| INTERNATIONAL -- ASIAN COVER STORY Mahathir's High-Tech Folly (int'l edition) The Silicon Valley of East Asia isn't dead, but it is badly wounded It looks like just another road in the Malaysian hinterland, flanked by the sleepy palm-oil plantations that have operated here for decades. Yet heavy trucks and powerful earthmovers rumble along it daily, shaking the ground as they go. They are heading for huge construction sites nearby, giant clearings where the scarred red earth bears the tracks of heavy vehicles. Here men are digging enormous trenches, preparing hundreds of kilometers of fiber-optic cables. Others are building new roads, new buildings--sleek structures that stand in sharp contrast to the traditional Malay villages they displaced. This is one of the most ambitious state-run projects ever conceived in Asia. And despite the ravages of the region's economic crisis, construction goes on. It's Malaysia's Multimedia Super Corridor (MSC), the brainchild of Prime Minister Mahathir Mohamad. Mahathir set out to build--from scratch--Asia's version of Silicon Valley, a huge zone stretching 750 square kilometers, an area slightly larger than Singapore (map). The project, started in the mid-1990s, was to cost $20 billion and take two decades to finish. It promised fiber-optic networks, research facilities, tax breaks, and new ''cyberlaws'' to any multinational setting up shop. Malaysia would provide the best incubator on the planet for high-tech businesses and create an environment in which a native high-tech industry could take root and boost the country into the ranks of developed nations by 2020. But there's something dramatically wrong with this picture. After more than three years of hype and $4.7 billion in government spending, Mahathir has failed to attract significant investment from the high-tech companies he needs. What's likely now--if the project is completed at all--is a significantly scaled-down version of his original vision. While recession is partly to blame, Mahathir's response to the crisis has dealt the most serious blow. His rhetoric blaming Jewish conspirators for his country's woes has dismayed multinationals. So have his moves to impose currency controls--and his decision to arrest Anwar Ibrahim, his former protege and Deputy Prime Minister, and put him on trial. ''Mahathir's behavior has set back the MSC several years, even in a best-case scenario,'' says a Westerner who has advised on the project. ''Worst case, it has destroyed the momentum.'' Mahathir had hoped to attract $4 billion from giants such as Microsoft Corp. (MSFT) and Oracle Corp. (ORCL). But the total pledged so far is just a quarter of that. Even that $1 billion figure may be an optimistic forecast as companies question the wisdom of investing into a politically unstable country and continue to scale back plans. Microsoft, in one of Mahathir's biggest victories, had announced in 1996 that it would make the MSC its regional headquarters. But today, Microsoft Malaysia has just 15 employees, hardly the numbers expected. Instead, ''Singapore is the operations center,'' says Managing Director Benedict Lee. Silicon Valley powers such as Sun Microsystems Inc. (SUNW) are now making just small investments after originally thinking big (table, page 27). By all accounts, Mahathir was the project's biggest asset: a driven leader who was willing to bet on a bold project that would propel Malaysia into the Internet Age. But with the onset of the Asia crisis, Mahathir became the project's worst enemy, a politician whose repressive tactics and crude intervention in the economy have driven away the very investors he desperately wanted to woo. ''People don't trust him,'' one foreign information-technology executive states flatly. The tragedy is that Malaysia needs to move up the technology chain. With its manufacturing base squeezed by lower-wage countries such as China, Malaysia must become more of a knowledge-based economy. ''If something like [the MSC] comes off, it gives Malaysia an edge,'' says Michael Leifer, a Southeast Asia expert at the London School of Economics. ''[If not] it's a setback to its industrial development.'' Mahathir once seemed to understand this. Indeed, he was regarded as something of a visionary in high-tech circles. The futurist writer Alvin Toffler, for example, has lauded him as ''the only Muslim leader in the world with an Information Age vision of the future instead of an obsession with the past.'' Even before launching the MSC, Mahathir had successfully promoted Malaysia--specifically, Penang--as a site for high-tech hardware manufacturers such as Intel Corp. (INTC) and Seagate Technology Inc. ''180-DEGREE TURN.'' The MSC would be the next step as Malaysia sought to move into the more innovative realm of creating software, multimedia products, and big-think ideas. Working with advisers such as Kenichi Ohmae, then a top consultant at McKinsey & Co., the Malaysian leader envisioned an IT nirvana. In a new city called Cyberjaya, Malaysians and foreigners would work side by side in ''intelligent buildings'' wired with the latest technology. Mahathir also pledged a new capital city, Putrajaya, where the federal government--including the