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Computing & Internet Diffusion Telecom Regulation & Liberalization
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IT FinancingThe government is backing its ICT vision with a serious financial commitment. According to the Eighth Malaysia Plan 2001-2005, USD$ 1.37 billion is allocated to ICT development over the next five-year period, or five percent of the government budget. Funding includes government computerization, flagship ICT applications and projects to reduce the digital divide. Below is a summary of where the government[1]. Malaysia’s rapid growth over the past 20 years has been financed and sustained by high domestic savings and by large inflows of FDI, attracted by Malaysia’s well-developed infrastructure, capable administration and well educated workforce. These inflows reached a peak of 8.7 percent of GDP in 1992-93. However, they never fully recovered after the Asian financial crisis: FDI inflows stood at 4.2 percent of GDP in 2000, were barely positive in 2001, recovered to a historically low level of 3.4 percent of GDP in 2002, but fell back to 2.4 percent in 2003. Most of the inflows are not really inflows at all but earnings reinvested by existing multinationals. Nevertheless, Malaysia continues to benefit from the trend among companies in developed countries to relocate some of their operations to lower-cost centers. A large part of FDI inflows is channeled into manufacturing, but a growing share is going into the services sector. Malaysia has to do battle with its regional neighbors, most notably China, in vying for foreign investment. It has in effect abandoned the official policy of reserving part of corporate equity for bumiputera, which scared off some foreign investment in the past. Malaysia is hoping to attract investment in higher knowledge content industries, in line with its ambition to become a knowledge-based economy, and in higher value added manufacturing[2]. |
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