04/08/2025

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MONDAY | AUG 4, 2025

13MP – strong execution, funding crucial o Five-year development plan ambitious and challenging, success depends on disciplined implementation and coordination, say analysts 120 strategies listed, and urged the government to establish clear priorities and delivery mechanisms. “Critical issues such as ageing population policy, long-term health care and institutional governance remain underdeveloped,” he said. help ease the government’s debt servicing burden, and Malaysia’s bond market remains relatively stable due to the Employees Provident Fund’s role as a statutory purchaser, he said.

deficit be reduced?” He also stressed the need for more job creation to prevent the rakyat from being left behind and called for stricter project management, especially for infrastructure efforts in poorer regions. BIMB Securities chief economist Imran Nurginias Ibrahim described the 13MP as a forward-looking roadmap centred on digitalisation, inclusivity and economic competitiveness. He said the targeted 4.5–5.5% GDP growth is consistent with Malaysia’s potential and supports both recovery and reform, adding that “RM430 billion in

dustry and academia. Akmal also highlighted the need for clear, forward-looking policies on data privacy, ethics and cybersecurity to foster public trust and attract investment. “Without robust data governance, innovation will be limited, and public confidence will suffer,” he noted. In addition, he pointed out that Malaysia needs stronger cloud and high-performance computing infra structure, as well as greater access to open datasets, to enable meaningful AI innovation. Rather than focusing solely on competing head-to-head with re gional players, Akmal said, Malaysia should position itself as a competitive AI hub that fosters collaboration and healthy competition within Asean. Fong said Malaysia’s strengths, from cloud infrastructure and 5G rollout to its multilingual workforce, provide a solid platform to build upon. “With the right focus, especially as Asean Chair 2025, we can position ourselves as a regional AI and digital hub, not by outspending others, but by being the most agile, inclusive and implementation-focused,” he said. Both agreed that continued investment, regulatory clarity and coordinated execution will be critical for Malaysia to transform AI ambition into sustainable economic growth and regional leadership. Loh praised the government’s balance between public and private spending, especially its prioritisation of education and technical and vocational education and training (TVET), which is allocated RM133 billion under the plan. “Deficit spending should build the economy’s productive capacity – human capital included. TVET is crucial to unlocking potential idle capacity over the long term,” he said. Loh also called for political culture reform to complement institutional changes. “Political culture is the software, and institutional reform is the hardware. Without both, changes won’t stick,” he said. Loh said Malaysia must avoid the “First World infrastructure, Third World mentality” trap and emulate Singapore’s model of high standards in both execution and mindset. He added that the 13MP should have included green bonds to modernise fiscal policy and support sustainable growth. To that end, Loh proposed setting up a Green Investment Bank under Bank Negara Malaysia to issue and trade green bonds, supporting a debt driven sustainability market along side Bursa Malaysia’s Voluntary Carbon Market.

Ultimately, he added, the 13MP’s success hinges not on the number of strategies outlined but on bold, disciplined implementation supported by strong interagency coordination. Independent analyst Jason Loh commended the Madani govern ment’s strategic use of deficit spending to drive growth, noting that only RM61 billion or less than 10% of the RM611 billion allocation comes from the private sector, mostly through public-private partnerships. “This reinforces the need for the government to rely on its own fiscal power to engineer economic growth,” he said. Loh said private sector depen dency on public spending helps offset rising costs from tax expansions, tariff hikes and subsidy rationalisation, especially for SMEs. Loh added that high private and household debt – now at 84.3% of GDP – could limit consumption, and further strain the economy if Bank Negara Malaysia raises the Overnight Policy Rate (OPR) to manage debt levels. Given these conditions, he said, there should be no rush to reduce the fiscal deficit to 3% of GDP, noting that the current 4.8% target can be deferred if necessary. The recent OPR cut to 2.75% may

Ű BY HAYATUN RAZAK sunbiz@thesundaily.com

However, execution remains the main hurdle. “Bureaucracy is the problem. The ability to coordinate – that’s a key challenge,” Nazri said, adding that investments in digitalisation and

