Artificial intelligence is no longer confined to labs, strategy papers, or technology discussions. It is becoming part of everyday life; in meeting rooms, educational institutions, cafes and households. What started out as a tool to help with discovery, analysis, and decision-making is now becoming something that can work on its own, talk to other software, organise tasks, and act as an intelligent assistant. This development is commonly referred to as agentic AI. 

This evolution is beginning to take shape in Malaysia’s own digital and financial ecosystem. In March 2026, Mastercard’s pilot with CIMB and RHB demonstrated that AI agents can already initiate and complete authenticated transactions within Malaysia’s financial ecosystem. The pilot involved an AI agent arranging a ride from Kuala Lumpur International Airport to KL Sentral. The transaction was facilitated through CardInfoLink’s AI agent platform using Mastercard Agent Pay, with tokenised credentials authenticated via Mastercard Payment Passkeys to ensure security, transparency, strong customer verification, and consumer control. While the pilot was conducted in a controlled environment, with commercial rollout to follow in phases, and the use case may appear simple on the surface, it signals a much larger shift where autonomous systems are capable of executing real transactions within existing digital and financial ecosystems.

The new phase of digital commerce is called agentic commerce. These systems can autonomously research, compare, find the best price, and complete purchases.! Unlike traditional e-commerce, these systems operate across multiple platforms, executing transactions without direct human intervention and fundamentally streamlining the buying journey.

This phase is not taking place in isolation. Instead, it is unfolding within a digital ecosystem that is already operating at scale. Approximately 74% of the world’s population is connected to the internet, forming the foundation of today’s digital commerce ecosystem. At the same time, the global e-commerce market is valued at more than USD6 trillion, reflecting the extent to which digital transactions have become embedded in daily life.

This trend is just as strong in Malaysia. The Department of Statistics Malaysia (DOSM) reported that e-commerce revenue reached RM937.5 billion in the first nine months of 2025, up 1.9% year-on-year. ICT and e-commerce together contributed 23.4% (RM451.3 billion) of the economy in 2024.

It means agentic commerce is not being introduced into a small or controlled environment. It is emerging within systems that are already operating at very high volumes.

When Transactions Are No Longer Initiated by Users

In a conventional digital journey, users search, compare, decide, and transact. Now, we see these activities are being delegated to autonomous agents that can act on behalf of users.

On the surface, the experience feels seamless. At scale, this improves efficiency, reduces friction, and optimises decision-making across sectors. But it also changes something more fundamental. The decision is no longer made at the point of action. It is made earlier and executed later.

Suppose you have a smart refrigerator that automatically tracks your consumption and replenishes essential items on a weekly basis. It is connected to your digital calendar, and it shows an upcoming “open house” for 50 people this Saturday. 

You have been watching Khairul Aming’s YouTube videos and going through recipes for rendang, nasi minyak, kuah kurma, acar, and sirap bandung, indicating that a larger-than-usual meal is being planned. 

It is Tuesday, your usual replenishment day. Based on these inputs, your smart refrigerator picks up on the need for additional ingredients and proceeds to place an order in advance. 

However, the event has since been cancelled, and you did not remove it from your calendar.

The transaction proceeds. No more confirmation is needed.

The event is no longer happening, but the order shows up as expected.

The decision has been correctly executed from a system perspective based on the information available.

In a practical sense, the outcome does not reflect the intended situation.

This is not a tech failure, but it is context mismatch.

This is where the gap becomes more apparent.

The issue is no longer how the system works, but how the surrounding structures can manage how decisions are made, executed and corrected, when systems operate based on prior inputs without real time validation.

The Shift from Capability to Control

The key challenge is no longer whether agentic systems can function. It is whether policy, security, and governance frameworks are evolving fast enough to manage how these systems make decisions, execute actions, and are held accountable.

Most existing digital systems were designed around a simple assumption that users remain present throughout the transaction process to initiate, review, and approve actions. Agentic commerce operates differently. Decisions may increasingly be initiated, evaluated, and executed with limited direct human visibility.

As a result, the focus of security can no longer rely solely on authenticating users through passwords, one-time codes, or biometric verification. It must evolve towards understanding and monitoring system behaviour, decision logic, and transaction accountability.

In many ways, this also reflects a broader evolution in digital trust models. For decades, financial systems focused heavily on “Know Your Customer” (KYC) frameworks designed to verify human identity and legitimacy. As autonomous systems act on behalf of users, institutions also need to develop stronger capabilities to understand, monitor, and govern the behaviour, authority, and decision boundaries of the agents operating within digital ecosystems. In time, this may gradually introduce the need for a “Know Your Agent” mindset alongside existing customer verification approaches.

This shift is important in Malaysia’s context. According to the Royal Malaysia Police (PDRM), cybercrime and online financial scam cases continue to rise annually, involving billions of ringgits in losses. At the same time, global organisations such as the World Economic Forum and IBM have highlighted growing concerns around AI governance, transparency, explainability, and liability.

Ultimately, the defining issue is no longer technology capability alone, but control and trust within an ecosystem where systems are increasingly able to act on behalf of users.

What This Means for Government, Financial Institutions, Businesses and Users

Malaysia is not starting from zero. Current initiatives and regulatory frameworks such as Bank Negara Malaysia’s Risk Management in Technology (RMiT), the Cyber Security Act 2024, AI governance initiatives, and broader digital trust efforts have already enhanced governance, cybersecurity, operational resilience, and technology risk management across the digital and financial ecosystem.

Agentic commerce, however, adds a different level of complexity. As autonomous systems become more common across platforms to make decisions and conduct transactions on behalf of users, the focus will shift from traditional transaction oversight and technology risk management towards broader issues of system behaviour, delegated decision making, accountability, interoperability, and consumer trust across interconnected digital ecosystems.

Against this backdrop, several strategic implications are beginning to emerge for governments, financial institutions, businesses and users. The rapid pace of development in agentic AI also highlights that governance frameworks can no longer remain static documents. In January 2026, Singapore introduced the world’s first Model AI Governance Framework for Agentic AI and described it as a “living document” that will continue to evolve alongside emerging technologies. This reflects a growing recognition that governance approaches for autonomous systems need to evolve continuously alongside the technology itself.

As autonomous systems become more embedded into everyday transactions and decision-making processes, different stakeholders will face various challenges that would require closer attention. 

Government

Financial Institutions

Businesses

Users

Translating Readiness into Implementation

Recognising the shift towards agentic commerce is only one part of the challenge. The greater challenge lies in translating readiness into coordinated implementation across policies, systems, institutions, and users.

For governments, this means ensuring that governance frameworks, regulatory positions, and oversight mechanisms are consistently operationalised across agencies and sectors.

For financial institutions, it requires aligning systems, processes, risk management, and operational capabilities to support autonomous and high-frequency decision-making environments.

For businesses, readiness will depend on how quickly they can adapt their digital capabilities, operational processes, and customer engagement models to AI-driven commerce ecosystems.

For users, trust will depend not only on system capability, but also on how clearly decisions can be understood, monitored, and corrected when necessary.

In this context, implementation capability becomes important. Successfully operationalising agentic commerce will require strong coordination across stakeholders, clear accountability, measurable outcomes, and continuous monitoring as the ecosystem evolves.

This is precisely where delivery discipline becomes the deciding factor. PEMANDU Associates has spent over a decade operationalising exactly this kind of complex, cross-agency transformation, turning ambition into measurable outcomes through clear accountability, rigorous monitoring, and the coordination structures that hold implementation together. As agentic commerce moves from capability to control, that same execution discipline, the ability to align government, institutions, businesses, and users around a common delivery roadmap, will determine whether Malaysia leads this shift or merely absorbs it.

The Next Phase of the Conversation

The foundations for agentic commerce are already in place. Connectivity, digital payment infrastructure, AI capabilities, and interconnected ecosystems are no longer operating at experimental scale but have already become embedded into everyday life and digital transactions.

As such, the question is no longer whether this shift towards more autonomous commerce will happen. The more important question is whether governance, policy, security, and oversight mechanisms are evolving fast enough to support it in a controlled and trusted manner.

This becomes important because as systems begin acting on behalf of users, the issue is no longer only about technological capability. It is also about accountability, visibility, and ultimately, control.

At a policy or system level, these discussions may still appear conceptual. However, their implications are often most visible through everyday situations and consumer behaviour.

Remember the groceries that your refrigerator ordered?

Your groceries arrive before you even realise the order has been executed. Your kitchen is now stocked with ingredients for rendang, nasi minyak, kuah kurma, acar and sirap bandung, enough to feed 50 people who are no longer coming because the event was cancelled earlier in the day.

Perhaps the next evolution is a robotic assistant capable of preparing the meals using what has already been purchased. With advances in robotics becoming accessible, what once felt futuristic no longer seems entirely impossible.

However, this introduces a different set of questions. If systems can decide what to buy, and how to act on those decisions, where does oversight sit as decisions begin compounding across interconnected systems? At what point does convenience begin moving faster than the ability to monitor, intervene, or maintain meaningful human control?

These may be questions for the next phase of the conversation, perhaps over coffee before the systems order it for us. 

Several perspectives within this article were informed through engagements with industry practitioners and technology experts.

Author:

Jezamin Razak

Associate Vice President

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Let’s transform together. Contact us at: https://pemandu.org/contact-us/ 

References

1. Mastercard conducts first live agentic transaction in Malaysia with CIMB and RHB Pilot, Mastercard, 4 March 2026
2. Global number of Internet users increases, but disparities deepen key digital divides, ITU, 17 November 2025
3. Malaysia Digital Economy 2025 (e-commerce revenue RM937.5 billion, 9M2025), Department of Statistics Malaysia (DOSM), 26 November 2025
4. AI Governance Alliance Briefing Paper, World Economic Forum, 2025
5. Research reveals 9 essential plays to govern AI responsibly in a multipolar world, WEF, 23 September 2025
6. Cost of a Data Breach Report 2025, IBM Security
7. Commercial Crime Investigation Department Annual Statistics, Royal Malaysia Police (PDRM), BERNAMA 2025
8. Singapore Launches New Model AI Governance Framework for Agentic AI, 22 January 2026
9. Model AI Framework for Agentic AI, INFOCOMM Media Development Authority
10. Mastercard Sees Data Moving Payments from KYC to KYA

The post Imagine This: Your Fridge Just Bought Groceries for a Party You Cancelled. Welcome to Agentic Commerce. appeared first on PEMANDU Associates.

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In one year, Malaysia’s EV market doubled. According to the Department of Statistics Malaysia, EV registrations rose from 21,789 units in 2024 to 44,813 in 2025, as cheaper imported models finally made EVs affordable for middle-income Malaysians. 

Then, in five months, the policy landscape shifted. 

The new rule now requires any fully imported EV (Completely Built Up – CBU) must carry a minimum declared cost of RM200,000 and produce at least 180kW of power. In practical terms, this pushes the minimum retail price to at least RM300,000 after duties, taxes, and margins. 

