As the first question, I would like to address the global issue of climate change, a very serious challenge nowadays. What do you think are the consequences of climate change in the ASEAN region?
First of all, Malaysia is blessed in the sense that we don’t have natural disasters like the other nations within our region, such as Indonesia and the Philippines. Having said that I mean the impact of climate change has been felt even in Malaysia. Towards the end of last year, we have seen these massive flash floods in areas you don’t expect to see floods happening. We always associate flood occurrences with the East Coast like Kelantan, Kota Bahru, Terengganu but suddenly Johor Bahru and Pahang are also being hit. It has happened that ice balls came down and so people start realising that environmental aspects are as important as economic growth. So in the ASEAN context, I think there is more awareness. The Philippines, Indonesia, and Thailand are more developed compared to Vietnam, but also Vietnam is progressing very fast; finding the balance between economic growth and taking care of the environment remains a crucial challenge. Malaysia is a bit unique in the sense that when Datuk Sri Najib took over as the Prime Minister way back in 2009, he set up the Ministry of Energy, Green Technology and Water, and he did it as soon as he took over. So that’s what I think differentiates Malaysia against the other countries in the ASEAN context.
Some economists emphasise how looking at GDP as the indicator for economic development is not correct because it doesn’t say enough about the health of a nation. For an example, you can achieve higher growth by higher consumption of energy that on the flip side will disrupt the environment. What is your perspective on this?
Yes, traditionally everybody likes to follow GDP as a growth indicator of a country. In Malaysia we introduced a new term, the Gross National Income (GNI). And this was introduced way back in 2010 when the economic transformation program was launched and the objective is to actually transform Malaysia into a developed nation and have a clear indicator to evaluate ourselves as a developed nation. But balancing the impact of quality of life is very difficult to measure, and GDP as you say is not enough; so over time there are other indexes that have been taken into consideration by the government, such as the environmental index and the transparency index. One think we also consider is our relative growth in these indicators compared with the other countries in the region. Malaysia records no 6 in 2014’s Ease of Doing Business by the World Bank in the ease of doing business for example, but the challenge is not just to be there but also to keep pursuing and maintaining that status.
Next year the AEC the Asean will create a single market among ASEAN countries. Malaysia is already strategically placed to be a regional hub for oil and gas for example it’s the global leader in Islamic finance. How will the establishment of the single market impact the objective for Green Tech Malaysia to make Malaysia the regional hub for green technology?
Of course we look at this as an opportunity especially in green technology. The free market will provide tremendous opportunities for Malaysia to become the regional hub especially when it comes to, for example, solar manufacturing. The way to progress is by partnering with entrepreneurs, businessmen, and foreign companies around the world; there’s great potential for them to make profits and for the people of Malaysia to benefit as well. For example, we have top solar manufacturing companies in Malaysia that were established in 2008 and 2009. And today, we have about four key companies operating in Malaysia. Foreign investments have created jobs for Malaysians and we have now close to 10,000 jobs in this sectors. These are high-tech quality jobs been created through solar manufacturing that produces about 4.5 gigawatt of solar-worth productions capacity on annual basis and this can be a platform to provide the kind of opportunity and benefits to other ASEAN countries in this region as well. And remember there’s about 600 million population in the ASEAN region and there’s tremendous opportunity not only in terms of business opportunities but also to create a better and more sustainable society. We are building up the right framework to get Malaysia’s entrepreneurs and small medium enterprises to upgrade their skills and use Malaysia as their learning ground so that they can then offer their expertise to other ASEAN countries thereby creating positive spill overs and technological transfer.
Also the free flow of people would be one of the key features of the establishment of the single market that will allow these technological transfers to take place...
Yes, exactly. It’s easy for us to travel; it’s easy to get visas and in just 2 hours you can be in Bangkok or 3 hours to be in Hanoi. We have great entrepreneurs prospering in Malaysia; but the single market will provide also new opportunities for countries like the UK that wants to do business and tap into this market.
What has been the genesis of GreenTech Malaysia and how do you feel the National Green Technology Policy that has been launched in 2009 has transformed the sector and the GreenTech Malaysia as well?
We still have a long way to go. I certainly think we should be more ambitious pursuing these goals, but it is true that we have gone far. We are actually among the top 3 major manufacturing countries of solar energy in the world. We are competing with global actors such as China, Europe, and even Japan. We are focusing on solar industries, biomass, and biogas. What we are trying to do for Malaysia is to create a fertile ground for entrepreneurs to upgrade their businesses. This is very important because people always argue that the cost of renewable energy and technology is expensive; but people forget that you need economies of scale for a-market to grow and products to become more competitive. This is where the government intervenes because otherwise things would not happen. Today we have a mechanism that creates opportunities for Malaysians to put solar in their homes or buildings. Just a few weeks ago the Kuala Lumpur International Airport has launched the biggest solar system in Malaysia accounting for 19 megawatt-worth installations on the rooftop. Green technology is still growing; there are other elements that we are looking into, for example green buildings. Our building here is a prime example of doing things differently and trying to be innovative. We are proud to say that this building is still the most energy-efficient building in this region. When we look at eco growth of Malaysia, the key point is that we are no longer look at ourselves as the cheap labour country. We are growing as a high-tech country and our labour is high skilled so our focus today is high value technology in order to create high income.
