Malaysia Digital Chamber of Commerce (MDCC) Opinion on Malaysia’s Chairmanship of ASEAN in 2025

By Dr. Chris Daniel Wong, PhD

Chairman Emeritus Malaysia Digital Chamber of Commerce

Fellow Chartered Institute of Digital Economy

Dr. Nicole Foo, DBA

Fellow Chartered Institute of Digital Economy

Dr. Stephen T. Homer, PhD

Director, Yunus Social Business Centre, Sunway University.

Head of Research, Principles of Responsible Management Education ASEAN+ Chapter

Introduction

Malaysia’s upcoming chairmanship of ASEAN in 2025 presents a significant opportunity to strengthen regional digital economic cooperation, foster innovation, and drive inclusive economic growth. As digitalization continues to reshape industries, Malaysia is well-positioned to lead ASEAN toward a more integrated and resilient digital economy. The Malaysia Digital Chamber of Commerce (MDCC) presents this opinion paper to outline key areas of focus, challenges, and policy recommendations for Malaysia’s chairmanship.

Strategic Priorities for Malaysia’s ASEAN Chairmanship

To maximize the impact of its leadership, Malaysia should prioritize the following areas:

necessary resources and tools.

• Establish an ASEAN Digital Startup Fund to provide financing support for innovative technology startups.
• Develop a regional startup ecosystem by fostering cross-border incubation programs, R&D collaborations, and knowledge-sharing initiatives.
• Reduce regulatory barriers that hinder SMEs from expanding their digital businesses across ASEAN markets.

Promoting Digital Trade and E-Commerce Growth

The rise of e-commerce presents an opportunity for ASEAN businesses to reach a wider consumer base.

• Encourage the adoption of a regional e-commerce standardization framework to facilitate ease of trade and logistics.
• Enhance ASEAN’s participation in global digital trade agreements, ensuring ASEAN businesses can access global markets competitively.
• Strengthen initiatives such as ASEAN Online Dispute Resolution (ODR) mechanisms to improve consumer protection and trust in e-commerce transactions.

Challenges to Address

Despite the promising opportunities, several challenges must be addressed:

1. Regulatory Fragmentation
   ASEAN countries have different digital policies, data protection laws, and regulatory frameworks, making regional integration difficult. For instance, while Singapore has a well-established data protection law (PDPA), other countries like Cambodia and Myanmar have less developed frameworks. This inconsistency creates hurdles for businesses operating across multiple ASEAN markets, as they must comply with varying rules regarding data sovereignty, cross-border data flows, and digital transactions.
2. Cybersecurity Threats
   The rise in digital transactions, e-commerce, and online services has led to increased cyber threats such as data breaches, ransomware attacks, and phishing scams. ASEAN countries have different levels of cybersecurity readiness, and a lack of standardized security measures can create vulnerabilities across borders. Cooperation among ASEAN nations through frameworks like the ASEAN Cybersecurity Cooperation Strategy is crucial, but enforcement and collaboration remain inconsistent.
3. Digital Skills Gap
   Despite rapid digital adoption, ASEAN faces a significant gap in skilled digital professionals, particularly in areas like AI, cybersecurity, and cloud computing. Many traditional workers need upskilling to adapt to automation and digital transformation. Countries like Indonesia, the Philippines, and Vietnam struggle with workforce digital literacy, which slows down the adoption of new technologies. Governments and private sector initiatives must focus on large-scale training programs to bridge this gap.
4. Funding and Investment Gaps
   While digital transformation offers opportunities, many ASEAN startups and SMEs struggle to access funding for technology adoption, innovation, and market expansion. Financial institutions often have strict lending criteria, and venture capital availability varies across the region. Startups in Singapore and Indonesia may find it easier to secure funding, whereas those in Laos or Brunei face challenges. Government-backed initiatives, fintech solutions, and cross-border investment mechanisms are needed to close these gaps.

We dive into the frequently asked questions on how Malaysia can perform well as the Chair of ASEAN in 2025. Excerpts of 12 questions along with the response as below:

Q1. As the Chair of ASEAN, how can Malaysia leverage this opportunity to strengthen its position as a digital hub in the ASEAN region?

As the Chair of ASEAN, Malaysia has the opportunity to strengthen its position as a digital hub in the region through several key strategies:

i. Leading ASEAN’s Digital Agenda

Why as the chair, Malaysia can prioritize digital transformation by:

• Accelerating the implementation of the ASEAN Digital Economy Framework Agreement (DEFA) to enhance the region’s digital economy.
• Promoting harmonization of ASEAN’s digital regulations, including standardized data protection, e-commerce policies, and cross-border transactions.
• Encouraging ASEAN-wide collaboration on 5G infrastructure, artificial intelligence (AI), and blockchain technology.

ii. Attracting Digital and Technology Investments

• Utilizing the ASEAN chairmanship platform to position Malaysia as a prime destination for digital technology investments through initiatives like Malaysia Digital (MD).
• Encouraging global tech companies to establish research and development (R&D) centers in Malaysia.
• Providing tax incentives and infrastructure support for startups and multinational tech firms.

iii. Enhancing Digital Infrastructure and Connectivity

• Accelerating 5G development and expanding data centers to position Malaysia as ASEAN’s data processing hub.
• Supporting the development of an ASEAN Cloud Region, making Malaysia a central hub for data storage and processing.
• Expanding broadband internet access to rural areas to strengthen local digital economies.

iv. Strengthening the Startup and Innovation Ecosystem

• Leveraging the ASEAN chairmanship to promote partnerships between Malaysian startups and ASEAN countries.
• Hosting an ASEAN Digital Summit to connect investors, startups, and regional tech companies.
• Introducing digital training programs to empower young entrepreneurs in fintech, AI, and blockchain.

v. Boosting Cross-Border Digital Economy

• Fast-tracking cross-border digital payment recognition, such as ASEAN QR codes, to facilitate seamless digital transactions.
• Encouraging the adoption of digital currencies and e-wallets within the ASEAN trade ecosystem.
• Streamlining e-commerce regulations, payment systems, and logistics to enhance intra-ASEAN trade.

vi. Strengthening Digital Talent and Human Capital

• Aligning digital training programs with ASEAN partners to develop a highly skilled digital workforce.
• Attracting global tech experts by offering technology visas and employment incentives.
• Enhancing academic collaboration between Malaysian and ASEAN universities for research in AI, cybersecurity, and digital technologies.

How Malaysia can leverage its ASEAN chairmanship to:

• Lead ASEAN’s digital economy development.
• Attract investments and enhance digital infrastructure.
• Foster a competitive startup and innovation ecosystem.
• Integrate Malaysia’s digital economy with ASEAN and global markets.

With these initiatives, Malaysia has the potential to solidify its position as a leading digital hub in ASEAN, boosting its economic competitiveness in the digital era.