Prime Minister himself--would work electronically. He drew up a set of ''cyberlaws'' to protect intellectual property and prevent computer crime. He proposed a new NASDAQ-style stock exchange, the Malaysian Exchange of Securities Dealing & Automated Quotation, or MESDAQ, to provide capital for local high-tech startups. The project had its share of hubris. At one end of the corridor, Mahathir built the world's tallest buildings, the Petronas Twin Towers. At the other, 50 kilometers to the south, was the futuristic Kuala Lumpur International Airport. Traveling the globe to promote the MSC in 1997, Mahathir called the corridor ''a gift to the world,'' and ''a global bridge to the Information Age.'' It was quite a performance. ''After his speeches, you had CEOs say this guy 'gets it,' he is saying the right things,'' recalls the former adviser. Mahathir attracted a who's who of the IT industry to give the project credibility. Rivals such as William H. Gates III of Microsoft, Lawrence J. Ellison of Oracle, and Scott G. McNealy of Sun Microsystems all agreed to sit on a 41-member advisory panel. With that star power, coupled with cheap land and an inexpensive, English-speaking workforce, Malaysia stood a chance of passing Singapore as the region's premier technology center. Then the Asia crisis hit. The sudden recession had a deep impact on business conditions and would have slowed the MSC's progress in any case. But that's not the whole story. As Malaysia's ringgit and stock exchange began plunging in 1997, the Prime Minister reacted with such a scathing critique of the outside world that foreigners got scared. Compared with his business-friendly attitude before the crisis, Mahathir took ''a 180-degree turn,'' says a regional executive of a Silicon Valley-based company. Malaysia's political upheaval since the arrest and trial of Anwar adds to the uncertainty. As the country prepares for elections sometime before April, 2000, a smoldering reformasi movement, led by Anwar from prison, is demanding that Mahathir step down. One government official has conceded privately that if an election were held today, opposition parties could win a big victory. The events raise the question of who will succeed the 73-year-old Mahathir--and what that will mean for the MSC. ''The MSC is Mahathir's pet project,'' says a Kuala Lumpur-based diplomat. ''It isn't necessarily going to be the next leader's pet project.'' Just as damaging to the MSC, however, is Mahathir's reversal of a promise to refrain from censoring the Internet. That was one of his key pledges outlined in a ''Bill of Guarantees'' to any investor in the MSC. Yet following Anwar's ouster last September, rumors circulated on the Net of ethnic unrest--and Mahathir had police track down the sources. Then, in another move designed to chill free use of the Internet, Mahathir's government in December ordered all cybercafes to register users and provide the information to police. Such blatant reversals have made some early supporters wary. Toffler, who sits with Gates on the advisory panel but boycotted the last meeting, has written two letters of protest to the Prime Minister. ''The essence of Silicon Valley is not fiber-optic cables...it is the creative, innovative drive, with large numbers of people racing to create new ideas,'' Toffler told BUSINESS WEEK. ''That's hard to sustain in an atmosphere tinged with political repression.'' In the corporate world, it's not just high-tech giants that are having second thoughts. U.S. accounting firm Ernst & Young had planned to build a regional technology center in the MSC but has put that idea on hold. ''We're waiting to build anything until there is certainty about what's going on,'' says Frank Smith, an Ernst & Young partner in Singapore. DAMAGE CONTROL. Little wonder, then, that the head of development for the MSC now spends a lot of time on damage control. ''We have to work harder to allay some fears and misconceptions,'' says Othman Yeop Abdullah. One task is to explain that companies operating in the MSC are exempt from Malaysia's currency controls. The controls, now slowly being eased, have scared away many venture capitalists interested in local startups (page 28). Other protectionist measures are taking a toll. While foreign Internet service providers such as U.S. company PSINet Inc. (PSIX) have acquired ISPs in other parts of Asia, in Malaysia they cannot own majority control. As a result, Malaysia has just two locally owned ISPs. Companies claim their service is unreliable, slow, and expensive: A 256K, medium-speed line costs about $16,000 a year--about 10 times the cost in the U.S. So it's a giant hassle to arrange for the transmission of large volumes of data in and out of the MSC. The biggest beneficiary of Malaysia's problems has been Singapore, where Prime Minister Goh Chok Tong has quietly pushed forward with plans to attract multinationals. Sun Microsystems, for example, is devoting far more resources to Singapore. While Sun has just 30 workers in Malaysia, it employs about 200 in Singapore and is working with its government on developing research facilities, training programs, and a venture-capital fund. ''The best showcase in the region is