/Digitalisation of Langkawi

Digitalisation of Langkawi

On behalf of the Federal government and all the people of Langkawi, I warmly welcome your visit to this archipelago of 99 magical islands. We are glad that a technology giant like Oracle and its luminary friends are meeting in Langkawi, and we hope that the ASEAN Leadership Conclave will be both pleasant and successful. I would also like to thank the organiser for inviting the Langkawi Development Authority or LADA – an agency under the Prime Minister’s Department – to say a few words by way of opening the Conclave. And as an arm of the Federal government here, I would also like to congratulate Oracle for the opening of the Oracle Cloud Solution Hub in Kuala Lumpur recently. This is indeed a welcoming move that will drive more digital crusaders to invest in Malaysia.

Allow me at the outset to share one trivia about Langkawi. All of you are standing on an ancient piece of land which dated back 550 million years. Here it all began during the Cambrian age way before the time of the Dinasours. In fact we have even found the evident of a dropstone in Langkawi whose age is 1 billion years old. It is for this unique geological endowment that the United Nations had decided to crown Langkawi as Southeast Asia’s first ever UNESCO Global Geopark twelve years ago.

 

Convening this future-orientated meeting in a rustic rural setting like Langkawi is to me both apt and important. Especially when the focus is ASEAN, a fraternity of 10 nations where 50%  of its population still lives in rural areas. More often than not the discussion on digitalisation of economies tends to focus more on cities. This is only natural because the media also churns daily celebration narratives of cities as sources of wealth, innovation and high productivity. In 2007, according to the United Nations, we crossed the halfway point when more than 50 % of the world’s population lived in cities. Malaysia is no exception to this trend with 77 % of its population residing in urban areas last year. By 2030, 26 million people or 80 % of Malaysians will be city dwellers.

Yet Rural Malaysia is still home to 7.3 million people. They live in 26,400 villages across the country. About 3.1 million of them reside in 46 remote districts in the peninsula, Sabah and Sarawak. The interior dwellers are spread across a vast rural landscape covering 52 % of Malaysia’s land mass. Improving the accessibility, economic opportunities and viability of these isolated places remains a policy challenge. Can technology help break this impasse? I hope you will take it up in your discussion in the forthcoming days.

 

Ladies and Gentlemen,

I am asked to flag a few points about the past and the future of Langkawi. As for the past, there have been four attempts to develop Langkawi as a major tourist destination. The first attempt came in the 1950s following Malaysia’s Independence. Tunku Abdul Rahman the First Prime Minister constructed the first first proper hotel, the Langkawi Country Club just next door to the St.Regis where we are today. He then pooled some Federal funding to create the first golf course on the island. Thanks to him we now we have three beautiful golf turfs here which I hope you’ll have the time to enjoy. He had also tried to build a casino on top of a 900-metre hill called Gunung Raya. Luckily the casino idea didn’t go through.

The second attempt to develop Langkawi came in the 1970s when the Federal government established the national Tourism Corporation. At the time the country’s economy was predominantly rural and the leadership then wanted to venture into tourism as one of its key economic sectors. Much of what was planned for Langkawi did not materialise then.

 

The third push came in the 1980s under the leadership of Dr Mahathir Mohamad as the Prime Minister. Hailing from the state of Kedah where Langkawi is part of, he had effectively mobilised significant funding from the Federal government to lay the infrastructure for tourism development. To catalyse the economic growth of Langkawi, the Cabinet of Dr Mahathir had in 1990 established the Langkawi Development Authority or LADA as a Federal vehicle to plan and coordinate development projects. The 30,000 population of Langkawi started to change their livelihood from farming and fishing to tourism. Roads were built, water supply was secured from the mainland, Telco towers were erected and jetties were upgraded. With these infrastructure done, hotels started to mushroom.

The fourth development push came in 2011. with the launch of the Langkawi Tourism Blueprint, 2011-2015. The government identified 14 strategic initiatives and pumped in half a billion RM worth of funding to boost tourism development in Langkawi. By the end of the Blueprint period, the tourist landing had increased from 2.5 million to 3.7 million yearly. Today the average household income for the 110,000 population in Langkawi is over RM6,000, the highest of all the districts in the state of Kedah. The poverty rates based on the poverty line income was only 0.00 %. Almost 60% of its economic production is sourced from tourism activities. There are now 12,000 hotel rooms, 4000 of which are those in the 4 and 5-star hotels.

