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Fri, Sep 09, 2005 - Page 12 News List

Malaysia plans to revamp incentives for technology firms

COMPETITIVENESS The government will offer new incentives to high-tech companies in the hope of drawing more of them to the country

AP , KUALA LUMPUR, MALAYSIA

Malaysia plans to provide more incentives to woo foreign investors to boost the competitiveness of its high-tech business zone, Prime Minister Abdullah Ahmad Badawi said yesterday.

Styled after California's Silicon Valley, the Multimedia Super Corridor -- or MSC for short -- is a 750km2 zone in and around Kuala Lumpur that offers tax breaks and grants to information technology companies and researchers.

The government is "re-examining the package of incentives that we offer to make the MSC a more compelling choice for investors," Abdullah said at the opening a two-day annual meeting of the zone's international advisory panel. He did not give details.

Abdullah also said the government will set up a high-tech talent development institute to "plug any gaps in the supply" of locally hired workers, and increase funding to encourage local tech entrepreneurs to expand their business.

Begun nine years ago, the tech hub was the brainchild of former prime minister Mahathir Mohamad, who wanted to transform Malaysia into a developed nation by 2020.

It runs from the Petronas Twin Towers in Kuala Lumpur to the international airport south of the city. The centerpiece is Cyberjaya, a so-called "cyber city" with a high-speed telecommunications infrastructure set amid oil palm plantations just south of the capital.

According to government figures, the MSC spurred sales in the information, communication and technology industries to rise 8.3 percent to more than US$1.6 billion last year.

Abdullah said the MSC has also developed a strong niche as a regional outsourcing hub, with 48 multinational firms operating there, and creating 11,200 jobs.

He said Bayan Lepas town in Penang in northern Malaysia was designated in January as the first cyber city outside the MSC and authorities hope to establish similar tech hubs elsewhere in Malaysia. The advisory council's annual meeting, normally held in Kuala Lumpur, is being hosted for the first time in Bayan Lepas.

Thirty-five members and representatives of the blue-ribbon panel, including Silicon Graphics CEO Robert Bishop, Oracle Corp. vice president Derek Williams, Alcatel Asia-Pacific president Christian Reinaudo and Mahathir were attending the talks to chart the hub's future growth.

Abdullah said the government would promote Malaysia as a gateway for other Asian nations.

"ASEAN, China, India and the Middle East are some of the markets that Malaysia has a strong and growing foothold in, and we are looking at ways to expand our market for [information, communication and technology] products and services to these destinations," he said.

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