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8 May 2024

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Singapore, Malaysia, and Indonesia Work Separately and Together on Digital Infrastructure

The three-nation complex of Singapore, Malaysia, and Indonesia offers one of the more dynamic potential Digital Infrastructure development areas in the world. Singapore and Malaysia are already highly developed, but have high aspirations and the economic strength to do a lot more. Indonesia has the fourth-largest population in the world (trailing only India, China, and the USA) and strives to be the economic and technology leader within the ASEAN region.

Each nation has its own individual vision, while also cooperating in the metro Singapore area through an arrangement known as the Sijori Growth Triangle. The triangle encompasses Singapore, Johor (Malaysia), and Batam (Riau Islands, Indonesia). The Sijori region is one of the “Big Six” data center hubs in all of Asia and APAC (along with Mumbai, Beijing, Tokyo, Shanghai, and Sydney). The triangle arrangement, which dates to a pre-datacenter era of some 30 years ago, provides cramped Singapore with a relief valve for further development and accrues economic opportunity to Malaysia and Indonesia.

Whether looking at the three nations separately or through the focused lens of the Singapore region, operators and investors can discover some key differences, based on data and findings within the IDCA Digital Readiness Index of Nations. Current index scores for them look like this:

Although Singapore is still the clear economic hub of this region, and one of the premier business destinations in the world, its lack of renewable energy clouds its future in building a sustainable Digital Economy. A surprising little secret may be its relative lack of the Digital Infrastructure expected from this world leader – in the Index, we can see that Malaysia has surpassed it in this category (which is highly integrated into the Economy category score).

Singapore's reputation for squeaky-clean business, reflected in its world-leading Governance score, was promulgated by transformational leader Lee Kwan Yew, the country's first prime minister after independence in 1959 and absolute leader until 1990. Singapore's governance continues to set it apart from the nations of the region, and the world.

But, back to renewable energy, it's clear that none of the three nations under review here are stars in this area. Each of the three score well below the world average in the Environment score, an average that reflects a 30% share of renewable electricity in the world grid, and an economic efficiency of 400 tons of CO2 emissions per $1 million on GDP.

Singapore, Malaysia, and Indonesia, by contrast show renewable energy grids of 4%, 18%, and 18%, respectively. Malaysia and Indonesia's economic efficiencies both are in the 450-500 range, slightly less efficient than the world average, and only 50% as efficient as the United States. Singapore's number beats the world average, which can be expected in such a service-oriented nation.

The clear challenge among the three nations is to develop their renewable-energy grids, one way or another. Both Singapore and Malaysia have targeted a 40% renewable grid by 2035, while Indonesia has created an incremental plan to shows the grid growing by a percentage point or two every couple of years. This is a region where opportunity knocks.

Photo of IDCA Data Center Training in Malaysia.

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