Focus on digital and green economy sectors
31 May 2023
The Economy Ministry is staking its investments on the digital and green economy, identifying it as a key area with significant growth potential, and simultaneously, aims to expand the number of tech experts within the country.
Economy Minister Rafizi Ramli said restructuring the economy requires his ministry to place bets on an economic model with the most promising growth opportunities and figuring out the best ways to reach them.
“The Economy Ministry’s biggest bets are on the digital and green economy – which intersect in many areas – and to scale up tech talents in a targeted way so that we build the necessary capabilities,” he said at Affin Bank Bhd’s inaugural Conference Series 2023.
The conference, themed “Malaysia 2023: A New Investment Chapter”, focuses on the Malaysian economy’s prospects and issues, besides highlighting the government’s initiatives to transform the country and achieve a strong and sustainable economic growth.
Malaysia has ambition to be the leader in the region for energy transition.
Rafizi pointed out that the country would require an estimated RM627bil to be the leader in transition towards renewable energy within the region.
He emphasised that when discussing on investments whether, within the country or globally, it is insufficient to merely highlight the country’s positive attributes and strong foundational elements.
“Instead, it boils down to where precisely the investments are directed, the available growth opportunities, the allocated funding, and comprehensive details regarding key projects and initiatives that have the potential to captivate investors,” he said.
Rafizi also underlined that, in the last couple of years, about US$1.1 trillion (RM5.06 trillion) has gone into energy transition globally, while in the space of venture capital and technology investment, more money had gone into energy transition than into tech and digital.
“That is where the money is now and that is where the assignment is. While it has sometimes been assumed that Malaysia is always in the game of catching up, we could lead the way in this strategic area, if we pick our bets early, and follow through with funding, collaboration, and a robust policy and regulatory framework,” he stressed.
To get the work going, Rafizi said Malaysia will roll out an Energy Transition Roadmap in phases starting next month, putting the country’s net-zero ambition into action by identifying key impact initiatives and implementation plans for the next two decades.The roadmap addresses the number of investments as well as what projects the government is going to push through, Rafizi explained.
He believes there is no need for any new blueprints, as there are reliable blueprints from the past that can simply be followed.
“Malaysia has very good blueprints, but what we lack is the consistency and persistence to remove all the pain points in implementing the grand design,” he said.
Rafizi noted that the first phase of the roadmap, which includes strategic projects and initiatives, will be revealed by the end of June.
These initiatives will involve collaboration with companies that are actively involved in these areas and attract investments in renewable energy projects.
Meanwhile, for the upcoming second phase, set to be launched by the Prime Minister in August, the roadmap will provide a detailed plan, encompassing additional reforms, regulatory streamlining, funding mechanisms, and other facilitators.
“This is an important step in putting our money in strategic growth areas; not merely paying environmental sustainability lip service, and no longer seeing economic growth and carbon emissions as incompatible goals,” he further explained.
Additionally, Rafizi said that lowering fuel prices is counterproductive to the country’s environmental ambitions and plans to transition to renewable energy.
He said the government has an ambition of achieving 70% renewable energy capacity in the country’s energy mix by 2050.
“So, any populist decision on fuel (prices) will definitely run counterproductive to that long term target,” he said, adding that the country can’t afford it anymore, as fuel subsidies and power subsidies constitute about 25% of its operating budget every year.
Source: The Star