Separately, new conditions on locally assembled EVs (Completely Knocked Down – CKD) introduced an 80 percent export requirement, a mandatory paint shop, and a cap on domestic sales volume for any manufacturer setting up a new plant after September 2025, unless they choose to assemble through existing facilities via local partners.

Malaysia’s Ministry of Investment, Trade and Industry (MITI) frames this as developmental rather than protectionist, intended to move Malaysia up the EV automotive value chain. The question is whether this is an industrial strategy disguised as protection.

A policy at war with Malaysia’s own net-zero roadmap

Malaysia’s premise is reasonable: a country serious about building an automotive industry cannot simply remain a destination for other people’s exports indefinitely. 

What it does not fully account for is who bears the cost of the transition, especially for the B40 and M40 households.

Malaysia’s National Energy Transition Roadmap (NETR) sets a target of 20 percent EV share of total industry volume by 2030, rising to 80 percent by 2050. 

In 2025, EV penetration sat at roughly 5.5 percent. Reaching 20 percent in five years requires roughly quadrupling the current rate of adoption. This, however, is a steep ask given that the affordable import segment that drove the recent growth has now largely been removed, and where the CKD supply chain needed to replace it will take years to reach comparable scale and price.

The NETR target and the import policy were produced by overlapping agencies, and they are now pulling in opposite directions. A transformation effort cannot succeed when its policies are misaligned with its True North. If Malaysia’s True North is simultaneously to build a globally competitive EV industry and accelerate transport decarbonisation, then the current policy architecture appears to be optimising for one objective while slowing progress on the other. 

For comparison, Vietnam tripled its EV market share to 28 percent within four years by keeping affordable options in the market while simultaneously building a domestic champion, which is proof that industrial ambition and climate trajectory do not have to be traded against each other.

The cars most Malaysians can afford just disappeared from the market.

Malaysia’s median household income is RM7,017 per month. Using the common rule that a car should cost no more than one year of household income, the “comfortable” price range for most Malaysians is around RM84,000. 

The minimum price at which any foreign brand may sell a locally assembled EV is RM100,000. Proton and Perodua have never been subjected to that floor, which means the only players permitted to compete in the segment that most Malaysian households can actually afford are the two national car makers. 

With limited competition, this market structure is unlikely to produce competitive pricing or rapid product development. This is especially concerning at a time when households are adapting to rising costs as the result of fuel subsidy rationalisation. 

The households most exposed are the bottom 40 percent by income (B40) and lower half of the middle 40 percent (M40); groups for whom housing, utilities, food, and transport already account for more than two-thirds of monthly expenditure, according to DOSM’s Household Expenditure Survey 2024, leaving limited room to absorb any further cost pressures. For many of them, an affordable EV would have provided meaningful long-term savings.

Elsewhere, the contrast is stark. In Thailand in 2024, the average price of a Chinese EV fell below the average price of a conventional petrol car, with entry models starting at approximately USD 12,500 (~ MYR 50,000), against RM100,000 floor in Malaysia.  

This does not serve the nation, especially when Malaysia’s urban development model was built around cars. Shah Alam, Putrajaya, and Cyberjaya are some examples where private vehicle use is a structural necessity, and most commuter corridors where Malaysian households live and work remain beyond the reach of the light rail transit (LRT) network. 

The practical consequence is that reducing EV affordability does not shift people onto trains. It simply prolongs petrol vehicle dependency at a time when maintaining fuel subsidies is becoming increasingly challenging.

For investors, this reinforces the importance of stable and predictable policy environments. Factory commitments, component localisation, and workforce development take years, not months. As a result, manufacturers choose investment locations based not only on current policies, but on whether those policies are likely to remain stable. 

Malaysia’s incentive framework for EVs has moved in either short cycles, renewed late, or with conditions shifting between announcement and implementation. The CBU duty exemption alone was extended twice before lapsing without a replacement framework in place, leaving distributors and consumers to plan around a deadline that had moved before finally holding. But the kind of transformation Malaysia claims to be pursuing, such as moving up the value chain and building sovereign industrial capability, requires a policy environment that does not surprise its intended beneficiaries.

Protectionism as a tool, not a verdict

These costs do not, by themselves, settle the argument. Protectionism is undoubtedly a legitimate tool, but what matters more is its design, and whether Malaysia’s design matches the transformation ambition it claims.

South Korea built its automotive industry behind protective walls in the 1970s and 1980s, but the protection was structured around a specific condition: that the beneficiaries would eventually have to compete without it. 

Hyundai was not simply shielded from foreign competition. It was also pushed, through deliberate policy pressure, to invest in engineering capability, to develop its own platforms, and to prove itself in export markets where no protection applied. 

The domestic market was the training ground, not the destination. Today, Hyundai-Kia is the world’s third largest automaker by sales, and South Korea is sufficiently confident in the competitiveness of its domestic industry that it has allowed Chinese EVs to enter as standard imports, with no special conditions and no price floors. BYD entered the Korean market in 2025 and has been gaining share, and yet, Hyundai has not collapsed.

Malaysia’s experience with the same protectionist tool produced a different outcome. Proton, through import duties and approved permit restrictions imposed upon foreign car brands for decades, was insulated from the competitive pressure that the South Korean policy had deliberately applied to its own champions. The protection then worked in the narrow sense that Proton survived. The current policy is closer in character to that experience than to South Korea’s. The CBU floor and the greenfield CKD conditions preserve the domestic market for national brands but contain no visible mechanism requiring Proton and Perodua to become competitive enough to not need that preservation.

The conditions that make protection work

The argument here is not that Malaysia should have simply opened its market and absorbed whatever followed. Thailand and Indonesia arrived at broadly similar industrial objectives through mechanisms that kept consumer access intact while still compelling manufacturers to invest locally.

Thailand, which has no domestic brand to protect, introduced a production ratio requirement: manufacturers wishing to sell competitively priced imports were required to produce locally at two units assembled for every one imported, rising to three to one by 2027. BYD responded by building a 150,000-unit factory in Rayong, employing over 6,000 people and exporting across ASEAN and beyond. 

Indonesia on the other hand, required manufacturers to post a bank guarantee equivalent to the duties they would have owed, redeemable only upon meeting production commitments. Nine global brands committed, approximately USD 950 million was pledged, and 281,000 units of annual capacity are coming online. 

In both cases, the industrial outcome was achieved without a price floor and without conditions that varied depending on when an agreement was signed.

A commitment-based structure, whether through production ratios or financial guarantees, creates the same investment incentive as a market restriction, while leaving the price environment intact for buyers. 

If Malaysia is serious about a genuine industrial transition, alternative pathways do exist. A foreign brand opting for contract assembly instead of building its own plant does not produce local long-term talent capability and technology knowledge transfer. While Malaysian content does sit at around 76 percent, that figure refers mostly to body panels, seats, wiring and final assembly, not to the parts that define the car as an EV — the software stack, the battery management system, as well as its platform architecture, all of which remain the IP of the original manufacturer. 

The result? Malaysia’s role in the value chain remains what it was before: screwdriver integration at the end of someone else’s supply chain.

The cost that does not show up as failure

Protectionism is not, in itself, the problem. Every country in this comparison protects its automotive interests in some form. In fact, the United States has effectively closed its market to Chinese manufacturers entirely. The European Union applies tiered tariffs calibrated by manufacturer. The tool is not the issue.

What distinguishes successful protectionism from unsuccessful protectionism is whether it was designed with an exit condition, a point at which firms are eventually expected to compete on their own after developing the capabilities the protection was meant to build.

The CBU price floor and the CKD own-plant conditions preserve market space for national champions but contain no mechanism that requires those champions to earn it. While the intention may be genuine, the cost is larger than it appears — one that a transformational industrial policy cannot afford, because the deep capability transfer Malaysia is pursuing is unlikely to materialise any time soon.

Nevertheless, foreign car makers will continue to adapt, and Malaysia will likely progress, albeit it being business as usual, much as it has before. 

The industry will survive, and the market will grow, slowly. Slowly is the operative word. Against peers who have moved faster. The true cost is not failure, but the non-arrival of the industrial objectives. The ambition is transformation. The current policy, however, still looks more like preservation.

Author:

Nazirul Ibrahim

Senior Manager

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Let’s transform together. Contact us at: https://pemandu.org/contact-us/

The post Designed to Protect, Not to Transform: What Malaysia’s New EV Rules Reveal About Industrial Policy appeared first on PEMANDU Associates.

By mid-afternoon, the economy began to slow itself down. Small businesses watched the clock. Suppliers waited for confirmation. Salary payments sent late on a Friday often became “Monday money.” Funds could be transferred, yes, but not always used. That gap between money sent and money usable shaped behaviour across the economy more than many people realised.

That is why the Bank of Botswana’s decision to introduce a 17:00 clearing window, alongside a rule requiring banks to make funds available within 60 minutes after settlement, matters far beyond banking convenience. It is not just a technical adjustment to the payment system. It removes a long-standing structural friction that citizens and businesses had quietly learned to live around. The Bank announced the change on 31 December 2025, and said it took effect on 1 February 2026. The daily settlement windows are now 09:00, 12:00, 15:00 and 17:00. Commercial banks must credit beneficiary accounts immediately upon settlement finality, and no later than 60 minutes thereafter.

In simple terms, Botswana has extended its economic day. For years, the country managed around that friction: informal traders absorbed timing risk, SMEs delayed supplier instructions, and households postponed decisions that should have been routine. The old system did not stop commerce outright, but it did force caution into ordinary transactions, especially as the weekend approached.

That matters on the ground. A construction subcontractor can now clear a supplier payment later in the afternoon and release labour for the weekend with greater certainty. A rural agro-aggregator paying farmers electronically can rotate capital the same day instead of asking people to return on Monday. A supermarket can restock fresh produce on a Friday evening because the supplier’s EFT now clears in time. A small logistics company can settle fuel payments after 16:00 and keep trucks moving into the weekend.

These are not lifestyle conveniences. They are working-capital realities. When payments clear later and funds become usable faster, liquidity circulates longer through the economy. Businesses make decisions with more confidence. Stock moves. Wages turn into purchases. Suppliers release goods. Farmers get paid. Risk reduces. Time, in effect, is returned to commerce.

What makes this reform particularly notable is that the difference is already being felt. Small businesses are planning with more certainty. Workers are accessing wages sooner. Suppliers are being paid before the weekend rather than after it. The financial system is beginning to work on people’s schedules, not just banking hours.

This also reflects a broader shift in how Botswana is approaching economic transformation. Under the Botswana Economic Transformation Programme (BETP), there has been a growing focus on addressing structural bottlenecks that quietly slow everyday economic activity, particularly in cross-cutting sectors like finance. Payments efficiency has long been one of those constraints.