Q2. What is Malaysia’s role in leading ASEAN countries towards a more inclusive and competitive digital economy, particularly through initiatives such as DEFA?

Malaysia’s Role in Leading ASEAN Towards an Inclusive and Competitive Digital Economy Through DEFA

As the chair of ASEAN, Malaysia has a significant opportunity to drive the development of a more inclusive and competitive regional digital economy, particularly through the implementation of the ASEAN Digital Economy Framework Agreement (DEFA). Below are the key roles Malaysia can play in this leadership:

i. Driving ASEAN Digital Economic Integration

Why Malaysia can act as the main facilitator in coordinating DEFA to accelerate the development of a more seamless regional digital market by:

• Ensuring the standardization of regulations for cross-border digital transactions.
• Facilitating the integration of ASEAN e-commerce platforms to support small and medium enterprises (SMEs).
• Harmonizing data protection policies to strengthen consumer trust in ASEAN digital transactions.

➡ Example: Malaysia can lead efforts to introduce a unified legal framework that simplifies cross-border digital trade for ASEAN businesses.

ii. Strengthening Digital Inclusion Among ASEAN Countries

Why as a country with more advanced digital infrastructure, Malaysia can help other ASEAN nations bridge the digital divide, particularly in countries with lower digital development levels such as Laos, Myanmar, and Cambodia.

• Digital infrastructure assistance programs – Sharing expertise in 5G, cloud computing, and artificial intelligence (AI) to accelerate digitalization.
• Training and technology transfer – Offering workshops and training programs to improve digital literacy and workforce skills across ASEAN.
• Support for ASEAN startups – Providing access to funding, incubators, and mentorship programs for ASEAN startups.

➡ Example: Malaysia can launch an ‘ASEAN Digital Capacity Building Program’, which provides digital training and infrastructure support to developing ASEAN nations.

iii. Strengthening ASEAN’s Digital Infrastructure and Connectivity

Malaysia can take the lead in developing ASEAN’s digital ecosystem by:

• Accelerating the development of 5G networks across the region.
• Introducing an ASEAN Data Hub, with Malaysia serving as a strategic location for ASEAN’s data centers and cloud computing.
• Supporting ASEAN e-payment initiatives to enhance the adoption of ASEAN QR codes for cross-border digital payments.

➡ Example: Malaysia can collaborate with ASEAN to establish an ‘ASEAN Digital Free Trade Zone’, reducing bureaucratic barriers for e-commerce and fintech businesses.

iv. Positioning ASEAN as a Global Digital Innovation Hub

To establish ASEAN as a global digital powerhouse, how Malaysia can:

• Attract more technology investments by offering incentives for global companies to set up R&D centers in ASEAN.
• Develop an innovation ecosystem by empowering ASEAN tech startups.
• Lead collaborations in future technologies such as AI, blockchain, and green technology.

➡ Example: Malaysia can launch the ‘ASEAN Digital Innovation Fund’ to finance strategic regional technology projects.

v. Enhancing Cybersecurity and Digital Trust

With the rapid growth of the digital economy, cybersecurity and digital trust are becoming increasingly important. Malaysia can lead ASEAN by:

• Establishing an ASEAN cybersecurity framework to address growing cyber threats.
• Promoting secure data-sharing mechanisms between ASEAN countries.
• Providing cybersecurity guidance and technical expertise to ASEAN nations in need.

➡ Example: Malaysia can take the lead in forming an ‘ASEAN Cybersecurity Alliance’, responsible for tackling regional cyber threats.

Malaysia as ASEAN’s Digital Leader

• Leading ASEAN’s digital economic integration through DEFA.
• Bridging the digital divide and empowering developing ASEAN countries.
• Accelerating digital infrastructure and regional connectivity.
• Establishing ASEAN as a global digital innovation hub.
• Strengthening cybersecurity to protect ASEAN’s digital economy.

With a strategic and inclusive approach, Malaysia has the potential to shape the future of ASEAN’s digital economy and ensure the region remains competitive, resilient, and inclusive in the digital era.

Q3. How Can Malaysia Strengthen the ASEAN Regional Digital Ecosystem Given Its Position as a Leader in Technology and Innovation?

How Malaysia can strengthen the ASEAN regional digital ecosystem through a strategy focused on infrastructure development, digital talent, pro-business policies, and regional collaboration. Below are some key approaches:

i. Expanding Digital Infrastructure & Connectivity

• 5G & IoT: Accelerate the nationwide implementation of 5G and support the Internet of Things (IoT) infrastructure for industries such as smart manufacturing, digital agriculture, and smart cities.
• Data Centers & Cloud Computing: Malaysia can position itself as a data center and cloud computing hub in ASEAN by offering attractive investment policies for global technology firms.
• Blockchain & Cybersecurity: Strengthen cybersecurity and blockchain technology to enhance trust in regional digital transactions.

ii. Advancing Digital Talent & Education

• STEM & TVET: Expand skills training programs in technology fields such as artificial intelligence (AI), data analytics, and software development.
• University & Industry Collaboration: Encourage more “industry-driven” programs at local universities with participation from global tech companies.
• Digital Workforce Incentives: Provide incentives for companies that train and employ local talent in digital fields.

iii. Business-Friendly Policies & Digital Investment

• Startup & Fintech Incentives: Introduce tax incentives for startups in financial technology (fintech), e-commerce, and AI sectors.
• Digital Sandbox: Provide a testing platform for new technologies for local and regional companies before full-scale implementation.
• Flexible Regulations: Adapt more progressive regulations in the tech industry to attract more global companies to operate in Malaysia.

iv. Strengthening Malaysia’s Role as ASEAN’s Digital Hub

• Collaboration with ASEAN Countries: Malaysia can serve as a key driver in implementing the ASEAN Digital Economy Framework Agreement (DEFA) to harmonize the regional digital ecosystem.
• Regional E-Commerce Platforms: Strengthen partnerships with ASEAN countries to expand cross-border e-commerce markets.
• ASEAN Digital Innovation Hub: Establish Malaysia as ASEAN’s digital innovation center for tech R&D and joint ventures between multinational corporations and local players.

v. Driving the Digital Economy & Technology Adoption in Traditional Industries

• SME Digitalization: Improve access to digital financing and technology for small and medium enterprises (SMEs) to enhance competitiveness in the ASEAN market.
• Industry 4.0 & AI in Key Sectors: Accelerate automation in manufacturing, agriculture, and services using AI, robotics, and smart technologies.
• Gig Economy & Digital Payments: Expand the gig economy ecosystem with more fintech solutions and regional e-wallet systems.

By implementing these approaches, Malaysia can not only strengthen the ASEAN regional digital ecosystem but also emerge as a key leader in digital transformation within the region, attracting greater investment, talent, and innovation into the country and ASEAN as a whole.

