30/06/2025

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MONDAY | JUNE 30, 2025

AI Cities cornerstone of Malaysia’s digital future

Ű BY HAYATUN RAZAK sunbiz@thesundaily.com

o MDEC CEO outlines blueprint for transforming country into globally respected tech economy over the next decade

KUALA LUMPUR: As Malaysia advances in its digital evolution, artificial intelligence-driven cities are taking centre stage – serving as dynamic hubs to attract investment, foster groundbreaking innovation and create equitable economic opportunities for all. Malaysia Digital Economy Corporation (MDEC) CEO Anuar Fariz Fadzil ( pic ) shared the agency’s blueprint for transforming Malaysia from a regional technology hub into a globally respected digital economy over the next decade. “Looking 10 years ahead, we see a Malaysia where AI integrates seamlessly into daily life, enabling equitable access to tools and opportunities. This future is about making cities more sustainable, citizen-centric, and competitive,” he told SunBiz . Anuar Fariz said this vision entails the responsible integration of AI, providing predictive and efficient public services and creating thriving smart cities that are both sustainable and people-focused. “Startups and SMEs will scale beyond borders, supported by robust infrastructure that drives inclusive, digital-led prosperity.” Building on MDEC’s mandate to catalyse high-value digital growth and position Malaysia as a regional technology leader, Anuar Fariz said, AI Cities will be the cornerstone of the transformation. “It will unite digital policy, innovation and public service to drive inclusive, competitive and sustainable growth, laying the foundation for Malaysia’s vision of becoming an ‘AI Nation’,” he added.

Anuar Fariz said. These initiatives support Malaysia’s broader goals outlined in the Fourth National Physical Plan, Malaysia Digital Economy Blueprint, Asean Smart Cities Network and the upcoming 13th Malaysia Plan (2026–2030). Anuar Fariz said MDEC’s goal is to catalyse future-facing, collaborative eco systems where technology serves both people and progress. “By embedding intelligence into how our cities are designed, managed and experienced, we’re not only building a smarter Malaysia, we’re laying the foundation for a resilient, inclusive and competitive digital nation that can lead the region,” he added. MDEC’s vision will take centre stage at the Smart City Expo Kuala Lumpur 2025 (SCEKL25), which will be held from Sept 17 to 19 at the Kuala Lumpur Convention Centre. Themed “AI Cities: Shaping Our Digital Future”, the event will serve as a platform for regional dialogue, innovation exchange and policy alignment with Malaysia’s Asean Chairmanship this year. Mohd Sedek said. He said a shift towards looser US monetary policy could also trigger a reallocation of global capital into higher-yielding emerging market assets, supporting currencies such as the ringgit. This portfolio rebalancing could be further amplified if investor confidence im proves in tandem with greater clarity from the Fed. “Under these conditions, an appreciation of the ringgit to around 4.15 is plausible, with potential for further gains. “While currency movements are inherently complex, shaped by both cyclical and structural forces, a scenario in which the ringgit trades below 4.15 by year-end is not implausible, particularly if global risk appetite remains favourable and Malaysia’s macroeconomic fundamentals remain intact,” he added. While the ringgit’s gains have been modest, Mohd Sedek said, Malaysia’s export base is highly diversified and increasingly integrated within the region. A significant portion of exports to Asean, China and East Asia is denominated in local or regional currencies. In addition, the Malaysian government, working with regional partners, has been actively promoting local currency settlement mechanisms to reduce reliance on the US dollar. “This reduces the pass-through effect of

Anuar Fariz said this vision not only elevates Malaysia’s leadership in AI development and adoption but also creates a scalable model for Asean, fostering cross border collaboration, knowledge exchange, and regional digital resilience. “Through partnerships across the public, private, academic sectors, and the rakyat , Malaysia aims to amplify its impact across Southeast Asia’s digital economy.” As part of its AI Cities initiative, MDEC is already implementing targeted, high-impact smart city pilots in selected locations, starting with Putrajaya. “In Putrajaya, we are applying parametric modelling to simulate real-world urban scenarios. This allows us to test and refine planning decisions, improve service delivery, and optimise resource use,” Anuar Fariz said. He added that data from Putrajaya’s Urban Observatory is being used to develop an interactive AI-powered digital avatar capable of delivering real-time analytics for city planning and citizen engagement. MDEC is also working closely with the National Artificial Intelligence Office (NAIO) to ensure that Malaysia’s AI growth is underpinned by strong governance and public trust. “Trust is the foundation of digital adoption. Together with NAIO, we are developing a regulatory brief to guide the responsible use of AI, one that balances innovation with transparency, ethics and accountability,”