Seen in that context, this reform is more than an isolated improvement. It signals an approach that prioritises practical, system-level fixes, changes that improve trust, reduce friction, and enable markets to function more smoothly. It suggests that the focus is not only on identifying challenges, but on equencing and delivering solutions that have immediate, tangible impact.

That is the real significance of this reform. It closes the distance between transaction and action. Rather than overstating it, this change should be seen for what it is, practical, systemic and confidence-building. Botswana should pay attention to reforms of this kind.

For too long, Botswana adapted to a system where the economy effectively paused after 15:00. Now, money can move with greater purpose into the evening. That may sound like a small operational fix. It is not. It is a quiet shift in economic rhythm.

And sometimes, the reforms that matter most are the ones that give people, businesses and markets their time back.

Authors:

Vinod Naidu

Associate Vice President

Wong Jie Ying

Senior Associate 

The post The Reform That Extended Botswana’s Economic Day appeared first on PEMANDU Associates.

Held at the edge of the Amazon rainforest, one of the planet’s most vital carbon sinks, last year’s COP carried an unmistakable sense of urgency. The setting itself shaped the negotiations: biodiversity, adaptation, and forest protection were not side events; they were the main stage. As Brazil’s President declared in the Opening Plenary, “This is the COP of the Amazon,” placing nature-based solutions and climate resilience at the heart of global climate diplomacy.

This uniqueness was further amplified by geopolitical uncertainty, particularly the political instability in the United States. Its absence from negotiation tables raised concerns among the remaining 196 signatories of the Paris Agreement about the credibility of global commitments to limit warming to 1.5°C above pre-industrial levels. 

The summit also unfolded amid heightened social tension. Protests led by indigenous communities punctuated the official programme, reinforcing a central theme of COP30: Just Transition must be more than rhetoric. It must reflect lived realities, particularly for communities who have contributed the least to emissions, yet bear the greatest burden of climate disruption.

In the final days, a fire incident within the Pavilion halls became an unsettling metaphor for the wider moment: climate negotiations are increasingly taking place in a world already destabilised by climate impacts. in this complex and evolving global landscape, one question became increasingly clear: What role should Malaysia play, not only for itself, but for ASEAN and the Global South?

Malaysia and Belém: A Shared Climate Identity

COP30’s location was deliberate. Belém sits at the gateway of the Amazon, 2,800km from São Paulo, and its geography influenced the tone of the summit: a reckoning with nature, indigenous rights, and the limits of mitigation-only thinking.

In many ways, Malaysia mirrors Belém. Both are equatorial nations with deep biodiversity, forest ecosystems, and indigenous communities whose stewardship has protected nature for generations. Malaysia is home to one of the world’s three major tropical rainforest regions, alongside the Amazon and the Congo Basin, collectively storing an estimated 250 billion tonnes of carbon. In a negotiating environment where nature-based solutions are increasingly valued as hard infrastructure for climate stability, Malaysia’s forests represent leverage.

But leverage only translates into influence when it is actively deployed. Malaysia’s credibility on the world stage extends beyond emissions reduction to include the stewardship of natural capital and the ability to articulate a climate agenda that reflects the realities of emerging economies. 

Malaysia at a Turning Point: Leadership Beyond Emissions

Despite contributing only 0.77% of global greenhouse gas emissions, Malaysia’s climate decisions carry consequences far beyond its carbon footprint. Collectively, ASEAN accounts for approximately 3.5% to 4.75% of global emissions, a share that is rising as the region industrialises. More critically, ASEAN is among the world’s most climate-vulnerable regions, exposed to rising sea levels, intensifying monsoons, heat stress, and food insecurity. 

However, the instinct to frame Malaysia’s climate challenge primarily as an emissions problem misses the deeper question: can Malaysia build a development model that is both growth-enabling and climate-resilient, without forcing a choice between the two? That is the real leadership challenge, and it is one that has implications not just domestically, but for the credibility of the Global South’s climate agenda more broadly.

Malaysia’s recent ASEAN Chairmanship gives it a platform to shape this narrative in practice. NDC 3.0 sharpens this ambition, marking a decisive shift to an economy-wide absolute emissions target — aiming to peak emissions by around 2030 and achieve an absolute reduction of 15–30 MtCO₂e by 2035. This is significant technically and politically, signalling that Malaysia is prepared to be held to account in absolute terms.

But targets are only as credible as the governance built to enforce them. That is where RUUPIN, the forthcoming National Climate Change Bill, becomes critical. The bill proposes to legally anchor Malaysia’s climate commitments through national emissions target-setting, a regulatory oversight body, mandatory emissions reporting, a centralised climate data platform (NICDR), and the foundations of a domestic carbon market. On paper, it is a solid framework.

In practice, its credibility rests on questions the current draft have not fully answered. RUUPIN as proposed gives the Minister discretion to set or not set carbon budgets, with no binding obligation to do so. Without a binding national carbon budget, there is no legal mechanism to compel government action or enable meaningful climate litigation. A climate law that is flexible by design risks being toothless by default. RUUPIN’s value will be determined not by whether it passes, but by whether it passes with enough institutional substance to outlast political cycles and compel real action.

What COP30 Revealed: The Emerging Climate Reality for Malaysia

COP30 was defined by a dual reality. On one hand, negotiations remain slow, technical, and politically constrained. On the other, climate impacts are accelerating, and countries are increasingly forced to respond under pressure rather than through planned transitions. For Malaysia, the gap between these two realities is already visible and at risk of widening:

1) Mitigation Must Be Regional, Not Isolated

Malaysia’s emissions profile is driven heavily by energy. The Long-Term Low Emissions Development Strategy (LT-LEDS) sets the direction for the next five years to focus on execution. With an emissions peak targeted around 2030, the margin for delay is narrow.

The most consequential lever here is ASEAN cooperation, particularly through the ASEAN Power Grid. Cross-border renewable energy flows would fundamentally change the economics of decarbonisation for the region, allowing countries to draw on each other’s renewable capacity rather than each building and financing their own. Malaysia’s role in advancing this architecture, including ongoing discussions on regional grid connectivity with Vietnam and Singapore, is a tangible test of whether the ASEAN Chairmanship produces durable infrastructure or statements.

The National Energy Transition Roadmap (NETR), currently under review, needs to move beyond ambition into implementation: clearer action plans, enabling regulations, and investment mechanisms that can crowd in private capital. The carbon tax confirmed in Budget 2026, targeting the iron, steel, and energy sectors, is a necessary complement. Its introduction is now explicitly linked to the EU Carbon Border Adjustment Mechanism (CBAM), which will begin imposing carbon costs on Malaysian exporters from 2026. 

2) Adaptation Must Become a Core Economic Strategy

The 2024 floods made clear that adaptation is not a future planning exercise. Flood-related losses reached RM933.4 million, a 23% increase from the previous year, with Kelantan, Terengganu, and Kedah bearing the heaviest burden. The December 2024 monsoon surge displaced over 137,000 people across nine states, with floodwaters covering approximately 11,000 km² in Terengganu and Kelantan alone. These are not one-off events. The 2024–25 Northeast Monsoon season saw multiple successive flood waves; METMalaysia projected five to seven major rainfall episodes for the season.

The economic trajectory is equally sobering. A 2024 joint report by the World Bank and Bank Negara Malaysia estimated that floods could cost up to 4.1% of economic output by 2030, with smaller firms among the most vulnerable. Yet Malaysia does not currently integrate climate projections and risk quantification into its national budgetary process, a gap that countries like France, which has budgeted €1.6 billion for its third national adaptation plan, have already moved to close. 

The institutional response, while growing, remains mostly reactive and fragmented. Selangor’s establishment of the Selangor Climate Adaptation Centre (SCAC) in May 2025 is telling: a state government building its own climate coordination body because federal mechanisms were not filling the gap. SCAC is a step forward, but a state-level initiative cannot substitute for national coherence. The forthcoming National Adaptation Plan (myNAP) must address this directly. Streamlining NADMA’s mandate, aligning local council planning with climate risk data, and building shared early-warning infrastructure across agencies are not administrative niceties. They are the difference between a plan and a response.

The Cost of Waiting Is Rising

The window for voluntary, self-paced action is closing as the regulatory environment tightens simultaneously from multiple directions.

Domestically, the carbon tax arriving in 2026 will directly increase operating costs for energy-intensive industries, with rates expected to start at RM45 per tonne of CO₂e and escalate over time. For large emitters, this is material exposure. But the more immediate pressure may be external. For Malaysian exporters of steel, aluminium, cement, and related goods, CBAM charges from the EU starting in 2026 requires accurate embedded carbon data and compliance documentation. 

The split between large corporates and SMEs also matters. Organisations like PETRONAS have the resources, sustainability teams, and regulatory relationships to navigate this transition. SMEs which form the backbone of Malaysia’s economy often do not. Supply chain pressure will cascade downward, as large corporations impose stricter emissions requirements on their suppliers. The companies best placed are not those waiting for rules to be finalised, but those who have already embedded climate risk into their strategy, operations, and capital allocation. Decarbonisation is no longer a compliance burden. For the companies that treat it as one, it will become an existential one.

Multilateralism and Malaysia’s Role in the Global South

COP30 reaffirmed something that geopolitics keeps trying to obscure: no single country solves climate change alone. Yet within that constraint lies Malaysia’s relevance. With its standing as one of the world’s three great tropical forest nations, and its credibility across the Global South, Malaysia enters this next phase of global climate diplomacy with more leverage than its emissions share suggests. NDC 3.0 and RUUPIN signal that the domestic foundations are being laid. The Malaysia Pavilion at COP30 curated by PEMANDU Associates demonstrated that the appetite for leadership is real. What remains is the harder work of turning commitment into delivery and positioning it into action. 

The Malaysian delegation at COP30 in Belém, Brazil

Authors: 

Abdulmuiz Aziz

Senior Vice President

Wan Hidayat

Senior Associate

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Let’s transform together. Contact us at: https://pemandu.org/contact-us/ 

The post Climate Action Now: Reflections from COP30 and Malaysia’s Climate Governance appeared first on PEMANDU Associates.

Malaysia’s Direct Investment Abroad (DIA) totaled RM622.1 billion at the end of 2024, with RM349.7 billion concentrated in Asia. This highlights our regional strength but also underscores the limited diversity of our outward investment base in relation to upcoming global demand. 

Africa should now be regarded as part of Malaysia’s diversification strategy. 

Malaysia is underinvested.  

While Malaysian companies have a presence in Africa—particularly in oil and gas, commodities, infrastructure, hospitality, and selected services—many overlook Africa’s diversity and the wide range of growth opportunities it offers. Much of this involvement remains ad hoc, but this must change as we create a platform for long-term growth. 

Africa accounts for a very small share of Malaysia’s outward investment, remaining below 2 percent despite the continent’s vast market and the alignment between Malaysia’s capabilities and Africa’s development needs. The goal is not to abandon mature markets but to build a more balanced outward strategy.  