Q4. In the Context of Malaysia’s ASEAN Chairmanship, What is the Role of the ASEAN Digital Economy Framework Agreement (DEFA) in Bridging the Digital Divide Among ASEAN Member States?

The Role of the ASEAN Digital Economy Framework Agreement (DEFA) in Bridging the Digital Divide Among ASEAN Member States

Why as the host of the ASEAN chairmanship, Malaysia has a significant opportunity to leverage the ASEAN Digital Economy Framework Agreement (DEFA) to bridge the digital divide among member states. This digital divide includes disparities in access to technology, digital infrastructure, digital literacy, and economic opportunities in the digital economy across ASEAN nations.

i. Ensuring Fairer and More Equitable Digital Access

One of the major challenges in ASEAN is the imbalance in internet access and digital technology infrastructure. Countries such as Singapore, Malaysia, and Thailand have advanced digital infrastructure, whereas Myanmar, Laos, and Cambodia lag behind.

DEFA can help by:

• Establishing a regional investment framework to develop digital infrastructure in less developed countries.
• Driving the development of high-speed internet and 5G networks across the ASEAN region.
• Aligning ASEAN’s digital infrastructure initiatives, such as submarine cable connections and satellite networks, to ensure broader regional connectivity.

➡ Example: Malaysia could propose an “ASEAN Digital Connectivity Initiative,” ensuring that all member states have access to fundamental digital technology by 2030.

ii. Enhancing Digital Literacy and Skills Across ASEAN

The digital divide is not only about internet access but also about the level of digital literacy among citizens in ASEAN countries. More developed ASEAN nations such as Malaysia and Singapore can share their expertise with other countries.

DEFA can help by:

• Establishing ASEAN digital training programs to enhance skills in e-commerce, fintech, artificial intelligence (AI), and data management.
• Supporting digital education initiatives through partnerships with the private sector and global tech companies.
• Encouraging digital workforce exchange programs among ASEAN countries to accelerate technology transfer.

➡ Example: Malaysia could propose the “ASEAN Digital Talent Exchange” program, where workers from less developed nations receive training and work experience in digitally advanced ASEAN countries.

iii. Supporting Digital Economy Growth for Small and Medium Enterprises (SMEs)

Small and medium enterprises (SMEs) in less developed ASEAN nations face challenges in adopting digital technology. Without access to the ASEAN digital market, the digital economic gap will continue to widen.

DEFA can help by:

• Standardizing e-commerce regulations and digital payment systems to facilitate SME operations within ASEAN.
• Providing access to ASEAN digital platforms to help SMEs expand into regional markets.
• Simplifying the adoption of e-wallets and unified digital payment systems across ASEAN.

➡ Example: Malaysia could propose the implementation of an “ASEAN Unified Payment System,” allowing SMEs from any ASEAN country to accept cross-border payments seamlessly.

iv. Promoting Technology Development and Innovation in Less Developed Nations

Digitally advanced ASEAN nations can assist others through technology transfer and innovation-sharing initiatives.

DEFA can help by:

• Establishing an ASEAN technology development fund to support digital startups in underdeveloped countries.
• Enhancing research and development (R&D) collaboration between ASEAN universities and tech institutions.
• Encouraging foreign tech companies to invest in developing ASEAN economies.

➡ Example: Malaysia could lead an “ASEAN Digital Innovation Hub” initiative, where startups from ASEAN countries receive technical assistance and funding to scale their digital innovations.

v. Ensuring Cybersecurity Policies and Data Standardization

The digital divide also involves differences in cybersecurity standards and data protection across ASEAN nations. Without clear regulations, less developed countries are more vulnerable to cyber threats.

DEFA can help by:

• Establishing ASEAN cybersecurity standards to protect users and businesses across the region.
• Providing cybersecurity training programs for countries with lower digital security capabilities.
• Strengthening cooperation among ASEAN nations in addressing cybercrime and digital threats.

➡ Example: Malaysia could spearhead the creation of an “ASEAN Cybersecurity Alliance,” where ASEAN countries collaborate to combat regional cybersecurity threats.

Malaysia as the Driving Force for ASEAN’s Digital Equity Through DEFA

Malaysia can play a leading role in ensuring that DEFA is truly effective in bridging the digital divide across ASEAN by:

• Driving digital infrastructure development in less developed countries.
• Enhancing digital skills through regional training and education programs.
• Supporting SMEs in ASEAN’s e-commerce and digital payment ecosystem.
• Promoting innovation and technology transfer in the ASEAN digital economy.
• Aligning cybersecurity measures and data protection policies for all ASEAN countries.

With proactive leadership, Malaysia can ensure that DEFA not only accelerates ASEAN’s digital economy but also fosters inclusive, equitable, and sustainable growth across the region.

Q5. How Can Malaysia Ensure That the Benefits of DEFA Are Enjoyed by Various Segments of Society, Including SMEs, in Creating Wider Digital Opportunities?

Why to ensure that the benefits of the ASEAN Digital Economy Framework Agreement (DEFA) are enjoyed by various segments of society, including small and medium enterprises (SMEs), Malaysia must take a comprehensive approach in terms of SME digitalization, financing, talent development, and digital awareness. The following are the key strategies:

i. Enhancing SME Access to Technology & Digital Platforms

• Digitalization Subsidies & Incentives
  • Provide tax incentives and grants to help SMEs adopt digital technologies such as e-commerce, AI, and automation.
  • Expand programs like the SME Digitalisation Grant to support SMEs in transitioning to digital operations.
• Regional Digital Trade Platform
  • Establish a regional e-commerce marketplace dedicated to Malaysian SMEs’ products and services under DEFA.
  • Simplify digital export procedures to make it easier for SMEs to sell to the ASEAN market.

ii. Ensuring Accessible Financing for SMEs

• Microfinance & Digital Credit
  • Expand access to digital financing, such as collateral-free microloans, through fintech companies and digital banks.
  • Introduce a digital credit scoring system for micro-businesses so that more SMEs qualify for loans.
• Support for Startups & Digital Entrepreneurs
  • Provide venture capital (VC) investments and crowdfunding opportunities for startups looking to expand in ASEAN.
  • Encourage collaboration with major tech companies to mentor local startups.

iii. Empowering Digital Talent in SMEs & Society

• Digital Training for Entrepreneurs & Workers
  • Offer free or subsidized digital courses to train SME employees in AI, digital marketing, and e-commerce.
  • Integrate digital skills into the education curriculum to ensure Malaysia’s workforce is ready for the ASEAN digital market.
• Digital Business Matching Program
  • Establish digital business matching initiatives between large tech firms and SMEs to accelerate digital transformation.
  • Facilitate collaboration between Malaysian startups and ASEAN companies through an official DEFA platform.

iv. Integrating SMEs into the ASEAN Digital Supply Chain

• Standardization & Digital Compliance
  • Simplify the digital licensing process for SMEs seeking to enter the ASEAN market.
  • Help SMEs comply with regional data regulations, e-payment compliance, and ASEAN e-commerce laws.
• AI & Automation in SMEs
  • Provide subsidies or grants for SMEs that want to adopt AI and automation in their operations.
  • Promote Industry 4.0 adoption for SMEs in manufacturing, logistics, and services sectors.

v. Increasing Digital Awareness Among SMEs & Society

• Digital Awareness & Education Campaigns
  • Launch digital awareness campaigns to help more SMEs understand DEFA benefits and join digital platforms.
  • Offer one-on-one guidance for SMEs with low digital literacy.
• Legal Support & SME Protection
  • Ensure consumer protection regulations are in place so that SMEs are not vulnerable to cyber risks.
  • Simplify digital dispute resolution processes to build SME confidence in operating within the ASEAN ecosystem.

