Investment of US$5b seen in Malaysia hi-tech zone

Investment of US$5b seen in Malaysia hi-tech zone

KUALA LUMPUR (AFP): Companies operating in Malaysia's hi-tech Multimedia Super Corridor (MSC) are expected to invest around 20 billion ringgit (US$5.26 billion) in the next five years, a senior official said Friday.

Othman Yeop Abdullah, chairman of the Multimedia Development Corporation, said Malaysia was getting a "tremendous return" on its investment.

"The returns are that we have 362 companies that may be investing over the next five years around 20 billion ringgit and will be generating about 35,000 jobs," Othman told a press conference.

The MSC stretches from the Petronas Twin Towers in Kuala Lumpur, the world's tallest buildings, to the new international airport 50 km (31 miles) to the south.

Othman said two billion ringgit had been spent on multimedia university and Cyberjaya, an "intelligent city" at the heart of the zone; three billion ringgit on the twin towers; and nine billion on the airport.

Prime Minister Mahathir Mohamad and world information technology executives, attending the annual meeting of an advisory panel on the zone, were also at the press conference.

The 15 km by 50 km MSC was launched in 1996 as the greatest of Mahathir's mega-projects -- part of his strategy of shifting the country towards becoming a knowledge-based economy.

Mahathir said the target was to have 50 world class companies out of a total of 500 by 2003. But already there were 37 world- class companies out of 362 which had been granted MSC status.

Officials said 327 companies had already started operating.

Without the MSC, Mahathir said, "we would be very backward indeed and we would not be able to understand what is happening in the world."

The premier took local banks to task for timidity in failing to support new ventures.

"The idea of venture capitalists is still something many Malaysian financiers and bankers find difficulty in doing," he said.

"Venture capitalists are supposed to invest fairly freely, hoping that out of 10 they get one company which will give them tremendous returns to cover the losses of the other nine.

"But if you talk to Malaysian financiers they think this is crazy."

Executives praised the MSC's progress but called for greater efforts to market products globally, develop local talent and create more sources of development capital.

Bob Bishop, chairman and CEO of Silicon Graphics Inc, said the focus should now be on "how to bring content production facilities into the MSC to produce Asia-specific content."

Products from the zone should be marketed globally, he said.

"Malaysia needs to develop its talents to keep up the progress it has made," said William Miller, a Stanford University professor.

Stan Shih, chairman and chief executive officer of Taiwan's Acer Group, proposed tax incentives for venture capital funds and called for more private investment in knowledge activities.