If Malaysia continues to invest only where others are already present, growth will be incremental. Africa presents a different proposition: higher growth potential, diverse sectors, younger demographics, and underdeveloped industries—providing Malaysian firms with opportunities to introduce tested, practical solutions suited to emerging markets. 

Where Malaysia can win 

Malaysia doesn’t need to compete with China, the United States, or Europe on scale. Our strength lies in our unique position—the “missing middle.’  

We understand emerging market realities because we have lived them. Malaysia industrialized, urbanized, and diversified its economy within a single generation. We transitioned from heavy reliance on commodities and oil and gas to thriving sectors like manufacturing, services, Islamic finance, tourism, healthcare, digital systems, and value-added industries. This experience is highly relevant and offers lessons for Africa. 

There are five key areas where Malaysia can be especially competitive: 

First, the halal ecosystem. In 2025, Malaysia’s halal exports reached RM68.52 billion, backed by strong governance, credible certification, and thriving sectors like food and beverages, halal ingredients, palm derivatives, and pharmaceuticals. This is more than just a product focus—it’s a comprehensive system involving standards, certification, SME development, logistics, branding, and building trust. 

Second, palm downstream and agro-processing. Africa boasts 60 percent of the world’s uncultivated arable land, and global food demand is set to increase significantly. Malaysia’s palm oil exports reached 16.9 million tonnes in 2024, with downstream segments like oleochemicals and finished products playing a vital role. The opportunity for Africa isn’t just exporting raw products—it’s about developing processing capabilities, standards, supply chains, supporting smallholders, and adding value. 

Third, Islamic finance. Many African nations require long-term capital for infrastructure, agribusiness, energy, housing, and SMEs. Malaysia’s credibility in Islamic banking, sukuk structuring, takaful, and blended finance can be highly relevant, especially in markets with large Muslim populations and governments seeking alternative financing options. 

Fourth, healthcare. Malaysia has built a robust healthcare ecosystem with excellent private providers, specialized capacity, medical tourism expertise, and cost competitiveness. In 2023, healthcare tourism generated RM2.25 billion with over a million visitors, aiming for RM2.4 billion in 2024. Africa’s growing middle class, urbanization, and healthcare gaps create exciting opportunities for hospital partnerships, diagnostics, digital health, training, and medical management. 

Fifth, digital systems. Africa has already leapt ahead in mobile money, digital payments, and platform services. Malaysia’s role is not just to sell software but to bolster digital public infrastructure—identity systems, payments, service delivery, data management, and disciplined implementation. 

Let’s think beyond conventional boundaries—by embracing these opportunities, Malaysia can inspire growth and innovation not just for ourselves, but as a catalyst for others to step out of their ‘box.’ 

Returns are attractive, but not automatic 

Infrastructure investments in Africa have been cited as capable of generating low-to-mid teens US dollar returns for operational projects, and higher returns for construction-to-maturity projects. But this comes with a clear condition: investors need patience, strong local relationships, robust due diligence, and the right partner on the ground.  

This is where many companies fail. They enter based on headlines. They follow a trend. They underinvest in local understanding. They assume a Malaysian solution can be copied and pasted. They do not spend enough time on political economy, offtake, regulation, payment risk, land issues, or local partnership quality. 

Africa is often misunderstood as a single market, but this is a misconception.  

East Africa boasts some of the continent’s fastest-growing and reforming economies.  

West Africa has significant demographic weight and a large consumer base.  

Southern Africa is more familiar to many institutional investors and provides more established entry points.  

North Africa’s strategic proximity to Europe and the Middle East adds another dimension.  

Each region faces different political conditions, consumer behaviours, regulations, currencies, risks, and growth patterns. For Malaysian businesses, the question should not be “Should we enter Africa?” but rather, “Which country, sector, partner, and route to scale?” 

Today, Africa resembles early ASEAN markets; fragmented, with uneven regulations and infrastructure gaps. However, these challenges also create opportunities for first movers who understand local contexts and build patient partnerships. Such early entrants can not only follow market trends but also help shape the market’s development. 

The effective approach is clear: select countries committed to reform; focus on sectors aligned with national priorities; collaborate with credible local partners; target actual demand rather than just market size; and approach with patient capital. Localise successful strategies from Malaysia and scale carefully, debunking the misconception that Africa is a uniform, easily accessible market. 

The real opportunity is in execution 

At PEMANDU Associates, our experience in Africa has reinforced one important lesson: plans do not transform economies. Execution does. 

When PEMANDU was part of the Malaysian Government, the National Transformation Programme was built around aligning public sector priorities, citizen needs, and private-sector capital. That same principle remains relevant in Africa. Governments need growth. Citizens need jobs and better services. Investors need bankable opportunities, regulatory clarity, and confidence that decisions will move forward. 

The bridge between these needs is execution. 

This means identifying priority sectors, translating policy into implementable projects, removing bottlenecks, aligning ministries and agencies, tracking progress and solving problems continuously. It also means building local capability from day one, not creating dependency on consultants. 

Malaysia’s value to Africa should therefore go beyond trade missions and one-off investments. We should help build investable sectors, institutional capability, execution discipline and long-term partnerships. 

From ad hoc projects to a platform approach 

Malaysia’s Africa strategy must shift from opportunistic to deliberate. 

We should build a platform that brings together Malaysian companies, GLCs, SMEs, financiers, government agencies and diplomatic channels. MATRADE, MIDA, MDEC, Wisma Putra, development finance institutions, Islamic finance players and sector champions should align around a sharper Africa agenda. 

The focus should not be “Africa in general”. It should be on priority corridors, priority countries and priority sectors. 

For example, East Africa may be a natural entry point for digital systems, halal trade, agro-processing, healthcare and logistics. Botswana and Rwanda offer reform-driven environments. Kenya and Tanzania provide scale and regional access. Nigeria and other West African markets offer consumer depth but require stronger local navigation. Southern Africa offers more familiar institutional structures for infrastructure and services. 

This should be treated as a portfolio. 

Different markets will serve different purposes: some for trade, some for investment, some for partnerships, and others for long-term platform development. Not every Malaysian company needs to enter in the same way. 

Why now 

The continent is already home to more than 1.4 billion people. By 2050, the United Nations projects that Africa’s population will approach 2.5 billion, meaning more than one quarter of the world’s population will be African. At the same time, the African Continental Free Trade Area is building a single continental market of 1.4 billion people and about US$3.4 trillion in combined GDP across 55 countries. That is not a marginal opportunity. It is the next major demand centre. 

Africa is urbanising, industrialising and reforming. Its young population will drive future consumption, workforce growth and digital adoption. The IMF expects sub-Saharan Africa’s regional growth to remain around 4.3 per cent in 2026, even amid global uncertainty and significant country-level differences.  

At the same time, global supply chains are shifting. Trade tensions are rising. Companies are rethinking concentration risk. Governments are seeking new partners beyond traditional blocs. South-South cooperation is no longer a slogan. It is becoming an economic necessity. 

Malaysia should not wait until Africa becomes obvious to everyone. 

By then, the best partnerships, concessions, distribution networks, local champions and policy relationships may already be taken. 

The choice for Malaysia 

Breaking into the African region is certainly not a walk in the park. But neither was Malaysia when early investors came here decades ago. 

We were once seen as a risky emerging market. Those who entered early, understood the country, and stayed the course benefited from Malaysia’s rise. Today, Malaysian businesses have the opportunity to take the same long view elsewhere. 

There is great power in making a differentiated choice. 

We can remain comfortable in mature markets and accept slower, incremental growth. Or we can build the capability, partnerships, and courage to enter the next major demand centre early. 

Africa is not a side story. It is part of Malaysia’s next outward-growth chapter. 

The opportunity is real.  

The gap is clear.  

The timing is now. 

Lab syndication in Botswana for the Botswana Economic Transformation Programme (BETP) 

Written by: 

Aida Azmi 

Joint Managing Director and Partner, PEMANDU Associates 

Sean Ong (Co-author) 

Executive Vice President at PEMANDU Associates 

———-  

Let’s transform together. Contact us at: https://pemandu.org/contact-us/ 

The post Malaysia’s Next Trade Frontier: Why Africa Matters Now  appeared first on PEMANDU Associates.

In the overall journey of the development and writing of national policy, there are, generally speaking, three phases:

1. Phase 1: Where those with the know-how come together to form the underlying idea behind what needs to be accomplished.
2. Phase 2: Where those ideas are refined, packaged and conveyed to relevant parties in a strategy document.
3. Phase 3: Where this strategy document gets transformed into tangible policy through successful (or unsuccessful) implementation.

Phase 3 is undoubtedly the most important. Today, however, I want to focus on Phase 2. Phase 2 often gets forgotten. Without Phase 2, there is no foundation for Phase 3. So, it is worth focusing on the human effort it takes to convert seemingly disjointed pieces of policy ideation into an executable strategy document.

To set the stage for Phase 2, I need to start with a little bit of context from Phase 1. So as not to be a closed exercise among policy specialists, the Ministry sought guidance from education experts within and outside the system. It also reached beyond the usual circles, seeking input from industry leaders, parents, uncles, and aunties. Students from public and private schools, across primary, secondary and tertiary levels, added their voices. The intent was deliberate. The Blueprint has to reflect the system as people experience it, not only as Ministry officials design it. Education policy shapes the daily experience of millions of students, the careers of teachers across the country, and the expectations of families who see education as the primary driver of social mobility. On a macro scale, it influences workforce readiness, national cohesion, and long-term economic competitiveness. The choices made in its pages determine which skills are emphasised, which gaps are addressed, and which communities receive attention or neglect. Tens of thousands of these voices were heard and gathered through Sesi Libat Urus (SLU) sessions, labs, syndications and roadshows, alongside structured focus group discussions and consultations with dozens of agencies, education leaders and public servants. The outputs of these thus bring us to Phase 2. For us, this meant inheriting not just slides and reports, but expectations that the eventual Blueprint would feel coherent to those who had spoken into it.

You Cannot Write It Alone

Data and word salad alone do not make a Blueprint. We are not writers. We are not designers. We’re consultants. We are facilitators, first and foremost. We know our limitations and so the first step towards a Blueprint is to bring in and manage a team who can cover these limitations. Fortunately, the right expertise was within reach.

First, our writers. A group of seasoned experts from award-winning social enterprises, leading education non-profits, and education policy experts formerly from the civil service were asked to lend a hand. The goal was to package policy such that its form became its function. If the Blueprint groups initiatives by theme, implementers align around themes. If it sequences reforms by phase, agencies plan budgets by phase. If KPIs and non-negotiable goals sit at the front, performance becomes central. Form directs attention, and attention drives action. 

For our writers, this means translating technical policy into language the public can understand while preserving policy specificity and impact. This means mediating between divisions with competing priorities, ensuring that one unit’s ambition does not contradict another unit’s responsibility. This means arguments and evidence structured with precision and deliberate language, leaving no room for ambiguity, leaving no room for confusion in implementation and accountability. This also means navigating political considerations, unavoidable in a national project of this scale. The choice behind every single word matters.

