me what you like. Tell me what other countries are offering and we'll see. The same thing we did to Dell and they decided to come here."

There is no doubt that Mr Jamaluddin and Mr Badlisham want to revive Dr Mahathir's vision of creating an Asian Silicon Valley.

Ironically though they may have a tougher time persuading Malaysia's government machinery and service providers to get with the programme than the movers and shakers of the tech sector.

You can hear more on this story on this week's World Service programme, Digital Planet.


SEE ALSO
Malaysia moves into 3G
30 Jul 02 |  Business
India pushes for IT summit
04 Dec 01 |  Business
Malaysia launches high-tech city
08 Jul 99 |  Asia-Pacific

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