Singapore,'' says Lionel Lim, Sun's executive managing director for Southeast Asia. ''It has a much more developed, thoughtful implementation and vision.'' Hong Kong, too, is now trying to steal Malaysia's thunder. It is earmarking $1.7 billion to develop a new IT zone. Shanghai also has high-tech plans. Meanwhile, Malaysia, forced to cut costs, has delayed a planned smart-card project and has scaled back development of telemedicine--a plan to use the Internet to diagnose and treat patients. The government insists it is proceeding with the projects, albeit more slowly. But with money now harder to come by, some noncore elements of the MSC seem wasteful. The money the government is spending on its new capital Putrajaya--where Mahathir plans to move his office within months--would have been better spent supporting IT projects, says Leifer. ''It's been a misallocation of resources,'' he says. NO SURRENDER. Multinationals are feeling the pinch, too. The government forced a consortium led by Fujitsu Ltd. to cut its bid significantly to win a contract for an electronic system that will allow bureaucrats in Kuala Lumpur to monitor infrastructure projects. With the discount, ''it is not profitable, honestly,'' says Iwao Shindate, general manager for Fujitsu Malaysia. Yet the big foreign companies are reluctant to walk away. ''We really want to support the nation's building,'' explains Ng Kien Lock, a general manager for IBM Malaysia (IBM), which is working with Fujitsu's consortium. Support, yes--but not too much. Even though Mahathir also landed IBM Chief Executive Louis V. Gerstner Jr. on his advisory panel, IBM has yet to apply to set up shop in the MSC. Ng says the company began the process, but ''there were too many things happening that slowed things down'' last year. IBM is deciding whether to rebid this year. The MSC can boast some modest successes. Nippon Telegraph & Telephone Corp. (NTT), the Japanese telecom giant, is putting the finishing touches on a big research center. From there, NTT hopes to develop software to provide new services for telephone calls connected over the Internet. The company, with 60 employees and plans to hire 40 more, knows it's unusual. ''The government has been doing its job mostly on schedule,'' says Akio Hotta, head of NTT's subsidiary in the MSC. ''But on the demand side, some foreign investors have gotten a little bit hesitant.'' Demand or no, the MSC will move forward as long as Mahathir is around. And some investors are optimistic that the MSC will survive him. ''Malaysia won't give up on it,'' says Ron Cattell, chief operating officer of Singapore-based Datacraft Asia, which has sold network-integration equipment to Telekom Malaysia. ''The MSC will come back again.'' But no amount of positive spin can make up for the rare opportunity that Malaysia has squandered. Other countries as far away as Ireland are starting their own Silicon Valleys, or ''Siliclones.'' Mahathir's powerful vision helped make the MSC a reality. Now his actions threaten the future of his dream. By Bruce Einhorn in Kuala Lumpur, with Sheri Prasso in New York |
| Malaysia Knows Its Way Around High Tech ''Mahathir's high-tech folly'' (Information Technology, Mar. 29) is sensationally misleading. It belittles the Malaysian leadership and undermines the credibility of the Multimedia Super Corridor (MSC). The article is slanted and sparse on the facts on the achievements made by the Multimedia Development Corp. in attracting investments. Considering that we started accepting applications only at the beginning of 1997, I think Prime Minister Mahathir has far from failed to attract high-tech companies. The MSC aimed to attract only 50 world-class companies by 2003. Getting 29 by March, 1999, is a great achievement by any standard. And the number of companies in operation increased from 94 in 1997 to 139 in March of this year. You also mentioned ''blatant reversal'' by the Malaysian Prime Minister on the government's commitment to noncensorship of the Internet as well as its business-friendly positioning. Let me underscore the fact that as recently as last week, the Prime Minister has reiterated that he has never wavered from promises made in the Bill of Guarantees. He has in fact reinforced his stand on the noncensorship of the Internet. He has instructed the relevant government agencies to put together the necessary legal and administrative arrangements to strengthen the enforcement of intellectual-property rights. Othman Yeop Adbullah Executive Director Multimedia Development Corp. Singapore |
