UAE and Malaysia enter strategic partnership to boost digital infrastructure development

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The Ministry of Investment of the UAE and the Ministry of Investment, Trade and Industry of Malaysia have signed a Memorandum of Understanding with the aim of establishing a framework for investment cooperation in the digital infrastructure sector with a specific emphasis on data centres in Malaysia.

The agreement was signed by His Excellency Mohamed Hassan Alsuwaidi, Minister of Investment of the UAE, and His Honorable Tengku Zafrul Aziz, Minister of Investment, Trade and Industry of Malaysia.

Malaysia’s growing reputation as one of the most dynamic data centre markets in the Asia Pacific region is bolstered by the country’s strategic location, robust infrastructure and government-backed initiatives such as the New Industrial Master Plan 2030. The plan prioritises the promotion of digitisation across key sectors and strives to accelerate the adoption of advanced technologies and digital solutions, with the overarching goal of enhancing productivity and efficiency in various industries.

Data centres are essential for organisations to store crucial data and operate applications. Malaysia currently operates more than 40 data centres, with the sector anticipated to witness a compound annual growth rate of approximately 16 percent between 2022 and 2027, reaching USD 2.90 billion by the end of the five-year period. This increase is attributed to rising demand from small and medium-sized enterprises, which play a crucial role in the country’s economy and are set to make substantial contributions to economic expansion through digital transformation.

The MoU between the UAE and Malaysia centres on establishing robust and efficient collaboration through the development of bilateral relationships between public and private organisations. The agreement also proposes introducing incentives to bolster relevant initiatives and seeks to facilitate the exchange of knowledge.

His Excellency Mohamed Hassan Alsuwaidi, Minister of Investment of the UAE, commented: “In the context of growing bilateral relations between our two nations, this partnership facilitates collaboration in an area that is essential to the development of a resilient economy. The planned increase in the number of data centres 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 digitisation.”

His Honorable Tengku Zafrul Aziz, Minister of Investment, Trade and Industry of Malaysia, said: “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. As a regional data centre hub, Malaysia is well-positioned to capture a significant portion of ASEAN’s digital economy, forecast to reach USD 1 trillion by 2030.

The Ministry of Investment, Trade and Industry of Malaysia and its agencies are determined to realise all committed investments so that investors, businesses and our people can quickly reap the benefits of a more robust, thriving digital economy within Malaysia and ASEAN.”

The signing of the MoU is underpinned by strong trade relations between the two countries, with non-oil trade volume surpassing USD 2.22 billion in the first half of 2023. The UAE currently stands as Malaysia’s second-largest trading partner in the Middle East, constituting 32 percent of its overall trade with Arab nations, while Malaysia holds the eighth position among non-Arab Asian countries for UAE exports and the 19th position in re-exports.