Second, our designers. It would be a mistake to see their work as mere decoration. Presentation in a national policy document is never an afterthought. Every layout decision is consequential. Policy buried in dense pages risks neglect. What is placed in a highlight box signals priority. A cluttered page weakens confidence while clear visual language demonstrates authority. Hundreds of pages of drafts, rough charts, and rudimentary tables – these had to be translated into a document that reads with coherence from cover to cover. 

A Minister must be able to identify the direction within seconds. A district officer must be able to understand operational detail without frustration. A member of the public must not feel excluded by technical density. Yes, the  Blueprint must look pretty, but aesthetic choices go beyond ornament. The cover must deliver a thousand words in one image. The typography signals professionalism. The charts must convey clarity. The pictures must speak to the people who will be affected by the execution of the words on the page. In a document that will be debated, quoted, and scrutinised for years to come, institutional credibility is built as much through visual clarity as through content.

Coordination Is Never Just Administrative

Third, our team, the consultants. We are neither the authors of policy nor the designers responsible for visual language, but rather the keepers of time and movement. In any project – let alone one of this scale – ideas expand and multiply, stakeholders add layers, and timelines compress. Without disciplined project management, complexity morphs into blockers that stall progress. Our responsibility was to manage that complexity and keep things moving. That meant not only tracking timelines and deliverables, but ensuring that discussions converged toward action. In rooms filled with strong and well-founded views, someone has to call for resolution, to ensure that direction is agreed, progress does not stall, and that not a single minute is wasted. We set cadence for regular and timely submissions and ensured decisions were made. We managed scope, preventing suggestions from expanding into unmanageable derailments. We aligned expectations between writers, designers, and clients, escalating when necessary. Momentum is fragile and once lost, it is hard to recover. In large national projects, coordination therefore goes beyond administration. It is the difference between movement and stagnation.

Writers shaped meaning. Designers shaped form. And the consultants ensured the entire effort moved forward as one coherent whole.

A month after kickoff, we had in our hands extremely preliminary rough drafts of the core content chapters. A decision was made to hold a week-long writers’ workshop away from the usual pace of the city, meant to hold us, our writers, and their Ministry counterparts in one place, dedicated to churning out refined material while also setting time to subject the material to wider feedback. Removed from daily routines, it was expected that we would work from dusk till dawn. In a tower atop the hills, surrounded by rain and fog, one of our writers remarked on the pathetic fallacy of it all. Low visibility, an unclear path, and a steep climb ahead. The chapters we had were substantial but uneven, with some sections rich in argument but thin on evidence, while others were technically sound but inaccessible to a broader audience – clearly shaped by different hands and not yet speaking in one voice. Time did not allow for leisurely refinement. We had to circulate refined drafts to eminent voices across the system. Former senior civil servants, education leaders, non-profit figures – each carried views that added clarity, sharpened arguments, but also questioned fundamental framing. Some suggested scope expansion at the precise moment we were trying to contain it. Every endorsement was heartening, while every objection required addressing. This workshop went beyond writing. It was a sequence of snowballing decisions. What do we stand by? What do we cut? How do we manage all these tensions to produce one coherent draft? Clarity came as the week progressed. We left with better drafts, more chapters, and integrated expert feedback. The first full draft was in hand, and we had begun shipping them off for design. That week set the tone for the remaining months ahead. Alignment must be built, not assumed, decision by decision.

No Thing Too Small

If that week was about ensuring the broad strokes were sound, the next couple months were about precision. The drafts we sent to the designers returned as designed chapters awaiting review. Arguments about direction became arguments about diction. The client reviewed these, and comments returned line by line, even word by word. Often, we went to the Ministry and parsed these lines together, questioning, redlining, and replacing words and phrases. Certain terms were deemed too technical for public comprehension, while others were seen as too casual where increased specificity would be welcome. Sentences that seemed settled reopened under fresh interpretation. Paragraphs were tightened, expanded, reordered. References were checked and rechecked. Definitions were aligned across chapters to prevent contradictions. Initiative titles were changed then changed again. The work was incremental but relentless – version numbers climbed steadily, and a single chapter could go through multiple iterations in a week. Debates were convened on whether one word conveyed intent more accurately than another. Minor revisions carried larger implications for tone, authority, and implementation ownership. An adjustment of a word in a paragraph in a section of a chapter often necessitated a consistent reflection across headings, diagrams, charts, the table of contents, the glossary. Nothing existed in isolation, and a small shift in one place required ripple edits somewhere else. This stage carried with it no singular crisis, but rather an accumulation. An accumulation of edits. Of clarifications. Of expectations. There was not a single day we didn’t wake up to a flurry of messages from the clients, writers, or designers. The discipline required here was different from the early sprint in the week-long workshop. It demanded patience, it demanded endurance. The Blueprint had to be read as if it had emerged fully formed, in one coherent voice, even though it had been stretched and tested through countless rounds of scrutiny. Precision was non-negotiable.

When Authority Enters the Room

With the launch ceremony imminent, there was not much time left, with numerous attritional changes still to be made. Nevertheless, we were one with the client in pushing through these final few days. It simply had to be done. We were almost at the finish line, and while no one wanted to say it, we were waiting for the other shoe to drop. At this stage, what could go wrong?

The other shoe dropped. A decision had been made to make systematic changes to key terms across the entire document. A political decision, but a necessary one nevertheless. Words that had been debated, defended, and aligned over months had to be replaced with alternatives. These substitutions were not isolated. They appeared in body text, in the table of contents, in diagrams, in the appendix. The consultants spent those days marking these changes on the latest PDF version. The writers and their Ministry counterparts did the same while also making the accompanying changes in sentence structure, ensuring the appropriate prefixes and suffixes were used, and that context was preserved. The designers had to apply these changes in their InDesign file, reflowing layouts where longer words altered spacing. The launch date did not move. What could have unsettled the entire process instead forced clarity of roles. All involved did their part with renewed focus, without complaint, making sure nothing slipped through. This episode reinforced a simple truth – in national policy work, political judgment is inseparable from technical design. The strength of a team lies in its ability to respond with composure when that judgment asserts itself, and that clarity of roles matters most when complexity peaks. When everyone understands their responsibility, even compressed timelines are navigable. Those final days were not elegant, but we had the Blueprint finalised for the launch in good time. A few hardcover copies, to be displayed at the ceremony, were to be printed. We were now ready to launch. 

At Some Point It Leaves You

Tuesday, 20th January 2026. Finally, the Blueprint was to be unveiled to the nation. The Prime Minister gave his speech to a room of over a thousand, surrounded by ministers, senior officials, education leaders, teachers and students. As with many of these official launch events, there is a gimmick involved – in this launch, for example, there was a person dressed as a robot who ran towards the stage holding a glowing cylinder. This cylinder was passed to the Prime Minister, who placed it into a receptacle on his rostrum, and on the big screen appeared the cover of the Blueprint. Standing on stage alongside him were the Deputy Prime Ministers, the Minister of Education, and the Minister of Higher Education. Printed hardcovers of the Blueprint were distributed between them. I have never been fond of these gimmicks. But as I watched the cover flash across the screen, and the hardcovers being flipped through on stage, knowing the pages we had debated and revised and worked on for what seems like an endless period of time were now tangible, I felt simultaneously a sense of pride and relief. I know my team felt the same. At this moment, the document ceased to be a draft. It had become a national commitment.

With the launch, Phase 2 came to an end. In the weeks that followed, many voices spoke and opined on the Blueprint. Friends and family sent messages, podcasts and radio shows debated its merits. Some views I agreed with. Others I did not. What was unmistakable, however, was that people across this nation care deeply about education and its beneficiaries. As I wrote at the beginning of this essay, the true test of the Blueprint lies in its implementation, and this responsibility now rests in the hands of those who will carry it into classrooms, departments, and budgets. The Blueprint is written. The real work begins.

Written by:  

Aaron Lugun Raj, Senior Associate

———- 

Let’s transform together. Contact us at: https://pemandu.org/contact-us/  

The post Inside The Making of a National Blueprint appeared first on PEMANDU Associates.

Entering its next phase of development from a position of strength, Johor is already among Malaysia’s largest economic contributors and serves as the nation’s southern gateway, deeply integrated into regional and global value chains. Anchored by long-term initiatives such as Maju Johor 2030 and the Johor–Singapore Special Economic Zone, the state has both a clear ambition and strong economic momentum. 

As Johor’s investment pipeline expanded rapidly in both scale and complexity, a defining strategic question naturally emerged – one that would shape the state’s next chapter of transformation. 

A Strategic Inflection Point 

As the state government assessed Johor’s economic trajectory, a critical opportunity became clear: the need to complement strong investment attraction with faster and broader realisation of the capital already committed. While Johor had been highly successful in securing approvals, the pace at which projects translated into operational outcomes began to lag the scale of new commitments. 

This was not a reflection of weak fundamentals or institutional shortcomings. Rather, it was the result of success outpacing existing delivery mechanisms. As approval volumes grew, the demands on infrastructure readiness, regulatory coordination, and cross-agency execution intensified. 

Without a deliberate shift in strategy, organic growth alone would be unlikely to close the gap to Johor’s RM260 billion GDP target by 2030. Investment approvals could continue to rise, but without accelerated realisation, their full contribution to GDP expansion, quality job creation, and income growth would remain constrained. 

More critically, Johor faces a time-sensitive opportunity to fully capitalise on transformational catalysts already in motion, most notably the Johor–Singapore Special Economic Zone and the growing influx of hyperscale data-centre investments by global technology leaders such as Microsoft, AirTrunk, and BridgeDC. Coordinated action would be required to ensure these developments deliver their intended economic and multiplier effects. 

The Cost of Inaction 

In the absence of targeted intervention, there was a risk that existing structural patterns would persist. Economic activity could remain concentrated around Johor Bahru, limiting the pace at which benefits diffuse across districts and weakening inter-district economic linkages.  

At the same time, rising demand for power, industrial land, water, and approvals capacity could place increasing pressure on infrastructure and utilities systems, creating bottlenecks that slow project mobilisation and discourage higher-value investments. 

From a longer-term competitiveness perspective, the implications were even more significant. In an increasingly competitive global environment, investors assess not only fundamentals, but also execution capability. Jurisdictions that consistently demonstrate speed, coordination, and delivery gain a durable edge. 

The opportunity at stake, therefore, was not merely incremental growth, but Johor’s ability to secure its future as a high-income, technology-driven regional economic powerhouse—one where prosperity extends across districts and communities. 

Execution as the Differentiator 

As Johor reached a strategic inflection point driven by the Johor–Singapore Special Economic Zone and rising high-value digital and industrial investments, it became clear that ambition and approvals alone were no longer sufficient. The real determinant of success was execution: the ability to convert commitments into operational projects that deliver sustained economic impact. 