MYR-USD fluctuations on trade competi tiveness, particularly within Asia,” Mohd Sedek said. He added that Malaysia’s key export sectors – such as semiconductors, palm oil, petrochemicals and machinery components – compete more on value-added, supply chain resilience and compliance standards than on pricing alone. This offers some protection from currency induced pricing shifts. For example, high-tech electrical and electronic exports are typically less price sensitive than commodity exports, allowing Malaysia to maintain market share despite ringgit strength. That said, Mohd Sedek warned that policymakers should remain alert. If the ringgit strengthens too quickly or significantly, profit margins of small and medium-sized exporters and low-margin manufacturers could come under pressure. “However, this would warrant a targeted policy response – for example, fiscal support or foreign exchange risk management tools – rather than an immediate monetary recali bration. “The appropriate policy approach, therefore, is vigilant but not reactive, ensuring macro stability is not compromised in an attempt to micro-manage currency levels,” he added. – Bernama 2,000 delegates and 10,000 visitors, including global experts, city leaders and technology providers across sectors. The agenda is built around four strategic pillars – AI cities, sustainable and resilient cities, digital entrepreneurship and economic development, and community empowerment through digital solutions. SCEKL25 will also feature keynote sessions by renowned global figures, including Dr David Hanson, creator of Sophia the Robot, urban strategist Dr Alfonso Vegara and futurist Penny Wong, among others. “These conversations will help shape the next decade of digital city-building, not just in Malaysia, but across Asean,” said Anuar Fariz.

“As the first Southeast Asian edition of the globally renowned Smart City Expo World Congress, SCEKL25 will position Malaysia as a central hub for smart city development and digital leadership in the region,” Anuar Fariz said. The expo will bring together more than Stronger ringgit, Fed shift could draw capital to Malaysia: Expert

KUALA LUMPUR: Malaysia could attract renewed capital inflows into its bond and equity markets, underpinned by a stronger ringgit and a possible shift in US monetary policy.

DXY, which measures the US dollar against a basket of six major currencies, often influences global markets, including the ringgit’s performance and Malaysia’s export competitiveness.

The ringgit has rebounded in recent days, rising from RM4.2948 per US dollar on June 23 to RM4.2327 on June 26, a 1.5% gain. Mohd Sedek noted that markets are aware of Trump’s repeated criticism of Fed chair Jerome Powell, particularly over interest rates. A new appointee is expected to align more closely with Trump’s economic preferences, favouring earlier and more aggressive rate cuts

UOB Kay Hian Wealth Advisors Sdn Bhd head of investment research Mohd Sedek Jantan ( pic ) said the appreciating ringgit enhances Malay sia’s import purchasing power and may boost foreign interest in local financial assets. However, he cautioned that the scale and durability of these inflows would depend on macroeconomic fundamentals, monetary policy stance and investor sentiment relative to regional peers.

to address inflationary pressures from trade policies, including reciprocal tariffs currently on hold until July 9. These tariffs have contributed to the Fed’s cautious approach to easing. “Should the Fed implement a rate cut, potentially as early as September, with a 25 basis point reduction, the expected interest rate differential between the US and emerging markets would narrow, making non-dollar assets relatively more attractive. “This is consistent with uncovered interest rate parity, where lower US yields would reduce the incentive to hold dollar assets, thereby exerting downward pressure on the US dollar,”

A Wall Street Journal report that US President Donald Trump is considering an early announcement of his nominee for the next Federal Reserve (Fed) chair has reverberated across global markets, with potential implications for Malaysia. “Markets are beginning to anticipate a shift in US monetary policy, potentially resulting in a weaker greenback against the ringgit. At present, with the US Dollar Index (DXY) at 97.4 and the USD/MYR pair trading at approximately 4.225, the near-term trajectory of the ringgit is likely to hinge on the direction of US monetary policy,” Mohd Sedek told Bernama.