COMMENT | Cabotage policy: Let's get clever

COMMENT | There are two strong opposing views on the issue of the cabotage policy impacting the undersea internet cable industry, and both seem to have a strong argument with good intention that requires clarity.

However, on balance, the view that exemption from the cabotage policy for the industry is the right thing to do, must be given precedence for the sake of making our country an attractive investment destination for digital infrastructure, especially in light of our aspirations set out in the MyDigital Blueprint and to truly be the Heart of Digital Asean.

Let’s first discuss the view that the cabotage policy is detrimental in making Malaysia the choice for investment destination, especially high-value digital investment.

The Global Digital Economy runs on top of the internet, a digital infrastructure that spans the globe, consisting of data centres to house all the data and optical fibre cables that move data around the world. The only way for global data connectivity to take place in this digital infrastructure is via crisscrossing cables under seas and oceans to reach every country, and hence they are called submarine cables.

They are essential strategic assets for countries to be part of the global digital infrastructure, as economic activities riding on the back of submarine cables include e-commerce, data transfer, financial transactions, business processing, digital exports, social interactions, services delivery and communications impacting national security.

An RTI International report in August 2020 on Economic Impacts of Submarine Fibre Optic Cables and Broadband Connectivity in Malaysia showed submarine cables landing had contributed to a 6.9 percent increase in GDP per capita and a 3.6 percent increase in employment in the services sector between 2008 and 2015.

Submarine cables are extremely expensive, require partners from different countries, and take three to four years from planning to be operational...