Mahathir 2.0

Malaysian Prime Minister Mahathir has always been known to pursue an independent foreign policy during his administration. In his first administration, he railed against the IMF with their prescription for Malaysia to resolve its financial crisis back in 1997. He chose instead to go it alone and Malaysia was able to recover from the crisis faster than its ASEAN neighbors. He also had his tiffs with Australia and the United States.

In his second coming, he has condemned the Rohingya massacre when others were reluctant to do so. He had ordered the review of the viability projects funded by Chinese loans to Malaysia resulting in their suspension, when others were lining up for it under the Belt and Road Initiative. He was also quite vocal on the assassination of the Saudi journalist Jamaal Khashoggi and welcomed North Korea’s rapprochement with the outside world. He promised to reopen Malaysia’s embassy in Pyongyang. On the South China Sea, he has reiterated his position that China “has a right to go wherever it wants to go,” but should not “check or prevent ships” from passing through it.

Although Mahathir may not have been proven right all the time – the Proton being the most prominent example – it always seemed like he never did anything out of pique or from some ill-informed personal beliefs. Rather he was guided by a vision to transform Malaysia into the ranks of the world’s leading economies as an “ethical, just and inclusive society”.

Digital savvy leadership

What impressed me most, however, is Mahathir’s grasp of the digital economy and the disruptions that need to be addressed in order to harness its promised benefits.  Even at age 93, Mahathir remains the most tech savvy leader among his ASEAN peers.  He has always been ahead when it comes to recognizing the impact of digital technology on economic growth.

In his speech at the APEC CEO Summit, Mahathir talked about how Malaysia is gearing itself for the digital economy and the Fourth Industrial Revolution. He said that his new government was forging ahead with efforts to respond quickly to economic disruption that technology has brought. Although it may have led to job losses and income disparity, he said that “technology itself would not widen the income gap, but that “bad policies will”.  A good policy is one that ensures that digital technology is accessible, and affordable to its citizen. The other key policy he said is one that prepares the workers of the future through education, especially knowledge of artificial intelligence and its application.  

The challenge is not unique to Malaysia. Worldwide, McKinsey estimates that by 2030, up to 350 million workers will need to learn new skills to fill new jobs. As Mahathir said, digital literacy needs to be taught now and from an early age.  In the Philippines, there is an impending skills gap that will constrain our ability to utilize new technology or attract high tech investors in the future.

It is also interesting that Mahathir mentioned the transformative impact of 5G technology. The Philippines can count itself as an early adopter in the Asia-Pacific region of 5G. But without the right policies in place, despite the announced 5G rollout in 2019, our implementation may suffer the same difficulties bedeviling our carriers in deployment of existing 3G and 4G infrastructure – costs and lengthy approval process.  5G will require denser cell sites so the problem will magnify. South Korea’s approach may be instructive. They have required their three mobile operators to co-deploy network infrastructure and open for sharing what they each have now. This seemed more sensible than outsourcing cell towers to independent entities who will face the same issues.

To hear someone, at the level of PM Mahathir embrace the digital economy, should be comforting to business and the general public that they have a government that is prepared to deal with the disruption and ensure they benefit, rather than fall victim. By contrast, in the Philippine this conversation has been confined to a small circle of vested parties, but not the general public and certainly not at the level as Malaysia’s. The digital future conference I organized a few weeks ago failed to attract  government officials, except for DOST Secretary Fortunato de la Pena and NEDA director general Ernesto Pernia. The private sector, however, are fully engaged regardless and are pressing on. For example, telecom providers PLDT and Globe have provided e-commerce platforms, financing and payment systems  that will bring MSMEs into the mainstream economy.

Although it has various initiatives in place, the Philippines still has to develop a coherent, whole of government approach, much like our ASEAN neighbors have done particularly Singapore, Malaysia, Thailand and Indonesia.

Independent digital readiness commission

I have proposed that the government should create a public-private digital readiness commission tasked with firstly, preparing a checklist of what needs to be done to make the country digital ready. Secondly, from that checklist, to develop a roadmap on how we get to full digital readiness. That may include recommendations for the formulation of policies supportive of the growth of digital economy and which may entail new legislation. The commission should be independent and be led by someone from the private sector who has demonstrated an understanding of the requisites of a digital economy through his body of work. Relevant government agencies will be represented at the sub-Cabinet level led by the DICT which will also provide technical and administrative support.  The private sector will be represented by a cross-section of telco operators, platform providers and firms engaged in the use of digital technology in some form. 

Global digital economy businesses – including Facebook, Google, Grab, Huawei, Ali Baba and fintechs for example - should also be invited as resource persons. The academe and civil society should also be included, as will one member from the House and Senate. The commission will have the mandate to conduct hearings, commission research and engage the services of experts. This structure I believe will provide the whole-of-government approach that will be led by DICT, while the private sector ensures that this will be a whole of society endeavor

The commission will then submit its report – essentially a digital readiness blueprint – to the DICT secretary who will then endorse it to the NEDA Board which is chaired by the President. The commission chair will be invited to deliberations at the NEDA Board. It will then be up to the Board to put this blueprint into motion.

Spoiler

I was boasting to a foreign friend that the Philippines would be the first to have 5G service in the Asia-Pacific so we should catch up with our neighbors despite our late start.  He reminded me that for a country that cannot issue license plates with certainty and which is still awaiting the implementation of a national ID system – a pre-requisite for a digital citizen – I should not feel so smug and confident.