January 2007

ICT empowering citizens of Malaysia

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Malaysia, an upper-middle economic state in SouthEast Asia, found its connectivity with the world with the installation of the first telephone line in 1874. The country developed its first computer system in 1966 and since then several initiatives to facilitate the integration of ICT in different areas have been introduced. The privatisation of the telecom sector in 1987, and the formation of the NTP (National Telecom policy) in 1994, led to the full liberalisation of the market. The enactment of the Communi-cations and Multimedia act in 1998 established the Malaysian Communication and Multimedia Commission (regulator) in support of national policy objectives. The regulator provides for economic, technical, consumer and social regulation ensuring competitiveness, licensing, frequency allocation, affordability and availability of ICT technologies and services. Framework for development (FID) is a five year rolling plan for ICT development. The country now faces the dilemma of ensuring global competitiveness as well as access to all.

e-Readiness of Malaysia

With a population of 25.58 million (2004) over an area of 330,000 sq. kms., Malaysia had an average population density of 74 people per square km., though it is unevenly spread across the country with the bulk of the population residing in the west half of the country. The economy of the country has been robust even in the wake of the economic setbacks in the Southeast Asian economies in 2000 and a SARS outbreak in 2003. The GDP of the country was reported as RM394 billion (2003) (RM 3.8= US $1), with a growth of 5.2 percent over 2002.



ICT has grown substantially in Malaysia contributing a (gross) revenue of RM19 billion to the economy. The total telephone penetration rates have reached a combined telephone penetration of 61.99 telephones per 100 people (2003).

The tele-density (fixed) has climbed to 20, with the mobile phone connections overtaking fixed lines. Deployments for 3G and EDGE mobile networks have also started.  Malaysia's performance with respect to other ASEAN countries has also been good, as shown in the graph.

The country's Internet development started in 1988 and by the end of 2003 the total dial-up penetration rate was 11.4 percent. Broadband Internet services started in 2001 and are still in their infancy. The absence of regulatory mechanisms allowing for local loop unbundling, the slow paces of the incumbent, and issues with last-mile connectivity have resulted in wireless broadband being preferred by operators. The broadband as well as the mobile segments though have been deployed around cities and urban areas.
Malaysia has embarked upon various measures to ensure the ICTs play an important role in the society. For ICT development the MSC – Multimedia Super Corridor (for global competitiveness) has been developed.

 The government has invested highly in its infrastructure. The MSC contains a high-speed 10Gb/s network connecting MSC to Japan, ASEAN, EU and the US. It supports public administration, education and business applications. Malaysia was ranked 26th in the world for e-Readiness. The telephone penetration rates rose by 7 percent while for the rural sector there was a rise of 6 percent (2000).



Facing challenges

ICT infrastructure development in Malaysia has been concentrated mainly in the urban areas. Even in the urban sector itself some areas are highly developed as compared to others. Regional differences in economic development and population density across the country have also resulted in some areas are considerably lagging behind. About 89 out of 136 districts in the country have been identified as undeserved. According to MEWC, about 3000 villages are not connected to the country's communication infrastructure.

The divide exists due to illiteracy, low incomes, amongst physically challenged people and due to difference in ethnicity, gender marginalising people whose access to ICT services is limited. Relatively low PC ownership has also been a reason for low access. The urban-poor of the country are also disadvantaged digitally.

The country is a federation of 13 states and 3 federal states. According to estimates the 'Bumiputeras' have low incomes and low education levels and suffer the most due to knowledge divide as well as digital divide. Data suggests that the states of Kedah, Sabah, Sarawak, Terengganu, Kelantan, Perlis and Pehang have more than 50 percent people in rural areas and also the highest percentage of 'Bumiputeras' in their population constitution. Thus they lag behind the rest of the country in terms of ICT.

According to the available data, most of the states mentioned have had traditional agro-economies and have had little development in terms of ICT industries. These states currently have a mean GDP less than the mean GDP of the country. The percentage of people below the poverty line is also higher than the national average in most of these states. More number of people here have never been educated.  Some of these states specifically Kelantan and Terengganu consist of some socio-cultural and religious parameters causing prominent gender divide, as has been observed in other South Asian and South-East Asian countries as well. Some of these states, specifically Sabah and Sarawak have a large number of ethnic groups, that sometimes causes difficulty in policy implementation as observed by several studies. It is not only an issue in Malaysia but also an issue in most countries around South Asia.

Political instability is also sometimes experienced, especially in the states like Sabah which has the chief minister changing after every two years (so that all ethnic communities are equally represented) and Kelantan which is the only state not ruled by the BN party alliance.  It is evident that political stability poses great hindrance to the growth in most countries around the developing world. Also, according to sources, Sabah has had an inequitable distribution of wealth between the state and federal government, which has adversely affected progress. The state of ICT in these states is below the national level. These states have low tele-density values and high number of undeserved areas. Sabah and Sarawak are the poorest states in Malaysia with the highest unemployment rates and have been the targets for many a development schemes.

'Vision' with ICT

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