12MP: Digitalisation and new technologies, paving the way for incremental economic growth

KUALA LUMPUR: As Malaysia rolls out its 12th Malaysia Plan (12MP) 2021-2025, it is crucial to emphasise on digitalisation.

The COVID-19 pandemic has accelerated the embracing of digital technology by several years as organisations rethink the role of digital technology in their overall business strategies and how they need to operate.

Innovation and efficiencies brought about by digitalisation is expected to contribute exponentially to the Malaysian economy.

It is imperative that the 12MP capitalizes this to identify areas that can provide a strong catalyst for the adoption of digital technology.

The 12MP can consider focusing on the digitalisation of large statutory bodies where by virtue of their size and ecosystem will contribute towards faster adoption of digital technology.

An exemplary instance being CIDB’s adoption of digital technologies, through its exclusive digital partner - Bayo Pay (M) Sdn Bhd, for the construction sectors trickles down to 1,000,000 construction workers and more than 70,000 construction companies.

Other Government agencies can emulate CIDB and play an extremely important role in pushing the digital agenda particularly for the bumiputera especially agencies that have presence in various levels of the bumiputera ecosystem which includes:

i. Development of bumiputera talents for the digital sector – data analysts, app developers, digital payment professionals, digital compliance and regulations, etc.

ii. Enabling and promoting bumiputera retailers and businesses to tap on new markets and increase their profitability by having digital presence and adopting digital payments.

iii. Financial inclusion via responsible micro digital financing to communities within the bumiputera ecosystem.

iv. Promotion of digital financial literacy and financial discipline to communities within its ecosystem.

Undeniably there has always been a gap between bumiputera and non-bumiputera participation in many traditional and main economic areas despite government initiatives and assistance.

The 12MP should identify newly emerged lucrative economic areas where bumiputera businesses can still catch-up and eventually compete at a level playing field.

There should be focus on establishing bumiputera champions in each newly established lucrative economic areas such as drone technology, fintech, semiconductor related manufacturing and other high technology areas.

As far as promoting the local fintech sector, an essential strategy is enabling easier participation of fintech companies into the national payment network infrastructure, by recognizing that unlike established financial institutions, fintech companies are mostly start-ups and growth companies with limited track record and operational volume to show but have immense potential to grow if given the opportunity to directly access the national digital payment infrastructure without having to rely on any intermediary.

As a vested industry player, we call for the development of a robust and accessible framework and digital infrastructure in relation to anti money laundering and terrorism financing.

This infrastructure should be comprehensive enough to cover identification data of citizens and non-citizens as well as data of sanctioned and blacklisted individuals and entities.

The infrastructure is to be maintained by a government regulatory body and be made accessible to all licensed and regulated institutions in the financial sector at no cost.

Currently there are no single source of data for such purpose and a majority of service providers are foreign entities resulting in millions of ringgit flowing out of the country to these foreign service providers every year.

It is also timely that the Government establish a National Digital Continuity Plan which should ideally fall under the purview of the National Security Council.

All aspects of government delivery channels including education, healthcare, social aid and all other government services must be able to switch from face-to-face interaction to digital means in the event that the situation warrants it.

Finally, to spur the economy, Government spending should be expedited starting with the swift implementation of projects that had been awarded but put on hold due to Covid-19. Quickly undertaken, this can generate an immediate impact to the economy.

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* Commentary by Bayo Pay Sdn Bhd, a pioneer in the provision of digital payment as a service in Malaysia.

** The views and opinions expressed in this article are those of the author(s) and do not necessarily reflect the position of Astro AWANI.