Why Malaysia can play a crucial role in ensuring that DEFA benefits not only large corporations but also SMEs and society as a whole? By strengthening access to technology, financing, training, and compliance standards, Malaysia can accelerate digital transformation, enhance SME competitiveness in ASEAN, and create more economic opportunities for all citizens.

Q6. What steps should Malaysia take to ensure that the country becomes a digital innovation hub that attracts foreign investment, particularly in the high-tech sector?

Steps for Malaysia to Become a Digital Innovation Hub and Attract Foreign Investment in the High-Tech Sector

To position Malaysia as a leading digital innovation hub and a preferred destination for foreign investment in high-tech industries, several strategic measures must be implemented. These include enhancing digital infrastructure, fostering an innovation ecosystem, offering attractive investment incentives, and developing a highly skilled workforce.

i. Accelerating the Development of Digital Infrastructure and Technology

Malaysia must establish world-class digital infrastructure to attract global tech companies and innovative startups.

Actions to be taken:

• Speed up the deployment of 5G networks and high-speed broadband nationwide, including in rural areas.
• Establish regional data hubs with competitive hyperscale data centers and cloud computing facilities.
• Expand the Internet of Things (IoT), artificial intelligence (AI), and blockchain ecosystem through investments in advanced technology.

➡ Example: Malaysia could develop an “ASEAN AI & Cloud Computing Hub” to attract global companies looking to set up their R&D centers in the region.

ii. Offering Competitive Investment Incentives

To attract foreign investment, Malaysia must offer more appealing fiscal and non-fiscal incentives.

Actions to be taken:

• Provide tax exemptions for high-tech companies and startups investing in R&D and innovation.
• Offer grants and low-interest loans to tech companies setting up innovation centers in Malaysia.
• Improve technology visa facilities to attract highly skilled foreign talent.

➡ Example: Malaysia could introduce a “Tech Pioneer Visa,” making it easier for foreign tech companies to bring global talent into the country.

iii. Building a Dynamic Startup and Innovation Ecosystem

Malaysia must create a supportive startup ecosystem to position itself as the “Silicon Valley of Asia.”

Actions to be taken:

• Establish more incubators and accelerators to support high-tech startups.
• Improve access to funding through venture capital (VC) and innovation funds.
• Promote collaboration between the private sector, government, and academia to accelerate technological innovation.

➡ Example: Malaysia could establish an “ASEAN Tech Valley,” a regional innovation hub for startups in AI, fintech, and green technology.

iv. Strengthening Human Capital and Tech Talent

Malaysia must cultivate a highly skilled workforce in high-tech fields to meet the demands of innovative companies.

Actions to be taken:

• Enhance training programs in AI, data science, and blockchain through partnerships with global tech companies.
• Offer scholarships and incentives for STEM students to attract more local talent into the technology sector.
• Encourage tech talent exchange programs with developed countries like the US, China, and Europe.

➡ Example: Malaysia could launch a “Global Tech Talent Exchange Program,” allowing Malaysian tech professionals to work in global companies before returning to the country.

v. Enhancing Cybersecurity and Data Protection

Foreign investors are more confident in investing in a country with strong cybersecurity frameworks.

Actions to be taken:

• Strengthen cybersecurity laws and data protection policies in line with international standards.
• Establish an ASEAN Center of Excellence in Cybersecurity to address cyber threats collectively.
• Introduce regional data security standards to support a safer digital economy.

➡ Example: Malaysia could lead the “ASEAN Cybersecurity Alliance” initiative to enhance digital security across the region.

vi. Strengthening International Collaboration in Technology

Malaysia can become a global digital innovation hub by promoting international technology partnerships.

Actions to be taken:

• Form strategic partnerships with international tech companies in AI, IoT, and green technology.
• Enhance R&D collaboration between Malaysian universities and international institutions.
• Promote technology transfer projects between global and local companies.

➡ Example: Malaysia could establish a “Global AI & Robotics Collaboration Center,” where researchers and companies worldwide collaborate on technological innovations.

Malaysia as Asia’s Digital Innovation Hub

To ensure that Malaysia becomes a leading digital innovation hub and attracts more foreign investment in the high-tech sector, the following priorities must be emphasized:

• Enhancing digital infrastructure, including 5G networks and hyperscale data centers.
• Offering more attractive investment incentives to global technology companies.
• Building a stronger and more conducive startup ecosystem for innovation.
• Empowering human capital through tech training and digital talent development.
• Strengthening cybersecurity to ensure investor and consumer confidence.
• Expanding international collaborations in high-tech and innovation.

By implementing these strategies comprehensively, Malaysia can solidify its position as a regional digital innovation hub and a prime destination for high-tech investments in ASEAN and globally.

Q7. Malaysia’s Key Focus in Promoting Regional Cooperation through DEFA to Enhance ASEAN’s Digital Economy Resilience

Why as the chair of ASEAN, Malaysia has the opportunity to leverage the ASEAN Digital Economy Framework Agreement (DEFA) to strengthen digital economic resilience among ASEAN nations. By prioritizing digital transformation, Malaysia can play a pivotal role in accelerating digital integration, enhancing regional competitiveness, and ensuring inclusive digital economic growth.

i. Establishing a More Integrated ASEAN Digital Market

One of the biggest challenges in ASEAN’s digital economy is regulatory fragmentation and differing digital standards across countries, which hinder digital trade, cross-border payments, and e-commerce operations.

Malaysia’s Focus in DEFA:

• Aligning ASEAN e-commerce regulations to enable digital businesses to operate seamlessly across multiple countries without excessive bureaucratic hurdles.
• Establishing a regional digital payment framework to facilitate faster and lower-cost cross-border transactions.
• Harmonizing consumer data protection to build trust in ASEAN’s digital economy.