| Malaysia's Cyber Corridor Boasts Some Successes It's unfair and misleading to insinuate that the Multimedia Super Corridor (MSC) is a failure (''Mahathir's High-Tech Folly,'' Information Technology, Mar 29). While the MSC may be facing some problems, these have been largely a result of the economic crisis which has reduced investor interest in Asia in general and affected the government's financial capability to proceed with the MSC's full implementation. A lot of money has been spent to develop the necessary infrastructure, and the government remains committed to the MSC, which continues to build up steam. You mention Singapore and Hong Kong as alternatives for investors in high tech. But these two have their own problems--including high costs. The devaluation of the ringgit has made the MSC cheap for high-tech companies. You say that money spent to develop Putrajaya, which you described as a noncore element of the MSC, was wasteful. Putrajaya is not part of the MSC. You failed to get the views of Intel, Matsushita, or Dow Corning. These companies have long been established in Malaysia, and they are increasing their investments. These investors know that Prime Minister Mahathir Mohamad was taking aim at short-term investors who have wreaked havoc on the Malaysian economy. There is growing international agreement on the need for some controls on short-term capital. On the other hand, Malaysia has made it easier than ever for these investors, relaxing foreign ownership restrictions and improving their investment terms. The currency regulations did not affect the MSC companies. Asgar Stephens National Economic Action Council Prime Minister's Department Kuala Lumpur Editor's note: Putrajaya is listed as an ''MSC city'' in government literature about the project. |
| MALAYSIA CENSORS THE INTERNET? February 6, 2001 IN what appears to be a misstep which may hurt Malaysia's Multimedia Super Corridor (MSC) project, the government has barred "unaccredited" journalists, including those from online newspaper Malaysiakini (www.malaysiakini.com), from covering government functions. In newspaper reports Monday, Deputy Home Minister Chor Chee Heung said that only media organizations with Information Ministry accreditation should be allowed to attend government press conferences or to interview department and agency heads. Though aimed at the feisty online newspaper which has ran reports critical of Prime Minister Mahathir Mohamad's government, the Home Ministry ban also appears to cover independent journalists representing a host of international newspapers and magazines. The ban has prompted howls of protests from various bodies, with Malaysiakini's editor, Steven Gan, describing the move as the start of attempts to censor the Internet. "The ban, which seems to be an underhanded way of censorship, will not keep us out or stop us from doing our job," said Gan in an AFP report. When Prime Minister Mahathir Mohamad launched his pet multi-billion ringgit MSC project in the mid-1990s, he gave the world a guarantee that Malaysia would never censor the Internet. Beset with a host of political problems at home, Asia's longest serving political leader now faces the task of fending off allegations that his government has reneged on its promise. Gan added the ban could have been sparked by complaints from some ministers about "being asked difficult questions." Malaysiakini had applied to the Information Ministry mid last year for press credentials but was told these could not be granted accreditation as it did not have a publication licence. But given its 'no censorship" policy, the government had not imposed any licensing requirements on Internet publications operating from Malaysia. Despite the lack of official accreditation, Malaysiakini's reporters have regularly covered government events. In the past, the Home Ministry has cracked down on errant publications by withdrawing a number of publication licences from print media seen as critical of the government. But this is believed to be the first time the government has imposed restrictions on journalists working for online publications. Meanwhile, human rights group Aliran rapped the Home Ministry for its "silly ban." "Does the ministry realise - or care - how absurd and ridiculous they sound? They seem to have run out of logical reasoning and rational thinking in their response to criticism," Aliran president P. Ramakrishnan said in a statement. He added: "Is the ministry suggesting that the government is above criticism and beyond reproach just because it is the government?" "Government functionaries like Chor must understand that there are rational answers available in responding to criticism rather than resorting to puerile action." Ramakrishnan said the government failed to disclose that Malaysiakini's application for press credentials was denied because "it did not hold a publication licence" - something that is not required for an Internet-based news website. "It is pertinent to remember that without this so-called 'publication licence,' Malaysiakini does not cease to be an electronic newspaper; neither does its reporting lack credibility because it does not have press credentials." He said that in the brief span of a year, the online newspaper has established itself as a credible and critical alternative media outfit earning two international awards. The latest media controversy follows a complaint by Mahathir last week about another publication - Asiaweek. He claimed that the Hongkong-based weekly magazine used a photograph in a recent issue which deliberately made him look idiotic. "To find a picture as if to make you look like an idiot, that is deliberately done,'' he told reporters after officially declaring Malaysia's new seat of government, Putrajaya, a Federal Territory last Thursday. The offending photo appeared in Asiaweek's January 26 issue which featured "The Mahathir Dilemma" as the cover story and had four photographs of Mahathir. The seasoned 75-year-old politician claimed he was "taken in" by the magazine's representatives. "They were so very friendly that I was taken in by them. They came and were smiling and talking nicely to me," said an exasperated Mahathir. The article said that during the interview, Mahathir was "slumped in his chair and appeared tired and worn down by the unprecedented criticism of his rule." However, Asiaweek has denied it had any agenda in using "that" picture. "All of us who were there were struck by how tired he seemed," editor Dorinda Elliott told The Associated Press. 