What Malaysia’s latest policies mean for the tech scene

Dan Lain-Lain (Malay for “and others”) is a weekly column by TIA journalist Emmanuel Samarathisa that dissects the goings-on in the Malaysia tech scene but with a heavy mix of current affairs, policy and politics. Click here to read past articles.

The Kuala Lumpur cityscape / Photo credit: Wikimedia Commons

It’s that season again where there are a number of political maneuvers and public policies that will have some bearing on the Malaysian tech scene. Good or bad, you be the judge. But let’s get to it:

Politicians appointed to tech-related agencies

At the time of writing, there are two agencies that have politicians – more precisely, members of parliament (MPs) – as their non-executive chairperson.

The Malaysian Digital Economy Corporation (MDEC) appointed Syed Ibrahim Syed Noh, an MP of the Ledang constituency, as chairperson, while state-owned tech financier Malaysia Debt Ventures picked Wong Chen, who’s from the Subang constituency, to be on the chair.

Both men hail from Parti Keadilan Rakyat, the political party led by Prime Minister Anwar Ibrahim.

For what it’s worth, Anwar’s men also command the key portfolios when it comes to government tech and startup funding: finance (Anwar himself); science, innovation, and technology (Chang Lih Kang); economic affairs (Rafizi Ramli); and communications and digital (Fahmi Fadzil).

In Malaysia, despite the possible conflict of interest, there isn’t an explicit clause that bars politicians from being on the board of government agencies. This is an old practice, anyway.

Why this is frowned upon is because of conflict and all the other negative things associated with such an appointment: patronage, corruption, and so forth.

Further, the country’s anti-graft agency is also under the control of the prime minister. It isn’t an independent body in the sense that it reports to the parliament.

While these appointees are vetted by the anti-graft agency, the process has been more of a performative measure since it’s not up for public scrutiny.

You could argue there are merits to appointing yes-men. Those politically affiliated with the prime minister, for instance, may have the ability to execute mandates or reforms.

But with very little oversight, who watches over the chiefs?

I’m concerned about one thing though: whether we can break away from the status quo.

The thing is, we need a hard reset. That means consolidating tech agencies, firing a few people in the process, closing a few of firms, and revamping this entire space.

Government has an outsized influence on the tech and startup sector. While that may not be a bad thing, direct involvement isn’t a good idea either.

These politicians, despite holding corporate jobs prior to joining politics, don’t have the skills to run tech companies, let alone tech agencies.

They may have contacts and be able to gather opinions, but they haven’t had that experience of bootstrapping a startup, raising funds, or even running a business.

This then brings us to the same old problem of tech agencies not doing much to move the country’s startup needle. So what should we expect? The usual grandiose statements of birthing x number of unicorns or setting aside x amount of ringgit for “innovative” and “high-growth startups.”

Kuala Lumpur to be a regional startup hub

Economic Affairs Minister Rafizi said he wants to make Kuala Lumpur the country’s startup hub.

To be sure, Kuala Lumpur is pretty large. What he probably meant was the downtown part and the nearby transport hub KL Sentral.

This is all well and good, but it goes back to what I wrote earlier about Cyberjaya being the next tech white elephant: It’s another vanity project.

Kuala Lumpur is naturally the port of call for many tech firms simply because it’s the most connected city in the country. That’s why TikTok, for instance, houses thousands of employees here.

This isn’t to say other cities or states don’t come close. Penang is a good example of a well-connected state outside Kuala Lumpur, but the latter is still the nation’s capital.

But we have already experimented with so many so-called hubs and we’re not getting it right. Kuala Lumpur as a tech hub was former prime minister Najib Razak’s pet project too.

He tried turning Bangsar South into a tech hub, but that only resulted in companies moving their operations and call centers there – not exactly “innovative.”

Startups need access to three things: funding, talent, and an ecosystem to test their products. Malaysia can easily meet all three but isn’t because it has brain drain problems, a lack of young fund managers, and no laws that can keep pace with, well, innovation.

A good example is how we go on about drone readiness but we aren’t really amending relevant laws for service providers to easily test their solutions.

Digital nomads in a pinch

Finally, if you’re planning to get a digital nomad visa – aka DE Rantau – and hole up in Penang to work remotely, I have some news for you: The state has banned Airbnb services or any short-term rentals for residential properties.

But the ban excludes six types of commercial properties: service apartments, SoHos, SoFos, SoVos, office suites, and duplex offices.

Still, owners of these commercial units who plan to offer any kind of short-term rental, which Penang defined as up to six months or 180 days, must secure approval from their respective joint management bodies or management corporations. These owners also need a 75% “yes” vote from other residents at the annual general meeting.

Penang is one of the country’s most urban states and a hub for big tech multinationals. Naturally, this state will be an alternative for those who want to work as a nomad but prefer somewhere other than Kuala Lumpur.

Hotel groups are thrilled with the state government’s move to curb Airbnbs.

Aside from the usual industry lobbyists, there are good reasons why Airbnb guests aren’t welcomed, e.g., they may not be on their best behavior. Also, most, if not all, who reside in a guarded condominium do so for the security and peace of mind.

How much will this policy be a turn-off for digital nomads? Anecdotally, from what I’ve gathered after asking a number of digital nomads or hopefuls, this might be a dealbreaker.

The attractive feature of the DE Rantau program is that visa holders can move around the country during that one-year duration. The visa can be extended for another year, pending approvals.

Short-term rentals were a draw because a nomad can spend a few months in Penang and then move to, say, Kuala Lumpur or another city within Peninsular Malaysia. Now that dream is up in the air.


Emmanuel Samarathisa

Kuala Lumpur-based journalist. Loves chasing scoops.

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