Malaysian technopolis tries to curry biz favor

As part of his five-day economic mission to the U.S., Dr. Mahathir bin Mohamad, the prime minister of Malaysia, on Tuesday unveiled his country’s ambitious plans for a Multimedia Super Corridor, a multibillion-dollar endeavor that would create “the world’s first multicultural content center for digital entertainment.”

Hoping to lure Hollywood entertainment and multimedia companies to the MSC, Mahathir addressed a group of entertainment industry and other local business leaders at a gathering at the Beverly Hills Hotel, hosted by the city of Beverly Hills, the Beverly Hills Chamber of Commerce and the Asia Society.

“There is no better place to connect the amazing creativity of Hollywood with the conditions necessary to localize digital entertainment relevant to much of Asia and the rest of the world,” Mahathir said to the group of nearly 300 attendees.

Mahathir acknowledged that the only way his country can hope to develop into an economic contender by his target date of 2020 is to offer the world’s leading technology and content companies an environment that could foster new ways of creating entertainment and educational content.

The MSC is blueprinted for a 9-by-30-mile zone stretching south from Malaysia’s capital city of Kuala Lumpur to the upcoming Kuala Lumpur Intl. Airport, opening in 1998.

According to Mahathir, the MSC would create an autonomous high-tech zone, “with the infrastructure, laws, policies and practices that will enable companies to explore the information age with out any of the usual constraints that frustrate them.”

The project aims to establish a high-capacity global telecommunications and logistics infrastructure built upon the MSC’s 2.5-to-10-gigabyte digital optical fiber system, as well as the new airport, to be Asia’s largest. The MSC will also have rail links to Kuala Lumpur, a dedicated freeway and two new “intelligent garden cities.”

The first of these cyber-cities is Putrajaya, which will become Malaysia’s new administrative capital, where most of the government ministries will locate their offices by 1998. Putrajaya’s population is targeted at 75,000 by the year 2000.

‘Cyberjaya’ city planned

The second city, Cyberjaya, is designed to “provide the physical and psychological spaces needed for productive contemplation and creativity” by multimedia companies. Adjacent to Putrajaya, it will contain the majority of office facilities, hotels and residential districts. Cyberjaya will be built around the new Multimedia U., established to teach the next generation of multimedia and information technology. The first phase of M.U. will be open in 1999.

The Malaysian government has agreed to enact new “cyberlaws” and policies exclusively for the MSC that will address intellectual property, digital signatures for business, medical and legal uses, and computer crime.

“For example, our new Digital Signature Act creates a regulatory framework for verification and certification by the authorities and severe penalties for cyber-fraud,” said Mahathir.

He added that the set of cyberlaws would be enacted by Parliament over the next few months.

Bureaucracy minimized

To manage and market the MSC, Mahathir has created the Multimedia Development Corp., an agency that will open 10 offices around the world over the next two years. The MDC has been incorporated by the Malaysian government and, according to Mahathir, “will not be constrained by bureaucratic practices” as it goes about its mission to lure companies into relocating to the MSC.

The MDC is registering interested companies and will be taking formal applications for companies seeking “MSC status” in March. This entitles companies to the financial incentives and the Multimedia Bill of Guarantees if the new operations of the company are located in a designated city such as Cyberjaya. Mahathir and his deputy prime minister will oversee the MDC.

Companies that choose to relocate their operations to the MSC and are granted “MSC status” are entitled to operate tax-free for up to 10 years or receive a 100% investment tax allowance. While companies in the MSC will have the freedom to pursue their own projects, the Malaysian government has outlined seven multimedia “Flagship Application” projects, including the goal of making the government paperless by the year 2000.

Other incentives the Malaysian government is offering prospective MSC tenants are relaxed immigration policies and unrestricted hiring and entry of foreign “knowledge” workers; freedom of ownership of companies located in the Corridor; freedom to gather capital and loans from any source; and no duties on the import of multimedia equipment.

One attendee was surprised that Mahathir and his government will not censor the Internet, “considering this is the country that banned ‘Schindler’s List’ as propaganda.”

Perhaps in response to criticism of Malaysia’s 1994 ban of the Universal film, Mahathir includes in his written “Multimedia Bill of Guarantees” the promise that “Malaysia will ensure no censorship of the Internet.”

Among the industry mavens present for the speech and luncheon were Anna Perez, VP of government relations, and Harry Grossman, senior VP of facilities, both of the Walt Disney Co.; Alan Silberberg, VP of corporate relations, Paramount Pictures; Jay Samit, director of new media, Universal Pictures; Bret Magpiong, VP at the Bubble Factory; and Marc Nathanson, CEO of Falcon Cable.

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