Crucially, the analysis showed that these challenges were not isolated or structural constraints beyond the state’s control. Instead, they were systemic and cross-cutting, spanning infrastructure readiness, regulatory processes, investment facilitation, and talent availability, highlighting the need for coordinated, end-to-end solutions rather than isolated fixes. 

This realisation marked a turning point in the programme’s direction. It underscored the need for a coordinated, whole-of-government approach focused on investment realisation, supported by targeted Flagship Initiatives to remove systemic bottlenecks. Ultimately, the ‘aha’ moment was empowering. Johor already possesses strong foundations—strategic location, industrial depth, institutional capability, and investor trust. By re-orienting its focus from attraction to delivery, the state is well positioned to unlock tangible, inclusive prosperity for all Johoreans. 

The Needle Mover 

The Johor Economic Transformation Programme (JETP) required deliberate prioritisation. Johor’s economy is diverse and dynamic, with momentum across advanced manufacturing, digital infrastructure, healthcare, logistics, tourism, aerospace, and agriculture. The initial assessment surfaced a vast universe of opportunities drawn from state and federal plans, agencies, and industries. 

Yet, in a volatile global environment, characterised by macroeconomic uncertainty, shifting trade regimes, and rapid technological disruption, attempting to pursue everything at once risked diluting focus and overwhelming institutional capacity. 

The challenge was to prioritise decisively without constraining ambition. 

To guide this choice, each potential initiative was evaluated through a structured prioritisation lens. Key considerations included alignment with Johor’s long-term economic vision and priority sectors; the ability to unlock systemic change and multiplier effects; impact on critical bottlenecks such as infrastructure readiness, regulatory efficiency, talent availability, and investment realisation; and readiness for rapid mobilisation within the 2030 horizon. Just as importantly, initiatives were assessed on their contribution to resilience and diversification in the face of external shocks.  

These choices fundamentally shaped JETP’s trajectory. By narrowing the agenda to a targeted set of high-impact projects and flagship initiatives, JETP shifted from a broad catalogue of ideas to a focused, execution-oriented transformation agenda. This clarity enabled stronger coordination across government, state-linked companies, and the private sector, accelerated mobilisation, and ensured that Johor’s transformation is not only ambitious, but deliverable – positioning the state to compete, adapt, and thrive in an increasingly complex global economy. 

Johor’s experience demonstrates that the true differentiator between good economies and great ones is the ability to convert approved capital into realised outcomes through disciplined prioritisation, whole-of-government coordination, and relentless execution. This is where transformation takes hold. 

This is the work that defines PEMANDU Associates: not just advising governments, but partnering with them to turn ambition into reality, ensuring that every Johorean, and every Malaysian, benefits from the prosperity that strategic transformation can deliver. 

Written by:  

Mohamad Razeen bin Amran, Vice President
Jeriel Ding Kai Shen, Senior Associate

———- 

Let’s transform together, contact us at: https://pemandu.org/contact-us/ 

The post From Attraction to Delivery: Johor’s Next Chapter of Economic Transformation  appeared first on PEMANDU Associates.

The energy transition is often framed around the technologies we build: more wind farms, more battery storage, more interconnectors. But the next frontier may lie in how we value and monetise the performance of what we already have. This shift would transform asset management from a defensive discipline to a proactive engine for revenue, resilience, and sustainability.

Background: Why the Current Model Falls Short

Asset management in the energy sector has historically been concerned with reliability, life extension, and cost control. This focus is essential, but it is also narrow. Exceptional resilience under stress is not rewarded. Preventing an outage through predictive analytics does not create a new line item in revenue. Sustainability reporting is often a compliance exercise rather than a core driver of valuation. In effect, we manage assets to keep them running, not to make them more valuable.

Three Linked Innovations for the Future 

The emerging vision for energy infrastructure rests on three linked innovations that work best together. 

First, Energy Reduction Assets (ERAs) create a financial value for energy efficiency. Think of ERAs as “white certificates 2.0”: instead of generic offsets like carbon offsets that compensate for emissions elsewhere, ERAs monetise measured, metered demand reduction at source against an agreed baseline. Precedents exist; Italy’s White Certificates scheme (Titoli di Efficienza Energetica) obligated distributors to meet quantified efficiency targets and certified millions of toe of primary energy savings, demonstrating that verified efficiency can be traded at scale. For instance, if a city upgrades its street lighting to ultra-efficient LEDs, the verified difference between baseline and actual consumption can be packaged into ERA credits and sold. This is a direct reward for reducing demand, not a balancing act for emissions produced elsewhere. 

Second, blockchain-secured digital twins provide the verification backbone for this model. Digital twins are virtual replicas of physical assets that already help operators optimise maintenance and performance. Digital twins are moving from pilots to a real market: estimates place the global digital twin market at ~USD 25B in 2024, with projections above USD 150B by 2030, driven in part by energy and utilities use cases. When paired with blockchain, their data becomes tamper-proof and auditable in real time. This ensures that ERA credits or other performance-linked revenues are backed by trustworthy records, accessible to regulators, investors, and insurers without dispute. 

The consequences of underinvesting in modern energy infrastructure are already visible. In the first half of 2025, Scottish wind farms were forced to curtail 37% of their potential output, with operators compensated to switch off, a decision that ultimately cost UK households an estimated £810 million. Across the wider UK, almost 10% of wind generation was curtailed in 2024, rising to 30% in Northern Ireland, due to grid capacity constraints. This is clean, low-cost energy being wasted, not because the technology failed, but because the supporting infrastructure could not keep pace. Effective asset management coupled with valuation models that reward resilience and performance, such as Energy Reduction Assets could transform these losses into measurable, tradable value streams that incentivise timely upgrades rather than payouts for wasted potential. 

Third, NAC-inspired valuation reframes infrastructure as a provider of ongoing services rather than as depreciating hardware. In the environmental space, Natural Asset Companies value ecosystems for the services they deliver, such as water purification or carbon sequestration. In the energy sector, a transmission network might be valued for the stability it provides to the grid, or a battery system for the resilience it offers during extreme weather. These services, once measured and verified through digital twins, could themselves become monetisable attributes. Service-based valuation is gaining mindshare, pricing stability and resilience services (e.g., frequency regulation or storm-season capacity) rather than just capex. Markets like California’s show batteries delivering far beyond the minimum regulation requirements, signalling that service markets can scale and be monetised independently of energy sales. 

How Would It Work?  

Figure 2 The Layered Value Stack – how blockchain verification, Energy Reduction Assets, and service-based valuation build into a diversified revenue model for energy infrastructure investors 

Consider a coastal wind farm approaching mid-life. With targeted upgrades and predictive maintenance, it runs more efficiently and with fewer outages than its peers. A blockchain-secured digital twin provides continuous proof of these gains. Reduced backup power needs are quantified as avoided energy demand, converted into ERA credits, and sold into a regional market. The farm’s stability during seasonal storms is also monetised as a resilience service, attracting investment from grid operators seeking guaranteed capacity. 

For investors, this creates complementary revenue streams. First, verified ERA credits generate sales proceeds, shared with investors via equity or tokenised performance rights. Buyers may include corporates pursuing efficiency targets, utilities under regulatory pressure, or municipalities seeking sustainable capacity without new builds. 

Second, service-based contracts allow resilience capacity to be sold like a capacity market product, with fixed payments tied to agreed service levels. Finally, tokenised performance rights can be traded, offering capital gains as demand for high-quality verified assets grows. This blend of operational income, credit sales, and tradable rights can deliver stronger returns than conventional infrastructure, which is often long-term and illiquid. 

Why This Changes the Game 

Crucially, it changes incentives. Instead of maintaining assets to avoid loss, owners would have reason to enhance performance continuously — not only for environmental or operational reasons but because it pays. 

This model shifts value creation from pure output to performance. Asset owners monetise operational excellence; investors gain fractional access to diverse revenue streams; regulators link returns to efficiency and resilience. Incentives change: owners enhance performance continuously, not just to avoid losses but because it pays. 

Challenges remain; tokenisation infrastructure is nascent, ERA market rules are incomplete, and poorly designed blockchain can be energy-intensive. Equity concerns also risk favouring large players over smaller owners. These can be addressed through regulatory sandboxes, low-energy blockchain protocols, shared ownership models, and clear governance. 

The energy transition will demand more than new technology; it will require new ways of valuing what we already have. Linking ERAs, blockchain-secured digital twins, and NAC-inspired valuation offers a pathway to make performance itself a tradeable commodity. This is not carbon offsetting by another name, it is a direct monetisation of measured efficiency, resilience, and service quality. 

Consultants and industry leaders could shape the frameworks that make this possible, bridging technical innovation with market design and regulation. If we succeed, asset management will move from the background of the energy sector to its forefront — not just keeping the lights on but helping fund the very future of the grid. The question is no longer if such a transformation can happen, but who will lead it. 

Written by: 

Nicolette Cross, Senior Associate 

References 

CAISO. (2023). 2023 Special Report on Battery Storage. California Independent System Operator. Retrieved from https://www.caiso.com 

CAISO. (2024). 2024 Special Report on Battery Storage. California Independent System Operator. Retrieved from https://www.caiso.com 

CAISO. (2024). Q3 2024 Market Issues & Performance Report. California Independent System Operator. Retrieved from https://www.caiso.com 

Energy Efficiency 2023. (2023). IEA Energy Efficiency 2023 Report. International Energy Agency. Retrieved from https://www.iea.org/reports/energy-efficiency-2023 

Grand View Research. (2024). Digital Twin Market Size, Share & Trends Analysis Report. Retrieved from https://www.grandviewresearch.com 

Italian National Institute for Environmental Protection and Research (ISPRA). (2023). White Certificates – Energy Efficiency Titles. Retrieved from https://indicatoriambientali.isprambiente.it 

MarketsandMarkets. (2024). Digital Twin Market for Energy & Utilities. Retrieved from https://www.marketsandmarkets.com 

Murray, J. (2025, January 23). UK wind farms paid to switch off, costing households £810m. Financial Times. Retrieved from https://www.ft.com 

Sifat, M. M. H., Choudhury, S. M., Das, S. K., Ahamed, M. H., Muyeen, S. M., Hasan, M. M., Ali, M. F., Tasneem, Z., Islam, M. M., Islam, M. R., Badal, M. F. R., Abhi, S. H., Sarker, S. K., Das, P. (2023). Towards electric digital twin grid: Technology and framework review. Energy and AI, 11, 100213. 

Yale Climate Connections. (2022, October 10). Energy loss is single biggest component of today’s electricity system. Retrieved from https://yaleclimateconnections.org

The post The Infrastructure That Pays for Itself: Monetising Performance in the Energy Transition  appeared first on PEMANDU Associates.

To become a high-income, digitally enabled nation and regional leader in the digital economy, Malaysia must look beyond treating telecommunications as a utility and start treating it as a national competitiveness driver^[2]. 