➡ Example: Malaysia could spearhead an “ASEAN Digital Single Market” initiative, aligning digital laws to streamline cross-border e-commerce transactions.

ii. Strengthening Regional Digital Infrastructure and Connectivity

A robust digital economy requires strong digital infrastructure. However, ASEAN countries vary significantly in 5G development, data centers, broadband access, and cloud computing technology.

Malaysia’s Focus in DEFA:

• Accelerating 5G network expansion across ASEAN to ensure fast and stable internet connectivity.
• Establishing an ASEAN Cloud Region, enabling shared cloud computing and data center infrastructure.
• Promoting IoT and AI development in industrial and service sectors.

➡ Example: Malaysia could propose an “ASEAN Digital Connectivity Fund” to finance digital infrastructure development in less advanced ASEAN nations such as Laos, Myanmar, and Cambodia.

iii. Accelerating Digital Transformation of Small and Medium Enterprises (SMEs)

SMEs account for over 90% of businesses in ASEAN but many still rely on conventional operating methods. DEFA can accelerate SME digitalization to make them more competitive in the digital economy.

Malaysia’s Focus in DEFA:

• Offering digital incentives and grants to help SMEs adopt digital technologies.
• Enhancing ASEAN e-commerce access, allowing SMEs to sell their products more easily across regional markets.
• Providing digital literacy training for small business owners to enhance technology adoption and innovation.

➡ Example: Malaysia could launch the “ASEAN SME Digital Acceleration Program”, offering funding, training, and technical support to help SMEs transition to digital platforms.

iv. Driving Innovation in ASEAN’s Digital Economy

To boost ASEAN’s digital economy competitiveness, Malaysia could take the lead in developing innovative technologies such as AI, blockchain, fintech, and green technology.

Malaysia’s Focus in DEFA:

• Establishing a special fund for digital technology R&D.
• Encouraging collaboration between ASEAN tech companies to accelerate digital innovation.
• Supporting tech startups in ASEAN through funding and business mentorship.

➡ Example: Malaysia could establish an “ASEAN Innovation & Tech Hub” to serve as a regional digital technology research center.

v. Enhancing ASEAN’s Cross-Border Digital Payment System

A key factor for a successful digital economy is the ability to conduct seamless and cost-effective cross-border transactions.

Malaysia’s Focus in DEFA:

• Standardizing ASEAN digital payment systems to ensure e-wallets and fintech solutions work across all ASEAN countries.
• Accelerating the adoption of ASEAN QR, enabling users and businesses to use a single regional payment system.
• Strengthening digital transaction regulations to prevent fraud and enhance user security.

➡ Example: Malaysia could propose the “ASEAN Digital Payment Framework”, enabling a universal payment system across all ASEAN nations.

vi. Strengthening Cybersecurity and Regional Data Protection

With rapid digital economy growth, cybersecurity threats are also increasing. Malaysia can lead ASEAN in enhancing digital security standards and data privacy.

Malaysia’s Focus in DEFA:

• Developing an ASEAN Cybersecurity Framework to ensure secure digital transactions and data protection.
• Establishing an ASEAN cybersecurity excellence center to tackle cyber threats collectively.
• Promoting data-sharing agreements among ASEAN nations with strict security measures.

➡ Example: Malaysia could launch the “ASEAN Cybersecurity Alliance” to address digital security issues in the regional economy.

Malaysia as a Leader in ASEAN Digital Integration through DEFA

How as ASEAN chair, Malaysia can utilize DEFA to:

• Establish a more integrated ASEAN digital market
• Strengthen ASEAN’s digital infrastructure and connectivity
• Accelerate SME digitalization to enhance regional business competitiveness
• Drive technological innovation in AI, blockchain, and fintech
• Standardize ASEAN’s digital payment system for smoother cross-border transactions
• Enhance cybersecurity and data protection to ensure digital economy stability

With a clear focus and effective strategy, Malaysia can play a central role in accelerating ASEAN’s digital integration, making the region more competitive, innovative, and inclusive in the global digital economy.

Q8. How Can Malaysia Play a Bigger Role in Accelerating the Adoption of New Technologies like Artificial Intelligence (AI) and the Internet of Things (IoT) to Strengthen ASEAN’s Digital Economy?

Malaysia can play a more significant role in accelerating the adoption of new technologies like Artificial Intelligence (AI) and the Internet of Things (IoT) to strengthen ASEAN’s digital economy through strategies focused on infrastructure, talent development, regional collaboration, innovative policies, and technology commercialization. The following are key steps:

i. Enhancing Digital Infrastructure for AI & IoT

ASEAN Data & AI Hub

• Positioning Malaysia as a regional data and AI hub by offering investment incentives to global tech companies like Google, Microsoft, and Alibaba Cloud.
• Expanding the development of green data centers to support AI analytics powered by sustainable energy.

IoT Ecosystem for Industry & Smart Cities

• Encouraging the adoption of IoT in key industries such as manufacturing, smart agriculture, and logistics.
• Empowering the development of smart cities with AI and IoT technologies for traffic management, security, and energy efficiency.

ii. Talent Development & Digital Competency

ASEAN AI & IoT Academy

• Establishing AI & IoT training centers to upskill the workforce in these technologies.
• Introducing AI & IoT courses in higher education institutions and Technical and Vocational Education and Training (TVET) programs.

Upskilling Initiatives for SMEs & Industries

• Providing free digital training programs for SME employees to help them integrate AI & IoT into daily operations.
• Promoting mentorship programs between major tech companies and local startups.

iii. Establishing Progressive Digital Policies & Frameworks

AI & IoT Policies that Support Innovation

• Offering tax incentives & R&D grants for companies developing AI and IoT solutions.
• Ensuring data protection regulations support innovation while safeguarding consumers.

Flexible Regulations & Digital Sandboxes

• Creating regulatory sandboxes for AI and IoT companies to test innovations without bureaucratic barriers.
• Simplifying the patent approval process & data compliance requirements for new technologies.

iv. Regional Collaboration & Malaysia’s Competitiveness in ASEAN

ASEAN AI & IoT Network

• Promoting collaboration between Malaysian tech firms and other ASEAN countries to accelerate AI & IoT adoption.
• Leading the development of an ASEAN-wide AI & IoT standardization framework.

Support for ASEAN AI & IoT Startups

• Establishing a regional AI & IoT investment fund to support innovation by startups in Malaysia and ASEAN.
• Providing incubation programs for AI & IoT startups with mentorship from major corporations.

v. Commercializing AI & IoT Technology for the Digital Economy

AI & IoT in Key Sectors

• Encouraging AI adoption in e-commerce, digital finance, and smart healthcare across ASEAN.
• Driving industrial automation (Industry 4.0) through AI predictive analytics and IoT sensors in manufacturing.