'We thought the pictures we ran were reflective of what we were struck by. We certainly did not have an agenda," Elliott said. - Asiafeatures.com |
| The Asian Wall Street Journal (AWSJ) 15th February 2001 Political News Web Site Struggles To Profit In Malaysia By DOUGLAS APPELL Staff Reporter KUALA LUMPUR -- The news site Malaysiakini.com was founded to do two things -- offer hard-hitting political coverage, and make money. In Malaysia, that combination can be treacherous. That became clear to a Malaysian insurance agent recently when he found himself out of a job after placing a banner ad on the site with his company's name. The company says he was sacked for failing to get clearance from the company beforehand. It declined to say whether the firing was also punishment for lending the firm's name to a publication that isn't afraid to criticize the government. Last week, Malaysiakini ran into new political obstacles. After a magazine reported the start-up had received funding from hedge-fund guru George Soros -- a despised man in many parts of Southeast Asia -- Deputy Home Affairs Minister Chor Chee Heung urged that Malaysiakini reporters be barred from covering government events. The threat is a serious one for an electronic-newspaper that lives on political coverage. Such minefields could derail a company that would otherwise be a prime candidate to succeed in the New Economy sector that Malaysia is eager to promote. Prime Minister Mahathir Mohamad talks proudly of megaprojects like the Multimedia Super Corridor, and of plans to foster a "knowledge economy." About a year ago, Malaysia launched Mesdaq, a new stock exchange to help fund local technology companies. Malaysiakini is, in effect, a test of just how much the government is prepared to loosen its iron grip on the media to meet its commitment to nurture high-tech. The company's managers haven't given up hope yet. Politics may complicate efforts to make independent journalism a commercial success here, but "we can do it," insists Chief Executive Officer Premesh Chandran. The company has already made inroads in the local media market, exploiting the government's "hands off the Internet" pledge, which exempts online outlets from the annual licensing requirements for mainstream media. Malaysiakini attracts more than 100,000 visitors a day with the sort of coverage critical of Dr. Mahathir's government that is rarely found in the country's major dailies. Some recent headlines: "Pro-Malay Gathering Turns Into Anti-Mahathir Rally" and "Anti-Corruption Agency Urged to Investigate Sarawak Chief Minister's Alleged Abuses." But the independence that attracts readers also scares off some advertisers and investors. The income profile of Malaysiakini's audience -- only a small percentage of Malaysians have access to computers and the Internet -- should make it an attractive venue for online advertisers. Yet, the perception of government hostility toward the e-newspaper is a deterrent, says one advertising industry executive who declined to be identified. That view is seconded by an executive at a multinational company, who, also requesting anonymity, professes admiration for Malaysiakini's reporting. The case of the insurance agent illustrates why the fear exists. In an article about Malaysiakini in The Asian Wall Street Journal last August, Islamic insurer Takaful Nasional Sdn. Bhd. was cited as one of the Web site's advertisers. Takaful responded with a letter to the paper denying it had any links with Malaysiakini. In the letter, Kamaruddin Sharif, principal officer with Takaful, explained that the company dismissed the employee for using the company's name without its authorization. Noting that Takaful is government-owned, Datuk Kamaruddin pointed out that the free banner ad hadn't contributed to Malaysiakini's revenues. Datuk Kamaruddin didn't respond to requests for further comment on the employee's dismissal. Malaysiakini's approach to the news could affect its financial prospects in other ways. For example, worries about a government clampdown may deter strategic investors or make it difficult to list the company's shares, says Ian Yoong, a financier with CIMB Securities Sdn. Bhd in Kuala Lumpur. So far, though, the online paper's problems have been rooted more in the perception of government distaste for the site than in any official action against it. "The government has basically kept its word not to interfere in the Internet," says Mr. Chandran. He sees growing evidence that even people within "the establishment" see the need