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TJ: MSC Yang Gagal Berperanan
By Kapal Berita
9/10/2000 11:40 am Mon
TJ Ringkas (point sahaja):
MSC YANG TIDAK BERISI
MSC bolehlah dikira sebagai satu usaha bercita besar untuk mewujudkan
satu bangsa yang celik IT dan mempunyai kuasa ekonomi ilmu digital, yang
sering disebut sebagai K-Ekonomi. Dengan mengekspot hasil teknologi, ia
diharap dapat berperanan menyumbang hasil untuk tahun yang bakal mendatang.
Infrastruktur dan kemudahan:
Resepi Aplikasi dan Masakan:
Multimedia Super Corridor not performing to cue
The Asian financial crisis and insufficient local interest and skills have all
conspired to slow Malaysia's leap to a knowledge-based future, according to
Business Asia, a publication of the Economist Intelligence Unit.
The Multimedia Super Corridor (MSC) -- a big, bold initiative conceived by
Mahathir Mohamad half a decade ago to catapult Malaysia into the information
age -- is languishing in limbo, a victim of heavy official oversight and slack
investor interest. Unless it gets a new lease of life, the country's ability to meet
the challenges of globalisation -- and the government's burning ambition of
achieving the leap from a production- to a knowledge-based economy -- will
While greeted with considerable scepticism when first mooted in the mid- 1990s,
the futuristic project made much sense. A prolonged manufacturing- driven boom
in Malaysia had been steadily pushing up production costs, eroding the
economy's competitiveness. The prime minister and his policymakers concluded
that to continue growing strongly, the economy had to move up the value chain.
And fast. The MSC -- a 15x50-km zone stretching south from central Kuala
Lumpur, and designated for the creation, use and distribution of information
technology products and services -- was to spearhead the climb.
The government set about trying to turn the largely greenfield site into an Asian
Silicon Valley. It pledged an initial US$10bn for basic infrastructure, including a
2.5-10 gigabyte fibre-optic communications backbone, and stipulated the
"flagship" applications to be pursued: electronic government; distance learning;
telemedicine; multipurpose smartcards; remote manufacturing; borderless
marketing; and R&D "clusters".
Acutely aware that little if any progress was possible without the help of big
players in the global high-tech industry, the authorities devised an attractive
incentives package to woo them. This exempted investors from the restrictions on
foreign ownership and expatriate employment applicable to other parts of the
economy; offered generous tax breaks and competitive communications tariffs;
and promised MSC infrastructure contracts to companies willing to use the zone
as a regional base. Bureaucrats busied themselves drafting a series of
"cyberlaws" to encourage the development of the corridor and protect investors
and their products. Dr Mahathir set up an MSC "international advisory panel" that
included the bosses of technology and new economy giants such as Microsoft,
IBM, Apple, Oracle, Compaq and Sun Microsystems. Its members applauded the
prime minister's vision, and most committed themselves to setting up operations in
the zone. It seemed poised for take-off.
Then the Asian crisis struck. While the MSC was largely spared the public
spending cuts that forced the cancellation or dilution of numerous other large
projects, it was adversely affected in other ways. Scores of small, local
companies granted MSC "status" found themselves deprived of anticipated
funding almost overnight.
More ominously, the early enthusiasm of some of the major multinationals waned.
One reason was Dr Mahathir's transformation into a seemingly hostile sponsor.
The increasing frequency and vehemence of his anti- Western outbursts --
blaming foreign "speculators" for the downturn and accusing overseas companies
of preying on Malaysian businesses weakened by it -- and his imposition of
capital controls gave them pause for thought. The government's repression of
domestic critics, which involved monitoring Internet traffic, was also seen as less
than conducive to the sort of innovation supposed to flourish in the corridor.