The Infrastructure Multiplier: Beyond Connectivity 

Nations compete for economic leadership, and strategic telecommunications infrastructure has become one of the most powerful levers for transformation. Unlike traditional infrastructure that serves specific sectors, modern telco infrastructure is sector-agnostic, a force multiplier for healthcare, education, agriculture, manufacturing, services, and more. 

Modern telecommunications infrastructure functions as an “enabling technology,” a foundational capability that unlocks productivity gains across multiple sectors simultaneously. Every ringgit invested in strategic telco infrastructure generates compounding economic benefits that ripple across the economy. 

Global studies highlight the scale of this effect. The World Bank found that a 10% increase in fixed broadband penetration correlates with 1.38% GDP growth in developing economies and 1.21% in developed economies ^[3]. Huawei’s 2024 Global Digitalisation Index (GDI) shows that in frontrunner countries, each one-point GDI gain creates 5.4 times more economic value than in starters. They also found that every US$1 invested in digital transformation returns US$8.3 to the digital economy^[4]. 

For Malaysia, the takeaway is clear. When nations pair robust digital foundations with ubiquitous connectivity, they reinforce each other. That is the true multiplier, and it is how we bridge divides and drive inclusive growth.  

Where Malaysia stands in Digital Competitiveness 

The IMD World Digital Competitiveness Ranking ^[5] measures the capacity and readiness of economies to adopt and explore digital technologies for economic and social transformation evaluated across three main factors, namely, knowledge, technology, and future readiness. 

In 2024, Singapore ranked #1 globally, climbing two spots from previous year. Malaysia, by contrast, ranked ninth (9^th) in Asia-Pacific, positioning us as a mid-tier player in one of the world’s most digitally dynamic regions.  

Huawei’s GDI ^[5a] puts Malaysia in the “Adopter” tier, with a score of 49.9 trailing “Frontrunners” like the US and Singapore. This shows that while we have built decent foundations, we have not yet translated connectivity into competitiveness. 

Malaysia has built strong digital foundations but has yet to fully translate connectivity into competitive advantage. Targeted infrastructure investments can turn Malaysia from an adopter into a frontrunner. 

Regional Benchmarks: Strategic Infrastructure as Development Catalyst 

1) Singapore’s Smart Nation Integration Model  

Singapore’s approach to telecommunications infrastructure demonstrates how strategic coordination can maximize economic impact despite geographic constraints. Singapore’s integrated strategy has generated: 

• A digital economy contributing 17.3% of GDP, significantly above regional averages ^[6] 

• Ranked third (3^rd) in the world as part of United Nations e-Government Survey on government digital services across 193 member states ^[7] 

• A leading fintech in the region with over 1,300 FinTech firms and over US$4.1B in FinTech investment in 2022 ^[8], enabled by robust digital infrastructure and proactive support from Monetary Authority of Singapore ^[9] 

Singapore’s success stems from treating telecommunications infrastructure as an integrated economic development platform rather than a standalone utility, creating synergies between government digitalisation, business innovation, and citizen services. 

2) South Korea’s Next Generation Infrastructure Leadership ^[10] 

South Korea’s strategic telecommunications infrastructure investments during the 1990s and 2000s did not just create a telecommunications sector, it enabled the emergence of global technology champions like Samsung Electronics, LG, and Hyundai’s digital transformation. As the world’s first country to launch nationwide 5G services, South Korea’s approach demonstrates the multiplier effects of investing in next-generation telecommunications infrastructure as it provides a compelling case study to leapfrog industry development: 

• Government investment commitment of more than KRW30 trillion (approximately RM91.1 billion) through public-private collaboration to build its 5G ecosystem^[11] 

• Projected domestic economic impact of US$30.3 billion by 2025 and economy is predicted to grow to at least USD 47.8 billion by 2030 ^[12] 

• Healthcare innovation with 5G-powered telemedicine such as machine learning capabilities for operation data analysis, and ICT-based chronic disease management service ^[13] 

• Smart factory solutions such as 5G-AI machine vision for product defect detection ^[14] 

South Korea’s 5G-first approach bypassed incremental 4G investments, instead building infrastructure capable of supporting applications that were not possible with previous generation technologies. This strategic choice positioned South Korea as a global testbed for 5G applications while attracting international technology companies and research investments. 

3) Hong Kong’s Data Infrastructure Hub Model: Leveraging Strategic Position  

Hong Kong’s telecommunications infrastructure strategy demonstrates how geographic positioning and sector-specific focus can create outsized economic impact despite limited physical space. Hong Kong’s approach provides particularly relevant lessons for Malaysia given similar roles as regional business hubs. Hong Kong has developed into one of Asia-Pacific’s most strategic data-centre hubs driven by its dense submarine cable networks^[15] and one of Asia-Pacific’s most established data centre hubs with total data centre capacity per capita of USD 81.6 billion, second only to Singapore’s USD 166.8 billion ^[16]. Hong Kong’s strategic investments generated measurable benefits: 

• Hong Kong’s SuperTerminal 1, Hactl and HKT deployed a 5G private network enabling Autonomous Electric Tractors to operate with real-time coordination, dynamically adapting to traffic and safety conditions while minimizing human intervention and boosting automation. ^[17] 

• Hutchison Port Holdings Trust implemented 5G-linked systems controlling remote rubber-tyred gantry cranes (RTGCs) and AI-enhanced CCTV with intrusion detection, enabling greater automation, reduced costs, and improved accuracy and safety. ^[18] 

• 75% of financial institutions in the city have already implemented at least one generative AI (GenAI) use case or are actively piloting one with projected adoption to reach 87% within the next 3–5 years, signalling robust momentum in leveraging AI across banking operations.^[19] 

Hong Kong’s approach offers clear lessons for Malaysia. By maximising its geographic advantage to become a regional gateway, aligning telecommunications infrastructure with its core strengths in finance and trade, and building cross-border capabilities to facilitate regional business operations, Hong Kong has positioned itself as a digital hub. These strategic principles, location leverage, sector-specific alignment, and seamless regional facilitation provide valuable insights for Malaysia as it seeks to harness its own diverse economy for digital competitiveness. 

From Advantage to Action  

Regional examples show that nations that win in digital competitiveness do not just expand coverage, they convert infrastructure into productivity and new industries. Malaysia is no different. Like Singapore, South Korea, and Hong Kong, we hold clear advantages – a central location in ASEAN’s trade routes, a diverse economy spanning agriculture, manufacturing, and services, and a skilled workforce ready to adopt modern technologies. Add to this a proven record of executing national programmes, and the foundations are already strong. 

But advantages alone do not create competitiveness. The real test is whether Malaysia can align its many stakeholders, ministries, regulators, telecommunications providers, enterprises, SMEs, and citizens behind a single True North to turn connectivity into higher productivity, better services, and higher-value jobs which contributes to the nation’s economy. Too often, infrastructure is deployed without clear links to sectoral outcomes, or initiatives move in silos without shared ownership. 

This is where discipline matters. PEMANDU’s transformation approach, honed through its 8-step BFR methodology, helps solve this problem by providing a way to convene diverse actors, co-design solutions, and lock in measurable outcomes. The power of this discipline is not in rigid process, but in ensuring that multiple efforts add up to one ambition and that progress is tracked, validated, and adjusted when needed. 

Each stakeholder has a pivotal role. Government must act as the enabler, integrating infrastructure deployment with economic policy, streamlining permits, and embedding cross-sector coordination. Telecommunications providers must shift from selling bandwidth to offering solutions tied to sector needs. Large enterprises and anchor institutions like ports, hospitals, and universities must pilot and adopt new workflows to show what is possible, and SMEs and citizens must be empowered as adopters through affordable, plug-and-play bundles that combine connectivity, applications, and support. 

When these efforts are aligned and measured, Malaysia can convert its latent advantages into tangible outcomes such as healthcare systems that reduce waiting times, education networks that broaden access, IoT-enabled farming that boosts yields, and 5G-ready industrial parks that anchor Industry 4.0. The discipline of the BFR approach ensures these ambitions do not drift into policy statements without impact but are delivered with accountability and transparency. 

Conclusion 

The region shows that those who treat telecommunications as a driver of competitiveness surge ahead. Malaysia must ensure investments are guided by transparency and measured by the outcomes. As Prime Minister Anwar Ibrahim cautioned, we must avoid the “trough of disillusionment” ^[20], where large allocations fail to deliver real change. Malaysia must now focus on outcomes, not just inputs. Acting with urgency and discipline will decide if Malaysia moves from coverage to competitiveness, or risks being overtaken by its peers. 

Written by: 

Atiqah Shazlin: Senior Manager 

References: 

[1] Ministry of Economy Department of Statistics Malaysia. (2025). ICT Use and Access by Individuals and Households Survey Report, 2024. Retrieved from https://www.dosm.gov.my/site/downloadrelease?id=ict-use-and-access-by-individuals-and-households-survey-report-2024&lang=English&admin_view= 

[2] Ministry of Economy. (2021). Malaysia Digital Economy Blueprint. Retrieved from https://ekonomi.gov.my/sites/default/files/2021-02/malaysia-digital-economy-blueprint.pdf 

[3] Michael Minges. (2015). Exploring the Relationship Between Broadband and Economic Growth. Retrieved from https://documents1.worldbank.org/curated/en/178701467988875888/pdf/102955-WP-Box394845B-PUBLIC-WDR16-BP-Exploring-the-Relationship-between-Broadband-and-Economic-Growth-Minges.pdf 

[4] Huawei. (2024). Global Digitalization Index 2024. Retrieved from https://www-file.huawei.com/-/media/corp2020/gdi/pdf/gdi-2024-en.pdf?la=en  

[5] IMD World Digital Competitiveness Ranking 2024 World Competitiveness Center. (2024). The digital divide: risks and opportunities. Retrieved from https://imd.widen.net/s/xvhldkrrkw/20241111-wcc-digital-report-2024-wip  

[6] Infocomm Media Development Authority & Lee Kuan Yew School of Public Policy, National University of Singapore. (2023). Singapore Digital Economy Report 2023. Retrieved from https://www.imda.gov.sg/-/media/imda/files/infocomm-media-landscape/research-and-statistics/sgde-report/singapore-digital-economy-report-2023.pdf  

[7] GovTech Singapore. (2025). Our digital government rankings. Retrieved from https://www.tech.gov.sg/about-us/our-achievements/our-digital-government-rankings 

[8] Monetary Authority of Singapore. (2024). FinTech and Innovation. Retrieved from https://www.mas.gov.sg/development/fintech 

[9] FIDE Forum. (2023). Event Report Observations from FIDE FORUM. Retrieved from https://fideforum.org/FideForum/media/documents/Singapore-Fintech-Festival-2023-Report-by-FIDE-FORUM.pdf  

[10] OECD. (2021). Korean Focus Areas: A global powerhouse in science and technology. Retrieved from https://www.oecd.org/en/publications/korean-focus-areas_f91f3b75-en/a-global-powerhouse-in-science-and-technology_61cbd1ad-en.html#:~:text=Korea’s%20rapid%20digital%20transformation,high%2Dquality%20connectivity%20becomes%20essential.  