for "something like Malaysiakini." Now in its second year of operation, Malaysiakini -- like most of its Internet brethren globally -- isn't generating enough revenue to cover its operating costs of 80,000 ringgit ($21,053) a month. The company seeks equal chunks of revenue from advertising, content sales and technology joint ventures, and hopes to break even by the end of this year and be profitable in 2002, company officials say. A local stock market listing could come sometime later. For now, though, the company needs funding. It is "on the verge of closing a deal to sell an equity stake to an investor who shares our values of promoting independent media," Mr. Chandran says. He declines to elaborate on the identity or location of the investor. Financing became a politically perilous issue this month, when the Far Eastern Economic Review reported that Malaysiakini had received funding from George Soros, whom Dr. Mahathir has singled out as the villain behind Asia's financial crisis in 1997. A few days later, Mr. Chor, the deputy home minister, said organizations without government-granted media accreditation, such as Malaysiakini, should be barred from covering government events. Malaysiakini denied the report in the Review, which is owned by the same company that publishes this newspaper, Dow Jones & Co. The site said it hasn't received any money from the international financier. The Review later issued a clarification, saying Soros money went to the Southeast Asian Press Alliance, or Seapa, which in turn funded Malaysiakini. Seapa, however, said the Soros money was used for a project unrelated to the Malaysian news site. The Review has declined to endorse assertions by Seapa and Malaysiakini that the site received neither direct nor indirect funding from Mr. Soros. Seapa is a nonprofit organization that promotes press freedom in the region. Malaysiakini Editor in Chief Steven Gan says he is bitter over the Soros episode. It could undermine the credibility that is essential to Malaysiakini's success, he says, adding that it will be months before the damage can be assessed. Meanwhile, Mr. Chandran is emphasizing the positive. The government, he points out, seems split over Mr. Chor's recommendation. An aide to Deputy Prime Minister Abdullah Badawi, who heads the Home Affairs Ministry and is Mr. Chor's boss, says Datuk Abdullah will continue to allow Malaysiakini reporters to attend his functions. But the signals are mixed. Information Ministry parliamentary secretary Zainuddin Maidin told reporters Sunday that "Malaysiakini (journalists) are barred from covering press conferences not because they are critical of the government, but because their credibility is in doubt." Datuk Zainuddin cited the alleged Soros financing as proof. Meanwhile, Malaysiakini will continue to operate in the "gray area" that exists because of the government's pledge to promote the Internet in Malaysia, says Mr. Chandran. "The government doesn't want to legitimize us, but at the same time they're allowing us to operate," he says. |
| From: DAP MALAYSIA <dap.malaysia@p...> Date: Fri Feb 23, 2001 10:24am Subject: [BUNGARAYA] White Paper - Why MSC has lost all its glitter ------------------------------------------------------------------------- This is the list for the Democratic Action Party of Malaysia. To subscribe, send "subscribe" in email body to <bungaraya-request@l...> ------------------------------------------------------------------------- Media Statement by DAP National Chairman Lim Kit Siang in Petaling Jaya on Friday, February 23, 2001: NITC should present White Paper in Parliament on why MSC has lost its glitter on the world stage and Malaysia lagged behind other countries in IT development in the last six years ============================================================== Last Saturday, when launching the 1,000-People Information Technology Literacy Gathering for K-economy at Stadium Putra in Bukit Jalil in Kuala Lumpur, the Prime Minister, Datuk Seri Dr. Mahathir Mohamad expressed his unhappiness with the progress made in promoting the use of computers and IT in the country. He said: "Too many people are just not making any effort to learn how to use computers. We have lots of computers, you cannot wait until you own one before learning. It has to be done now, otherwise, we will be left behind. "From primary pupils to university undergraduates, from workers to chief executives, housewives, farmers and fishermen, they must be able to understand IT and multimedia, and how to communicate using electronic technology and computers." The next day, calling on workers to be skilled in information and communication technology (ICT) or the country will lose its competitive edge, the Human Resources Minister, Datuk Dr. Fong Chan Onn said that only about 8% of Malaysians used computers which was lower than the rate of computer usage in some other east Asian countries such as Singapore, South Korea or Taiwan. This is a very poor personal computer usage rate for a country which wants to take the quantum leap into an information society and K-economy. Malaysia must be able to compare favourably with Singapore which has a rate of 39 per cent, Hong Kong's 36 per