THE government is committed to reducing the price of internet connectivity while ensuring higher speeds and better quality of services, said Deputy Finance Minister Amiruddin Hamzah.

Increased adoption of information and communications technology would enhance competitiveness, said Amiruddin during the launch of the World Bank’s report on Malaysia’s digital economy.  

“Malaysia must aspire to be become a front-runner on the digital front to fully unlock its economic benefits,” said Amiruddin.

“The good news is that according to Bank Negara’s paper (Unlocking Malaysia’s Digital Future: Opportunities, Challenges and Policy Responses), if Malaysia can transition its economy to front-runner status – in the same league with the United States, Estonia, South Korea, Japan, and Singapore – Malaysia can yield significant additional growth dividends of between US$100 billion (RM415 billion) to US$136 billion per year by 2025.”

“The bad news, or rather, the challenging news is that, according to the same paper, Malaysia needs to focus urgently on three essentials, namely fast and affordable broadband, talent tailored for digital progress covering both new graduates and re-skilled workers, and high digital adoption among consumers and businesses.”

Also present at the launch was World Bank’s country director for Malaysia, Mara Warwick, who said that despite an internet connectivity of around 80%, less than half of Malaysian business firms have access to broadband services, with only 18% with some form of web presence.  

“This level of digital adoption by businesses is well below averages for upper-middle and high-income countries around the world,” Warwick said.  

E-commerce also remains dominated by large firms, while digital entrepreneurs still lack the “right mix” of skills and access to capital.

Public policies that the World Bank recommended to unlock the full potential of a digital economy include increased competition, universal and inexpensive internet connectivity, improved human capital, and reformed taxation on digital economy.  

Earlier, Amiruddin said that 3,800 small and medium enterprises have joined the Digital Free Trade Zone, a figure double that of last year.  

The DFTZ is a joint initiative by former prime minister Najib Razak and Alibaba Group that aims to double e-commerce growth from 10% in 2017 to 20% by 2020.  

Through the DFTZ, the purchase of online goods worth US$276 and below will be exempted from paying tax. – September 12, 2018.