AI & IoT for the People’s Economy

• Introducing AI and IoT solutions for smart agriculture to increase yields and reduce production costs.
• Enhancing AI applications in fintech to help micro-enterprises and SMEs access digital loans.

Malaysia can take a leading role in driving ASEAN’s digital economy by becoming a frontrunner in AI & IoT. Strengthening digital infrastructure, developing a highly skilled workforce, implementing innovation-friendly policies, and fostering regional collaboration will enable Malaysia to enhance ASEAN’s competitiveness in the global digital landscape.

Q9. Key Challenges Faced by Malaysia in Implementing DEFA and Strategies to Overcome Them

As the ASEAN chair, Malaysia has a significant opportunity to lead the implementation of the ASEAN Digital Economy Framework Agreement (DEFA) and strengthen the regional digital ecosystem. However, implementing DEFA comes with several key challenges. Below are the primary challenges that need to be addressed, along with their respective solutions:

i. Challenge: Digital Infrastructure Imbalance in ASEAN

Not all ASEAN countries are at the same level of digital infrastructure development. Countries like Singapore and Malaysia have more advanced internet networks, while Laos, Myanmar, and Cambodia lag behind in broadband access, 5G deployment, and data centers.

Solution Strategies:

• Establish an ASEAN Digital Infrastructure Fund to assist ASEAN nations in improving their digital infrastructure.
• Align investments in 5G networks and submarine cables to enhance regional connectivity.
• Promote public-private partnerships (PPP) in developing regional data centers and high-quality broadband.

➡ Example: Malaysia could propose an “ASEAN Digital Connectivity Initiative”, focusing on the development of high-speed internet and 5G access across the region.

ii. Challenge: Differences in Digital Policies and Regulations Across ASEAN

Each ASEAN country has distinct digital laws, data protection regulations, and e-commerce rules, creating barriers to developing a seamless regional digital market.

Solution Strategies:

• Develop an ASEAN Digital Legal Framework to standardize digital trade regulations and data protection policies.
• Accelerate discussions on ASEAN cybersecurity standards to ensure uniform control measures across all member states.
• Utilize DEFA to harmonize digital payment systems, enabling cross-border e-wallet transactions without restrictions.

➡ Example: Malaysia could take the lead in forming an “ASEAN Digital Single Market Framework”, which standardizes digital regulations to facilitate cross-border business flows.

iii. Challenge: Shortage of Digital Talent and High-Tech Skills

Malaysia and other ASEAN nations face challenges in producing skilled workers in AI, data analytics, blockchain, and cybersecurity. This shortage can hinder digital economic growth.

Solution Strategies:

• Implement regional digital training programs in collaboration with global tech companies such as Google, Microsoft, and Huawei.
• Establish an ASEAN Digital Training Center focusing on future digital skills.
• Introduce scholarships and incentives for STEM students to attract more talent to the technology sector.

➡ Example: Malaysia could launch an “ASEAN Digital Talent Program” to provide digital skills training and enhance the competitiveness of ASEAN’s workforce.

iv. Challenge: Cybersecurity Threats and Data Protection Issues

With increased digital activity, cyber threats such as ransomware attacks, online fraud, and data breaches are rising. If left unaddressed, this could weaken trust in ASEAN’s digital economy.

Solution Strategies:

• Develop ASEAN Cybersecurity Standards to strengthen digital security controls.
• Establish an ASEAN Cyber Threat Response Center to monitor and respond to regional cyberattacks.
• Ensure that DEFA aligns data security regulations across ASEAN to prevent misuse of user information.

➡ Example: Malaysia could lead the formation of an “ASEAN Cybersecurity Alliance” to enhance digital security and protect the regional digital economy.

v. Challenge: Malaysia’s Competitiveness in Attracting Digital Investments

Some ASEAN countries, such as Vietnam and Indonesia, are increasingly attracting digital investments by offering tax incentives and access to a lower-cost workforce. Malaysia needs to compete more aggressively to attract global tech firms.

Solution Strategies:

• Offer tax incentives and innovation grants to global tech firms setting up R&D centers in Malaysia.
• Accelerate the development of digital startup ecosystems by providing funding and support to new businesses.
• Leverage DEFA to position Malaysia as an ASEAN e-commerce and data center hub.

➡ Example: Malaysia could launch “Malaysia Tech Valley”, a digital innovation hub for global tech firms and ASEAN startups.

vi. Challenge: Different Levels of Digitalization Among SMEs

Many small and medium enterprises (SMEs) in ASEAN still rely on traditional business models and have yet to fully adopt digital technology for growth.

Solution Strategies:

• Provide special incentives for ASEAN SMEs to adopt e-commerce and fintech solutions.
• Conduct digital education and training programs for SME owners.
• Utilize DEFA to facilitate SMEs’ access to regional markets.

➡ Example: Malaysia could propose an “ASEAN SME Digital Transformation Fund”, offering financial and technical assistance to accelerate SME digitalization in the region.

How Malaysia Can Overcome Challenges and Strengthen ASEAN’s Digital Ecosystem?

To ensure the successful implementation of DEFA, Malaysia must take the following steps:

• Support the development of ASEAN’s digital infrastructure to provide high-speed internet and 5G access to less developed countries.
• Harmonize ASEAN’s digital regulations to facilitate seamless digital trade and cross-border payments.
• Strengthen digital talent development and enhance tech training to create a competitive workforce in the global digital economy.
• Enhance cybersecurity and data protection to build investor and consumer confidence.
• Offer investment incentives and foster digital innovation ecosystems to keep Malaysia as a prime destination for global tech companies.
• Facilitate SME digital transformation to ensure they remain competitive in the digital economy.

By overcoming these challenges, Malaysia will not only ensure DEFA’s success but also help position ASEAN as a dominant force in the global digital economy.

Q10. Looking at Malaysia’s Advantages in the Technology Sector, What Role Do Local Companies Play in Accelerating Malaysia’s Integration as ASEAN’s Digital Hub through the Implementation of DEFA?

Local companies play a crucial role in accelerating Malaysia’s integration as ASEAN’s digital hub through the implementation of the ASEAN Digital Economy Framework Agreement (DEFA). With advantages in technology infrastructure, digital talent, and innovation-friendly policies, local companies can take on strategic roles in several key areas:

i. Driving Innovation in Digital Technology

Developing AI & Internet of Things (IoT) Technology

• Local tech companies can develop AI & IoT solutions to enhance industrial automation, smart cities, and digital agriculture.
• Examples: Aerodyne in drone & AI technology, Fusionex in data analytics.

Building Regional Cloud & Data Center Infrastructure

• Malaysia is already a prime destination for data centers, and local companies can accelerate the growth of cloud computing & data analytics.
• Examples: TM One, AIMS Data Centre, and local fintech companies can provide DEFA-compliant cloud services.

ii. Strengthening SME Digitalization & the Digital Economy

Enabling SMEs’ Digital Transformation

• Tech companies can provide digital platforms, e-commerce, and fintech solutions to help local and ASEAN SMEs enter the digital economy.
• Examples: StoreHub, Fave, iPay88 assisting small businesses with digitalization.