cent and Japan's 33 per cent in 1999 and should not feel proud to be better than countries like Thailand, Indonesia and the Philippines whose usage rate in 1999 ranged between 1.34 per cent and 4.04 per cent. In actual fact, there is nothing to be proud and every reason to be ashamed of the 1,000-People Information Technology Literacy Gathering for K-economy at the Bukit Jalil Stadium last Saturday. It is a sign of Malaysia's failure to carry out a systematic programme to promote "IT for All" in the six years after the announcement of the grandiose Multimedia Super Corridor, to the extent that Malaysians from all over the country have to gather in Kuala Lumpur in the year 2001 with the not very productive purpose of getting into the Malaysian Book of Records. There has recently been a renewed call from the ICT industry for a review of the MSC to ensure that it could play an effective role in the success of Malaysia's K- economy, as a lot of the MSC-status companies are just enjoying the tax benefits rather than developing the MSC's goals resulting in the MSC being more of an importer of ICT than exporter. The MSC suffers from a lack of proper focus and direction, as illustrated by the fact that there has been no single allocation from the RM500 million allocated by the Government for venture capital in Budget 2001 although local information technology (IT) and Internet companies face a chronic lack of funding. The government, Parliament and nation must find the answer as to why the MSC has lost all the glitter it had been able to attract on the world stage when it was first announced six years ago, to the extent that it has become common staple in IT journals and articles to dismiss the MSC - or as one IT writer has put it, "first mover advantage lost", resulting in "Singapore and Bangalore are now years ahead" in terms of IT development. It is most shocking that four days after the Prime Minister has expressed his unhappiness with the progress made in promoting the use of computers and IT in the country, the Minsiter for Energey, Communications and Multimedia, Datuk Amar Leo Moggie could come out with the statement that Malaysia's level of e-commerce readiness is comparable to that of developed countries! It is time that the various Cabinet Ministers who make pronouncements on IT get their act together and agree whether Malaysia is ready or not ready for the quantum leap into the information society and K-economy. The National Information Technology Council (NITC) should present a White Paper in Parliament next month on why the MSC has lost its glitter on the world stage and zero in on the causes why Malaysia has lagged behind other countries in IT development so that the country's readiness for the quantum leap into the information society and K-economy will be one of the top priorities of Members of Parliament, both Barisan Nasional and Barisan Alternhative, in the policy debate on the Royal Address beginning on March 20 next month. - Lim Kit Siang - |
| msc - multimedia super corridor |
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| From siliconvalley.com Posted at 9:58 p.m. PDT Tuesday, June 26, 2001 Malaysia's tech oasis faces dry future BY MARK MCDONALD Mercury News Vietnam Bureau CYBERJAYA, Malaysia -- It's 30 miles long, nine miles wide, laced with new roads, power lines and fiber-optic cables. And it's shaped, perhaps not by accident, just like California. The Malaysian politicians and technocrats who are masterminding the Multimedia Super Corridor, or MSC, have never made any apologies about the model for the brave new world they're building in the gooey wetlands south of Kuala Lumpur. They've always been clear and unrepentant about their desire to create Malaysia's very own version of the Silicon Valley. But five years into construction, the dream of a cyber paradise with world-class corporations going campus-to-campus with domestic start-ups is appearing to be just that -- a dream. Or at the very least, a dream delayed. Participation in the corridor by international IT conglomerates has so far been limited, their enthusiasm dampened first by the dot-com crash and now by the worldwide economic downturn. Malaysian companies also have been reluctant to move into the largely unpopulated, high-tech part of the corridor known as Cyberjaya. ``Cyberia'' is what some critics call it, as in Siberia, as in nowhere. ``There's absolutely nothing out there,'' says a young Malaysian entrepreneur who prefers to work in Kuala Lumpur with its restaurants, verve and chaos . ``In Cyberjaya you've got no place to eat, no shops, no people. It's deserted. It's, you know, it's . . . Egypt!'' Others are even more blunt about the grandiose concept. ``The Multimedia Super Corridor is just kind of a joke,'' said Raymond Lin, vice president of SIT Investment Associates in San Francisco, when asked to compare Malaysia with Taiwan and Singapore. That's not the script that was written. Intelligent independence When Prime Minister Mahathir Mohamad inaugurated the MSC five years ago, he said it would be a signal to the international community -- anto his own citizens -- that Malaysia was fully staking its future on the knowledge economy. Malaysia would