[11] Ministry of Science and ICT. (n.d.). Science, Technology & ICT Newsletter( NO.41 ). Retrieved from https://www.msit.go.kr/eng/newsLetter/view.do?sCode=&mId=&mPid=&pageIndex=3&newsLetterSeqNo=41&searchOpt=#:~:text=Also%2C%20the%20Korean%20government%20announced,nationwide%205G%20network%20by%202022.  

[12] Eastspring Investments. (2020). 5G & South Korea: Beyond the hype. Retrieved from https://www.eastspring.com/hk/insights/5g-south-korea-beyond-the-hype 

[13] STL Partners. (n.d.). Digital health in South Korea: five examples of digital health beyond telemedicine. Retrieved from https://stlpartners.com/articles/digital-health/digital-health-in-south-korea-five-examples-of-digital-health-beyond-telemedicine/  

[14] World Bank Group Korea Office. (2021). Entering the 5G Era: Lessons from Korea. Retrieved from https://documents1.worldbank.org/curated/en/852791623927787358/pdf/Entering-the-5G-Era-Lessons-from-Korea.pdf  

[15] Submarine Cable Networks. (2025). Hong Kong. Retrieved from https://www.submarinenetworks.com/en/stations/asia/hongkong  

[16] KPMG. (2025). The Asia Data Centre Landscape. Retrieved from https://assets.kpmg.com/content/dam/kpmg/cn/pdf/en/2025/03/the-asia-data-centre-landscape.pdf  

[17] TELECOM Review. (2025). HKT, Hactl Unveil Hong Kong’s First 5G-Enabled Air Cargo Terminal. Retrieved from https://www.telecomreviewasia.com/news/network-news/13090-hkt-hactl-unveil-hong-kongs-first-5g-enabled-air-cargo-terminal/#:~:text=Autonomous%20Electric%20Tractor%20(AET)%20Operations,leader%20in%20smart%20cargo%20operations.%E2%80%9D  

[18] Ionna, K. (2023). HPH Trust implements 5G technology at its Hong Kong container terminals. Container News. Retrieved from https://container-news.com/hph-trust-implements-5g-technology-at-its-hong-kong-container-terminals/ 

[19] The Government of the Hong Kong Special Administrative Region. (2025). Report on “Financial Services in the Era of Generative AI: Facilitating Responsible Adoption”. Retrieved from https://www.info.gov.hk/gia/general/202504/09/P2025040900279.htm  

[20] Bernama. (2025). Anwar cautions against ‘AI Productivity Paradox’ in digital transformation. The Edge Malaysia. Retrieved from https://theedgemalaysia.com/node/766915 

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While the statistic that approximately 24% of key plastic resins were recycled in 2019 offers a glimmer of hope, the accompanying information reveals critical shortcomings in the recycling ecosystem [3]. The reliance on limited collection systems, the voluntary nature and limited coverage of recycling initiatives, and the tendency for the informal sector to focus on high-value plastics leave a substantial amount of low-value plastics susceptible to leakage into the environment. Furthermore, the loss of 81% of the material value of disposed plastics represents a significant economic inefficiency and a missed opportunity for a circular economy [3].  

A Global Movement Toward a Plastics Treaty 

The issue of plastic pollution is not unique to Malaysia—it is a global crisis that has prompted international action. The United Nations Environment Programme (UNEP) has spearheaded negotiations for a legally binding Global Plastic Treaty, with the goal of addressing plastic pollution across its entire lifecycle, from production to disposal. The treaty, expected to be finalized by 2024, is being hailed as the most significant international environmental agreement since the Paris Climate Accord.  

Key discussions within the treaty negotiations highlight the need for extended producer responsibility (EPR), restrictions on harmful plastic additives, and harmonized global standards for recyclability. Malaysia’s participation in the treaty negotiations is a step in the right direction, but without robust domestic legislation, the nation risks falling behind in implementation, undermining its commitments to sustainability and responsible waste management.  

Why Malaysia Needs Comprehensive Legislation 

Despite the commendable development of two national roadmaps by the Ministry of Natural Resources and Environmental Sustainability (NRES)—the “National Roadmap Towards Zero Single-Use Plastics 2018-2030” and the “Malaysian Plastics Sustainability Roadmap 2021-2030″—the pace of implementation seems to be at a standstill. The Circular Economy Blueprint for Solid Waste in Malaysia (2025-2035) by the Ministry of Housing and Local Government (KPKT) was also released with the intent to address the value chain and waste generated towards a circular economy. However, key milestones such as the mandatory Extended Producer Responsibility (EPR) scheme and the phase-out of problematic plastics, have been delayed until 2030, leaving Malaysia with an unregulated plastic market for the foreseeable future.  

Without binding legislation, these roadmaps risk being aspirational rather than actionable. Enforceable regulations are necessary to close enforcement gaps, provide legal certainty for businesses transitioning away from virgin plastic dependency, and prevent the unchecked proliferation of plastic waste. Moreover, the instability within Malaysia’s environmental policy landscape has hindered continuity, making legislation an essential mechanism for ensuring long-term policy adherence.  

Managing Plastics Across the Value Chain 

Addressing plastic pollution requires a systemic approach that manages plastics across their entire lifecycle. Malaysia’s plastic value chain is complex, involving petrochemical producers, plastic manufacturers, retailers, consumers, waste management companies, and recyclers. Effective legislation must tackle all these stages, starting with production, where eco-friendly product design should be incentivized and the use of recycled content in plastic packaging mandated. On the consumption side, bans or levies on single-use plastics should be enforced while promoting reusable alternatives. Waste management must be standardized with an efficient collection and recycling system to ensure that all plastic waste is captured and processed effectively. Additionally, Extended Producer Responsibility (EPR) should be mandated, requiring producers to take responsibility for the end-of-life management of their products. This shift in accountability away from consumers and local governments would encourage industry-wide sustainability efforts and innovation in plastic waste reduction.  

Effective legislation should target all these stages: 

1. Production: Incentivizing eco-friendly product design and mandating the use of recycled content in plastic packaging. 

2. Consumption: Enforcing bans or levies on single-use plastics and promoting reusable alternatives. 

3. Waste Management: Establishing a standardized collection and recycling system, ensuring that all plastic waste is captured and processed efficiently. 

4. Extended Producer Responsibility (EPR): Mandating that producers take responsibility for the end-of-life management of their products, thus shifting the burden away from consumers and local governments. 

Lessons from Japan’s Plastics Legislation 

Japan’s “Plastic Resource Circulation Act,” enforced in 2022, offers a compelling case study for Malaysia. The law takes a holistic approach by addressing the entire lifecycle of plastics, promoting the 3Rs (Reduce, Reuse, Recycle), and enhancing circularity. The legislation mandates that manufacturers incorporate sustainability into product design, with incentives for eco-friendly materials, while retailers are required to reduce disposable plastics under strict government oversight. Businesses must comply with recycling targets, and municipalities collaborate with private recyclers to improve efficiency. Furthermore, companies are held accountable for the collection and recycling of plastic waste generated by their operations. Japan’s model demonstrates that comprehensive, enforceable policies can significantly reduce plastic waste and promote a circular economy. Malaysia should consider adopting similar legislative measures to align with its sustainability goals and global best practices. 

Key provisions from Japan’s Plastic Resource Circulation Act: 

• Design for the Environment: Manufacturers are required to incorporate sustainability into product design, with incentives for eco-friendly materials. 

• Single-Use Plastics Reduction: Retailers are mandated to reduce disposable plastics, with strict oversight from the government. 

• Mandatory Recycling: Businesses must comply with recycling targets, while municipalities collaborate with private recyclers to improve efficiency. 

• Corporate Responsibility: Companies must establish collection and recycling plans for plastic waste generated by their operations. 

The complexity of Malaysia’s plastic value chain, involving numerous stakeholders from raw material production to end-of-life treatment, significantly contributes to the challenges in implementing the national sustainability roadmaps. The sheer number and diverse interests of these actors necessitate a highly coordinated and collaborative approach, which the forthcoming act could potentially facilitate through clearer mandates and responsibilities. Japan’s move to legislate plastic circulation offers a compelling example of a comprehensive legal framework addressing the entire lifecycle of plastics, promoting the 3Rs and increasing circularity. Its blend of design incentives, reduction mandates, and facilitated recycling pathways holds valuable lessons for Malaysia as it embarks on developing its own dedicated legislation. The introduction and robust enforcement of such a law could indeed facilitate the alignments, enhancements, and improvements critically needed to propel Malaysia towards a truly sustainable future for plastics.   

A Call to Action: The Path Forward 

The Malaysian Government has signaled its intent to develop an act to tackle plastic pollution [4]. By enacting a comprehensive legislation that establishes legally binding targets for plastic reduction, recycling, and reuse, coupled with implementation of a mandatory EPR system that holds producers accountable, Malaysia can move from ambition to action. In addition, the act should also strengthen waste management infrastructure with clear funding mechanisms, and aligns with global treaty obligations to ensure compliance with international standards and enable a truly effective circular economy for the plastic lifecycle. The time to act is now, before plastic pollution further threatens our environment, economy, and future generations. 

Written by:   

Abdulmuiz Abd Aziz: Senior Vice President, Head of PA Lestari   

Anwar Azmi: Senior Associate  

Members of PA Lestari, a specialised unit of PEMANDU Associates for Sustainability & Climate Change 

Sources: 

[1] World Wide Fund for Nature (WWF). (2019). Study on Extended Producer Responsibility (EPR) Scheme Assessment for Packaging Waste in Malaysia. Retrieved from https://www.wwf.org.my/?28886%2FStudy-on-Extended-Producer-Responsibility-EPR-Scheme-Assessment-for-Packaging-Waste-in-Malaysia= 

[2] Fong, F. (2024, February 24). Malaysia Ranks Third In Ocean Pollution: A Rising Tide Of Plastic Peril. The Rakyat Post. Retrieved from https://www.therakyatpost.com/news/malaysia/2024/02/24/malaysia-ranks-third-in-ocean-pollution-a-rising-tide-of-plastic-peril/ 

[3] World Bank Group. (2021). Plastics Market Study for Malaysia: Plastics Circularity Opportunities and Barriers. Retrieved from https://www.worldbank.org/en/country/malaysia/publication/market-study-for-malaysia-plastics-circularity-opportunities-and-barriers 

[4] Malay Mail. (2024, June 6). Nik Nazmi: Malaysia to consider dedicated law to address plastic disposal and pollution. Retrieved from https://www.malaymail.com/news/malaysia/2024/06/06/nik-nazmi-malaysia-to-consider-dedicated-law-to-address-plastic-disposal-and-pollution/138391 

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