Expanding Fintech & Digital Payment Solutions

• E-wallets and cross-border payment solutions are crucial for ASEAN’s digital economy.
• Examples: Touch ‘n Go eWallet, Boost, DuitNow—regional payment platforms that can be utilized across ASEAN.

iii. Driving Innovation Hubs & Regional Collaboration

Establishing an ASEAN Startup Hub in Malaysia

• Local companies can create innovation hubs for ASEAN startups to co-develop new technologies.
• Examples: Malaysia Digital Hub, Cyberjaya Innovation Hub can attract investments and talent from ASEAN.

Enhancing Blockchain & Digital Trust Ecosystems

• Blockchain can be applied in finance, logistics, and digital identity verification across ASEAN.
• Examples: Etherscan, Belfrics—local blockchain companies developing solutions for digital identity & cross-border trade.

iv. Accelerating ASEAN’s Digital Supply Chain Integration

AI & IoT Solutions for Regional Logistics

• Local companies can develop AI & IoT solutions for warehouse automation and regional delivery systems.
• Examples: GDEX, Ninja Van Malaysia—optimizing ASEAN’s e-commerce logistics with smart technology.

Driving Cloud & SaaS Technology for ASEAN Businesses

• Local companies can offer SaaS (Software-as-a-Service) solutions to help ASEAN businesses manage digital operations.
• Examples: Fusionex, JurisTech—providing AI-driven analytics & cloud ERP solutions for ASEAN companies.

v. Collaborating with the Government on DEFA Policies & Infrastructure

Positioning Malaysia as a Leader in ASEAN Digital Policy

• Local companies can work with the government to develop regional policies for digital trade, cybersecurity, and data governance.
• Examples: TM, MDEC, CyberSecurity Malaysia—key advisors in DEFA frameworks for data security & AI ethics.

Providing Digital Solutions for Public Sector & Education

• Local companies can develop digital systems for ASEAN governments & education under DEFA.
• Examples: EdTech companies ReSkills & Pandai—bringing digital learning solutions to ASEAN.

Malaysian local companies are in a strategic position to accelerate ASEAN’s digital integration through DEFA. With expertise in AI, IoT, cloud computing, fintech, and e-commerce, they can drive innovation, support SMEs, digitalize the public sector, and strengthen regional supply chains. By fostering collaboration between the government and private sector, Malaysia can become a leading force in ASEAN’s digital economy.

Q11. Malaysia’s Expectations for ASEAN Cooperation in Developing an Inclusive Digital Framework through DEFA

As the host of ASEAN, Malaysia has high expectations for strengthening regional cooperation in developing an inclusive digital economy through the ASEAN Digital Economy Framework Agreement (DEFA). Malaysia aims to ensure that all ASEAN member states can fairly benefit from digital transformation, accelerate regional economic growth, and enhance the region’s global competitiveness.

i. Malaysia’s Expectation: ASEAN as an Integrated and Aligned Digital Ecosystem

One of the main challenges in ASEAN’s digital economy is the variation in regulations, infrastructure, and market access among member states. These differences make cross-border digital trade complex, especially for small and medium-sized enterprises (SMEs) and startups looking to expand in the region.

Malaysia’s expectations:

• Standardizing e-commerce regulations, data protection policies, and digital transactions to facilitate business operations across ASEAN.
• Establishing a unified ASEAN digital market through a framework that enables digital businesses to operate without excessive bureaucratic restrictions.
• Aligning digital taxation and cross-border e-payment systems to simplify digital transactions across the region.

➡ Example: Malaysia could propose the “ASEAN Digital Single Market”, an integrated digital ecosystem that allows ASEAN businesses to operate online without dealing with different regulations in each country.

ii. Malaysia’s Expectation: Bridging the ASEAN Digital Divide

There are significant differences in digital development levels across ASEAN. While Singapore, Malaysia, and Thailand have advanced digital ecosystems, Myanmar, Laos, and Cambodia lag in internet access, digital literacy, and technology infrastructure.

Malaysia’s expectations:

• Increasing investment in digital infrastructure in developing ASEAN countries.
• Establishing an ASEAN Digital Assistance Program to accelerate broadband and 5G expansion in rural areas.
• Ensuring wider access to cloud computing, AI, and IoT technologies to stimulate digital economic growth.

➡ Example: Malaysia could lead an initiative called the “ASEAN Digital Inclusion Fund”, where developed ASEAN nations support digital infrastructure in less advanced member states.

iii. Malaysia’s Expectation: Enhancing SME Participation in ASEAN’s Digital Economy

More than 90% of businesses in ASEAN are SMEs (ref: https://smecorp.gov.my/index.php/en/policies/2020-02-11-08-01-24/profile-and-importance-to-the-economy), yet many still rely on traditional business models. To ensure inclusive growth, SMEs must gain access to ASEAN’s digital market.

Malaysia’s expectations:

• Expanding digitalization support programs for SMEs to help them adopt digital technologies.
• Providing training and technical support to SMEs to leverage AI, e-commerce, and fintech.
• Creating digital financing access to help SMEs scale their businesses across ASEAN.

➡ Example: Malaysia could propose the “ASEAN SME Digital Transformation Program”, where ASEAN governments and tech companies collaborate to provide financing platforms, training, and digital incentives for SMEs.

iv. Malaysia’s Expectation: Strengthening ASEAN’s Cybersecurity

With the rapid growth of the digital economy, cyber threats such as hacking, data breaches, and ransomware attacks are rising. If left unchecked, these threats could undermine trust in ASEAN’s digital economy.

Malaysia’s expectations:

• Establishing ASEAN cybersecurity standards aligned with global best practices.
• Creating a regional cybersecurity cooperation mechanism to collectively address threats.
• Ensuring DEFA strengthens data protection and privacy across ASEAN.

➡ Example: Malaysia could propose the “ASEAN Cybersecurity Alliance”, a framework for coordinating cybersecurity efforts and enhancing regional data security standards.

v. Malaysia’s Expectation: ASEAN as a Global Leader in Digital Technology

ASEAN has the potential to become a global innovation hub, but to achieve this, the region must attract more investments in high-tech sectors such as AI, blockchain, fintech, and green technology.

Malaysia’s expectations:

• Positioning ASEAN as a global technology hub with special incentives for international tech companies.
• Accelerating research and development (R&D) in digital technologies through regional collaboration.
• Increasing funding for ASEAN tech startups to drive digital innovation.