no longer live solely off commodities exports and low-end manufacturing for multinational corporations. Mahathir's plan, known as Vision 2020, also called for a new mindset among Malaysian citizens, starting with a generation of computer-savvy children educated at newly built ``intelligent schools'' the better to prepare them for a digital future. ``The MSC has rallied the country and created an awareness about high tech that simply wouldn't have been there without it,'' says Nicholas Zefferys, president of the American Chamber of Commerce in Kuala Lumpur. ``It's part of the transformation of their assembly-type economy to a knowledge economy. I think it has gone quite extraordinarily well.'' But a new study by McKinsey & Co., commissioned by the government, says the MSC needs a revamping, perhaps a rethinking, and a scaling back of its ambitious goals. Japanese telecom giant NTT has a sprawling research and development facility here, but big international firms need to invest more in the corridor and not just maintain a token presence in Cyberjaya, the report said. At the same time, MSC managers and government officials need to pressure more Malaysian conglomerates to relocate there. One of those mentioned was Petronas, the state oil company. ``We've been talking to Petronas and we believe this will happen by the end of the year,'' says Othman Yeop Abdullah, executive chairman of Multimedia Development, which runs the corridor project. Othman also said he has had ``a very strong discussion with Microsoft'' about the U.S. company's reluctance to follow through on plans to put an R & D lab in Cyberjaya. Companies need not have offices inside the MSC to initially receive MSC status, which can include up to 10 years of tax breaks, the easy importation of tech equipment, quick visa approvals for foreign workers and ready access to government-backed grants and loans. But MSC status requires companies to eventually relocate to Cyberjaya, eventhough many small and medium-size firms are doing anything they can to avoid making the move. Some have even given up their MSC status to remain in Kuala Lumpur. ``This concept of relocating to Cyberjaya needs to be re-examined,'' says Mark Chang, founder of a successful online employment agency in Penang that has MSC status. ``If I have to move, and if I figure in the costs of moving my workers and their families out there, I'll lose my company.'' Kevin Poh, 25, is director of WorldbidMalaysia.com, a business-to-business marketplace and one of a handful of start-up projects with offices in Cyberjaya's much-advertised Central Incubator. If Cyberjaya has the equivalent of Steve Jobs' garage, it's the Incubator. Poh complains that Cyberjaya is simply too far away from the social and commercial hub of Kuala Lumpur. His last secretary quit after three days, he said, because she couldn't manage the 30-mile commute to Cyberjaya on the slow and unpredictable public buses. He also said there are no shops or good restaurants yet, and he's tired of eating chicken and rice every day at Cyberjaya's only lunch place. More seriously, he said, he has never received any of the promised business help from the mentors at the Incubator. ``Nobody has taught me how to write a business plan. Nobody has showed me how to get venture capital,'' he said. ``They've not done one thing for me. I've not been incubated at all.'' Aggression needed Othman, the MSC chief, bristles at such comments. ``Our entrepreneurs just sit around and wait for things to fall in their laps,'' he said. ``That's one of their faults, as if society owes them something for their existence. They need to be more like the Indians. Indian entrepreneurs are very aggressive and forward-looking. ``When you want to build a nation, those who want to participate in full just might have to travel more than 30 minutes to work.'' In addition to the chicken-and-rice place, there are growing signs of life in Cyberjaya -- plenty of Malaysian Protons in the parking lots, forests of construction cranes in full swing, the rumble of concrete trucks and the smell of fresh tarmac. The would-be city is already home to the new Multimedia University (eventual population: 6,000), a number of corporate research-and-design facilities, the Incubator, and a newly christened, high-tech film studio known as E-Village. The master plan for the corridor also includes Putrajaya, a new administrative capital, and office buildings there are just about ready, designed in a mix of stolid British public architecture and Islamic ornamental motifs. Mahathir, the visionary Svengali behind the corridor, has already moved his offices into an overly grand hilltop building that overlooks a massive new mosque and a man-made lake. Plans also call for all the attendant services needed by any city -- power plants, water and sewer systems, schools, housing, restaurants, malls, mosques and clinics, all of them strung together by a fiber-optic network. It's all new, built from scratch, the financial crises be damned. ``This is everybody's project, every Malaysian's, and really there's no other option for us,'' says Othman. ``Without the MSC, we'd be like Thailand, like the Philippines -- very slow and way behind.'' |