Biomass and solar energy account for 90% of the renewable energy potential here in Malaysia. What are the main projects that GreenTech Malaysia is sponsoring under the Green Technology Financing Scheme for 2014?
Statistics shows that since 2010 the goal was to achieve allocation of 1.5 RM million worth of green investment. We’ve realised about 1.58, slightly above that as of 31 December last year and the majority of it goes to the energy sector (around 70%) and smaller percentage towards building sector (approximately 30%) with smaller allocations for waste and water sector. Moving forward we still see the tremendous need for the energy sector. What is crucial to unlock the value of renewable energy is also financing because renewable energy tends to be capital intensive and having access to attractive financing to support this kind of project has always been a difficulty in Malaysia. This is because there was no learning curve, no experience, and our bankers and financial institutions were not comfortable in providing funds because this is something new. But after 4 years I would say things have progressed tremendously. There are at least 22 banks providing financing schemes. The majority are Malaysian banks, but there are some international banks like HSBC, Standard Chartered, and UOB. There are also opportunities for the United Kingdom as London has always been known as a financial hub in the world. I would like to have the same UK investment banks that provide huge financial support to clean projects around Europe to do the same here in Malaysia. In Europe, you have enough learning curve so you know how to measure the risk appropriately. Here we don’t have that experience yet. So coming back to the question, that we still see the energy sector as a great growth area, but we hope to increase the take up rate for the building sector and explore further waste energy. The transport sector will be something interesting because we are setting up a Sustainable Mobility Fund together with the Ministry of Finance and teaming up with local banks. This is to unlock the potential for electric vehicles and electric buses. We always believe things should progress from creating something new to providing better value for the population. If you look at mobility today we are trying to shift with small steps. Before end of this year, we should have about 20 electric buses for public transportation up and running within the city center.
Research and development and technology are the key along with the human capital to succeed in this sector. Based on your expertise, what would you say are the key technological development that could spark a green technology revolution?
We should definitely increase our R&D investment to meet the standards of countries such as Korea, the U.S., and Japan. What we have always seen to be very successful instead of pure R&D is basically innovation in applying new technology. That’s for me better value of R&D which I usually call it applied research. Basically, something that works well in some countries or been tried in other countries may just not be adoptable in our climate conditions. Yet, companies in research development with global aspirations could potentially use Malaysia as their research development hub. If you look at the equatorial region, these are markets that you can tap into, not necessarily ASEAN only, but you can go as far as Africa and the Middle East because they are along the equatorial belt with similar climate conditions. There’s potential to try out many things and explore. Even for this building, when it was designed back in 2006 and completed in 2007, we had a team of Malaysians engineers and architects working together with a Danish partner. We argued many times because what works in Denmark may not necessarily work in Malaysia and vice versa. So there were learning experiences in coming through that process. An example, I don’t know whether you realised it or not but Europeans like to have the hot air blow to their face especially in winter. Malaysians cannot stand that because they feel suffocated. But if Europeans sit in Malaysians’ cars with air conditioning switch on and the cold air blowing to their faces, they feel uncomfortable but Malaysians love that.
What do you think is the potential for green tech to be a new ground between UK and Malaysia and bring the relations to a new level?
I would start first with the opportunities in the financial sector. I am aware that London is looking at developing Islamic financing and of course the opportunity that we have in Malaysia here is access to project opportunities with so many countries in the region providing different opportunities. So, access to financing is the key and there are a lot of financing opportunities available in Malaysia. What’s missing is still is that knowledge of doing assessment. Looking at Malaysian institutions, they may just see it as a project, but London may see it as a major business opportunity to team up. And Islamic financing is about the creation of wealth and sharing of wealth. The biggest opportunity we have is not about competition between London and Kuala Lumpur but it’s about teaming up together and maximising that value.
How do you feel Malaysia is taking advantage of the many UK universities that have been based here in Malaysia?
Malaysians tend to be very exam orientated and I think with the introduction of the education blueprint, the objective is to look at different kinds of education systems and bring Malaysian institutions in the global context. There’s the case of the British-Malaysian Institute under the University of Kuala Lumpur which has introduced together with its sister agency a training skill programme on solar energy installations. We have been appointed by the Ministry of Human Resources to be the industry lead for developing National Occupational Skills Standard for workers so we are responsible on green tech modules in order to se the requirements for the institutions. We know that you can have the best market, best technology in the world but if nobody helps you to apply it you will simply not be able to reap the benefits of it.
It’s very comforting to see a young leader an expert in the sector driving the economic transformation towards sustainable growth. As a source of inspiration for many young professionals that would like to follow your career what would be your last message?
We only have one Earth and we are all in it. This is the only planet we can live in, so we have to make the best of the planet Earth! We have to grow responsibly in order to ensure that future generations will also be able to enjoy it.
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