➡ Example: Malaysia could propose the “ASEAN Tech Valley”, a regional technology innovation hub attracting investments in AI, fintech, and smart technology.

vi. Malaysia’s Expectation: Streamlining ASEAN’s Digital Payments System

The adoption of e-wallets and fintech solutions is rising, but ASEAN’s digital payment systems remain fragmented, leading to high transaction costs and slow cross-border transactions.

Malaysia’s expectations:

• Ensuring all ASEAN countries adopt a harmonized cross-border payment system.
• Accelerating the use of ASEAN QR codes for seamless digital payments.
• Making ASEAN fintech regulations more flexible to encourage financial innovation.

➡ Example: Malaysia could propose the “ASEAN Unified Digital Payment System”, enabling businesses and consumers to use a single cross-border payment system efficiently.

Malaysia’s Expectations for ASEAN in Building an Inclusive Digital Ecosystem through DEFA

As the host of ASEAN, Malaysia hopes that DEFA will drive an inclusive, advanced, and competitive digital economy. The key expectations include:

• Establishing a unified and business-friendly ASEAN digital market.
• Bridging the digital divide through infrastructure development.
• Enabling SMEs to compete in ASEAN’s digital economy.
• Strengthening cybersecurity and data protection.
• Positioning ASEAN as a global hub for innovation and technology.
• Streamlining ASEAN’s digital payments system for faster and easier transactions.

With strong commitment and close cooperation among ASEAN member states, Malaysia is confident that DEFA will bring immense benefits to ASEAN’s people and businesses, ensuring that the region becomes a powerful digital force on the global stage.

Q12. The Future Vision of Malaysia’s Digital Economy in a Global Context

Malaysia has immense potential to become a leader in the digital economy within ASEAN and a key player on the global stage. With its strategic location, evolving infrastructure, and rapidly growing digital ecosystem, Malaysia can emerge as a hub for digital innovation, fintech, and artificial intelligence (AI), competing with countries such as Singapore, South Korea, and China.

In the next 10 to 20 years, I envision Malaysia as:

• The ASEAN Hub for AI & IoT Technology – A center for artificial intelligence (AI) and the Internet of Things (IoT) to drive industrial automation, smart cities, and regional logistics.
• A Leader in the Digital Economy & E-Commerce – Establishing Malaysia as the regional hub for e-commerce platforms with seamless integration of digital payment systems.
• An Asian Hub for Data & Cloud Computing – Attracting global companies to set up data centers and cloud technology facilities in Malaysia to meet Asia’s growing market demand.
• A Digital Gig Economy & Nomad-Friendly Nation – Expanding digital job opportunities and strengthening Malaysia’s role in the global gig economy.
• A Digitally Advanced Nation with Innovative Policies – Implementing flexible and innovation-friendly regulations to attract more technology investments.

Strategies to Stay Ahead in the Digital Era

To achieve this vision, Malaysia must implement key strategies:

i. Accelerating Technological Innovation & Digital Infrastructure

Expanding 5G & IoT Development

• Strengthening the nationwide 5G network to ensure the speed and stability needed for AI & IoT applications.
• Driving digital transformation in manufacturing, agriculture, healthcare, and smart cities.

Developing a Regional Data & Cloud Computing Hub

• Attracting global cloud computing giants such as Google Cloud, AWS, and Alibaba Cloud to establish data centers in Malaysia.
• Ensuring data security through the ASEAN Data Governance Framework to protect business and consumer interests.

ii. Strengthening Human Capital & Digital Talent

AI Academies & Digital Skills Training

• Launching more AI, cybersecurity, data analytics, and blockchain training programs to build the future workforce.
• Providing government support for IT & digitalization courses for SMEs and employees.

Boosting Startups & Young Innovators

• Offering more R&D grants for technology startups to help them compete internationally.
• Encouraging university-industry collaboration in technology development.

iii. Promoting a Thriving Digital Business & Fintech Ecosystem

Supporting SMEs in Digitalization & Global Expansion

• Facilitating SME access to digital technology, AI, and e-commerce to expand into ASEAN & global markets.
• Accelerating blockchain adoption and digital payment systems for cross-border transactions.

Developing Malaysia as ASEAN’s Fintech Hub

• Advancing fintech solutions such as open banking, insurtech, and crypto-regulations to attract international investment.
• Promoting e-wallets and regional digital payment solutions.

iv. Innovation-Friendly Policies & Regulations

Flexible Regulations for Emerging Technologies

• Establishing a digital sandbox to allow companies to test new technologies without bureaucratic hurdles.
• Adapting AI & data privacy laws that encourage innovation while protecting consumers.

Incentives for Investment & Digital Trade

• Attracting global tech firms to establish regional headquarters in Malaysia.
• Strengthening digital trade relations with China, the EU, and the US to secure high-impact investments.

v. Enhancing Regional & Global Collaboration

Leading the ASEAN Digital Economy Framework Agreement (DEFA)

• Driving the harmonization of ASEAN’s digital standards to ease Malaysian business expansion in the region.
• Encouraging safe data sharing & AI collaboration among ASEAN countries.

Technology Partnerships with Advanced Nations

• Collaborating with Japan, South Korea, the US, and the EU in AI, robotics, and blockchain development.
• Leveraging China’s Belt and Road Initiative to boost Malaysia’s technology ecosystem.

Malaysia’s Digital Future on the Global Stage

To remain competitive in the global digital economy, Malaysia must leverage its technological advantages, digital workforce, and strategic position within ASEAN. By investing in AI, IoT, fintech, digital infrastructure, and talent development, Malaysia can become a regional tech hub and a global digital leader.

In the coming decades, Malaysia has the potential to be a regional digital technology hub, attract high-tech investments, and create new economic opportunities for all citizens.

Policy Recommendations

To ensure a successful chairmanship, Malaysia should:

1. Advocate for Policy Alignment – Work towards aligning ASEAN’s digital economy policies to create a cohesive and interoperable digital ecosystem.
2. Enhance Regional Cybersecurity Collaboration – Establish an ASEAN Cybersecurity Task Force to improve response mechanisms against cyber threats.
3. Strengthen Public-Private Partnerships – Foster greater collaboration between governments, tech companies, and financial institutions to drive digital adoption.
4. Develop ASEAN Digital Talent Programs – Invest in regional training initiatives to equip ASEAN’s workforce with future-ready digital skills.
5. Encourage Cross-Border Fintech Integration – Promote financial technology solutions that enhance digital payments and financial inclusion across ASEAN.

Conclusion

Malaysia’s chairmanship of ASEAN in 2025 is an opportunity to lead the region towards a more integrated and resilient digital economy. By prioritizing digital trade, cybersecurity, infrastructure, and SME empowerment, Malaysia can position ASEAN as a global leader in the digital age. MDCC urges Malaysia to take bold steps in fostering regional cooperation, innovation, and inclusive economic growth during its leadership tenure.