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Overview

The digital economy is providing new opportunities for Malaysia’s economic growth. It is estimated to be worth over AUD51.63bn, equivalent to approximately 18% of Malaysia’s Gross Domestic Product (GDP). The impact of COVID-19 crisis is expected to have lifted this to 20% by the end of 2020. Going forward, digital trade will play an increasingly important role in Malaysia’s economy, growing faster than traditional trade.

As this report will highlight, there is still significant scope to further increase and accelerate overall trade through harnessing national digitalisation efforts and leveraging international standards. Greater use of new and emerging technologies is not only creating trade opportunities in digital goods and services, it is also increasing the trade in physical goods and services that can be delivered digitally or otherwise enhanced through digital enablers.

Adoption of international standards has the potential to accelerate digital trade. For instance, by enabling businesses and governments to digitise using systems that can interoperate and interconnect with one another, seamless cross-border trade is facilitated. Standards, therefore, play the role that regulation has traditionally played: facilitating market access and participation, ensuring competition, reducing compliance costs, and boosting productivity.

Digital technologies can significantly lower barriers to trade, improve trade efficiencies and open access to markets, creating new trade possibilities. For Malaysia, this report estimates that—at a minimum—digital trade could increase to a total projected AUD57.42bn by 2030. This suggests that the economic value of digital trade has the potential to increase 256% for Malaysia.

In this context—particularly noting the impacts and challenges of COVID-19—it is useful to examine the ways in which digital trade is taking shape in Malaysia, and the ways in which international standards can be leveraged to maximize its growth potential and ensure it is inclusive.

In order to scale this potential growth, this report will:

  • Examine digital trade and break down its components;
  • Estimate the economic value of Malaysia’s digital trade;
  • Identify priority areas;
  • Identify key international standards for each prioritised area to focus on; and
  • Map out a suggested way forward in order to accelerate digital trade growth.

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