TASK FORCE MEETING HILTON HOTEL, KUALA LUMPUR 1 AUGUST

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1 BRIDGING THE DIGITAL GAP KEYNOTE ADDRESS BY Y. B. DATUK AMAR LEO MOGGIE, MINISTER OF ENERGY, COMMUNICATIONS AND MULTIMEDIA AT THE LUNCHEON TALK IN CONJUNCTION WITH THE 4 th E-ASEAN TASK FORCE MEETING HILTON HOTEL, KUALA LUMPUR 1 AUGUST 2000 Mr. Roberto Romulo, Chairman of E-ASEAN Task Force, Tan-Sri-Tan Sri, Datuk-Datuk, First let me thank the e-asean Task Force for inviting me to speak at this luncheon talk held in conjunction with the 4 th e-asean Task Force Meeting. On behalf of the Malaysian Government, I would like to extend a warm welcome to our ASEAN friends and during the few days that you are here, I hope you will find our Malaysian hospitality satisfactory. I would also like to congratulate, the Chairman Mr. Roberto Romulo, for his able leadership and for his perseverance to focus on the issue at hand. Although the advent of digital technology has successfully propelled the transformation of developed countries into the knowledge-economy, similar benefits have yet to be realized by the developing countries. This transformation, made possible by digital technology and manifested by the explosive growth of the Internet, not only brought along with it many new challenges but also opportunities. For those countries that have embraced the digital technology, they are now reaping the benefits, most notably, in the form of higher productivity, creation of IT related jobs as well as generating new export revenues from high value-added products and services. It is therefore not a surprise that those countries ranked high in the World s Competitiveness Index for the Year 2000, are also high in ICT development and usage. For most of the developed countries, the extensive applications of Information Communications Technology, especially the Internet has reached the critical mass. ICT has also made it possible for these countries to achieve a sustainable economic growth. For instance, currently more than one third of the economic growth in United States is attributed to the growth in the Information technology related sector. 1

2 Whilst this phenomenal growth of ICT has served as a primary driver of economic growth in this millennium, it has also carried with it the risk of worsening the disparity between the rich and the poor nations. As a result of the remarkable increase in national productivity arising from the application of Information Communications Technology, the economic disparity in this information age is likely to be wider than during the industrialization age. The ugly side of the advancement of digital technology in the civilization of mankind, is therefore the Digital Divide. Digital Divide or the divide between the people in this world into those who are information rich and therefore knowledge or skill-based, from those who are information poor, has been well recognized by the United Nations. Though it has been widely proclaimed that the arrival of the Information Age provides a new window of opportunity for those poor nations to leapfrog their economy into a knowledge-based economy, unfortunately, until now, this has not been true. This is because some of the basic pre-requisites that will enable such a transformation are not easily met. What are some of the important pre-requisites? Firstly, to leapfrog from a developing agricultural or production based economy to a knowledge-based economy, a country requires to put in place the basic infrastructure namely the electricity and communications infrastructure, to enable widespread applications of Information and Communications Technology. Unfortunately, both these infrastructures require substantial financial resources, which currently most of the poor nations are unable to raise. Secondly, it requires a pool of ICT skilled manpower. Again this requires physical and financial resources to retrain and re-skill the manpower. This is by no means easy, especially with low literacy and language barriers as most of the content and application software are foreign to these countries. Thirdly, a strong content development industry that could generate sufficient contents both transactions-based such as e-commerce, e-learning, Tele-medicine, e- Government and Media-Based such as movie, videos and other documentary programs. Fourthly, a well established regulatory and policy framework that would facilitate the realization of the strategic value of ICT; and Fifthly, the necessary mindset and commitments of society to support and embrace ICT not only in economic sectors, such as manufacturing and the services but also in other pursuits such as leisure, learning, medicine and others. Therefore as we move further into the virtual and cyber world, we must remember the very real risk that this Technology Gap will continue to widen. A vast majority of the society in the developing countries will be left out due to the inaccessibility to information, as a consequence of poor basic info-structure condition. 2