The Multimedia Development Corporation (MDC), the official agency overseeing
the MSC, continues to talk up the project. It says the number of MSC-status
companies has grown steadily to 362 -- 40% of them foreign- owned --
undertaking a wide range of activities, among them software and hardware
development, Internet-based business, systems integration, and telecoms and
But other figures released by the MDC, based on the business plans of the
companies under its supervision, are hardly flattering. By 2001 they will have
invested no more than US$475m, and generated a maximum of 7,300 jobs --
modest numbers when measured against rival high-tech zones elsewhere in
Asia. Worse, independent MSC-watchers say only about one-quarter of the
approved firms have actually moved into the corridor. Most are resisting pressure
to do so, not least because it still lacks essential facilities such as housing,
shops, schools and public transport. Indeed a sizeable proportion of the
companies are effectively dormant, according to industry analysts.
So what's gone wrong? Members of the international advisory panel attending its
fourth annual meeting last month in Cyberjaya -- one of two "intelligent" cities
slowly taking shape in the MSC -- highlighted numerous shortcomings. For
starters, too much is being attempted with too little resources, so more focus is
required, they said. Some suggested that prioritising two or three of the seven
flagship applications -- most of which are unique to Malaysia -- would be a
Others felt there was insufficient commitment to the project on the part of
Malaysian firms, and warned this would have to change if foreign companies are
to play a bigger role. The problem stems partly from the limited appreciation
among local businesses and other potential consumers of the benefits technology
But there are other reasons, too. One is a severe shortage of indigenous
knowledge workers. The MDC touts low salary levels as a big plus for investors
-- the pay cheques of Malaysian managers are on average about one-fifth and
one-third those of their Hong Kong and Singaporean counterparts respectively
-- but it is a double-edged sword. A lot of local talent has migrated as a result to
more remunerative and vibrant high-tech hubs now mushrooming across the
region and beyond.
The MDC insists the dearth of qualified Malaysian professionals is a short-term
problem and will be more than adequately addressed when two state-run
universities in the corridor (that are now operational) begin turning out engineers,
researchers and other specialists. Still, the education system generally, which
has long favoured memorisation over inquisition and creativity, will have to
become far more attuned to the needs of an increasingly IT-based economy.
Another obstacle to the emergence of a critical mass of homegrown technology
companies is lack of financial support. Malaysia's conservative banks,
conditioned to underwriting investments by old-economy manufacturers and
property developers, have been acutely risk-averse since the recent recession.
Some have so-called venture-capital units, but few of these possess the
capacity to assess the creditworthiness of seed and early-stage start-ups, so
tend to shy away. There is also little scope for them to exit such investments.
The MESDAQ, a new stock exchange modelled on the tech-heavy NASDAQ in the
US, and launched 18 months ago, has secured just two listings. Here, too, the
government is trying to plug the gap. MSC Venture Corporation, an MDC offshoot
set up in mid-1999 with a M$120m (US$31.6) war-chest, has injected little more
than M$20m into seven companies. Staffers attribute the modesty of the outlay to
the poor quality of many of the business plans they receive. Nonetheless, MSC
advisory panel members pointed out that government-backed funds are often
ill-equipped to identify worthy initiatives, and made a case for the introduction of
tax and other concessions to attract more discerning overseas funds that have
established a strong presence elsewhere in Asia. The persistence of copyright
piracy, and the local authorities' ambivalent attitude to it, is a major disincentive
to investment in the MSC for big and small companies alike.
In mid-year Dr Mahathir appeared to condone the practice, warning that makers of
high-technology products would continue to be victims of counterfeiters until
they reduced prices to levels local consumers could afford. On the other hand,
crackdowns on end-users of illegal software and audiovisual goods have
intensified, and tougher laws targeting manufacturers are now on the statute
books. Still, the problem in Malaysia is less the quality of its legislation than the
willingness and ability of government agencies to implement it. Moreover, given
the speed of the technological revolution, concern is being expressed, even in
official circles, about the risk of existing cyberlaws quickly becoming outdated.
Insisting numerous gaps and inconsistencies are already apparent, Othman Yeop Abdullah, the MDC's executive chairman, has called for a major review. Is there any positive message in all this? Well, there seems little doubt that the MSC, a project which was to have provided a good deal of the momentum for Malaysia's much-needed advance up the technological value chain, will be rather more modest than originally envisaged. That is no disgrace. The question is whether the authorities can recognise this and adapt MSC strategies accordingly. Failing this, the country's much-vaunted leap into the future could be little more than a hobble.