Malaysia plans digital sovereignty law, backs global halal logo with Indonesia

Business Times

28-05-2025

[KUALA LUMPUR] Malaysia is drafting new legislation to address digital sovereignty in the age of artificial intelligence, aiming to safeguard national security without stifling innovation, Prime Minister Anwar Ibrahim said on Wednesday (May 28).
Speaking at the 2025 Fortune Asean-GCC Economic Forum, Anwar said the use of artificial intelligence (AI) is now unavoidable across all areas of life – including within government agencies – and that the traditional concept of sovereignty is no longer adequate to protect the country's national interest. Therefore, he said, sovereignty must be redefined to safeguard security.
'It has to be reviewed and repurposed to protect the country's security, but at the same time (we must allow) this new space to accommodate companies and operations in the cloud-based operations,' he said at a panel discussion.
'I'm pushing for this as hard as possible… But I also recognise that values and knowledge cannot be dictated by a single society. This must be resolved through education and critical thinking,' he added.
Anwar said that with the right legislation in place, Malaysia can protect its national security without stifling innovation and creative development. While sanguine about the role of AI in driving economic growth and digital transformation, the prime minister acknowledged that ethical concerns remain. 'Technology is neutral, but values are not. We must be vigilant.'
In a separate session, Malaysia's Home Affairs Minister Saifuddin Nasution Ismail echoed the same sentiment, stressing that the adoption of AI is no longer optional but essential.
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He noted that Malaysia welcomed over 35 million tourists last year, with the majority entering through the country's two busiest gateways – Kuala Lumpur International Airport and Johor-Singapore Causeway.
'Take Johor-Singapore Causeway, for instance. It is one of the busiest crossings in the world, handling around 500,000 travellers daily. Without the usage of AI and technology tools, such as face recognition and automation systems, it would have been impossible to ensure smooth and efficient immigration clearance,' he said.
AI to enable deeper regional collaboration
Vietnam's Prime Minister Pham Minh Chinh, also on the panel, said AI could serve as a key enabler of deeper collaboration between Asean and the Gulf Cooperation Council (GCC).
'Asean has a vibrant, diverse market and a skilled workforce, while the GCC brings energy resources, financing, and advanced technologies. These are complementary strengths. Governments must facilitate, but businesses must lead,' he added.
Pham cautioned that the rise of AI must be accompanied by global cooperation. 'No single country can manage the risks alone. Multilateralism is essential, especially to help less developed countries catch up and ensure no one is left behind.'
In enhancing competitiveness, G42 Group CEO Peng Xiao suggested that Asean countries such as Malaysia and Vietnam must reposition themselves in the global supply chain by capitalising on their respective strengths – Malaysia in semiconductors and Vietnam in engineering talent.
'We (investors) are no longer just building factories; we are building intelligent ecosystems,' he said. 'The future belongs to those who can fuse human talent with AI innovation.'
Malaysia, Indonesia push for global halal logo
In a separate session, Malaysia's Deputy Prime Minister Ahmad Zahid Hamidi emphasised on the potential of halal industry and the country's collaboration with Indonesia to establish a consolidated halal logo that is recognised globally.
He revealed that officials from Malaysia and Indonesia are are set to meet representatives of the World Halal Council in Riyadh this November to discuss the proposal – a move aimed at strengthening global consumer trust and industry standards.
'The global demand for halal-certified products is rising rapidly, and it's not just among Muslims. Halal has become synonymous with safety, hygiene, and quality,' Zahid said. 'We need to unify standards to enhance global confidence.'
Citing data from the Malaysian Investment Development Authority, Zahid said global exports of halal products are projected to reach US$1.3 trillion this year, and are expected to grow to US$3 trillion by 2027 and US$5 trillion by 2050.
Panelists at the summit, which highlighted the emerging sectors such as the green and digital economy, underscored that Malaysia should capitalise on its leadership in the halal ecosystem.
Jing Guangjun, chairman of Guangzhou Industrial Investment Holdings, highlighted cross-border opportunities for regional investors in halal.
'Malaysia can contribute its branding and certification expertise, while R&D and manufacturing can be based in China. Together, we can serve global markets,' he said.
At a separate media briefing, Malaysia's Trade and Investment Minister Tengku Zafrul Aziz confirmed that the halal industry is a key focus in bilateral discussions with GCC member states, alongside logistics and pharmaceuticals.
He also revealed that negotiations are under way to expand the Asean-China Free Trade Agreement to cover new sectors, including the green economy, digital economy, and supply chain industries.
'Geopolitical dynamics are becoming more complex, and we need to deepen engagement with new economic blocs,' Tengku Zafrul said. 'The 46th Asean Summit and the inaugural Asean-GCC-China summit have opened the door to expanded cooperation, particularly in strategic growth sectors.'