UAE and Malaysia Partner for Digital Infrastructure Development

digital Infrastructure, digital, Infrastructure, UAE, Malaysia, MoU

The UAE and Malaysia solidified their commitment to enhancing bilateral digital infrastructure development by signing a memorandum of understanding.

  • It establishes a framework for investment cooperation with a focus on data center infrastructure in Malaysia.
  • The collaboration positions Malaysia as a dynamic data center market in the Asia-Pacific region.

On January 25th, the UAE and Malaysia signed a memorandum of understanding to uplift bilateral digital infrastructure development.

Despite being non-binding, the agreement establishes a framework for investment cooperation. It puts special emphasis on developing robust data center infrastructure in Malaysia.

Both countries want to create a sturdy collaboration between public and private organizations. They also discussed introducing incentives to support relevant initiatives and aim to ease knowledge and expertise exchange.

This agreement perfectly fits Malaysia’s New Industrial Master Plan 2030 (NIMP 2030). NIMP 2030 focuses on economic growth, technological advancement, and sustainable development over the next seven years. This plan includes digitization and technological adoption across industries, small and medium-sized enterprises, and startups.

This collaboration also backs up Malaysia’s position as a dynamic data center market in the Asia-Pacific region. With over 40 data centers currently operational, Malaysia’s digital infrastructure is projected to experience a compound annual growth rate of approximately 16% between 2022 and 2027, reaching a market value of $2.90 billion by 2027.

UAE’s Minister of Investment Mohamad Hassan Alsuwaidi believes that “The planned increase in the number of data centers in the country will elevate Malaysia’s standing as one of the emerging data hubs in Southeast Asia and provide businesses across various sectors with a robust foundation for digitization.”

Tengku Zafrul Aziz, Minister of Investment, Trade, and Industry of Malaysia, is confident that “Malaysia is well-positioned to capture a significant portion of ASEAN’s digital economy, forecast to reach USD 1 trillion by 2030.” He also confirmed that “Malaysia’s digital infrastructure collaboration with the UAE, with a focus on data centres, will certainly help strengthen our position as a preferred destination for digital investments.”

But this MoU is not only for the benefit of Malaysia. As things stand, the UAE is Malaysia’s second-largest trading partner in the Middle East. In fact, it makes up 32% of its overall trade with Arab nations.

As foreign investments keep pouring in, the digital economy and the startup ecosystem are growing. In early 2023, Amazon Web Services announced its expansion in Malaysia, with a plan to invest over $5 billion in the country by 2037.

It’s a mutually beneficial agreement. There’s no doubt. Malaysia gets investment and good relations with a key Arab country, while the UAE gets good relations with the digital hub of Southeast Asia.

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