Malaysia is betting on economic transformation. China and A.I. are key to making it happen
Fortune's Derek Zhang and Malaysian Prime Minister Anwar Ibrahim talk digital transformation, economic inequality, and...Shakespeare.
Transcript
00:00 Thank you, Prime Minister, for your time. So how was the trip to Beijing and Hainan,
00:04 where you returned to China for the first time as the Prime Minister of Malaysia?
00:09 It was a great visit. I'm extremely pleased with the way both President Xi Jinping and
00:17 Premier Li Cheng gave so much importance and caught us with the proper... No, I'm not talking
00:26 about the protocol. I'm talking about the engagement and the issues discussed.
00:32 So you mentioned at least three times that the policies are clear. You know that China
00:37 has been a very significant source of FDI in areas like tech and infrastructure. So
00:45 any special message to Chinese investors to regain their trust?
00:49 Well, so far they have been very forthcoming. As you know, what was committed when we went
00:57 was about $40 billion, and since then, some have come in very fast. I mentioned of course
01:07 Zhili, automotive city in the south of this state, in the province, they have come in.
01:15 And then Rongchun, of course, in the petrochemical. And the rest are of course medium scale. Medium
01:23 scale, Chinese standards actually is very upper scale as far as we are concerned. We
01:29 have of course proposed in terms of digital transformation, food technology, and some
01:37 areas of services industry, and low on infrastructure. But we have placed this set of priorities.
01:52 But of course we are flexible, because we should, politicians shouldn't decide what
01:59 to or not to invest. We give some policy parameters, and then we negotiate with the potential investors.
02:07 Since you mentioned Zhili, you may have known that although China's economy falters at this
02:17 moment, but there are certain sectors like auto industry and hard tech actually expanding
02:23 swiftly overseas. Malaysia used to be one of the most attractive industrial hub. So
02:31 is there any way to capture this momentum of your biggest neighbor?
02:35 Thus far as I said, we are managing to do that. I would say that I would do again whatever
02:44 is necessary to then accelerate that process. But thus far, in the last say four or five
02:51 months, the Chinese have been quite aggressive in terms of their investment portfolio into
02:57 Malaysia. Of course, initially they were, but mainly in the infrastructure. I said,
03:04 no, you go beyond that. So that's why automobile, petrochemical and data centers, and they have
03:12 been quite active in those fields.
03:17 That's right. So talking about, let's say AI, so is it going to be a challenge or an
03:24 advantage to Malaysia? If we're talking about the upgrade of the economic structure?
03:32 To me it is essential, it's imperative, we have no choice. That is why the key strategy
03:39 has been to focus on digital transformation. That is why the issue of Starlink, it's interesting,
03:45 I was just at one of the indigenous villages in the hills. To them, connectivity means
03:54 Starlink. So AI in a sense, both in the social media battle and in terms of general digital
04:06 transformation is very critical to alleviate the status from middle income economy to more
04:16 sophisticated high tech.
04:20 On top of all these topics, Malaysia is still a very young country. I remember that the
04:25 median age of Malaysia is somewhere around 30, whereas in China it's 40, 10 years older
04:31 than Malaysia. So how is Malaysia going to use this to its advantage as a contrast to
04:38 the Asian population of, let's say, China and Japan?
04:42 I think we'll work to our advantage, which means the learning curve, the young has a
04:47 better capacity to absorb this new technology and digital technology. People like me took
04:53 ages to learn and master this. I still remember how difficult, how challenging it was, even
05:00 to start an email while lecturing in Georgetown. But for the young, my grandchildren can teach
05:07 me some of the new apps. So I think what is required from the authorities, from the government,
05:14 from the policy makers, is to make sure that the younger students are given that opportunity
05:24 and exposure, which means it has to be internationalised. So this protectionist view to me will be to
05:32 our disadvantage. The more we open, both to the East and the West, the more beneficial
05:39 would it become. That is why when there's a controversial issue about the 5G, for example,
05:44 although the system adopted is of course the Western system, I mean, precisely Ericsson,
05:53 but we made it very clear as a country, we remain open, we are not going to discriminate
06:00 or prejudice the possible participation of any other country, which may include, therefore,
06:07 the Huawei of China. So I understand this controversy, many of my colleagues from both
06:14 corners of the world kept on asking me this question. I said, look, as a country with
06:22 a younger population, with the capacity to absorb this new technology, more challenging,
06:30 more sophisticated, the only option is to be really open and get our young students
06:40 to be exposed to as many technology systems as possible.
06:47 So besides the generation gap, the gap between the rich and the poor in Asia has been widening
06:52 alarmingly. You used to study the ideas from Harvard philosopher John Rawls. So at this
07:01 moment you're talking about equal opportunities. How do you prevent this from going to, let's
07:06 say, the other extreme of the equality of outcome?
07:10 Well, the issue of inequality is a major issue, it's not only for John Rawls, of course, I'm
07:16 a student of John Rawls, but from even Adam Smith, when he talks about theory of moral
07:22 sentiment, not only wealth of nations, or you study Confucius, or for that matter Islam.
07:30 I mean, the relevance of these sages and religions is when you actually have affect the meaning
07:38 of justice, of compassion, of humanity. I don't believe that you can do with some form
07:46 of disparity. But unbridled capitalism that condone that sort of insane disparity is not
08:01 acceptable. So there is therefore a role of those in authority, in government, to try
08:12 and reduce this gap. Not so much of poverty, but abject poverty. That's why when you mention
08:21 Rawls it's interesting because what is justice if it's not fairness? So we have to deal with
08:28 it. That's why in my Madani economic concept, I made it clear that we have to attract foreign
08:35 investments, we have to understand that capital is at the core and the fundamental for growing
08:42 economy. But you must also infuse with that set of values that mark us to be really different
08:51 from just an economic animal to become part of humanity, with compassion, with care. It's
09:02 not too difficult. I mean, I work with some very rich people here, I say, look, we're
09:06 not going to tax you, but you must show a little bit more compassion and bring them
09:12 to the remote villages where the poor are striving to live. And people do care. And
09:19 I think if the system's not corrupt, if the leaders do not take the money pocket for themselves,
09:28 then they would appreciate the fact that, okay, probably give what is due, can be small,
09:34 to those who have been deprived.
09:36 Very interesting. Before we wrap up, we know that you carried a copy of the complete works
09:43 of Shakespeare in your darkest days. So which Shakespeare character do you think you resemble
09:48 the most and why?
09:51 You see Shakespeare, people do ask me this question. When I was young, it's Romeo and
09:55 Juliet, of course. When I was in jail, of course, it's King Lear, in his conversation
10:01 with Cordelia towards the end. Or when I'm a bit annoyed, it becomes Hamlet. So because
10:10 Shakespeare is unique, is a genius, who's the core of the Western canon. So that is
10:19 how I explain Shakespeare. Well, I'm a student, I'm not a professor of English literature.
10:29 But I think it has given immense contribution to humankind, to understand the feelings,
10:39 emotions, and well, that's about, that's so unique and the genius of Shakespeare.
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