Malaysia’s ICT industry has applauded certain elements of the Malaysian prime minister Datuk Seri Najib Tun Razak’s Budget 2010, themed ‘1Malaysia, Together We Prosper’.
Tabled in the Malaysian parliament on October 23, the prime minister’s Budget 2010 speech comprised three core strategies, one of which was to become a high-income economy. The other two themes were sustainable development and people’s welfare, said Najib, who added that Budget 2010 would provide the context for a new economic model based as preparation for the 10th Malaysia Plan [10MP].
“Now we have to shift to a new economic model based on innovation, creativity and high-value added activities,” said Najib, whose budget proposals included initiatives to develop a sustainable environment through green technology, as well as further strengthening of the local information and communications technology (ICT) industry through promoting broadband penetration, with personal tax relief on broadband subscriptions and ownership of computers.
Government ICT agency Multimedia Development Corporation (MDeC) CEO Datuk Badlisham Ghazali said the Budget 2010 has given prominence to ICT’s role in driving the nation towards becoming a high-income economy.
“For example, the Creative Industry Policy, which provides US$59.12 million [RM200 million] through Creative Industry Fund in the form of soft loans to finance activities, such as film and drama productions, music, animation, advertisements and local content development, will further complement the M-CMCI [MSC Malaysia Creative Multimedia Content Initiative] plans for the development of the creative industry encompassing the performing arts and music, design, animation, advertisement and content development,” said Badlisham.
The National ICT Association of Malaysia (PIKOM) chairman, Wei Chuan Beng, generally welcomed the ICT initiatives. “Several of the proposals in the budget utilises ICT as an enabler, such as the use of a single reference number for individuals and companies with MyID and MyCoID across multiple government agencies, and implementation of petrol subsidy control that could save billions for the country.”
‘Green’ technology, SMEs, security
“According to Symantec 2009 Asia Pacific and Japan Green IT Report released in April 2009, 92 per cent of Malaysian companies surveyed are expecting green IT budgets to increase over the next 12 months,” said security provider Symantec Malaysia managing director, Suzie Tan. “In addition, 72 per cent of respondents state that they are working on creating a green IT strategy. While these organisations might be the first beneficiaries of the incentives, we hope the initiative will drive many more companies to adopt similar practices.”
Tan added that government’s commitment in the development of sustainable environment through green technology. The US$440 million (RM1.5 billion) fund to provide soft loans to suppliers and users of green technology, as stipulated in Budget 2010, would solidify the government’s effort for the development of green technology in Malaysia.
Power and cooling solutions firm APC Malaysia country general manager, Ng Hon Chun, said: “The government acknowledges the potential of green technology, which is seen in the National Green Technology Policy announced in August 2009, and the restructuring of the National Energy Centre to become a National Green Technology Centre.”
PIKOM’s Wei said under Budget 2010, there would be an allocation of US$103.5 million (RM350 million) worth of funds to SMEs [small and medium enterprises] for soft loans, capacity enhancement, branding and promotion. “This allocation to SMECorp means that SME ICT companies will benefit in terms of loans and capacity enhancement funding. Other SMEs will also be able to capitalise on this funding to enhance the productivity and competitiveness, indirectly benefitting the ICT industry as a whole.”
He said these technologies should address SMEs’ critical concerns, especially on automating key processes that will allow SMEs to be more efficient. “Malaysian SMEs have high awareness of security and disaster recovery, but there is still a relatively low adoption of basic IT security and disaster recovery measures in Malaysia.”
Surveillance solutions firm Axis Communications Malaysia country manager, Nafis Jasmani, said: “The government’s priority in reducing crime rate, focusing on crime prevention measures, is to be applauded. The US$1.09 billion [RM3.7 billion] fund injection to increase efficiency of the security force, including the provision of modern and sophisticated equipment is a commendable measure to curb crime. Surveillance cameras play an important role to help reduce crime and increase emergency responsiveness.”
Tax relief on broadband and computer purchase
MDeC’s Badlisham welcomed the government’s assistance in making access devices such as computers more accessible to university students by offering a netbook package, which includes free broadband service for US$14.8 (RM50) per month for two years. Civil servants can also apply for computer loans once in every three years, and there is a proposal for tax relief for individual taxpayers on broadband subscription fees up to US$148 (RM500) a year from 2010 to 2012.
“These steps will see a big jump in the number of PC ownership and broadband take-up in the country and the demand for local online content, which will encourage Malaysians to acquire knowledge and information through the Internet,” said Badlisham.
“The combination of netbooks with quality broadband connectivity is now an indispensible tool for learning, work and play,” said WiMAX firm Packet One (Malaysia) Networks [P1] chief executive officer, Michael Lai, who hoped that the incentive was for all wireless or wired, mobile, and fixed broadband users.
Looking ahead
“As the country gets more connected, Symantec recommends that the government will also continue to strengthen the cyber-security framework, as increasing broadband usage will expose users to more risks from cyber threats,” said Symantec’s Tan. “As such, we recommend leveraging on the public-private partnerships to determine the data protection legislation structure, national infrastructure and technologies and industry best practices. This will be critical to ensure that we are prepared to provide an environment where businesses and consumers can continue to engage in and benefit from the online world.”
While Intel Malaysia country manager Ryaz Patel generally welcomed the initiatives, especially the netbook bundle to students, he said: “Intel hopes that this can be scaled out to students at all educational levels, ensuring a stronger integration of ICT in education, particularly to drive learning in and outside of the classroom.”
Patel hoped that the 10MP would help address the need to encourage competition and liberalisation among Internet service providers (ISPs) so that broadband costs and quality could be improved.
“Malaysia’s ICT industry is still facing a serious shortage of skilled IT professionals despite several key measures to tackle the problem,” said Malaysia-based Dell Global Business Centre managing director, Bobbi Dangerfield. “There are a large number of unemployed ICT graduates who do not meet today’s industry requirements. This alarming situation is further aggravated by corporate expansions and brain drain to other developed countries which offer far better job prospects and remuneration. There is also a growing mismatch of graduates’ expectations and industry needs.”
Storage solutions firm Hitachi Data Systems’ Malaysia managing director Johnson Khoo welcomed the allocation of more than US$0.59 (RM2) billion towards education and public institutions of higher leaning, and added: “The company also welcomes the government’s move to make it easier for skilled workers and professionals to obtain permanent residence status in the country. However, we feel that more can be done to attract more skilled workers from abroad, to enhance the transfer of skills and knowledge to our local workforce.”
“While PIKOM welcomes the budget proposals, we hope that in the future the government would consider double tax deduction for SMEs who invest in ICT products and services, as well as organisations that outsource their business process and ICT services to local outsourcing companies,” said PIKOM’s Wei. “In addition, we recommend the re-introduction of the EPF [Employment Provident Fund] Withdrawal Scheme for Computer Ownership be made available to the general public.”
“Malaysia is currently ranked the world’s third most competitive country in the outsourcing business by analyst firm AT Kearney,” said Wei. “This is indeed a rare achievement and we must strengthen the industry further and hopefully become the world’s top outsourcing destination.”