 

Ladies and gentlemen,

For those among you who follow Malaysian politics, the year 2018 was a watershed one. A new government was voted in. Voted out was a government that was in power for 61 years. Interestingly enough, not only that Dr Mahathir Mohamad was returned to power as the Prime Minister, he is also now the Member of Parliament for Langkawi, where we are gathered today. His return marks the fifth phase of the development of Langkawi. Whatever happens today will set the tone for the future to come.

When I was asked to lead the Langkawi Development Authority, the marching order was to diversity the economic base of Langkawi beyond tourism. Two areas were identified from the outset – the blue economy, i.e., capitalising on the ocean and maritime potential of the island, and also digital economy. We are guided by the vision of Shared Prosperity. Development should be inclusive and sustainable by the year 2030. The government will ‘leave no one behind’ as it marches towards this policy goal.

 

Let me end my remarks by saying a bit more about the digitalisation drive in Langkawi. The basics are there, especially if you look from a 30,000 feet perspective. The internet and mobile phone penetration rate in Langkawi is high. The 3G coverage is almost 100% while 4G is more than 70%. The internet speed 5 years ago was already at 100mbps. The future looks exciting. The government has chosen Langkawi to be the site for 31 5G demonstration projects from October 2019 to March 2020. The use case includes smart street lighting, drone light shows, virtual concert, smart traffic light solutions, smart CCTV, IOCCC, smart agriculture and the list goes on. However, I’d like to quote the Prime Minister at this juncture “There are too many pilots without passengers these days”. How do we ensure the pilot projects graduate to become real applications that will benefit societies? That is the one million dollar question we ought to be asking.

I suspect the way forward is to tweak the ‘infrastructure of the mind’. Any technology mainstreaming involves 30% technical-challenge and 70% cultural-challenge. And technology disruption in the past has been seen as something negative in the tourism sector here in Langkawi. The rise of E-hailing was received with aggressive reactions by the taxi associations. Similarly, the hotel association here wanted LADA to regulate the growth of online booking and AirBnB. Much to their dismay, we do not have the power and jurisdiction to do so. A month ago we co-organised a session with the Malaysian Digital Economy Corporation with local tourism players on ‘going digital’. We were surprised to find out most of the shops along our most famous beach – the Chenang Beach – do not even accept credit cards. So the government is initiating a programme to encourage these shops to use E-payment.

 

Ladies and gentlemen, I have spoken briefly of the past and the present, but we have to do more together for our common future.

The challenge lies in translating policy buzzwords into real changes in the lives of the day-to-day people. There is no one-size-fits all since each locality has its own set of unique challenges apart from the generic ones.

Take one example. We want encourage digital entrepreneurship among the young, but can we? In Langkawi, out of 14,000 school kids, 1,000 do not turn up in school daily. They are not from poor families. They just enjoy having cash in hand and jobs are easy to find. This truancy figure is high and it is worrying. If the kids are not interested in school curricula, can we help them to learn coding, develop the technical acumen, creative confidence, and the grit to become outstanding designers of solutions for the Brave New World?

 

Though many people talk about “gloom and doom”, I feel we are instead at the cusp of great opportunities in this digital age. Digital technology is changing swiftly from being a driver of marginal efficiency to an enabler of innovation and disruption.

As an eternal optimist, I believe we can help the young against all odds. But we cannot do it alone. We need the help from tech giants like Oracle – maybe through the Oracle Academy –  to help the rural kids to have the same dream and reality with their urban counterparts. By extension, can Langkawi become the hub for the ever growing pool of Digital Nomad? As important as it is, however, let this wish of mine be a topic for another day. As for today, let me repeat, on my own behalf, on behalf of the Langkawi Development Authority and on that the rest of the people of Langkawi, our good wishes for the success of your ASEAN Leadership Conclave. We hope that you will enjoy your stay in Langkawi – the island of legends and natural beauty – and that your discussions will be enlightening and stimulating.

I hereby declare the ASEAN Leadership Conclave open. Thank you kindly.

 

Opening Speech at the ASEAN Leadership Conclave at The St. Regis Hotel Langkawi. 6 November 2019. Organised by Oracle Corporation.