OpenGov | 24 January 2025
Malaysia’s digital push: FTA reform to drive regional growth
by Alita Sharon
At the World Economic Forum (WEF) 2025 in Davos, Prime Minister Datuk Seri Anwar Ibrahim outlined Malaysia’s focus on integrating digitalisation into the country’s Free Trade Agreements (FTAs). He said digitalisation was a “missing component” in Malaysia’s previous FTAs and would be addressed in upcoming trade negotiations, as part of Malaysia’s strategy to upgrade them for enhanced economic growth, technological collaboration, and regional connectivity.
“We are looking at upgrading some of our existing FTAs to include digitalisation, which is a key priority for Malaysia. We have just signed new agreements, including with the United Arab Emirates and the United Kingdom, as well as looking to fast-track negotiations with the European Union through the Malaysia-EU Free Trade Agreement (MEUFTA),” Prime Minister Anwar said. Including digitalisation in these agreements is essential to making Malaysia more competitive in the global digital economy.
The Prime Minister noted that ASEAN, as a region, has been aggressively pursuing digital transformation, and Malaysia’s efforts are in line with this regional agenda. Digital transformation is a key priority for ASEAN leaders, who are working to close the digital divide and ensure that the benefits of technology are accessible to all.
According to Prime Minister Anwar, digitalisation is not only about improving technology infrastructure but also about ensuring that this transformation reaches both urban and rural areas. He mentioned that Malaysia, along with its ASEAN partners, is committed to ensuring that digital infrastructure covers all regions, including the more remote and less developed areas.
In his address, Prime Minister Anwar also highlighted the importance of artificial intelligence (AI) in driving connectivity across ASEAN. As digitalisation and AI become central to global economic development, ASEAN must focus on bridging the technological gaps between urban and rural areas.
This, he said, would be crucial in ensuring that digital transformation is equitable and accessible to all citizens, regardless of their location. This commitment to inclusive growth will shape the region’s future and boost its global competitiveness.
“By focusing on the digitalisation of trade, we are creating opportunities for ASEAN to become a hub for the digital economy. The use of AI to enhance connectivity will ensure that we leave no one behind in the digital era,” Prime Minister Anwar said.
He expressed confidence that digitalisation would provide ASEAN with the tools to enhance economic cooperation and integration, improving the region’s competitiveness in global markets.
Alongside digitalisation, the Prime Minister also discussed another crucial regional initiative: the ASEAN Power Grid (APG). The APG project aims to create an integrated Southeast Asia power grid, allowing the region to connect and share energy resources more efficiently. The initiative already links Laos, Thailand, Malaysia, and Singapore, with plans for an undersea cable to connect Sarawak and Peninsular Malaysia.
Prime Minister Anwar acknowledged that regional energy integration would complement digital transformation by enabling better access to power across ASEAN, which is essential for industrial growth and technological development.
“If we succeed in both the digital and energy sectors, ASEAN will emerge as one of the most dynamic and technologically advanced regions in the world,” he added. This combination of digitalisation and energy cooperation will position ASEAN as a leader in both industries globally.
As Malaysia continues to strengthen its digital and energy infrastructures, Prime Minister Anwar remains optimistic about the region’s future. ASEAN is one of the fastest-growing regions globally, and with enhanced digital and energy collaboration, it is poised to lead the way in economic and technological development.
The Prime Minister concluded by stressed the importance of private sector involvement in driving digital transformation. He encouraged businesses to collaborate across borders, innovate, and work together to create the digital solutions that will propel ASEAN’s future growth.