3 The risk of widening of the Technology Gap or the Digital Divide is also happening within an individual country, though the gap might not be as serious in the developed countries as compared to the developing world. This situation, if left unchecked, can alienate the non-users from the virtual communities within the digital economy. Such segregation not only diminishes the potential of this group of population from the main stream of development, but would also lead to other social problems. To overcome the problem, a national policy ensuring equitable distribution and access to the new Information and Communications Technology is necessary to meet the citizens' needs for information and knowledge and to avoid tensions within the society. In our effort to bridge the divide, there is a need to put in place a clear policy on Universal Service Program or USP. An effective USP should be based on three basic principles of availability, accessibility and affordability. Availability implies ubiquitous network services such as telephone and Internet, with nationwide coverage. Accessibility means there should be no discrimination in terms of price, service and quality, regardless whether the geographical location is deemed uneconomical or unprofitable. Affordability is interpreted as network services which are within the reach of a wider spectrum of society. The purpose of the USP is to provide universal communications service to the underserved areas and groups, thereby bridging the technology, information or digital divide between the information rich and the information poor, and consequently, achieve a more balanced development between areas and groups of people in the country. In the case of Malaysia, our incumbent telecommunications provider, Telekom Malaysia Berhad has been designated the sole Universal Service Provider for an interim period beginning which will expire by the end of this year. Beginning , a new Universal Service Program will come into effect under which all the network operators are required to contribute to a Fund known as the Universal Service Fund. In the case of Malaysia, our basic telephony penetration rate for 1999 was around 21% or 21 per 100 population as compared to 14% in 1994, when the Malaysian Government started the initiative to allow new players to enter the market. Correspondingly, rural telephony penetration rate has also increased from 5.1% to around 11%. However, these statistics have indicated that the pace of increase in penetration rate for rural population has not been in tandem with the overall increase. As such, new measures need to be introduced to enhance faster rollout of Information and Communications infrastructure by means of leveraging new technologies such as wireless and satellite technologies. In addition, we are also exploring the possibility of putting in place an effective funding mechanism that will enable sustainability of a comprehensive Universal Service Program. Ladies and gentlemen, 3

4 The e-asean initiative is evidence that the ASEAN region is also rapidly moving towards the digital world. As member countries of ASEAN, we cannot neglect those who would like to embark on a similar journey to the e-world. I urge that e-asean as the regional organisation undertaking this initiative, place their deepest concern on the increasing imbalance in the distribution of access, resources and opportunities in the Information and Communications field. It is almost impossible to eliminate entirely the digital division, but through the exchange of information, sharing of experiences and collaboration in efforts such as on content and applications development, we can certainly help to close such division. Ladies and gentlemen, I have been informed that the e-asean Task Force is created by ASEAN to develop a broad and comprehensive action plan for an ASEAN e-space and to develop competencies within ASEAN to compete in the global information economy. In developing the plan, the Task Force will need to examine the physical, legal, logistical, social and economic infrastructure required to create the basis for ASEAN competitiveness in this millennium. As an example, to further promote e-commerce activities amongst the ASEAN countries, the e-asean Task Force should address crossborder issues on electronic transactions such as taxation, payments and customs arrangements, as well as matters related to cross-certification and dispute resolution. In facing the challenges of globalization and liberalization, ASEAN countries must collectively formulate a strategic plan in the area of ICT that will benefit every member country. This strategic plan should include the need to develop an ASEAN Information and Communications infrastructure, human resource development, institutional exchange programs for capacity building, collaboration in indigenous content development and other necessary ICT programs that could accelerate the pace of its applications. In this regard, the proposal to establish an ASEAN Power Grid on electricity is a step towards the right direction. In the spirit of ASEAN, Malaysia is of the opinion that all countries must try to contribute to the success of e-asean in one way or another. For Malaysia, we intend to assume a significant role in the e-asean programme. In this context, we are pleased to inform that Malaysia has adopted its own model and approach in managing the Information and Communications industry. The approach is quite unique in that, whilst we promote competition through de-regulation, we have also put in place a strong policy and regulatory framework to ensure fairness to industry players and protection of consumers. This approach has been developed through close collaboration between government, industry and consumer groups. This collaborative effort has been the hallmark of our approach in planning and implementing ICT development in Malaysia, particularly in the Multimedia Super Corridor, and the various flagship applications associated with the MSC such as e- 4

5 Government, Tele-Medicine and e-learning. Our Rural Internet Project, in which Internet access is provided to the rural community through the Post Offices, also utilizes the Malaysia Incorporated Concept through the participation and contribution of public and private sectors namely TMNet, Post Malaysia, MAXIS, INTEL, Government training centre INTAN, and with the assistance of local community leaders in places where the Rural Internet Centres are being located. Lately, our Ministry has also received contribution in monetary form and for this reason we will be establishing a Rural Internet Service Fund. I would like to encourage industry leaders present today to participate in the program through their contribution to this Fund. ASEAN countries have many similarities in terms of geographical conditions, social and cultural practices as well as rural-urban set up. Thus, we will be very happy to share our experiences and knowledge in addressing some of the issues of ICT development as well as initiatives that we have taken to narrow the Digital Gap. Finally, I am confident that with all the initiatives and programs undertaken by e-asean Task Force, and with the principle of Prosper Thy Neighbors, ASEAN as a region will be able to take advantage of the Information and Communications Technology in strengthening ASEAN countries, and to put in place a regional order to face the challenges of Globalization and Liberalization. Thank you 5