This article first appeared in The Edge Malaysia Weekly on June 3, 2024 - June 9, 2024

The government’s decision to exempt cable-laying vessels from cabotage is a positive development for Malaysia’s growing investments in digital infrastructure. This is especially as the country has now emerged as a key destination for digital technology investments in Asia.

Submarine cables are critical infrastructure for the growth and adoption of a digital economy as terabytes of data flow through these glass or copper cables every millisecond, allowing data to be transported across the world.

Submarine cables zigzag across the Malaysian seabed as its two main bodies are separated by the South China Sea. However, under the country’s cabotage policy, the installation, maintenance and repair work of these cables can only be done by Malaysian-flagged vessels.

Because of the policy, a number of digital investors have given Malaysia a miss in the past, as they were concerned that repairs to damaged submarine cables could not be undertaken speedily. The exemption now removes this concern.

Nvidia, Google and Amazon Web Services have recently pledged multiple billions of dollars in digital investments and the cabotage exemption now increases Malaysia’s attraction to other technology behemoths.

The local submarine cable-laying shipping companies will also now face competition from foreign players, which will in turn encourage investments and collaborations, as well as technology transfer and know-how.

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