Elon-Anwar deals the wrong direction for Malaysian economic sovereignty

So, Anwar Ibrahim had a virtual meeting with Elon Musk, and apparently immediately ordered the purchase of 40 starlink internet devices at a total cost of 90k ringgit, which will then have a monthly cost of 20k for internet service. So, roughly 330k in total for say a year of using Starlink internet in universities; the advantage being that it has a faster connection.

Well, average broadband speed in Malaysia is between 114 Mbps and 120 Mbps, with some packages even reaching 1GB per second, Starlink speeds in the US average between 62.5 Mbps to 90.55 Mbps. So, it is actually not faster than fixed broadband services provided by Malaysian internet companies, and it is, obviously, more expensive. Starlink is also notoriously less reliable. Most universities already have wifi, as well. So, just from a practical point of view, this doesn’t make much sense.

But, to me, the whole deal between Anwar and Elon Musk represents exactly the wrong direction Malaysia should be going. I mean, in terms of the Starlink deal, it clearly is pointless. You are paying more for slower, less reliable internet from a foreign company, to replace faster, more reliable internet from domestic providers. Why? Because Elon Musk is a prestigious name? If the idea is that Starlink will eventually be used to provide service in rural areas, well, who is going to pay for that? When Starlink came to Nigeria, people were excited, just like Anwar, but the cost turns out to be prohibitively high for people living in villages and outside areas. And again, why would you not prioritise your own companies?

And then there is the Tesla deal. Elon Musk is setting up a production facility in India which will build the cars and export them to the Indo-Pacific region, along with his already existing facility in Shanghai. He will set up a showroom in Malaysia to sell Teslas to richest members of the T20 class, and allegedly will invest in developing Malaysia’s charging station infrastructure. Now, EVs, and particularly Teslas, are incredibly expensive, they run between $40k and $90k, or 181,004.63 to 407,000 MYR. Needless to say, this is well above most people’s annual income in Malaysia, which presumably is why only 4 electric vehicles were sold in 2020. But local companies are producing and developing more affordable EVs in Malaysia. Why would you facilitate foreign competitors to your own industry? Tesla charging stations are not universal, as far as I know, so the infrastructure investment — if it comes from Tesla — will be only for the purpose of consolidating market share, and hobbling domestic companies, just as they are trying to get a foothold in the market.

The Malaysian auto industry is one of the better performing sectors in Malaysia domestically, most of the cars on the roads in Malaysia were made in Malaysia. Wouldn’t it be better if most of the EVs that eventually hit the roads in Malaysia are also made in Malaysia? Why would you start importing something that undermines your own companies? Rather, you should be working on helping those companies develop, build local or regional supply chains for the full manufacture of these vehicles.

Bringing Starlink and Tesla in is exactly the way you lose the opportunities presented by the global economic pivot I have been talking about. It just doesn’t make any sense, if you are interested in strengthening your economy and securing economic sovereignty.