Exclusive: How Malaysia plans to create a tech developer society

By Sol GonzalezYogesh Hirdaramani

Malaysia’s Minister of Economy Rafizi Ramli shares his vision for Malaysia's digital economy.

On the sidelines of Malaysia's inaugural KL20 summit, Minister of Economy Rafizi Ramli shares with GovInsider his vision for the country's digital future. Image: KL20

Malaysia’s Minister of Economy, Rafizi Ramli, who has an engineering background, believes that in order to fix something, one needs to diagnose the problem correctly.

Talking to GovInsider, Rafizi says: “The one thing that sticks with me as an engineer is diagnoses. If you want to fix something, you have to have the right diagnosis and your root cause analysis must point to the right prescription.”

It is this targeted and methodical mindset that he brings to the table as Malaysia’s Minister of Economy. Rafizi has a background in finance, business, and data, which drives his approach to public policy.

Since his time in the Cabinet, Rafizi has introduced a central database, PADU, which aims to provide data-informed subsidies, improve government efficiency, and inform long-term welfare policymaking.

On the sidelines of the recent KL20 event, the country’s inaugural startup summit, Rafizi shared his views on the use of data in the public sector and his plans for the country’s growing digital economy.

Tech for Malaysians, by Malaysians 

Rafizi shares that he hopes to transform Malaysia into a “tech developer society”.

“It is not just about the size (of the digital economy), I actually want to see how much of the pie is actually the ones that we created ourselves,” he says. He hopes to develop Malaysia as a society that not only creates technology but can consume what it produces.

While the digital economy is bound to continue growing organically, he aims to ensure that a bigger portion of that growth supports regular Malaysians, says Rafizi.

Malaysia is a favourable market for tech and AI start-ups to pilot and then scale-up, he adds. This is due to the country’s data centres, skilled workforce, and semiconductor industry – key factors that can enable a strong digital economy.

Minister Rafizi notes that “structural problems” in the past led to poor views on the profitability of start-ups and tech in Malaysia and limited funding.

“We recognise that the capital component of the ecosystem needs a lot to boost,” shares Rafizi, adding that the biggest boost to tech in Malaysia must come from the public sector.

One of the country’s recent initiatives is the Venture Capital Roadmap, a project to attract Venture Capital and support startup growth in the country.

Improving data sharing within the Malaysian public sector  

As the founder of Invoke Malaysia, a data-driven public campaign startup, Rafizi is familiar with implementing artificial intelligence (AI) and technology in his work. This focus led him to oversee the creation of PADU as part of Malaysia’s new GovTech programme.

“If we want to improve efficiency of government delivery, if you want to get the best value from the government’s IT expenditure... you cannot do it without a centralised database,” he explains.

The absence of a centralised database has led to poor service delivery, duplication of efforts, and an overreliance on private sector vendors to provide tech solutions, due to limited data capabilities within the government, he says. This is one reason why Malaysia’s government has had so many apps, as GovInsider reported previously.

Rafizi has sought to ensure PADU was built entirely by civil servants. He aimed to prevent data breaches and to prove that the public sector could build tech products as well as any IT company, he told GovInsider.

“The public sector has always been designed to just manage the processes but not work on the product itself,” says Rafizi.

“I think we have proven that there's a huge potential that public servants and civil service can play into designing their own tech products... and that's why PADU was instrumental to us, because it proves that it can be done.”

Centralising digital government in Malaysia’s new GovTech 

Rafizi hopes that the successful launch of PADU will raise public sector morale and attract more capable talent to develop government technology.

The government is taking steps to raise digital capabilities by centralising tech talent within Malaysia’s upcoming GovTech programme, which is expected sometime this year, he shares.

“Over the years, what happened was that there was more reliance on the vendors and the market and that's why it becomes very siloed and scattered. So, the decision to centralise everything and create a nucleus group of product developers, programmers, software engineers, having a tech unit, is actually quite significant,” he explains.

PADU will complement these efforts. As a single backbone for government services, agencies will be able to add more features over time and citizens will not have to go to multiple agencies to solve a single problem. This is similar to the “once only” principle of digital governments in Europe and Asia.

He hopes that these initiatives will transform the perception of tech within the Malaysian government.

Commentators from the Penang Institute have highlighted that a successful PADU could be transformational for digital government in Malaysia but warned that the country will need to take steps to ensure tighter data security measures. 

Malaysia’s innovation future  

Rafizi expects that by 2030, Malaysia’s digital economy will grow organically with the support of government focus on tech and start-ups, as well as the digital transformation of the public sector.

These hopes are not in vain, but they come with challenges. Having started his career in London alongside senior leaders in public and private sectors, Rafizi is keenly aware of criticism toward politicians and policy decisions.

Public reaction to PADU has been mixed, and wariness toward government technology use persists due to distrust toward the government’s capacity to safeguard information.

The Minister shares that he is prepared to enhance the capacity of government technology to regain trust and deliver the expected results by doing a competent job at diagnosing problems and intervening at the right time.