PETALING JAYA: The 13th Malaysia Plan (13MP) is ambitious and its goals can only be delivered with strong execution and clear funding plans, analysts say. Berjaya Mutual Bhd chief investment officer Datuk Dr Nazri Khan ( pic ) said the government’s 4.5– 5.5% gross domestic product (GDP) growth target is challenging but not impossible to achieve. “Given the current situation, it’s very challenging to hit 5.5%. But it is achievable – just more challenging,” he told SunBiz . He welcomed the focus on high value, high-growth sectors such as artificial intelligence (AI), describing the move as a good way to break out of the middle-income trap. “Targeting a fiscal deficit below 3% of GDP and keeping government debt under 60% – that’s excellent. It will strengthen governance and fiscal reforms,” Nazri said. He added that regional develop ment in Sabah and Sarawak, targeted subsidies such as the Rahmah Cash Aid and structural transformation efforts are positive steps. PETALING JAYA: Malaysia’s bold plan to become an AI-driven nation by 2030 unveiled under the 13th Malaysia Plan (13MP) has drawn cautious optimism from both industry and academia, who agree the roadmap is ambitious but achievable if executed effectively. Prime Minister Datuk Seri Anwar Ibrahim’s 13MP positions AI (artificial intelligence) as a key driver of Malaysia’s transition to a high-value digital eco nomy, anchored by initiatives such as the National AI Action Plan, MyDigital ID and major foreign investments in AI and cloud infrastructure. Cybersecurity firm LGMS Bhd’s chairman, Fong Choong Fook, said the initiatives signal a turning point for Malaysia’s digital ecosystem. “Malaysia’s tech ecosystem stands to gain the most from three key areas in the 13MP,” he said, citing the acceleration of the National AI Action Plan, the full digitalisation of public services by 2030, and major foreign investments as game-changers. “First, the acceleration of the National AI Action Plan and full digitalisation of public services will unlock huge demand for AI, cyber-security and GovTech solutions,” Fong explained. “Second, the MyDigital ID and Ű BY DEEPALAKSHMI MANICKAM sunbiz@thesundaily.com

rural internet infra structure will require a whole-of-government approach and strong monitoring. “We always want to cut debt, but our execu tion and oversight have been weak,” he said, warning that the global environment adds to the difficulty. Nazri also flagged concerns about heavy reliance on domestic demand amid a dis

development spending and the aim to bring the fiscal deficit below 3% by 2030 show a strong intent to balance growth with sustainability”. Imran Nurginias wel comed the focus on digital transformation, AI and data infrastructure, along with social equity and education-employ ment alignment under the Madani Framework.

rupted labour market, global commodity shocks and geopolitical tensions. He said the 13MP’s privatisation mechanisms are not clearly explained and hoped Malaysia Madani will not become purely rhetorical. “The RM430 billion development budget is great, but it’s unclear how it will be funded. There are still many subsidies, so how exactly will the

However, he cautioned that targets such as tripling household income or increasing wage share of GDP are ambitious and would require pro ductivity reforms and private sector buy-in. “The absence of concrete tax reform measures creates uncertainty over how these plans will be sustainably funded.” Imran Nurginias warned of diluted focus, noting the 600 initiatives and

Cautious optimism over Malaysia’s ambition to become AI-driven nation

positioned as a top national priority,” he said. “This clear direction signals strong political will to integrate AI into key sectors and public services.” Akmal welcomed the plan’s focus on strengthening re search, development, com mercialisation and innovation, saying it could create a foundation for deeper colla boration between academia, government and industry. “This is crucial to help Malaysia move beyond just AI adoption into actual AI

unified GovTech gateway are critical where they lay the digital infrastructure needed for secure transactions, identity management and seamless service delivery.” Fong noted that large-scale foreign commitments are already reshaping Malaysia’s digital landscape. “Major investments like

Microsoft’s RM10 billion AI and cloud initiative and ByteDance’s RM10 billion data centre and AI hub in Johor signal strong global confidence and will directly fuel job creation and knowledge transfer,” he said. Despite these positive developments, Fong cautioned that several structural challenges must be addressed to fully realise RMK13’s ambitions. “Talent remains the biggest bottleneck. We’re seeing a lot of reskilling efforts, but these must be laser-focused on industry-relevant AI and digital capabilities,” he said. He also highlighted weaknesses in Malaysia’s early-stage funding eco system. “We still lack a robust pipeline for seed-to-Series A capital, especially for deep tech and AI-driven startups.” On regulation, Fong called for clearer governance frameworks to support innovation responsibly.

Akmal: Milestone moment

Fong: Turning point

“AI ethics, safety and data use policies are still evolving. Clearer rules are essential to enable responsible innovation at scale,” he said, while commending Digital Minister Gobind Singh Deo for laying strong groundwork through the National AI Framework and the establishment of the National AI Office. Universiti Malaysia Kelantan Institute for Artificial Intelligence and Big Data director Dr Muhammad Akmal Remli echoed the view that 13MP’s AI push is a milestone moment, but stressed that implementation will determine success. “The initiatives outlined in 13MP reflect a comprehensive and holistic approach. It’s encouraging to see AI

innovation and even exports,” he said. Both of them agreed that Malaysia’s aspiration to lead Asean in AI by 2030 is ambitious but achievable, provided key gaps are addressed. “The real challenge lies in imple mentation,”Akmal said.“It’s not just about policy documents but ensuring we have the right people, the right expertise and the right strategies on the ground.” He emphasised that Malaysia must first strengthen its talent pipeline by producing more skilled AI practitioners and embedding AI literacy into tertiary and vocational education. Equally important, he said, is boosting funding and incentives for applied AI research to encourage deeper collaboration between in