Julian Matthews, Kuala Lumpur
Super Corridor Plan Ahead of Schedule Despite Crisis
Malaysia's Multimedia Super Corridor (MSC) is progressing ahead of schedule and will not be delayed by the regional economic turmoil, said Prime Minister Mahathir Mohamad.
"There is no reason to put this project on hold because a lot of the expenditure is coming mainly from the companies participating," he said.
Since the economic downturn in July 1997, the ringgit has devalued more than 30% against the US dollar, and several factories in the country have shut down, downsized their operations or retrenched staff.
Mahathir said the regional financial markets crisis had not affected the MSC project in any way.
"The project is, in fact, one year ahead of schedule. If there is any effect at all, it is to accelerate the project, which has progressed much faster than anticipated," he said.
To date, 180 foreign and local companies have applied to invest in the MSC with total capital outlay of over US$1 billion spread over five years, he said.
The combined revenue of these companies by the fifth year of operations is expected to be in excess of US$3 billion.
Of the 180 companies, 110 have already received MSC status which entitles them to preferential incentives such as 10-year tax holidays, guaranteed infrastructure, competitive telecom tariffs and unrestricted import of knowledge workers.
Mahathir was speaking after chairing the recent meeting of the MSC's 2nd International Advisory Panel (IAP) which comprised heads of various leading information technology and telecommunication corporations from around the world.
The 25 IAP members, consisting of chairmen and CEOs of major technology corporations, were unanimous in their endorsement of the project and expressed satisfaction of its progress.
Mahathir (middle) and Members of the International Advisory Panel for the MSC
Protection for Companies
Among the issues discussed by the panel was there be tolerance for companies that may fail in the MSC.
"We must ensure that companies that fall, do not wither away from the scene but bounce back and learn from their failures," said Othman Yeop Abdullah, executive chairman of the Multimedia Development Corp (www.mdc.com.my), the lead agency promoting and developing the MSC.
Mahathir said the government was considering having legislation similar to US's Chapter 11 bankruptcy protection laws in Malaysia.
Mahathir said with the present economic crisis a number of good companies may have to fold up and be "bankrupted through no fault of their own."
"It may be necessary to provide a safety net for MSC status companies that fail," he said.
Panel member Ambassador Diana Lady Dougan, senior adviser of the Center for Strategic and International Studies, compared this to California's Silicon Valley where to every one successful company, there were two failures.
"There is a need to nurture creativity and entrepreneurship among companies in the MSC, which includes the willingness to fail and start up again," she said.
On the availability of human resources, Mahathir said Malaysia will produce 7,000 graduates annually, and will allow easy entry for foreign skilled workers to meet the requirements of the MSC.
Silicon Graphics World Trade Corp chairman Robert Bishop, another panel member, said there has been major progress in development of the MSC.
Silicon Graphics is assisting local companies in developing training curricula on digital media content for the Multimedia University, which will be located in the MSC.
"We are also hoping to bring several partners to build a 3D (three-dimensional) simulation center in the MSC for another local university," he said.
Acer Group (www.acer.com) of Taiwan's chairman Stan Shih said building a software culture in Malaysia and the Asian region was critical to its future.
"The MSC is crucial to transform manufacturing-dependent economies in the region into one based on software, services and higher value-added activities," he said.
Venture Capital for Software
He said Acer Group was keen on setting up a venture capital fund for the MSC, possibly with local partners, to support companies in software and content creation activities.
He hopes, via the MSC, software content development in Malaysia will one day exceed hardware content in terms of revenue.
Ben Verwaayen, chief operating officer of Lucent Technologies Inc (www.lucent.com) of the US, which recently received its MSC status said the company would invest over US$100 million in Malaysia in the next three years.
He said the sum was to make Malaysia its regional hub for Global System
for Mobile Communications (GSM), expand its GSM development and training
center, and grow its staff from the present 270 to 700.